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Mac Guru
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Out of curiosity, I looked at the pricing of homes within Toronto and GTA's outskirts, and haven't found one yet under $450,000 for a standard-sized home. Am I missing something.. is that the minimum price which only climbs thereafter? Then I thought I'd look at condos, as they may be less.. less if you consider $250,000+ "less," or any more affordable.

I find it ridiculous that you need to have a $150,000+ income per year to afford "to own." I understand the idea behind market value, etc., but that really doesn't make the insane prices any more justified, no?

I'm not interested in buying presently, but that could change in the next 5 years... or, you, never, if I have to wait until I make half a million a year annual income. :rolleyes:
 

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Here in Calgary I have a home that is worth $15,000 sitting on a lot that is close to half a mil. Most of the homes that sell around here are torn down and newer mansions built.
 

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Here's a hint: it's not the materials used to make the house so much as it's the land it's sitting on and its proximity to a comprehensive range of services and infrastructure. At least, that's the logic behind city prices. Elsewhere, in rural Canada, there are a host of different reasons.

{And to toss a bone to MacDoc - it's also the result of developer and "flipper" speculation. But I think that the majority of the explanation is what I first offered up).

In any case, if you are looking to buy in a booming major Canadian city, start saving now and expect to be paying down whatever you end up getting for a long, long time.
 

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If you're handy there are some fixer up homes in the 200,000 - 250,000 range. The problem is folks want to move into the perfect home. The less expensive places are snapped up, usually by immigrants who aren't adverse to a little sweat and labour. Todays standards of home ownership are a great deal higher than previous generations... hence higher costs.

As gas price escalates so too will property within the city. I'm about to put an old, fixer upper on the market and buy a condo. I've been watching the market carefully.
 

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If you like big cities, you're going to have to pay for it. Toronto is, long-term, heading for prices similar to other major international centres. Maybe commute from Guelph? :)
 

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Many people are quick to think they are making big money on their homes due to the jump in real estate prices in the past few years.

I stopped to consider my own situation and when you weigh it all up, there is not a lot of profit left. For example, we paid $100,000 for our home 19 years ago.

Six years back, we did major renovations which included, new shingles, soffits, gutters, entrance and screen doors, insulation in the attic, two new bathrooms with vanities and fixtures, new sidewalks, new fence, total interior paint, new kitchen counters and plumbing with all new appliances, new crown moldings, new maple hardwood floors in the upper level, new carpeting in the lower level, electrical wiring changed from aluminum to copper, new maple railings and spindles, a new energy efficient furnace, a new 55 gallon hot water heater and a new deck on the rear of the house. Total cost, $80,000.

So now we have $180,000 invested in the home, but wait, our 25 year mortgage payments were a grand a month for 300 months or $300,000. That's $200,000 more than we paid for the house, so we now have $380,000 invested in the home. The most recent appraisal last fall came in at $375,000.

Seems to me we're out about $5,000, but if you throw in the other repairs over the years for small things that go wrong every year, we're likely out closer to $10,000.

Yeah, we're making a killing on this place.
 

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First, most home renovations do not return close to 100% of their cost. A large piece is just for personal enjoyment. Also, investments that reduced your bills had some offsetting cash flow benefits.

Second, depreciation of physical assets is a factor. You use up various aspects of the home and the renovations.

Third, did you include your whole mortgage payment, or just the payment off principal? Along those lines, did you invest $100k or a smaller amount as downpayment? You may be double counting (ie. interest on the amount of money you borrowed is not an investment).

Fourth, home ownership is not necessarily a great investment. With certain timing, such as people that bought in the mid-to-late 1990s, it can be hugely profitable. Longer-term, it's questionable. I think in calculations I did some years back, they become most questionable after you "own" about 40% of the asset. Or maybe it was 40% of the value when purchased.

Still, it does have its non-financial benefits (more control over living space) and is a nice way to diversify your investments.
 

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Yeah, we're making a killing on this place.
Beats renting... which is what I've been doing for the past 25 years.

However, I just bought my first house last month (deal closes on June 1). So now I can start shoveling money into my *own* hole.

Cheers
 

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Beats renting... which is what I've been doing for the past 25 years.

However, I just bought my first house last month (deal closes on June 1). So now I can start shoveling money into my *own* hole.

Cheers
Not necessarily and congratulations. It does feel better to own, in my opinion.

I hope to be digging my own hole in the near future.
 

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Owning property is good, owning the house that sits on it is bad.... Just need to figure out how to remedy that.... :confused:

Lease a pre-built house from the dealership and turn it in every few years for a newer model. ;)
 

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Canadian By Choice
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Don, I am in a similar situation as you. What I did, however, is put in $1200 a month on a weekly basis and we brought our 25 year mortgage down to 14 years. I have just over 4 more years left.

What is driving up the price of our home is the land. The home is about 3300 square feet, so it is too big to just knock down. However, our latest appraisal was $281,000 because the land is worth $120,000 according to the city.

Thus, I think the situation is the same elsewhere -- the price of the land/lot is what is driving up the prices of homes, along with the availability of these spots in places where people want to live.
 

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Indigent Academic
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There is a reason why the real estate creedo "Location, location, location!" exists. It applies at the macro and the micro level. Toronto is expensive because lots of people want to live there. Availablity of employment is a factor, so is the fact that GTO is something of a cultural hub. Not my cup of tea but that's another story.

Best real estate deals in the country right now (as in 3 bedroom, 5 years old @$42,000, fixer uppers that are not beyond the pale I have seen for as low as $22,000) are to be had down east if you can take an income with you, ie. retired, independently wealthy, etc. This is an artifact of the (non)employment situation. Easterners are going west for work, and in the free market tradition someone's gain is someone else's loss. If you cannot take an income with you, you will find it as tough as the native easterners.
 

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Canadian By Choice
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rgray, sad but all too true. Many Newfoundlanders and Labradorians are moving to Alberta and are experiencing "sticker shock" when they see the cost of housing. Granted, the salaries are vastly higher, and there are jobs there, but one does have to live somewhere.
 

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There was a good article I was trying to chase down about how London is losing it's charm.- especially Chelsea.

Five London pubs close a week
By Elizabeth Hopkirk, Evening Standard 14.02.07
Add your view

The Hog in the Pound has been sold to developers

The Red Lion in Soho has already shut

Last orders has been called on The Phene Arms in Phene street

The Intrepid Fox in Wardour Street is no more

London pubs are closing at a rate of almost five a week, campaigners warn today.
Research by the Campaign for Real Ale shows that the capital lost 230 last year - a 53 per cent increase in the rate of closures compared with the year before.
The group says the loss of historic watering holes is damaging the character of high streets across the capital.
http://www.thisislondon.co.uk/resta...ails/Five+London+pubs+close+a+week/article.do

The interesting aspect is that pubs are not closing in areas of London that are part of landed estates ( historical holding by lords ) where there are no freeholds.

The estate leases the property as I feel all municipalities should so value is based on structure not land.

As the character of the lease estate remains strong the value of the rents in that area will go up as it becomes a more desirable location and also current leasees can put $$ into structure not land costs.

I met two brothers - one in his 20s one a bit older...they thought nothing of the fact that they had a mortgage on their flat of 550,000 POUNDS!!!!
 

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Here's to hoping I can find a decent place under 500k in Burnaby... or New Westminster... or Coquitlam...
 

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Here's to hoping I can find a decent place under 500k in Burnaby... or New Westminster... or Coquitlam...
Or Yahk... ;)
 

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Short memories.....1982, 1992 :eek:

what goes up...including economies........

•••••

One action being taken

This Affordable Housing Would Stay Affordable

By CAITLIN KELLY
Published: April 15, 2007
FINDING affordable housing in Westchester — the nation’s seventh-most expensive county, according to census data — is never easy. Even long-term residents of properties built with county, state or federal subsidies inevitably face steeper housing costs when their homes eventually revert to market rates.

In the Region
Long Island, Westchester, Connecticut and New Jersey
Go to Complete Coverage »
Some 240 properties have already lost their price caps this year, and 4,000 more in 11 communities will soon follow suit.

Last month, County Executive Andrew J. Spano proposed the creation of a land trust whose goal would be to preserve affordable housing in perpetuity. A coalition of 15 developers, housing advocates, bankers, lenders and county officials served as advisers to create the trust, which is expected to be operating by July. The trust will set up a bank of land, donated by towns, villages or cities; developers will be able to build affordable housing for rent or sale on parcels from that bank, which will remain the property of the trust, rented out in 99-year leases.

“There is not enough, and a decreasing amount, of subsidized housing in Yonkers,” said Jon Shenk, executive director of the Cluster Housing Resource Center, a nonprofit housing advocacy group. “It’s a problem.” Residents of subsidized housing who soon face higher market rates fear losing their homes, he said.

Tanya Mahboob, a tenant at the Whitney Young apartment complex in Yonkers since 1999, has heard that her rent will probably rise $300 from the $1,300 a month (30 percent of her salary) she now pays for the affordable-housing three-bedroom, two-bathroom apartment she shares with her three sons. None of her sons, ages 18, 19 and 26, have full-time jobs, but all are now looking for work to help her financially, she said. “It would be scary for me if they weren’t here to help,” she said. “I’d have to look at moving or take on a second job.” Ms. Mahboob, who works as a project manager for Starwood Hotels, called the rent increase “a big change a lot of people weren’t prepared for.”
The social impact of high land costs is devastating.

Moving farther out just increases sprawl, wastes energy and farmland. Sad spirals and look at the vested interests that benefit. :mad:

In my view municipalities need control of the land and the market based on structure value.
 

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These projects look more to me like a subsidy for businesses to keep low-cost labour nearby.
 
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