[blixtex]

No, rural or small town life isn't for everyone (I came back to Cabbagetown after 3 years in Freddie, for example), but I think too many millennials envision the only life is working for a start-up software firm and living in a condo box. There's a lot of country out there.

This is playing out all over N. America. If you compare it to Gen X, a key difference is Gen X couldn't wait to get their license and be 'free'. However, Millennials having grown-up in a virtual world do not want to go out and 'live'. They are generally content with being in that shoe box as long as they have their internet connection (i.e. through laptop, tablet, phone, tv). The work is an extension of the house they grew up on in, so workplace needs to be as convenient to get to as their kitchen. Also explains why many don't even have their licenses or desire that first car anymore. Whereas pre-internet generation, you got antsy being at home. Also less coddled by the parents who expected you to get out.

I lived in a small town for a lot of years. My children left because there simply weren't career opportunities. There were jobs, but not careers.

This is the very reason why many don't want to sell their nice expensive Toronto home and settle outwards. I know for sure, my kids growing up will want to get the heck out of a small town and into that shoe box said above.

 

[Admiral Beez]

This is playing out all over N. America. If you compare it to Gen X, a key difference is Gen X couldn't wait to get their license and be 'free'.

It does amaze me sometimes the differences in Gen X to millennial. First of all, being born in 1971 we didn't have computers at all for much of my childhood (nor calculators in elementary school math), and the internet didn't readily exist until Netscape appears in the mid-1990s. My research skills at uni were in actual books and archives, including microfiche (can anyone still set up those reels?). I never have my cell phone near at home, in fact I don't even own a personal cell phone, and I turn off the work cell when I walk through the door (it's on in the car for Waze). As soon as I graduated uni in 1995 and got my first job I immediately moved out into a basement apartment, and as fast as I could bought my first used car (the next day my girlfriend and I drove to Ottawa for breakfast and then came home). I was absolutely focused on asap getting married, getting a house, starting a family and building both happiness and wealth. I've never understood the adult gamer lifestyle, since to me my Colecovision was put away in my late teens, and I moved onto interacting with the real world. I live in a house, with a kitchen where we make food, instead of eating out or ordering in every meal (I often wonder if the ovens in condo kitchens ever see anything beyond heating up something from a box). I'm happiest when on my own not in front of a screen, but on a vintage motorcycle in the country (and I can actually fix the motorcycle, and do home repair, I own and use tools). I don't understand the Millennial's need to share personal information and to seek affirmation from acquaintances and often strangers online, nor their trust in free information found online (it's worth what you paid for it) vs. paid investigative journalism and accredited research. IMO, constant connectivity is a noose, not a conduit - that's why I like my job, when I'm overseas or on a plane, I'm for the most part unreachable due to either timezone or technological limitations, the independence of both thought and action is thrilling, where I can make personal and business decisions without the need to check with the hivemind.

Reading my thoughts above, I can't imagine being happy in the inverse. Getting back on topic, I think we're a long way from any bubble in non-condo real estate in Toronto proper. Sure houses valued now at $1 million may drop by 20% to $800K, but that's still an upward trend from that same house's 1998 value of $250K.

 

[Admiral Beez]

You're generalizing here. If so many millennials want mini mansions, why are they clamouring to move to the core where properties are smaller?

I would argue group think and sheepism is very high with millennials. So many of the young people I know can’t decide on anything without seeking affirmation of their peers and the hive mind.

Imagine being a young adult today and all your peers seem to aspire to working for some software start-up and living in a high rise box? If you seek peer affirmation of your decisions, what chance do you have of seeking a unique path? Sometimes you do break free, in my family circle we have a farrier, went from living in Toronto near suburbs where all his pals were clamering for a cubical and he went to agricultural college, shoeing horses and living in rural Ontario.

 

[Eug]

I would argue group think and sheepism is very high with millennials. So many of the young people I know can’t decide on anything without seeking affirmation of their peers and the hive mind.

I would argue that you sound like an overgeneralizing old fart. And I believe I can say that because I'm an old fart too, since Gen X'ers seem to be old farts around here.

Imagine being a young adult today and all your peers seem to aspire to working for some software start-up and living in a high rise box? If you seek peer affirmation of your decisions, what chance do you have of seeking a unique path? Sometimes you do break free, in my family circle we have a farrier, went from living in Toronto near suburbs where all his pals were clamering for a cubical and he went to agricultural college, shoeing horses and living in rural Ontario.

Uh, I didn't want to live in the middle of nowhere either when I was that age. Not that I could anyway, since as PinkLucy says, the career opportunities just didn't exist there.

BTW, this made me laugh:

 

[TrickyRicky]

I agree moving to the East coast would be a lovely choice for millennials and Canada is still a place where you can go live in a quite place and still have some land, affordable living, and a peaceful life (thanks in large part to regional government subsidization direct and indirect).

But let's not pretend that Toronto is this kind of ultra-competitive meat-grinder. The real meat-grinder of existence is the experience of 95% of humanity not living in countries like Canada or Cities like Toronto. Forget Toronto, the real world future is one where Cities we look up to like London or New York don't even crack the top 50 in size and competition for housing!

 

[Ex-Montreal Girl]

I agree moving to the East coast would be a lovely choice for millennials and Canada is still a place where you can go live in a quite place and still have some land, affordable living, and a peaceful life (thanks in large part to regional government subsidization direct and indirect).

But let's not pretend that Toronto is this kind of ultra-competitive meat-grinder. The real meat-grinder of existence is the experience of 95% of humanity not living in countries like Canada or Cities like Toronto. Forget Toronto, the real world future is one where Cities we look up to like London or New York don't even crack the top 50 in size and competition for housing!

Yup. I can't even bear to think of Mexico City let alone Rio, Manila, Lagos, Calcutta, Cairo .... While housing there may seem cheap in Canadian dollars, it would cost a relative fortune for an actual slum.

 

[ponyboy]

This piece from the Financial Times does a good job reviewing some of the main influences on Toronto's market since 2009.

https://worldinstruggle.blogspot.ca/2018/03/financial-crash-made-our-cities.html?view=sidebar

 

[blixtex]

The market is getting hot again in the core (defined as not Scarborough, generally south of St. Clair/O'Conner). Not as crazy as before, but the millennials love their Streetcar/Subway/Walk-ability/storefront shops/city amenities.

 

[TrickyRicky]

I think it's really tough to say how the market will go in the second half of 2018. The industry experts say prices and sales activity will pick up but I'm not so sure. There are a lot of competing forces that may lead to a continuing rebound in second half 2018 but it's not out of the realm of possibility that we could see a market capitulation that will drag down prices another 10-15%. The trailing data coming out is showing a bit of a bloodbath in regional sub-markets (Richmond Hill for example).

One of the big question marks I find is how much of the price-setting activity is based on move-up resale activity? A lot of people have built up equity in their existing properties and use (and need all of) that equity to purchase a new property. Property-less buyers are basically shut out of must sub-markets anyways at this point. If the only way you can buy a property is using existing home equity the resilience of the market in the face of price declines comes in question. It wouldn't take much of a price drop to create a vicious negative feedback loop. This is already happening in some sub-markets but it remains to be seen if the contagion will spread or the pockets of existing strength like the condo market etc. will provide enough resilience?

 

[Avenue]

One of the big question marks I find is how much of the price-setting activity is based on move-up resale activity? A lot of people have built up equity in their existing properties and use (and need all of) that equity to purchase a new property. Property-less buyers are basically shut out of must sub-markets anyways at this point. If the only way you can buy a property is using existing home equity the resilience of the market in the face of price declines comes in question. It wouldn't take much of a price drop to create a vicious negative feedback loop.

This is exactly the turn of events I'm hoping for to be able to afford a condo.

 

[TrickyRicky]

A globe and mail article this morning pointed out that about half of condo buyers are now going to investors and that a large portion of these investors are holding their properties in cash flow negative positions. While strong rent increase and capital appreciation momentum has sustained the condo market thus far it wouldn’t take much to tip this balance and further price and rent surges look less likely. This is not to say I’m predicting a price drop but that the market does not look like it’s supported by robust fundamentals. A certain amount of suppression of market conditions is government driven (by design). We could see some lifting of spirits with a change in government (good for the market, no comment on it being good for society).

 

[Admiral Beez]

One of the big question marks I find is how much of the price-setting activity is based on move-up resale activity? A lot of people have built up equity in their existing properties and use (and need all of) that equity to purchase a new property.

And sometimes that move doesn't work out.

Oakville homebuyers purchased at their own risk, housing minister says
https://www.thestar.com/business/re...-at-their-own-risk-housing-minister-says.html

 

[narduch]

And sometimes that move doesn't work out.

Oakville homebuyers purchased at their own risk, housing minister says
https://www.thestar.com/business/re...-at-their-own-risk-housing-minister-says.html

While there is always risk involved, these people did get fucked over by a sudden rule change.

 

[Avenue]

A globe and mail article this morning pointed out that about half of condo buyers are now going to investors and that a large portion of these investors are holding their properties in cash flow negative positions.

Isn't negative cash flow quite normal? Like your mortgage + maintenance fees + property taxes being higher than rent collected? To me, the fact that that ratio is only 50% shows how crazy the market is (and how clueless condo renters are, to some extent).

 

[blixtex]

While there is always risk involved, these people did get fucked over by a sudden rule change.

They did but they still took a huge risk with minimal margin for error. I'm like them... immigrants, worked hard, have kids, want a better life for them, blah blah blah.

But if you go on to their web page, they really live in this bubble. What's not talked about is they valued their existing home expecting valuation gains for about 1.5 years (2018 closing) while they 'locked' in the purchase in 2017. In other words, they expected their semi to keep going up to pay for a full detached in the future. Sure people have gotten away with that in the past, but the got stuck holding the hot potatoe. This is the greater fool in action. And I bet they voted Liberals too (interventionists).

Being a homeowner myself of a 'used' house in Scarborough (btw they are so elitist, they scoff at being in my type of situation) with 2 young kids, given how crazy the housing market was last year, I said specifically the 'beta' or sensitivity to error is extremely high due to the absurd volatility. You have to have a lot of guts to try to make a move now with any sort of property value at around 1 mil or more. Especially if you bought and held on to your existing home. I have friends in the same boat, they were considering buying new in Pickering, but said forget it given how much and fast the builders were raising prices. They got the message. And stuck to their existing used townhouse.

But these people, if you read their testimonies on their petition site say stuff like

• "I lived in a dangerous part of Toronto! We deserved a better location in a NEW House",
• "These finishings are low quality for a million dollar home.. the pamphlet lied so we had to upgrade our finishes from the builder but now we owe more and can't pay it!"
• "We wanted a second property for our kids! It had to be new. What's wrong with that?"
• "We expected our existing houses's future value to match the purchase price".
• "Our newly bought townhouse is not good enough. Our dream was to buy a NEW Detached Home".

Many hardworking responsible people are in the same boat and would have looked at these people like entitled kooks for doing what they did.

Stress tests even last year were being applied to many AAA people given expectation that it would be applied more broadly. The idea of up-sizing in a bubble market is very risky unless you immediately liquidate your own bubble asset. These folks lined-up on the site hoping to cash in on the bubble. If they had 'won' like the people before, they would be laughing. But unfortunately will end up as one of those ppl that lost out big on a financial bet, which may financially 'ruin' their lives (it has happened all throughout history".