My brother is buying with majority cash. Strategy will be offering $900 - 1K/sqft for all 2BR 2BA properties. His realtor was suggesting to offer $900K for a 770 sqft in mount pleasant.

He's taking an L either way though. His payments are more than if he bought at higher price low interest lol. But low price, high interest is better than high price, high interest.

I think when you are buying $2 $3m homes you're not gonna be putting 20% down and financing the 80. Most likely you've had cheaper houses and built equity or put a much bigger chunk down. Even if I made $500 you won't be let's buy the most expensive house I can afford, you will still have to juggle, expenses, lifestyle and investments. But what do I know I doubt I'll be earning 500k a year through working.

Very lucky to be in demand!

I feel like our finance/accounting jobs are in demand, given you're willing to work for average market rate.

I think it'd take minimum 3 to 6 months in order to find another job that pays in the $120K+ range for our field. So it'd spooky to lose your job.

Yeah, $500K+ in my field is only CFO / Partner at a professional services firm. It's about as common as making it to the NFL/NHL/NBA lol.

Best case scenario is if you sack away a ton of cash from 20's to 30's for investment / small business income + regular income get close to $500K. Even then, unlikely!

Yeah the fact places are still asking 1100/sq ft on the north shore when that’s what it was 5 months ago is a laugh. Like, people aren’t taking on an extra $800 or more a month to buy these places. They will just sit, and they are.

Well the fact that my brother doesn't know enough to continue offering on these places at like $1,100/sqft makes me think that all it takes is one person who's not well versed in real estate + a little panic buying from recent run up to over pay.

What a change from presales selling out in days (300+ units ) in Surrey in January at $1k/ft to doom and gloom and 5 year fixed at 5.5%.
There's a lack of buyers in the market as everyone's on sidelines - deals are there to be had but scary times ahead for smaller developers in the middle of rezoning and hoping to sell their Cambie corridor projects at $1200-1400/ft.

Hey, nothing goes up in a straight line!

____

We should expect to see a HUGE drop in real estate prices, which sucks for portfolio but at least allows real families to get space when needed.

Let's be honest $150K individually doesn't even make a dent if you're bidding up $2-3M houses in Vancouver given the after tax calculation you've all done with 35% max TDSR (debt load) per month so lots of people either are trading up from 2BR/Townhouses and/or putting in $2M+ down payment.

Yeah, at the $2m+ mark (heck, even past $1.5m now) it's rare that you can borrow enough that you can just do a 20% downpayment b/c the income just isn't high enough to pass the stress test even if you can afford the payment (since you have so much more disposable income at that income level). I had to put down around 30-35% on my house (total cost was just north of $2.4m) to make it work and our household is a bit north of $300k.

CIBC will allow 20% down and a mortgage of $5M if you have liquid assets of $500K with them (can be in their self-directed low-cost broker, InvestorEdge). There are obviously other qualifying criteria as well, such as other assets, income etc.

I've been browsing in that area too. Is he going to live in it or rent it out?

IMO the 2nd bathroom is a big waste of space. But for me it'll be just myself, my partner and a pup

My wife met up with an old friend she hadn’t seen since Covid pretty much. Married a guy who’s family is balling AF, like we have some family friends worth 30-50m and I’m sure this family is worth hundreds of million given what I’ve seen

They recently had a baby and have been looking to buy a house (currently live in a ridiculous condo PH) she told my wife basically perfect timing for them as a 5m house may become a 3M house for them in the next few months lol..

They probably talk about what a shithole they think your place is on the drive home

https://www.bankofcanada.ca/2022/06/...tgage-payments

A lot of good data on how many people have mortgages and how many of those are fixed, variable etc. A little less than a third of people with mortgages (and only half of homeowners have mortgages) are on variable mortgages with most of those on fixed payment variables. What it doesn't show is that variable became way more popular recently.

Live, if he wanted to invest, it's better to go to Alberta / Kelowna / Victoria for Airbnbs/Rentals.

I need a 2nd bathroom, it's good for guests. But I also host a lot, dream would be to upgrade patio to something bigger than could fit a hottub too.

At least he will lock that "lower price" and his payments will be predictable for the forthcoming future. We're gonna hit peak rates the end of this year and from there it will either hold or go down next year.

Whereas me, I literally just moved into my place last week and I'm already 1 hike away from my trigger rate... lol...

I spit my drink out when I read this, LOL, 100%

https://twitter.com/sbarlow_rob/stat...NNl8wgErHycxkA

Love the nerdy language of economists.

https://pbs.twimg.com/media/FXtG6gJV...pg&name=medium

So which side are you on now?

Just earlier this year, you called me looney tunes and a covid/climate change denier when I said that I believe the supply constraints here are overblown and the recent higher RE prices are due to demand boosted artificially by low interest rates and FOMO due to the rapid RE capital appreciation and the expected continuation of that appreciation.

You said that no, I am misinformed and this is supply supply supply. By your logic, prices shouldn't decrease drastically at all right? Since we aren't increasing supply, and demand is apparently fundamentally sound due to all the reasons you cited such as immigration and foreign money rolling in?

I guess we shall see.

https://www.cmhc-schl.gc.ca/en/blog/...rdability-2030

There's still an brutal acute shortage of housing in Canada to the tune of millions of homes - CMHC says we need to build about 5.8m new homes between now and 2030 to get back into affordable housing territory and that's off a starting point of about 16.5m homes (we add about 1-1.5% to our housing stock each year so this is a massive increase). Making matters worse most of that housing stock is needed in Vancouver and Toronto.

The CMHC is basically saying that for every 3 houses we have there are 4 families wanting to live in them (We need 22m homes by 2030 and only have 16.5m today) - there is no way that doesn't lead to skyrocketing housing prices (and that's what has happened) and that's not even getting to foreign investments etc.

Price will certainly come down b/c of higher interest rates (temporarily) but it won't come down anywhere near what it "should" b/c there simply aren't enough houses available. People are going to just keep putting more and more money into housing b/c they simply need a roof over their heads. We're basically watching a really, really high stakes version what happens when a water truck shows up to a drought stricken neighbourhood and it has a bad ending for a lot of people.

Housing prices are less relevant to the affordability crisis in canada than % of income spent by the average homeowner.
Housing prices can drop substantially due to the increase of mortgage payments necessary, and it does nothing to remedy our affordability crisis. It just changes who profits.
Supafamous is correct in a way, that nothing more than a massive supply influx can change that.

We're heading towards the highest rates we've experienced in over a decade, Canadian households are holding record amounts of debt but there's some people who think we'll see double digit growth in RE in a year or two? I'm so confused.

And what CMHC is saying is we need 5.8m more new homes by 2030 but we're on pace for only 2.3 million. The 22 million is the housing stock goal for 2030, rght now we are on track for 18.5 million.

I’d really like to see how the housing stock would be affected if 3rd/4th/etc property owners were limited and that housing was back in the market, would affect the numbers. I have a feeling we’d be not panicking about building homes and address the root of the problem.
Of course the rental properties would affect that, but I mean homes used as short term rentals and such.

Cue renters complaining because rental stock would shrink and bump prices even higher for rent

At some point, when rent gets high enough, people will leave Vancouver to interior. International will immigrate to another first world country. I don't move to HK / Singapore due to high cost of living for housing. It'd be hard to downsize to something half my size for double the price.

I think homeowners would rather bite 50% mortgage increases than to sell at a loss. It's such a risk adverse asset where we won't see prices drop unless it's mandatory due to financial reasons.

The point of contention isn't if massive supply increase will changes prices, it's whether or not the demand here was fundamentally sound in the first place. Supafamous seems to think it's sound (i.e. won't decrease) but I don't.

We are still very early and we won't find out for another 2 to 3 years. If prices are still the same at that time with interest rates being more normal (not sub 3%), then he will be right. I have my doubts though.

As for sellers not wanting to sell for a loss and will just hang on to their properties, that's very true. Until they can no longer afford the payments of course.

We also thought there would be mass collapse of the housing market when Coronas started and everyone lost their jobs. Look what happened. I think it might suck for some people but they will find a way to hang onto their houses. As at the end of the day you need a place to live even if you don't eat. Housing cost isn't really something elastic that you can choose to not spend Vs Starbucks and avocado toast. Just look at gas, prices double but you don't see RS folk walking to meets FeelsBadMan