Housing Bubble II: The Quest To Build Enough Homes Where People Actually Need Them

[Acajack]

Originally Posted by Loco101

So that house is CAD $952,000.00

That's affordable?!?! Did you see that property taxes alone are over 18 grand U.S. per year!?! That's about $25,000 CAD per year in property taxes!!! Affordable?!?

On the outskirts of what could arguably be humanity's greatest city.

[Truenorth00]

Originally Posted by Loco101

So that house is CAD $952,000.00

That's affordable?!?! Did you see that property taxes alone are over 18 grand U.S. per year!?! That's about $25,000 CAD per year in property taxes!!! Affordable?!?

Conversion doesn't work like that. $700k is going to be quite affordable for the types of wages somebody who is 30 mins from midtown Manhattan would make. Meanwhile, my parents house at the edge of Scarborough is worth $1.2M and that's a 1h 15m commute to downtown Toronto, where the wages aren't nearly as generous as New York. Given lower income and sales taxes, higher property taxes are probably close to a wash.

[niwell]

Not to downplay things here but that NJ house is over an hour by transit to most offices in Midtown. These listings in Bay Ridges in Pickering are $800k CDN and probably 45 mins by GO to the financial district: https://www.realtor.ca/real-estate/2...ing-bay-ridges

https://www.realtor.ca/real-estate/2...ing-bay-ridges

However we sold my grandmother's former house very close by and in similar condition in 2019 for just over $400k... The area doubled in price in just 5 years. In a moment of more morbid thoughts I think about if she'd lasted a couple more years we could probably have had a downpayment for a house. Also worth noting that as soon as you cross the border into Scarborough it's even worse, for areas that are actually less transit accessible to the core (though local transit is much better).

[P'tit Renard]

Originally Posted by niwell

Not to downplay things here but that NJ house is over an hour by transit to most offices in Midtown. These listings in Bay Ridges in Pickering are $800k CDN and probably 45 mins by GO to the financial district: https://www.realtor.ca/real-estate/2...ing-bay-ridges

https://www.realtor.ca/real-estate/2...ing-bay-ridges

This home is a lot dumpier than the Montclair NJ one though. The NJ one looks like a home in a very pristine, affluent upper middle class neighbourhood with large lots lined with attractive heritage homes. Can't say the same for the Pickering one, which clearly has the Oshawan working class esthetic.

[YOWetal]

Originally Posted by P'tit Renard

This home is a lot dumpier than the Montclair NJ one though. The NJ one looks like a home in a very pristine, affluent upper middle class neighbourhood with large lots lined with attractive heritage homes. Can't say the same for the Pickering one, which clearly has the Oshawan working class esthetic.

Yes if you want dumpy working class houses you can do that too. But Pickering is not 45 minutes to anywhere.

East Orange is closer to Midtown and this is for sale for $465k

https://www.zillow.com/homedetails/6...38650166_zpid/

Yes property taxes are high in New Jersey. It has lower income taxes than New York or California and vastly lower than Ontario offset by property taxes.

[ssiguy]

Originally Posted by Loco101

So that house is CAD $952,000.00

That's affordable?!?! Did you see that property taxes alone are over 18 grand U.S. per year!?! That's about $25,000 CAD per year in property taxes!!! Affordable?!?

The price per-US$ is not relevant, we don't get paid in US$ and Americans don't get paid in Canadian ones. It's an old trick used by developers and realtors to justify high housing costs to pretend their are not as bad as they seem.

The Demographia reports are currency neutral, It's the amount people make in their own currency vs the price they pay for housing in their own currencies. Currency rates are irrelevant unless you are an international buyer.

[P'tit Renard]

Originally Posted by YOWetal

Yes if you want dumpy working class houses you can do that too. But Pickering is not 45 minutes to anywhere.

East Orange is closer to Midtown and this is for sale for $465k

https://www.zillow.com/homedetails/6...38650166_zpid/

Agreed this East Orange home is a much better proxy for the Pickering home. Bay Ridge is also immediately adjacent to the Pickering Nuclear power plant, which has always held back values in the area.

Pickering also lacks the historical shopping high streets, civic institutions, galleries, amenities that Montclair has in spades.

I think it goes to show how much young Ontarians have lowered their standards in what's considered a nice home, especially if we can't even compare favourably to the NYC metro area.

[Truenorth00]

Originally Posted by niwell

Not to downplay things here but that NJ house is over an hour by transit to most offices in Midtown. These listings in Bay Ridges in Pickering are $800k CDN and probably 45 mins by GO to the financial district: https://www.realtor.ca/real-estate/2...ing-bay-ridges

https://www.realtor.ca/real-estate/2...ing-bay-ridges

You are underestimating travel time in Toronto. My parents house at the edge at Malvern in Toronto is 1 hr 27 min by transit (as per Google) 40 mins under zero traffic (which never happens in Toronto at any reasonable hour) to the Financial District. Their house is the smallest on the street and is easily wortg over a million. They estimate $1.2M.

Your example in Pickering is considering the GO ride but not the time it takes to/from the GO station. I put 847 Zator Avenue into Google. 1 hr 11 min by GO including an 18 min walk to the station or 43 min drive with zero traffic.

By comparison, I put in 20 Carteret St (example from YOWetal) to Midtown Manhattan in Google Maps. 1 hr 4 mins by transit. 51 mins including traffic. And of course, the house and neighborhood are nicer and the salaries in New York are better.

[theman23]

Originally Posted by Truenorth00

You are underestimating travel time in Toronto. My parents house at the edge at Malvern in Toronto is 1 hr 27 min by transit (as per Google) 40 mins under zero traffic (which never happens in Toronto at any reasonable hour) to the Financial District. Their house is the smallest on the street and is easily wortg over a million. They estimate $1.2M.

Your example in Pickering is considering the GO ride but not the time it takes to/from the GO station. I put 847 Zator Avenue into Google. 1 hr 11 min by GO including an 18 min walk to the station or 43 min drive with zero traffic.

By comparison, I put in 20 Carteret St (example from YOWetal) to Midtown Manhattan in Google Maps. 1 hr 4 mins by transit. 51 mins including traffic. And of course, the house and neighborhood are nicer and the salaries in New York are better.

I also don’t know the real estate market in suburban NY, but those working class Pickering houses are probably not selling for less than $1 million. It’s just realtor games.

[Truenorth00]

Originally Posted by theman23

I also don’t know the real estate market in suburban NY, but those working class Pickering houses are probably not selling for less than $1 million. It’s just realtor games.

Was just going to say that too. These houses (in Pickering) look priced for bidding wars.

[niwell]

To be clear, I used to travel to Pickering fairly frequently. My grandparents lived closer to the GO but it took me just under an hour from Parkdale. Faster from my work if I took an express train. It's pretty accessible neighbourhood that used to be affordable. There is in fact a walkable strip near the waterfront (new urbanist development) and some decent bars/restaurants in the plazas.

My point wasn't that the houses there are priced fairly - they aren't at all. What we sold for was likely what the unrenovated ones should be worth. But it doesn't help the argument when claims like a place in NJ (albeit a nicer one) is "20 mins from Midtown" when that's patently false. Unless you work right beside Penn Station or the Port Authority Bus Terminal it's a pretty hefty commute. A quick look at Zillow shows that most houses in Montclair are going for well over $1M with the median sales price right around that, so I'm not sure that the statement about lack of bidding wars is correct either. NYC has higher salaries for the types of jobs a professional Canadian expat might be able to land (though not all jobs - my industry actually pays less), but the median household income of Essex County NJ is $73kUSD compared to $107k CDN for Durham Region - Montclair itself is probably higher though.

I could claim that the average semi in old Toronto is just over a million based on what friends just got in the West Bend area (3 bdrm, 2 bathroom renovated with legal basement appt), but that's not true either - they happened to luck out and had their first offer accepted. I tend to find these "grass is greener" arguments just as cherry-picked as some of the charts being thrown around on this and other threads. I'd rather focus on our massive issues as the vast majority of Canadians are never going to be able to parachute into a high 6 figure finance job in NYC.

[YOWetal]

Originally Posted by theman23

I also don’t know the real estate market in suburban NY, but those working class Pickering houses are probably not selling for less than $1 million. It’s just realtor games.

Yeah people really have no idea how out of whack Toronto prices are. They made sense when we had 1% mortgages and US had 2.5%. Though we now realize our rates are lower becaues they are short term. In terms of affordabilty, stress test aside, this didn't matter to people. This aspect is under appreciated. But the main reason is transport infrastructure and the insane swaths of land that are undevelopable. All this combines in psycholgoical factors that make people think prices never go down because all the factors above work together to make that true. Recession .. meh rates drop to 1%. Rates go up meh some people have cash and there are only so many places you can live and build.

Immigration is of course part of the story but I think until the insane increase in 2022 that was exxagerated as the cause of the SFH shortage and it spurred apartment construction.

[Acajack]

I think the greater NYC area is still more affordable overall relative to salaries than the GTA is, and that's not including the mortgage interest tax deduction that American homeowners can benefit from.

Anyway you slice it, even if Toronto and NYC were about the same in terms of affordability relative to commuting distance, that is still a loss or fail for us.

[niwell]

Originally Posted by Acajack

I think the greater NYC area is still more affordable overall relative to salaries than the GTA is, and that's not including the mortgage interest tax deduction that American homeowners can benefit from.

Anyway you slice it, even if Toronto and NYC were about the same in terms of affordability relative to commuting distance, that is still a loss or fail for us.

I would agree with these points, particularly the latter. Though will say pretty much everyone I know who spent a couple years in NYC did not come out ahead, but then again they were mostly there for the experience / arts related things.

[theman23]

Are up and coming artists and people wandering aimlessly through life thriving financially in Toronto?

You’re generally one of the better posters here but it seems you’re just being pedantic here. I’m not sure why since I’m pretty sure you would agree with the whole point of this NYC/Toronto tangent which is that the housing market here is particularly bonkers.

[YOWetal]

Originally Posted by niwell

To be clear, I used to travel to Pickering fairly frequently. My grandparents lived closer to the GO but it took me just under an hour from Parkdale. Faster from my work if I took an express train. It's pretty accessible neighbourhood that used to be affordable. There is in fact a walkable strip near the waterfront (new urbanist development) and some decent bars/restaurants in the plazas.

My point wasn't that the houses there are priced fairly - they aren't at all. What we sold for was likely what the unrenovated ones should be worth. But it doesn't help the argument when claims like a place in NJ (albeit a nicer one) is "20 mins from Midtown" when that's patently false. Unless you work right beside Penn Station or the Port Authority Bus Terminal it's a pretty hefty commute. A quick look at Zillow shows that most houses in Montclair are going for well over $1M with the median sales price right around that, so I'm not sure that the statement about lack of bidding wars is correct either. NYC has higher salaries for the types of jobs a professional Canadian expat might be able to land (though not all jobs - my industry actually pays less), but the median household income of Essex County NJ is $73kUSD compared to $107k CDN for Durham Region - Montclair itself is probably higher though.

I could claim that the average semi in old Toronto is just over a million based on what friends just got in the West Bend area (3 bdrm, 2 bathroom renovated with legal basement appt), but that's not true either - they happened to luck out and had their first offer accepted. I tend to find these "grass is greener" arguments just as cherry-picked as some of the charts being thrown around on this and other threads. I'd rather focus on our massive issues as the vast majority of Canadians are never going to be able to parachute into a high 6 figure finance job in NYC.

It's not about parachuting into a high finance job or grass is greener. There are dozens of affordable and accessible to Manhattan neighbourhoods in New York. My point is this destrys arguments that the suburban and especially exurban prices are in Toronto are justified, inevtiable, sustainable and most importantly unavoidable becaues Toronto is a world class city on par with New York, London etc. People who say we are cheap still compared to New York can rightly point to Bloor and Young apartment prices but outside of downtown comparables to New York are cheaper in many cases. Open the non ecologically sensitive green belt. Build some freeways into these new areas and add transit and poof problem solved. We are not Hong Kong.

[Acajack]

I think it's also good to compare apples to apples and oranges to oranges.

So someone who grew up in the NYC area vs someone who grew up in the GTA.

Someone who went through the US education system and moved to NYC vs someone who went through the Canadian education system and moved to Toronto

Etc.

We shouldn't compare a fresh off the plane Canadian who moves to NYC to someone who is from there.

I think that in most of these cases at least today in terms of property affordability (enabled by the job you can get, again enabled by skills, experience and contacts), the American will fare better in the NYC area than the Canadian will fare in the GTA.

[Build.It]

1. Requesting this thread be renamed "The Great Canadian Housing Bubble" - to keep with SSP thread naming culture.

2. New York metro has remained affordable for its residents because they don't block development to a great extent.

3. Toronto is expensive to its residents because we do block development, and (up until recently) haven't built infrastructure to the places that need it.

4. Toronto is still an upper tier city, with tons of opportunity. I think this gets forgotten amidst all the negativity on this forum. But to make it here these days you have to work harder than ever before. We are most certainly not New York (not by a longshot). However the reward is still there though for those that make it, and now stupidly expensive housing is something we have to put up with in the process of making a name for ourselves. For those that aren't that ambitious and just want a job so they can live, you're better off in Ottawa or Edmonton - the GTA is no longer for you.

[niwell]

Another point would be that the US also has more affordable secondary markets where one without the skills to make it in NYC can live fairly well. We've seen a couple of these in Canada shift from "affordable" to distinctly... not. And a place Halifax isn't exactly Philadelphia or Chicago.

I've crunched the numbers based on the careers of my wife and I - even with her salary bonus to move to NYC it wouldn't work. But somewhere like Chicago could become *very* attractive. It's a moot point since we aren't moving, but there really isn't anywhere else in Canada that would offer the same cost benefits vs. salaries for us. Similarly our friends in the music industry are kinda stuck here.

[Acajack]

Originally Posted by Build.It

1. Requesting this thread be renamed "The Great Canadian Housing Bubble" - to keep with SSP thread naming culture.

2. New York metro has remained affordable for its residents because they don't block development to a great extent.

3. Toronto is expensive to its residents because we do block development, and (up until recently) haven't built infrastructure to the places that need it.

4. Toronto is still an upper tier city, with tons of opportunity. I think this gets forgotten amidst all the negativity on this forum. But to make it here these days you have to work harder than ever before. We are most certainly not New York (not by a longshot). However the reward is still there though for those that make it, and now stupidly expensive housing is something we have to put up with in the process of making a name for ourselves. For those that aren't that ambitious and just want a job so they can live, you're better off in Ottawa or Edmonton - the GTA is no longer for you.

You make some good points but even a city that is made for ambitious people needs a lot of people who are a bit less ambitious to keep the streets clean, food on the table and the lights on. There isn't really a personality pattern that makes people who work in these sectors in the GTA more ambitious than their peers in Edmonton.

Sure, there are lots of cities in the world that are made for the more ambitious among us but they still have lots of support staff as well - often living pretty crappy lives.

I don't think that's what we want.