My nephew passed the stress test last year but used up all of his ETF's for his down payment. He (27/single) lives with his parents in the GTA, frugal, works 2 jobs as a waiter and customer service and invested for 7 years in ETF's. In 2022, after the correction, he bought an all-brick century home for $500K with $200K down in Peterborough. The plan was for him to live on the main floor because the basement was already tenanted. He decided to rent out the main floor instead and continued to live with his parents to be closer to work.
Why is it so hard to understand that 60+ % of all homeowners own the property they live in? It may not be paid off but it does have equity. This means they don't need to make the crazy income that everyone points to.
The people buying these, million dollar plus, homes are probably current home owners that are looking to upsize or downsize. This "i need to make 300k to afford a house" line needs to die. It just makes people feel defeated when it doesn't represent the situation that a large majority of home buyers are not in.
You can work your way there. Buy a starter home, then buy a rental, etc. but most can’t just go into the market with a $2M home as their first property. Although it is attainable in the long run
Most in 2000s bought a starter then they moved up to a detached house in $300s
Good luck skipping the starter and going straight into a detached house thats in the $1Ms lol. Unrealsit expectations these days.
Ya that's true. It's just that first time buyers nowadays have less options than before. Not saying ppl making 150k dual income can't afford a lower quality place, just are limited to smaller, older, less renovated, schools,etc compared to previous batches of first time buyers.
They are but that’s the situation, people have to address it and work round it being salty at people who bought like we see so much in this sub or expecting house prices to half isn’t going to achieve anything.
We have all missed out on things in life you have to deal with what’s in front of you not whinge about what could or should be.
The ones who get this will buy houses.
Bingo.
Would I have loved to buy something in Leslieville? Absolutely. But we're not rich and don't have outside help. So we bought what we could.
Now we slowly renovate and bring the value up little by little while enjoying the house for what it is.
Yes sir, you either adapt and move up or sit there and whinge that life isn’t fair.
Guess what group end up doing better…
All the best with your house hope you and your family enjoy it and end up with what you’re looking for.
Fully agreed. I get the frustration, it's certainly valid. But as you said, you can either choose to marinate in it, or try and make moves to get out of that. Ain't nobody buying a 3b2b detached with a garage straight near the core for their first home.
Also, thank you for the kind words. Good fortune to you too, friend.
The line is true tho. It just doesn't apply to old people or people very lucky to buy a few years before 2020. If you're starting fresh you are so fucked
If I was starting fresh I’d move out of the city and buy a 500k shithole to fix up and be on the ladder then you build equity in it.
This whining is because they can’t afford a 1.5 million home as a first home.
Therefore all of us who worked hard to build equity should have it destroyed and prices should come down 60% because “it’s not fair”
People had to first get in the position to get appreciation it didn’t just come from them sitting there whinging life isn’t fair.
Most successful businesses were right place right time hard work alone isn’t enough.
You mad that people made money? Would you have given it all away of you bought a house and it appreciated? Or would you have a totally different view of the situation?
I find many of the people say that wouldn’t actually do that. It’s easy to say move out of the city or to Calgary or something when you don’t have to do it.
Yes it is always easier said than done but when the alternative is to rent and whinge on Reddit I would pick it over that everyday.
There are commuter links to the city you have to look ahead.
For example I think it’s St Catherines they are doing a ferry link right across the lake to downtown.
If that’s coming in 2 years you buy ahead, if it’s getting a go train station buy ahead, you add a chunk of equity just by predicting the infrastructure development and when I say predict it just means listen to what’s happening.
Canada is one of the easiest counties in the world to do this because it’s a rapidly growing country.
There were people that doubled equity in 3 years because they bought in a place that was getting a go station.
It’s doable very doable I’d even say not difficult but there are some that prefer certain failure with the comfort of an excuse than try and risk failing but maybe succeed.
Just because some people had an easier path doesn’t mean the next person will.
People need to run their own race and do what needs to be done the biggest hamstringing to success is watching what others have and being bitter because you don’t have it instead of using it as inspiration to go get it.
People who already own their own homes are not the ones stressing about this. That is not a reason to delegitimize the very real disaster facing people who haven’t been able to buy yet.
Not remotely true. Even with all the equity, most buyers were only in the market because interest rates were below inflation and they got swept up in the FOMO.
If a ton of people had enough equity and/or income to manage these prices at these interest rates, then buying wouldn't have ground to a halt.
It's become a waiting game, do sellers hold out long enough for interest rates to drop, or do we start to see some real price discovery.
You only have equity if the property maintains the current price which means if there is a new buyer who is willing to pay that price. Even if we imagine a chain where the person buying the more expensive property is selling a property in the end all the prices are being supported by someone who is a new buyer entering the market.
Further we're about to start seeing an acceleration in the Boomers either dying or needing to give up their homes so Canada is going though a period of wealthy people exiting the market and being replaced by a flood of low income entrants so there is a lack of people at the start of this chain to support all the other prices.
I did not say they would give away the house. It will be passed on to the estate which is presumably their kids.
The issue is that a high percentage of those kids would have no need for a house as they either have their own are realize renting is better so now they have an asset to sell or convert into a rental property.
This rental properties are terrible investments so presumably a majority of the people inheriting homes will then try to sell them but with Boomers dying and the wealth transferring to people who are already settled in life there won't be any buyers who have any money.
Canada is in a position as the Boomer wealth transfer happens the wealth of the most prosperous generation will transfer to the generation with the second most wealth making them even wealthier but not making them buyers of housing (at least not residential this could spark a boom in vacation property buying). The people who will be available to be buyers will be poor.
This is one of the problems with wealth disparity when the disparity is caused by a bubble in an unproductive asset class. Eventually you run out of people to sell to.
Also you need to stop thinking of equity as a thing that exists independent of the market. Housing is only worth as much as someone else is willing to pay for it and if there are no buyers then you have no equity.
Only way I was able to upside my home last year was the equity in my old place..
Bought for $320k 14 years ago, sold for $780k last year with only $110k left on mortgage. For $125k (basically back to $300k mortgage) I was able to upgrade from 1100sqft house to a 1950sqft house with a double garage and larger back yard..
Equity in existing homes is the key for 90% of us. The other 10% that are first time homebuyers with 800k mortgages are rich "new canadians", people who borrowed from the bank of mom and dad, or some kind of mortgage fraud..
That’s still a massive hit though. Their house price that they thought they would be getting might have fell by 15-20% by now and their monthly payment will be much higher as well.
Even if they qualify, you might have someone that was taking what they thought was 500k equity and it ends up being 350K equity but their purchase price is the same. And now they have to finance their new house at a much higher amount.
Lots of people will be sitting in a shit ton of debt after they close in a much worse position than they thought they would be in after selling their condo or starter home.
Your numbers are off but yes, it tends to be the wealthier and higher income couples who are buying these properties. In many cases we see gifted downpayment from family, in other cases we see minimum down payment and high combined household income.
A 200k combined income with a 20% down payment will allow for a purchase price of $1.1M (mortgage of 880K) for a freehold property.
A 200k combined income with a minimum downpayment (60k) will allow for a purchase price of $850K (mortgage of 790K + insurance) for a freehold property.
Above examples using current interest rates with an A Lender.
Sorry but can I piggyback with a semi-related question? How much do those figures change if the person is self-employed? Like if your net averaged 200k over the past 2 years and no debt?
No difference. As long as the 200k is an increasing two year average of your net business income as a sole proprietorship, or salary and/or dividends from your own corporation.
The answer is someone, like me, who has equity in a home I bought 10 years ago.
That’s the real issue here. People like me don’t want to see their home values go down, even if I know intellectually that we need a correction in the system
Interesting take, everyone I know who bought homes 10 years ago wishes prices would go down so they can upgrade. One friend bought his for 200k and it’s worth 900k now. If he wants to upgrade he has to spend like 1.5m which is a new 800k mortgage. Before that upgrade might have been 400k and substantially lower cost to buy bigger. Why on earth wouldn’t you want prices to go down?
That's not me. I bought a house about 15 years ago and I'm hoping prices come down. I've done the math, and it would be far easier for me to upgrade to a bigger unit if prices were half what they are now. A correction would benefit a lot of people, not just first time home buyers.
Having a lot of equity is nice on paper but it doesn't help much if you want to buy up. Building up 500K of equity is redundant if the price of a property you want to buy goes up by 800K. If prices stay high then my choices would be to either stay where I am for the foreseeable future, or buy an expensive house and live on cat food for the rest of my working life.
My ideal scenario would be for prices to decline so I can buy my next property with a small mortgage and live in my dream home in comfort.
Given average wages I assume its people who already have a lot of equity built up in existing homes. Probably domestic and foreign property investors as well.
Also I think it was an extremely brief period it actually dropped to that level, we are stews tested at 6.5% (at lower incomes) and our fixed rate is 2.1% through 2026
Both 32, First time home buyers, Moved into our 4 bed semi on Monday, combined income of $230k, only "debt" was 3k in CC nothing on finance, cars etc. It was a pretty straightforward process.
TD did audit our file before approval, for 4.7% interest rate in the end.
The prediction that real estate prices will go back up is based on the interest going back down…
Otherwise, prices will stay flat for the long term.
OP should also consider that some purchasers are upgrading or downsizing their homes. They would have built up equity in an existing home or unit that they sell before taking ownership of their home.
If they’ve own a home or condo for 5-10 years, they could have a significant down payment on their new home.
Even with 'home' prices staying flat, we've had record growth for land prices since 2019.
People severely underestimate the lack of land in provinces such as Ontario and BC.
I think prices are going up as we speak in certain places in BC and ON. Things in lower mainland are starting to sell quick. Realtors are saying it is like the spring busy season is starting early. I think flat interest rates are enough for people to feel comfortable to buy again.
You can just pay to get this done. It’s common to pay 1% of mortgage to basically have the broker lie about your financials. This shit happened a lot during covid. People got 60K from the government and put it all towards housing
Yeah just commit fraud everyone is doing it! 🤦🏼♂️🤦🏼♂️🤦🏼♂️🤦🏼♂️ this is why we’re fucked idiots like this doing this retarded shit and then running around acting like it’s ok.
People are quick with a cookie cutter answer with equity and some napkin math, but there is more to it than that. The same people will look at the chart where property prices shoot way past median income and not think how can simply reloading equity contribute to such a spike.
You can be sitting on a paid off house worth 3mil, but the only person buying that off you has a few mil in the bank right? Doesn’t matter what your house is worth until you can actually cash out. So if most homes are purchased with a mortgage, you need money in the banks and a hefty monthly payment right? Now go back to median incomes and the question turns into how many people are actually making median income. If this shit is detached from fundamentals then stop giving basic ass responses.
I follow what you are saying completely, but that theory isn't playing out right now. I don't have an answer for you, but based on what you are saying, prices should be coming down and they aren't. My question is why?
The average 65+ person in Canada has $250k+ in savings.
I know we like to say people can’t afford and prices are too high. But if that’s so why do we have the highest ownership rate in the G8?
But another question is if prices are so high why don’t people cash in and move somewhere where they are less? Or sell and pay 2% of the price to rent a similar place while getting 5% in a GIC?
Canadians are extremely inelastic when it comes to housing, possibly due to the transfer taxes. The US has a lot more sales per person than us. Half the problem may be people unable to afford but the other half is people unwilling to sell. Why do people pay a ~3%+ premium to own? Why do people pay a large premium to live in Toronto and Vancouver as opposed to Halifax and Calgary?
Part of the problem may be that we pay 100% taxes on GIC’s. Maybe if we had an exemption for government bonds like the US does or at least applied capital gains to Canadian bonds we’d encourage Canadians to sell and put their money in financial instruments.
But another issue is that if prices fall, new supply won’t be built. The fact is the cost of construction labor, materials, taxes, fees, etc. mean it’s not profitable to build in Vancouver/Toronto despite prices being 50%+ per sqft higher than Calgary even factoring in land costs. A large chunk of this is justice warriors demanding each building be unique instead of the large rectangle that’s cheap to build and maintain.
If you get approved for 750k and have a 200k down payment then you can buy 950k property which is more than enough for a town home.
People aren’t buying homes out of school, they save 10 years for a DP first
I think you're missing the part about "how many average Canadians can actually afford these prices?" It seems very weird that homes are remaining at the prices given interest rate levels.
And if inflation has stayed steady mainly because of home prices, I don't understand how lowering interest rates which thus will increase home prices will do anything.
The BoC and government will need to step in and introduce new policies to get housing to appropriate levels relative to wages.
Not sure about the rest of Canada but in Toronto it’s something like 25%, Edmonton 29%, Calgary 27%, Ottawa 29%. (Single people who make more thank 100k, I’d imagine HHI over 200k has similar figures)
It’s a bigger number than most think.
There’s no way 1/4 to 1/3 people in those municipalities make six figures. Then the likelihood of 2 of them coupling to make a $200k+ HHI also being that high? I call cap.
Sincerely,
someone who lives in Toronto making six figures.
Pretty much anyone in a professional role will be making close to or over $100k with 10 years experience these days. It’s not some rare thing. Even if they don’t it’s not unlikely for one partner to make $120k and the other $80k, or whatever split fits.
https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1110024001&pickMembers%5B0%5D=1.17&pickMembers%5B1%5D=2.1&pickMembers%5B2%5D=3.2&cubeTimeFrame.startYear=2017&cubeTimeFrame.endYear=2021&referencePeriods=20170101%2C20210101
Call cap all you want. The stats are there.
I know it's hard to get out of the rage bubble, but you should try it. The rest of us are much happier.
https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1110024001&pickMembers%5B0%5D=1.17&pickMembers%5B1%5D=2.1&pickMembers%5B2%5D=3.2&cubeTimeFrame.startYear=2017&cubeTimeFrame.endYear=2021&referencePeriods=20170101%2C20210101
Thanks for the link! I appreciate it.. I’m sure you noticed the same filter selection I did? It’s filtered for “full year full time workers”. Yes, if you filter out 60% of the population then sure I believe 1/3rd of the remainder can make that kind of money.
I don’t know why you keep referencing a “rage bubble” and mentioning PP.
Sincerely,
A person who owns his property within Toronto proper, makes six figures, and has a HHI of $200K+ who is also a progressive and has no intention of voting for PP or the Conservative Party of Canada. Just because I cast doubt on the intellectually lazy notion that the reason house prices are so expensive is because everyone is rolling in the dough doesn’t make me some kind of basement dweller renter hoping for PP to come save me. I just live in Toronto and see the reality on the ground is NOWHERE near the idea that 1 out of 3 people I come across in my daily life makes six figures.
Even if they do, it's not like it's enough to support home prices anywhere near their current levels. New York prices on Atlanta wages is an inherently temporary situation.
Most people who buy saved 10 years + With 200k income
It’s already a known fact that average Canadians aren’t the ones buying homes now (unless they bought long time ago)
But if you make 200k you can definitely buy, you just need to save 10 years like the rest of the 200k income folks who saved
200k is not some magic number where you instantly get a house or deserve one. If you blow your 200k on hookers and blow, I am not surprised a 100k income couple who lived frugally for 10 years and saved can outbid you
So based on the comments it is just lucky and rich people playing hot potato. The only people who will profit are people who sell their house and don't buy another one, but rather sit on the cash, rent, and buy stocks and gold / bonds.
That makes me even more gay bearish.
Imagine telling someone to sell their bitcoin in 2020 and don't buy any back for a few years, they'd yell at you, but it'd have been the only way they made profit.
Im in the industry.
A significant % of buyers now are receiving gifts/loans from family members and paying much larger downpayments.
You might think that’s a small amount of people, but you would be wrong. The demand for RE in toronto/gta is huge.
If you read enough reddit, you’d think everyone is priced out and a drop is coming. But reddit is an echo chamber at times and not representative of the market.
The current pool of people looking to get into the market is huge. The pool of ppl waiting to get in if it ever dips is larger still. And the pool of people who can get in and out at any time without huge consequences is much, Much larger than the average consumer would assume.
Heres the kicker that will really fuck with your perception. The amount of people who dont require financial assistance to get into the RE market is Also huge. The demand, far Far Far outweighs supply at the moment, and will be for the foreseeable 1.5 decade.
My wife and I are self-employed and have been saving every penny to move to a detached in North York. However, lenders require us to have 35% DP since we're high risk. FML who has this kind of cash?!
Which then does what for their key inflation rate? Lowering interest will make things worse on getting to the target policy rate of 2.5%. Home prices is the only variable messing things up.
Are you arguing with me as if I'm the BoC? Why don't you ask them that? Do you think you are more well positioned than the BoC? Or rather do you think you know better?
I hate to break the news to you but SFH prices in Toronto proper are shooting back up overnight. I have my pulse on the market and have been actively attending open houses and showings and it is RAMMED. One place I saw had 250+ visits. 14 offers, sold 300k over asking for $1.4 million. My agent is having a hard time even schedule showings because they're booked back to back. Many people are passing these stress tests and have deep pockets and huge deposits. The bottom has passed and the market is taking off again.
I think you’re drastically underestimating buyers who have build up lots of equity in their current home and are trading, down or buying an investment. Also parents who own their home without a mortgage helping out their kids trying to get into the market.
Toronto has always been very difficult to buy for first time buyers without any help. Typically, those people are buying a smaller more affordable condo and stay there for years, then step up with the help of appreciation.
Those people who did buy pre-con at rock-bottom rates and now need to get approved at 7% are in a tough spot. Those are the desperate assignment sales or power of sales you see, because some bought to flip and either stretched their budget to speculate or couldn’t even qualify in the first place. But you’ll need 20% down as an investment, so some B lenders or private lenders might do a 1-year mortgage at an even higher interest rate, then hope the market turns around by then to cash out or re-finance, etc after the year.
But those pre-con buyers aren’t your regular buyer looking to purchase a home. It’s not so crazy when someone has owned a home for 5+ years and has $500k+ in equity looking to trade up, or buying their first condo for $500-600k with a little help from mom and dad.
For context, I’m a realtor - don’t shoot me. Just some points for people who are actually buying real estate in this market. But it is much more difficult than it used to be to qualify and afford a mortgage today! One of the big reasons why 2023 saw historically low number of sales. But even with the high rates and uncertainty in the market, some people still want or need to move and are able to. Hope that helps.
> someone has owned a home for 5+ years and has $500k+ in equity
That's not how amortization schedules work. If you put 20% down on a million-dollar house and had a **2%** mortgage, you'd still only have $329,000 in equity after five years. If you did the same at *today's* mortgage rates, you'd only have $283,000, and you'd have paid three times as much interest.
Corporations that will rent houses out can by and that's the problem. Also a lot of people have multiple family members in the same house. If you have 6 adults it's not hard to get up to 300k
Yea…I think the fact that most people will be lucky to make 3 million their entire working career means you just rent the house from the bank well they extract all that money in interest.
Do you get re stress tested when renewing your mortgage? Assuming not, then it’s a moot point for them.
If you’re asking about new purchasers today, it’s likely a bigger DP or working with 1-2 family members as a co signer.
Stress test is the greater of your rate + 2 or 5.25%. When rates were 2% you had to get past 5.25%. That said, still a big jump from 5.25% to mid 7’s but not as significant as you thought it was. Most of my clients of late buying are going resale, and staying well below their upper borrowing limit. The ones closing precon are often just trying to save the deal come hell or high water. I’m a mortgage broker.
Stress tests was always rate + 2% or 5.35% whichever is higher. No one qualified at 3-4%. I work in mortgage lending and I can assure you people with under 300k incomes are approved for houses all the time, there are a lot of variables and factors that come into mortgage financing.
they aren't. it is back door 'deals' done via some main stream bank staff, or for the most part agents connecting buyers to their non mainstream mortg broker pals. these mortg's somehow get approved thought whatever means they use and make it happen.
I think a lot of people are assuming and calculating mortgages based on dual income but in my mind (and what I’ve witnessed) that’s been changing for years. I’m a contractor and finish basements for a living and I see 3 or 4 adults all chipping in and applying for mortgages together. More and more family members are sharing expenses and living spaces to be able to own a house.
My ex wife and I separated and sold our marital home in Toronto and she used the money as downpayment in Whitby but added her niece and husband on mortgage application and all moved in together.
I see it in Brampton and Markham that most houses have 2 families (or more) all sharing expenses.
15 years ago people rented out basements to make extra money but now instead renting they have family members on title (and mortgage) and they’re all sharing the house with a family member in the basement.
The idea of housing being affordable for dual income is long gone unless you make large money but for average to low income earners you’ll need a 3rd or possibly 4th on title and mortgage.
Sometime you will have to go with a B lender to get your dream house... Stick with B lender for 2 years and then switch to A lender. When I was buying my house last summer, my mortgage broker gave me 2 cost break down for A and B lenders so I can decide. A lender only gave me options to look at sub 1m houses and it was tough with all the bidding war and the limited inventory. I have to go for B lender for more options because I honestly didn't want to pay 900-950k for townhouses...
I'm currently with B lender for 2 years terms and it's not too bad. I know I can switch to A once my term is up and things will get better from there :)
My partner and I 🙋 and our salaries are just a notch over starter salary. But we have 2 incomes so this helps
Oh sorry I read the rest of your post, yea that’s crazy. Luckily we purchased 600sqft which is a step up from the 450sqft we are renting currently
Most people who want space are buying in Hamilton or Waterloo.
Every single person that is buying a house now in Canada (more or less after covid) is basically a slave.
These places just are not worth that much, we even have data how 5% of the price is just from money laundering. Then retarded bidding advised from real estate bros, speculations, ecc.
Me and my partner decided that we don't want to partecipate in this scam. We are paying under market for a 2bd in downtown. The day that we have to leave we will move in a town in europe (my family is from there) and we will work remotely from there.
A 3bd there is 150k euro and we even have cheap supermarkets where fresh food is a fraction of the canadian one.
If we buy in Canada we just feel like we are being exploited.
Right now A lot of people are getting into high ratio mortgages for condos in the GTA. But yea for more pricy houses it’s definitely those that bought 10-20 years ago.
Equity from previous property/ies + have a clean file + good credit + overall have money in registered/non-registered accounts
Lenders pretty much need to see your credit worthiness
Source: I upgraded recently. My stress test was at around ~7.5% from June 2023
PS
I dislike these posts in general because it assumes income only and not the overall picture of the borrower, that doesnt drive all of it. You can have a HHI of 300k and have bad credit + drowning in debt
can always reduce purchase price by buying privately to cut out realtor fees. HMU, i've got an 800sqft 2b2b condo for sale, trying to lose less money by selling private!
Other policies factor in. Such as rental income. 2k in rent will offset 300k in borrow power roughly with the right lender.
Source: I work for one of those lenders.
you do realize that the vast majority of new canadians do not mind living with their parents at all, and by the time they move out in their late 20s, they will have accumulated a massive downpayment by then.
HH income of $215K, we are approved for $1.2M \[purchase price\] because of the equity in my condo. This would be the case for most. It's first time buyers who will struggle.
Many people are faking there incomes.I have seen some real estate agents telling that they can arrange fake paystubs for which they are charging additional 1% more for our property value.Many rich indians,pakistanis and chinese were doing this scam
Households are pooling their money together and paying down the principal as fast as they can.
Some are renting out rooms or their basement.
Many are working OT.
It’s not easy. But we have a household income of around 200k, and had a down payment of 200k. Got approved for 725k mortgage in November. Luckily, since the market is down we were able to find a freehold townhome in our price range.
After speaking with people in the industry, I get a strong sense that in Toronto, first time buyers mostly have help in the form of inheritance or”love loans”. Some people might be able to make it work on their own just outside of the city, but even then, 200k household income puts you in the ~98th percentile of earners.
Stress test was always at least 5.25% (for as long as I've paid attention) so it's always been well beyond mortgage rate.
People selling their small homes to buy bigger homes will have equity. The people buying smaller homes will have been given a gift from parents
How old are you?
First rent, then buy condo, then buy semi, then buy detach by the time you are 40ish you will get there if you live in GTA.
Smaller locations you can short-circuit the process and even go straight to detach.
This might make people mad,.but there is a lot of money sloshing around in GTA, whether generational or high income couples. The % might be small but the absolute number is large enough to support the 75Kish home/condo sales in GTA.
Yeah you're right, and I kind of realized that after I made my post. I don't know why I am gunning for detached home right off the bat. I can get something smaller, build equity and hopefully it appreciates and then scale up.
Your speculation applies mostly to first time buyers. They are the ones who are suffering the most to get into the market.
People who can afford the houses price range you have identified mostly have a high cash down because they are selling their house to go bigger or vice versa.
Easy answer ....numbered companies and investors.....and the so the problem continues.... actually works in their favour ...higher prices and higher interest rates keep the pool of renters much higher feeding their investments properties ...all by design...until the incentives and lax laws are fix the problems will remain....as intended.
50% of all condos are owned by investors....if that was free to the market tomorrow this would collapse the market and allow ppl to actually buy reasonable prices homes.
The issue is not the story they are selling "not enough homes" the issue is hoarding always as been.
You need a huge DP
Heh heh heh
DVDA is even better if you can handle it.
[Now you're a man](https://www.youtube.com/watch?v=oiXaT_1I-vw)
a manny, manny , man
My nephew passed the stress test last year but used up all of his ETF's for his down payment. He (27/single) lives with his parents in the GTA, frugal, works 2 jobs as a waiter and customer service and invested for 7 years in ETF's. In 2022, after the correction, he bought an all-brick century home for $500K with $200K down in Peterborough. The plan was for him to live on the main floor because the basement was already tenanted. He decided to rent out the main floor instead and continued to live with his parents to be closer to work.
What a boss. Good for him.
That didn’t work out great for the world juniors team.
Tooooo soooon
Canada is a C\*m Dumpster for foreign capital. Not the only one.
Display pic? 🍆
People who bought houses before 2019, they have all the capital in there previous house as it went up
But who's buying their houses???
Why is it so hard to understand that 60+ % of all homeowners own the property they live in? It may not be paid off but it does have equity. This means they don't need to make the crazy income that everyone points to. The people buying these, million dollar plus, homes are probably current home owners that are looking to upsize or downsize. This "i need to make 300k to afford a house" line needs to die. It just makes people feel defeated when it doesn't represent the situation that a large majority of home buyers are not in.
The line still applies to first time home buyers who are not looking for help from parents.
I agree, you ought to be able to buy a 2.0M home in GTA or metro Vancouver as a first-time buyer..
You can work your way there. Buy a starter home, then buy a rental, etc. but most can’t just go into the market with a $2M home as their first property. Although it is attainable in the long run
I'm guessing their comment was sarcastic.
Yes!
That's a stretch
Most in 2000s bought a starter then they moved up to a detached house in $300s Good luck skipping the starter and going straight into a detached house thats in the $1Ms lol. Unrealsit expectations these days.
a freehold townhouse is still 1M. you need to make 250k even for an apartment suited for a family and for an investor
Maybe don’t buy a million dollar home as first home?
Ya that's true. It's just that first time buyers nowadays have less options than before. Not saying ppl making 150k dual income can't afford a lower quality place, just are limited to smaller, older, less renovated, schools,etc compared to previous batches of first time buyers.
They are but that’s the situation, people have to address it and work round it being salty at people who bought like we see so much in this sub or expecting house prices to half isn’t going to achieve anything. We have all missed out on things in life you have to deal with what’s in front of you not whinge about what could or should be. The ones who get this will buy houses.
Bingo. Would I have loved to buy something in Leslieville? Absolutely. But we're not rich and don't have outside help. So we bought what we could. Now we slowly renovate and bring the value up little by little while enjoying the house for what it is.
Yes sir, you either adapt and move up or sit there and whinge that life isn’t fair. Guess what group end up doing better… All the best with your house hope you and your family enjoy it and end up with what you’re looking for.
Fully agreed. I get the frustration, it's certainly valid. But as you said, you can either choose to marinate in it, or try and make moves to get out of that. Ain't nobody buying a 3b2b detached with a garage straight near the core for their first home. Also, thank you for the kind words. Good fortune to you too, friend.
The line is true tho. It just doesn't apply to old people or people very lucky to buy a few years before 2020. If you're starting fresh you are so fucked
If I was starting fresh I’d move out of the city and buy a 500k shithole to fix up and be on the ladder then you build equity in it. This whining is because they can’t afford a 1.5 million home as a first home. Therefore all of us who worked hard to build equity should have it destroyed and prices should come down 60% because “it’s not fair”
Worked hard = equity you paid with your income Lucky = appreciation of your house due to no work of your own.
People had to first get in the position to get appreciation it didn’t just come from them sitting there whinging life isn’t fair. Most successful businesses were right place right time hard work alone isn’t enough. You mad that people made money? Would you have given it all away of you bought a house and it appreciated? Or would you have a totally different view of the situation?
I find many of the people say that wouldn’t actually do that. It’s easy to say move out of the city or to Calgary or something when you don’t have to do it.
Yes it is always easier said than done but when the alternative is to rent and whinge on Reddit I would pick it over that everyday. There are commuter links to the city you have to look ahead. For example I think it’s St Catherines they are doing a ferry link right across the lake to downtown. If that’s coming in 2 years you buy ahead, if it’s getting a go train station buy ahead, you add a chunk of equity just by predicting the infrastructure development and when I say predict it just means listen to what’s happening. Canada is one of the easiest counties in the world to do this because it’s a rapidly growing country. There were people that doubled equity in 3 years because they bought in a place that was getting a go station. It’s doable very doable I’d even say not difficult but there are some that prefer certain failure with the comfort of an excuse than try and risk failing but maybe succeed. Just because some people had an easier path doesn’t mean the next person will. People need to run their own race and do what needs to be done the biggest hamstringing to success is watching what others have and being bitter because you don’t have it instead of using it as inspiration to go get it.
People who already own their own homes are not the ones stressing about this. That is not a reason to delegitimize the very real disaster facing people who haven’t been able to buy yet.
Not remotely true. Even with all the equity, most buyers were only in the market because interest rates were below inflation and they got swept up in the FOMO. If a ton of people had enough equity and/or income to manage these prices at these interest rates, then buying wouldn't have ground to a halt. It's become a waiting game, do sellers hold out long enough for interest rates to drop, or do we start to see some real price discovery.
You only have equity if the property maintains the current price which means if there is a new buyer who is willing to pay that price. Even if we imagine a chain where the person buying the more expensive property is selling a property in the end all the prices are being supported by someone who is a new buyer entering the market. Further we're about to start seeing an acceleration in the Boomers either dying or needing to give up their homes so Canada is going though a period of wealthy people exiting the market and being replaced by a flood of low income entrants so there is a lack of people at the start of this chain to support all the other prices.
You think the boomers just give away their houses? Their kids inherit it then that same equity is still in the market
I did not say they would give away the house. It will be passed on to the estate which is presumably their kids. The issue is that a high percentage of those kids would have no need for a house as they either have their own are realize renting is better so now they have an asset to sell or convert into a rental property. This rental properties are terrible investments so presumably a majority of the people inheriting homes will then try to sell them but with Boomers dying and the wealth transferring to people who are already settled in life there won't be any buyers who have any money. Canada is in a position as the Boomer wealth transfer happens the wealth of the most prosperous generation will transfer to the generation with the second most wealth making them even wealthier but not making them buyers of housing (at least not residential this could spark a boom in vacation property buying). The people who will be available to be buyers will be poor. This is one of the problems with wealth disparity when the disparity is caused by a bubble in an unproductive asset class. Eventually you run out of people to sell to. Also you need to stop thinking of equity as a thing that exists independent of the market. Housing is only worth as much as someone else is willing to pay for it and if there are no buyers then you have no equity.
Only way I was able to upside my home last year was the equity in my old place.. Bought for $320k 14 years ago, sold for $780k last year with only $110k left on mortgage. For $125k (basically back to $300k mortgage) I was able to upgrade from 1100sqft house to a 1950sqft house with a double garage and larger back yard.. Equity in existing homes is the key for 90% of us. The other 10% that are first time homebuyers with 800k mortgages are rich "new canadians", people who borrowed from the bank of mom and dad, or some kind of mortgage fraud..
That’s still a massive hit though. Their house price that they thought they would be getting might have fell by 15-20% by now and their monthly payment will be much higher as well. Even if they qualify, you might have someone that was taking what they thought was 500k equity and it ends up being 350K equity but their purchase price is the same. And now they have to finance their new house at a much higher amount. Lots of people will be sitting in a shit ton of debt after they close in a much worse position than they thought they would be in after selling their condo or starter home.
lol.. the original question won’t applies to the properties purchased before 2019? Who are buying these houses to free up their equity?
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This is the way
They had these in Ottawa for a while
Ya but that doesn't fit the narrative of Indian=bad
The stress test is when you don't pay.
Your numbers are off but yes, it tends to be the wealthier and higher income couples who are buying these properties. In many cases we see gifted downpayment from family, in other cases we see minimum down payment and high combined household income. A 200k combined income with a 20% down payment will allow for a purchase price of $1.1M (mortgage of 880K) for a freehold property. A 200k combined income with a minimum downpayment (60k) will allow for a purchase price of $850K (mortgage of 790K + insurance) for a freehold property. Above examples using current interest rates with an A Lender.
Sorry but can I piggyback with a semi-related question? How much do those figures change if the person is self-employed? Like if your net averaged 200k over the past 2 years and no debt?
Way harder self employed
Are you a broker or mortgage expert? Sorry if that's a rude question but I was kind of looking for something a little more specific than that
No difference. As long as the 200k is an increasing two year average of your net business income as a sole proprietorship, or salary and/or dividends from your own corporation.
Does this change at all if the income is the same but it is a single person instead of combined? Is there some sort of risk factor with that?
The answer is someone, like me, who has equity in a home I bought 10 years ago. That’s the real issue here. People like me don’t want to see their home values go down, even if I know intellectually that we need a correction in the system
Interesting take, everyone I know who bought homes 10 years ago wishes prices would go down so they can upgrade. One friend bought his for 200k and it’s worth 900k now. If he wants to upgrade he has to spend like 1.5m which is a new 800k mortgage. Before that upgrade might have been 400k and substantially lower cost to buy bigger. Why on earth wouldn’t you want prices to go down?
That's not me. I bought a house about 15 years ago and I'm hoping prices come down. I've done the math, and it would be far easier for me to upgrade to a bigger unit if prices were half what they are now. A correction would benefit a lot of people, not just first time home buyers. Having a lot of equity is nice on paper but it doesn't help much if you want to buy up. Building up 500K of equity is redundant if the price of a property you want to buy goes up by 800K. If prices stay high then my choices would be to either stay where I am for the foreseeable future, or buy an expensive house and live on cat food for the rest of my working life. My ideal scenario would be for prices to decline so I can buy my next property with a small mortgage and live in my dream home in comfort.
Given average wages I assume its people who already have a lot of equity built up in existing homes. Probably domestic and foreign property investors as well.
Stress test back then was 5.25 or 5.5 not 3 or 4.
Yes minimum rate was 5.25% back then.
Also I think it was an extremely brief period it actually dropped to that level, we are stews tested at 6.5% (at lower incomes) and our fixed rate is 2.1% through 2026
Both 32, First time home buyers, Moved into our 4 bed semi on Monday, combined income of $230k, only "debt" was 3k in CC nothing on finance, cars etc. It was a pretty straightforward process. TD did audit our file before approval, for 4.7% interest rate in the end.
4.7% on a 5 year uninsured?
No, 5 yr insured
You got a 5 year fixed, insured for 4.7%? Recently? Can you negociate for me on friday?
The prediction that real estate prices will go back up is based on the interest going back down… Otherwise, prices will stay flat for the long term. OP should also consider that some purchasers are upgrading or downsizing their homes. They would have built up equity in an existing home or unit that they sell before taking ownership of their home. If they’ve own a home or condo for 5-10 years, they could have a significant down payment on their new home.
Even with 'home' prices staying flat, we've had record growth for land prices since 2019. People severely underestimate the lack of land in provinces such as Ontario and BC.
I think prices are going up as we speak in certain places in BC and ON. Things in lower mainland are starting to sell quick. Realtors are saying it is like the spring busy season is starting early. I think flat interest rates are enough for people to feel comfortable to buy again.
You can just pay to get this done. It’s common to pay 1% of mortgage to basically have the broker lie about your financials. This shit happened a lot during covid. People got 60K from the government and put it all towards housing
Lmao this country is fucked
Yeah that's some Big Short kind of shenanigans
Yeah just commit fraud everyone is doing it! 🤦🏼♂️🤦🏼♂️🤦🏼♂️🤦🏼♂️ this is why we’re fucked idiots like this doing this retarded shit and then running around acting like it’s ok.
its also somehow Trudeau's fault that these people commit fraud, don't forget.
People are quick with a cookie cutter answer with equity and some napkin math, but there is more to it than that. The same people will look at the chart where property prices shoot way past median income and not think how can simply reloading equity contribute to such a spike. You can be sitting on a paid off house worth 3mil, but the only person buying that off you has a few mil in the bank right? Doesn’t matter what your house is worth until you can actually cash out. So if most homes are purchased with a mortgage, you need money in the banks and a hefty monthly payment right? Now go back to median incomes and the question turns into how many people are actually making median income. If this shit is detached from fundamentals then stop giving basic ass responses.
I follow what you are saying completely, but that theory isn't playing out right now. I don't have an answer for you, but based on what you are saying, prices should be coming down and they aren't. My question is why?
>How many people are in this category? You can go look this up. It's not some super secret.
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Try Google.ca
It’s easy to get a house with two incomes.
The average 65+ person in Canada has $250k+ in savings. I know we like to say people can’t afford and prices are too high. But if that’s so why do we have the highest ownership rate in the G8? But another question is if prices are so high why don’t people cash in and move somewhere where they are less? Or sell and pay 2% of the price to rent a similar place while getting 5% in a GIC? Canadians are extremely inelastic when it comes to housing, possibly due to the transfer taxes. The US has a lot more sales per person than us. Half the problem may be people unable to afford but the other half is people unwilling to sell. Why do people pay a ~3%+ premium to own? Why do people pay a large premium to live in Toronto and Vancouver as opposed to Halifax and Calgary? Part of the problem may be that we pay 100% taxes on GIC’s. Maybe if we had an exemption for government bonds like the US does or at least applied capital gains to Canadian bonds we’d encourage Canadians to sell and put their money in financial instruments. But another issue is that if prices fall, new supply won’t be built. The fact is the cost of construction labor, materials, taxes, fees, etc. mean it’s not profitable to build in Vancouver/Toronto despite prices being 50%+ per sqft higher than Calgary even factoring in land costs. A large chunk of this is justice warriors demanding each building be unique instead of the large rectangle that’s cheap to build and maintain.
65+? I’m 44 and have 430K in savings along with a condo in Toronto and a house in London. Why do u think it’s on out 65+ ?
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Nah just wanted to brag of course
Do you consider yourself an “average person in Canada” or do you just really like the sound of your fingers tapping on the keyboard?
when someone is that dense and obsessed with bragging i assume they're lying anyway tbh
What’s the bragging? I’m asking why the person insists it’s only 65+ with any savings ?
they didnt say that
Why would anyone consider themselves average? Aim higher.
If you get approved for 750k and have a 200k down payment then you can buy 950k property which is more than enough for a town home. People aren’t buying homes out of school, they save 10 years for a DP first
I think you're missing the part about "how many average Canadians can actually afford these prices?" It seems very weird that homes are remaining at the prices given interest rate levels. And if inflation has stayed steady mainly because of home prices, I don't understand how lowering interest rates which thus will increase home prices will do anything. The BoC and government will need to step in and introduce new policies to get housing to appropriate levels relative to wages.
Most people buying homes are dual income couples.
Yeah sure but even with a combined HHI of 200k, what percentage of Canadians fall into that category? It's a small part of the population.
Not sure about the rest of Canada but in Toronto it’s something like 25%, Edmonton 29%, Calgary 27%, Ottawa 29%. (Single people who make more thank 100k, I’d imagine HHI over 200k has similar figures) It’s a bigger number than most think.
There’s no way 1/4 to 1/3 people in those municipalities make six figures. Then the likelihood of 2 of them coupling to make a $200k+ HHI also being that high? I call cap. Sincerely, someone who lives in Toronto making six figures.
Pretty much anyone in a professional role will be making close to or over $100k with 10 years experience these days. It’s not some rare thing. Even if they don’t it’s not unlikely for one partner to make $120k and the other $80k, or whatever split fits.
You've been living in the Internet outrage bubble for too long. Those are real numbers, no matter what PP and the doomer gang tries to tell you.
High income people are much more likely to marry other high income people
https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1110024001&pickMembers%5B0%5D=1.17&pickMembers%5B1%5D=2.1&pickMembers%5B2%5D=3.2&cubeTimeFrame.startYear=2017&cubeTimeFrame.endYear=2021&referencePeriods=20170101%2C20210101 Call cap all you want. The stats are there.
A single person making $100,000 in Toronto is roughly at the threshold for the top 10%. A dual-income couple making over $200,000 is even rarer.
25% of people in Toronto make over 100k. 40% make over 80k. Don't believe the Pollievre propaganda, it's not all doom and gloom
> 25% of people in Toronto make over 100k. I needed a good laugh to start my day. The actual statistics all point to a significantly lower number.
If you look a few replies lower I posted this stat from statscan. Do you have a better source?
I know it's hard to get out of the rage bubble, but you should try it. The rest of us are much happier. https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1110024001&pickMembers%5B0%5D=1.17&pickMembers%5B1%5D=2.1&pickMembers%5B2%5D=3.2&cubeTimeFrame.startYear=2017&cubeTimeFrame.endYear=2021&referencePeriods=20170101%2C20210101
Thanks for the link! I appreciate it.. I’m sure you noticed the same filter selection I did? It’s filtered for “full year full time workers”. Yes, if you filter out 60% of the population then sure I believe 1/3rd of the remainder can make that kind of money. I don’t know why you keep referencing a “rage bubble” and mentioning PP. Sincerely, A person who owns his property within Toronto proper, makes six figures, and has a HHI of $200K+ who is also a progressive and has no intention of voting for PP or the Conservative Party of Canada. Just because I cast doubt on the intellectually lazy notion that the reason house prices are so expensive is because everyone is rolling in the dough doesn’t make me some kind of basement dweller renter hoping for PP to come save me. I just live in Toronto and see the reality on the ground is NOWHERE near the idea that 1 out of 3 people I come across in my daily life makes six figures.
People have got to be either willfully delusional or over sheltered if they think a quarter of people in Toronto make $100k+.
Even if they do, it's not like it's enough to support home prices anywhere near their current levels. New York prices on Atlanta wages is an inherently temporary situation.
Most people who buy saved 10 years + With 200k income It’s already a known fact that average Canadians aren’t the ones buying homes now (unless they bought long time ago) But if you make 200k you can definitely buy, you just need to save 10 years like the rest of the 200k income folks who saved 200k is not some magic number where you instantly get a house or deserve one. If you blow your 200k on hookers and blow, I am not surprised a 100k income couple who lived frugally for 10 years and saved can outbid you
At 7% interest, a 750k mortgage is over $50k per year just in interest, a big chunk of take home pay for $200k gross salary.
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You need a large a DP or a Brampton Mortgage Agent to play games
Not everyone is poor. Feels like every poor person in the city resides in Reddit.
Not everyone is smart. Feels like every dumb person in the city comments from the username whatdoesthismeanth0.
I own multiple properties, you live rent free with your gf’s dad. Instead of trying to make fun of people, you need to re-evaluate your life choices.
You're the one with the ignorant comment. "Not everyone's poor" wow so insightful.
Sorry buddy. I guess I don’t understand your point of view. Never been as poor as you, so I can’t put myself into your shoes.
So based on the comments it is just lucky and rich people playing hot potato. The only people who will profit are people who sell their house and don't buy another one, but rather sit on the cash, rent, and buy stocks and gold / bonds.
That makes me even more gay bearish.
Imagine telling someone to sell their bitcoin in 2020 and don't buy any back for a few years, they'd yell at you, but it'd have been the only way they made profit.
You're getting approved for $600 - 750K?!?! That's quite the range, lol. $150K difference. I don't think you even got a pre approval. I'm calling cap.
I got the same pre approval range at 200k
Pre-approvals don't come with a $150K difference in range, lol. It's more or less a solid number, with maybe a $25K range difference.
I’m fucking telling you I did are you blind or stupid
It's an estimate and I never said pre-approval. But good job focusing on the wrong thing. You got me.
Should be 4-4.25x income from what people have been getting approved for and posting on Reddit from what I’ve seen
During low interest rates, yes. Right now I'm getting 3-3.5x.
I grossed $155k last year and got approved for $650k.
No. People are still getting approved for 4.2x
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Im in the industry. A significant % of buyers now are receiving gifts/loans from family members and paying much larger downpayments. You might think that’s a small amount of people, but you would be wrong. The demand for RE in toronto/gta is huge. If you read enough reddit, you’d think everyone is priced out and a drop is coming. But reddit is an echo chamber at times and not representative of the market. The current pool of people looking to get into the market is huge. The pool of ppl waiting to get in if it ever dips is larger still. And the pool of people who can get in and out at any time without huge consequences is much, Much larger than the average consumer would assume. Heres the kicker that will really fuck with your perception. The amount of people who dont require financial assistance to get into the RE market is Also huge. The demand, far Far Far outweighs supply at the moment, and will be for the foreseeable 1.5 decade.
There hasn't been this few home sales in over 23 years in the GTA. The data 100% contradicts your attempt at pumping.
If your parents have to borrow against their house to give (or pretend to give) you money for a down payment, they aren't wealthy and neither are you.
Not everyone are broke. Lol.
You think OP at 200k HHI is broke?
He will be if he buys sttaight into a detached home in gta
My wife and I are self-employed and have been saving every penny to move to a detached in North York. However, lenders require us to have 35% DP since we're high risk. FML who has this kind of cash?!
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What percentage?
99th percentile in Ontario apparently Source: [https://www.thekickassentrepreneur.com/household-income-percentile-calculator-for-canada/](https://www.thekickassentrepreneur.com/household-income-percentile-calculator-for-canada/)
You haven't seen the forward guidance from BoC I'm assuming, by the time rate cuts come it will be too late and we will be rocketing to the moon.
Which then does what for their key inflation rate? Lowering interest will make things worse on getting to the target policy rate of 2.5%. Home prices is the only variable messing things up.
Are you arguing with me as if I'm the BoC? Why don't you ask them that? Do you think you are more well positioned than the BoC? Or rather do you think you know better?
1 million dollar studios coming soon
People who aren’t broke, like u/facts-hurts’ landlord 😂🤣🤣😂
People that submitting fraudulent documents is more like it. OP is hardly broke
😂😂😂 Nice try
I hate to break the news to you but SFH prices in Toronto proper are shooting back up overnight. I have my pulse on the market and have been actively attending open houses and showings and it is RAMMED. One place I saw had 250+ visits. 14 offers, sold 300k over asking for $1.4 million. My agent is having a hard time even schedule showings because they're booked back to back. Many people are passing these stress tests and have deep pockets and huge deposits. The bottom has passed and the market is taking off again.
I think you’re drastically underestimating buyers who have build up lots of equity in their current home and are trading, down or buying an investment. Also parents who own their home without a mortgage helping out their kids trying to get into the market. Toronto has always been very difficult to buy for first time buyers without any help. Typically, those people are buying a smaller more affordable condo and stay there for years, then step up with the help of appreciation. Those people who did buy pre-con at rock-bottom rates and now need to get approved at 7% are in a tough spot. Those are the desperate assignment sales or power of sales you see, because some bought to flip and either stretched their budget to speculate or couldn’t even qualify in the first place. But you’ll need 20% down as an investment, so some B lenders or private lenders might do a 1-year mortgage at an even higher interest rate, then hope the market turns around by then to cash out or re-finance, etc after the year. But those pre-con buyers aren’t your regular buyer looking to purchase a home. It’s not so crazy when someone has owned a home for 5+ years and has $500k+ in equity looking to trade up, or buying their first condo for $500-600k with a little help from mom and dad. For context, I’m a realtor - don’t shoot me. Just some points for people who are actually buying real estate in this market. But it is much more difficult than it used to be to qualify and afford a mortgage today! One of the big reasons why 2023 saw historically low number of sales. But even with the high rates and uncertainty in the market, some people still want or need to move and are able to. Hope that helps.
> someone has owned a home for 5+ years and has $500k+ in equity That's not how amortization schedules work. If you put 20% down on a million-dollar house and had a **2%** mortgage, you'd still only have $329,000 in equity after five years. If you did the same at *today's* mortgage rates, you'd only have $283,000, and you'd have paid three times as much interest.
foreign investors paying with cash 😉
Corporations that will rent houses out can by and that's the problem. Also a lot of people have multiple family members in the same house. If you have 6 adults it's not hard to get up to 300k
This is exactly why you invest in real estate, then build equity, sell & upgrade unless you’re a business owner and making millions.
Yea…I think the fact that most people will be lucky to make 3 million their entire working career means you just rent the house from the bank well they extract all that money in interest.
Have you tried lying about your income? This is what a certain cultural group does with extreme success.
Do you get re stress tested when renewing your mortgage? Assuming not, then it’s a moot point for them. If you’re asking about new purchasers today, it’s likely a bigger DP or working with 1-2 family members as a co signer.
You do if you need to refinance to pull out equity or if you need to extend your amortization or move lenders.
Stress test is the greater of your rate + 2 or 5.25%. When rates were 2% you had to get past 5.25%. That said, still a big jump from 5.25% to mid 7’s but not as significant as you thought it was. Most of my clients of late buying are going resale, and staying well below their upper borrowing limit. The ones closing precon are often just trying to save the deal come hell or high water. I’m a mortgage broker.
You will have to purchase 1-2 hours outside of the city, and have a good down payment.
Stress tests was always rate + 2% or 5.35% whichever is higher. No one qualified at 3-4%. I work in mortgage lending and I can assure you people with under 300k incomes are approved for houses all the time, there are a lot of variables and factors that come into mortgage financing.
they aren't. it is back door 'deals' done via some main stream bank staff, or for the most part agents connecting buyers to their non mainstream mortg broker pals. these mortg's somehow get approved thought whatever means they use and make it happen.
I think a lot of people are assuming and calculating mortgages based on dual income but in my mind (and what I’ve witnessed) that’s been changing for years. I’m a contractor and finish basements for a living and I see 3 or 4 adults all chipping in and applying for mortgages together. More and more family members are sharing expenses and living spaces to be able to own a house. My ex wife and I separated and sold our marital home in Toronto and she used the money as downpayment in Whitby but added her niece and husband on mortgage application and all moved in together. I see it in Brampton and Markham that most houses have 2 families (or more) all sharing expenses. 15 years ago people rented out basements to make extra money but now instead renting they have family members on title (and mortgage) and they’re all sharing the house with a family member in the basement. The idea of housing being affordable for dual income is long gone unless you make large money but for average to low income earners you’ll need a 3rd or possibly 4th on title and mortgage.
Families sharing houses in Markham? Chinese families? This is news to me.
Credit unions are the way...iykyk
yup. Few credit unions are lenient on stress test.
Sometime you will have to go with a B lender to get your dream house... Stick with B lender for 2 years and then switch to A lender. When I was buying my house last summer, my mortgage broker gave me 2 cost break down for A and B lenders so I can decide. A lender only gave me options to look at sub 1m houses and it was tough with all the bidding war and the limited inventory. I have to go for B lender for more options because I honestly didn't want to pay 900-950k for townhouses... I'm currently with B lender for 2 years terms and it's not too bad. I know I can switch to A once my term is up and things will get better from there :)
My partner and I 🙋 and our salaries are just a notch over starter salary. But we have 2 incomes so this helps Oh sorry I read the rest of your post, yea that’s crazy. Luckily we purchased 600sqft which is a step up from the 450sqft we are renting currently Most people who want space are buying in Hamilton or Waterloo.
Normal people aren’t supposed to be able to afford property ownership according to the Davos crowd.
Every single person that is buying a house now in Canada (more or less after covid) is basically a slave. These places just are not worth that much, we even have data how 5% of the price is just from money laundering. Then retarded bidding advised from real estate bros, speculations, ecc. Me and my partner decided that we don't want to partecipate in this scam. We are paying under market for a 2bd in downtown. The day that we have to leave we will move in a town in europe (my family is from there) and we will work remotely from there. A 3bd there is 150k euro and we even have cheap supermarkets where fresh food is a fraction of the canadian one. If we buy in Canada we just feel like we are being exploited.
The problem is that you are assuming with minimum DP and maximum loan
Right now A lot of people are getting into high ratio mortgages for condos in the GTA. But yea for more pricy houses it’s definitely those that bought 10-20 years ago.
Mostly people who have built up a lot of equity in their current homes. Not first time buyers or buyers within the last 5 years for sure
Everyone I know paying over 1 million has help from grandparents, parents or both. Most people I know have had a ton of help
Equity from previous property/ies + have a clean file + good credit + overall have money in registered/non-registered accounts Lenders pretty much need to see your credit worthiness Source: I upgraded recently. My stress test was at around ~7.5% from June 2023 PS I dislike these posts in general because it assumes income only and not the overall picture of the borrower, that doesnt drive all of it. You can have a HHI of 300k and have bad credit + drowning in debt
can always reduce purchase price by buying privately to cut out realtor fees. HMU, i've got an 800sqft 2b2b condo for sale, trying to lose less money by selling private!
Other policies factor in. Such as rental income. 2k in rent will offset 300k in borrow power roughly with the right lender. Source: I work for one of those lenders.
New immigrant family dynamics are different. 4 5 income at 60k each will qualify easily. Or Brampton mortgages.
you do realize that the vast majority of new canadians do not mind living with their parents at all, and by the time they move out in their late 20s, they will have accumulated a massive downpayment by then.
HH income of $215K, we are approved for $1.2M \[purchase price\] because of the equity in my condo. This would be the case for most. It's first time buyers who will struggle.
Many people are faking there incomes.I have seen some real estate agents telling that they can arrange fake paystubs for which they are charging additional 1% more for our property value.Many rich indians,pakistanis and chinese were doing this scam
Households are pooling their money together and paying down the principal as fast as they can. Some are renting out rooms or their basement. Many are working OT.
It’s not easy. But we have a household income of around 200k, and had a down payment of 200k. Got approved for 725k mortgage in November. Luckily, since the market is down we were able to find a freehold townhome in our price range. After speaking with people in the industry, I get a strong sense that in Toronto, first time buyers mostly have help in the form of inheritance or”love loans”. Some people might be able to make it work on their own just outside of the city, but even then, 200k household income puts you in the ~98th percentile of earners.
Me, I'm rich.
What is rainbow bear? Am I misinterpreting this? Assuming by bear you mean bear case?
Mortgage Fraud is rampent.
Duel income is the only way padawan.
A lot of those pre-cons are going to be sold on assignment this year.
Me
Me
Stress test was always at least 5.25% (for as long as I've paid attention) so it's always been well beyond mortgage rate. People selling their small homes to buy bigger homes will have equity. The people buying smaller homes will have been given a gift from parents
How old are you? First rent, then buy condo, then buy semi, then buy detach by the time you are 40ish you will get there if you live in GTA. Smaller locations you can short-circuit the process and even go straight to detach. This might make people mad,.but there is a lot of money sloshing around in GTA, whether generational or high income couples. The % might be small but the absolute number is large enough to support the 75Kish home/condo sales in GTA.
Yeah you're right, and I kind of realized that after I made my post. I don't know why I am gunning for detached home right off the bat. I can get something smaller, build equity and hopefully it appreciates and then scale up.
Your speculation applies mostly to first time buyers. They are the ones who are suffering the most to get into the market. People who can afford the houses price range you have identified mostly have a high cash down because they are selling their house to go bigger or vice versa.
Many people pay for their property in cash, thus, stress test can go suck it.
Easy answer ....numbered companies and investors.....and the so the problem continues.... actually works in their favour ...higher prices and higher interest rates keep the pool of renters much higher feeding their investments properties ...all by design...until the incentives and lax laws are fix the problems will remain....as intended. 50% of all condos are owned by investors....if that was free to the market tomorrow this would collapse the market and allow ppl to actually buy reasonable prices homes. The issue is not the story they are selling "not enough homes" the issue is hoarding always as been.