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^ ^ ^

the classic measurement of affordability using price to income ranges from 3.0-3.5X, so I used the outer range of 3.5x.
i can see your use of 4x, but beyond that is pushing it imo.

the average resale price of $550 psf was a mix of products ranging from 20 yr old Minto Plaza at Bay/Dundas, 10 yr old CP condos, 10 yr old Tridel Richmond selling for $500 psf, 10 yr old Context District Lofts for $550 psf to slightly newer builds like Mozo and Spire selling for $600+ psf.

i agree that alot of the younger ppl want it ALL, want it NOW. it's an attitude of entitledment.

the main reasons i see for the high prices throughout Canada are low interest rates and loosened lending/CMHC standards.
 
Why BUY when you can RENT???

Here is an exmaple of a $350,000 condo unit:

1 Bedroom Condo Expenses Remark
Purchase Price $350,000.00 580 sq ft unit at $600/sqft
Down Payment $70,000.00 20% down payment
Mortgage $280,000.00
Monthly Payment $1,355.00 at 3.2% over 25 years
Maintenance fee $348.00 typical at $0.6/sqft
Property tax $292.00 1% of assessed value
Utilities + Insurance $150.00 typical 1 bedroom
Total $2,145.00 (for Buying)

You can rent one bedrooms downtown for under $2,000 + utilities... and you can put that $70,000 in a GIC earning 2%... gaining $1,400 per year, and you don't have to worry about home owners insurance (rental insurance is like $120/year) or repairs... so buy or rent???.... oh and don't forget closing cost, but you do get some money back if your a first time homeowner... but really currently it's better to rent than to own... right now.
 
TheSpeculator said:
It all depends on the variables you choose.

There are pre-con units going for $458 psf today on Bathurst (don’t want to name names, but this was just emailed to me hours ago).
Click to expand...

I too would be intrigued.

I am guessing not very high, not great location, and minimal amenities. That said a comment for cdr. Even at $458/sq.ft. x600 sq.ft. totals $274,800. By your metrics cdr; $274,800/$60000
= 4.58x. This is not even downtown. So while I am curious, if you are true to your metrics, I assume you would not be interested though compared to the 5.5 to 6.5x being quoted for TO, this is considerably better. I think without knowing where the project is (other than on Bathurst) and what it is, it would lend support to the idea of differentiation of cost/foot reasonably paid in Downtown core say vs. Bathurst(assuming it is not in the core).
 
macookie said:
Why BUY when you can RENT???

Here is an exmaple of a $350,000 condo unit:

1 Bedroom Condo Expenses Remark
Purchase Price $350,000.00 580 sq ft unit at $600/sqft
Down Payment $70,000.00 20% down payment
Mortgage $280,000.00
Monthly Payment $1,355.00 at 3.2% over 25 years
Maintenance fee $348.00 typical at $0.6/sqft
Property tax $292.00 1% of assessed value
Utilities + Insurance $150.00 typical 1 bedroom
Total $2,145.00 (for Buying)

You can rent one bedrooms downtown for under $2,000 + utilities... and you can put that $70,000 in a GIC earning 2%... gaining $1,400 per year, and you don't have to worry about home owners insurance (rental insurance is like $120/year) or repairs... so buy or rent???.... oh and don't forget closing cost, but you do get some money back if your a first time homeowner... but really currently it's better to rent than to own... right now.
Click to expand...

With the ever-increasing cost of purchasing and maintaining property in the 416, and the relatively flat rental increase guideline set out by the Ontario government year-after-year, renting is definitely the wiser choice provided the opportunity cost of that down payment is realized and put into a healthy investment. Gone are the days of 10:1 or even 15:1 purchase price-to-annual rent ratio investment properties.
 
macookie said:
Why BUY when you can RENT???

Here is an exmaple of a $350,000 condo unit:

1 Bedroom Condo Expenses Remark
Purchase Price $350,000.00 580 sq ft unit at $600/sqft
Down Payment $70,000.00 20% down payment
Mortgage $280,000.00
Monthly Payment $1,355.00 at 3.2% over 25 years
Maintenance fee $348.00 typical at $0.6/sqft
Property tax $292.00 1% of assessed value
Utilities + Insurance $150.00 typical 1 bedroom
Total $2,145.00 (for Buying)
....
Click to expand...

You forgot to mention the mortgage pays principle plus some gains as a result of appriciatiation rate for the condo. Take them into consideration and the renting option becomes less attractive. I think the justification for renting is instability and uncertainty of real estate market and possibility of burst...
 
vz64 said:
You forgot to mention the mortgage pays principle plus some gains as a result of appriciatiation rate for the condo. Take them into consideration and the renting option becomes less attractive. I think the justification for renting is instability and uncertainty of real estate market and possibility of burst...
Click to expand...

Yep, on the first year you'll be paying about $5000 towards your principle and if prices go up a modest 5%, that's another $17,500 of added equity. The opportunity cost of the 70000 at 2% is 1400, plus a few dollars on the rent (since you don't pay all the rent on the first day).
 
macookie said:
Why BUY when you can RENT???

Here is an exmaple of a $350,000 condo unit:

1 Bedroom Condo Expenses Remark
Purchase Price $350,000.00 580 sq ft unit at $600/sqft
Down Payment $70,000.00 20% down payment
Mortgage $280,000.00
Monthly Payment $1,355.00 at 3.2% over 25 years
Maintenance fee $348.00 typical at $0.6/sqft
Property tax $292.00 1% of assessed value
Utilities + Insurance $150.00 typical 1 bedroom
Total $2,145.00 (for Buying)

You can rent one bedrooms downtown for under $2,000 + utilities... and you can put that $70,000 in a GIC earning 2%... gaining $1,400 per year, and you don't have to worry about home owners insurance (rental insurance is like $120/year) or repairs... so buy or rent???.... oh and don't forget closing cost, but you do get some money back if your a first time homeowner... but really currently it's better to rent than to own... right now.
Click to expand...

Actually, purchasing a Condo at 350000 condo with 20%, monthly mortgage would be 1236 a month (based on a 30 year amoritization). Property tax is assessed around .7% of the value. The city does not assess based on real sale values, they seem to have there own system. Maintenance fees are closer to 50 cents a square foot. Based on this your total expenses would be 1719 a month. Insurance is usually $200 a year, and utilities should only be around 30-50 dollars a month for a hydro. Based on that all in should be 1750 a month. To rent this type of place can cast you around 1600 a month plus you would have to pay for hydro.
 
drewp said:
Actually, purchasing a Condo at 350000 condo with 20%, monthly mortgage would be 1236 a month (based on a 30 year amoritization). Property tax is assessed around .7% of the value. The city does not assess based on real sale values, they seem to have there own system. Maintenance fees are closer to 50 cents a square foot. Based on this your total expenses would be 1719 a month. Insurance is usually $200 a year, and utilities should only be around 30-50 dollars a month for a hydro. Based on that all in should be 1750 a month. To rent this type of place can cast you around 1600 a month plus you would have to pay for hydro.
Click to expand...

The problem with this calculation is that the cost of home ownership is not static. There are many more variables involved which can change versus renting. With rent, you essentially only need to consider cost of utilities (if not inclusive) and account for annual rent increases which are clearly set forth by the province at 3.1% for 2012 and a measley 0.7% in 2011.

There is quite a bit of supply as far as rental units go, however, renters are also more picky about the places they rent too since many renters are young professionals looking to save up until they can buy. With the number of 1-bedroom condos on the market, even though the rental demand will still be strong in the sought-after neighborhoods, rents are not going to and have not been increasing at the same rate as home prices have.

Also keep in mind the $70,000 that you could be using for other investments, whether they be exchange traded funds or government bonds or what have you. Don't get me wrong, investment properties are still worth it in the long run. That said, I think we ought to recognize that in this market, renting isn't exactly throwing money away as was the mentality of the past.
 
Rent increases only are capped for Condo/Apartments built before October 31st 1991. The landlord can increase the rent 100% if they want to.
 
From the Globe and mail today:

http://www.theglobeandmail.com/repo...hows-further-signs-of-cooling/article2339028/

Housing market shows further signs of cooling
steve ladurantaye
Globe and Mail Update
Published Wednesday, Feb. 15, 2012 9:36AM EST
Last updated Wednesday, Feb. 15, 2012 12:09PM EST

222 comments

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The Canadian Real Estate Association says the country’s real estate market is “stabilizing,” as it reported the sharpest slowdown in demand in almost two years.

Home sales across the country were down 4.5 per cent in January compared to December, the sharpest monthly decline since July 2010. Average prices were 2 per cent higher than a year ago at $348,178, the smallest year-over-year increase in the last year.
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Canadian housing market to stay strong

Market watchers have wondered if Canada’s real estate sector is due for a correction, with prices up considerably since the recession and Canadians taking advantage of low interest rates to buy increasingly expensive homes.

While Canada Housing and Mortgage Corp. said Monday the next two years should see stability in prices and the number of sales, some bank economists expect price drops of up to 10 per cent in some markets such as Toronto and Vancouver.

Activity did slow in many of Canada’s major centres to start the year, CREA said.

“Activity was down in over half of all local markets in January from the previous month,” it stated in a release. “Led by declines in Greater Toronto and Montreal, demand also softened in a number of other major urban centres including the Fraser Valley, Calgary, Edmonton, Winnipeg, Ottawa, and Greater Vancouver.”

But it’s not willing to get in on the bubble debate.

“The national housing market is stabilizing and remains well balanced,” said CREA president Gary Morse. “That said, forecasts for economic and job growth going forward vary widely for different parts of the country, suggesting a possible continuation of a softening trend in some markets, as well as the potential that demand will pick up based on strong fundamentals in others..”

The association – which represents the country’s real estate agents – also said that market watchers shouldn’t pay too much attention to average monthly prices in the coming months because last year’s figures were skewed by a number of high-price sales in Vancouver.

“Year-over-year comparisons in the national average price are expected to become volatile and may turn negative, reflecting average price developments in the first half of 2011 in Vancouver,” said Gregory Klump, CREA’s chief economist. “At that time, high-end home sales in Vancouver’s priciest neighbourhoods surged to all-time record levels, which skewed the national average price upward considerably. A replay of this phenomenon is not expected this year. As a result, comparisons for national average price to year-ago levels over the coming months will reflect an upwardly skewed base effect. For this reason, year-over-year comparisons should be kept in perspective.”
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222 comments
 
drewp said:
Rent increases only are capped for Condo/Apartments built before October 31st 1991. The landlord can increase the rent 100% if they want to.
Click to expand...

drewp reality is that rents have marginally increased. If landlords could, they would up rents rather than see them stagnate. It is a balance between renters ability to pay and landlords ability to charge. Landlords are not increasing as they realize renters as a group cannot afford significant increases. So while your statement is technically correct, it is quite clear I believe if a landlord increased the rent from 1600 to 3200 for a 1 bedroom condo in TO what would ( or rather would not ) happen.
 
I think you are taking my comments too literaly, of course they won't increase rents 100%. The market will dictate that of course. What I am saying is that there is no limit to what the Landlord can increase for rent. I do notice where we see the most increases is the year after a condo registers due in part because there are less units on the market in that building.
 
Last edited:
^^^ Agree, many less units after the initial flooding on the market.
Also the amenities are usually done by a year and not living in a "construction zone" as it were.
I realize the 100% was not what you meant drewp....I was just pointing out the reality that there have been only marginal increases in the past 10 years due to ability to pay on the renters part. The rents will only go up significantly if/when we start getting increasing wages to justify it, at least that is my view.
 
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