Realtors suggesting selling price | Page 2 | General financial discussion | Discussion forum

MarkFog, my house is my property, no-one else's. As such, I can sell any of my property for whatever price (high, low or in between) I want to whomever I want with or without the involvement of an agent. There is no potential buyer who is compelled to buy it at any particular price, it's her choice whether to agree to any terms I insist on or to walk away. That's about it as far as I can see.

Really, what it comes down to it, for me, is the fact the federal government is doing nothing to deal with the affordability of the housing in Toronto and Vancouver. Yes, you people are correct that prices are set by the market demand. Unfortunately, the market value of homes, especially in the Vancouver area are out of step with local incomes. Realtors are very aware of what is going on. There was an article in the Financial Post posted on May 10, 2016, that calls out on the BC and Federal governments to adopt similar polices like Australia and Singapore to deal with the influx of foreign money. It specifically outlines the issue to be Chinese investors funnelling money towards Canada. The statistics are there. The Trudeau government has allocated $500 million to study it. What will he do once he gets the data, no one really knows.

I can see some of you not having a problem with what is happening in these markets. Maybe because you are an existing house owner and want to be able to sell your house for the highest amount possible regardless who is the buyer. "Sell to the highest bid" you would say. If you are downsizing to a smaller property or leaving the city centres then, of course, it would be worthwhile for you. But, those of you that have children will find it very difficult to compete with foreign money even with higher education. In the article, a professional couple are renting a condo in Vancouver, they have two children. Both, were born and raised in Vancouver. They are first generation Canadian from Chinese descent. One is an engineer the other a lawyer. They cannot afford to buy a home in Vancouver and are thinking of leaving the area. So this is not a case of racism, since they are feeling this pressure just like every other Canadian. An employer mentioned that he is having difficulty finding workers because working class people are not coming to Vancouver. People in Toronto are afraid to sell their homes because they might not be able to improve on their current home by the time they find another property to upgrade to.

I've read some solutions to this problem. Like making your property tax deductible if you have a Canadian income. If you are a senior you receive the same deduction. Charging a surtax if the owner is not a resident or citizen of Canada. Other countries do this.

Whatever the solution, it is better to recognize there is a major problem with affordability for many working class Canadians in these two cities than to ignore it. Or, I don't know, maybe its better to let the markets just correct themselves and let the bubbles finally burst; repeating the crash of 1991.

Yes, Brian. Toronto is not on the list you've posted. But, since I am a resident of Toronto, I have paid close attention to asking prices in my area. In the past year I have see a 30% increase in prices. Bidding wars are the norm with realtors posting "Sold Over Asking". I know of 5 houses that have been bought by foreign investors. The houses are renovated and two or more families rent. Some living situations are even counter to municipal occupancy limits. One owner had 20 students living in his home and someone blew the whistle. One of my neighbours has two families living in a back-split. Last year I asked for permission to trim the hedge between us and the guy living there said that he would have to speak to the owner. I asked if he lived here and he didn't want to say.

Yeah, it's true. It all depends on if people stop paying the asking price. But, that is assuming they are local people. Local incomes cannot compete with money from abroad. There are predications things will go even higher because property values in China are soaring and will push more investors abroad. A correction may not happen for many years to come, if ever. This would have to depend largely on if something happens in that market and not in Canada. In the meantime, the next generation exiting post-secondary institutions have to some how purchase a home and start a life. In the meantime Vancouver with turn into some sort of "ghost" town. Statistically speaking only 800 people between 18-35 have relocated to the city in the past year. The Canadians that don't want government intervention are obviously those that stand to profit from this situation. As I mentioned perviously, these are owners that will scream foul if the government were to affect the "equity" in their homes. Justin Trudeau said it himself back in December. However, Canadians on the other side of the spectrum would gladly welcome some sort of intervention.

Immigration is not the issue here. Immigrants come, settle, work and contribute to the local economy. Just like every other immigrant has done for decades. Other immigrants like my parents came to Canada worked and bought their first home and their subsequent home. The issue is foreign investors that are choking even landed immigrants. This issue began with the Harper government's inaction. Besides, immigration is important to Canada since we are a large country with a small population. I have spoken to many people across the world that want to immigrant to Canada.

But, Canada is not like the US where employment is uniform throughout the country. Leave the city centres and you have very few opportunities for employment.

Brian said

yes, MarkFog, Canada is a large country with a small population but
- nobody wants to live in perhaps over 75% of the country - cold, remote, unpopulated etc. The population is concentrated in certain areas. Immigrants rarely if ever, choose to go to Yukon, NWT or the northern part of any province.
- They settle in the southern parts - they choose Toronto and area by a big margin (not Hudson Bay/northern Ontario).

That is correct Brian. The vast majority of Canadians (including immigrants) don't want to locate to remote parts of this country. So, instead of having empty houses where the owners are overseas, it would be better suited for people that actually work in those cities and have families in those cities to have the opportunity to purchase those homes.

As history has shown us, when things are out of alignment with any market, things correct themselves on their own. I hope this actually happens.

And I agree with you, I don't see the Liberals doing much of anything.

Loonie said
I have no stats on the extent of foreign ownership of Toronto houses. I have not seen that happening in my part of town at all - yet. Young families are definitely still buying in my area. It still is affordable for 2-income professional families, and they can expect to pay it off just as fast as or even faster than their parents did in today's low-interest environment if they live on one income and use the other to pay for the house, which is certainly do-able. In addition, some houses have rental units such as basement apartments. I think this is no longer feasible in Vancouver.
There is, however, a shortage of inventory of homes for sale in Toronto.

Hey Loonie, come to the Faiview Mall area and to the north. Houses have been sprouting up for sale. But, have been selling very fast. Three of my neighbours have gone to foreign owners. The maintenance of the home just behind me has deteriorated since it was bought 4 years ago. Peeling paint on the garage door, cracked veranda, grass growing high in the pathway. One other house sold last summer and never had a moving truck bring any furniture. House is empty. Maybe in your part of town young families can still buy a home. Not possible in my area anymore. There is a lack of children too. The average price for a back-split in decent condition is approximately $1.2 million. One bungalow on Victoria Park Ave. is listed at $1.08 million. It needs a wrecking ball than anything else, its in horrible condition. I agree that the houses coming on the market are from empty nesters and of people passing away. One old woman died a few weeks ago and her house was listed by her children. It was sold even before the first open-house which was to be this weekend. Again, sold over asking. At this point I don't know who the owner is.

Last year a realtor came canvassing door to door. She was oriental. During our conversation she confirmed that she has clients from China which are buying homes just from photos. Could it be speculation? Who knows. The evidence is in my area and there are a few reputable media outlets like the Globe & Mail, Financial Post and Maclean's Magazine all featuring detail articles on this subject of "speculation".

Justin Trudeau came into the limelight just at the right time. People got tired of Stephen Harper. Trudeau lined his cabinet with some experience. But, he himself is very green and he holds the highest office. He is leaning more to the left than the Liberal centre; running deficits and raising taxes. He will put Canada deeper in debt in the next 4 years with the blessing of the electorate. Maybe by weakening the country financially it will make it less viable to investors.

Australia is a capitalist nation which has adopted a framework for dealing with foreign investors. "The aim of the residential real estate aspect is to encourage increased housing supply through foreign investment and not increase house prices because of over-demand for established housing stock. Increased demand for established housing stock drives prices up for Australian residents - locking some out of the housing market altogether."