Micheal Gayed of the Lead-Lag Report interviews Canada’s foremost real estate expert Ron Butler in a recent podcast. Well worth the listen as it covers all the main points about Canadian real estate. In a nutshell, the Canadian housing market might be where the US was in 2008, or maybe even worse.
I’ve been mortgage free since 2019. I’m retrofitting my house so my children can live here. We’re back to manor times…
Yep and seeing this in places in our area, houses being expanded, where as a bungalow was/is fine for a couple.
We can’t believe the rents, not to mention the lack of availability.
No young person/couple can hope to purchase a house at these costs.
Onr thing that is never mentioned is that when you get a 15 or 30 year mortgage in the US, that rate is good for the life of the mortgage, So, you have the scurity of no having to worry about renewals, but if rates drop, you can renegotiate if the savings are worth paying a break fee.
In Canada, five years is the max to negotiating a new rate and anything can happen in that time.
https://www.perplexity.ai/search/how-do-mortgages-for-houses-di-jRH9r1IEQ7OESwPk1x_KVw
Interestingly, you can do longer if you qualify, but the rates are typically higher.
For example, the RBC posted rates for a 5yr closed are 6.39%, 10yr closed at 7.05% and 25yr closed at 12%
Cibc only posts up to 10yr closed for 7.14%. BMO at 7.19% for the same.
Made sense if you locked in when rates were lower, but less sense now.
It’s far worse than 2008 was to the States. Canada’s real estate market has been criminally over-valued since the early 70’s and a massive market correction has to happen for housing to ever become affordable again. The problem is that the vote-whore politicians from both parties have been propping up the bubble every time that it looks like reality is going to set in and prices just keep going up.
Even before the current madness set in, a 50’s era wartime house on a postage stamp sized lot in Peterborough was selling for $500G. Forty years ago it sold for $30G. I haven’t looked lately because I’m trying to keep my blood pressure down.
Chris did u mean to say “criminally overvalued since the early 80’s”? The early 70’s makes no sense to me.
“the Canadian housing market might be where the US was in 2008, or maybe even worse.”
What an opportunity that was.
In 2010, I bought a 2000 square foot 10 year old house with a pool in California for 150K. The Canadian dollar was at .94 cents back then, so it was still under 200K Canadian. When I sold it 4 years later, the Canadian dollar was at .77 cents. I made as much from the currency devaluation as I did on the increased sale price on the house. California still took 17K in capital gains, though.