According to a Financial Post report the average price of detached homes in Toronto passed the $1 million mark for the first time last month. 🙂 The GTA has experienced a housing bull market for almost 2 decades and there is no sign of it stopping.
I want to congratulate Torontonians for reaching the $1 million milestone. Welcome to the club. 🙂 Meanwhile the average detached home in Vancouver now stands at about $1.4 million. But hey, it’s not a competition. 😉 And extreme cases like the Point Grey mansion that was sold a few months ago for nearly $52 million will skew the average results. Can you imagine the commission real estate agents make around here?
We often hear complaints about how unaffordable housing is in Canada. But there are two sides to each coin. My friend’s parents bought a home for $70,000 over 40 years ago. They have since paid off their mortgage, and their home is now worth over $1 million. 😀 They plan to sell their house soon in order to downsize and will become liquid millionaires. That sounds great to me. The majority of Americans and Canadians are home owners. So financially speaking rising home prices should benefit most of us. 🙂
Recently a Vancouver house sold for $567,000 over the asking price. It was listed for $1,600,000, but sold at $2,167,000. People are even making jokes about how insane the housing market is. Below is a short video I found of a Vancouver real estate agent talking about his inexperienced clients. It captures the ridiculous nature of the current market around here. 😆
The video may be a parody, but it’s still funny because it’s true. $1 million doesn’t buy much in North Vancouver these days. But what’s even more interesting is a recent study by Vancity which shows that by the year 2030 the average detached home price in Vancouver will exceed $2.1 million. The report also suggests many millennials will have to lower their home ownership expectations as Vancouver becomes more unaffordable. “We really need to stop talking and really come up with policies and strategies that will help people to buy homes in the future,” said Andy Broderick, a vice-president at Vancity.
As a real estate investor, I don’t really mind if the average price rises up to $2.1 million lol. But if Vancity wants to promote cheaper housing then I would do the opposite of what Mr. Broderick suggests. I think home prices are expensive today because there are already too many “policies and strategies” that make it easy for anyone to buy a home. If policy makers want lower housing prices they should make it harder for people to buy. Less buyers in the market will help push home prices down. 🙂
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Random Useless Fact:
Anything can be offensive if someone wants it to be.
It’s shocking how crazy the real estate market is here in Vancouver. We are seeing more and more condo developments in Vancouver… This will in term drives the hiring process up even further I think.
I just hope Vancouver doesn’t turn into one of those cities where employment relies too heavily on construction. Real estate development is beneficial to GDP but we need more perpetual jobs for a sustainable economy.
My friend from Toronto said she wants to buy in Vancouver, housing price in Canada should up like a rocket. I’m just at awe when they bid $550k over the asking price. I want to see housing around here do it, yet I don’t. Because people will act irrationally and eventually the market collapse. The could trickle to the broader market.
It’s a difficult balance between wanting growth but not at the expense of building a potential bubble.
That vid was hilarious! Yet another reason why I won’t be buying a house for a very, very long time. LOL! It’s sad but real estate is almost going the way of financial advisors where they’ll sell anything to get their commission and not care about the customer. You don’t know what you’re doing? Okay, let’s rip you off and get you in lots of debt. People need to take the time to educate themselves and say no. They’re focusing only on I want to live here and it gets them in trouble because it’s not actually what they can afford.
Honestly, they need to become much more strict on investment property rules. The investors are the ones that are pricing everyone else out of the market – especially foreign investors. They buy sight unseen. I’ve overheard many a convo over lunch in Toronto of the insane things foreign investors are doing to hide their money, make more…etc.
Some real estate agents like to play games but in the end they have their own best interest in mind. The reality of the housing market now requires buyers and sellers to be diligent and do their own homework. I know there are a lot of foreign investors around here as well. I think there should be restrictions in both Toronto and Vancouver on foreign ownership, such as making them pay higher property taxes lol.
Liquid,
Whoa! And here I thought Belgium was ridiculously expensive – although it probably will be when you compare the median and average income between our two countries. I’m actually quite torn between home ownership and renting. On the one hand I would love the added security of owning my own place, but financially it could be smarter to continue renting.
Also, government policies stimulating people to purchase homes don’t work. We’ve seen housing prices inflate at two to three times the historical speed since tax cuts were awarded to first-time buyers here in Belgium. Balancing incentives and not distorting the market remains very difficult!
Cheers,
NMW
I don’t like too many incentives either because it’s not based on real economic needs. In the last recession Spain’s real estate market lost 50% of its value on average. I would expect governments around the world to learn from each other, yet somehow past mistakes are still being made today.
I think it’s really sad that housing is so expensive in many of the Western countries, especially here in the UK. Our house went up in ‘value’ by £100k in 2 years. Now if that isn’t crazy, I dunno what is. The sad thing is that these modern houses are rubbish. Tiny rooms, no storage space, tiny gardens, low ceilings, all false partitions instead of brick walls like they were in the old days… the list goes on…. I don’t want this to turn into a rant, but the state of housing and housebuilding is pretty bad in the UK in my opinion. It saddens me greatly to be honest. We are just super lucky that we own our own home, and only because of a random inheritance, otherwise we wouldn’t have been able to buy anything around here.
I laugh a lot with video. It is not joke.
I am incredibly lucky – bought a brand new townhouse a year ago near Toronto area (little north of Oshawa – just 20 minutes from Toronto) for $260 000. It is a developing area, may be I could sell it for $1 million in 10 years 😀 .
Cheers,