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Admiral Beez said:
IDK, never in my 24 years here in Cabbagetown have I seen so many houses taking weeks and weeks to sell.

https://www.realtor.ca/map#ZoomLevel=16&Center=43.666230,-79.368790&LatitudeMax=43.67304&LongitudeMax=-79.35180&LatitudeMin=43.65942&LongitudeMin=-79.38578&Sort=6-D&PGeoIds=g10_dpz83vjg&GeoName=Cabbagetown, Toronto, ON&PropertyTypeGroupID=1&PropertySearchTypeId=1&TransactionTypeId=2&BuildingTypeId=1&Currency=CAD

These prices are insane still. $2+ million for three floor semis? Who can afford these? When I bought in 1998 it was well under $300k, or about four times our household income after tax income. Now it's about fifteen times our current income. Jeez.
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If you look at transactions, looks like most of the recent ones in Cabbagetown are hundreds of thousands below asking, or well down from earlier transactions. A lot of deals falling through on valuations.
 
I was reading an article, somewhere, a few days ago that outlined a couple who bought a house near the end of the low-interest/high price wave, then either couldn't get enough for their house or it wasn't moving (can't remember) and ended up selling the house they just bought for $60K less just to get out of it.
 
lenaitch said:
I was reading an article, somewhere, a few days ago that outlined a couple who bought a house near the end of the low-interest/high price wave, then either couldn't get enough for their house or it wasn't moving (can't remember) and ended up selling the house they just bought for $60K less just to get out of it.
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Ouch. Unless you can easily float both, never buy a house until you’ve sold your house. You don‘t remarry until the current spouse is divorced or expired.
 
It’s a timing thing. We bought then sold a few years back when the condo market was hot. We did it that way because both my siblings sold and then couldn’t find a place to buy … one was “between houses” for a year because once they did buy, they had to do some significant reno work.
 
With prices down 20-30% YTD and interest rates spiking, do we think this might be enough to start slowing down the pace of development? Seems like we might start to see too large a gap between new build and resale prices.
 
afransen said:
With prices down 20-30% YTD and interest rates spiking, do we think this might be enough to start slowing down the pace of development? Seems like we might start to see too large a gap between new build and resale prices.
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Some of the GTA's greatest development was when interest rates were double digits. After we arrived in Canada in 1976 my parents in the early 1980s bought a new-build house at Derry Road and Winston Churchill and I believe my Dad said the mortgage was over 15%.
 
Admiral Beez said:
Some of the GTA's greatest development was when interest rates were double digits. After we arrived in Canada in 1976 my parents in the early 1980s bought a new-build house at Derry Road and Winston Churchill and I believe my Dad said the mortgage was over 15%.
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That would require a lot of adjustment between home prices, rents, and cost of construction. Home prices cannot be 10x incomes with 15% interest--it just doesn't pencil out.
 
afransen said:
With prices down 20-30% YTD and interest rates spiking, do we think this might be enough to start slowing down the pace of development? Seems like we might start to see too large a gap between new build and resale prices.
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Only about 10% in my area.
 
Much of the 905 is off around 30%. Comps to my house are down about that much since the high in Feb.
 
afransen said:
That would require a lot of adjustment between home prices, rents, and cost of construction. Home prices cannot be 10x incomes with 15% interest--it just doesn't pencil out.
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A fair point. When my wife and I bought our three floor, five bedroom semi in downtown east in 1998 it cost about $290k when our combined income before tax was about $60k, or about 1/5 of the house cost. My children won’t be so lucky.
 
Admiral Beez said:
Some of the GTA's greatest development was when interest rates were double digits. After we arrived in Canada in 1976 my parents in the early 1980s bought a new-build house at Derry Road and Winston Churchill and I believe my Dad said the mortgage was over 15%.
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I bought my first house in 1980 and felt blessed by angels to get a 5-year mortgage at 10%.
 
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