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Originally posted by rahul_singh23

I rented in Calgary for 4 years ( 2007-2011) average rent $1500/month of condo 380 K (2007 price), $350/month condo fee, $1500/year taxes, $500 total maintenance. Same condo is selling now for 300-310K.

Add mortgage interest, condo fee, taxes, negative equity, mortgage break penalty, realtor commission, closing cost and other miscellaneous cost than renting was a good deal. Yes, I moved with a month notice to US. There is a price for flexibility and better opportunity.


1. How do you explain effect of Canadian sub-prime, 5% down ( 5% cash back available) and super low interest rate affect?

2. How do you explain concern of Jim F and Mark C over Canadian RE and personal debt?

3. How do you read future of Condo capital of North America (GTA) after Condo capital of America (Miami)?

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It may not...but what is changing is that the expense on interest will be reduced...instead of paying 65K for years in interest, I will be paying $47K in interest. 2 years back same house was available for sale for $410K, I did not buy as an investment because I never thought it would appreciate that much. A house that was for 585 K a year ago today it is saling at 675K, PM me and I will can send you the link of houses in oakville and Burlington area..mind you I am just talking about the brand new houses and not the resales/condos. 525 may not become 810K but it will not go down either.

Me thinks the RE market is a house of cards. With no job growth even immigarnts will think twice about coming. The condo market is surviving on speculators and investors who are in for a rude wake up call once rates move up. A matchbox for 500K soon downtown will look like a first world chawl.

Meanwhile, lunacy prevails in Toronto.






http://www.theglobeandmail.com/life/home-and-garden/real-estate/buying-and-selling/this-toronto-bungalow-sold-for-421800-over-asking-yes-really/article2362078/


This Toronto bungalow sold for $421,800 over asking. Yes, really


As hard as it's becoming to shock jaded Torontonians with bidding war antics, one young woman managed it last week when she beat out 17 rivals for a house in Willowdale.

The asking price was $759,000; her triumphant bid was $1,180,800.

Her prize? A pleasant three-bedroom bungalow that hasn't had a whole lot of updating since it was built in the 1960s or so.


An offer $421,800 above the asking price is a lot to absorb and a reader e-mailed to say that folks in the neighbourhood were all talking about it.

Michael Adelson and Sam Samivand of ReMax Realtron, who represented the seller, expected more than asking, but not 56 per cent more.

“We thought the market would take it to its logical level – and the market took it to its illogical level,” quipped Mr. Adelson.

The house is within walking distance of the Yonge subway line and stands in the Earl Haig Secondary School district, which is popular with parents. The lot is not particularly deep but it is 60 feet wide, which makes it appealing to some builders.

Mr. Adelson says that four bids came in above $1-million on offer day. The agents gave those four competitors the chance to increase their bids and alter any conditions attached to their offers. He also looks for a hefty deposit in the form of a certified cheque in order to protect the seller.

“It's amazing and it's a little bit scary as well, to be honest,” says Mr. Adelson of the action on this one. “When you get a price like this, it's off the chart.”

In previous sales nearby, bungalows have sold short of $900,000.

Mr. Adelson worries that offers have become so rich that deals may fall through if a bank has the house appraised before providing a mortgage. If the sale price is too far out of line with appraised value, the bank may be unwilling to provide financing.

In this case the successful bidder is a university student originally from China with family money behind her, says Mr. Adelson. She assured the agents there would be no problem in closing the deal.

Mr. Adelson says he has been selling in the area for nearly 30 years and has trouble remembering a house in the past 10 that hasn't received multiple offers.

“We've been expecting a market correction for some time and it doesn't come.”

He sees so much appetite among buyers now that he's not certain there will be a cooling any time soon.

John Whyte, an agent with Century 21 Leading Edge Realty Inc., says there was lots of buzz in his office about the outcome of this sale.

The area has seen a lot of redevelopment as builders tear down older bungalows and put up two new houses or one larger one. The area around Yonge and Finch is in high demand because of the subway and the pace of change along that stretch of Yonge.

Approximately 10 new condominium buildings are planned for the Yonge corridor between Finch and Highway 401, he says. A Whole Foods is slated to arrive and the retail strip is thriving.

“The demand is there for the area,” says Mr. Whyte. “It's convenience – there are too many cars in the City of Toronto as it is.”

Meanwhile, on the Toronto Community Housing file, the proposal to sell off hundreds of city-owned houses is in for some further scrutiny.

Council voted Tuesday to pass the file to councillor Ana Bailão, who will chair a working group set up to investigate all of the possible solutions to overcoming a $750-million repair backlog.

Ms. Bailão and the group will look at scenarios that include selling off some of the houses, forming partnerships with non-profit agencies, or finding ways to help tenants purchase properties.

The group is slated to come back with an interim report in May and a final report in September.

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Originally posted by bhootnath

I guess , looking at this many over here tried to become Peter Schiff, and started warning about Canadian housing market since 2008. Four years later, the prices already doubled. so If someone started paying rent of five figures 4 year ago.would have already paid min 5 mil in rent . Should he have invested those 1 mil in the begininig he would have earned more instead of loosing 5 mil in rent.
Web2000, still curious to know how long have you been waiting. Now also wondering how much influence these expert opinions on this forum had on your decision making.

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Ghost of Fannie Mae Haunts Canadian Housing as Exposure Worsens: Mortgages

http://www.bloomberg.com/news/2012-03-09/ghost-of-fannie-mae-haunts-canada-as-exposure-worsens-mortgages.html

Time to panic about the housing market
http://ca.news.yahoo.com/time-to-panic-about-the-housing-market.html

But pry through the pocketbooks and bank accounts of the average Canadian and the country looks remarkably like the America of 2005—or even worse by some measures—complete with record house prices and unprecedented debt. “One of the really terrible narratives we’ve allowed to develop in the minds of Canadians is that somehow we are better than the U.S. and so that means we have nothing to be concerned about,” says Ben Rabidoux, who runs The Economic Analyst website and parlayed his obsession with watching the housing market into a job with a Wall Street firm that advises institutional investors on how not to get caught up in the Canadian miracle/disaster.

Since 2008, Canada’s ratio of debt to after-tax income has exploded. By the third quarter of 2011, Canadians owed an average of $1.53 for every dollar they brought in, up 40 per cent in the past 10 years and just below where the U.S. was before its housing crash. By the end of 2010, the average homeowner had just 34.3 per cent equity in their home, the lowest level in two decades and a 20 per cent drop in just four years.

http://www.greaterfool.ca/2012/03/09/the-harbinger/#comments
a second major bank quietly told the industry it’s getting out of the high-risk mortgage business. TD will shutter its non-prime lending operation, TD Financing Services, at the end of the month. This comes as CIBC formally announced it’s selling FirstLine mortgages, which for years has been shoveling out billions to finance mostly high-ratio loans made through mortgage brokers across the country.

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I heard that Canadian Banks are advising 10% down with CMHC instead of 20% down and no CMHC.

http://albertabubbleblog.blogspot.com/2012/03/so-were-alberta-bloggers-right-damn.html

Averaged priced SFH Calgary May 2007 $505,000
Averaged priced SFH Calgary Feb 2012 $460,000
Savings of buying now versus then $45,000

Now the financing.

$505,000 financed @ 7% over 30 years = $3,370/mo x 60 months = $202,000
$460,000 financed @ 3% over 30 years = $1,936/mo x 60 months = 116,160
Mortgage payment savings over the full 5 term total $85,840
$45,000 + $85,840 = $130,844
So buying a home in Calgary today is $130,844 cheaper now than it was at the bubbled up peak.

Edmonton.

Averaged priced Edmonton SFH May 2007 $451,000
Averages priced Edmonton SFH Feb 2012 $360,000
Savings now versus then $91,000

Financing.

$451,000 @ 7% over 30 years = $3,007/mo x 60 months = $180,420
$360,000 @ 3% over 30 years = $1,515/mo x 60 months = $90,900
Mortgage payment saving over the full 5 year term = $89,520
$91,000 + $89.520 = $180,520.
So buying a home in Edmonton today is $180,520 cheaper now than it was at the bubbled up peak.
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Calgary Real Estate Board doesn't give out the lower median prices anymore.