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prices of houses

Wain Ho

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Jan 21, 2014
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I am a realtor in BC and i have many asking me this question and i have also asked my mortgage broker this many times.

It is not wise to buy a house when you are waiting for the price to go down, you should buy a house when it is right for you, i.e., financially stable. THe market will never go down to what you like and what you think is right. Even when the prices go down to a certain point, it will never go down to what you think is low. Strike when the iron is hot is usually the best way to go. Talk to a lending center and present them with your financials and they will work with it to find you the best rate among all banks in the province.

They will also help you to decide when is the best time to buy.

Fear is the most common obstacle but education overcomes this! You need to find an experienced realtor who can guide and educate you of finding the right property, then that is the right time for you to buy.
 

newtone

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House prices will never go down in Canada, too many people have procrastinated and ended up renting because they waited to buy a house and now its got beyond their reach. You buy whenever you are ready. Its as simple as that.
 

farrous13

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Being a realtor in BC, how do you see the market in Vancouver. Mind you prices are sky high (or maybe it's because I am looking at the most elegant ones).
I want to move to Vancouver later on and started tapping into the job market there. My wife and I are property owners in Montreal, but very worried that the prices in Vancouver are astronomically more expensive than Montreal. could you give us some insight on the market there. :) Thank you

Wain Ho said:
I am a realtor in BC and i have many asking me this question and i have also asked my mortgage broker this many times.

It is not wise to buy a house when you are waiting for the price to go down, you should buy a house when it is right for you, i.e., financially stable. THe market will never go down to what you like and what you think is right. Even when the prices go down to a certain point, it will never go down to what you think is low. Strike when the iron is hot is usually the best way to go. Talk to a lending center and present them with your financials and they will work with it to find you the best rate among all banks in the province.

They will also help you to decide when is the best time to buy.

Fear is the most common obstacle but education overcomes this! You need to find an experienced realtor who can guide and educate you of finding the right property, then that is the right time for you to buy.
 

farrous13

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Oct 1, 2013
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I believe most people are given the wrong information probably. In Montreal, banks and builders are pushing people to buy houses and condos. The condo market here is getting out of control. Montreal officially has the highest vacancy rate compared to Toronto and Vancouver. SO prices went down by 5%. I heard that on the news. Probably on CBC (not sure). I am sure that this has some sort of impact on the market prices though.

newtone said:
House prices will never go down in Canada, too many people have procrastinated and ended up renting because they waited to buy a house and now its got beyond their reach. You buy whenever you are ready. Its as simple as that.
 

Dejaavu

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Aug 17, 2013
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House prices are difficult to predict. Nobody knows what will happen to house prices.

Both rents and borrowers with mortgages take risks. Renters rent a housing unit and borrowers with mortgages rent money from a bank/lender. Renters have the flexibility of moving anytime where mortgagees are less flexible.

It is always best to buy when the market is going up since the equity increases in the property. If the market is stagnant or going down then it doesn't make sense.

Economists calculate whether housing is overvalued or undervalued by multiplying a monthly rent a unit would get over 15 years (180 months) if a property is equal or more than 180 monthly rents then it is a good buy (undervalued or valued properly); if it is higher than 180 months rent then it is overvalued. For example, if a condo in downtown Toronto can get 1000$ in rent then that condo's fair market value (absent distortions in the market such as a bubble, lack of supply, ultra low interest rates, too much credit etc) should be around 180-200k. If it is more than that then it is overvalued. If a condo is less than 180 k then renting doesn't make sense at all.

Personally, I decided against buying in Toronto now since I can rent a unit for about 1100$ and if I wanted to buy it would at least be 400 k. Doesn't make sense in my case since there are other expenses associated with 'owning' a property such as property taxes, maintenance, interest on mortgage) etc. If that unit goes down to 250k, I would consider buying it, if not I am a renter :)
 

Wain Ho

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Jan 21, 2014
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For Toronto market, the prices of housing will definitely be higher than in Vancouver just like the weather. ;) I have many relocating buyers from Toronto who are just surprised to see low the prices are here compared to in Toronto.

There are certainly reasonable priced new developments that you can look into and probably find a deal but in Vancouver especially the Westside, you are looking at over $1M houses. I would encourage you to look into that area if you have that kind of money. ;D

If you are looking to buy a reasonable priced home which is about 10 years old or younger, pricing should start about $400k, look into Tri-cities area. This is a developing and upcoming vibrant place which has more investors and new immigrants moving to. I have some townhome listings priced from $375K and is only 6 years old which is something hard to find in the Vancouver area. Also, new developments like Riversrun in Coquitlam is approximately starting from $650k for single family homes. New townhomes in Cedar Creek is $469K for 1,870 ft2.

As a realtor, I would always recommend my buyers to buy instead of rent as you do not want to pay someone else's mortgage. Do not build their equity for them in another words and in the end you will get nothing, just throwing your rent away. Interest rates vary if you go to a lending center which I strongly recommend, as they will look at your financials and decide which is the best for you. I am working with a financial consultant and he has helped many of my clients as most of them were tempted by the fancy products some banks have.
 

mrbeachman

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Oct 24, 2011
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Dejaavu said:
House prices are difficult to predict. Nobody knows what will happen to house prices.

Both rents and borrowers with mortgages take risks. Renters rent a housing unit and borrowers with mortgages rent money from a bank/lender. Renters have the flexibility of moving anytime where mortgagees are less flexible.

It is always best to buy when the market is going up since the equity increases in the property. If the market is stagnant or going down then it doesn't make sense.

Economists calculate whether housing is overvalued or undervalued by multiplying a monthly rent a unit would get over 15 years (180 months) if a property is equal or more than 180 monthly rents then it is a good buy (undervalued or valued properly); if it is higher than 180 months rent then it is overvalued. For example, if a condo in downtown Toronto can get 1000$ in rent then that condo's fair market value (absent distortions in the market such as a bubble, lack of supply, ultra low interest rates, too much credit etc) should be around 180-200k. If it is more than that then it is overvalued. If a condo is less than 180 k then renting doesn't make sense at all.

Personally, I decided against buying in Toronto now since I can rent a unit for about 1100$ and if I wanted to buy it would at least be 400 k. Doesn't make sense in my case since there are other expenses associated with 'owning' a property such as property taxes, maintenance, interest on mortgage) etc. If that unit goes down to 250k, I would consider buying it, if not I am a renter :)
Sorry... I find that hard to believe. Actually cross that. It's impossible. $1100 a month will get you one of those 1 bedroom commie block buildings in North York from the 60's. I am renting my own one bedroom in downtown Toronto that is worth 250k for $1325 (utilities included) and I know for a fact I am undercharging. There is no way the place is worth 400k unless you cut a deal with a family member.

What area of Toronto do you live in?
 

Dejaavu

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Aug 17, 2013
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I have been living here in downtown for a while maybe that is why my rent is cheap. Rents have been going up in the last couple of years. Maybe it is a sign that housing is no longer affordable. But in your case 180 months of rent would be around 238 k or so, so if you can buy a similar property in that area, it is not overvalued. Though, as a condo owner, there are condo fees that you have no control over since condo boards are not always good at managing expenses.
Kevin O'Leary in his book compared two people who rented vs owned and the person who owned came out ahead but not by much. However the person who owned had to forgo flexibility. Plus in Canada the last 10 years housing prices have doubled and I do not think they will double in the next decade. At best, prices will just keep up with inflation. So it is all about affordability. If you can afford to pay a mortgage, maintenance, property taxes and know for sure that you will be living in the same unit at least for 10 years then it might be worth it. Otherwise I see no point.
 

MR. SIDHU

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thanks for sharing info guys !!
 

SanRoque

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Jan 19, 2012
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Hello All,

I just want to know what is the % equity to buy a new house? Like 5, 10 or 20%? I am looking at Edmonton, AB area?

Cheers.
 

steaky

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SanRoque said:
Hello All,

I just want to know what is the % equity to buy a new house? Like 5, 10 or 20%? I am looking at Edmonton, AB area?

Cheers.
You can check this with your banker or mortgage broker.
 

torontosm

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Apr 3, 2013
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Wain Ho said:
As a realtor, I would always recommend my buyers to buy instead of rent as you do not want to pay someone else's mortgage. Do not build their equity for them in another words and in the end you will get nothing, just throwing your rent away. Interest rates vary if you go to a lending center which I strongly recommend, as they will look at your financials and decide which is the best for you. I am working with a financial consultant and he has helped many of my clients as most of them were tempted by the fancy products some banks have.
This is illogical and poor advice that is usually spouted by either naive or deliberately self-serving realtors.

Your monthly mortgage payment is comprised of two components: (i) a principal repayment component; and (ii) an interest component. Prior to buying, do the analysis and see how much of your monthly payment is going towards interest vs. principal repayments. The principal repayments are akin to "savings" while the interest is being "thrown away". When you look at it, chances are that in the current market, the interest element alone will be greater than the rent cost for the same or a similar property. If that's the case, then you are solely betting that prices will continue to appreciate into the future, and you will profit from capital gains. Given the appreciation over the last 20 years, any further appreciation is highly unlikely, and fundamentals indicate that prices are much more likely to decline than continue to rise.

Also, consider the cost of foregone income that you would have otherwise had on your downpayment amount (which earns 0 once you invest it in a house).
 

rgk

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as im new comer, anyone can give some idea ne house contruction in north markham or east or west with price around 250k to 300k,

thank you.
 

newtone

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You cannot get a house for that price in Markham. Maybe 1 bedroom condo