Taking into account the “stress test” for mortgages that the federal Liberals instituted last year, Porter estimated that a couple earning $225,000 with $100,000 for a down payment would be able to buy a residence of $987,289.
The median rate of a single-family house sold in Toronto in February was $1.57 million.
“It will be incredibly tough to attract talented folks… if they are going to struggle to buy a house and yet still pay taxes of over 50 per cent of their earnings,” Porter said.
So of course, the issues to becomes, who’s buying mansions at $1.57 million? Some have pointed the finger at foreign cash purchasers, others at cash-rich speculators.
But the single largest benefactor may be “move-up” purchasers — those who’ve seen the value of their dwelling soar in recent years, and is a requirement to take a mortgage for a relatively small portion of a brand-new home’s value.
Toronto’s housing market is “chiefly being driving in “move-up” purchasers leveraging the equity in their existing homes,” David Madani, senior Canada economist at Capital Economics, wrote.”
Since these “move-up” house purchasers obviously already live in a house and are largely responsible for the greatly increases in residence prices, it stands to reason that there isn’t a major deficit of housing causing housing prices to intensify,” he added.”
Investors are the other reason for rising residence prices. There are always shortages of housing for people wanting to buy their third, fourth or tenth property !”
“Investors are the other reason for rising residence prices. There are always shortages of housing for people wanting to buy their third, fourth or tenth belonging!”
Source: Huff Post Business
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