[ghrh1977]

I hear my parents talk about home prices in the early 80’s & interest rates. Out of curiosity is there a website that would compare home prices in any particular year & how that would be in today’s value, based on inflation?

Example: avg home price in 1980 in Toronto @ $80k would be compared to a home in Toronto today at $750k.

 

[agent99]

You could use the inflation rate to determine what the price should be if supply and demand for housing stayed the same.

This site will do that for you: Best Inflation Calculator (2021) - Historical & Future Value | SmartAsset.com. You can probably find actual Toronto historical prices somewhere on-line.

This chart shows how prices have increased in 2016 dollars. A house is no doubt harder to afford now than back in the day!

 

[Landlordnomore]

Well, two houses in my immediate neighbourhood have been sold for around $180,000 over asking and they were sold in a gut job condition, let alone polyB pipes. In this red hot market, everything and anything goes!!! Crazy. I am tempted to cash in but just don't know where my family of 4 would move to??? So, we have decided to just stay put. Surely, the prices will double in 10-20 years.

 

[Bananatron]

In order to do an accurate comparison one would have to compare the average income in, say 1975, along with the going mortgage rate of that era to determine what percentage of their income was going towards a mortgage payment.

It's not as simple as homes have gone up 6x in the past 30 years while wages have only doubled, therefore homes today are 3x as expensive.

Not saying homes in gta or Vancouver aren't overpriced, but there is more to it.

 

[like_to_retire]

I think it's hard to assign such an important metric of the 80's (which was mortgage rates) its gravitas for that time. It had a lopsided physiological effect on house prices.

I remember when I renewed the mortgage on my house in late 1981, the mortgage rate on a 5 year term was 21.75%. The inflation rate was around 12.5%. Many who were up for renewal would be losing their homes at these rates.

I do laugh when I read posters having debates about the differences between 1.65% and 1.69% mortgages. They have no idea.......................

ltr

 

[doctrine]

When realtors are roaming the streets, cold calling and knocking and begging people to sell their homes, you know it's at a peak. At least in the last 20 years, it's hotter than it has ever been. But interest rates are also lower than ever. If 5 year mortgage interest rates ever get back to "generational lows" of just 3%, housing prices are going to correct 10-20%. Much of the boost has occurred with 1.5% mortgages.

 

[sags]

The government should eliminate CMHC guarantees and let the free market control prices.

Municipal governments could also eliminate the minimum footage requirements for new builds in subdivisions. There is no reason people should be unable to build a new 900 square foot bungalow.

Our family grew up in one and there were 7 of us in the house. People finished the basements with a rec room, bathroom, and bedrooms. Totally finished that is 1800 square feet......more than enough.

 

[Bananatron]

The government should eliminate CMHC guarantees and let the free market control prices.

Municipal governments could also eliminate the minimum footage requirements for new builds in subdivisions. There is no reason people should be unable to build a new 900 square foot bungalow.

Our family grew up in one and there were 7 of us in the house. People finished the basements with a rec room, bathroom, and bedrooms. Totally finished that is 1800 square feet......more than enough.

Lots of options for building smaller new homes, not too many bungalows though as two stories offer better bang for the buck.
But yeah, one can build a new 1300-1500 sq ft two story (which translates to the same cost as a 1000 bungalow) with a parking pad with the option for a future detached garage.
That's also not considering the entry level options of town or row homes and duplexes.

Around edmonton, these options went from anywhere between $300k-$450k. With an average family income of about $100k and current interest rates that seems very affordable to me.

I realize those prices are a fantasy for those that live in bc and Ontario, but starter homes are still a possibility for the less desirable parts of Canada. /s

 

[MrMatt]

The government should eliminate CMHC guarantees and let the free market control prices.

Municipal governments could also eliminate the minimum footage requirements for new builds in subdivisions. There is no reason people should be unable to build a new 900 square foot bungalow.

Our family grew up in one and there were 7 of us in the house. People finished the basements with a rec room, bathroom, and bedrooms. Totally finished that is 1800 square feet......more than enough.

They should also get rid of rent controls, and allow the collection of security deposits, and eviction of bad tenants.

I think the biggest problem with housing prices is that there simply isn't enough development to keep up.
If you want to double the population in an area, you have to double the density.
If everyone wants progressively larger McMansions, it's going to take a lot of land.

FWIW, my house is over 3x the size of the one I grew up in.

 

[AltaRed]

I hear my parents talk about home prices in the early 80’s & interest rates. Out of curiosity is there a website that would compare home prices in any particular year & how that would be in today’s value, based on inflation?

Example: avg home price in 1980 in Toronto @ $80k would be compared to a home in Toronto today at $750k.

CPI is the least of the factors. The real measure is wages plotted against monthly mortgage payments, not house price. With lower down payments, rock bottom interest rates, dual incomes and longer amortizations, one can buy a lot more house today than in the 1980s. Realtors have conflicts of interest and MSM is dumb as nails when they keep referencing house prices as the metric for affordability. Nothing could be further from the truth.

 

[nathan79]

The really high interest rates (~20%) in the 1980's were only for a couple of years, and not everyone was locked into those rates. Most people were paying around 12-13% during the 80's, which sounds like a lot until you realize that house prices were roughly 1/8th of what they are today.

A typical house around here that cost 150K in the 1980's goes for about 1.2 million now. Even with the low rates of today, the mortgage payments would be significantly higher adjusted for inflation.

Bringing up dual incomes is just moving the goalposts, and not everyone is married anyway.

We're also over looking the fact that is was much easier to save a larger downpayment when house prices were 3X the average income, as opposed to whatever they are today.

Even 10 years ago, I could buy a house outright for 400K. Now you need a six figure income on top of the 400K downpayment.... lol.

To even suggest that houses are more attainable today is crazy talk, IMO.

 

[sags]

They should also get rid of rent controls, and allow the collection of security deposits, and eviction of bad tenants. There are no rent controls on new units.

I think the biggest problem with housing prices is that there simply isn't enough development to keep up.
If you want to double the population in an area, you have to double the density.
If everyone wants progressively larger McMansions, it's going to take a lot of land.

FWIW, my house is over 3x the size of the one I grew up in.

Doug Ford abolished the rent controls in 2018, and landlords can charge any rent they want for occupancy after November 2018 or when people move out and there is a vacancy.

The result was sharp increases in rents and tenants unwilling to move out units they have been living in since before November 2018. The number of new buildings has also declined which proves that rent controls had no impact on rental development.

I expect that the NDP will propose a reversal of the Ford changes during the next election, and that will prompt Ford to reverse his own changes, as he has done in the past on other issues.

The Ford government wouldn't be the first to fall in Ontario due to increasing rental rates.

 

[sags]

Forget about "asking price" around here. People are bidding up homes hundreds of thousands of dollars above asking prices.

The number of homes for sale is lower because people are afraid to sell and move. I read there are like 50,000 realtors in Toronto alone and they are starving for business......no listings = no sales = no income for realtors.

The idea that all realtors are getting rich from home sales is a false one. Most have 1 or 0 sales in a year.

They are also being frustrated with all the bidding wars. They can spend months with a client writing up and offering contracts to sellers only to be outbid every time. It cost the realtors time and money with no income to pay for it all.

If there are 20 bids on a home.....19 realtors are going home without a sale.

 

[sags]

Prices have risen to the point that they have made the low interest rates redundant.

People can't afford to buy a home even at today's interest rates, and the rates won't stay low forever.

The only thing government can do to keep the bubble going is to extend mortgages.

I expect we might see something like that if interest rates start to rise.

 

[MrMatt]

Prices have risen to the point that they have made the low interest rates redundant.

People can't afford to buy a home even at today's interest rates, and the rates won't stay low forever.

The only thing government can do to keep the bubble going is to extend mortgages.

I expect we might see something like that if interest rates start to rise.

Prices are high BECAUSE rates are low.
The issue is demand is higher than supply.

 

[MrMatt]

Doug Ford abolished the rent controls in 2018, and landlords can charge any rent they want for occupancy after November 2018 or when people move out and there is a vacancy.

Not true. They still control how much it can change.

https://www.ontario.ca/page/residential-rent-increases#section-0

The result was sharp increases in rents and tenants unwilling to move out units they have been living in since before November 2018. The number of new buildings has also declined which proves that rent controls had no impact on rental development.

I'd suggest that his failure to remove rent control and fix the other issues is why investors didn't rush out and build more housing.

Rent can only be increased by a limited amount ever year, so tenants are unwilling to move out and lose the rent control.

New buildings aren't being built, because you can't charge security deposits, can't hike rents enough, and can't evict bad tenants.
I personally think residential rental housing is too risky. Due to bad government policy here.

The Ford government wouldn't be the first to fall in Ontario due to increasing rental rates.

Nobody ever said democracies result in good policy.
We elected Trudeau because people want to smoke pot.


It's really simple, to fix rental housing, we need to build more housing.
1. To get people to build move rental housing we need to allow people to build it.
2. We need to lower the risk, ie kick out bad non paying tenants, and hold tenants liable for damage (via security deposits or other measures)
3. We need to allow rent to be increased in line with the market.
It's important to note that in many cities, for example London, property tax rates increase by more than the rent increase limit.
Think about that, your properly taxes go up 4%, rent goes up 1%.
year after year, decade after decade Who wants to invest in a declining

Part of the problem, is people aren't migrating to places they can afford, they want (or wanted) to live in downtown Toronto, causing a shortage. If they simply hiked rent the renters would move out, and put less pressure on supply.
Instead they try to lock the price below market rates, which causes shortages. That's the problem with price controls.

In my city we're being flooded with people from Toronto, because the prices are too high there.

 

[andrewf]

The government should eliminate CMHC guarantees and let the free market control prices.

Municipal governments could also eliminate the minimum footage requirements for new builds in subdivisions. There is no reason people should be unable to build a new 900 square foot bungalow.

Our family grew up in one and there were 7 of us in the house. People finished the basements with a rec room, bathroom, and bedrooms. Totally finished that is 1800 square feet......more than enough.

Uhh, the age of building bungalows in the GTA are, shall we say, long passed. Starter homes are stacked townhouses, etc.

 

[sags]

There is lots of vacant land just outside of Toronto. There are subdivisions going up all over the place but they don't build 900 square foot bungalows because of zoning restrictions and profit margins.

Municipal governments have to remove those restrictions and allow people to build affordable small single family homes with finished basements (with a proper escape window) . The restrictions on building are clear examples of NIMBY attitudes. It is the "we don't want small bungalows in our neighborhood and lowering the value of the area" crowd that spawn these subdivision restrictions.

Those can be built on smaller lots that offer more privacy than streets of 2 story homes where second level windows look into each others backyards.

Many people may want a 3,000 square foot 2 storey home with double garage., but they don't need it and can't afford it.

People have treated homes like boat owners. They have "one foot itis"......

 

[andrewf]

There is lots of vacant land just outside of Toronto. There are subdivisions going up all over the place but they don't build 900 square foot bungalows because of zoning restrictions and profit margins.

Municipal governments have to remove those restrictions and allow people to build affordable small single family homes with finished basements (with a proper escape window) . The restrictions on building are clear examples of NIMBY attitudes. It is the "we don't want small bungalows in our neighborhood and lowering the value of the area" crowd that spawn these subdivision restrictions.

Those can be built on smaller lots that offer more privacy than streets of 2 story homes where second level windows look into each others backyards.

Many people may want a 3,000 square foot 2 storey home with double garage., but they don't need it and can't afford it.

People have treated homes like boat owners. They have "one foot itis"......

People don't want to spend the kind of money they would need to in order to get a 900 sqft bungalow at Toronto land prices. They would rather a 1400 sqft townhouse. If both cost $600k, which would you choose to buy, the 900 sqft bungalow or the 1400 sqft townhouse?

 

[birdman]

Bought a nice home in Kelowna in 1983 for 114,000. and I expect it is now worth around $1 or 1.2 million.