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Originally posted by tamilkuravan
It is also better to buy in the outskirts (meaning outside of Toronto). Toronto is not longer being attractive for house owners.

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"Mah deah, there is much more money to be made in the destruction of civilization than in building it up."

-- Rhett Butler in "Gone with the Wind"

I too have been struggling with this question. I am moving to GTA (Miss) from Edmonton. I am being transferred and I make about 120K/year. I decided to wait because

1. Housing prices are over valued in Canada compared to most of US. Incomes are lower and cost of living is higher. So it does not fundamentally add up. I cannot imagine that Vancouver housing prices are higher than Silicon Valley. There is absolutely no comparison between Silicon valley's economy and Vancouver's, yet Vancouver prices are higher. Even weather -wise California weather is beautiful year around.

2. Housing is just one part of a person's investment portfolio(it does not matter if it is for primary residence). At some point in life you will have to sell it. If all of one's saving goes in to paying mortgage, then it does not make sense. Currently the way housing prices are, a substantial portion of one's income will go into housing.

3. Don't just think Mortgage costs. Maintaining a house is also very expensive. All it take is a small roof leak to blow your finances for the year.

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Originally posted by viggy

Rahul: You do have a point... but what is confusing me is, if 50K new immigrants are landing in GTA every year and people are keeping away from buying houses, then won't the rental units become scarce, there by increasing the rents? That in turn, will drive people to buy, isn't it?

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Aashu,

I would say, listen to your gut feel. If you feel butterflies in your stomach, don't dare. If opposite, take the plunge...and if you really need to seek advice, the responses here will confuse you further rather than providing a direction. I am not proclaiming anyone to be providing wrong advise...it is just that we all are prisoners of our experiences and see things differently. Go to someone who you really trust and stick to the advice you get!

Funny thing about price drop is, who would tell that it has hit the bottom. I was in Sacramento, California just last week where the market has rebounded with vigour. Agents are buying the foreclosures/short sales (we don't have them here) themselves, fixing them and flipping them in less than 2 months, making a cool 30-40% profits. The people who are in the market to buy are of Chinese and Indian origin and most of them are paying $200K-$250K cash. A realtor(R) there I know told me that he has been seeking loans of 100K from individuals and returning them 110K back in 3 months.

And for some who are expecting the prices to fall 20-30%, in Mississauga/GTA, it would mean a drop of 70K-105K from the current average. I sincerely wish it could happen here. But I doubt that most recent purchasers here (majority of them are immigrants) are bad investors and would sell their dearest possession for less than what they paid for it...even if they have to leave the country for good.

It does not surprise me that the market is still active here. I have sold all my listings...still without a drop in market value (though I admit, it took me longer than before to sell it), leased my condo listing for full asking, and purchased a couple of homes for my clients midst of multiple offers. Again, I stress that in order to sell a home, its location and pricing it right (based on its upkeep and condition) for sale are paramount.

Where do I see it go from here? I see the sales of average single family homes slowing down in the Toronto and Scarborough areas. Vaughan, Oakville, Mississauga and Markham will retain interest of buyers, prime areas of Toronto (with $700K plus homes) will continue to outpace other sales and Brampton to pick up by end September. Again, this is all my own analysis....even though I would like to see the market go in the opposite direction. Increased affordability = More Buyers!

Good Luck!

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Rajeev Narula, Broker, REALTOR®
ACE TEAM REALTY INC., Brokerage
10 Kingsbridge Garden Circle, Suite 704
(Opp Square One - HWY10/403)
Mississauga, ON L5R 3K6
Bus: 1-888-355-3155 Ext. 300
Fax: 1-888-443-3155
Email:
Web: http://www.RAJEEV.ca" rel="nofollow">LINK

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Originally posted by Rajeev Narula

Aashu,

I would say, listen to your gut feel. If you feel butterflies in your stomach, don't dare. If opposite, take the plunge...and if you really need to seek advice, the responses here will confuse you further rather than providing a direction. I am not proclaiming anyone to be providing wrong advise...it is just that we all are prisoners of our experiences and see things differently. Go to someone who you really trust and stick to the advice you get!

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Are you there?

It does not have to be such an emotional decision(although it is a factor when it comes to homes I suppose). But it is pure math...finances. Ignore speculation. We are not talking about some depreciating commodity like a Car or LCD TV...this is real estate and even of the market was to go down in the next 6 months, most of us will hold on to our properties with our dear lives rather than sell it for less.

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If you have a gun, you can rob a bank.
If you have a bank, you can rob everyone.
- Bill Maher

I think best advice can be given by:

Do you know anyone who is living completley debt free (no mortgage to pay)? Seems like extinct species. I think it’s good learning if you meet them and ask how they managed their life and debt. Then you will know how bad we are doing in general.

Question is how much %age earning people put just for home ownership?

People should not spend more than 40% of their after tax earning on housing (including house taxes, fees, maintenance and others). Then family income must be 150K plus to support today's price and keeping that consistent income for next 30-35 yrs to feed home.

I am not sure how people are keeping their RRSP, RESP, cash savings, kids schooling if want to send private school, their professional sport practice, vacation/traveling, cars, credit card payment and paying other debt ( college, business). I heard that it's not easy to find 10$/hr summer job in GTA for students and daily news with layoff from manufacturing sector. May be Indians are rich in GTA like in US where we (Indians) have average salary above 70K and one of the richest community.


Very nice article and Canada is not different. We are also heading depression.

http://market-ticker.denninger.net/archives/545-Why-America-Is-Headed-For-A-Depression.html?ref=patrick.net

………….We MUST frame the political debate in this nation around these principles. We MUST teach these facts to our children. We MUST stop demanding that the government give us that which as a nation we cannot afford, and WE MUST shout down those in the public space who continue to insist on unsupportable, unsustainable spending both by individuals and by the government. It is no accident that the bankers, Universities, Realtors and credit merchants want you to spend more than you make. They love the money you give them and they do not care if you go broke or wind up eating dog food in your retirement. That's a fact………………………….