# House Prices Comparison



## ghrh1977 (Jun 4, 2014)

I hear my parents talk about home prices in the early 80’s & interest rates. Out of curiosity is there a website that would compare home prices in any particular year & how that would be in today’s value, based on inflation?

Example: avg home price in 1980 in Toronto @ $80k would be compared to a home in Toronto today at $750k.


----------



## agent99 (Sep 11, 2013)

You could use the inflation rate to determine what the price should be if supply and demand for housing stayed the same.

This site will do that for you: Best Inflation Calculator (2021) - Historical & Future Value | SmartAsset.com. You can probably find actual Toronto historical prices somewhere on-line.

This chart shows how prices have increased in 2016 dollars. A house is no doubt harder to afford now than back in the day!


----------



## Landlordnomore (Sep 23, 2019)

Well, two houses in my immediate neighbourhood have been sold for around $180,000 over asking and they were sold in a gut job condition, let alone polyB pipes. In this red hot market, everything and anything goes!!! Crazy. I am tempted to cash in but just don't know where my family of 4 would move to??? So, we have decided to just stay put. Surely, the prices will double in 10-20 years.


----------



## Bananatron (Jan 18, 2021)

In order to do an accurate comparison one would have to compare the average income in, say 1975, along with the going mortgage rate of that era to determine what percentage of their income was going towards a mortgage payment.

It's not as simple as homes have gone up 6x in the past 30 years while wages have only doubled, therefore homes today are 3x as expensive. 

Not saying homes in gta or Vancouver aren't overpriced, but there is more to it.


----------



## like_to_retire (Oct 9, 2016)

I think it's hard to assign such an important metric of the 80's (which was mortgage rates) its gravitas for that time. It had a lopsided physiological effect on house prices.

I remember when I renewed the mortgage on my house in late 1981, the mortgage rate on a 5 year term was 21.75%. The inflation rate was around 12.5%. Many who were up for renewal would be losing their homes at these rates.

I do laugh when I read posters having debates about the differences between 1.65% and 1.69% mortgages. They have no idea.......................

ltr


----------



## doctrine (Sep 30, 2011)

When realtors are roaming the streets, cold calling and knocking and begging people to sell their homes, you know it's at a peak. At least in the last 20 years, it's hotter than it has ever been. But interest rates are also lower than ever. If 5 year mortgage interest rates ever get back to "generational lows" of just 3%, housing prices are going to correct 10-20%. Much of the boost has occurred with 1.5% mortgages.


----------



## sags (May 15, 2010)

The government should eliminate CMHC guarantees and let the free market control prices.

Municipal governments could also eliminate the minimum footage requirements for new builds in subdivisions. There is no reason people should be unable to build a new 900 square foot bungalow.

Our family grew up in one and there were 7 of us in the house. People finished the basements with a rec room, bathroom, and bedrooms. Totally finished that is 1800 square feet......more than enough.


----------



## Bananatron (Jan 18, 2021)

sags said:


> The government should eliminate CMHC guarantees and let the free market control prices.
> 
> Municipal governments could also eliminate the minimum footage requirements for new builds in subdivisions. There is no reason people should be unable to build a new 900 square foot bungalow.
> 
> Our family grew up in one and there were 7 of us in the house. People finished the basements with a rec room, bathroom, and bedrooms. Totally finished that is 1800 square feet......more than enough.


Lots of options for building smaller new homes, not too many bungalows though as two stories offer better bang for the buck. 
But yeah, one can build a new 1300-1500 sq ft two story (which translates to the same cost as a 1000 bungalow) with a parking pad with the option for a future detached garage.
That's also not considering the entry level options of town or row homes and duplexes.

Around edmonton, these options went from anywhere between $300k-$450k. With an average family income of about $100k and current interest rates that seems very affordable to me. 

I realize those prices are a fantasy for those that live in bc and Ontario, but starter homes are still a possibility for the less desirable parts of Canada. /s


----------



## MrMatt (Dec 21, 2011)

sags said:


> The government should eliminate CMHC guarantees and let the free market control prices.
> 
> Municipal governments could also eliminate the minimum footage requirements for new builds in subdivisions. There is no reason people should be unable to build a new 900 square foot bungalow.
> 
> Our family grew up in one and there were 7 of us in the house. People finished the basements with a rec room, bathroom, and bedrooms. Totally finished that is 1800 square feet......more than enough.


They should also get rid of rent controls, and allow the collection of security deposits, and eviction of bad tenants.

I think the biggest problem with housing prices is that there simply isn't enough development to keep up.
If you want to double the population in an area, you have to double the density.
If everyone wants progressively larger McMansions, it's going to take a lot of land.

FWIW, my house is over 3x the size of the one I grew up in.


----------



## AltaRed (Jun 8, 2009)

ghrh1977 said:


> I hear my parents talk about home prices in the early 80’s & interest rates. Out of curiosity is there a website that would compare home prices in any particular year & how that would be in today’s value, based on inflation?
> 
> Example: avg home price in 1980 in Toronto @ $80k would be compared to a home in Toronto today at $750k.


CPI is the least of the factors. The real measure is wages plotted against monthly mortgage payments, not house price. With lower down payments, rock bottom interest rates, dual incomes and longer amortizations, one can buy a lot more house today than in the 1980s. Realtors have conflicts of interest and MSM is dumb as nails when they keep referencing house prices as the metric for affordability. Nothing could be further from the truth.


----------



## nathan79 (Feb 21, 2011)

The really high interest rates (~20%) in the 1980's were only for a couple of years, and not everyone was locked into those rates. Most people were paying around 12-13% during the 80's, which sounds like a lot until you realize that house prices were roughly 1/8th of what they are today.

A typical house around here that cost 150K in the 1980's goes for about 1.2 million now. Even with the low rates of today, the mortgage payments would be significantly higher adjusted for inflation.

Bringing up dual incomes is just moving the goalposts, and not everyone is married anyway. 

We're also over looking the fact that is was much easier to save a larger downpayment when house prices were 3X the average income, as opposed to whatever they are today.

Even 10 years ago, I could buy a house outright for 400K. Now you need a six figure income on top of the 400K downpayment.... lol.

To even suggest that houses are more attainable today is crazy talk, IMO.


----------



## sags (May 15, 2010)

MrMatt said:


> They should also get rid of rent controls, and allow the collection of security deposits, and eviction of bad tenants. There are no rent controls on new units.
> 
> I think the biggest problem with housing prices is that there simply isn't enough development to keep up.
> If you want to double the population in an area, you have to double the density.
> ...


Doug Ford abolished the rent controls in 2018, and landlords can charge any rent they want for occupancy after November 2018 or when people move out and there is a vacancy.

The result was sharp increases in rents and tenants unwilling to move out units they have been living in since before November 2018. The number of new buildings has also declined which proves that rent controls had no impact on rental development.

I expect that the NDP will propose a reversal of the Ford changes during the next election, and that will prompt Ford to reverse his own changes, as he has done in the past on other issues.

The Ford government wouldn't be the first to fall in Ontario due to increasing rental rates.


----------



## sags (May 15, 2010)

Forget about "asking price" around here. People are bidding up homes hundreds of thousands of dollars above asking prices.

The number of homes for sale is lower because people are afraid to sell and move. I read there are like 50,000 realtors in Toronto alone and they are starving for business......no listings = no sales = no income for realtors.

The idea that all realtors are getting rich from home sales is a false one. Most have 1 or 0 sales in a year.

They are also being frustrated with all the bidding wars. They can spend months with a client writing up and offering contracts to sellers only to be outbid every time. It cost the realtors time and money with no income to pay for it all.

If there are 20 bids on a home.....19 realtors are going home without a sale.


----------



## sags (May 15, 2010)

Prices have risen to the point that they have made the low interest rates redundant.

People can't afford to buy a home even at today's interest rates, and the rates won't stay low forever.

The only thing government can do to keep the bubble going is to extend mortgages.

I expect we might see something like that if interest rates start to rise.


----------



## MrMatt (Dec 21, 2011)

sags said:


> Prices have risen to the point that they have made the low interest rates redundant.
> 
> People can't afford to buy a home even at today's interest rates, and the rates won't stay low forever.
> 
> ...


Prices are high BECAUSE rates are low.
The issue is demand is higher than supply.


----------



## MrMatt (Dec 21, 2011)

sags said:


> Doug Ford abolished the rent controls in 2018, and landlords can charge any rent they want for occupancy after November 2018 or when people move out and there is a vacancy.


Not true. They still control how much it can change.


https://www.ontario.ca/page/residential-rent-increases#section-0




> The result was sharp increases in rents and tenants unwilling to move out units they have been living in since before November 2018. The number of new buildings has also declined which proves that rent controls had no impact on rental development.


I'd suggest that his failure to remove rent control and fix the other issues is why investors didn't rush out and build more housing.

Rent can only be increased by a limited amount ever year, so tenants are unwilling to move out and lose the rent control.

New buildings aren't being built, because you can't charge security deposits, can't hike rents enough, and can't evict bad tenants.
I personally think residential rental housing is too risky. Due to bad government policy here.



> The Ford government wouldn't be the first to fall in Ontario due to increasing rental rates.


Nobody ever said democracies result in good policy.
We elected Trudeau because people want to smoke pot.


It's really simple, to fix rental housing, we need to build more housing.
1. To get people to build move rental housing we need to allow people to build it.
2. We need to lower the risk, ie kick out bad non paying tenants, and hold tenants liable for damage (via security deposits or other measures)
3. We need to allow rent to be increased in line with the market. 
It's important to note that in many cities, for example London, property tax rates increase by more than the rent increase limit.
Think about that, your properly taxes go up 4%, rent goes up 1%.
year after year, decade after decade Who wants to invest in a declining 

Part of the problem, is people aren't migrating to places they can afford, they want (or wanted) to live in downtown Toronto, causing a shortage. If they simply hiked rent the renters would move out, and put less pressure on supply.
Instead they try to lock the price below market rates, which causes shortages. That's the problem with price controls.

In my city we're being flooded with people from Toronto, because the prices are too high there.


----------



## andrewf (Mar 1, 2010)

sags said:


> The government should eliminate CMHC guarantees and let the free market control prices.
> 
> Municipal governments could also eliminate the minimum footage requirements for new builds in subdivisions. There is no reason people should be unable to build a new 900 square foot bungalow.
> 
> Our family grew up in one and there were 7 of us in the house. People finished the basements with a rec room, bathroom, and bedrooms. Totally finished that is 1800 square feet......more than enough.


Uhh, the age of building bungalows in the GTA are, shall we say, long passed. Starter homes are stacked townhouses, etc.


----------



## sags (May 15, 2010)

There is lots of vacant land just outside of Toronto. There are subdivisions going up all over the place but they don't build 900 square foot bungalows because of zoning restrictions and profit margins.

Municipal governments have to remove those restrictions and allow people to build affordable small single family homes with finished basements (with a proper escape window) . The restrictions on building are clear examples of NIMBY attitudes. It is the "we don't want small bungalows in our neighborhood and lowering the value of the area" crowd that spawn these subdivision restrictions.

Those can be built on smaller lots that offer more privacy than streets of 2 story homes where second level windows look into each others backyards.

Many people may want a 3,000 square foot 2 storey home with double garage., but they don't need it and can't afford it.

People have treated homes like boat owners. They have "one foot itis"......


----------



## andrewf (Mar 1, 2010)

sags said:


> There is lots of vacant land just outside of Toronto. There are subdivisions going up all over the place but they don't build 900 square foot bungalows because of zoning restrictions and profit margins.
> 
> Municipal governments have to remove those restrictions and allow people to build affordable small single family homes with finished basements (with a proper escape window) . The restrictions on building are clear examples of NIMBY attitudes. It is the "we don't want small bungalows in our neighborhood and lowering the value of the area" crowd that spawn these subdivision restrictions.
> 
> ...


People don't want to spend the kind of money they would need to in order to get a 900 sqft bungalow at Toronto land prices. They would rather a 1400 sqft townhouse. If both cost $600k, which would you choose to buy, the 900 sqft bungalow or the 1400 sqft townhouse?


----------



## birdman (Feb 12, 2013)

Bought a nice home in Kelowna in 1983 for 114,000. and I expect it is now worth around $1 or 1.2 million.


----------



## Retiredguy (Jul 24, 2013)

andrewf said:


> People don't want to spend the kind of money they would need to in order to get a 900 sqft bungalow at Toronto land prices. They would rather a 1400 sqft townhouse. If both cost $600k, which would you choose to buy, the 900 sqft bungalow or the 1400 sqft townhouse?


600 k gets u a 500 - 600 sq ft 1 bedroom apt in vancouver. A 1400 sq ft TH about 1.2m.


----------



## agent99 (Sep 11, 2013)

Retiredguy said:


> 600 k gets u a 500 - 600 sq ft 1 bedroom apt in vancouver. A 1400 sq ft TH about 1.2m.


For $1.2M you could get a two story home more than twice that square footage on a large waterfront lot where we live in Ontario!


----------



## andrewf (Mar 1, 2010)

agent99 said:


> For $1.2M you could get a two story home more than twice that square footage on a large waterfront lot where we live in Ontario!


There's your answer: if you want to live in a 900 sqft bungalow, move to where the jobs aren't! Easy!


----------



## sags (May 15, 2010)

andrewf said:


> People don't want to spend the kind of money they would need to in order to get a 900 sqft bungalow at Toronto land prices. They would rather a 1400 sqft townhouse. If both cost $600k, which would you choose to buy, the 900 sqft bungalow or the 1400 sqft townhouse?


The 900 square foot bungalow. because I would own the land and no shared walls or roof.


----------



## Money172375 (Jun 29, 2018)

Some homes in my neighbourhood have sold for 50% more than they did just 3-4 years ago.
the 500,000s are now going for 7-800. The $1million ones from 2017-2018 are going for for 1.4-1.6. Just crazy. Don‘t even see a “for sale” sign......a “sold” sign just appears.


----------



## Eclectic12 (Oct 20, 2010)

MrMatt said:


> ... FWIW, my house is over 3x the size of the one I grew up in.


Interesting ... both my houses were/are about one third smaller than the first house I grew up in (a two storey).
With five kids, it was getting chaotic so my folks moved out into the country to a larger bungalow which my houses were/are about one quarter smaller.

I guess I missed the memo about going larger. 


Cheers


----------



## Eclectic12 (Oct 20, 2010)

andrewf said:


> There's your answer: if you want to live in a 900 sqft bungalow, move to where the jobs aren't! Easy!


With work from home being pushed and in some cases, made permanent, some of the sales are doing this.


https://ca.movies.yahoo.com/cooped-toronto-couple-now-embracing-230000567.html



Cheers


----------



## nathan79 (Feb 21, 2011)

Eclectic12 said:


> Interesting ... both my houses were/are about one third smaller than the first house I grew up in (a two storey).
> With five kids, it was getting chaotic so my folks moved out into the country to a larger bungalow which my houses were/are about one quarter smaller.
> 
> I guess I missed the memo about going larger.
> ...


Me too... I don't know anyone who is living in a larger house than they grew up in.

You always hear about this, but it doesn't seem to reflect the average person's situation. However, it seems that the upper middle class is driving some home size increases at the high end of the market, and the rest is likely driven by multi-generational immigrant homes. Neither of these situations reflect typical wage earners with one or two kids, childless couples, or singles. Most singles and young couples are pushed into condos that keep getting smaller and more expensive.


----------



## Eclectic12 (Oct 20, 2010)

My brother and I are definitely smaller.

I'd guess my sister's first house was in between the two houses I was alive to know that my parents owned. The second house is likely equal to my parent's bigger house, despite four less people.

One cousin is smaller while her sibling is larger but nothing outrageous.

Another cousin's house is a bit smaller than her parent's house was.


Cheers


----------



## Retiredguy (Jul 24, 2013)

sags said:


> The 900 square foot bungalow. because I would own the land and no shared walls or roof.


Or want to be in a strata.


----------



## james4beach (Nov 15, 2012)

Retiredguy said:


> 600 k gets u a 500 - 600 sq ft 1 bedroom apt in vancouver. A 1400 sq ft TH about 1.2m.


That sounds about right, based on a 2 bedroom condo my friends just bought. Basically the price is roughly $1k per sq ft.

It's amazing how much easy financing conditions distort the housing market. Imagine that I only have 40k to invest in stocks. So like a genius, I go and buy 600k of stocks where I am borrowing 560k. Everyone would call this insanely stupid, of course.

And yet, we actively encourage average Canadians to do the same things with houses. It's reckless and I think it's going to destroy the economy, once it unravels.


----------



## Retiredguy (Jul 24, 2013)

james4beach said:


> That sounds about right, based on a 2 bedroom condo my friends just bought. Basically the price is roughly $1k per sq ft.
> 
> It's amazing how much easy financing conditions distort the housing market. Imagine that I only have 40k to invest in stocks. So like a genius, I go and buy 600k of stocks where I am borrowing 560k. Everyone would call this insanely stupid, of course.
> 
> And yet, we actively encourage average Canadians to do the same things with houses. It's reckless and I think it's going to destroy the economy, once it unravels.


I hear various people saying this is like the roaring 20's And we know what happened in 1929 followed by the 30s. "Oh but this time it will be different" ... Lol.

With govts everywhere especially Canada telegraphing to people its ok to spend spend spend, it's free money and that govt ( of all stripes) dont care about debt and deficits, its individuals just following the leaders.


----------



## james4beach (Nov 15, 2012)

Retiredguy said:


> With govts everywhere especially Canada telegraphing to people its ok to spend spend spend, it's free money and that govt ( of all stripes) dont care about debt and deficits, its individuals just following the leaders.


Individuals are just doing what the rules permit them to do. I think the government could start by requiring minimum 20% or 25% downpayments, so that it's not even possible to buy a house with a smaller downpayment.

5% down shouldn't be allowed, it's insanity.


----------



## Money172375 (Jun 29, 2018)

Here’s how home prices compare to incomes across Canada | Globalnews.ca


The average national home price is now more than seven times the average household income, according to data from the Canadian Real Estate Association and Statistics Canada.




globalnews.ca


----------



## andrewf (Mar 1, 2010)

sags said:


> The 900 square foot bungalow. because I would own the land and no shared walls or roof.


Of course, in the GTA we are talking a 400 sqft bungalow to be equivalent in price to a much bigger townhouse.


----------



## Kilbarry20 (Aug 19, 2020)

ghrh1977 said:


> I hear my parents talk about home prices in the early 80’s & interest rates. Out of curiosity is there a website that would compare home prices in any particular year & how that would be in today’s value, based on inflation?
> 
> Example: avg home price in 1980 in Toronto @ $80k would be compared to a home in Toronto today at $750k.


Ok, here’s a real life example.

In 1981, I bought my present TO home for a little over 100k.
It is certainly worth (given the most recent Sales in my neighbourhood) $1.5M today.


----------

