Toronto Real Estate Is Broken: Where Did First Time Buyers Go?
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- Опубліковано 30 чер 2024
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Video Chapters
00:00 🏠 Decline of First-Time Home Buyers in Toronto
02:20 📈 The Downward Spiral and Impact on Higher Value Property Transactions
05:37 💡 Solutions to Re-engage First-Time Home Buyers
The opinions expressed herein are solely that of Tom Storey, not Royal LePage or the TRREB and should not be misconstrued as advice or the basis of an agency relationship whatsoever. Please consult your professional advisor prior to taking action on any decisions relating to the matters discussed in these videos. This communication is not intended to cause or induce breach of an existing agency agreement. This is not financial advice. - Розваги
Home buyer’s haven’t disappeared it’s more like peoples wages have not kept up with inflation therefore those buyers have been priced out of the market
the equity buyers are out in abundance.
@@DummMoney-rr1fi yeah sure but we are talking about everyday home buyers first time buyers
The first time buyers that can afford it don't see it being wise, why would you pay $4000-5000 a month to own a place you can rent for $2000-2500. Gambling the difference in investments/stocks/crypto has been proven to be wiser than owning in this market
First time home buyers are leaving Canada
I fit in this category.
excellent choice!
Might be true but according to the Stats Canada website Canada's population is growing at over 3,900 people a day which works out to something like a population increase of
1.4 million people per year.
The number of people leaving Canada is still much smaller than the number of people moving to Canada.
I suspect that that has always been the case over the past 200 years.
@@puddles1364 Also fit this category. There comes a point in time it doesn't make sense. I left also.
retiring home sellers are not
FTHB (First Time Home Buyers) were priced out of the market years ago. They were replaced in the Condo space by speculators /investors. The Investors quit when prices plateaued, and interest rates meant that there would be a large negative cash flow.. Tom you know how a GDSR/TDSR works do the math. A 1 bedroom apartment requires an income in the top 5% of the population. There is your answer.
So much cheaper to rent than buy unless you have 300k down on a 500k condo. That's the issue.
Absolutely..
That is what people need. U need to have 200k+ saved up before considering buying anything
Rent is crazy expensive
no, its much cheaper to rent period. it doesn't matter if you had 300k to put down, you could rent and put that 300k in a 5% risk free savings account and make $1250/mo.
@@cronstrubzo rent only goes up. So if u owned a property today, in 10 years your payments and owning would be far less than rent. Never to be evicted. If u tackle the mortgage and pay it off aggressively. Long term better to own I find is all.
The young people that I know don't want to buy a shoebox with ridiculous condo fees, They are moving to Calgary and buying g nice starter home with a yard for under $400 000
Lots of Toronto condos are anti human. I don't want to buy a box in the sky in the hopes that I can sell it on to the next guy for more money.
The first time homebuyers don't want in on this pyramid scheme. Would rather move to the US and live a better life in a bigger house.
Is the US market less of a pyramid scheme?
@@TomStoreyCanada's a joke always has been. If an entire country's economy is based on homes whose value is fueled by banking and cheap credit, that economy is fundamentally broken.
@@TomStoreyummmm in the red states I'd say yes. In the blue states it's not much different than Canada.
@@TomStorey Yeah check out income to home price ratios in Chicago vs Toronto.
Agreed. My US coworkers around Houston can get a detach for $400k USD any day of the week. Where do I sign up? Why should I fund someone else's retirement and overpay for a house in GTA?
If you own a paid-off home , don't be stupid and buy a bigger one igniting a new mortgage and increasing your property taxes. Keep your hard earned money in your pocket and enjoy yourself , let other people lose sleep at night.
Lol yes keep money in the bank where you are losing on inflation wise words. Lol
Dont by a condo rhat i agree.
But realeste if bought properly and good location will be good
@@Relaxlifeisshort2 I don’t think he meant “in your pocket” literally. The money saved can be invested numerous ways to generate a return that outsizes inflation.
@@crhayes yes i know that .
Still
It depends on what kind of lifestyle you want. Sure, I could live in a small place mortgage free but I decided to upsize into a newer detached house so I won't feel the need to go bigger/newer down the road with the potential risk of be priced out
Depends I know people who built themselves up significantly by buying renovating selling every 3 years
I can't wait for this melt down.
Way to publicly wish for the financial demise of innocent people trying to secure a better future through investment.
Homes should not be an investment
@DeWalt20V Yes, they should. They are a valid, viable, and recognized asset class that allows people with lower levels of literacy in stock markets to have a leg up and build some wealth and financial security. Just because you don't like it doesn't make it any less valid.
@@SamSarabi Sam, a very well laid out comment. I agree 100%
Why invest in real estate when LTB is biased to the TT. Massive financial risk. Now add disincentives like an increase to cap gains tax and this is where we are.
People may start buying a larger primary home instead.
Forget about first-time buyers, now we have last-time buyers.
It's very simple. GTA housing is too expensive. People either can't afford it (and move to Calgary/Edmonton/East coast), or for the money there are better places to go. If GTA is going to insist it is a world class city, that sword cuts both ways. I would rather be elsewhere warmer if I am going to pay through the nose.
You can buy a nice house in Michigan for less than the cost of a lot in Southern Ontario. We are Canadian and we are getting hosed.
I bought a 2300 sq ft front double garage detached house fully upgraded for 550k in the premium community of Edmonton, same house is north of 1.5 million in Toronto, Mississauga, and lots of jobs available That is why no one is buying in GTA.
Nothing premium in Edmonton
@@viciss3224Sherwood park is a premium community
@@viciss3224toronto is a dump. Far-left liberal policies have hollowed out the middle class
TOO COLD in Edmonton
Edmonton is cheap for a reason
I love the creative thinking. We need that to tilt the balance back toward more people owning the home they live in.
Been chased out of the market. Buying is for families with a lot of assets or wealth now. Gov has helped create a literal class system of those who have houses and those who don't and those who do are quite literally superior in this country.
Don't give up if it's something you want to accomplish.
@@TomStorey dat sum deep shyt Son . Dat should be enough to Buy two houses Now . Love conquers all ❤
@@dingdong8242 You can't make excuses and produce results at the same time.
I noticed the people who moved into my neighbourhood the last few years have actually been multi-family. Sign of the time we are in. Sucks.
Many of those people living in those expensive houses live very low class and poor lifestyles. They need tenants to supplement their mortgage. The car in the driveway rarely matches the home.
The property ladder isn’t something that should exist. Your home shouldn’t be an investment.
My gf and I combine for over 250k income and we have around 400k saved up. We are not in the market because the value for housing around the GTA is piss poor, and also who wants to be on the hook for a 800k mortgage with such poor economic outlook and job insecurity? Simply, the price is too high, it's really not worth it. Sorry boomers please find someone else to fund your retirement. Not paying $1m for a 1950's tiny bungalow in Scarborough.
Should have put it into gold. Or Nvidia.
@@vert911Should ofs is for knuckleheads.
You hit the nail on the head with this comment
You should take a look at your spending because you should absolutely be able to afford a home with those numbers.
I think you missed the part where they said they don't see the value in investing in a home the way the market is now
The problem is the cost associated with selling/buying a property. 5% selling price to give to realtor + land transfer tax that you lost from previous home, and the new home you are buying. That’s a lot of money throwing away. The system has to change some how otherwise people would just keep buying without selling if they can. I know lots of people owning multiple properties who don’t want to sell because the cost associated with the transaction.
It's very expensive to move. Hiring a realtor is optional, paying double land transfer tax is not.
Very good points. The way the market is structured you pretty well have to hire a realtor at 5%. Which is stupid.
Should be a reasonable fee for service.
Where did we go? We got priced out of the market. I make $125k/year and I can't afford a shoebox condo in the GTA once you factor in saving for a down payment, then mortgage payments, monthly maintenance and taxes.
Are you renting in Toronto or did you end up buying in a more affordable market?
Been looking for an opportunity to move out of canada. This system is not sustainable. The once great Egypt, Persian and Babylon is untraceable. We never learn from the past.
I for one, am in the process of buying in another province lol. Job allows me to move, and I'm getting MUCH more house for my dollar. I may have been born in Toronto, but I'm not about to financially die there, so that some retiree can laugh to the bank. Enjoy!
Are you buying in Alberta?
@@TomStorey Happily. My retirement plan and my home won't likely overlap, and I'm okay with that.
There are buyers out there, unfortunately some don't qualify on their own. And with everything else going up, some buyers have given up or some have relocated.! Great video as usual!
The millennial generation in Toronto thought it was wonderfull to let huge numbers of migrants come to Toronto , believing that would solve all the problems , boy did that ever go wrong , suddenly you people can't afford a home or much else . The sad thing is it's not going to get better , the migrants are happy though !
There are several very affordable cites southern Ontario especially now with remote jobs and schools. Companies are also moving and downsizing office space. South Essex is where we are moving too. Super hospital opening and housing is being built in a more affordable manner .. they are approving ADU’s so I can build a place for my son for later… plus winters are similar to Toronto. An option is to also get the shoe box condos and rebuild their layouts, people are living in RV’s, boats and Tiny houses - developers have NOT been maximizing space -look at New York and how they evolved interior design, Japan etc… the product on the market is very low quantity for the price.
The problem is the huge growth in values of houses !!!! It’s insane !!! Capital tax gain on primary residency is necessary!!! Unless the economy will crash but the house prices not !!! The solve of this problem not interest rate but more regulations.
Once interest rates start coming down heavily, we will see more activity in the housing market in my view. The same trend is happening globally not just in Canada.
I don't know of anybody who climbed the property ladder the way you described it. /the loss of equity is terrible due to taxes and expenses. One move perhaps and that's it.
I did. Condo to townhouse to house. Upsizing in a bad market can work well.
@@TomStoreyyeah maybe when property prices weren’t ridiculous like now, that worked well.
@@inderjeetkaur720 That's what people have been saying for 50 years.
Why the same is not happening in HONGCOUVER 😅
You made it very non-bullshit this time, Tom. Props to you!
Really nice suggestions, and I wish our politicians would implement your suggestions! But… They are full of bullshit, and their self-interests are much higher priorities than our needs… Keep up with the good work bro. 👍
Although people hope to move up to bigger and bigger properties as they age I wonder who might buy a condo in the next couple of years as a first time home and then end up spending 30 years from age 30 to age 60 living in that tiny condo and then at age 60 when they are finally mortgage free realize that they're about to retire in a couple of years and the idea of moving into a bigger home and having a family has passed them by.
Things have changed since 60 years ago when a couple could get married at age 18 after finishing high school and get jobs, maybe with the man getting a job at a car manufacturer, and then just six years later buy a small bungalow and start a family.
How many 24 year olds can buy a detached bungalow now?
Very few.
I think the developer are one of the major problems with Canadian real estate, along with municipal red tape. It’s becoming so expensive you can’t build anything close to affordable and make no mistake the young buyers are paying for all of it. People have to hold municipal governments held accountable for this…the problem is nobody does.
I recall around 30% of the cost is actually fees paid to municipal government. They are hooked on the fees and refuse to roll them back.
Don't forget 5% real estate fees and land transfer tax. Just as onerous.
Around the 6:30 mark, 2 basis points is 0.02% not 2.00% which would be 200 basis points that you implied to get that 7.00% stress test mark. Love the vid, just wanted to mention that.
Thanks for catching that.
The problem is there is no point in buying in Toronto, unless you have millions of dollars sitting in your bank accounts. For most first time home buyers, they buy homes to settle and to raise family. But are you going to raise family in a 400 sqft shoebox, and have hundreds of thousands or million of dollars debt ever since? Plus for the environment that you are buying, there are shootings, robberies, drugs, unleashed aggressive dogs, racists and reckless drivers in a constant heavy traffic jam…..plus the salaries you earn is the exactly the SAME as everywhere else that have houses for much much cheaper prices…..then, what is the point to be that dumbass who is going to pay off someone else’s failing investment? 😂 Please, just stop it, the real estate in Toronto is the falling knife, and Toronto realtors should all quit and find some other jobs!
In a semi, don't want a detached after the BOC cranked up the rates. I'm sure that has scared many people away.
Do you feel Montreals market is also broken? I have 475 sqft for sale and notice that there isn't much supply at that sq footage in my area and little in the entire city. My understanding is that Toronto is overflooder. But Montreal realestate is super slow too, almost dead.
I don't know the in an outs of the Montreal market. Sorry!
food, house, water are essentials. making them object of profitable commodity is a wrong policy
Oh Toronto, your golden era of real estate boom has come and gone. You had an amazing decade. It is now Calgary’s turn.
Calgary will crumble even harder 😂
no one want to spend 50% of their income on house, and another 10-15% for property tax and maintenance it. there isnt much left for live.
Ive been thinking this would happen for the longest time. 35 yr ammorts for first time buyers... Would be the best
I'd never buy in these expensive places, I'd sooner couch surf. I would only buy in remote towns cause you get value for $, if you can do it that's the only way it's worth owning a home, this work your fingers to the bone for what? To live in a over valued piece of brick wood concrete whatever...nah.
Developers need some new incentives. I like it!
The solution is quite simple, but unpopular: increase property taxes and get rid of all development taxes
5% and up mortage rates....
Nah I’d rather prices came down than giving a break on stress test. If you want high home prices then you want less affordability for young Canadians which means less babies and more immigration.
First time buyers didn’t “ go “ anywhere. They just quit believing in the homeownership fallacy.
Spending 15x to 20x their annual salary on a place to live , with $5,000 to $10,000 in property taxes, $10,000 in average maintenance costs and adopting a 40 year mortgage in which RBC or CIBC or TD get 75% or more of the initial purchase price in interest….the only logical choice is to rent for the rest of your life.
San Francisco, Toronto etc. , they are are so over valued. High paying jobs also can’t support them any more. What goes up must come down.
They are renting (paying broken landlord’s ridiculous mortgage payment.)
Housing 4x incomes in 90s vs 13x now, the math isnt mathing. Thanks Trudeau for not regulating investors and making no attempt to create something like HUD homes for first time homebuyers. Guess that's what happens when the main industries are finance and real estate. Is Canada just a glorified Canary Islands?
Canada condo Market is a Pyramid scheme period. Garbage condo or residential is overpriced. Condos are total waste of money
The scheme to allow 30 year mortgages really doesn't appeal to me at all. That's not a solution, that doesn't make housing more affordable, it's a deal with the devil. All it does is shuffle the numbers around so that it's not as immediately painful for me to sell my soul into indentured servitude. In the end, I actually end up worse off financially because there's more in interest payments.
I just want an actual entry level place to stay that costs 200-300K. Even if its just a shoebox, at least I can actually 1) qualify for a mortgage, and 2) build equity with prepayment within a short number of years instead of just making massive interest payments for the next decade.
What we want often differs from what actually happens.
My 40 year mortgage in 2008 allowed me to accrue nearly 400k equity with 0 down that I used to buy a 1mil home years later. Longer amorts work to put people in homes, just not to save people already in trouble.
Supply. Not more financial engineering.
*supply that first time buyers are not competing with investors.
@@TomStorey Fair enough. I appreciate your point. Should also consider the (admittedly more radical) idea of 3x property taxes on 2nd dwelling owned, 5x on 3rd/4th/5th/... dwelling owned. That would shift perspective from house= asset to be manipulated towards house=home/shelter. Additional government revenue earmarked (forcibly and in an audit-able fashion) to infrastructure mtce / expansion to accommodate the effects of growing population and density.
@@enWtee They could also increase the minimum down payment on investment properties from 20% to 35%.
quit buying boomers bigger houses
Do I need to tell you how they get approvals? Jeez...
Nothing will break. They will lower the rate at every BoC meeting until the end of the year.
Sadly I think these sticky inflation reports might cause some pausing in the decreases. It shouldn't, but they will use every excuse to cause pain.