The Canadian Real Estate market........

This guy is too much...

 

Your numbers are off, RE% is anywhere from 4-5% not 7% at least not here in ontario. Also 40 year AM first Ive heard of this in ontario too, 25 at the most. Asking prices, not value are down but what percentage? Dont know. 60% of people in canada have a 40 year AM? Where are you getting these stats from? Everything you posted is BS except that the market is going down, its a better time to buy than last year but where I am nothing is sitting empty or going dirt cheap. Plus the US is not the same as Canada, Ive heard many arguements as to why canada wont be as bad off as the US this time around. We have an ex-boxer owner in the boxer section that procalimed to have his finger on the pulse (for the boxer market) and as soon as he sold, he preached dooms day to the rest of us. He made an arse of himself kinda like you are here. Whether you're right or not, you look like a d i c k weed for being so negative and gloating about it.

 

Folks don't mind KDS. We all know that he just loves to dump on anything north of the 49th parallel.

...carry on!

 

people can go as high as 35% in Ontario now...fairly new....and that's the extent of my real estate knowledge so can't comment on anything else and the only reason I know this is because I was watching some house buyer show on hgtv and they were suggesting it to someone looking for a house..

 

As Newman pointed out, you won't make any friends gloating about the losses of others. You also did not properly quote your source. Calgary SFR home values are not down 10%. One of your sources published, "Right now, resales in Canada are off 18%, but prices are down only 2-3% on average, and as much as 10% in certain markets, like Edmonton."

The standard charge is 7% for the first $100K and 3% for every additional $100K. Selling a $500K house would end up with around 3.8% in realtors fees.

A home will sell for list price if you price it properly.

Again, another misquote. Your source cited the following..."About 60 per cent of first-time buyers are opting for a 40-year mortgage," says Craig Alexander, deputy chief economist at TD Bank.

The "first time buyer" part is very significant and there is no mention of the <5% down part. In fact, your souce stated loans with 40 yr ams must have 5% or more down.

+1

 

Why isn't Toronto on that graph?

The Toronto market would be a graph line pointing up, and in no sign of coming down. Although house sales have slowed down in the GTA, but prices are still rising.

 

I do not see Toronto or Vancouver on the chart.

 

Vancouver would be interesting. Has "Condomania" shown any sign of subsiding? Canadian waterfront liesure properties seem to be holding up much better than the US???

 

Dude don't worry about the little picture, RE is all about the big picture ie. long term investment unless you happen to catch the wave as it comes to shore then there's loads of money to be made. No one has ever lost with a long term land / real estate investment unless it's discovered later to be a previous grave site or a nuclear radio-active site, and even then there are many potential gains to be had in the right hands.
What I would like to see is a show of hands on THIS site as to how many have been successful in RE verses how many have fallen on their faces.

 

Kds according to your graph you could have bought your house in 2002 pretty cheap compared to 2008 prices (6 years you said). Prices skyrocketed & your 1/3 rent you are paying at todays prices is still more than the mortgage you would have been paying if you had bought in 2002 & the price drop so far is still higher than the price index in 2002.
&&& if you were smart enough to get into a manageable mortgage you could have paid the sucker off in 6 years.

When prices go back up (and they will if you look at past history) your rent will go up & your savings will not look so great.

 

Marioz beat me to it. I was just thinking about the same thing after I posted the Toronto and Vancouver comment.

Kds, you should have bought 6 years ago instead of rented. Kds, the rent you are paying goes to the owner who has real asset saved in the form of a concrete condo. You are helping him pay off his investment. Get it?

Kds, if you find RE prices dropping, then use this opportunity to your advantage. From my own experience in Vancouver, RE cycles generally run 7 to 10 years long. Save up cash as RE prices cycle down and when you think prices are bottoming, BUY, and hold.

 

This guy doesn't even own a house? wow... No wonder he is bitter and always negative.

 

I'm in Hardwood floors, here's how Real Estate works, it's actually a good pulse of what is happening. When the economy and housing market is good I'm booked solid in residential homes. That means renovations and new homes adding hardwood or sanding and refinishing. While I'm there painters and plumbers are working, tile guys are laying floor BUT I am NOT working in rental apartment buildings. When the housing market is booming rental apartments lie empty and property managers don't spend money fixing empty apartments. That has been the case for several years now. I have been doing very few rental apartments. When the housing market takes a dive I am no longer working in Residential renovations or new homes, now the tide changes and it's ALL apartments. All those trades shift focus to apartment rental units. I can tell you I am booked months in advance in the residential houses...there is no slowing of the residential market. Of course there are always pockets that are more desireable then others....houses in Jane and Finch are not selling and more are being put on the market every day. But that is a different story.

 

Interesting perspective.

One thing though; I'm confused about the "When the housing market is booming rental apartments lie empty" part... I can see the landlords having no interest in renovating units that fill themselves... do you just mean you aren't doing doing rental jobs?

KDS - I meant nothing personal about my post in that other thread and apologize if it came off that way, but stand by my RE assessment...

 

Yes but No When the housing market is booming and interest rates are low (as they are now) nobody is renting apartments, everyone is buying houses. Many of the Property management companies I do work for have several empty units on each floor that they are unable to rent. These apartments are in good areas too not the skids. People just aren't willing to spend $900+ a month for a 1 bedroom apartment when for a few more dollars they can own a whole house or even a condo with all the amenities. Houses are still selling they just aren't selling with multiple offers $20-50K over asking price!

 

Rented in 2002 and kept renting until now? Boy, somebody missed the real estate boat. The equity that many have gained in those 6 years are astronomical....I wouldn't be "grinning from f-in ear to ear" if I was left on the side of the equity upswing. Even with the market correction that we see now in Calgary, most of those who bought in 2002 are still way ahead of the game. The people buying when prices were at its peak are not as fortunate right now, but long term trends show that they too will be ahead on their equity. There's no equity in leasing/renting.

I know I'm glad I stopped renting and bought in 2002.

 

If you purchased a condo for $300K in 2002 in Calgary. It would be worth approx $600k today. Assuming you had you had a mortgage with zero down with a 25 yr ammortzation at 5% you would owe around $260K on it now. Your payment on the mortage woud be around $1700 a month which is most likely only $500 a month more than your rent. You would be up $340K in 6 years building approx $4700 a month in equity. The $500 a month you would have saved on rent over that term is worth $36,000 over 6 years. Put down "all that money you saved renting" $36K on a $600K place now you would have a $3,300 montly mortgage payment. I would not be grinning from ear to ear, I would be crying!

 

We here in Eastern Canada are doing just fine...

I built a house 7 years ago, and have it in the market right now for more than double the construction price. The increase in value enabled me to purchase a waterfront home a bit further away from downtown Montreal (i.e. 43 km instead of 28 km - 10 minutes more commuting time). I don't think I could have achieved the same result by renting...

Of course, Quebec isn't the same market as Alberta, which right now seems to be driven by greedy and moneyhungry speculators. Everybody wants to "flip that house" and make a huge profit by purchasing an old shack, adding two gallons of paint then selling it for a huge profit (screwing the new purchaser in the process). Very much following the US-mould (If you can believe all these "reality house flipping TV shows", of course....)

 

Jay, you are absolutely right. That is the common trend these days.

What amazes me the most about Toronto is that there are no more rental aparments being built anymore! If you look back at the 70's and 80's, there were rental apartments being built on every corner. Now, only condos are being built. Why don't they build new rental apartments anymore? How can new families/immigrant families who can't afford to buy a home, live in the city?

Jay, many people can't afford a $1200 month mortgage, whereas you could rent an apartment for $750. The only other option is goverment housing.

 

In Montreal it's simply because the Government ("Rental Board") has become so "protective" of the lessees (e.g. as far as rental increases and evictions of non-paying lessees are concerned) that rental units simply aren't a financially attractive investment anymore. I guess the same holds true for cities in all other Provinces....

 

Yes, and the fact that the land (property) that the building sits on is worth more than the value of the building itself.

I believe renting apartments has become unprofitable, the cons far outweigh the pros.

 

Well I actually have a reason to be grinning from ear to ear but my story is a little different then KDSs'. Bought first condo in 2002 when I was 22 yrs old, had a friend move in spare room and pay me rent. Bought another condo in 2003 to rent out (It was never empty, same tenants for 4.5 years), sold both condos in March 2007(Calgary's Peak) and bought a nice house. Sold this house in April 2008 (Had the same roommate since 2002) and still made money on it after all fees.

There is always a good buy in the real estate market IMO, you just can't fall in love with a place and overpay. Just last week I bought a 1 bedroom condo that won't be built till 2010 but I have a good feeling it'll work out b/c there won't be another building like it in Calgary. (Calgary Waterfront)

Bernardo66- I got a good chuckle out of your comment

 

I suspect that he is saving to purchase a convenience store named "Alcohol, Tobacco and Firearms" - just look at the hint in his signature

 

Kieth does make some good points. I think overall though, the Canadian RE market slightly lags what goes on in the States. Depending on the data you look at and your gut feelings, the bottom for Canadian RE is far away. That being said, when you start to see prices that borderline rediculous (ie. foreclosures, etc.) it may be time to pull the trigger, provided your time horizon is a good length just in case your timing is off.

I bought a month ago here in Naples, FL. Waterfront condo, 40% off the previous high and I'll be happy in this place for at least 5 years. Even in this market and even with the skidish banks, my mortgage appraisal came back higher than what I paid for the place. I also gutted the condo and had all the renovations done for dirt cheap as all the contractors where hungry for work.

As for the Canadian RE market, I'd wait at least another year to pull the trigger, but certainly keep a keen eye on it.

Just my $.02.