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real estate prices in Canada sustainable?

real estate prices in Canada sustainable?

Old May 24th 2021, 5:50 pm
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Default Re: real estate prices in Canada sustainable?

Originally Posted by Shard View Post
Closed economy ?

Isn't it just runaway property prices in an economically stable country? Toronto/Vancouver the same boat.


Graphs from City of Vancouver.
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Old May 24th 2021, 5:51 pm
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Default Re: real estate prices in Canada sustainable?

Originally Posted by Shard View Post
Closed economy ?

Isn't it just runaway property prices in an economically stable country? Toronto/Vancouver the same boat.
Long standing issue in Vancouver, and BC in general, is wages relatively low compared to the rest of Canada despite the high cost of living and high cost of housing.

Even Kelowna and the small towns surrounding Kelowna while cheaper housing than Vancouver, same struggles, wages are too low for the actual cost of living.







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Old May 24th 2021, 8:21 pm
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Default Re: real estate prices in Canada sustainable?

Originally Posted by Shard View Post
Closed economy ?

Isn't it just runaway property prices in an economically stable country? Toronto/Vancouver the same boat.
The biggest employer is the government. Then it's domestic oligopolies with little or no international competition. It's a bit like south Korea with the Chaebol.

Yes the elections are free and fair. Yes there is some consumer choice but ultimately when one looks at what their household spends- the same bills are going to the same places even more so than in other countries. The bills are just higher.

These handouts typically come out of the parents own housing equity. There lies the cliff Canada stares off.

I actually don't think Canada is economically stable. It's lopsided towards governments that are loaded with debt and that was before the money printing of the pandemic happened. The civil service is not sustainable at all. Runaway house prices are of increasing concern because consumer debt was the economic driver. Canada needs to find new industries that it is good at and double down. Massive economic restructuring is required here. They need to get more international companies to actually want to open up and do business here and more competition for labor to put upward pressure on wages.

Originally Posted by dbd33 View Post
Salaries aren't low in Toronto compared with the rest of the country. I think that's a fair complaint about Vancouver but not Toronto.
They're not low in Toronto relative to places outside but they don't produce enough for people to live in normal times. If you take out rent plus a car lease + insurance from the average salary it's a grind with little left to spend on household items let alone invest or accumulate wealth in assets.

I'm not a gospel source by any stretch but more than half the homeowners I know took a family handout at some point. I believe half the kids around me are taking handouts just to live in the neighbourhood and pop to the bar.

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Old May 25th 2021, 12:07 am
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Default Re: real estate prices in Canada sustainable?

Originally Posted by JamesM View Post
They're not low in Toronto relative to places outside but they don't produce enough for people to live in normal times.
For me, the whole reason for moving to Toronto was that I couldn't afford a house in London, wasn't willing to consider the UK beyond the North Circular and felt I had nothing to lose by trying a place with cheap housing. If the housing isn't cheap any more then I don't think there's any reason to move to Toronto and I wouldn't do so. However, I suspect it's still cheaper than London, cheap enough to make up for the lower incomes. (Note that while I think incomes in Toronto are high for Canada they're not what one could earn in a big city, London for example - if I do work for firms there I charge the same rate in pounds as I can charge in dollars here).
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Old May 25th 2021, 2:25 am
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Default Re: real estate prices in Canada sustainable?

Originally Posted by dbd33 View Post
For me, the whole reason for moving to Toronto was that I couldn't afford a house in London, wasn't willing to consider the UK beyond the North Circular and felt I had nothing to lose by trying a place with cheap housing. If the housing isn't cheap any more then I don't think there's any reason to move to Toronto and I wouldn't do so. However, I suspect it's still cheaper than London, cheap enough to make up for the lower incomes. (Note that while I think incomes in Toronto are high for Canada they're not what one could earn in a big city, London for example - if I do work for firms there I charge the same rate in pounds as I can charge in dollars here).
To an extent I agree. Most of my working life in Toronto I've walked to work. In London I'd be unlikely to match that commute experience because I would not likely want to rent in Zone 1.

Downtown Toronto for costs is unlikely to touch Zone 1 in London for prices, may be closing in on Zone 2 in parts but on balance probably still slightly cheaper. But I think within the M25 there are places that become comparable or could be cheaper. These places have better access to central London than most of the places in the GTA do to Downtown Toronto. The term GTA is a con for inward investment because it tries to fool companies into thinking there is a wider accessible talent pool and market than there is.

If you start stretching out across the South East I think you can still likely find better commutes than one would experience in the GTA, have more job accessibility and find some reasonable house prices.

From when you moved I think a lot of the advantages have evaporated. I wouldn't encourage anyone to move believing they would be better off financially unless they had secured a job that gave them 2.2ish + times the dollars that they earned in pounds. Too many do the $ to pound conversion that you mention you charge.

I think the biggest misconception people make when they come here from the UK is they've been fooled into thinking Canada has higher salaries and a lower cost of living when the opposite is the likely outcome if one works outside of the broader public sector.

I like my life outside of work here and did manage to create a more active lifestyle than I had in the UK- but I realize that was more a shift in attitude but the environment did help spur it on. I'm putting this last sentence in if an observer is wondering why I'm here and I also contemplate heading back often.

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Old May 25th 2021, 2:49 am
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Default Re: real estate prices in Canada sustainable?

Another downside to high housing costs, it can force people into or stay in relationships because they have no other option as they can't afford housing on their own alone.

"Oxford Economics, published on Tuesday, said homes in Canada are 34 per cent more expensive than the median-income household could afford."


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Old May 25th 2021, 5:07 am
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Default Re: real estate prices in Canada sustainable?

Originally Posted by Jsmth321 View Post
Another downside to high housing costs, it can force people into or stay in relationships because they have no other option as they can't afford housing on their own alone.

"Oxford Economics, published on Tuesday, said homes in Canada are 34 per cent more expensive than the median-income household could afford."

I'd like to see the detail, which isn't referenced in the article. I'd want to explore, in particular, whether the geographic definitions of each city's boundaries for real estate cost purposes actually coincide with the city boundaries used for household income measures, in each city case.

I'd also want to know what the selection criteria were for "the 25 North American metros for which we constructed HAIs". San Fran, San Diego, Denver, Boston, Houston, Washington, Tampa??? Any Top 25 list which features Quebec City (pop 528,000) but omits those 7, probably has some unmentioned selection bias.
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Old May 25th 2021, 8:30 am
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Default Re: real estate prices in Canada sustainable?

Originally Posted by dbd33 View Post
For me, the whole reason for moving to Toronto was that I couldn't afford a house in London, wasn't willing to consider the UK beyond the North Circular and felt I had nothing to lose by trying a place with cheap housing. If the housing isn't cheap any more then I don't think there's any reason to move to Toronto and I wouldn't do so. However, I suspect it's still cheaper than London, cheap enough to make up for the lower incomes. (Note that while I think incomes in Toronto are high for Canada they're not what one could earn in a big city, London for example - if I do work for firms there I charge the same rate in pounds as I can charge in dollars here).
Surely that depends on what you considered a "house in London" ? Quite a price range in each locality, and if the earnings rate is approximately double Canada then it's hard to see why London was that unaffordable, back in the day.
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Old May 25th 2021, 8:45 am
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Default Re: real estate prices in Canada sustainable?

Originally Posted by JamesM View Post
The biggest employer is the government. Then it's domestic oligopolies with little or no international competition. It's a bit like south Korea with the Chaebol.
I actually don't think Canada is economically stable. It's lopsided towards governments that are loaded with debt and that was before the money printing of the pandemic happened. The civil service is not sustainable at all. Runaway house prices are of increasing concern because consumer debt was the economic driver. Canada needs to find new industries that it is good at and double down. Massive economic restructuring is required here. They need to get more international companies to actually want to open up and do business here and more competition for labor to put upward pressure on wages.
Perhaps the increasing scale of cities like Toronto and Vancouver will lead to new industry and innovation. Although it's difficult to develop industry with the USA at the doorstep, as firms grow there is a financial imperative to access the bigger market. As a result, Canadian business seems to be anchored in the resource, construction or SME sectors.

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Old May 25th 2021, 10:46 am
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Default Re: real estate prices in Canada sustainable?

Originally Posted by Shard View Post
Surely that depends on what you considered a "house in London" ? Quite a price range in each locality, and if the earnings rate is approximately double Canada then it's hard to see why London was that unaffordable, back in the day.
I don't recall all the details of London prices but my first house in Canada cost $140,000 in 1985 against a salary (overtime included) of $85,000. As soon as I had a mortgage I packed in having a job and went to a zero hours contract for about twice the income, so more per year than the value of the house. I couldn't do that in London because I didn't have a novelty accent that made people think I was clever, all uneducated Londoners sounded like me.

People in the position I was might now get $80/hour, 80x8x260 = $166.000. $166,000 doesn't buy a house, it's not the deposit on a house, so there's no point in emigrating to Toronto.

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Old May 25th 2021, 1:27 pm
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Default Re: real estate prices in Canada sustainable?

Originally Posted by Shard View Post
Although it's difficult to develop industry with the USA at the doorstep, as firms grow there is a financial imperative to access the bigger market. As a result, Canadian business seems to be anchored in the resource, construction or SME sectors.
Dublin has had considerable success attracting jobs with London just a short hop away. I feel like in Canada there's an ilk who don't want the shift because they do very well out of the status quo.

There is more tech in Canada now but there is more tech everywhere else too. And the SME tech industry isn't for the feint hearted in terms of stability I've lived it now for 11 years.

Originally Posted by dbd33 View Post

People in the position I was might now get $80/hour, 80x8x260 = $166.000. $166,000 doesn't buy a house, it's not the deposit on a house, so there's no point in emigrating to Toronto.
That's my take. In the last decade the boom in Toronto house prices has slid it away.

Also I don't know what it was like when you came but I believe they want a bigger deposit from contractors/ self employed when they try to buy now? Even though regular employment isn't any more stable although does have the cushion of some employment insurance if it goes tits up.

I'm currently self employed again but not quite at $80 per hour. Contracting in IT is lucrative though I drink with a few folk who do very well out of it.

Originally Posted by dbd33 View Post
I couldn't do that in London because I didn't have a novelty accent that made people think I was clever, all uneducated Londoners sounded like me.
Vintage dbd!

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Old May 25th 2021, 1:42 pm
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Default Re: real estate prices in Canada sustainable?

Originally Posted by dbd33 View Post
I don't recall all the details of London prices but my first house in Canada cost $140,000 in 1985 against a salary (overtime included) of $85,000. As soon as I had a mortgage I packed in having a job and went to a zero hours contract for about twice the income, so more per year than the value of the house. I couldn't do that in London because I didn't have a novelty accent that made people think I was clever, all uneducated Londoners sounded like me.

People in the position I was might now get $80/hour, 80x8x260 = $166.000. $166,000 doesn't buy a house, it's not the deposit on a house, so there's no point in emigrating to Toronto.
Certainly not in terms of housing affordability, but for snow and ice it's still in the lead.

It does sound like the Canada move was as much about career/business opportunity as it was cheap housing.
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Old May 25th 2021, 2:20 pm
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Default Re: real estate prices in Canada sustainable?

Originally Posted by abner View Post
I'd like to see the detail, which isn't referenced in the article. I'd want to explore, in particular, whether the geographic definitions of each city's boundaries for real estate cost purposes actually coincide with the city boundaries used for household income measures, in each city case.

I'd also want to know what the selection criteria were for "the 25 North American metros for which we constructed HAIs". San Fran, San Diego, Denver, Boston, Houston, Washington, Tampa??? Any Top 25 list which features Quebec City (pop 528,000) but omits those 7, probably has some unmentioned selection bias.
Why? Adding more cities won't change the HAI's of the places referenced.

Also what is the value of the boundaries to you? People cross boundaries all the time to work anyway.
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Old May 25th 2021, 7:15 pm
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Default Re: real estate prices in Canada sustainable?

Originally Posted by JamesM View Post
Also I don't know what it was like when you came but I believe they want a bigger deposit from contractors/ self employed when they try to buy now?
That was the case at the time so I kept the T4 job until the mortgage was approved and only then went contracting. I suspect that's only if there's no history though, once you can produce three years' worth of Notices of Assessment it's likely not an issue.
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Old May 26th 2021, 1:54 pm
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Default Re: real estate prices in Canada sustainable?

Originally Posted by dbd33 View Post
For me, the whole reason for moving to Toronto was that I couldn't afford a house in London, wasn't willing to consider the UK beyond the North Circular and felt I had nothing to lose by trying a place with cheap housing. If the housing isn't cheap any more then I don't think there's any reason to move to Toronto and I wouldn't do so. However, I suspect it's still cheaper than London, cheap enough to make up for the lower incomes. (Note that while I think incomes in Toronto are high for Canada they're not what one could earn in a big city, London for example - if I do work for firms there I charge the same rate in pounds as I can charge in dollars here).
This was us 4 years ago 100%. Small flat in NW London zone 3, wanting to stay within London if in UK, and facing ~700k GBP differential to buy a decent house. So in moving to Toronto the deciding factor was cheaper housing.

We ended up keeping the flat and buying a detached house (well, bungalow) in Clarkson, 23 mins train ride to Union. It's not like for like with London location, but it was much better bang for your buck.

Now in past 18 months prices have gone crazy here too, but still can't think of anywhere equivalent near London where you can have a detached home with decent outdoor space for close to current Toronto prices.
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