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Desjardin's website calculator says I can go ahead and buy a 267k house with 25 down, no big deal.
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Mar 5, 2014 21:59
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FrozenVent posted:Desjardin's website calculator says I can go ahead and buy a 267k house with 25 down, no big deal. That's a fun one to play with. The difference between a 3% and 5% interest rate equated to $40,000(180-225ish). It actually looked fairly reasonable to me. 60k annual salary with a 25k downpayment suggested between $180,000 and $220,000. Also really neat to see mortgage insurance ends up costing you almost $25k over the course of the purchase. Not that there's anything that costs that near Ontario city centers or anything. I love renting.
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Mar 5, 2014 22:30
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PT6A posted:The obvious flaw with that article is that it treats the Canadian housing market as a whole, while clearly there are some very meaningful differences between cities. The Toronto and Vancouver markets are, in any realistic estimation, greatly overvalued compared to the markets in the rest of the country, and those markets probably make up a great portion of the Canadian housing market by any metric, but I don't think the situation is quite as dire as presented, if you're looking at the value of your property in most other areas of the country. I think that places like the outskirts of the Lower Mainland of BC or the interior of BC will get hit even harder than Toronto/Vancouver when the bubble starts to deflate. At least Toronto/Vancouver are still very desirable places to live (jokes aside) and will always have a certain amount of demand.
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Mar 5, 2014 23:09
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blah_blah posted:I think that places like the outskirts of the Lower Mainland of BC or the interior of BC will get hit even harder than Toronto/Vancouver when the bubble starts to deflate. At least Toronto/Vancouver are still very desirable places to live (jokes aside) and will always have a certain amount of demand. I agree. It's huge 800k+ McMansions in places like Newmarket, Ajax, and whatever the Vancouver equivalents of those types of places are that are hosed. It's already pretty hard to move a place in the bedroom communities surrounding Toronto for anything close to what the owner might consider "a good price". The exception to this is the condo market in Toronto and Vancouver, which is going down the drain. Proper homes in city centre on good transit routes like subway in Toronto will lose less value relatively speaking, as long as the job market doesn't implode.
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Mar 5, 2014 23:31
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Saltin posted:Proper homes in city centre on good transit routes like subway in Toronto will lose less value relatively speaking, as long as the job market doesn't implode. Isn't construction close to or over 10% of our labor market these days? Granted not all of that is involved with Condomania '14, but still.
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Mar 6, 2014 00:54
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Corrupt Cypher posted:That's a fun one to play with. The difference between a 3% and 5% interest rate equated to $40,000(180-225ish). It actually looked fairly reasonable to me. 60k annual salary with a 25k downpayment suggested between $180,000 and $220,000. Also really neat to see mortgage insurance ends up costing you almost $25k over the course of the purchase. Yeah it's a lot of fun to play with, but it still goes higher than I'd feel comfortable buying. 260k house on 61k/year seems a bit of a stretch to me. http://desjardins.com/ca/tools/value-home/index.jsp for reference.
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Mar 6, 2014 01:09
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Rime posted:Isn't construction close to or over 10% of our labor market these days? Granted not all of that is involved with Condomania '14, but still. For sure it's a significant proportion. Will it have ripple effects, absolutely. I think the impact of substantial blue collar job losses will be worse on bedroom town economies and real estate markets than it will on Toronto's, with full respect given to the effects being felt to some degree everywhere. For example, Oshawa has been imploding for years with job losses (GM) and Toronto just kept ticking like it didn't even happen. I always thought it was well accepted that large cities tend to weather downturns better than suburbs, relatively speaking. The only people who think cities are going to be worse off are people who tend to dislike cities on principal and don't understand the differences between a small and large market.
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Mar 6, 2014 01:12
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A friend of mine who knows a correction is coming just bought a house for $1.6M in Toronto. He says he doesn't care about the correction because he likes the house and the area that he is in and he figures that it will go back up in value eventually. He was involved in a bidding war but it wasn't too crazy since I guess at the higher end of things, there are less interested parties. At least, that would be my guess.
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Mar 6, 2014 01:16
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So uh, how much does your friend make a year?
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Mar 6, 2014 01:28
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UnfortunateSexFart fucked around with this message at 21:20 on Mar 23, 2017 |
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Mar 6, 2014 03:11
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Rime posted:Isn't construction close to or over 10% of our labor market these days? Granted not all of that is involved with Condomania '14, but still. Out of curiousity I picked up the infosheet from that hedge fund that's got the Canada housing short fund going now and there was this handy chart in their investment thesis presentation: 
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Mar 6, 2014 03:18
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11/12 good job Canada
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Mar 6, 2014 03:26
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Paper Mac posted:Out of curiousity I picked up the infosheet from that hedge fund that's got the Canada housing short fund going now and there was this handy chart in their investment thesis presentation: To make it even worse Canada exceeded the US bubble metrics for things such as the debt to income ratio and only has the bright of having better raining day funds if something goes bad.
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Mar 6, 2014 03:30
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Paper Mac posted:Out of curiousity I picked up the infosheet from that hedge fund that's got the Canada housing short fund going now and there was this handy chart in their investment thesis presentation: "Mirrors"? More like "Blew past while blaring that kitschy General Lee horn from Dukes." 
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Mar 6, 2014 04:32
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jet sanchEz posted:A friend of mine who knows a correction is coming just bought a house for $1.6M in Toronto. He says he doesn't care about the correction because he likes the house and the area that he is in and he figures that it will go back up in value eventually. He was involved in a bidding war but it wasn't too crazy since I guess at the higher end of things, there are less interested parties. At least, that would be my guess. Million + homes tend to go for under asking in Toronto since the Fed changed the rules about CMHC insurance for big mortgages. Essentially you need 20% down in any million+ scenario. It cooled that sector of the market significantly and lit the 500-900k market in desirable neighbourhoods absolutely on fire. It must be a hell of a place for a bidding war to happen in that price range. It's not normal.
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Mar 6, 2014 14:37
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Cultural Imperial posted:So uh, how much does your friend make a year? I'd guess around $300K or so. He can actually afford the house and the neighbourhood is full of professionals who can afford to be there which was also an attractive quality of the neighbourhood, according to my friend. When I walk around my neighbourhood of Roncesvalles, I keep thinking about how crazy the prices of houses are here and that there will be a lot of for sale signs once the interest rates start to go up. Saltin posted:Million + homes tend to go for under asking in Toronto since the Fed changed the rules about CMHC insurance for big mortgages. Essentially you need 20% down in any million+ scenario. It cooled that sector of the market significantly and lit the 500-900k market in desirable neighbourhoods absolutely on fire. It must be a hell of a place for a bidding war to happen in that price range. It's not normal. Yes, I think my friend's house only went over asking by a few thousand, I will ask him when I see him next. It is a very nice house but it is the neighbourhood that he really likes, it is near Bayview and Lawrence. Someone in this thread was talking recently about Rosedale and how it has doubled in value since the crash in America. Another friend of mine bought a house in the Bridal Path in 2008 and it has already doubled in value according to him. He wasn't bragging, he was just telling me that 3 houses on his street have each sold for more than $4M in the last few months and he paid slightly less than $2M for his house.
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Mar 6, 2014 18:36
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You know, even at 300k a year I fail to see how he can afford the mortgage on that house. I'm guessing his take home is about 5k every 2 weeks. That's after tax, rrsp, espp, etc. At 25% down that's a 1.2 million mortgage. That's about 6000 a month on mortgage payments. Since he's a loving baller he probably needs everyone to know how rich he is and has 1500 in car payment every month. What does he do? Deal drugs?
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Mar 6, 2014 21:53
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jet sanchEz posted:I'd guess around $300K or so. He can actually afford the house and the neighbourhood is full of professionals who can afford to be there which was also an attractive quality of the neighbourhood, according to my friend. When I walk around my neighbourhood of Roncesvalles, I keep thinking about how crazy the prices of houses are here and that there will be a lot of for sale signs once the interest rates start to go up. It's not the poor people who can't get credit that bring the average personal debt up to 160%. It's the white collar workers paying huge mortgages and carrying 200-300% personal debt levels.
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Mar 6, 2014 22:46
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From twitter: it looks like work is slow for electrical contractors in Toronto. http://www.contractortalk.com/f5/shortage-work-toronto-92230/
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Mar 6, 2014 23:57
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cowofwar posted:There are a lot of professionals out there who live in expensive houses that can afford the mortgage payment but who are effectively house-poor, cash-strapped and sensitive to changes to mortgage interest rates and any kind of interruption in their incomes. This is certainly true from what I know. The people in the most debt I know are all the richest people I know. While my friends buying a "vancouver" (ie way the gently caress out where they can afford them) condos or houses I think is a really bad financial choice, they can afford their mortgages, barely. Meanwhile the few actually rich people I know or am antiquated with all have their money tied up in "investments" that just happen to be massive massive housing debt and are paying a far greater percent of their income towards this. I'm not a finance guy nor rich but why do people keep buying ridiculously over-priced property and then rent them out at a loss while bragging about their shrewd investments? When I asked why this was a good idea they scoffed and said "The rent is just a bonus, it's about equity". I guess if they think prices are just going to keep going up and up this makes sense?
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Mar 7, 2014 00:31
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Because they're nouveau riche assholes. I truly cannot think why else Canadians do this.
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Mar 7, 2014 00:39
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Cultural Imperial posted:Because they're nouveau riche assholes. I truly cannot think why else Canadians do this. Many of them simply fail at math. I had an argument with a coworker the other day: He claimed that even if the market dipped, owning a house would still put you ahead because you'd have an asset. I pointed out that the price you paid for a house doesn't retroactively adjust if the market dips, and if it drops significantly in value and you only have the minimum downpayment on it then you don't haven an asset: you have a brutal amount of debt. Then we got into how condo's are a terrible investment compared to renting after you factor in strata fees and the inevitable repair bills that you'll be charged into for the whole building (on top of your huge mortgage) and he didn't want to accept that as reality either. 
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Mar 7, 2014 00:57
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Rime posted:Many of them simply fail at math. I had an argument with a coworker the other day: He claimed that even if the market dipped, owning a house would still put you ahead because you'd have an asset. I pointed out that the price you paid for a house doesn't retroactively adjust if the market dips, and if it drops significantly in value and you only have the minimum downpayment on it then you don't haven an asset: you have a brutal amount of debt. I kind of see where the guy is coming from, but it really depends on you buying something within your means.
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Mar 7, 2014 01:20
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Also I can already state as an absolute fact that every person I know doing this will lash out and blame the government when their idiotic "investments" catch up with them because they're all the worst kind of right-wing poo poo heads who are all for as much "socialism" as possible for keeping the bubble going and their personal business interests humming along but turn into radian sociopaths at anyone else benefiting from government. I got into a slight argument (I try not to talk to these people at all, ever) over the CMHC subsidizing the risk on mortgages so people can buy houses they can't afford and the banks can make bank, and he just yelled that banking profits are good and housing construction creates JOBS and I just don't get how big and important both finance and construction are to the economy so it's just prudent economic policy to keep those areas booming. Also bike lanes and transit taxes are social engineering and government needs to be hands-off and stop social-engineering us to death and meddling in the economy.
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Mar 7, 2014 01:26
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Alberta Cross posted:I kind of see where the guy is coming from, but it really depends on you buying something within your means. Uh, it's not enough to simply 'have' an asset. You want good assets whose prices are commensurate with their value.
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Mar 7, 2014 01:36
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A house isn't an asset until you own it and you don't own it until the mortgage is paid off.
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Mar 7, 2014 01:58
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I just tell myself that those who consistently make poor financial decisions just subsidize the privilege of those who don't. Makes it easier to accept the widespread financial illiteracy.
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Mar 7, 2014 02:56
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Alberta Cross posted:I kind of see where the guy is coming from, but it really depends on you buying something within your means. Even buying within your means doesn't help when the market implodes. Basically paying for example $400,00 over the life of the loan for something that's only worth half as much or even less depending on the size of the bubble explosion, Housing is not a "investment" due to it's illiquid nature not to mention the stupidity of putting all the eggs in one basket.
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Mar 7, 2014 02:59
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Unfortunately, it seems the vast majority of Canadians do not grasp this very simple concept.
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Mar 7, 2014 03:09
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Rime posted:Unfortunately, it seems the vast majority of Canadians do not grasp this very simple concept. Look at what's being told to them though, everyone from day one pushes home ownership as the end all and be all. It's going to take a huge cultural shift (or market correction) to change that sort of behaviour.
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Mar 7, 2014 03:16
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Somebody fucked around with this message at 15:31 on Mar 7, 2014 |
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Mar 7, 2014 04:00
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Ian McLean posted:https://www.facebook.com/notes/divine-pharaoh/a-scenario-for-a-utopian-society/939453186184 Sounds like a well researched and credible essay.
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Mar 7, 2014 04:20
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cowofwar posted:A house isn't an asset until you own it and you don't own it until the mortgage is paid off. The only reliable way to make a home into a asset is to rent it (and actually get some one to pay that rent) for more than the cost of the PITI + up keep. Its helps to think of it the same way you would a car: even after the loan is paid off the car still requires a constant influx of cash to keep it running for gas and up keep so you can use it. This doesn't mean that it isn't sensible to pay off a car, especially with the way car prices keep rising, but its still a liability even when paid off. Its just less of a financially burdensome one. *that is the main reason I'm so pessimistic about buying older homes. New ones have their issues, but I've seen (and lived in) so many financial disasters disguised as older homes that I've become extremely cynical about buying one and view the sellers/RE agents as something like a used car salesman but worse.
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Mar 7, 2014 06:45
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Bob rennie the yellow king of real estate is charging motherfuckers 25k to have lunch with mayor moonbeam http://www.theprovince.com/news/Vancouver+condo+king+invites+person+donations+Gregor/9588886/story.html
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Mar 7, 2014 07:05
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That's like paying someone $25,000 for a realtalk sit-down with Bubbles. Bubbles would probably have more useful policy ideas.
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Mar 7, 2014 08:10
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PC LOAD LETTER posted:Actually even then it still may be a liability due to ongoing repair costs associated with home ownership! The rule of thumb is to put away at least 1-5% of the value of the home per year for up keep but almost no one does that since the mortgage alone is enough to push them to the financial limit. The lack of up keep can, and often does, cause expensive smaller problems to turn into huge financial disasters that wreck the owners!* You're not even touching on the fact that you must pay property tax as well. Real estate is a godawful investment, and every sane rich person I know shies away from it. They will typically own their own home, as well as (possibly) vacation properties, but I honestly don't know anyone that sees real estate as a true investment. Obviously, owners hope their properties will hold their values or make money, but I wouldn't say it's viewed as a money-making enterprise by most of the rich people I know. My grandfather, in particular, was adamant about not ever owning property you aren't living in.
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Mar 7, 2014 08:11
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The T in PITI is for tax. edit: Principle, Interest, Tax, and Insurance. PC LOAD LETTER fucked around with this message at 08:16 on Mar 7, 2014 |
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Mar 7, 2014 08:14
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PC LOAD LETTER posted:The T in PITI is for tax. Oh, I didn't see that. I mainly read your first paragraph and skimmed the rest. Insurance is, indeed, another fairly big cost that I didn't mention, so PITI covers it very well. Basically, as an investment, property costs a whole gently caress of a lot to maintain, and that's before you consider the massive pain in the rear end that it is to be a landlord and actually make money off your property. We're all getting to the same place, which is: real estate (especially that you aren't living in) is a terrible investment, and doubly so in a bubble. If you aren't in a bubble, and you're living in it, it can be acceptable since you need a place to live anyway, but even so I wouldn't stake my future on making money off it. If anything, you're paying for the convenience of never having to deal with a landlord and/or not having your lease renewed.
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Mar 7, 2014 09:05
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Cultural Imperial posted:You know, even at 300k a year I fail to see how he can afford the mortgage on that house. I'm guessing his take home is about 5k every 2 weeks. That's after tax, rrsp, espp, etc. At 25% down that's a 1.2 million mortgage. That's about 6000 a month on mortgage payments. I may have guesstimated low, he currently works for McKinsey but was with Google for a few years and Facebook before that and he drives a Subaru. As far as I know, he makes good money and is not house poor, he made a boatload off a house that he owned in san Francisco, maybe he used that money to pay for this house. Anyways, enough about my friend, it is interesting that to afford his neighbourhood a person has to make so much money though, I never did the math... My friend in the bridal path has no mortgage, he paid cash for it. I don't think that this is very unusual in that neighbourhood, I don't think anyone in there works a regular job as we know it. jet sanchEz fucked around with this message at 09:25 on Mar 7, 2014 |
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Mar 7, 2014 09:21
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Stunning. People in Toronto have real jobs. I automatically assume rich people in Vancouver inherited their wealth or work in the drug industry.
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Mar 7, 2014 15:46
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