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Comment by dmix | Hacker News Reader

Toronto had a massive building boom [1] over the last 5-7 years that far outpaced Chicago, NYC, and Huston (something like #1 Toronto had 150 buildings v the closest #2 was 40 in Chicago being built). The construction on the hundreds of condos are just starting to be completed and condo prices actually went down for the first time in forever while housing prices continue to rise.

SF housing crisis is entirely self-created. If it wasn't for zoning limitations they'd be one of the top 5 fastest growing city in North America no doubt.

[1] http://www.cbc.ca/news/business/130-highrise-building-projec...

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I recall reading somewhere that the downtown core actually has less condos than needed. TO should have built more apparently. They built a lot of condos further away and those condos are the ones that are decreasing/not going up.

Also, since there are a lot of Toronto folks on this thread ... what are you folks doing if you don't own anything already? Prices are at an all time high but there is a general fear that if you don't buy now, you will be locked out forever. A data point there are condos in Gibson Square in North York for north of 650K. Seems insane but that is what the market is I suppose.

I'd personally invest money in businesses or building businesses. IMO real estate is for people without specialized technical talent (outside of handyman style work) or lots of extra cash needing a safe place to hold it.

Regarding my living situation it makes more sense for me to rent, everyone I know who buys a house has spent tons of time and money fixing up their place. I'd rather invest those resources into a startup or consulting.

Buying a condo might make sense at some point but I'm not really into condo living. If I go that route I'd want one with a pool and gym - which means a lot of extra condo fees, so I don't know if that ultimately makes financial sense. I'd be curious to see the numbers on that though.

Renting. People with the resources borrow money from family for down payments. People without borrow money from secondary lenders. My downtown condo up $50k/15% over the past 18 months but friends outside the core are flat or down.

What you read likely has to do with multi-individual/family focused dwellings. Toronto is currently overbuilt for single bed rooms, but under-built for units suitable for families.

Anyways, as far as what to do - Patience. Most people in Toronto who have good/great credit have mortgages w/~2.4% interest rate and 5 or less year term. What that means is that a ~1% increase in rates would increase their annual interest expense by ~50%. Considering that the average house price is $1MM in the GTA, let's say the average downpayment is 20% (it's actually lower from what I've read...), and you're looking at a situation where if rates go up just 1%, the average new home owner is going to need to come up with an additional $8K / year after tax, so ~$11-16K before tax, in order to not default on their mortgage. With wages being as stagnant as they are in Canada, and the average Canadian being more in debt than they have ever been in the history of the country(1), you can imagine that there will at least be a couple of people who will no longer be able to afford the houses they are in and need to sell it off.

1)http://www.theglobeandmail.com/report-on-business/economy/ca...

> Toronto had a massive building boom [1] over the last 5-7 years that far outpaced Chicago, NYC, and Huston (something like #1 Toronto had 150 buildings v the closest #2 was 40 in Chicago being built)

South Florida gets ignored in articles like that, because the cities are so physically small[1]. As of December 2014, South Florida as a whole had built 20 new towers, started construction on 80 more, and had yet another 200 in some sort of planning or presale stage[2]. That is what you want to look at for an example of skyrocketing population density in land-constrained areas.

[1] The largest city in South Florida is Miami, which is only 36sqmi. In contrast, Toronto is 244sqmi).

[2] http://www.miamiherald.com/news/business/biz-monday/article4...

I was going to reply that hey, that 244sqmi is the greater toronto area (GTA), but then I checked the wiki page, and well I'll be damned that's just the city itself. The GTA is 676 sqmi.

What's really interesting is that the 244sqmi is full. There is room for maybe one or two more subdivision of houses, and then the only option is up (or another amalgamation with the neighbours, because that went so well last time).

Yeah, I checked to make sure I had the wright number before I posted. I don't have a good number for the tri-county core of South Florida, but I'd guess it is not much larger than the GTA.

We hit the point of "no way but up" about 20 years ago. There are a few holdout family ranches, but other than that there is nowhere left to build that doesn't involve tearing down something else first. In some parts of my home county the school board has had to start cannibalizing parts of public parks in order to build new schools to support the population.

The Toronto school board got clever: you tear down the school, build a 20-story building on top but the bottom 3 floors are a school and the other 17 are condos that you sell or rent.

The board keeps their school in the area that needs it (minus a few tough years without it) and they make a profit selling or renting the condos!

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