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Comment by throw20160915 | Hacker News Reader

throw20160915

It's because Toronto is in a state of transition.

No one complains about NY, London, HK real-estate because it's already understood to be expensive in the mainstream.

But Toronto real-estate being expensive is relatively new such that you have people who grew up in Toronto not being able to afford it in adulthood.

People are slowly realizing that TO is now just another global city out of reach to the middle class unless you make heavy comprises. Give it some time, and soon people will stop complaining about being able to buy a house with a backyard here as well.

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The other big issue is that there's no local economic boom driving the increase. Which is very confusing to locals -- salaries aren't going up, unemployment is fairly high, but prices are skyrocketing.

Apparently low interest rates are a big driver. If they increase then many people won't be able to afford their mortgages.

Statistically more people would be able to afford the mortgages because houses would be cheaper and wealth is on a powerlaw distribution. High interest rates is great for poor people for which their labor dominates their wealth.

High interest rates are great for buying a home. Both for the house prices falling, and for having the option of refinancing at a lower rate later. The big complicating factor is that most people buy and sell a house at the same time, and lower interest rates sound like "lower prices".

I think the wrinkle is that many people see rent as a function of mortgage payments and low interest rates and other rebates are seen as a way to lower rent and provide a win-win. Homeowners get value appreciation and renters get cheaper rent. Of course this is a temporary effect and will only persist during a period of accelerating asset price inflation - which is impossible to maintain long term.

At this point, the average million dollar home in the far suburbs of Toronto costs about 4K a month (mortgages, utility bills, etc.). A condo in a better location costs 1500 a month. We're just starting out our family (which is why we need a house, but we can also not depend on my wife's income). A 10K salary results in 6k after taxes. While we could put everything into the house, I am very very afraid to do so. When I've asked how others do it, I get crazy answers from parents helped get the downpayment down big time to unregistered rental suites. Craziest story I've heard is people buying a house and living in the basement. It all makes my head spin.

> salaries aren't going up

This. You can really see the disparity when looking at the divergence between Toronto rental prices (what people who work can afford to pay with their jobs) and purchase prices (what investors can afford to pay, which probably includes a lot of foreign investment and homeowners remortgaging their homes to invest in a 2nd).

Rental prices haven't increased nearly as much as purchase prices.

It's so cold there, who needs a backyard? You can only use it 2 weeks a year, and you'd be better off sailing.

Honestly, as a Canadian, this is what I find so dumb about our urban planning. People demand adequate house spacing, backyard space, etc... Only for it to be usable for 4 months of the year. Meanwhile, all that dead space makes our cities unwalkable in the other 8 months. I guess people are just so used to having to drive everywhere that they don't see how else it could be.

Where do you live in Canada? In southern ontario (where Toronto and most of the people are) there's no snow for 8 months out of the year. And backyards/sidewalks are really only impeded for maybe 2 months (if you're able-bodied). Meanwhile you can totally have a pool, a vegetable garden, a place for your kids to play, etc. the rest of the time.

I recently moved from an apartment to a house downtown with a tiny backyard, and it's a huge improvement. We didn't really use it in February/March. But the rest of the time it's awesome.

I agree that the pervasive car culture is very frustrating, but saying a backyard is only usable 4 months of the year is silly. Many of us with kids use them year round.

Where in Canada do you live, Whitehorse? Toronto is further south than most of Michigan, and folks in Michigan seem to use their yards and open space just fine for a large part of the year.

It probably depends on the stage of your life. I had a house with backyard when I was single and didn't use it much.

Now, I have family and kids and totally enjoy having it even though I only get to use it 4-5 months out of the year: - kids spend a lot of time there on the trampoline - my wife has an organic garden and beautiful flowers - my dog chases rabbits and squirrels - enjoy being outside without having to go to a park (reading books, playing with my kids) - family gatherings, BBQs and etc

There's no way I'm going back to living in an apartment or even a townhouse with no backyard unless I really have to...

May-Sept is generally regarded as "spring/summer" and, while the backyard is useless half the year, it is still apparently nice to have.

I think they're a ridiculous pain in the ass and largely useless but that's beside the point -- some people still derive enjoyment from them.

For folks with kids, if it is cold, the backyard becomes more useful because you can then make a backyard ice rink pretty easily.

I certainly complain about London, all the time. It's always been expensive compared to the rest of the country, sure, but the current flat-out-insane bubble prices are a comparatively recent (and deliberately induced/maintained) phenomenon.

Totally, 17 years ago a friend of a friend bought a 1 bed flat near Stratford in London for £35k... Nice 2 bed houses in Forest Gate were £65k. They weren't super cheap for the locals, but people could buy them. Now 2 bed house are £450k plus, and people are flocking to East (far east...) London because it's 'cheap' - no one who buys there now was born there.

So it has happened here too, but because the beast of London has always been pricey, then it kind of gets ignored, except by those in it and those not now quids in from the crazy prices.

I complain about London house prices all the time!

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