HawthorneVillager.com

As long as we keep adding more and more people to the region and the unemployment rate doesn't start going up, there will always be sustainable growth. Now if the interest rates, mortgage restrictions and consumer debt reduce come into play, you will see less qualified buyers. This will show in the prices but don't expect a massive drop. You are posting as if the entire GTA is living pay cheque to pay cheque with their credit cards maxed and running to the money mart down the street for cash advances every day while living in a $600,000 home. I don't think this is the case.

Does Ben Rabidoux have advertising on his regular guy blog? If so, that's how he is being paid. If not, kudos.

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growth in multi million dollar homes? this is where i shake my head. its small part of the population in multi million dollar homes, when the economy is in the dumps, these are the first homes to get a major beatdown. regualr homes in the 500k suffer, albeit not like the larger, expensive homes. believe me im speaking from direct experience.

Do you remember the last housing crash we had? Short lived & as soon as it was over new record high prices.

That's why paranoia over bubbles is just paranoia. In long haul prices keep going up and there is no way a home next year is ever go to be long term cheaper than a home decades ago.

Too many external factors.

This was because paranoia hit over the US situation -- everyone retracted. Builders halted new construction, people living on the edge listed their homes quickly etc. Quickly, Canadians realized that although we were very affected, we weren't nearly in the same situation. Quickly people looked to themselves and said "hey, I still have my job! It's not going anywhere anytime soon" to which caused them to quickly say "hey, look at the prices of these houses.. and look how cheap mortgage money is now! It's a great time to get into the market/upsize/downsize" etc.

So the market came back furiously. Add to that many fence sitters were forced to buy sooner rather than later to blanket them against the coming HST implementation which would mean a more expensive house.

Low interest. Less taxes. Cheaper prices. = strong market.

Then what happened in the new build segment was that many builders had hit the panic button and halted production which actually left a bit of a shortage on new homes right at the point the market was running full tilt which lent to less supply vs. higher demand.

The same thing is happening again right now as builders have dropped new home starts in anticipation of the end of the real-estate run up. (Although nobody has told the condo segment this yet). Builders are pretty darn smart.. they work in waves and they know when to cut supply, focus on acquiring new land, commercial development etc. when they feel the real estate demand is decreasing. They wait until the right moment, then unleash the fury once again. By doing this, they ensure a healthy market and top profits for themselves. It makes no sense to whack out hundreds of thousands of units only to sell them for 5% profit.

Unfortunately in the United States, this didn't happen as there was an endless supply of people with signed mortgage papers in hand thanks to the greed of the many banks and private lending institutions. If your a builder and there are lineups of people offering you 20-30-40% profit on your builds with bank approval, you aren't going to turn them down. Unfortunately, now those builders are likely in for a very long time without growth as the massive amount of over supply is taken care of (if that's even possible).

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Anyone have a plot with monthly/annual home prices for the past 40 years for the GTA plotted against all of Canada?

2008 was a hiccup exacerbated by the doom sayers

Seriously do you really even need this?

There is no plot of land in the GTA that costs less today than 40 years ago (even factoring in the inflation and if the house needs to be demolished on said plot as it was no longer livable)

Many real Canadian stats can be found here:
http://www.cmhc-schl.gc.ca/en/corp/abou ... /index.cfm

What I would be curious to see is how dips in the overall market in canada , correlated with just the gta dips. I wasnt expecting to see land costs lower now than 40 years ago.

Thanks,

I was kinda hoping Ol Skool would chime in with the graph and save me the trouble of looking I assume he has all the data to plot it up as part of his research

There is something wrong with that graph (as it actually contradicts what the CMHC reports). In particular the breakdowns by age are wonky (as the aging baby boomers die off or downsize into condos & retirement homes).

It also contradicts Stats Canada who claim that 2006 had highest % of Canadians owning homes since 1971 (yet on the link you provided 1971 is apparently a very low year)

http://www.canadianbusiness.com/article ... -coal-mine

The party is over!

Yeah but you see what I am saying right?

It shows a nearly continuous upward trend in all categories, despite influx of immigration (we are not importing as many 75 year olds as 25 year olds) and says every year higher percent of people own homes (which I disagree with, but if it was true this would mean even a recession or depression or oil shortage had no effect on home ownership whatsoever??? That makes no sense at all...)

Many believe between 65-70% is a very healthy home ownership rate for a prosperous country.

Traditionally Canada has run in the 67% range. 70% is a bit high but as you are seeing, prices are up and many are being priced out of the market so that number will slowly come back down over the next few years.

Some countries in Europe are much higher (and probably a reason they are experiencing issues now). For example Ireland is in and around 83%. Hungary is in the 90s.

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Interest stuff for sure. The last slide looks very erie! One thing I don't like about the last slide is that it doesn't account for inflation. I've seen the same exact slide going back 50 years but taking inflation into account. In that slide, the 1986-1989 bubble average inflation adjusted price was actually higher than we are now.

Here is one...



So definitely looks like we are heading up that road again, but if you look at the trend line, it doesn't look like we've gone too far up yet. Looks like $375k-$400k seems to be about the right average price for right now. So I think the average of $446k or so is high.

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But even at 25%, wouldn't that only remove the gains made over the past 3 years? So someone who purchased before say 2008 would still be better off purchasing then than now?

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