Cost of housing in Canada

[Weinie]

I live in a ghetto in Halifax (Fairview). But its as close to the peninsula as you can get without being on it. Dumps are selling for 6-700K, which is wild for us. We have less than 100K left on our mortgage, I think were silly not to sell now take that profit and turn it into acreage with a house outside the city.

We made a killing when we sold in Ottawa in 2022. I hope (selfishly) that the market corrects before we return.

 

[Remius]

We made a killing when we sold in Ottawa in 2022. I hope (selfishly) that the market corrects before we return.

I dont bemoan that kind of selfishness. We lucked out at buying low in 2017.

 

[Halifax Tar]

The problem here is that prices outside the city aren’t much different. Demand for those properties have gone up significantly with good reason and even moving further out is not as easy as it once was.

We made a killing when we sold in Ottawa in 2022. I hope (selfishly) that the market corrects before we return.

Ottawa is a crazy town. I imagine when all those fixed mortgages start coming up things will get straightened out. Not with out some bleeding.

 

[Remius]

Ottawa is a crazy town. I imagine when all those fixed mortgages start coming up things will get straightened out. Not with out some bleeding.

We opted to pay off our mortgage with all the travel budget we didn’t spend during the pandemic. Exactly because we didn’t want to renew this fall at higher rates. Not that we couldn’t absorb the increase but we just decided to rip the band aid off.

Anyone who bought at those high prices and low rates will be hurting for sure. And they may not make back what they put into it.

 

[Rifleman62]

The lending institutions in Canada make a killing by restricting the length of the Term thus requiring renewal at a different rate. The longer the term, the higher the rate. Often, like now, a higher rate. Plus penalties.


Comparing mortgages on both sides of the border

Use the table below to better understand the differences between U.S. and Canadian mortgages.

	MORTGAGES IN CANADA​	MORTGAGES IN THE U.S.​
Mortgage Length	- Mortgage amortization periods are typically up to 25 years	- The mortgage term typically ranges from 15-30 years.
Mortgage terms	- Shorter length mortgage terms are negotiated throughout the amortization period and range from 6 months to 10 years At the end of each term, a new term length and interest rate are negotiated. In general, the longer the term, the higher the interest rate. Mortgage terms can either be fixed (interest rate doesn’t change over the course of the term) or variable (rate changes as the prime rate changes).	- The mortgage does not need to be renegotiated at any point during the term. At the end of the term, if all payments have been made when scheduled, the mortgage is fully paid off. Mortgage interest rates can be either fixed or adjustable: With a fixed rate mortgage, payments will remain the same for the entire term of the mortgage. With an adjustable rate mortgage, the rate stays the same for the first 3 to 10 years, after which the rate may adjust annually for the remainder of the amortization period based on the market interest rate changes.
End of mortgage term	- At the end of a term, you can: a) Pay off the balance of the mortgage, b) Renew the mortgage with your current lender, or c) Renegotiate with a new lender.	- The provisions of the mortgage stay the same throughout the mortgage term and don’t need to be renegotiated.
Pre-payment options	- Pre-payment opportunities are set out in the mortgage agreement and vary depending on whether your mortgage is open or closed- rate. An open-rate mortgage lets you pay off your mortgage at any time without penalty, but interest rates are generally higher. With a closed rate mortgage, there are penalties for pre-payment outside of the established pre-payment opportunities. For example, you may be able to increase payments up to 10% per year without penalty.	- Most U.S. mortgages can be paid off in full or additional payments can be made at any time without penalty.
Changing mortgages	- You may be able to switch to a different type of mortgage without reapplying, but you could pay a penalty.	- If you want to switch to a different type of mortgage with the same lender (like from a fixed to an adjustable rate mortgage) most U.S. lenders will require you to apply for a new mortgage, go through the application process again, and pay the associated fees.
Tax deductible?	- Interest on your mortgage payments is not tax deductible.	- Interest paid on a mortgage on residential property may be deductible on a U.S. federal tax return1

 

[Halifax Tar]

The lending institutions in Canada make a killing by restricting the length of the Term thus requiring renewal at a different rate. The longer the term, the higher the rate. Often, like now, a higher rate. Plus penalties.


Comparing mortgages on both sides of the border

Use the table below to better understand the differences between U.S. and Canadian mortgages.

	MORTGAGES IN CANADA​	MORTGAGES IN THE U.S.​
Mortgage Length	- Mortgage amortization periods are typically up to 25 years	- The mortgage term typically ranges from 15-30 years.
Mortgage terms	- Shorter length mortgage terms are negotiated throughout the amortization period and range from 6 months to 10 years At the end of each term, a new term length and interest rate are negotiated. In general, the longer the term, the higher the interest rate. Mortgage terms can either be fixed (interest rate doesn’t change over the course of the term) or variable (rate changes as the prime rate changes).	- The mortgage does not need to be renegotiated at any point during the term. At the end of the term, if all payments have been made when scheduled, the mortgage is fully paid off. Mortgage interest rates can be either fixed or adjustable: With a fixed rate mortgage, payments will remain the same for the entire term of the mortgage. With an adjustable rate mortgage, the rate stays the same for the first 3 to 10 years, after which the rate may adjust annually for the remainder of the amortization period based on the market interest rate changes.
End of mortgage term	- At the end of a term, you can: a) Pay off the balance of the mortgage, b) Renew the mortgage with your current lender, or c) Renegotiate with a new lender.	- The provisions of the mortgage stay the same throughout the mortgage term and don’t need to be renegotiated.
Pre-payment options	- Pre-payment opportunities are set out in the mortgage agreement and vary depending on whether your mortgage is open or closed- rate. An open-rate mortgage lets you pay off your mortgage at any time without penalty, but interest rates are generally higher. With a closed rate mortgage, there are penalties for pre-payment outside of the established pre-payment opportunities. For example, you may be able to increase payments up to 10% per year without penalty.	- Most U.S. mortgages can be paid off in full or additional payments can be made at any time without penalty.
Changing mortgages	- You may be able to switch to a different type of mortgage without reapplying, but you could pay a penalty.	- If you want to switch to a different type of mortgage with the same lender (like from a fixed to an adjustable rate mortgage) most U.S. lenders will require you to apply for a new mortgage, go through the application process again, and pay the associated fees.
Tax deductible?	- Interest on your mortgage payments is not tax deductible.	- Interest paid on a mortgage on residential property may be deductible on a U.S. federal tax return1

We need to take some of this from the USA.

 

[Remius]

The lending institutions in Canada make a killing by restricting the length of the Term thus requiring renewal at a different rate. The longer the term, the higher the rate. Often, like now, a higher rate. Plus penalties.


Comparing mortgages on both sides of the border

Use the table below to better understand the differences between U.S. and Canadian mortgages.

We went with a non bank mortgage and our flexibility to pay down and when was way better than what the banks had. Plus it was super easy. Just log in and make the increase or payment. The banks were way stricter about when and how much and didn’t make it easy.

 

[mariomike]

I shared the link to more illustrate how out of hand the Canadian housing market is. A couple of months ago, we considered moving back to Canada from Ireland. But a standard 3 bedroom detached house in nearly anywhere in southern Ontario was running at least 800k. Here in Dublin, my admittedly small, house is paid off and I did not relish having to take on a mortgage in my 50s. I would rather put the money aside for a retirement spot in the Canary Islands. Unless there is a major correction in the Canadian housing market, I do not foresee myself ever moving back.

When you mentioned France, it reminded me of Popeye Doyle: "I'd rather be a lamp-post in New York than president of France."

I'm only familiar with one commune, in one department, in the Grand Est region of north-eastern France.
My family knows it to be a beautiful place, with kind-hearted people.

I've got my EU passport, and my wife is a dual US-Canadian citizen, so, we're not too worried.

We live a short Uber ride from the Union-Pearson ( UP ) Express train. That gets us to the GO trains, Air Canada and VIA Rail.

My wife and her sister took it yesterday for an AC flight to Atlantic Canada.

One thing for sure is the demand for housing in this town.

One third of Canada's population lives within a 160 Km radius of Toronto, and one-half of the population of the United States is within one day's drive of the city.

There are 157 residential neighbourhoods in the city. 15 years ago I knew them pretty well.

Now, it seems more likely that some posters know them better than I do.

The concern in our neighbourhood is residential re-zoning for higher density.

ALLIANCE OF TORONTO RESIDENTS' ASSOCIATIONS APPEALS GARDEN SUITES OVER-REACH BY CITY

/CNW/ - Building Better Neighbourhoods, a city-wide alliance of Toronto residents' associations, has launched a legal appeal of the City's decision to include...

www.newswire.ca

protecting trees and green space

As far as the USA goes, there are a couple of You-tubers ( like Nick Johnson ) I like to watch. They drive through a lot of smaller towns. Back in their day, they must have looked like something out of a Norman Rockwell painting. Or Mayberry.
With declining populations, many are just fading away. Some of the house prices are super-cheap.
But, infastructure is lacking. Crime rates are frequently higher than the national average.

 

[captloadie]

But does no one remember 2008 housing crisis in the US? If mortgages were so much better down south, why did so many people lose their homes? Obviously the sub-prime mortgage rules were different than those indicated above.

Interests rates, housing problems and mortgage affordability are cyclical in nature. The problem is that in Canada, the cycles are measured by generations, so that people forget how good, or bad it was for the one or two generations before.

 

[Brad Sallows]

I never found the process to make an extra payment burdensome enough to care.

Shorter terms help borrowers overcome the knowledge disparity that exists between borrowers and lenders. Institutions have teams of people paid to think about what is likely to happen over long periods, and are disinclined to take unnecessary risks. I would expect a 30-year mortgage to be priced accordingly - to have a safety margin which favours the lender. A homeowner approximately has no clue what might happen over 30 years. Slicing that up into 5-year increments allows a homeowner to "follow the terrain" (the ups and downs of rates) more closely.

 

[Eaglelord17]

But does no one remember 2008 housing crisis in the US? If mortgages were so much better down south, why did so many people lose their homes? Obviously the sub-prime mortgage rules were different than those indicated above.

Interests rates, housing problems and mortgage affordability are cyclical in nature. The problem is that in Canada, the cycles are measured by generations, so that people forget how good, or bad it was for the one or two generations before.

Household debt is also a good indicator of how much things have gone wrong.

We are at 180% average for income to debt. The US was at 100% when they had the 2008 crisis. Many households in Canada have no household debt so that means there are plenty with well over 300% debt. Those are the ones going to have a rough go very soon.

My grandfather (boomer) told me about taking a small loan from his parents (greatest generation) for a bicycle so he could get to work efficiently as a teen. His parents fought him tooth and nail on it saying if he didn’t have the money he needed to save for it. Eventually he convinced them because it would help him earn money, but it shows the difference in mindset.

I think better education on loans and money would help but unfortunately that isn’t something they want to teach the youth, too much money is made off people not understanding how debt works.

 

[Weinie]

I dont bemoan that kind of selfishness. We lucked out at buying low in 2017.

We bought from a couple who were divorcing, at a fire sale price in October 2018.

 

[IKnowNothing]

The problem here is that prices outside the city aren’t much different. Demand for those properties have gone up significantly with good reason and even moving further out is not as easy as it once was.

I live two hours outside the GTA, one hour from the nearest urban centre.

You can still get more for your money rurally compared to KW, London, Guelph, but the gap has closed immensely. Pre run up people regularly bought 3BR 1Bath detached homes under 200k. In 2016 I chose my first home (fixer upper) from a list of 5 between 105 and 140 within a 15 minute drive. Home ownership was an expected reality for people with careers in foodservice/retail/line manufacturing making 16-20 hr. That's gone, and there will be a clear divide in terms of lifetime wealth between those that got in before and those that didn't.

One thing that I've noticed is an (anecdotal) uptick in how much consideration is given to the benefits of generational wealth/housing planning in the rural/conservative middle class (which is quickly adding "upper" to the description)
I was very much raised in an environment where outside of succession planning for the family farm, children were raised with both the ideal and output of self-sufficiency. Parents helped where they could/wanted to, but your finances were yours, theirs were theirs, they only met when the estate was being settled and that was in no way part of your financial plan. I'm finding that's changing- peer discussion are becoming more about how we can plan to house our children, and pre-emptive estate planning with parents is getting more collaborative.

 

[Halifax Tar]

I live two hours outside the GTA, one hour from the nearest urban centre.

You can still get more for your money rurally compared to KW, London, Guelph, but the gap has closed immensely. Pre run up people regularly bought 3BR 1Bath detached homes under 200k. In 2016 I chose my first home (fixer upper) from a list of 5 between 105 and 140 within a 15 minute drive. Home ownership was an expected reality for people with careers in foodservice/retail/line manufacturing making 16-20 hr. That's gone, and there will be a clear divide in terms of lifetime wealth between those that got in before and those that didn't.

One thing that I've noticed is an (anecdotal) uptick in how much consideration is given to the benefits of generational wealth/housing planning in the rural/conservative middle class (which is quickly adding "upper" to the description)
I was very much raised in an environment where outside of succession planning for the family farm, children were raised with both the ideal and output of self-sufficiency. Parents helped where they could/wanted to, but your finances were yours, theirs were theirs, they only met when the estate was being settled and that was in no way part of your financial plan. I'm finding that's changing- peer discussion are becoming more about how we can plan to house our children, and pre-emptive estate planning with parents is getting more collaborative.

We are exactly thinking that way as well. Whatever we own will be our daughters house that she can either sell or live in.

 

[Kilted]

I'd rather have a castle in the south of France for half the price.

Impressive Knights Templar Chateau in excellent condition ideal for Chambre d'Hotes

Impressive Knights Templar Chateau in excellent condition ideal for Chambre d'Hotes

www.green-acres.fr

If I had to move at this point, I'm pretty sure I'd just end up building some semi-above ground sandbag contraption with overhead protection in the woods somewhere and then try and convince my unit that I have no idea where all the defensive stores went.

 

[mariomike]

Not sure how many readers are members of home-owners associations. There are many in our town.

Something our association is facing now: "Expanding Housing Options in Neighbourhoods - Garden Suites".

Sounds harmless enough.

Home-owners with concerns about the loss of trees/canopy, green space, loss of wildlife diversity and mature trees may be accused of "NIMBY-ism".

Our neighbourhood has ravines, hilly and narrow roads, irregular shaped lots and trail-like roads that were etched out by history and add impossible obstacles to the installation of Garden Suites.

Anyone with an opinion - one way or the other - about these so-called "Garden Suites" may, or may not, find this of interest.

https://www.toronto.ca/legdocs/mmis/2022/cc/comm/communicationfile-145171.pdf

The result is that the community becomes the Developers’ Hood rather than the Neighbourhood.

 

[Furniture]

Not sure how many readers are members of home-owners associations. There are many in our town.

Something our association is facing now: "Expanding Housing Options in Neighbourhoods - Garden Suites".

Sounds harmless enough.

Home-owners with concerns about the loss of trees/canopy, green space, loss of wildlife diversity and mature trees may be accused of "NIMBY-ism".

Our neighbourhood has ravines, hilly and narrow roads, irregular shaped lots and trail-like roads that were etched out by history and add impossible obstacles to the installation of Garden Suites.

Anyone with an opinion - one way or the other - about these so-called "Garden Suites" may, or may not, find this of interest.

https://www.toronto.ca/legdocs/mmis/2022/cc/comm/communicationfile-145171.pdf

That is classic "garden variety" NIMBY-ism...

"I realize people need a place to live, but this community is special and can't change." Is just a polite middle-class way of saying not in my back yard.

You're free to feel that way, but don't complain when you can't get people to staff the local businesses because they can't find a place to live.

 

[dapaterson]

Not sure how many readers are members of home-owners associations. There are many in our town.

Something our association is facing now: "Expanding Housing Options in Neighbourhoods - Garden Suites".

Sounds harmless enough.

Home-owners with concerns about the loss of trees/canopy, green space, loss of wildlife diversity and mature trees may be accused of "NIMBY-ism".

Our neighbourhood has ravines, hilly and narrow roads, irregular shaped lots and trail-like roads that were etched out by history and add impossible obstacles to the installation of Garden Suites.

Anyone with an opinion - one way or the other - about these so-called "Garden Suites" may, or may not, find this of interest.

https://www.toronto.ca/legdocs/mmis/2022/cc/comm/communicationfile-145171.pdf

With garden suites sometimes sharing the same civic address, how do paramedics know where to go in emergencies?

 

[mariomike]

With garden suites sometimes sharing the same civic address, how do paramedics know where to go in emergencies?

EMERGENCY ACCESS

https://www.toronto.ca/legdocs/mmis/2022/cc/comm/communicationfile-145171.pdf

You're free to feel that way, but don't complain when you can't get people to staff the local businesses because they can't find a place to live.

Thank-you.

As I said about the anticipated scolding,

Home-owners with concerns about the loss of trees/canopy, green space, loss of wildlife diversity and mature trees may be accused of "NIMBY-ism".

 

[IKnowNothing]

That is classic "garden variety" NIMBY-ism...

"I realize people need a place to live, but this community is special and can't change." Is just a polite middle-class way of saying not in my back yard.

You're free to feel that way, but don't complain when you can't get people to staff the local businesses because they can't find a place to live.

I don't think that's entirely fair.

People trying to stand in the way of clustered townhome developments in their single detached neighbourhood can get bent, but a lot of Ford's 2023 "solutions" need a whole lot more thought put into them. I'm all for removing universal barriers to adding 2nd and 3rd residences on the same property- no municipality should be able to bar a homeowner from doing so just because they don't want them in a neighbourhood. But more granularly- those units should comply with both building codes and sensible zoning by-law provisions- set backs, lot coverage ratios, accessory building heights etc.

Enabling and encouraging secondary and tertiary units shouldn't have to come at the cost of trampling good practices and granting carte blanche to do stupid things.