Counter: in 1984 the average Toronto house price was 100k in 1989, 5 years later, the average Toronto house was 280k, a 280% increase In 1995, 6 years later, housing reached a low of 200k, a 28.6% decrease from that peak and a 100% increase over 11 years from the 1984 price or about 6% increase a year. relative to inflation in the 90s housing lost value in toronto. In the 5 years before the peak in February of 2022 the average home price of a single detached in toronto more than doubled. It has since dropped 15% Where will home prices be in 2034? Well in nominal terms I would posit you that they will nearly the same they are now. I suspect we will see a further drop in home prices over the next 2 years, as interest rates have not finished correcting housing. In real terms, adjust for inflation, Toronto housing in 2034 will have lost value relative today. And in real terms since peak it has lost almost a quarter of it's value. The average Toronto home will be lower in 2034, by then we will have had a major recession and a major slow down in immigration, and a weaking of the Canadian dollar. Buying a house right now is a huge mistake. Something a realtor probably won't tell you. But what a realtor might tell you 3 drinks in at the bar, is that no one is buying in Toronto. And why would you. Let's say I bought a 2 million dollar house right now, a nice house eh? But whats the INTEREST on that house. Bond rates are going up, mortgage rates are nearing an all time high and may continue to do so if there does not materialize a rate hike. But let's say I lock in a cool 6% fixed somehow. Well my monthly INTEREST on that mortgage would be 10k. The principle would be another 4k at least. So 14k a month. Let's be a bit more reasonable and say it's a 1 million dollar house. So 6k a month. What is the rent on a 1 million dollar house in toronto (that would barely be a 2 bedroom 1 bath), You could probably manage inside of 4k. so 7k + taxes and maintenance, call it 8k a month, vs 4 k and investing 4k. Buying makes 0 sense. And thats especially showing in condos. But housing is rare! condos are overpriced and theres too many, but a detached, you say. Except if you can't sell your condo you cant buy a house. If condos aren't selling and are losing value like mad, the people looking for a 1.5 mil house who want to sell their condo for 800k cant buy, because their condo is 750k, wait, 700k, wait they cant even sell it. Buying a house for the next 2 years is a mistake, save this comment.
Counter:
in 1984 the average Toronto house price was 100k
in 1989, 5 years later, the average Toronto house was 280k, a 280% increase
In 1995, 6 years later, housing reached a low of 200k, a 28.6% decrease from that peak and a 100% increase over 11 years from the 1984 price or about 6% increase a year. relative to inflation in the 90s housing lost value in toronto.
In the 5 years before the peak in February of 2022 the average home price of a single detached in toronto more than doubled.
It has since dropped 15%
Where will home prices be in 2034?
Well in nominal terms I would posit you that they will nearly the same they are now. I suspect we will see a further drop in home prices over the next 2 years, as interest rates have not finished correcting housing.
In real terms, adjust for inflation, Toronto housing in 2034 will have lost value relative today. And in real terms since peak it has lost almost a quarter of it's value.
The average Toronto home will be lower in 2034, by then we will have had a major recession and a major slow down in immigration, and a weaking of the Canadian dollar.
Buying a house right now is a huge mistake.
Something a realtor probably won't tell you. But what a realtor might tell you 3 drinks in at the bar, is that no one is buying in Toronto.
And why would you. Let's say I bought a 2 million dollar house right now, a nice house eh?
But whats the INTEREST on that house. Bond rates are going up, mortgage rates are nearing an all time high and may continue to do so if there does not materialize a rate hike. But let's say I lock in a cool 6% fixed somehow. Well my monthly INTEREST on that mortgage would be 10k. The principle would be another 4k at least. So 14k a month.
Let's be a bit more reasonable and say it's a 1 million dollar house. So 6k a month. What is the rent on a 1 million dollar house in toronto (that would barely be a 2 bedroom 1 bath), You could probably manage inside of 4k. so 7k + taxes and maintenance, call it 8k a month, vs 4 k and investing 4k.
Buying makes 0 sense. And thats especially showing in condos.
But housing is rare! condos are overpriced and theres too many, but a detached, you say.
Except if you can't sell your condo you cant buy a house. If condos aren't selling and are losing value like mad, the people looking for a 1.5 mil house who want to sell their condo for 800k cant buy, because their condo is 750k, wait, 700k, wait they cant even sell it.
Buying a house for the next 2 years is a mistake, save this comment.
Thanks for the insight. Buying a home might not be for everyone and that’s ok too.