HawthorneVillager.com

Yes I want to move in to the new build, and am perfectly fine if it is worth less over the next 5-10 years. Its our primary residence.
My concern isn't the price of the new home, but the gap between the new and what I sell existing for (this year or next???).

Yes its easy to sell now, homes im my current area are moving fast for decent asking price, just unsure where that will be next year.

As for rates, I'm locking in now for a long term fixed just in case, but its the gap that is the concern pending market correction.

I know no one has a crystal ball, especially the experts, but Appreciate the collective thinking.

It's all about risk and how willing you are to toy with the risk. There is no right answer. You could sell now, guaranteed to earn a great deal, without the risk of having your value go down. Can you live with having the value go up a lot more?

It's similar to when selecting a mortgage term/style.

Interest rates are at an all time low. If you get a builder cap you are laughing. It's almost guaranteed that rates will go up right after the election. You need to look at the savings you will have over those 5 years.

Another aspect is that regardless of "fake house values", the actual cost of building a house is going up.. With the Japan crisis, they will be demanding a lot of wood and metal as well as other building materials and that will drive up costs for building here.

Finally, it's only a year away. In such a short term I can't see an total collapse of anything (without unforseen circumstances). Economy is moving strong, unemployment is creeping down, etc. I wouldn't expect you would see your house worth 15% less next year or anything drastic like that.. but there is always a risk.

Your biggest risk would be a slow market where there are no buyers and you can't sell.

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Thought this was an Interesting indepth take on the Toronto market 2011/12 housing forecast
http://addysaeed.com/treblog/?p=1221

Home Auctions - that's crazy!!!.

Given similarities between Australia/Canada (both resource based economies and current strong dollars),
I would assume their 7 consecutive rate increases to 4.75% is the main driver.

Our relatively lower BOC interest rate (1%) should give some padding before we see similar reaction.

http://www.global-rates.com/interest-ra ... banks.aspx

Here is an interesting link that shows property prices increase in different parts of the GTA using interactive map.

http://www.thestar.com/news/article/974 ... ally-worth

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Furqan Haider (Broker of Record)
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The reality is, if you want a house, buy one. Sitting out will do you no good. If you are waiting for the "big crash", and it actually happens, the economy will be so in shambles that you wont be in a position to buy a house anyways, because it's likely you wont have a job or any income.

You keep drawing parallels to the USA.. how many people are "jumping on the low prices" right now? None.. Because everyone is wiped out -- the entire economy.

For those worried about interest rates - don't be. History shows that when interest rates are high, foreclosures are at their lowest.. this is because high interest rates are a direct reflection of the strength of the economy. When we have rock bottom interest rates, the economy is in bad shape.

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A different take on why sales are down but prices are still climbing in the 416/905:

http://www.moneyville.ca/article/977288 ... slide?bn=1

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"Land to build on" -- in the GTA (416/905) - especially the 416.

I don't think anyone would spend $500,000 on a 2,000 sq/ft house in Sudbury.

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Ahh.. but if the sales are declining, why are prices going up and up and up -- I believe they are now much higher than the "peak" predicted earlier in this thread. Any economist (even the ones predicting the ultimate crash) will tell you it's all down to supply and demand. If the supply is always lower than the demand, prices will *always* go up. Sounds like there are LOTS of condos being built but new home development is way down this year -- which explains why the resale market is hot right now and breaking records once again.

Don't forget, just because it's a big field -- doesn't mean it's serviceable and can be built on. Unless people want to live in cottages, no basement, well water, outhouses etc. There are a lot of factors in making a plot of land available for development -- which is why the builders are quick to snap them up when they become available. If there is solid rock 2ft down, they can't get sewers in, water mains, etc. It's not serviceable.

Also, lots of land (especially in the 905) is designated as protected lands for environmental/agriculture purposes. Most of the land between Highway 9 and Highway 88 was protected by the Green Belt plan up until around 2006 when the government overturned the protection policy to allow builders access to the land (due to a lack of places to develop) as part of the "places to grow" act. Basically, the government realized they were running out of land in the GTA.

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Dabills - where do you see lots of fields in 416? For that matter, where do you see lots of fields in Mississauga, Brampton or Pickering (parts of the 905). Yes, there are fields that can still be developed in Oakville, Milton, Burlington, North Ajax, Whitby and Oshawa and also parts of Vaughn.

Prices will always be higher in the desirable areas to live (Queen West or Lawrence Park will have a higher asking price and resale values than parts of Scarborough.

It's all about Location, Location, Location and where people are willing to live.

I believe that's exactly the point I was challenging. Shrinking demand.

How can demand be shrinking when prices are rising with builders saying there isn't enough development land available to satisfy demands?

Forget about the rest of Ontario -- we all know we are talking about the 100km radius around the CN Tower. There is tons of land everywhere else but everyone wants to be within 100km of the CN Tower so they can actually find decent jobs. It's where almost all new immigrants to Ontario go.

Pick up a copy of "New In Homes" and see how many "New Developments" that aren't condos or "condo townhomes" there are in areas like Scarborough, Toronto, Etobicoke, Mississauga, etc.

Even places like Milton are showing less development vs. a few years ago.

New development has reached Orillia, Wassaga Beach, Ajax, Newcastle, Peterborough, Cambridge, Stoney Creek, Alliston, etc.

Sure, if the population in Toronto stopped growing today -- we'd be fine -- lots of supply. As the population continues to grow, there isn't land to put the people except in condos -- how practical are condos to a family of 4 or 5 (or those housing parents/grandparents).

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Not to be mean in any respect... but a single income of 42k a year is not enough to be a home owner. Not everyone is set out to be a home owner. Renting would be a better alternative until your brothers income rises significantly or he finds a fine young lady to spend his life with so that you become a double income household.

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Less to do with demand at this stage, and more to do with the land, but the key is not just finding available land, but available AFFORDABLE land. I can tell you this from working WITH the developers that are always looking for new projects.

If the land + construction costs + DCs + everything else means they can't make a profit on the homes, they won't build there.
Simple economics states the opposite of what most people believe... You make money when you BUY, not when you sell. If you pay too much for something, you might potentially never make a dime off it.

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If you want to live in the city or close to the city, yes, you should be a high wage earner. Just like other major cities.

Time have changed -- as our parents did so well, they were able to afford to send most of us to school. The middle age generally has a university degree if not two and as such they are earning. The days of being a factory labourer and buying a detached home downtown are long gone. Even the immigrants coming to the country are appearing with educations and/or businesses.

The industrial revolution and the economy in the 60s-70s afforded factory workers and unskilled labour big wages. Many people didn't have educations. Those days are gone.

Where I work (area and field) a $65k salary is probably about average. I couldn't afford to live in the area I work -- no way and I accept that. If I want to go back to school, get some more meaninful education in an in-demand area, I too could be 6 figure salary and then buy in the area I work.

In the subdivision I purchased, the average household income is $105,000. The average house is under $400k. I don't see a problem there.

The reality is:

a) Dont get a useless degree like Philosophy or Theatric Arts and if you must, don't borrow $30k to do it
b) Don't buy a full detatched, 2000 sq/ft home 30 minutes from downtown when you just got out of school

Buy a townhouse that is in your price range, have a decent down payment, be debt free and build equity. It will likely be 1 hour or more commute to your work, but you do it as a sacrafice to own a home. In 5 years, sell the townhouse, and move closer to work and/or upsize. That's how our parents did it. Unfortunately we all feel entitled to have everything now -- just like the BMW/Mercedes leasees with 40k in student debt and maxed credit cards.

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