CMHC: Home prices could fall 47.9%

[fratri]

First house buy a duplex or a triplex and live in part of the house and rent the rest out. If rates do what they say there will be lots of renters. After 5-8 years you can either sell for profit or keep it as income and buy another house to live in.

As far as the future goes cash is KING! You need to insulate yourself from the ability of the gov't to claw back anything.....because you know they will be recouping COVID for the next 10-15 years

No way, I am not sharing my new 2400 Sqft house with anyone..... I want the two car garage and all brand new stuff, seem to hear this more often than not from our youth these days.... Wants vs Needs.....they should teach that a little more in school...

[410001661]

No way, I am not sharing my new 2400 Sqft house with anyone..... I want the two car garage and all brand new stuff, seem to hear this more often than not from our youth these days.... Wants vs Needs.....they should teach that a little more in school...

......sorry but listen to the post. A guys daughter and husband is looking for a 1st house......probably not in Brantford where housing is the cheapest I have ever seen. If they are looking in a higher priced area and have nothing to sell as leverage you have limited clout. Use other people to leverage your first buy. Buy smart and you will be better off when you sell or (keep as an investment property) vs going to where real-estate is cheap........it is cheap for a reason

[trimmer21]

So,what does everyone think of this? I was just talking with my daughter (real estate agent). Her clients,5 years ago,bought a house in North York in a middle class neighborhood for $779K,just got in under the wire and mortgaged the property up the wazoo at almost 75% of the value,including a huge second mortgage from the Bank of Mom&Dad. They struggled to make the payments and taxes which took almost 90% of their combined income,so,for 5 years,they're literally living hand-to-mouth. They list their house for sale last week,daughter shows them an older house south of Peterborough for $510K that needs some work,but,nothing immediate. She lists their house at $1.4M and it sells unconditionally in a week. The kids pay cash for the house and there's lots left over for renos. This stuff is typical according to my daughter. The kids are sacrificing like crazy in the short term and making out like bandits in the long term. Kids are smart. We don't give them enough credit.

[Fisherman]

Looks like they did well, but now they're stopping at the gas pumps more often, more hours on the road, is it really worth it.

[dean.f]

Looks like they did well, but now they're stopping at the gas pumps more often, more hours on the road, is it really worth it.

This is what blows my mind, I have coworkers who drive 2 hours 1 direction in perfect weather and traffic. Imagine the vehicle costs and the toll on health and family. Come winter time or cottage season traffic they spend half their life during the week driving. I opted to suffer up front and pay more on the mortgage to live driving junkers and have no internet or cable for a few years and I'm sure glad I did because commuting 3-4 hours daily and replacing my vehicle every couple years would get old quick.

[trimmer21]

Looks like they did well, but now they're stopping at the gas pumps more often, more hours on the road, is it really worth it.

Evidently,the commute for them is no biggie. The trick is to own your home free and clear. Once you're there,and as long as they can carry utilities,traveling and taxes,not a hell of a lot else really matters. The economy could crash completely and as long as you can turn a few bucks to keep the heat on and the tax mutts away,the world can crash around you.

[MikePal]

The trick is to own your home free and clear. Once you're there,and as long as they can carry utilities,traveling and taxes,not a hell of a lot else really matters.

That's very true..I've been mortgage free for almost 10 yrs now with a pension that covers all the ancillary costs. Sure is a nice to be settled in.

I've been talking to a few other pensioners, with housing market being so good, is it time to sell off the 'family' home and head towards renting or owning a condo closer to amenities for the last phase of our existence. Mix views. Most would have enough equity to bank and live comfortable off it.

Some worry about leaving an inheritance for the kids. Funny thing is, their own parents are still alive and they are in the 60's with no real need for the money that will be left to them.

Some interesting stats:

In fact, almost 9 in 10 Canadian homeowners aged 25 to 44 (88%) have a mortgage. In comparison, only about 17% of Canadian seniors aged 65 or older have a mortgage. Among those who have an outstanding balance on their mortgage, the median amount owing is $200,000. In fact, the median mortgage debt of Canadian families has more than doubled since 1999, even after adjusting for increases in salaries and the cost of living.

On top of this, about 13% of Canadians have an outstanding balance on a home equity line of credit (HELOC) attached to their primary residence. For those with an outstanding balance on their HELOC, the median amount outstanding is $30,000.

from: https://www.canada.ca/en/financial-c...rvey-2019.html

[JBen]

Not sure why some almost seem to welcome rates taking off and a crash. We got a wee little taste of what would happen in 2008. We are getting another today.

The “damage” won’t be limited to just the people that are house poor. Banks will take beatings, choke off credit ( liquidity crunch). People won’t be able to borrow, nor will small businesses etc etc. Or if their still able, their rates will be much higher...meaning.....2008 on steroids......now couple that with many who doubt have it so good, being sacrificed today. Forced to live on rice and water. Many more, who are holding on today.....The snowball grows and gains momentum...

others won’t spend, etc the economy will go into a massive tailspin. Seniors will see their savings and pensions wiped out, and so on. We don’t live in a bubble and the ripple effects of a housing crash will touch near everyone.

Maybe 20 years ago, or when we were young and starting families renting was more viable. Have you guys checked the rental markets?
They aren’t that much better. Why pay $1500 for a closet, in a sketchy hood. When $2,000 or $2,500 is your mortgage and land taxes.

Will say, if it happens. No one to blame but ourselves. Our greed, our keeping up with the Jones’s, especially Boomers...Our lack of forsight going back to around 2000. Not diversifying etc etc etc..

Might also want to recall one boatload of people for whom their homes are their retirement funds. Thanks to greed in PS, greed in private and stagnant wages and more...Maybe you all want to pay to house and feed them post crash...


just rewards perhaps, because Boomers and their own wants, screwed it up, but it could make Greece look good.

[oaknut]

I doubt if houses will fall by that amount, you cannot build a house for less then 200 thousand excluding the land. Just to replace my house which was built in 1973 the cost would be approx 275000 with material and labor.

Build cost at the moment is 8nsane, material prices have nearly doubled in the last couple years. If you can have a house built at $300 a foot, you're doing damn good. Most are now hitting the $375-$400 a square foot range.

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[JBen]

lol. Literally just saw and read this.
The article should have delved into how much debt he had to take on.
$330,000 to refurb a garage into a 1 bedroom rental. He initially listed it for $2,200/month. No bites, so he dropped to $1,800/month. Why? Because demand>>>>>>>>supply. Why?

~In 2018, Sadler lived in a three-bed, one-bath rental at Broadview and Danforth, paying $2,400 a month.
~1.1 million for a small house ( My old stomping grounds, I can picture what 1 million bought). Even with $250,000 from his father ( likely the Down Payment)...So call it $700,000 mortgage. Plus $330,000 ( his fathers $$) from somewhere to convert the garage. Ultimately, robbing Peter to pay Paul..or 6 of one, 1/2 dozen of another

$1,800 per month to rent this......
https://torontolife.com/real-estate/...ebfISkhbZHq_mk


And if it crashes........................
He's 1 grain of sand, that would start the mother of all landslides that few would side step.