Cant buy much these days with $300k

[lead82]

Not yet they don't, but they soon might. Toronto is getting a lot of attention from foreign buyers, who are kicking up prices during this recession. A year after the recession started, condo prices in this city have skyrocketed.

I bought my unit last July (closing) for under 300K in NYCC area for 2br+den (parking+locker included), now similar units are going for $350K. You cant find any 2br under $320K (with 2 bathrooms).

1br units are going for almost $300K in the area. While I like the appreciate if I decide to sell, it is bad that prices have gone up so much.

I honestly don't know how people afford buying these expensive units. Most people don't have 80K salaries to be able to afford these units with <20% down.

 

[daveto]

Remember, We don't have lenders willing to shoot themselves in the head to inflate prices to Chicago, Sydney, New York levels.

Au contraire, mon frere...

The lenders didn`t shoot themselves in the head in Chicago, Sydney, New York et all.

They wrote the mortgages because they were able to bundle them into AAA rated securities and sell them off to other unwitting investors (aka the ones who got shot in the head)

And now turning to Canada in the present day...

We have the CMHC insuring a significantly higher volume of high ratio mortgages (ie low downpayment) than its US equivalent the FHA. The CMHC is able to do this because it is securitizing these mortages.

But wait! you point out...why would investors buy these securitized mortgages after what happened in the US.

It is because the CMHC securitized mortgages are fully guaranteed by the Gov`t of Canada. And indeed, the CMHC has been recently directed by the Fed Gov`t to expand this volume of securitized mortgages (as confirmed by CMHCs own publicly available documents on its website)

But don`t mind me...I`m just one of those embittered `doom and gloomers', using my fancy pancy logic `n stuff. As a native born Torontonian who studied pure math at Oxford I'm just a cynic who doesn't realize that Toronto's prices are cheaper than New York and London and therefore our prices are destined to increase much further without regard for the static incomes of its citizens. Hey, I agree, what do I know?

 

[EXgeMMy]

government was smart enough to recognize that 40year mortgages with 0% down was probably not a good idea but I don't think having record low interest rates makes it any better.

 

[simuls]

Im a grumpy first timer who can buy anything.
This market blows. Crapy houses in price wars, condos over priced
It really blows to be a first timer.
Is there no end to the madness?
Do I just bend over and over pay like everyone else?

Don't worry Skibadee and hang in there. In less than 2 years this will be a VERY different market. Condos are now overpriced by at least 20% and it's completely unsustainable and will reverse itself. The people who buy today are absolute suckers and fools, be glad you're not among them. You'll be fine.

 

[Skibadee]

Don't worry Skibadee and hang in there. In less than 2 years this will be a VERY different market. Condos are now overpriced by at least 20% and it's completely unsustainable and will reverse itself. The people who buy today are absolute suckers and fools, be glad you're not among them. You'll be fine.

I want to believe it , I really do

 

[Eug]

I want to believe it , I really do

It may or may not end up being true. However, that's what people were telling me back in 2004.

 

[Skibadee]

I hear ya Eug

 

[sbd]

There are a number of (small 700-1000 sqft) houses in Corktown, Riverside, Little India, and East Chinatown that have sold in the past year for about $280-330K. These are cheaper per square foot than a condo, and of course don't have maintenance fees.

I agree with this, I still see houses for around the price. Smaller houses, perhaps without parking, but you can still find them in areas in Toronto, that are much closer / in the city -- then living in the suburbs.

I live around Dufferin / Bloor / Landsdowne / Dupont and you can still find houses in the area for around 300k.

I was able to to purchase my house for a bit under $300 (although it was last January at the peak of the mini-crash) and it is about 1100 square feet, with another 500 feet of basement, and a front and backyard with two washrooms.

Houses like that are still going for around 300-320k. They can sometimes need a bit of work, but if you are selective enough, and look for houses that are just cosmetically ugly (which can be fixed with cleaning, paint, handyman work) but have solid bones, you be surprised what you can still find.

 

[cdr108]

It may or may not end up being true. However, that's what people were telling me back in 2004.

if you look at a historical mortgage interest rates chart, you will see why the RE market started appreciated in 1995/1996, and continued with another pop around 2003/2004.

mortgage interest rates decreased from 13% to 8% to 4%.
as long as 5-year fixed rates don't go up further than 8%, there won't be a 'collapse' of TO RE prices but there will be a correction up to 20%.


EDIT: corrected interest rate

 

[EXgeMMy]

2004 also didn't have 35 year mortgages making it easy to borrow a lot of money.

 

[Eug]

If you look at 5-year fixed interest rates from 2005 to 2007, they went up from around 4.25% to about 6.0%.

 

[cdr108]

If you look at 5-year fixed interest rates from 2005 to 2007, they went up from around 4.25% to about 6.0%.

sorry, i meant 8% ... i'll update that.

2007 was a boom year for Toronto b/c people were rushing to buy to avoid the Toronto LTT ...
Purchase & Sale Agreements executed on or before December 31, 2007 were eligible for a full rebate.
http://www.toronto.ca/taxes/mltt.htm

 

[Eug]

I agree the Land Transfer Tax took the steam out of price increases, but sales were still brisk in 2008 until the US meltdown.

Anyways, I expect interest rates may be in the 6% range in 2011-2012, but of course, I have no functional crystal ball.

 

[TorontoMike$$]

I want to believe it , I really do

I feel for you get in my friend.. it's not going to get cheaper.. take advantage of these rates.

 

[X2 Buyer]

I agree with this, I still see houses for around the price. Smaller houses, perhaps without parking, but you can still find them in areas in Toronto, that are much closer / in the city -- then living in the suburbs.

I live around Dufferin / Bloor / Landsdowne / Dupont and you can still find houses in the area for around 300k.

I was able to to purchase my house for a bit under $300 (although it was last January at the peak of the mini-crash) and it is about 1100 square feet, with another 500 feet of basement, and a front and backyard with two washrooms.

Houses like that are still going for around 300-320k. They can sometimes need a bit of work, but if you are selective enough, and look for houses that are just cosmetically ugly (which can be fixed with cleaning, paint, handyman work) but have solid bones, you be surprised what you can still find.

http://brownstonesonthepark.com/flash.php

I am not advertising for the builder at all. This is one among the area just phase 4 opened in October and price starting from 250k for a small two bedroom unit stacked town.

Granite counter top, stainless steel appliances anything you name for the upgraded chic looking. So, if you can accept the not developed yet community /surroundings, you are still able to find something in downtown Toronto - keep looking.