4 ms·
In 1990 the house next door (Bloor West Village, Toronto) sold for 500k. A year later it was worth somewhere between 250-275k. It took all the way to 2005 for i
by hourislate 5y ago
In 1990 the house next door (Bloor West Village, Toronto) sold for 500k. A year later it was worth somewhere between 250-275k. It took all the way to 2005 for it to sell again for 500k. It sold again a few months ago (after a shitty reno) for almost 2 million, It almost doubled in value from what I can recall over the last 2 years. The new owner is a holding company based out of Vancouver. It is sitting empty from what I can tell with the odd visitor every few of weeks.
I have seen Condo's double in price over a period of about 6-8 months Between Oct 2019 to about May/June of 2020) and then go up another 50% after that. House prices are going up over $1k a week and even land that has a road allowance but no road or utilities in Northern Ontario (Muskoka) has gone up over 100 % in the first few months of 2020.
My guess is Toronto real estate will easily double over the next 5 years. The Federal Government and BoC will never be able to raise interest rates meaningfully without collapsing the entire economy. Young Canadians will have nothing but the yoke of debt around their necks and live hand to mouth.
- foepys 5y agoAt some point it cannot continue this way. I wonder what will happen when those empty houses suddenly cannot sell for more than their purchase price. Will people start living there because now they aren't a burden to the new owner? Or will the market promply crash so even moderately wealthy people will lose their previously overvalued houses because they cannot pay their mortgages anymore due to rising interests?
- onlyrealcuzzo 5y agoWhy can't it continue this way? You can expand credit forever. Interest rates can go negative. It is NOT a free market. The Bank of Canada controls the price of debt. Debt is the majority of the economy. It will obviously lead to a sicker and sicker and more unequal (and unfair) economy. But the Bank of Canada isn't really accountable to anyone. It could continue its path for at least the rest of our lifetimes, in theory.
- refurb 5y agoBank of Canada has already signaled interest rates will be rising faster than expected. They will have no choice - if rates don’t go up they’ll have inflation problems compounded by a falling dollar.
- hourislate 5y agoInterest rates will not be over 5 % in our lifetime (50 years plus). Average home price in TO will be well over 2-3 million in the next decade. BoC understands that any meaningful rise will cause economic calamity that will leave everyone naked and hungry in the streets and a collapse of the financial system. Just saying...
- refurb 5y agoNope. If they don’t increase interest rates (and they are clearly moving faster than what they said a year ago) inflation will skyrocket and the Canadian dollar will be crushed, causing more price inflation due to imports. The BOC will have no choice. They’ve just painted themselves into a corner.
- Marsymars 5y agoIn such a collapse, are the houses just all going to be empty?
- cmrdporcupine 5y agoA low dollar (within reason) benefits central Canada, with our manufacturing exports. Ontario & Quebec suffered quite a bit when the price of oil (and thus the dollar) was high back about 10 years ago.
- cmrdporcupine 5y agoWhen my wife's grandfather passed away (2008 I think?), her mom&uncle sold their neglected and sad old house in Bloor West Village for about $500k, in a pretty bad state. My wife and I had just bought our first home a couple years before, and we kinda pondered buying the grandparents' place off family, but figured we couldn't possibly swing the mortgage to get the renos done. What a missed opportunity, we'd be sitting on a goldmine now. The new owner just let it sit there for years; haven't been by to see what has been done to it.