Canada real estate prices

[ezmobee]

I got a question for you canucks. I watch a lot of HGTV which I believe is based in Canada and LOTS of the shows take place there. I want to know what cities these are that have these RIDICULOUS house prices. I mean like bombed out row houses for $600,000. I know it's not totally the exchange rate because the prices quoted for renovation work sound pretty reasonable. It's just the property prices that are silly high. It's like San Francisco bay area silly.

 

[r.j.dawg]

Re: Canada real estate prices

A lot of the shows are in the Toronto area. And yes, the prices down there are ridiculously stupid. Up here around Lake Simcoe which is about 60 miles north of Toronto, the same sized homes sell for a third of the price. If I'm not mistaken, Vancouver prices are even higher.

 

[rbh]

Re: Canada real estate prices

A lot of the shows are in the Toronto area. And yes, the prices down there are ridiculously stupid. Up here around Lake Simcoe which is about 60 miles north of Toronto, the same sized homes sell for a third of the price. If I'm not mistaken, Vancouver prices are even higher.

YUP, Vancouvers prices are the third highest in the world, which makes my areas prices go stupid every 2-5 years as people retire and want to move to the interior of BC.

BC- Bring cash or Bring coffin!!

 

[Bigprairie1]

Re: Canada real estate prices

EZ, I couldn't agree more with what you have seen.....it is ridiculous. It is (still) rooted in the real estate speculation that started back in the early 90's up here. Up until that time, house prices across the board were pretty much on par with earnings, etc.
Some cities are completely off base....particularly Vancouver. An average 3 bedroom bungalow (1960's) in Vancouver will list for probably $700k or....up to a million if its closer in to town. A lot of this property is being bought up by the Hong Kong/Asian community of investors.
Personally, I think there is a correction coming as soon as interest rates start to rise. As well as Asians, a lot of the buyers are young couples (with good jobs?) who are pretty sure today is a good day to buy.
One thing different than in the U.S is historically tougher bank lending and business rules where mortgages are/were only given out to qualified buyers (No low income, part timers, etc). There is a formula they use to determine your true mortgage available income...and it works pretty well. As a result the banking 'issue' that occured in the U.S didn't happen here (less than 5%) so our general banking/economy in pretty good shape.
Still.....I often say to young people and possible real estate investors, that before they buy something they should look a little more at the history of real estate bubbles and why they happen. Unfortunately a lot of Canadians say, "Oh, that wouldn't happen here".....yeah, right.
Regardless, the other side to this is the amount of Canadians investing in real estate down south in Vacation hot spots.
Sorry a bit wordy, but its a great question....and a tough answer.
All Good
BP

 

[oops!]

Re: Canada real estate prices

yep....Vancouver. Toronto. Kelowna.

a 40 year old plane jane house is half a million bux here.

a penthouse on the lake shore is 4.5m

agricultural land, still in town right by the airport is a million an acre....average lot size, 3 acres.

a carpy mobile home in a trash trailer park is 80 k. a good trailer park is 110k.

it is insane.

 

[jkust]

Re: Canada real estate prices

Funny, I've wondered the same thing. Really, really sub par houses, with no yard, backing up to other houses for over the top prices.
If mortgages are actually difficult to get in Canada as compared to the government forcing banks to give them to poor risks as happened in the U.S. and presumably demand was kept in check in CA, I don't get the high prices. I mean at it's basic level our prices skyrocketed because of basic economics due to easy money. When I see those young couples buying houses at such high prices on those CA based shows, I almost feel bad for them. The funny thing though is that the shows always seem to mention their hefty down payments as well. I recall going into the houses on the Parade of Homes here in MN and the first thing the realtor would hand to you was a sheet with all their creative financing options. I recall some would allow you to pay whatever you could afford that month and just keep capitalizing whatever amount you didn't pay any given month. Basically name your payment each month.

 

[oops!]

Re: Canada real estate prices

our down payments here are so high that a young couple cannot afford them.

they need 7.5k just to get into a bad mobile home.

the only way a younger person can get a house is to go work on the oil rigs or put a grow op in the basement of their rented house

 

[Bigprairie1]

Re: Canada real estate prices

When I see those young couples buying houses at such high prices on those CA based shows, I almost feel bad for them. The funny thing though is that the shows always seem to mention their hefty down payments as well. I recall going into the houses on the Parade of Homes here in MN and the first thing the realtor would hand to you was a sheet with all their creative financing options. I recall some would allow you to pay whatever you could afford that month and just keep capitalizing whatever amount you didn't pay any given month. Basically name your payment each month.

Kjust...Yeah, this is pretty typical of realtors working to get in the sack with the banks....pretty common for sure. I'm not 100% up on what the format is today in Canada but the basics are that you have to pass a DSR (Debt Service Ratio) test for financing a mortage....and that rule goes back many, many years.
Basically, you are obligated to disclose how much you make for a living (with proof- cheque stubs, etc). Then you have to show all your current debts (visa, car payment, boat payment?, line of credit, etc). Then from there...the bank decides what you are eligible to borrow and probably handle given everything else like phone, food, etc. At that point they will tell you what they will loan you for a mortgage. If you are spending your money on 'everything else' and either under employed and/or heavily debted then the amount they will lend you will not be that high. It might only be $25k for that matter.
So at that point, the only way you afford a house is to have the cash to compensate for the purchase price against what is available as a lent mortgage.
However.....with prices shooting through the stratosphere......the only way to buy is to having a smokin' high wage/salary and household income (both spouses?....100k+). Or have a huge downpayment...($150k?). People who already have a house can 'move around' the market because they use their equity in their existing home for the down payment on their next/new home.
Either way....even as a home owner, I don't like it because it is very hard on a lot of the population who actually are really working to get in on ownership....and it should be easier. I've met some very viable, hard working young people who have to move on because they can't afford to buy here (and contribute in manys!!). Where we live (Victoria) seems to be pretty desireable for a lot of people....but it sure ain't easy for newcomers.
BP

 

[ezmobee]

Re: Canada real estate prices

Thanks for the info guys. Both my wife and I found your replies to be very interesting. So are the salaries much higher? I'm sure they are, but not anywhere near the same percentage higher as the properties. My house: http://i176.photobucket.com/albums/w200/ezmobee/DSCF0004.jpg was only $157k 6-7 years ago when he bought it (new). It shot up to a value of $215k during the bubble and has since settled back down to around $190k-ish. My old house http://i176.photobucket.com/albums/w200/ezmobee/DSCF1006.jpg is probably currently worth like $75k. In Vancouver that would be like 750k!!! Crazy!

My buddy lives down in Maryland in a house very similar to mine. He paid over double what I paid and he isn't even that particularly close to Baltimore. Sure he make more money than me but not double. I have no idea how people do it.

 

[oops!]

Re: Canada real estate prices

minimum wage in bc is 10 bux an hour.....part time is less.
we pay 5 bux for a brick of cheese the size of a cigarette pack. and 4 bux for a gallon of milk.

the average wage for un skilled is about 12 where i live

your current house, in an ok area in my city is an easy 550.

 

[kenmyfam]

Re: Canada real estate prices

Our house if in Toronto = 1.2 million +
3.5 hours west in Belle River = a quarter of the Toronto price and double to triple the lot size.

 

[puddle jumper]

Re: Canada real estate prices

In my opinion up here its the real state agents have talked people into asking outrages prices for the homes that are for sale. If you look at the property tax evaluation most of these home/property,s is way lower than what people are trying to sell them for. With the Oriental people from China,Japan other Asian counties paying full Realtor price the price goes up.

In Vancouver theres 5million dollar homes are being torn down for location with a new (say) 20million dollar house to be built.

What gets me is people flock to the city to make minimum wage and barely survive.

 

[jasoutside]

Re: Canada real estate prices

My bride watches a lot of HGTV (which in turn keeps me busy building/renovating stuff).

Almost every time it's on and I hear them quoting home prices....

I have no idea how people do it.

I say out loud this ^^^^ or something like...

"How in the world can they afford the mortgage on that?"

Or...

"What in the heck do they do for a living to make that kind of money?"

I just don't get it???

 

[puddle jumper]

Re: Canada real estate prices

"How in the world can they afford the mortgage on that?"


They cant thats why mom and dad have to work there buts off on a never ending payment plan on a pile of crap just to say they have a house.

 

[ngt]

Re: Canada real estate prices

"How in the world can they afford the mortgage on that?"


They cant thats why mom and dad have to work there buts off on a never ending payment plan on a pile of crap just to say they have a house.

Thats how it was here (hour north of SF in the Bay Area) a few years ago, and then everything dropped out. people bought $400,000 2br condos that are now worth $180,000. I have a 1300 sqft 3 bedroom 40year old home that cost $296,000. The people that the bank forclosed on, paid $540,000 three years pior. My wife is a stay at home mom, and we squeeze by milking our tax return little by little throughout the year to get by each month, but we make it work. I wouldn't move to a worse place for a bigger house and lower bills. I love it here and bet the folks in BC feel the same way!

 

[NewfieDan]

Re: Canada real estate prices

It's not only Vancouver, Kelowna and Toronto that have ridiculuos prices. I moved out of NE Alberta about a year and half ago. We got about 4 times the price we paid for our place. It was nothing special about 1050sq ft with mostly finished basement and 2 car detached garage in decent neighbourhood. Good sized yard for the kids and the dog.

Up there it's demand for housing that keeps the prices up. Even when the markets tanked in late 2008 there was some slow down in the work but not a complete shut down of all the work. House markets slowed down but were still building.

One of the reasons is the tax base in Alberta. If an oil company is finished construction of the plant the tax rate increases, if they continue to add on, "they never completed the construction" so tax rate stays lower. Because of this ongoing construction there isconastant demand foe new houses. New workers coming in to town need a place for their family to live and the oil giants pay very well even for a basic labour position. Average wage in the town I moved from was well over 100,000/yr.

 

[Fly Rod]

Re: Canada real estate prices

Kjust...Yeah, this is pretty typical of realtors working to get in the sack with the banks....pretty common for sure.

Show me your souce of information of the above. Or is that just your opinion?

It is aganist the law for any bank, loan company, to make deals with Realtors and vise versa.

It is against the law for Realtors to discuss percentages amongest each other, other then what a listing company will pay a Realtor who brings the buyer and that percentage has to be posted in the listing sheet.

City or town assessments are based on what that city needs for operating cost, nothing to do with the assessment of a house for sale even though both buyer and seller believe that it does.

Seller's determine price...... Buyer's determine the value.

We have the same problem here with young buyers as far as affordability, they have a new car, top of the line electronics and 20% to put down on a property that needs 60-100,000 worth of work to make it liveable.

And in Canada they have shortsales and bankruptcies too.

If that banker was blonde and could afford me as a kept man, pay for all my toys, I consider making a deal with her because I would certainly lose my license.

 

[Jeep Man]

Re: Canada real estate prices

EZ, your house in this area would be about $350k. Prices have never really "shot up" in this area. (1 hr west of toronto) Prices have steadily increased and we did not see the massive drop in prices as seen in many areas in the US, primarily due to the banking rules that have been in place for decades. "Creative" financing and sub par mortgages weren't allowed.

 

[puddle jumper]

Re: Canada real estate prices

Thats how it was here (hour north of SF in the Bay Area) a few years ago, and then everything dropped out. people bought $400,000 2br condos that are now worth $180,000. I have a 1300 sqft 3 bedroom 40year old home that cost $296,000. The people that the bank forclosed on, paid $540,000 three years pior. My wife is a stay at home mom, and we squeeze by milking our tax return little by little throughout the year to get by each month, but we make it work. I wouldn't move to a worse place for a bigger house and lower bills. I love it here and bet the folks in BC feel the same way!

So your saying that you are willing to live off of kraft dinner to live in area that you cant relay afford. People in Vancouver and northern Alberta are paying up to $1500 to $2000 for a 1 bedroom apartment and are not making that good of money.Not trying to knock your way of life or you dream but it is one that I don't understand. I live in a place that my kid can go down town and I don't have to worry.I have a good paying job. I fish 10 minuets from my front door all year. I don't have a big house but I can afford it and make it into my castle with extras. I guess you need to expand on what you call a worse place.

 

[Bigprairie1]

Re: Canada real estate prices

Kjust...Yeah, this is pretty typical of realtors working to get in the sack with the banks....pretty common for sure.

Show me your souce of information of the above. Or is that just your opinion?

It is aganist the law for any bank, loan company, to make deals with Realtors and vise versa.

It is against the law for Realtors to discuss percentages amongest each other, other then what a listing company will pay a Realtor who brings the buyer and that percentage has to be posted in the listing sheet.

City or town assessments are based on what that city needs for operating cost, nothing to do with the assessment of a house for sale even though both buyer and seller believe that it does.

Seller's determine price...... Buyer's determine the value.

We have the same problem here with young buyers as far as affordability, they have a new car, top of the line electronics and 20% to put down on a property that needs 60-100,000 worth of work to make it liveable.

And in Canada they have shortsales and bankruptcies too.

If that banker was blonde and could afford me as a kept man, pay for all my toys, I consider making a deal with her because I would certainly lose my license.

Fly Rod....ok, good questions. My response is as follows:
Real Estate Agents tend to be bottom feeders (at least around here....maybe I'll expand on this later). The unfortunate part of the real estate system is that both the 'Buyers agent' and the 'Sellers agent' profit from the houses maximum resale value. This means that it is not ever in the 'buyers agent' interest to ever negotiate the price down considerably, he only loses money if he does so...why would he do that within this system?
IF, the system had the 'buyers agent' fee based on how much he was able to negotiate down from the asking price the end result...which would be true negotiated pricing, would be far, far more in line with the people on average and their incomes and budgets. This is one of the very few sale venues/systems that works this way, its pretty ridiculous....I could go on about this but consider this approach in other business disciplines....ie: company purchasers, etc.
I should have clarified better my statements about the real estate agents and bankers. What I meant is through the brokers who work for several banks. It is their job to get people mortgages...that is their commission lifeblood...and most used to work for, and are hooked into banks. They are the conduit....and they are the ones who are facilitating the deal after the realtors have closed the sale.
Ok, I'll leave off there for the mnute.
All Good
BP