What's a millennial to do in this housing market? - Page 4
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Thread: What's a millennial to do in this housing market?

  1. #31
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    I'm curious why everyone stays in Toronto? I can understand folks with specialized jobs or family obligations but this can't be the majority...

    You could move a couple hours away to Ottawa where salaries are comparable except you can buy a house and a rental property for less than one house in the GTA, significantly less downside risk in RE, less traffic, better hockey team etc.


  2. #32
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    The problem is Job availability. Toronto does have more job options. With the fall of Nortel and RIM, Ottawa job options has shrunk in scope to mainly public sector work if your a STEM worker.

  3. #33
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    ^Agreed, I'm sure Toronto has the largest number of opportunities for most fields. But my personal experience has been no issues finding (tech) jobs in Ottawa and a very reasonable cost of living and great quality of life.

    Here are some job searches in Ottawa...the vast majority being private sector jobs.
    monster.ca - 'IT' - 1000+ jobs, 'software' - 948 jobs, 'hardware' - 49 jobs, 'mobile' - 251 jobs
    glassdoor.com - 'IT' - 2165 jobs, 'software' - 1430 jobs, 'hardware' - 331 jobs, 'mobile' - 469 jobs

    For reference - glassdoor results for Toronto:
    'IT' - 12945 jobs, 'software' - 7064, 'hardware' - 1388 jobs, 'mobile' - 2951 jobs

    So Toronto has about 4-6x as many tech jobs as Ottawa, but about 5x the population (i.e. more people applying for these jobs).

    I suspect that as the GTA becomes more and more unafordable either talent (particularly millennials) will leave or salaries will have to adjust.
    Last edited by protomok; 2017-02-26 at 03:49 PM.

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  5. #34
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    I just joined this forum thinking the exact same thing as the OP. We are at about 150k+ combined salary, have saved enough for more than 20% down payment, and if need be, can get a bit of help from the bank of mom and dad.

    I'm 29 living with my gf in a condo, haven't proposed yet, but plan to within the next few months.
    I've been sitting on the fence, just watching real estate prices inflate year over year and people kept telling me about this bubble that's inevitably going to burst and just wait.
    Just in the past 3 years alone, prices haven't changed dramatically. It would have made so much sense, in hindsight, to leverage myself up even when I was making less money and had less savings, to get anything and ride it out to make massive capital appreciation that my salary wouldn't even come close to providing me in the same time frame.

    Now my to-be in-laws are telling me, don't wait any longer cause I've already lost out so much and that Toronto isn't the type of city that will ever depreciate.
    My personal thinking is that there might be a slowdown or minor market correction, but the prices won't ever drop/crash since the government needs to facilitate that change slowly whether it's with interest rate hikes/mortgage tightening rules/foreign buyers tax etc.

    From reading these posts, it sounds fairly unanimous that we should just sit here and wait until that correction/crash comes. Unlike OP, we've already been living together for nearly 3 years in her condo. If we bought a new place, that condo would then become a rental unit to ideally offset her mortgage. I understand that the fundamental economics to support these prices aren't there, but I think that holds more true if you view Canada as a closed economy. There are so many foreign buyers that have tons of money to drop on places that they view are still relatively cheap compared to what they could buy in their home country. Say the BoC does raise interest rates, buyers slow down, home owners with mortgages get pushed beyond their means, foreclosures start happening and the bubble burst we've all been waiting for happens. The people that get hurt the most by this are those millennials that bought into this crazy market with mortgages up to their necks. The foreign buyers now see Canada as EVEN cheaper and continue to flood the market which will somewhat sustain housing prices. After what Vancouver did, now everyone from China is flowing over to Toronto. Keep in mind how many wealthy buyers there are from China where interest rates/mortgages don't affect their buying power at all. Sure there are stats saying it's not actually foreign buyers, as they only represent x% of sales volume, but what that doesn't show is the number of properties bought using a proxy like a local but still using foreign money.

    I really regret not entering the market several years ago as the sound advice given to me then is exactly the same as what's being suggested now...to rent and wait out the crash. Just how much longer should we wait...what if waiting ends up pricing me out of the market...from being able to afford a detached home in a reasonable location a few years ago, and now being downgraded to townhome in a similar location now. What's next, wait 3 years and find myself paying the same to get into a condo?

  6. #35
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    Here is the thing: you can't predict the future with any degree of certainty. It's a game of probabilities. There are several scenarios which may or may not materialize, each impacting Toronto housing market differently. Some of the factors:

    - Government changing rules (e.g. BC style foreigner tax).
    - Banks imposing additional mortgage requirements to cut risks.
    - Inflation going up, pushing interest rates up.
    - Inflation going down, pushing interest rates down.
    - Oil price going up, boosting incomes.
    - Oil price going down, cutting incomes.
    - NAFTA falling apart, leading to job losses.
    - US economy booming, leading to job gains.
    - China imposing further capital controls.
    - Increase in construction
    - Speculative stream ending based on recent forecasts from industry experts and the banks.
    - Impact from increases in immigration under the Trudeau government.
    - Things I haven't thought of.

    You should really assign a probability and consequence to each of the above events and look at the resulting event tree. Thats a lot of guessing meaning that the outcome is highly uncertain.

    Having said this, the risk of the downside is higher than the other way around. You can see that by simply counting the "for" and "against" and looking at the scope for the downside vs upside in interest rates.

    In the end of the day decision on buying a home should be primarily based on living requirements rather than investment considerations. If you plan to stay long term (>10 years), short term price movements will be less important. And the downside can be reduced by a prudent selection of location.
    Last edited by mordko; 2017-02-27 at 03:07 PM.

  7. #36
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    Quote Originally Posted by stryder1587 View Post
    I just joined this forum thinking the exact same thing as the OP. We are at about 150k+ combined salary, have saved enough for more than 20% down payment, and if need be, can get a bit of help from the bank of mom and dad.

    I'm 29 living with my gf in a condo, haven't proposed yet, but plan to within the next few months.
    I've been sitting on the fence, just watching real estate prices inflate year over year and people kept telling me about this bubble that's inevitably going to burst and just wait.
    Just in the past 3 years alone, prices haven't changed dramatically. It would have made so much sense, in hindsight, to leverage myself up even when I was making less money and had less savings, to get anything and ride it out to make massive capital appreciation that my salary wouldn't even come close to providing me in the same time frame.

    Now my to-be in-laws are telling me, don't wait any longer cause I've already lost out so much and that Toronto isn't the type of city that will ever depreciate.
    My personal thinking is that there might be a slowdown or minor market correction, but the prices won't ever drop/crash since the government needs to facilitate that change slowly whether it's with interest rate hikes/mortgage tightening rules/foreign buyers tax etc.

    From reading these posts, it sounds fairly unanimous that we should just sit here and wait until that correction/crash comes. Unlike OP, we've already been living together for nearly 3 years in her condo. If we bought a new place, that condo would then become a rental unit to ideally offset her mortgage. I understand that the fundamental economics to support these prices aren't there, but I think that holds more true if you view Canada as a closed economy. There are so many foreign buyers that have tons of money to drop on places that they view are still relatively cheap compared to what they could buy in their home country. Say the BoC does raise interest rates, buyers slow down, home owners with mortgages get pushed beyond their means, foreclosures start happening and the bubble burst we've all been waiting for happens. The people that get hurt the most by this are those millennials that bought into this crazy market with mortgages up to their necks. The foreign buyers now see Canada as EVEN cheaper and continue to flood the market which will somewhat sustain housing prices. After what Vancouver did, now everyone from China is flowing over to Toronto. Keep in mind how many wealthy buyers there are from China where interest rates/mortgages don't affect their buying power at all. Sure there are stats saying it's not actually foreign buyers, as they only represent x% of sales volume, but what that doesn't show is the number of properties bought using a proxy like a local but still using foreign money.

    I really regret not entering the market several years ago as the sound advice given to me then is exactly the same as what's being suggested now...to rent and wait out the crash. Just how much longer should we wait...what if waiting ends up pricing me out of the market...from being able to afford a detached home in a reasonable location a few years ago, and now being downgraded to townhome in a similar location now. What's next, wait 3 years and find myself paying the same to get into a condo?
    Alot of people have regrets, even existing home owners like myself. Though the wife bought it when we were dating many years ago, I was eyeing properties in undervalued areas (Scarborough) for along time. I had no debt, making 70+ K for the 5+years. But didn't pull the trigger due to being risk adverse, having kids, etc. You also have to consider that you making more money now with your spouse is also because of the inflationary environment. I have friends in higher finance pulling in about 200K but even can't look to buy. That's because the very thing that has increased the income and job situation in Toronto is also part of the global force that has led to the skyrocketing home prices here.

    Also, your gf wife-to be has a condo. There are now bidding wars for condos, so also consider yourself more fortunate than others. It also has undoubtedly increased in value. If you do plan to rent it out, rents have also increased. Either way, this extreme credit fueled inflation to get us out of the crash of 08-09 has actually resulted in huge market distortions and a loss of purchasing power when it comes to housing here. The risk takers were rewarded (as designed in a low interest rate, easy credit situation). I personally would suggest you look for something that you think you would be comfortable raising kids in. There are still cheaper places mainly in the east GTA. Even Scarborough. But you'd definitely have to also consider housing types that isn't right away 'turn key' or typically desirable home.

  8. #37
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    My suggestion: for investment, hold on. for your own inhabitant , buy it as early as possible.
    --- From a Chinese.

    I bought my first condo in 2012 in DT and sold it to buy a townhouse in Bayview village in 2015. In 2016, I sold my townhouse and now, I am trying to buy a detached home in Newmarket, and yesterday I lose the bid again(7 times this year). The winner was not Chinese, so I figure, why do I go to non-Chinese forum to see how other buyers think about this market, and how eager they would make offers these days.

    When I go through this post, honestly, i checked back and forth to make sure, this post and replies are in 2017, not 2014.I am not an expert in real estate, I just write down what I see and know.

    From 2012 to 2017, I saw the richest buyers are not from China but other countries like Russia, Iran and middle east. And, Chinese prefer its own communities, Markham, Richmond hill, now Aurora, Oakville (richer ones). New immigrants from China are rich and willing to purchase big houses, no doubt. But it hurts people like me, Chinese-Canadian, barely you guys, because you dont want to live in Chinese communities, like it never hit me to live in Little Italy or Greek town or Brampton.

    Check North York, check midtown, who is building those 3,4 million houses on the ground of 1 million land they just purchased a year ago. the builders, the government, who make the most portion of the hit market? foreign buyers? seriously? Maybe Vancouver, but not the case in Toronto. Refugees(40k last year only), rich immigrants (fr political unstable countries, riches protect their wealth), small builders (buy, flip and sell, quick money), government(tax), are the major players to push the market increase, not foreigners from China.


    I am not helping Chinese to defend, I am just telling you something that no one tells you, at least no media in Canada will tell you, that Chinese Government restrict its citizens' money going out to buy other country's property. If you are a Chinese and you are sooooo rich, like you have $1bil Chinese currency in Chinese bank, you want to buy a 1mil house in Canada, no way, because you dont even have $200k CND downpayment. You say ok, can I exchange some? Can not! case close. But you are seeing Chinese buying houses around you, and media say so too. Yes, but they are immigrants, have the same right to buy as you do.

    TORONTO IS BECOMING A BIG INTERNATIONAL CITY. THE HOUSE PRICE WAS TOO LOW BEFORE. It is making balance to the other international cities like London, Sydney, Tokyo and Beijing. Because Toronto is top best city to live in this whole world! Everyone is wanting to live here. That is why.

    Oh, and green belt. But I love green belt i think it is necessary to exist.

    If you dont see the truth(more people coming, less land to build houses) about this market, who is buying, who is winning, where the money come from, is it sustainable, you will not make correct decision, buy or wait. you will still put your hope on the government to increase the tax on foreign buyers. If so, the target is wrong, the price will keep going up, till you can not even afford a condo.

  9. #38
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    "Everyone wants to live here" is a nice theory.

    In reality, the population growth rate in Toronto (census to census) between 2011-2016 is the slowest the metropolitan area has experienced in at least 40 years.

    And yet, the house price growth rate in the same time period (census to census) is by far the highest in 40 years.

    http://www.macleans.ca/economy/econo...es-so-what-is/
    Last edited by rebel_ins; 2017-03-09 at 05:44 PM.

  10. #39
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    Quote Originally Posted by ericho View Post
    My suggestion: for investment, hold on. for your own inhabitant , buy it as early as possible.
    --- From a Chinese.

    I bought my first condo in 2012 in DT and sold it to buy a townhouse in Bayview village in 2015. In 2016, I sold my townhouse and now, I am trying to buy a detached home in Newmarket, and yesterday I lose the bid again(7 times this year). The winner was not Chinese, so I figure, why do I go to non-Chinese forum to see how other buyers think about this market, and how eager they would make offers these days.

    When I go through this post, honestly, i checked back and forth to make sure, this post and replies are in 2017, not 2014.I am not an expert in real estate, I just write down what I see and know.

    From 2012 to 2017, I saw the richest buyers are not from China but other countries like Russia, Iran and middle east. And, Chinese prefer its own communities, Markham, Richmond hill, now Aurora, Oakville (richer ones). New immigrants from China are rich and willing to purchase big houses, no doubt. But it hurts people like me, Chinese-Canadian, barely you guys, because you dont want to live in Chinese communities, like it never hit me to live in Little Italy or Greek town or Brampton.

    Check North York, check midtown, who is building those 3,4 million houses on the ground of 1 million land they just purchased a year ago. the builders, the government, who make the most portion of the hit market? foreign buyers? seriously? Maybe Vancouver, but not the case in Toronto. Refugees(40k last year only), rich immigrants (fr political unstable countries, riches protect their wealth), small builders (buy, flip and sell, quick money), government(tax), are the major players to push the market increase, not foreigners from China.


    I am not helping Chinese to defend, I am just telling you something that no one tells you, at least no media in Canada will tell you, that Chinese Government restrict its citizens' money going out to buy other country's property. If you are a Chinese and you are sooooo rich, like you have $1bil Chinese currency in Chinese bank, you want to buy a 1mil house in Canada, no way, because you dont even have $200k CND downpayment. You say ok, can I exchange some? Can not! case close. But you are seeing Chinese buying houses around you, and media say so too. Yes, but they are immigrants, have the same right to buy as you do.

    TORONTO IS BECOMING A BIG INTERNATIONAL CITY. THE HOUSE PRICE WAS TOO LOW BEFORE. It is making balance to the other international cities like London, Sydney, Tokyo and Beijing. Because Toronto is top best city to live in this whole world! Everyone is wanting to live here. That is why.

    Oh, and green belt. But I love green belt i think it is necessary to exist.

    If you dont see the truth(more people coming, less land to build houses) about this market, who is buying, who is winning, where the money come from, is it sustainable, you will not make correct decision, buy or wait. you will still put your hope on the government to increase the tax on foreign buyers. If so, the target is wrong, the price will keep going up, till you can not even afford a condo.
    Selling in 2016 was a big mistake. You should have bought first, then sold. Especially in a rising market. Chances of getting a detach are unlikely. Now what is it about NewMarket that you wanted?

  11. #40
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    I can provide a bit more context to some points of Ericho's post. Specifically about the case of Chinese currency leaving China. The government has mandated that they can only take out 50k usd per year. This is one factor that will slightly ease the effect of "rich foreign Chinese buyers". This applies to the Chinese immigrants that have landed in Canada to live here as well, as their parents can't give them unlimited cash anymore.

    I read somewhere that on Chinese real estate listing websites that there's a huge push to buy in Toronto, cause we're relatively undervalued, especially now that Vancouver is not a good deal for them. Somebody translated a message to the effect of "If you don't buy now, you will cry later".

    For those waiting for the crash, I don't think it's coming. 20% yoy growth definitely not sustainable and will slow down, but I doubt that massive crash is coming unless interest rates spike more than 3% all of a sudden.


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