Home construction prices in Canada...what the heck is going on?

[3930dave]

Fortunately for the skilled trades, Canadian real estate has stayed up. So, current homeowners have plenty of $ leverage to use, if they choose. And... many do leverage their house pretty heavily.... sound familiar, fellow US trend watchers ?

Manufacturing (ex Autos) in Ontario has been pretty much decimated. So, skilled trades in that sector often have slim pickings.

There is plenty of money in construction here - the guys who have worked in other industries get that, some don't realize how good they have it.

Longer term, the catch here is going to be Gen X, Y. Many (most?) of them haven't moved out of their parent's basements, plenty aren't even buying cars - forget about houses.

Canada does have fairly high immigration levels, and some of it illegal. To some extent, that will prop up housing here in the future.

But yes, the prices here are pretty crazy. We are approaching the point where just our typical Land Transfer taxes are going to exceed what I paid to buy my first house (brand new 1,000 sq ft bungalow, on a 100' by 166' lot).

OK, I'm not a kid anymore, but I'm not 90 years old either !

Aside from certain major US cities, you can often buy a decent US house for less than what some people are spending for upper mid range cars here !

Yes, our cost structures are pretty ridiculous.

Rgds, D.

 

[WilliamBos]

It's only news in Toronto and Vancouver, which have historically superheated housing markets. They go through these cycles all the time, and we do not have the same mortgage rules that you folks have. It's not the same issue at all.

Exactly! When it does burst, it will be nothing like the USA went through.m Our tough mortgage and banking rules are the reason why.

 

[WilliamBos]

No kidding Clem...hmmm, let me think a min. This $600K 2,000 sq ft house..I wonder how much is labor and how much is materials. Just a WAG, but say $200K in material? So, I figure a good crew of 4 guys should be able to build the whole house in 6 months....or about 120 8hr days...right? 960 hrs total means these guys are making $100 an hr. Most likely one is making over $200 an hr, while the other three are getting a lot less.......not a bad living ...{eh}?

Those $600,000 homes are being built on 30'- 50' lots depending on area. They are all production housing. They slap them togrther as fast as any other house in a subdivision.

Sewers and town water killed the 1/2 acre lots in subdivisions.

Also need to consider that homes with out basements are rare up here. Frost line is 4' minimum, not much more to go 8' and put in a basement.

 

[dfkrug]

If you put $250,000 down your payment would be almost
$2000/month.

A friend of mine just refinanced his house and his rental property last week. He got a 3.5%
30y fixed loan (no pts, no fees) on his house, and 3.75% for the rental. Of course, he
has good credit.

A $350K 30 y loan at 3.5% results in a monthly pmt of only $1572, an amazing (and unprecedented)
low. I would not want to be an institution owning that paper when inflation hits.

Do they offer those kind of rates in Canada?

 

[3930dave]

Debt level is a funny (not haha) thing.

Comparing Canadian vs. US debt levels is a bit like comparing the guy that drinks one 40oz bottle of booze a day to the guy that drinks two 40oz'ers a day.

Exactly who has a problem ? That depends who you ask.

As an old friend of my Dad's used to say "Having a drink is OK, going swimming in it is another story !".

I observed at a young age that "mortgage" had roots in the French "mort" - death. But yes, rates here are at or near historic lows.

Rgds, D.

 

[clemsonfor]

Fortunately for the skilled trades, Canadian real estate has stayed up. So, current homeowners have plenty of $ leverage to use, if they choose. And... many do leverage their house pretty heavily.... sound familiar, fellow US trend watchers ?

Manufacturing (ex Autos) in Ontario has been pretty much decimated. So, skilled trades in that sector often have slim pickings.

There is plenty of money in construction here - the guys who have worked in other industries get that, some don't realize how good they have it.

Longer term, the catch here is going to be Gen X, Y. Many (most?) of them haven't moved out of their parent's basements, plenty aren't even buying cars - forget about houses.

Canada does have fairly high immigration levels, and some of it illegal. To some extent, that will prop up housing here in the future.

But yes, the prices here are pretty crazy. We are approaching the point where just our typical Land Transfer taxes are going to exceed what I paid to buy my first house (brand new 1,000 sq ft bungalow, on a 100' by 166' lot).

OK, I'm not a kid anymore, but I'm not 90 years old either !

Aside from certain major US cities, you can often buy a decent US house for less than what some people are spending for upper mid range cars here !

Yes, our cost structures are pretty ridiculous.

Rgds, D.

Another thing dont you pay 50% income taxes due to socialized programs there? My point if you make $80K your only keeping $40kish? That would be similar to me making $60k and keeping $40-45k. So i guess what ever, same thing as california. Same jobs earn rediculos prices due to inflation. My whole thought whats the point? A Cop here May make $32k and one in california similar credentials may make $90K? Makes no sense.

 

[Mike476]

Taxes are higher here it's true, federal taxes and then provincial taxes, not unlike your state and federal taxes, take a fair chunk of your income, but aren't due solely to socialized programs. It's a big country, and with a population similar to the states of California or New York, there are costs associated with keeping it all together.

 

[3930dave]

Taxes are a significant factor here, no doubt.

Taxes, food, and real estate set a baseline income requirement, wherever you are. Only a guess, but I wouldn't be surprised if the 32k Cop in SC can live more comfortably than the 90k Cop in California.

To show how out of control taxes are here, there were a couple of paid shills (consultants) making headlines in Ottawa a few months back. They were proposing taxing groceries, one of the very few things we are not taxed on here. They were on about "re-engineering capturing value in the economy", or some other B school bs.

Buddy in British Columbia told me recently that you have to have a special registration card to buy off-road diesel in BC.

I'll sign off to the tune of the Beatles "Taxman".....

Rgds, D.

 

[MapleLeafFarmer]

Another thing dont you pay 50% income taxes due to socialized programs there? My point if you make $80K your only keeping $40kish? That would be similar to me making $60k and keeping $40-45k. So i guess what ever, same thing as california. Same jobs earn rediculos prices due to inflation. My whole thought whats the point? A Cop here May make $32k and one in california similar credentials may make $90K? Makes no sense.

50%.. no where close. Old wives tail. tax increase as your income increase.

family 4 at $30,000/year can be income tax free. Lots of tax credits. First $10,527 is 100% completly tax free for each person in the family. Lots of other deductions for children, age, farmers, etc...

Then whats left after all the credits gets taxed.

FEderal Tax:
15% first $42,707 after deductions, then
22% on next $42,707
26% on next $46,992
29% of taxable income over $132,406.

PLUS

Provincial Tax (Manitoba) Alberta pays flat 10% of taxable income
10.8% on the first $31,000 +
12.75% on tnext $36,000, +
17.4% on next $67,000



so on $1 you earn after say $150,000 then close to 50% on that dollar but all the money before then is taxed much less.
2 people working, $40,000 per year and a couple of kids can get away with almost 0% tax if they play it right.

 

[WilliamBos]

Not here in Ontario! McLiar has found ways of increasing taxes, a hidden health tax, the 13% HST which is tax on tax, especially at the pumps. It never stops. But Ontario seems to be used as the bank account that Toronto keeps taking money from.

50%.. no where close. Old wives tail. tax increase as your income increase.

family 4 at $30,000/year can be income tax free. Lots of tax credits. First $10,527 is 100% completly tax free for each person in the family. Lots of other deductions for children, age, farmers, etc...

Then whats left after all the credits gets taxed.

FEderal Tax:
15% first $42,707 after deductions, then
22% on next $42,707
26% on next $46,992
29% of taxable income over $132,406.

PLUS

Provincial Tax (Manitoba) Alberta pays flat 10% of taxable income
10.8% on the first $31,000 +
12.75% on tnext $36,000, +
17.4% on next $67,000



so on $1 you earn after say $150,000 then close to 50% on that dollar but all the money before then is taxed much less.
2 people working, $40,000 per year and a couple of kids can get away with almost 0% tax if they play it right.