Cost of housing in Canada

[Colin Parkinson]

Secondary/tertiary housing is going to underwhelm expectations if stories of people who try to be good landlords and get f*cked over keep popping up in the news.

The reason why we went with airbnb and not long term rental. Not worth it.

 

[Eaglelord17]

Another thing to keep prices reasonable is if someone offers your asking price with reasonable conditions (i.e. financing and home inspection) you must accept the offer. That would help prevent the insane bidding thats going on as that would be the max it can go.

 

[IKnowNothing]

Another thing to keep prices reasonable is if someone offers your asking price with reasonable conditions (i.e. financing and home inspection) you must accept the offer. That would help prevent the insane bidding thats going on as that would be the max it can go.

Perhaps splitting hairs, but I wouldn't go as far as instant mandatory acceptance, but I think that rejecting said offer (asking or above, reasonable conditions) shouldn't be allowed.

IMO the objective should be to increase transparency, reduce information asymmetry and get rid of the gamesmanship- keep buyers from getting screwed, not screw the seller.

 

[IKnowNothing]

Secondary/tertiary housing is going to underwhelm expectations if stories of people who try to be good landlords and get f*cked over keep popping up in the news.

I'm likely completely wrong, but the thing I see it doing is enabling more multi-generational compounds vice creating more open market landlords.

 

[lenaitch]

I'm likely completely wrong, but the thing I see it doing is enabling more multi-generational compounds vice creating more open market landlords.

I can see that happening. Some cultures are more 'attuned' than others to having different generations under one roof, but allowing you folks to live in a separate residence on the same lot could have its advantages.

A buddy of mine actually helped his municipality to write the zoning a bylaw rules to allow 'granny flats' (drawing, I think, on existing in the K-W area). Granted, he had an acre+ but it allowed his aging parents to buy a mobile home, plunk it on the property and hook up to his water/sewer/power and while out their days.

I haven't seen many, but I get the sense that current tertiary homes are built structures, but I see a market for something pre-made but more compact - or at least differently dimensioned - than a traditional 'trailer home'.

 

[foresterab]

When I think of the last 4 real estate agents I've had to deal with:
One was selling land and didn't even realize the farm tresspassed onto crown land
One lied, multiple times, over municipal bylaws even after I printed them off and sent them to him
3 of the 4 properties had legal orders regarding non-compliance which was not known/released
One wasn't aware there was a reclaimed oil well on the lands.
One sent me a purchaser contract that had me listed as paying the commission.

Only one was decent to deal with and didn't make you feel slimy afterwards.

Want my input?
1. Fix commissions so a single sale doesn't equal commissions greater than some folks annual salary.
2. Must be a written bid and shared with other parties also bidding.
3. A real estate agent is legally liable for failing to disclose any non-compliance issues with the property. This includes municipal bylaws, legal land title, and HOA rules.
4. Only homes fit for residence can be sold. If it won't pass building inspection then you can't sell it as a home.
5. Homes must be listed for a minimum of 1 week. Can't tell you how many I've seen where the "sold" sign is being posted hours after the listing was made...and yet the same friends and family seem to have time to arrange the financing and settle the deal before the public know.

 

[Eaglelord17]

Perhaps splitting hairs, but I wouldn't go as far as instant mandatory acceptance, but I think that rejecting said offer (asking or above, reasonable conditions) shouldn't be allowed.

IMO the objective should be to increase transparency, reduce information asymmetry and get rid of the gamesmanship- keep buyers from getting screwed, not screw the seller.

How does giving them exactly what they asked for screw the seller? All this does is prevent the bidding wars some are starting by listing houses well below what they know the value is. I have literally seen someone list a house for a dollar just to see what people will offer for it. That isn’t right.

 

[Halifax Tar]

Another thing to keep prices reasonable is if someone offers your asking price with reasonable conditions (i.e. financing and home inspection) you must accept the offer. That would help prevent the insane bidding thats going on as that would be the max it can go.

Isnt that pulling the legs out on the free market ?

If I have a house for up for sale for 250K and two potential buys want to get into a bidding war, why should I the seller, not be able to take advantage of that ?

The power is in the hands of the buyers, and until buyers stop being mouth breathers this isn't going to get fixed.

 

[Brad Sallows]

It doesn't matter who pretends to pay the commission. It is a cost which is part of the sale price. Conventionally, buyers of anything are the ones paying the costs.

Pricing a home is difficult, and sellers shouldn't have to eat their ignorance any more than buyers should. An open auction process would fix that. A five-day or one-week delay (after listing) before any offer could be accepted would help.

Housing is a supply/demand problem, and as long as people continue to support policies which support the demand side, prices will remain high. While it is true that almost nothing can go on forever, the persistent increases in housing prices have been ongoing despite 30+ years of people guessing it has to end soon. Either stop increasing population, or find ways to encourage people to move to where there is land available for detached houses.

 

[IKnowNothing]

How does giving them exactly what they asked for screw the seller? All this does is prevent the bidding wars some are starting by listing houses well below what they know the value is. I have literally seen someone list a house for a dollar just to see what people will offer for it. That isn’t right.

Situation A- Selling lists for 500k. Buyer A offers 505, Buyer B offers 525. Selling Agent goes back to A and B and asks them to bring "bring their best offer" Buyer A ups to 520, Buyer B to 540. Buyer B gets screwed out of 15k and the market gets distorted.

Situation B- Selling agent lists for 500k. Buyer A offers 505. Seller required to accept. Buyer B doesn't get a chance to offer, Buyer A gets for less than their top bid, Seller gets screwed out of 15-20k,, Buyer B gets screwed out of a house, and the market gets distorted.

Situation C- Selling agent lists for 500k. Buyer A offers 505, Seller cannot reject, but sale remains open for 48 hours. During this window B bids 515. During that window A comes back at 520, then B at 525. A drops out. House sells for 525.

To me C is the fairest. Nothing inherently wrong with a legitimate bidding war. As @Halifax Tar said, that's the free market at work. Where my issue is the current process allows (nay- encourages) artificial surplus over and above what would be justified in a transparent situation. The buyer should be entitled to get x dollars more than what the 2nd highest bidder is willing, not however much they can trick/pressure from the highest bidder- that's not an efficient market.

 

[Eaglelord17]

Isnt that pulling the legs out on the free market ?

If I have a house for up for sale for 250K and two potential buys want to get into a bidding war, why should I the seller, not be able to take advantage of that ?

The power is in the hands of the buyers, and until buyers stop being mouth breathers this isn't going to get fixed.

Giving the seller exactly what they want is the free market, no one is forcing them to list it low. If you went to the store to buy a pork roast which is there for 14$ should the store deny you the sale and state we are going to bid on it because that other guy is willing to pay 15$? They put a fixed price on the item, if you have met that price that should be good enough for all parties involved.

Situation A- Selling lists for 500k. Buyer A offers 505, Buyer B offers 525. Selling Agent goes back to A and B and asks them to bring "bring their best offer" Buyer A ups to 520, Buyer B to 540. Buyer B gets screwed out of 15k and the market gets distorted.
Situation B- Selling agent lists for 500k. Buyer A offers 505. Seller required to accept. Buyer B doesn't get a chance to offer, Buyer A gets for less than their top bid, Seller gets screwed out of 15-20k,, Buyer B gets screwed out of a house, and the market gets distorted.

Situation C- Selling agent lists for 500k. Buyer A offers 505, Seller cannot reject, but sale remains open for 48 hours. During this window B bids 515. During that window A comes back at 520, then B at 525. A drops out. House sells for 525.

To me C is the fairest. Nothing inherently wrong with a legitimate bidding war. As @Halifax Tar said, that's the free market at work. Where my issue is the current process allows (nay- encourages) artificial surplus over and above what would be justified in a transparent situation. The buyer should be entitled to get x dollars more than what the 2nd highest bidder is willing, not however much they can trick/pressure from the highest bidder- that's not an efficient market.

They put a price on it, if they didn’t think it was fair they should have put it higher. It isn’t distorting a market to get paid what you asked for.

If you want a auction put it up for sale on one.

 

[Halifax Tar]

Giving the seller exactly what they want is the free market, no one is forcing them to list it low. If you went to the store to buy a pork roast which is there for 14$ should the store deny you the sale and state we are going to bid on it because that other guy is willing to pay 15$? They put a fixed price on the item, if you have met that price that should be good enough for all parties involved.

That's exactly how grocery stores, meat especially, works. The higher the demand, the lower the stock of the item, the higher the price.

The difference with a grocery store is if you get the last roast there is no opportunity for me bid. But you're free to sell it to me afterwards for an inflated price. And I'm free to offer or not.

The problem is with the buyers, not the sellers.

I'm not onside with your position that takes away a bidding war for housing. It's an investment, the seller should be able to get maximum value for their investment, and the buyers and the market should dictate what that is.

 

[lenaitch]

I don't have a problem with bidding wars so long as they are transparent, which they are currently not.

I certainly not defending commissioned real estate sales folk, far from it, but in order to change how they are compensated, you have to look at the entire industry. In most agencies in Ontario, out of that commission he has to pay photographers, videographers, maybe a UAV operator plus advertising costs, and those costs exist regardless of whether the property sells or not, or sells in a day or a year. Our recent agent also said he has to pay a per-listing liability insurance premium. I forget the exact figure but it was in the hundreds.

 

[IKnowNothing]

The power is in the hands of the buyers, and until buyers stop being mouth breathers this isn't going to get fixed.

I think that is a view that is entirely enabled by being "housed" and having the benefit of watching from the outside. Are some people being stupid and overspending? Sure. But the current system very much puts the power (by way of restricting information) in the hands of the sellers to try and extract every last dollar of willingness/ability to pay out of the buyer. Even the most responsible buyer is going to say fuck it and spend their entire preapproval budget (even knowing the house really isn't worth that) after their 6th-7th lost house, watching month after month go by in their parents basement/bachelor apartment etc.

 

[Furniture]

I think that is a view that is entirely enabled by being "housed" and having the benefit of watching from the outside. Are some people being stupid and overspending? Sure. But the current system very much puts the power (by way of restricting information) in the hands of the sellers to try and extract every last dollar of willingness/ability to pay out of the buyer. Even the most responsible buyer is going to say fuck it and spend their entire preapproval budget (even knowing the house really isn't worth that) after their 6th-7th lost house, watching month after month go by in their parents basement/bachelor apartment etc.

Or when they are posted to a location, and have a couple of days to figure out where they will live for the next 3-5 years... A reality many sailors have never faced.

 

[YZT580]

the pressure comes from the bottom. Buildings that used to be constructed for rental housing are now condos so there is a reduced availability for rental units. A decent apartment goes for what 3000 in Toronto. That is a hefty mortgage payment. We are bringing in close to half a million new citizens per year with no allowance being made for housing; putting pressure on the bottom tier of housing costs and forcing prices upwards and availability/affordability into the basement. Want to get prices under control? Keep your immigration in line with your housing construction and get control of the short-term rental system

 

[IKnowNothing]

the pressure comes from the bottom. Buildings that used to be constructed for rental housing are now condos so there is a reduced availability for rental units. A decent apartment goes for what 3000 in Toronto. That is a hefty mortgage payment. We are bringing in close to half a million new citizens per year with no allowance being made for housing; putting pressure on the bottom tier of housing costs and forcing prices upwards and availability/affordability into the basement. Want to get prices under control? Keep your immigration in line with your housing construction and get control of the short-term rental system

Ok. Immigration cut, housing pressure relieved.
Now what's the solution for our shortage of working age people due to a population pyramid that's (not so) slowly inverting?

 

[captloadie]

There is also a need for expectation management by buyers. Everyone wants a house with a bedroom for every kid, an ensuite for the master, and a room for guests and inlaws. They want marble countertops and inground pools. And these are starter home desires.

We seems to pick on immigration as one of the issues driving up housing, but is it really? Maybe this is a stereotype, but many of those coming here better use whatever space they can afford, understanding that future generations may be able to have it better.

 

[lenaitch]

There is also a need for expectation management by buyers. Everyone wants a house with a bedroom for every kid, an ensuite for the master, and a room for guests and inlaws. They want marble countertops and inground pools. And these are starter home desires.

We seems to pick on immigration as one of the issues driving up housing, but is it really? Maybe this is a stereotype, but many of those coming here better use whatever space they can afford, understanding that future generations may be able to have it better.

And in terms of new subdivision builds, at least in the big cities, that is the market they are building toward.

 

[YZT580]

Ok. Immigration cut, housing pressure relieved.
Now what's the solution for our shortage of working age people due to a population pyramid that's (not so) slowly inverting?

knew that someone would come up with that. I did not, repeat did not say that we should stop immigration but you need a place for them to live that is reasonable, safe, and provides the education, social infrastructure and medical facilities to accommodate them. The original settlers and founders of this country came over with an offer in the bank for land. True they had to build homes on it but the raw materials were on hand: mud, logs, stone or whatever. To absorb the rates that we are maintaining now there is an absolute requirement to create the modern-day equivalent facilities and services otherwise you are ghettoizing and creating an enormous hurt for yourself down the road