alertmeipp

My guess is the problem is mostly in Vancouver and Toronto, not really Canada wide. The global affluent go after these highly livable cities. You hear the same complaints when you talk to someone from London or Sydney. I presume even before the immigrants arrived in scale a couple of decades ago, the same trend was taking place, albeit not as visible. People from other cities moved in, neighborhoods gradually gentrified, local low-income households moved out. So this broad trend has been in place for many years and will surely continue. Only the characters have changed and the pace has accelerated. I agree if Canada changes its immigration policy, it will likely slow the Vancouver market a bit. In addition, the government could force the foreigners to buy new apartments rather than existing properties, which is the rule in Australia. Trend continues but does not mean it will not swing to extreme as the trend continues. Historical low rate won't last long and math tells you, normalized rate will literally push many home owners into distressed area. Hard to see rate to go up any time soon tho... just an example

just like many bubbles (I don't know if this one is but it sure looks like one) ... it will be hard to see how it stops until it does. as this continue, pretty much all locals will need to move to condos, while foreign ppl (mainly from China) taking over all detached. does this look like sustainable to you? most other major cities in around the globe do have some rules in places to stop the inflow while Canada has done nothing so far. That makes the situation way worse as Canada is becoming the easiest place to move money into.

I don't actually see why this is scummy (and I tend to have very strong opinions about real estate). As long as the agent wasn't representing the original seller, I don't see the problem. Like, once the deal is signed, the original seller has got what they want, and the buyer has all the risk. Would it still be scummy if the market dropped, and the agent sold the assignment for a $200,000 loss rather than a $200,000 gain? Is it scummy if a market maker in the stock market buys shares for you for $10, and then sells them 30 seconds later for $10.10? I don't see any real difference. I think that this issue is simply media-created outrage over something that's actually ethical (and kind of stupid for the agent to do.) The people want to blame someone for the ridiculous Vancouver housing prices, so would prefer to blame agents rather than the stupid people buying houses that they can't actually afford, the Bank of Canada trying to keep the bubble economy alive by pumping debt into the system through low interest rates, and CMHC lubricating the system by pushing a healthy dose of moral hazard onto the banks. I think some are thinking that's more trading with insider info.

Canada House up 10% year over year. If u take out Van and Toronto, only 3.4%. Rate cut and lowering loonie will almost guarantee more upward movement. But then what.... rate is not far away from zero. But loonie going down means more Chinese buyers.

Is prem adding in this level.

SD - u are missing out a lot of expenses.

Not idea, but probably afraid it will go up further.

LOL, why buy stocks when you are almost guaranteed large returns on a pre-construction homes? all you need to do is line-up on the first day when the sales office opens!! The Aurora sites all start in the $700k, there's 3 new ones. I knew of the people buying pre-construction but these people buying 3-4 year old homes are putting $10's of thousands and one home had about $100k put in after the people bought. We're looking to go back to Newmarket in the old downtown area. Century homes with lots of tree lined streets and people take care of their property. We miss it, a lot. We're tempted to list our place since all the homes here are selling for prices we thing are insane and selling quickly. But right now, we're just not ready. There are many home owners I know of thinking of cashing in. But then the hard question comes, where to go? I know a family was thinking to move to Montreal as their son going to McGill there (very cheap tuition there btw), they sold their house early last year to get ready. Things change and they end up need to pay 15%+ more to get back a similar house in a not as good neighborhood. Pure madness, but I wish I have get in when I moved here few years ago.

We're the next best option for those moving out of the city. When the developer opened about 7 years ago, most were from Woodbridge, Mississauga, Richmond Hill and Newmarket. Five minutes to the 400, 20 minutes to Barrie, 10 minutes to Newmarket and we have a GO station. I'm not sure the demographics of the resale buyers. So far the house across the street was bought by an Asian couple with no kids. They look to be our age (late 30's), both drive Mercedes and they spent a month renovating before they moved in. They renovated a new house, yes. Same with our friends house up the street, same scenario but his family has young kids. The demographic for Bradford was predominantly white with a fairly large Portuguese population and Italian when the new homes started. The last couple of years Bradford looks more like a typical GTA town, more diverse. Those that are leaving Bradford from our neighbourhood seem to be cashing in and moving further North. Innisfil, Barrie etc. We bought in 2011 for $349 and as of last January when new phases were released, our model is up to $505. Our next door neighbour who just sold for $629 paid $369 in 2011. Yes, in Bradford, Ontario. :o In a town that had 18000 before the developers showed up will have added something like 3000 homes in 8 years. Our developer is closing in 3 years and will have built 1200 homes in 10 years. Edited to actually answer your question ;D They all seem like they've just moved from elsewhere in the GTA. Some neighbours I spoke to that moved from Woodbridge etc have done this before. Buy a new home before the ground has broken, live there a couple of years rinse, repeat a bit further North. I'm pretty sure the diversity in our town now is just people moving from the GTA rather than completely new Canadians or investors. I know a handful of acquitances that have bought in Bradford with the sole intention of buying pre-construction, adding cosmetic touches only to flip it a few months to a year later. They think it's guaranteed money with zero risk and so far they've been spot on. Same here. More than a few actually, more than pocket money. Some of those are retired ppl with deep pocket, some are working class ppl. I am sure when I get in, it will burst.

Yes, if you believe CDN will go lower, buying FTP is the way to go. ;D The exchange rate saved them lots of headache. We should open another thread to talk about idea that will benefit from lower CDN.

The strategy works when things keep going up. It's a confidence game. Once ppl realize house prices can drop. Unsold houses will jump. Speculators stuck with houses and they can't afford P+I or just I. Will be ugly.

We're the next best option for those moving out of the city. When the developer opened about 7 years ago, most were from Woodbridge, Mississauga, Richmond Hill and Newmarket. Five minutes to the 400, 20 minutes to Barrie, 10 minutes to Newmarket and we have a GO station. I'm not sure the demographics of the resale buyers. So far the house across the street was bought by an Asian couple with no kids. They look to be our age (late 30's), both drive Mercedes and they spent a month renovating before they moved in. They renovated a new house, yes. Same with our friends house up the street, same scenario but his family has young kids. The demographic for Bradford was predominantly white with a fairly large Portuguese population and Italian when the new homes started. The last couple of years Bradford looks more like a typical GTA town, more diverse. Those that are leaving Bradford from our neighbourhood seem to be cashing in and moving further North. Innisfil, Barrie etc. We bought in 2011 for $349 and as of last January when new phases were released, our model is up to $505. Our next door neighbour who just sold for $629 paid $369 in 2011. Yes, in Bradford, Ontario. :o In a town that had 18000 before the developers showed up will have added something like 3000 homes in 8 years. Our developer is closing in 3 years and will have built 1200 homes in 10 years. Edited to actually answer your question ;D They all seem like they've just moved from elsewhere in the GTA. Some neighbours I spoke to that moved from Woodbridge etc have done this before. Buy a new home before the ground has broken, live there a couple of years rinse, repeat a bit further North. I'm pretty sure the diversity in our town now is just people moving from the GTA rather than completely new Canadians or investors. Interesting, thanks. I heard a new site near Aurora had 100s of ppl lining up. :) And some buy more than 1.

You mean ever? Money will just stay free forever and that's the solution. Case closed. Is that something you want to bet on? Maybe houses will also keep appreciating at multiples of wage growth for a decade or two also, the difference can just be made up of even more debt... Where do you see the CAD vs the USD in 2-3 years if the Fed methodically raises during that time? For sure, not forever. :) CDN can go all the way to 60 cents. And the houses will look even cheaper for the foreigners. Canada gov really in a difficult position, they really can't do much, burst it and we will lots of job losses. The real estate industry probably hire tons of ppl directly and indirectly....

Yes, it will be ugly. Many of the high end homes were purchased by the riches.. so those might be ok. But many of the smaller houses are owned by normal families with big mortgages. But I am in the camp that BoC won't raise rate even if US does. They just can't.

Wow, I didn't really the madness goes all the way up there. Any idea who are those buyers (local or from oversea)?

Good for you on relatively cheap rent though. Prices sound like they are firmly in greater fool territory. I'm astonished at how low some of these quoted rental yields are. Your hypothetical landlord's situation were he to buy it today: $2k * 12 / $750k = 3.2%. By contrast, I own a rental at an 11% yield in the U.S. Nothing special, I bet there's millions of them in the U.S. available at similar prices. Yes, and we have not talked about taxes on rental income, property taxes and maintenance expenses. If one assumes house price will JUST appreciate the same pace as inflation, it makes no sense to buy now. But somehow in Canada, there is a thinking that detached houses will be in shortage, so buy now or never!

I am renting in Toronto suburb, $2000 per month, it will cost me about $750,000 to buy the place. Rent is pretty reasonable. But the catch is the same house can be have to 630k last year. So, yes up close to 20% in a year! :-\

This post has some stuff about how some lenders like Vancity are offering all kinds of crazy products (ie. they give you half of your downpayment at 0.01% interest, etc): http://www.greaterfool.ca/2015/06/14/the-money-changers/ Also: http://business.financialpost.com/personal-finance/mortgages-real-estate/a-third-of-canadians-would-struggle-if-mortgage-rate-grew-by-only-1-survey-finds "A third of Canadians would struggle if mortgage rate grew by only 1%, survey finds" I am debating whether I should get in.. (Toronto) I guess not?!!?

Toronto up like 15 percent year over year. Sky is the limit.

If u believe the rate will go up eventually back to 5% which makes the mortgage rate 6 or 7 percent , house price will come down. Yes, the cash buyers won't need to sell. But they won't be significant driver there.

No asset goes up at 6-10 times the rate of inflation. Sure it can, just for some reasonable or unreasonable amount of time. Many say it will go up forever, and soft landing just mean it go up slowly to let income catch up. None of the people I talk to expect house to go down. You have to live in Vancouver and Toronto to believe the atmosphere here.

i would like in some area, it's more like up 15% to 20% YoY. And no sign of slowing down.

I wouldn't mind my cash settlement.

Thanks all for the input. Many of the good points mentioned, the phone about using mobile app as a channel is so true. I work in IT, and have some down cycle (work less busy) for next few months, thinking to get a site or app going. Was thinking to do something stock investing related, but seems lots of brokers and media are already in the place. kfh227 - how do u manage to get those side jobs? using site like elance?

as mentioned in the subject, this is completely OT. I am just wondering if anyone here actually try to develop and market a mobile app... (not for fun, but to make money).. If you did, how did it go, etc...