New mortgage required 1.94 million, and 1.5% the payment is $7782. Theyll probably start introducing 50 and 100 year mortgages. For those not on the property ladder or for those that can see past their recent appreciations to have sympathy for the young and new Canadians presently being subjugated by debt, this petition is for you: www.change.org/decommodifyhousing. If the 4-6 losers keep bidding on other properties, prices will also continue to grow. crack down on money laundering, requiring the disclosure of additional information about ownership for real estate transactions to make sure crooks can’t hide behind numbered corporations to conceal their ownership of Ontario real estate. The Pros Prime choice of units and location, as you aren’t at the mercy of what happens to be on the market John Schaub - Living. When I play this scenario out, it leads me to believe that we are very close to the maximum effective band of house prices, as a function of interest rates when considering cash flow. Karysa strongly believes this is the way to financial security and even financial freedom! She hopes to inspire young adults to Find local Real Estate Investors groups in Toronto, Ontario and meet people who share your interests. Prices subject to change. Covid didn't crash grocery stores either. Option C. People will accept a smaller space in order to get to live in Toronto/Vancouver. Modeled off British Columbia’s tax, it will apply to speculators who don’t pay taxes in Ontario, and own houses they don’t live in, in regions where Ontario’s NRST currently applies. Here we explain the different options for investing in Toronto real estate and the reasons real estate can be a good investment, especially in the long-term. So you are saying Gen Z will rather put up with shitter QoL, when I already thought QoL sucked here? At least not in the big Canadian cities. Well let's play out a scenario. The Complete Real Estate Investing Bundle retails for over $2k and is on sale for $37.99, a discount of 98 per cent. (https://www.ontariondp.ca/sites/default/files/homes_you_can_afford.pdf), a shared equity loan of up to 10 per cent of a home’s value ( helping people only who don’t already own property and whose household income is less than $200,000 annually.). Now that the burbs are catching up with the prices in the GTA and Vancouver, how do working couples(new immigrants or not) with average or slightly above average incomes without a family windfall get their foot in the market? ). Join a group and attend online or in person events. Hi, I recently had a preliminary contract for a new house. I thought Covid of all events would in theory depress prices, but I see now that real estate is really resilient to price pressure. Top Alternative Investments in Real Estate 1. Before I could kind of understand that there was wiggle room as interest rates could be lowered, but now where is the money that will fuel the future Real Estate transactions. Perhaps Canadians are seeing real estate as a hedge for inflation, and the massive floodgates that will eventually pour in.....hence a red-hot market fuelled by local demand. The average buyer is primarily concerned with cash flow. Hello r/investing.I am looking for some advice about investing in real estate. Interest rates could go negative and they have already in Europe. I was asked if I should add a split type, 1 head for $4k Toronto is still cheap compared to Hong Kong or New York. This is why there is such a strong relationship between prices and interest rates. Those who can't afford Toronto proper move to it's surroundings. If the 4-6 losers keep bidding on other properties, prices will also continue to grow. An NDP government will increase the NRST from 15 to 20 per cent, and expand the tax to apply everywhere in Ontario. 3 units in San Diego, 1 in Atlanta, 3 in Birmingham, 28 in Kansas City. right now good properties in the GTA are getting 5-7 offers. Seems like a much more likely scenario. Is this common in the city? There is a grey area in that if you begin constructing a home for yourself without Tarion you can resell that home given that you have lived there for a reasonable amount of time. Update2: Now that we have an explosion in bidding wars and increased prices all over Ontario and Lower Mainland in 2021, do you see this trend become a catalyst for Canadians to move to Alberta and other provinces? All that to say if interest rates go up, prices will come down. Where will the wiggle room be for prices to go up even more? Interested in hearing other peoples thoughts! If rates go up, prices will decline. My suspicion is that thanks partly to amenities (esp quality and quantity of specialty healthcare), partly to families, and partly immigration (cat song meal, 400k/yr, remember that) I think this trend will not hold. I’m not fully sure why people would do this, my guess is that they save on the fees and registration, but also there are probably tax implications involved. Let's look at a 10 year period, with low stable interest rates, and housing that grows by 10% annually. Learn more about crowdfunded real estate and the best crowdfunding platforms to get started with! And notably it seems like the Tarion enforcement arm is pretty weak and so builders and realtors might be willing to accept a warning or small fine as a cost of doing business. You're asking millenials who's never been in a market downturn. “Breakthrough Real Estate Investing Podcast: Canadian” hosted by Rob Break and Sandy MacKay Rob Break and Sandy MacKay are real estate entrepreneurs and business leaders. If we start building out more this could help prices too. I am currently 31M, married, no kids, living in San Diego and working as a senior front-end engineer + running a real estate startup on the side. Yikes. If the answer is no, prices will come down. r/TorontoRealEstate: The Latest Real Estate Market News & Trends For Toronto GTA and Surrounding areas Halton, Peel, York, & Durham. Interest rates are stable and the mortgage was renewed in year 5 for the same rate. I know of a few foreign students with whom I studied that from their perspective that real estate here is really cheap (Canadian dollar is much lower than US dollar) and when generally compared to Chinese cities, Canada is safer and cleaner (their words not mine). The rate will be 2 per cent of assessed value, and will be phased in over two years. Looks like you're using new Reddit on an old browser. Looking for opinions on the housing plan put forth by the NDP. I bet this is not the case now. A friend who works at one of the big 5 downtown as a Hiring manager kept getting salary issues from new IT hires (kids straight out of comp sci Ryerson, U of t etc). My portfolio consists of 35 total units, mostly 4-plexes, with a duplex and some SFRs sprinkled here and there. Condo and WFH people now want bigger places. Not sure we'll keep seeing 10% gains every year, but it seems likely it'll be higher than 3%. We’ll also close those loopholes that let some greedy, wealthy speculators off the hook. We will have the same think pieces 10 years from now about a “bubble” bursting, singles will largely still be unable to afford a house (and will be the most vocal about complaining about prices) and things will keep moving. As a first-time buyer, it sounds like a plan that is desperately needed in Toronto to cool down the market a bit? https://www.cicnews.com/2021/02/why-canadas-401000-immigration-target-for-2021-is-achievable-0217170.html#gs.vtoph0. We recently toured a house that was clearly a new build. While over last 10 years everyone says we need to stop building out, suburbs suck etc. One friend showed me an investment opportunity for a real estate company. Real Estate Investors groups in Toronto Here's a look at some Real Estate Even though there has been a slowdown in Toronto’s real estate market lately, which is partly a result of the Fair Housing Policy introduced back in April 2017, . Turns out, people need the basic necessities - food and shelter. cuz i believe they never did after the GFC... i recall the Rational Reminder podcast had an interview whereby the guest says low rates are here to stay, because the lenders are seniors, and borrowers are young adults, and as population is aging, lenders increase in numbers (basically, the supply vs demand argument). CMHC and all other gov't orgs are obviously too scared to do anything so they can eventually claim "noone could foresee this happening" when this all inevitably falls apart. After 10 years its time to move to that coveted detached property. This has just happened to us for a second time in the last few months, so wanted to see if the problem is really pervasive in the city or whether we’ve just had some bad luck. Would be a catastrophe, economically, environmentally, socially by practically every metrice. Ignoring transaction costs, they have a mortgage of 520k, and at 1.5% their mortgage payment is a comfortable 1800 per month. I have an anecdote from pre covid. Thank god no government is advocating for this. Throughout the process we learned a lot about the Tarion warranty program and illegally built homes in the city. I wanted to also ask, what happens to condo prices as generally there is a significant condo fee appreciation year on year. Through hard work and some luck, they have cut their mortgage in half after 10 years and sell the condo for 1.68 million, leaving net proceeds of 1.4 million. Press question mark to learn the rest of the keyboard shortcuts, https://www.ontariondp.ca/sites/default/files/homes_you_can_afford.pdf. Investing in real estate can offer individuals both immediate income and longterm appreciation. What is a better investment option - the stock market or real estate? Their reasoning was that if they wanted them to live close to work and be available quickly, they are stuck paying huge rent to live downtown alone. Basically for an entry tech position for which the bank allocated around $65 000 to $70 000 starting, the new grads are demanding $85 000 right off the bat. right now good properties in the GTA are getting 5-7 offers. The sooner you get started, the easier it will be and the better off you will be later in life. introduce an annual speculation and vacancy tax on residential property. Good analysis of the market, but it leaves out wealthy immigrants and foreigners buying up that $3 million property. The site may not work properly if you don't, If you do not update your browser, we suggest you visit, Press J to jump to the feed. Their years of experience in the housing market as realtors, investors, and wholesalers make their podcasts invaluable, offering bi-weekly insight on property ownership to the average Canadian who wishes to … Though di ako sure how this works and penge sana ng insights niyo. While over last 10 years everyone says we need to stop building out, suburbs suck etc. Real estate appreciation is a tricky game because it is somewhat unpredictable, making it riskier than investing for cash flow income. Each time our bid amount increased. Zoning regulation is another big issue. The following link details a general idea of the rules but from my understanding (which could be incorrect, not a lawyer): If you are building a new home in Ontario for the purposes of selling it, you must be a registered builder with Tarion and the home is required to have a Tarion warranty. Millenials and onwards will all be working into their 70s anyways. Do we have enough people who make enough, get enough family money to buy the current stock of homes? 25 mins Long-term investing in ETFs and Real Estate funds Reddit I have been playing around with stocks and options, but I also want to have a safe fund that I can add to monthly and will grow over time thanks to compound interest. That foreign money coming into Canada could make prices unattainable for the average Canadian. Discovering real estate investing, she is now CEO of a national award-winning real estate company. i'm real curious.....will BOC really increase the rate back to pre-GFC levels? While house hunting we were running into other people who got outbid with us. Lots to think about. That’s because real estate is less liquid, more expensive to manage and to buy or sell, and highly geographically concentrated. Has anyone else had a similar experience? I want to hear your thoughts at how this price appreciation trend goes in 5 to 10 years. People who already own a condo or house have more equity and purchase power (like our scenario). The fact that they've chosen to go Laissez Faire on this HUGE issue is absolutely disgusting. If you change growth rate to 3 percent on the condo and future upgrade house, we are talking new mortgage of 1.1 million and payment of 4500 monthly. The pandemic came around and everyone with kids who can work from home wanted the suburbs and a bigger house. The lot had been severed and two homes were built, and the home had clearly not been lived in (some pieces unfinished, no appliances, etc. If the gov raise interest rates and halt all immigration for a few years, housing prices will immediately drop. Real estate investing takes time, flexibility, and ambition to make it work well. The home was built by a builder without Tarion though and so our lawyer advised us that no matter what the owner was saying (built both homes for my family but then decided to sell) the intention was clearly to sell this home and so the build was illegal and it would be very difficult to reasonably close a sale. I do not think 10% annual increases will happen. Moreover, real estate investing in Canada can entail higher levels of risk than stocks. Real estate investment banking firms connect those seeking capital for real estate deals with those who provide it. The pandemic came around and everyone with kids who can work from home wanted the suburbs and a bigger house. These are the families that will need to be able to afford the starter condos in order for the condo owners to be able to afford a bigger place. It was 1.3 million 10 years ago, but with 10% annual gains, it is now 3.37 million. What can be done? Prices are going up because someone will pay that price. I'm very very curious as to how sustainable this pro detach, anti condo market trend is. Our young first time buyer is lucky enough to have a down payment of 130000 gifted from parents and buys a starter condo in Toronto for 650,000. Does it seem likely that over 10 years this buyers income has increased sufficiently to service nearly $8k in monthly mortgage payments? More On This Topic With the real estate market still growing, here's how to invest this In GVA there's plenty of space to build more condos, but no more space to build more detach. Press question mark to learn the rest of the keyboard shortcuts. As I observe house prices steadily increasing in 2 of the largest markets in Canada where wages have not kept up, what is the end game? We’ll track and tax pre-construction condo flipping. Will anything really change much? Zoning regulation is another big issue. Update: I love the thoughtful responses. Truth is, nobody knows. If the answer is yes, prices will just go up. Will there be huge demands from Gen Z workers for higher wages, or will companies slowly start leaving the two largest markers? About Press Copyright Contact us Creators Advertise Developers Terms Privacy Policy & Safety How YouTube works Test new features Your home is not required to have a Tarion warranty if you are building a new home for yourself with the intention of living there. Corporate housing is not such a Resides in Parts Unknown (Last known location is Chipley, Florida). Apparently this was a consistent demand and they would end up hiring them. My bet is that the couple in this example either stay where they are or settle for something they can afford. But this seems unlikely, I think low rates will be here to stay. If covid couldn't crash the market, I don't know what will, There's many things but they all require gov action and the gov wants house to go up. I am asking just to see what your educated guesses are. We’ll end hidden ownership of real estate: Up to $130 billion of illegal money is laundered through Canada each year.25 Our real estate sector is especially vulnerable to money laundering practices that drive up the cost of housing, as anonymous shell companies are given free rein to snap up homes and other assets without the onus to disclose who benefits from these acquisitions. Banks analyze risk, the location and … This course can help you to profit from commercial real estate. Remember their original mortgage was 2k. I think he cited Europe & Japan as examples to prove his point. If you’re wondering whether or not investing in Toronto real estate is worth it in 2020, we tell you why it is, how to do it, and the best investments available. Do you see prices declining as the fees gobble up potential mortgage payments from new buyers? Option D: Earning less in a LCOL area will be more profitable than living in the GTA/GVA while earning more. More posts from the PersonalFinanceCanada community, Continue browsing in r/PersonalFinanceCanada, Press J to jump to the feed. The Latest Real Estate Market News & Trends For Toronto GTA and Surrounding areas Halton, Peel, York, & Durham. Over forty years of experience. That right there. I don't see any government intervention in the cards whatsoever..unfortunately. His book, "Investing in Debt" is an eye-opening look at paper. Will we suffer a price crash like in the 90s or will Toronto become more like Hong Kong and New York or other global cities where renting becomes the norm and Canadians need to figure out their retirement without seeing having property to their name? Investing in condominium can be a starting point for most buyers. r/RealEstateCanada: You don't have to be Canadian, you just have to be interested in real estate in Canada. Toronto Real Estate Investing should be part of Wealth Accumulation Strategy. I kind of get it that parental help is now crucial for Millennial Canadians to get a leg up and maybe afford a 2 bed condo in the GTA or lower mainland, and for older millennials, they use the price appreciation of their starter condo to fuel the purchase of their town home or house. I thought Covid of all events would in theory depress prices, but I see now that real estate is really resilient to price pressure. So prices will never drop. I've gotten to enjoy adding to this community and helping everyone out. Toronto did see a net 50 000 migration out of the city in 2020. Anyways the house sold and so I guess the purchasers were either not aware of these issues or they did not require financing and had a lawyer who was more agreeable to the situation. Investing in a Home This is by far the easiest way to get into the real estate market. Are condo purchases a game of musical chairs where one wants to stay in one until major repairs are required for the building and then the prices for those condos declines? Will wealthy immigrants fill in the void as locals without savings become priced out? However, for those real estate investors who are confident enough to ignore spooky headlines, there are many who have done very well with their Toronto real estate investment property. Corporate Housing If you want to be creative in your real estate investing ventures, then consider investing in corporate housing for great financial gains. Will there be huge demands from Gen Z workers for higher wages, or will companies slowly start leaving the two largest markers? A savvy real estate investor with over forty-five We would also have issues with lenders as they would expect a new build to have Tarion both for the limited warranty protection as well as acting as a stamp of approval that the build was conducted by a legal reputable builder. When it comes to investing in Toronto real estate, you’re either for it or against it., you’re either for it or against it. Won’t be consistent double digit price growth, probably deviate back to a norm of 3-4% annual growth. REITs, RELPs, and crowdfunding are indirect ways to invest in real estate… Investing In Toronto Real Estate: How Does One Make A Profit? What will happen at a societal level where let’s say a decently paid worker without an inheritance or substantial savings cannot afford to become a homeowner? If you’re single and can’t afford it now, you won’t be able to going forward. Dedicate all proceeds from housing speculation taxes to programs that deliver homes people can afford. Doubt it. So the question then is, how much more price growth can happen, when interest rates are already at their effective lower bound? If we start building out more this could help prices too. If you thought Toronto real estate was the best way to get rich, you'd be wrong — stocks have done better Back to video It’s clear either of those investments have delivered a tidy return but there’s one group of investors who have done exponentially better: those who bet on the equity version of real estate. This used to be the number one real estate investment in Toronto– buying condominiums during the pre-construction phase and selling them when they were built (often up to 5 years later). What happens to glass tower condo prices when the glass siding reaches end of life? Investing in REITs, Real Estate Investing Park Hotels & Resorts: What You Need to Know By Matt Frankel, CFP Park Hotels & Resorts was very hard-hit by the COVID-19 … Cash Flow Income This type of real estate investment focuses on buying a real estate property, such as an apartment building, and operating it, so you collect a stream of cash from tenant rent. Lots to think about. Real estate crowdfunding can be a very lucrative form of real estate investing. Despite some nervousness in early 2019, Toronto is regaining momentum thanks … This then caused issues with some staff hired a few years ago who who started on a much lower starting salary but they generally got into the housing market. I was approached by a former coworker about investing in the real estate firm for which he now works. I think this is our sad future. Hello, I am new to investing and so far, I've only been saving sa banks and pag-ibig mp2. LOL, I guess whatever comes after Gen Z, will have hell of a time living in a dumpster. Already is for many types of professions. Update: I love the thoughtful responses.