I have no plan to eat Airplane Free foods of beef brisket with mashed parsley potatoes with truffle oil, braised lamb shanks and baked cheesecake with pistachio brittle.
Around here, realtors are asking 6%.
The average house is selling for $500k.
Thats $30,000 of the listing.
Houses are selling quite fast, and even if realtors are not making the full 6% on each listing, they are making bank.
And apparently this bubble doesnt seem like it wants to burst for whatever weird reason.
I would be able to, but rent buys me a much nicer place than I could afford to buy, dollar for dollar. Plus, my portfolio has hit that snowball stage where it gets big fast, which is satisfying.
Feels good, right? The obsession with homeownership is overblown, especially for single, childfree people. I don't need to worry about leaving a house to a surviving spouse or kids if anything were to happen to me, so I've always just rented below my means and invested heavily instead of overextending myself to buy a home in ridiculous Toronto.
At some point, I'll move away to a LCOL area, buy a little place outright, and just enjoy the peaceful solitude and nature as I coast into retirement.
Except that rent is ridiculous now. When the avg 1 bed is 2200 it becomes pretty difficult to save and invest for more people so the save the difference between rent and buying to invest and get ahead doesn't really work.
The income piece is a tricky one in Toronto - 1BDs are generally lived in by younger couples or older singles from my experience. Rare to be 20-25 living on your own - this was true even in 2010 when I moved to the city in my early 20s. Most of us had roommates and we were starting our first jobs at $60-100k.
On $1500 v $2200 - the market just isn’t that today. I’m not bullish but I’m not _that_ bearish on the Toronto market.
Pretty much, yeah. I've spent 25 years working, investing, and delaying gratification to earn mine, so you can go straight to hell for all I care.
What's stopping you you from getting yours?
I guess you missed the part where I said I don't even own a home?
I didn't even move out of my parents' home until age 25, fucked around for a few years, and didn't really settle into a decent career until I was 30.
Any advice? I'm in a similar boat. I recieved an inheritance last year but I'm a novice in terms of financial literacy so it's being managed by a broker recommended by family.
Living in a studio apartment and the investments are index funds, like a tech one with Microsoft, Nvidea ect.
Play long on those investments and don't try for short term gains or something like that. Max TFSA and the other tax advantageous accounts and just go about your every day life.
I actually lucked out. 15 years ago wife and I bought a fixer-upper with $5k RRSPs we had saved up. We both worked shit jobs that paid poorly (under 30k each). It was a struggle for 10 years or so. I now pay under $700 dollars a month for my mortgage… cause the struggle was successful in the end.
I still see it as unfair that other Canadians won’t ever be able to do that same… Canada isnt affordable, the Canadian dream has turned into a hopeless nightmare.
Weird. Rent on a 4.5 is a tad more than double my mortgage on a brick 5 bedroom house with half acre of yard.
I have no idea how renting could possibly be a good idea anywhere near here.
The mortgage on that would only be about $100 more and you’d then get equity in the unit.
Less cash flow, but in your case it’s significantly cheaper to buy.
Alternatively, with a mortgage, Fees and taxes = 600/month, mortgage interest (200k@5% pa = 800 pm and opportunity cost on downpayment (25k @ 10%) about 200 more = total ownership cost of around 1600 dollars. Rent is 1200.
I could buy cash, but the math is even worse if you do that. 200k in assets more than pays my rent.
I’d say that currently micro condos don’t have as much resale becasue they are mainly bought by investors and investment has been quashed by high interest rates.
Every property you own has costs not just condo’s. Houses have loads of hidden costs, property taxes are usually more than double that of a condo.
Shelter in general has carrying costs, that gos with all types.
Condos near me have been going up 5-15% every year.
Toronto single bedrooms are in the 700k range.
Condos not appreciating is an ancient idea from when single family homes were affordable for first time buyers.
Condos (apartment style) are always the first to lose. The housing that has come down in the Toronto is condo prices, not crazy amounts yet but they are coming down.
Condos (apartment style) are typically a mixed bag. Newer ones tend to hold value but as they age there’s so many factors that come into play. If you’ve had a bad condo board and fees were low, there’s a good chance you’re gonna get hit with a very large special assessment. Most people are already buying a condo because they can’t afford a house and are tight to their max budget. Having your fees double or 40k assessment can finically ruin someone.
The money is with companies like Brinks. They deliver cash nearly every day. Its why of you want even a few thousand cash the banks want advance warning and can even deny you if you just walk in. If you wanted $50k in cash you would have to go through a company like brinks. There are several steps you need to go through as well. Background/police check, reason why you need it, etc plus a fee to have it delivered.
we have no money this is impossibly out of our reach. like depressingly, almost anxiety causingly so, planning the life required to make it possible, when rents have reach a level where simply surviving is suffocating, causes a downward spiral in most people..
So yeah they do not have a plan, kind of like a whole bunch of Gen X people have no plan for retirement as they realize what it will cost for their children to get a higher education with the current increases and the realization their children are never leaving and they will never get the reprieve their parents got,. and will continue to live in a destructive codependence handicapping the children's ability to detach and be upwardly mobile in society.
its kind of fucked
It’s completely fucked. My dad owns a home off of a single income of counter service for truck parts.
I make more than he ever did at a way more intense and high stress job.
I rent an apartment that gets to 35° in the summer, live in poverty.
this I disagree with, you have the right to vote, express your opinion, and try to change what is happening in the country, try living in a dictatorship, then you will know what NOTHING is Canada is not perfect and this is certainly a difficult time, but WE CAN RECOVER and we need to not allow ourselves to become complacent.
Try living without them, and say that.
I AM certain things are less than perfect, and it sucks, and we as a society need to do something about, but taking for granted some things that are very important, and not universal is a WEAK point of view.. you call them basic rights..but they are not universal on this planet.. and you could lose them at anytime.. APPRECIATE that and build on it using them to better your life
I disagree with the premise of comparing ourselves with countries that don't have basic human rights as a means to say we're not doing so bad. It's the same as saying "well there's starving kids in Africa so your suffering doesn't matter". Our struggles are real and our complaints are valid. Holding our officials accountable AND to a higher standard is perfectly reasonable and you can fuck off if you think it isn't.
thanks for telling me to fuck off, that is super nice and respectful of you
if you go back and read my original statements on this entire issue, I think its pretty fucked..
and I do think we have some serious issues and that it is incredibly hard for young people today to be hopeful, have faith and get ahead.. it needs to be fixed.
Where I take issue is when you say Canada Has NOTHING for you.. break your fucking arm.. see how much it costs you ?
Get someone( or get) pregnant, give birth to a child and all it costs you is parking at the hospital, maybe you decide to go private for some tests because its easier on your schedule
if you look up the Global quality of life index for 2023 Canada ranks anywhere between 3rd and 10th depending who you believe, in over 200 countries
things are imperfect.. there is lots to be improved upon.. but Canada is pretty good place to live, and to quote someone I was speaking to recently... and you can fuck off if you think it isn't.
Your post is so ironic it hurts:
>this country has given me nothing. WAH
>let's compare ourselves to the worst and never strive to do better. Great loser mentality.
Let me know who’s got the loser mentality. Everyone should fight to do better, not expect the country to give them handouts to success.
That’s because it just doesn’t make sense financially. I’m rent controlled at $2.3k in downtown TO in an early 2018 built condo. To buy the same exact unit I’d need to produce a $125k Downpayment and my all in would still be close to $4k/m for a 500 square foot condo. I got into my lease at the top of the market and I know there’s plenty of other renters paying much less for similar spaces.
It’s just not feasible. I wouldn’t be able to save aggressively for retirement like I am now AND I’d have to pray to the gods I don’t get laid off (private sector woo!) because it’s not like I can easily just give my 60 days notice and leave.
Ya agreed I'm in a similar boat. Turns out the best financial decision of my life was that I just happened to move to a new apartment in 2019 just before everything exploded. I managed to get an amazing deal b/c the building was doing major Reno's and had the units priced way below market price even for 2019. I have a pretty big unit, and the same amenities you would have in a typical condo (washer, dryer, AC, and dishwasher) but if anything breaks I don't have to pay to fix it. Comparing what I pay now to buying a place is a complete joke, excluding all the extra costs and just comparing rent to MTG + taxes I could buy a condo that is smaller than where I live now and pay about the same, but even a small shitty house would be much more expensive. I'm more than happy to just ride this out where I am.
There's no problem with renting. Anyone should be able to have a good life and rent forever. But, with rents being so fucking high, it's a massive financial detriment to rent. Basically, our governments have set up a system where if you can own a living space, you should under any circumstance, which is stupid and incentivizes property hoarding.
> our governments have set up a system where if you can own a living space, you should under any circumstance, which is stupid and incentivizes property hoarding.
None of that is true.
Your hypothesis is that homeownership is categorically superior. This is wrong: [https://www.youtube.com/watch?v=Uwl3-jBNEd4](https://www.youtube.com/watch?v=Uwl3-jBNEd4)
Yes, there is one policy that favor homeownership: the principal residence capital gains exemption. However, that's not enough to bias homeownship to "under any circumstance", which is totally wrong.
When wages are stagnant and rent continues to increase year after year at a rate that far outpace wage increases, home ownership is absolutely superior and will be until it's completely unaffordable. My opinion at least.
If you're able to buy a modest home or condo in the next few years, you can likely get a place that will be 900-1500 a month for your mortgage and bills. If you continue to rent and pricing increases continue with their current trajectory, a 1 bedroom apartment could rent for a minimum of $2000 a month. We are quickly approaching a system where any renters will be putting most If not all of their pay cheque into paying rent which leaves no money to save for a down payment on a place.
I would agree that owning isn't always superior if rent prices weren't seemingly an infinitely increasing value. Where I live currently a 1 bedroom apartment in the 90s was going for $500 a month, now in 2024 those same 1 bedrooms are $1500 and up. Given rental prices show no sign of slowing down what are we to draw from this? Are 1 bedrooms in 2054 going to be renting for $3000 a month? It seems insane to suggest but given rental cost history, this seems inevitable. Also given Canadians haven't seen any level of substantial wage increase in over 20 years it seems like we're headed fast towards a country where everyone who doesn't own a home is just living paycheque to paycheque.
>When wages are stagnant and rent continues to increase year after year at a rate that far outpace wage increases, home ownership is absolutely superior and will be until it's completely unaffordable. My opinion at least.
The conclusion doesn't follow. Wages being high or low doesn't make homeownership a better or worse deal. In fact, it should be the other way around if anything since renting involves hiring a de facto property manager (your landlord), and low wages drive down the cost of that landlord.
>If you're able to buy a modest home or condo in the next few years,
Your analysis is totally naive. The largest unrecoverable cost of homeownership is the opportunity cost of the down payment, which wasn't even part of your calculation!
And that's invested down payement that's the reason that renting and owning don't have the stark long term outcomes you're paying. You must consider a renter with the down payment and then assume that that figure is invested in securities.
How do you figure a down payment wasn't part of my calculation? All I see owning a home or place as is just having a place to live I'm not looking at it as an investment to recover cost from. As I said with the way rental costs have been going it seems likely that anyone who doesn't own property in the next 10 years could likely lose any ability to ever save enough to own a place and WILL have most of their money go to paying rent. Which translates to them not being able to save any money for investing or retirement.
If you want to talk about recoverable costs and investments I don't see how any one who keeps renting is supposed to build any real wealth with the way rental prices are going. Unless you already have a 6 figure investment account the 8% return or whatever you could get on the amount you used for a down payment only comes out to a few thousand dollars. Which again with rental prices will quickly just be eaten up by rent increases.
> How do you figure a down payment wasn't part of my calculation?
Because you need to account for the renter's portfolio appreciation. The renter who has 300k invested at the start of their tenancy earns compounding interest of about 5% on that (15k the first year, more the second, etc.). This is compoensates for increasing rents.
> As I said with the way rental costs have been going it seems likely that anyone who doesn't own property in the next 10 years could likely lose any ability to ever save enough to own a place and WILL have most of their money go to paying rent. Which translates to th
Which is wrong when you consider that the renter has an increasing stock portfolio.
> If you want to talk about recoverable costs and investments I don't see how any one who keeps renting is supposed to build any real wealth wi
The stock portfolio that they have is "real wealth".
> Unless you already have a 6 figure investment account the
**You must assume that the renter has a 6 figure investment account already.** If you don't assume that, then your rent-vs-buy analysis is not comparing apples-to-apples. You must assume that the renter and buyer are starting with the exact same net worth.
"The stock portfolio that they have is real wealth"- man props to you if your savy enough in investing that your returns can outpace equity increases enough to make owning not worth it. That being said I think you need to remember most canadians (over 50%) live paycheque to paycheque and just need a place to live. Canadians overwhelmingly do not have stock portfolios their weighing against the cost of a down payment. They just want a place to live.
> man props to you if your savy enough in investing t
You don't need to be savvy. The assumption is that you buy a broad market fund.
> That being said I think you need to remember most canadians (over 50%) live paycheque to paycheque and
We're not talking about those Canadians in this thread. This thread is about whether buying a house or renting a house is a better decision **assuming that you can afford to do either**.
**Obviously, someone with 300k to buy a home is richer than renter with nothing!!**
The conversation at the top of this thread is about renters who could buy, but don't. That's what we're discussing. The question is whether buying is always a better choice than renting **assuming you have the money to do either.**
Why would any wealthy person be incentivized to rent and throw thousands away every month when they could just buy a rental unit outright?
That's my point. The rent is too damn high and that changes incentives and supports ever rising housing values/costs.
> Why would any wealthy person be incentivized to rent and throw thousands away every month when they could just buy a rental unit outright?
This is just financial illiteracy. You should just watch the video I linked.
> The rent is too damn high and that changes incentives and supports ever rising housing values/costs.
Rent is high, but **so are the unrecoverable costs of homeownership.** So your hypothesis that renting is always worse is just naive and ignorant.
Yeah man, homeownership is such a burden and isn't profitable. This is why corporate landlords are buying up rental properties like crazy in the last 5 years. 🙄 Step outside.
Corporate landlords buying up properties is evidence of market efficiency. It disproves your point that markets are biased against one economic substitute.
How the fuck is that market efficiency? 😂 Consolidation of resources is unproductive. Diverse markets with higher rates of decentralized ownership are ALWAYS stronger.
You're talking out of your ass.
I wish I could. I have kids. It’s literally impossible for myself and my partner to get a mortgage though because we don’t collectively make $140,000+/year and neither of us come from rich boomer families that apparently are really common.
Ehh being poor doesn’t mean you have a bad life. It definitely is getting less good though, and with PP or another empathy lacking career politician set to become PM next, things are only going to get much, much worse
Well for starters the current government has increased the deficit more than every other government combined in the history of the country. Also the ever growing list of scandals that get swept under the rug and forgotten. If you don’t already know this you’re either completely ignorant or a bot.
Can you provide a link to the claims on the deficit?
Oh great you’re one of those guys who says “if you don’t already know you’re an idiot”
Or I don’t know and that’s why I’m asking? You’d be a horrible teacher
>and with PP or another empathy lacking career politician set to become PM next, things are only going to get much, much worse
Whatever makes you cope voting for this mess three straight times
Why are you making assumptions?
I only voted for Trudeau the first time. Electoral reform and decriminalizing /legalizing cannabis were big deals to me. I have not since and do not plan to in the future so you don’t have to stay up at night worrying.
I will always take Trudeau over PP though.
You probably couldn't afford it even if you made $140k/year, it's a lot more expensive than just a mortgage payment? Realistically, whatever your mortgage is, double it and that's what it will cost. Unless you luck out in a really cheap area?
Utilities, insurances, taxes, maintenance, etc. It adds up to a ridiculous degree and it's never talked about when you are purchasing your first home. My legal fees cost more than my down payment, and I had 10% down.
House poor is a real thing now in Canada, you are renting and poor, or you have a mortgage and that's your retirement plan. You won't realize how little money you actually have until you have a mortgage.
I disagree fully. You’re building equity with a mortgage. You *have* all that money to some extent as well if need be.
I’m paying some asshole’s mortgage right now and he literally does nothing for this property
Thats what happens when renting is cheaper than owning.
I'm dumping money into my TFSA, FHSA and RRSP and will buy when the mortgage isn't double my rent (plus property tax, insurance, higher bills).
And if it never gets to that point even if i have a 100k downpayment............i'll just keep renting.
There is nothing wrong with renting.
Pretty much
You can buy and hope the appreciation and equity affords you a retirement cause there won't be any savings otherwise
or
Rent and put the difference into investing and hope the appreciation affords you a retirement and hopefully a continued place to live
Me... I'll take my investments and head for the cheaper places like Costa Rica and Thailand...
Most people I know didn’t buy for the equity in retirement, but for a lower cost of living.
Even then, if the market does great, cost of living goes up and so does the equity, but worst case the market crashes and I still have no housing costs..
So you can get that equity so you can retire. See above.
Sure... you can hold onto that house you bought now and stay in it forever - come see all the shit shacks and Vancouver specials that have never been changed because the owners can't avoid anything other than the mortgage. They too have everything sunk into the house for the day they sell. Yet... when they do... they have to move to Fort St John or somewhere... or just up and leave. See above.
I feel the same way. Started renting like 5 years ago and I always told myself it was a waste of money. Now? My sub $1500 rent seems like I've struck gold. Even the most basic house would be well over $3000 a month with a decent down payment. That's just the mortgage...
>I'm dumping money into my TFSA, FHSA and RRSP and will buy when the mortgage isn't double my rent (plus property tax, insurance, higher bills).
Good luck with that. I bought 14 years ago even then my costs doubled compared to when i was renting.
I have no plans to buy a platinum Philippe Patek, ironically, the same price as an absolute dump of a Canadian 0 bedroom hovel shack where you shit in a bucket.
I would have no problem with renting all my life if the landlords weren’t so shitty. As soon as your affordable appartment block is sold it’s pretty much over, the new landlord will find a way to kick you out to rent it 700$ more a month.
That's because those of us who are intelligent understand that the market is in a bubble. It's actually irrational what is happening some areas of the country. No intelligent person seeking a place to own find live in would look at a Toroto 500 sq foot Condo for 600k and think yes. This is a good buy.
If it's not a bubble then there are deep rooted predatory systemic issues and millenials and gen z are basically forced out of that region of they want any chance at ownership and retirement
You do know millennials are 28 and older… as one of the youngest millennials 93’ born, majority of my friends own real estate. Now Gen Z and following generations are fucked.
Your subjective experience is not an accurate representation of reality, saying "the majority of my friends" doesn't really mean anything unfortunately. Although you're right that Gen Z is pretty fucked.
Here's the data. At age 26 the following generations had these percentages of home ownership
Boomers - 35.6%
GenX - 32.5%
Millenials - 31%
Gen Z - 26%
This rhetoric is exactly what makes me believe we are truly in a bubble lol. When everybody believes it can’t be possible based on only some of the market fundamentals, that’s when you need to worry.
Imo, the only fundamental market factor that matters is price to income.
If you’re starving to death and someone offers you an apple for the price of $3, you’re still starving if you don’t have the 3 bucks.
It was a bubble when I bought in 04 that was going to pop any moment. It was a bubble when we sold that place for 4X what we paid for it a dozen years later and bought our dream home. That was also in a bubble despite the place now having a market value over double what we paid. We have people and realtors walk down our street in the weekends asking if anyone is willing to sell. That bubble, it’s going to pop *any day now*. Go ask chicken little, they’ll tell you!
I never said anything about deportation.
Are you arguing that this is the last change to buy the aforementioned condo? Like you think the 500 sq ft 600k condo is going to go up in price from here?
Looking at our population growth and our housing supply it seems likely there will be upward pressure on prices.
Nobody can predict the future, so the opposite could be true, but it seems price appreciation is a reasonable expectation.
Is it really that hard to grasp that as people move here they are likely doing so with the intent to not be homeless, and as such contribute to housing demand?
To some extent, though most seem to end up in premises that your average Canadian would actively avoid. I'm not interested in sharing a bunk bed in some grotty basement.
Very simply yes. Dollar will just be worth less, those with assets like real estate will always come out ahead. People would say my 2 bedroom townhome in the suburbs for $650k 4 years ago was insane.. but now it’s worth over $1m.
A two bedroom townhome in the suburbs is infinitely more attractive than a bachelor apartment though. The 650k 1 bedroom is already worth 50k less than it was 1 year ago.
I really don't understand how you can say a 600k space which is large enough for one person will see huge price appreciation. Unless you're buying to rent it out as an investment, who can actually afford this?
As a first time home buyer, you show up with 30k, 5% down, you're looking at over $3500 a month in mortgage alone.
Consider these numbers..The average person in toronto makes about 60k a year, which is 3461 per month, so average people can't afford it.
The top 25% salary earners make an average of $76,700 which would be \~$4750. Can these people afford it? Not really, unless you consider \~$1250 a month enough to cover food, bills, transportation, clothing, entertainment, and adding to emergency or retirement savings.
What about 100k?
$6137 monthly take home, minus mortgage would be $2637 a month cash to cover the rest.
This is about where the place becomes actually affordable
This is the core of the problem. The only context where any of these units are affordable is only for people making at least 80k a year and even then, it's not exactly a good buy for those people.
You just show more and more people into them. I don't you grasped just how dire canada's future is yet. I would flee to the states myself if I didn't need nearly half a decade of training to continue my profession.
Might still be worth it. We are still in the prosperous fat cat times.
Thing is, it’s unlikely that prices will drop much more from here. Is it a good buy? Well depends on if you want to stay here. But we won’t be seeing 300k condos ever again.
Prices have already been dropping.
Listings are going up, sales are still slumping.
I don't think there's much evidence to suggest prices will not continue on the downtrend they're already on.
Rate cuts were the justification, however the most recent cut did not budge a single thing. Where are all the buyers who were allegedly waiting for the cut?
I agree they probably won't see 300k any time soon but it's hardly out of the question.
Few people want to buy a Bachelor apartment as their primary residence. These are investment properties designed for the purpose of rentals.
Dude - there have been folks saying this exact same thing for the last 30 years. Trust me... I've heard and read it over and over.
Whatever needs to happen to give people a chance isn't going to be a slow leak... its going to take something big that just shifts the entire ground and scares people completely away from RE as an investment. Until then... costs are going to be too high, salaries too low.
>folks saying this exact same thing for the last 30 years
People say this thing constantly today, but the thing is prices have shot up like 70-100%+ in 3 years. Things are drastically different today than they were 30, 20 or even 10 years ago. Past performance is not an indicator of the future.
People also said all throughout late 2022 and 2023 that interest rates would plummet and the housing market would explode upwards again, but what has happened? Nothing even close, rates barely moved and the housing market dipped.
Watched it all from 2000 on... 'it can't go any higher!' 'Its a bubble' etc etc and yet... its never changed. Yes... its all Musical Chairs and don't be the last one holding the bag but Musical Chairs doesn't end with a slow fade out... its sudden and dramatic and thats not happening. It will eventually end... but if you're hoping for something to help in the next 5 or 10 years... it won't. Your salary will move in low fractional percentages while housing will keep on moving along...
Again, the past 4-5 years have drastically changed the housing landscape. To suggest that the 600k, 500 square foot condo is going to continue moving up in price is something else. People would love you to believe that it will be worth 800k in a year or two. Who is going to buy this? who can actually afford a unit like that?
The average home price in 2019 was 520-540k.
The average home price in 2022 was 720-840k.
The average price of houses across the country in this 3 year period shot up around 65% but sure, that data doesn't mean anything.
Housing always go up right? so presumably in the next few years the average home price should be 1 million right?
That seems to be the point you're trying to make.
In 2000 in Vancouver you couldn't give a condo away with free TVs because of the leaky condo crisis. House prices were what people considered ridiculous then but now - they'd call them bargain basement. It all shot up.
The point I'm making is that what you're seeing today isn't telling you what you want it to. Nothing is going to change so much in 1-2 years that there's going to be flood of relief and those that can't buy today will be able to then. The numbers will fluctuate but the sentiment will remain - 'it can't go higher', 'it must be a bubble', 'look at the charts - its weakening!' etc etc. Its all the same... the changes needed have to be gigantic and obvious.
No plans because no money. Unless I'm looking at a house that's going to require just as much money put into it as purchasing it, I likely need a 60k deposit and/or an income >$100k a year.
Besides money, there is also the issue of the career landscape shifting towards back in office and short term contracts. Unless you are a senior employee with highly demanded skills, you have absolutely no say in where you want a live if you want a decent shot at getting any job.
>“The rental sector is not immune to the significant affordability challenges stemming from Canada’s acute housing shortage. High mortgage rates have made it difficult for many to purchase a home, forcing some to move into, or remain longer than planned, in the rental market,” Phil Soper, president and chief executive officer of Royal LePage, said in the press release.
Yes Phil, It's those pesky interest rates and lack of supply. Nothing to do with the price.
Meanwhile, in the most populated city in the country:
[At the end of May, Greater Toronto had the highest number of condos for sale for any month in recent history with 8,183 apartment units on the market. The last highest number of active condo listings was 7,600 in October 2020.](https://www.thestar.com/real-estate/the-condo-market-right-now-is-a-ghost-town-toronto-has-a-record-number-of/article_60f20a98-24e0-11ef-8d75-376ea6f76eaf.html)
It's not that I don't "plan to" it's that even when I'm trying to save for a simple condo, on my own without a SO or family help, the inflation rises much faster than my pay raise and ability to save.
I'm WFH and I was glad in the beginning because it saved me money on a train/metro pass, on work clothes, makeup, etc. Today, with my rent increase, food increase, general increase of everything I have less money at the end of the month.
So really, "don't plan to" needs to be worded as "can't afford to" without a SO or family help.
My rent is much higher than my friends' mortgages who bought houses a few years ago. I rent a 1 bedroom.
All the realtors that are hyping up the hot market that's about to hit because of built up inventory and lower rates will soon default on their bmw payments when nobody buys anything.
I also have no plans to buy a private jet
Me neither! Better to just horde the millions in the bank account
Yeah, Lack of ability != Lack of plans
I have no plan to eat Airplane Free foods of beef brisket with mashed parsley potatoes with truffle oil, braised lamb shanks and baked cheesecake with pistachio brittle.
Why not? A private jet is way cheaper than a Brampton townhouse
Or a yacht.
Around here, realtors are asking 6%. The average house is selling for $500k. Thats $30,000 of the listing. Houses are selling quite fast, and even if realtors are not making the full 6% on each listing, they are making bank. And apparently this bubble doesnt seem like it wants to burst for whatever weird reason.
“No plans to”. Like they will just keep their millions in the bank? Wouldn’t “no ability to” be more accurate?
I have no plans to buy a Porsche in the near term.
I have no plans to buy a yacht myself.
And I suppose I won't get the private jet this year.
Porsche also became a company that has no plans to sell you the car that you might truly *want* too.
Actually I'm buying one cuz I give up on house lol
I have no plans to buy a mansion in the next few years
Also, they don’t want to buy a 1 bed shoebox for 800k. If you are going to live in a 1 bed shoebox, might as well rent it.
I would be able to, but rent buys me a much nicer place than I could afford to buy, dollar for dollar. Plus, my portfolio has hit that snowball stage where it gets big fast, which is satisfying.
Feels good, right? The obsession with homeownership is overblown, especially for single, childfree people. I don't need to worry about leaving a house to a surviving spouse or kids if anything were to happen to me, so I've always just rented below my means and invested heavily instead of overextending myself to buy a home in ridiculous Toronto. At some point, I'll move away to a LCOL area, buy a little place outright, and just enjoy the peaceful solitude and nature as I coast into retirement.
Except that rent is ridiculous now. When the avg 1 bed is 2200 it becomes pretty difficult to save and invest for more people so the save the difference between rent and buying to invest and get ahead doesn't really work.
Renting at $2200 is significantly better than owning the same place at $3500-$4500.
Better yet should be renting at 1500 and owning at 2200. But both worlds are out of wack these days for the average Canadian income.
The income piece is a tricky one in Toronto - 1BDs are generally lived in by younger couples or older singles from my experience. Rare to be 20-25 living on your own - this was true even in 2010 when I moved to the city in my early 20s. Most of us had roommates and we were starting our first jobs at $60-100k. On $1500 v $2200 - the market just isn’t that today. I’m not bullish but I’m not _that_ bearish on the Toronto market.
"I got mine, fuck you"
Pretty much, yeah. I've spent 25 years working, investing, and delaying gratification to earn mine, so you can go straight to hell for all I care. What's stopping you you from getting yours?
Poor credit and financial decisions in my early 20's, means I wasn't able to buy a home in my 30's, and now I never will. 🤷♂️ It is what it is.
I guess you missed the part where I said I don't even own a home? I didn't even move out of my parents' home until age 25, fucked around for a few years, and didn't really settle into a decent career until I was 30.
Any advice? I'm in a similar boat. I recieved an inheritance last year but I'm a novice in terms of financial literacy so it's being managed by a broker recommended by family. Living in a studio apartment and the investments are index funds, like a tech one with Microsoft, Nvidea ect.
Play long on those investments and don't try for short term gains or something like that. Max TFSA and the other tax advantageous accounts and just go about your every day life.
Thanks, appreciate it
I actually lucked out. 15 years ago wife and I bought a fixer-upper with $5k RRSPs we had saved up. We both worked shit jobs that paid poorly (under 30k each). It was a struggle for 10 years or so. I now pay under $700 dollars a month for my mortgage… cause the struggle was successful in the end. I still see it as unfair that other Canadians won’t ever be able to do that same… Canada isnt affordable, the Canadian dream has turned into a hopeless nightmare.
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How do you check that on how much you contributed ? Is there a way to figure that out in wealthsimple ?
Weird. Rent on a 4.5 is a tad more than double my mortgage on a brick 5 bedroom house with half acre of yard. I have no idea how renting could possibly be a good idea anywhere near here.
I pay 1200 for a condo that would cost me 220k to buy.
The mortgage on that would only be about $100 more and you’d then get equity in the unit. Less cash flow, but in your case it’s significantly cheaper to buy.
Alternatively, with a mortgage, Fees and taxes = 600/month, mortgage interest (200k@5% pa = 800 pm and opportunity cost on downpayment (25k @ 10%) about 200 more = total ownership cost of around 1600 dollars. Rent is 1200. I could buy cash, but the math is even worse if you do that. 200k in assets more than pays my rent.
Did you factor in condo fees and upkeep? Most condos have next to no resale
I’d say that currently micro condos don’t have as much resale becasue they are mainly bought by investors and investment has been quashed by high interest rates. Every property you own has costs not just condo’s. Houses have loads of hidden costs, property taxes are usually more than double that of a condo. Shelter in general has carrying costs, that gos with all types.
Condos near me have been going up 5-15% every year. Toronto single bedrooms are in the 700k range. Condos not appreciating is an ancient idea from when single family homes were affordable for first time buyers.
Condos (apartment style) are always the first to lose. The housing that has come down in the Toronto is condo prices, not crazy amounts yet but they are coming down. Condos (apartment style) are typically a mixed bag. Newer ones tend to hold value but as they age there’s so many factors that come into play. If you’ve had a bad condo board and fees were low, there’s a good chance you’re gonna get hit with a very large special assessment. Most people are already buying a condo because they can’t afford a house and are tight to their max budget. Having your fees double or 40k assessment can finically ruin someone.
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Ya, that’s for sure what it is. Rising interest rates is what killed demand, it wasn’t high prices.
Thats good
> it wasn’t high prices with wages being what they are, I don't understand how it wasn't prices.
Because people were buying right up until interest rates were raised.
Bro it’s the million bucks not the 7%
Oh ya I forgot the progressive duo deregulated banks, how great to have a reward for existing asset holders when productivity investment is so low.
We can plan a bank robbery. Do you think a branch has enough for a down payment?
No. You would be lucky to even get $50k out of one.
So where is all this money they are taking about.
The money is with companies like Brinks. They deliver cash nearly every day. Its why of you want even a few thousand cash the banks want advance warning and can even deny you if you just walk in. If you wanted $50k in cash you would have to go through a company like brinks. There are several steps you need to go through as well. Background/police check, reason why you need it, etc plus a fee to have it delivered.
Damn so we need to hit Brinks. Got it.
[Its here most likely](http://media1.tenor.com/m/pjsVPqOlLwMAAAAd/computer-technology.gif)
we have no money this is impossibly out of our reach. like depressingly, almost anxiety causingly so, planning the life required to make it possible, when rents have reach a level where simply surviving is suffocating, causes a downward spiral in most people.. So yeah they do not have a plan, kind of like a whole bunch of Gen X people have no plan for retirement as they realize what it will cost for their children to get a higher education with the current increases and the realization their children are never leaving and they will never get the reprieve their parents got,. and will continue to live in a destructive codependence handicapping the children's ability to detach and be upwardly mobile in society. its kind of fucked
It’s completely fucked. My dad owns a home off of a single income of counter service for truck parts. I make more than he ever did at a way more intense and high stress job. I rent an apartment that gets to 35° in the summer, live in poverty.
Im sorry its like this man, I really am.
This country has given millennials NOTHING.
this I disagree with, you have the right to vote, express your opinion, and try to change what is happening in the country, try living in a dictatorship, then you will know what NOTHING is Canada is not perfect and this is certainly a difficult time, but WE CAN RECOVER and we need to not allow ourselves to become complacent.
"You have basic human rights" is a pretty fucking weak argument.
Try living without them, and say that. I AM certain things are less than perfect, and it sucks, and we as a society need to do something about, but taking for granted some things that are very important, and not universal is a WEAK point of view.. you call them basic rights..but they are not universal on this planet.. and you could lose them at anytime.. APPRECIATE that and build on it using them to better your life
I disagree with the premise of comparing ourselves with countries that don't have basic human rights as a means to say we're not doing so bad. It's the same as saying "well there's starving kids in Africa so your suffering doesn't matter". Our struggles are real and our complaints are valid. Holding our officials accountable AND to a higher standard is perfectly reasonable and you can fuck off if you think it isn't.
thanks for telling me to fuck off, that is super nice and respectful of you if you go back and read my original statements on this entire issue, I think its pretty fucked.. and I do think we have some serious issues and that it is incredibly hard for young people today to be hopeful, have faith and get ahead.. it needs to be fixed. Where I take issue is when you say Canada Has NOTHING for you.. break your fucking arm.. see how much it costs you ? Get someone( or get) pregnant, give birth to a child and all it costs you is parking at the hospital, maybe you decide to go private for some tests because its easier on your schedule if you look up the Global quality of life index for 2023 Canada ranks anywhere between 3rd and 10th depending who you believe, in over 200 countries things are imperfect.. there is lots to be improved upon.. but Canada is pretty good place to live, and to quote someone I was speaking to recently... and you can fuck off if you think it isn't.
>This country has given millennials NOTHING. Sent from my iPhone Honestly, trying traveling the world some time.
Yeah let's compare ourselves to the worst and never strive to do better. Great loser mentality.
Your post is so ironic it hurts: >this country has given me nothing. WAH >let's compare ourselves to the worst and never strive to do better. Great loser mentality. Let me know who’s got the loser mentality. Everyone should fight to do better, not expect the country to give them handouts to success.
Honestly if you think the expectation of working services and infrastructure are "handouts" then you're a fucking idiot.
That’s because it just doesn’t make sense financially. I’m rent controlled at $2.3k in downtown TO in an early 2018 built condo. To buy the same exact unit I’d need to produce a $125k Downpayment and my all in would still be close to $4k/m for a 500 square foot condo. I got into my lease at the top of the market and I know there’s plenty of other renters paying much less for similar spaces. It’s just not feasible. I wouldn’t be able to save aggressively for retirement like I am now AND I’d have to pray to the gods I don’t get laid off (private sector woo!) because it’s not like I can easily just give my 60 days notice and leave.
Ya agreed I'm in a similar boat. Turns out the best financial decision of my life was that I just happened to move to a new apartment in 2019 just before everything exploded. I managed to get an amazing deal b/c the building was doing major Reno's and had the units priced way below market price even for 2019. I have a pretty big unit, and the same amenities you would have in a typical condo (washer, dryer, AC, and dishwasher) but if anything breaks I don't have to pay to fix it. Comparing what I pay now to buying a place is a complete joke, excluding all the extra costs and just comparing rent to MTG + taxes I could buy a condo that is smaller than where I live now and pay about the same, but even a small shitty house would be much more expensive. I'm more than happy to just ride this out where I am.
"but you are throwing money away by paying some else' mortgage!" ;)
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Is this really what most Canadians think when they look at today’s RE market?
Yes, and what he's telling you is that he got more than 165k of value, and would have spent more in **unrecoverable** costs had he bought a house.
That’s still extremely high, even if rent controlled. That’s more than I pay in mortgage payments for a 3 bed townhouse purchased in 2019.
Yup well I was still a wee university student baby back in 2019 LOL. Wish I could've been born about 10-15 years earlier but fate chose otherwise.
I too plan on not being a millionaire in the near term
There's no problem with renting. Anyone should be able to have a good life and rent forever. But, with rents being so fucking high, it's a massive financial detriment to rent. Basically, our governments have set up a system where if you can own a living space, you should under any circumstance, which is stupid and incentivizes property hoarding.
> our governments have set up a system where if you can own a living space, you should under any circumstance, which is stupid and incentivizes property hoarding. None of that is true.
Care to share why you think I'm wrong?
Your hypothesis is that homeownership is categorically superior. This is wrong: [https://www.youtube.com/watch?v=Uwl3-jBNEd4](https://www.youtube.com/watch?v=Uwl3-jBNEd4) Yes, there is one policy that favor homeownership: the principal residence capital gains exemption. However, that's not enough to bias homeownship to "under any circumstance", which is totally wrong.
When wages are stagnant and rent continues to increase year after year at a rate that far outpace wage increases, home ownership is absolutely superior and will be until it's completely unaffordable. My opinion at least. If you're able to buy a modest home or condo in the next few years, you can likely get a place that will be 900-1500 a month for your mortgage and bills. If you continue to rent and pricing increases continue with their current trajectory, a 1 bedroom apartment could rent for a minimum of $2000 a month. We are quickly approaching a system where any renters will be putting most If not all of their pay cheque into paying rent which leaves no money to save for a down payment on a place. I would agree that owning isn't always superior if rent prices weren't seemingly an infinitely increasing value. Where I live currently a 1 bedroom apartment in the 90s was going for $500 a month, now in 2024 those same 1 bedrooms are $1500 and up. Given rental prices show no sign of slowing down what are we to draw from this? Are 1 bedrooms in 2054 going to be renting for $3000 a month? It seems insane to suggest but given rental cost history, this seems inevitable. Also given Canadians haven't seen any level of substantial wage increase in over 20 years it seems like we're headed fast towards a country where everyone who doesn't own a home is just living paycheque to paycheque.
>When wages are stagnant and rent continues to increase year after year at a rate that far outpace wage increases, home ownership is absolutely superior and will be until it's completely unaffordable. My opinion at least. The conclusion doesn't follow. Wages being high or low doesn't make homeownership a better or worse deal. In fact, it should be the other way around if anything since renting involves hiring a de facto property manager (your landlord), and low wages drive down the cost of that landlord. >If you're able to buy a modest home or condo in the next few years, Your analysis is totally naive. The largest unrecoverable cost of homeownership is the opportunity cost of the down payment, which wasn't even part of your calculation! And that's invested down payement that's the reason that renting and owning don't have the stark long term outcomes you're paying. You must consider a renter with the down payment and then assume that that figure is invested in securities.
How do you figure a down payment wasn't part of my calculation? All I see owning a home or place as is just having a place to live I'm not looking at it as an investment to recover cost from. As I said with the way rental costs have been going it seems likely that anyone who doesn't own property in the next 10 years could likely lose any ability to ever save enough to own a place and WILL have most of their money go to paying rent. Which translates to them not being able to save any money for investing or retirement. If you want to talk about recoverable costs and investments I don't see how any one who keeps renting is supposed to build any real wealth with the way rental prices are going. Unless you already have a 6 figure investment account the 8% return or whatever you could get on the amount you used for a down payment only comes out to a few thousand dollars. Which again with rental prices will quickly just be eaten up by rent increases.
> How do you figure a down payment wasn't part of my calculation? Because you need to account for the renter's portfolio appreciation. The renter who has 300k invested at the start of their tenancy earns compounding interest of about 5% on that (15k the first year, more the second, etc.). This is compoensates for increasing rents. > As I said with the way rental costs have been going it seems likely that anyone who doesn't own property in the next 10 years could likely lose any ability to ever save enough to own a place and WILL have most of their money go to paying rent. Which translates to th Which is wrong when you consider that the renter has an increasing stock portfolio. > If you want to talk about recoverable costs and investments I don't see how any one who keeps renting is supposed to build any real wealth wi The stock portfolio that they have is "real wealth". > Unless you already have a 6 figure investment account the **You must assume that the renter has a 6 figure investment account already.** If you don't assume that, then your rent-vs-buy analysis is not comparing apples-to-apples. You must assume that the renter and buyer are starting with the exact same net worth.
"The stock portfolio that they have is real wealth"- man props to you if your savy enough in investing that your returns can outpace equity increases enough to make owning not worth it. That being said I think you need to remember most canadians (over 50%) live paycheque to paycheque and just need a place to live. Canadians overwhelmingly do not have stock portfolios their weighing against the cost of a down payment. They just want a place to live.
> man props to you if your savy enough in investing t You don't need to be savvy. The assumption is that you buy a broad market fund. > That being said I think you need to remember most canadians (over 50%) live paycheque to paycheque and We're not talking about those Canadians in this thread. This thread is about whether buying a house or renting a house is a better decision **assuming that you can afford to do either**.
Are you on fucking crack? How many renters do you know that have 300k in investments?
**Obviously, someone with 300k to buy a home is richer than renter with nothing!!** The conversation at the top of this thread is about renters who could buy, but don't. That's what we're discussing. The question is whether buying is always a better choice than renting **assuming you have the money to do either.**
Why would any wealthy person be incentivized to rent and throw thousands away every month when they could just buy a rental unit outright? That's my point. The rent is too damn high and that changes incentives and supports ever rising housing values/costs.
> Why would any wealthy person be incentivized to rent and throw thousands away every month when they could just buy a rental unit outright? This is just financial illiteracy. You should just watch the video I linked. > The rent is too damn high and that changes incentives and supports ever rising housing values/costs. Rent is high, but **so are the unrecoverable costs of homeownership.** So your hypothesis that renting is always worse is just naive and ignorant.
Yeah man, homeownership is such a burden and isn't profitable. This is why corporate landlords are buying up rental properties like crazy in the last 5 years. 🙄 Step outside.
Corporate landlords buying up properties is evidence of market efficiency. It disproves your point that markets are biased against one economic substitute.
How the fuck is that market efficiency? 😂 Consolidation of resources is unproductive. Diverse markets with higher rates of decentralized ownership are ALWAYS stronger. You're talking out of your ass.
Just watch the video. You're stimply wrong. And market efficiency is induced by market participation.
You guys don’t have plans to do the impossible?
I wish I could. I have kids. It’s literally impossible for myself and my partner to get a mortgage though because we don’t collectively make $140,000+/year and neither of us come from rich boomer families that apparently are really common.
Man this is why when my gf tells me she wants kids I kinda chuckle and dodge the conversation. I really don't want to raise kids in poverty
Ehh being poor doesn’t mean you have a bad life. It definitely is getting less good though, and with PP or another empathy lacking career politician set to become PM next, things are only going to get much, much worse
No it wont, we are living under the most corrupt, out of touch, and irresponsible government Canada has EVER seen.
By what metric?
Well for starters the current government has increased the deficit more than every other government combined in the history of the country. Also the ever growing list of scandals that get swept under the rug and forgotten. If you don’t already know this you’re either completely ignorant or a bot.
Can you provide a link to the claims on the deficit? Oh great you’re one of those guys who says “if you don’t already know you’re an idiot” Or I don’t know and that’s why I’m asking? You’d be a horrible teacher
>and with PP or another empathy lacking career politician set to become PM next, things are only going to get much, much worse Whatever makes you cope voting for this mess three straight times
Why are you making assumptions? I only voted for Trudeau the first time. Electoral reform and decriminalizing /legalizing cannabis were big deals to me. I have not since and do not plan to in the future so you don’t have to stay up at night worrying. I will always take Trudeau over PP though.
> I really don't want to raise kids in poverty Even the Bravo pasta sauce is expensive now! Wtf?!
You probably couldn't afford it even if you made $140k/year, it's a lot more expensive than just a mortgage payment? Realistically, whatever your mortgage is, double it and that's what it will cost. Unless you luck out in a really cheap area? Utilities, insurances, taxes, maintenance, etc. It adds up to a ridiculous degree and it's never talked about when you are purchasing your first home. My legal fees cost more than my down payment, and I had 10% down. House poor is a real thing now in Canada, you are renting and poor, or you have a mortgage and that's your retirement plan. You won't realize how little money you actually have until you have a mortgage.
I disagree fully. You’re building equity with a mortgage. You *have* all that money to some extent as well if need be. I’m paying some asshole’s mortgage right now and he literally does nothing for this property
Thats what happens when renting is cheaper than owning. I'm dumping money into my TFSA, FHSA and RRSP and will buy when the mortgage isn't double my rent (plus property tax, insurance, higher bills). And if it never gets to that point even if i have a 100k downpayment............i'll just keep renting. There is nothing wrong with renting.
Pretty much You can buy and hope the appreciation and equity affords you a retirement cause there won't be any savings otherwise or Rent and put the difference into investing and hope the appreciation affords you a retirement and hopefully a continued place to live Me... I'll take my investments and head for the cheaper places like Costa Rica and Thailand...
Most people I know didn’t buy for the equity in retirement, but for a lower cost of living. Even then, if the market does great, cost of living goes up and so does the equity, but worst case the market crashes and I still have no housing costs..
Keep in mind that when you sell... you still have to live somewhere so its either buy something - most likely even smaller and more expensive or rent.
Why would I ever sell though?
So you can get that equity so you can retire. See above. Sure... you can hold onto that house you bought now and stay in it forever - come see all the shit shacks and Vancouver specials that have never been changed because the owners can't avoid anything other than the mortgage. They too have everything sunk into the house for the day they sell. Yet... when they do... they have to move to Fort St John or somewhere... or just up and leave. See above.
When it’s paid off I can easily retire though, that’s my point. A few grand in taxes, utilities and maintenance.
And whats going to pay for your Long Term Care?
Unless I’m palliative I’ll be in my home until I die, in that case I’d likely not be around long and have a dnr.
You're starting to get it. Now what do you do with your partner?
That's what children are for, duh!
I feel the same way. Started renting like 5 years ago and I always told myself it was a waste of money. Now? My sub $1500 rent seems like I've struck gold. Even the most basic house would be well over $3000 a month with a decent down payment. That's just the mortgage...
>I'm dumping money into my TFSA, FHSA and RRSP and will buy when the mortgage isn't double my rent (plus property tax, insurance, higher bills). Good luck with that. I bought 14 years ago even then my costs doubled compared to when i was renting.
Oh I know, but that's kind of my point. Buying doesn't make sense for everyone but for some reason everyone is obsessed with buying.
"Most renters can't afford to buy a home" Fixed it.
Shocked, I tell yee, shocked!!!
And here's your reworded daily reminder!
I have no plans to buy a platinum Philippe Patek, ironically, the same price as an absolute dump of a Canadian 0 bedroom hovel shack where you shit in a bucket.
I would have no problem with renting all my life if the landlords weren’t so shitty. As soon as your affordable appartment block is sold it’s pretty much over, the new landlord will find a way to kick you out to rent it 700$ more a month.
That's because those of us who are intelligent understand that the market is in a bubble. It's actually irrational what is happening some areas of the country. No intelligent person seeking a place to own find live in would look at a Toroto 500 sq foot Condo for 600k and think yes. This is a good buy.
I’ve been hearing this “it’s a bubble!” Stuff since the 90s. What if it’s not a bubble?
If it's not a bubble then there are deep rooted predatory systemic issues and millenials and gen z are basically forced out of that region of they want any chance at ownership and retirement
You do know millennials are 28 and older… as one of the youngest millennials 93’ born, majority of my friends own real estate. Now Gen Z and following generations are fucked.
Your subjective experience is not an accurate representation of reality, saying "the majority of my friends" doesn't really mean anything unfortunately. Although you're right that Gen Z is pretty fucked. Here's the data. At age 26 the following generations had these percentages of home ownership Boomers - 35.6% GenX - 32.5% Millenials - 31% Gen Z - 26%
This rhetoric is exactly what makes me believe we are truly in a bubble lol. When everybody believes it can’t be possible based on only some of the market fundamentals, that’s when you need to worry. Imo, the only fundamental market factor that matters is price to income. If you’re starving to death and someone offers you an apple for the price of $3, you’re still starving if you don’t have the 3 bucks.
It was a bubble when I bought in 04 that was going to pop any moment. It was a bubble when we sold that place for 4X what we paid for it a dozen years later and bought our dream home. That was also in a bubble despite the place now having a market value over double what we paid. We have people and realtors walk down our street in the weekends asking if anyone is willing to sell. That bubble, it’s going to pop *any day now*. Go ask chicken little, they’ll tell you!
Its sadly less a bubble and more a last call. Unless you think we are actually going to deport people.
I never said anything about deportation. Are you arguing that this is the last change to buy the aforementioned condo? Like you think the 500 sq ft 600k condo is going to go up in price from here?
Looking at our population growth and our housing supply it seems likely there will be upward pressure on prices. Nobody can predict the future, so the opposite could be true, but it seems price appreciation is a reasonable expectation.
Ah, yes, all those international students who had to fudge the 10k GIC are all lined up buying 800k Toronto condos.
Is it really that hard to grasp that as people move here they are likely doing so with the intent to not be homeless, and as such contribute to housing demand?
To some extent, though most seem to end up in premises that your average Canadian would actively avoid. I'm not interested in sharing a bunk bed in some grotty basement.
Very simply yes. Dollar will just be worth less, those with assets like real estate will always come out ahead. People would say my 2 bedroom townhome in the suburbs for $650k 4 years ago was insane.. but now it’s worth over $1m.
A two bedroom townhome in the suburbs is infinitely more attractive than a bachelor apartment though. The 650k 1 bedroom is already worth 50k less than it was 1 year ago. I really don't understand how you can say a 600k space which is large enough for one person will see huge price appreciation. Unless you're buying to rent it out as an investment, who can actually afford this? As a first time home buyer, you show up with 30k, 5% down, you're looking at over $3500 a month in mortgage alone. Consider these numbers..The average person in toronto makes about 60k a year, which is 3461 per month, so average people can't afford it. The top 25% salary earners make an average of $76,700 which would be \~$4750. Can these people afford it? Not really, unless you consider \~$1250 a month enough to cover food, bills, transportation, clothing, entertainment, and adding to emergency or retirement savings. What about 100k? $6137 monthly take home, minus mortgage would be $2637 a month cash to cover the rest. This is about where the place becomes actually affordable This is the core of the problem. The only context where any of these units are affordable is only for people making at least 80k a year and even then, it's not exactly a good buy for those people.
You just show more and more people into them. I don't you grasped just how dire canada's future is yet. I would flee to the states myself if I didn't need nearly half a decade of training to continue my profession. Might still be worth it. We are still in the prosperous fat cat times.
Thing is, it’s unlikely that prices will drop much more from here. Is it a good buy? Well depends on if you want to stay here. But we won’t be seeing 300k condos ever again.
Prices have already been dropping. Listings are going up, sales are still slumping. I don't think there's much evidence to suggest prices will not continue on the downtrend they're already on. Rate cuts were the justification, however the most recent cut did not budge a single thing. Where are all the buyers who were allegedly waiting for the cut? I agree they probably won't see 300k any time soon but it's hardly out of the question. Few people want to buy a Bachelor apartment as their primary residence. These are investment properties designed for the purpose of rentals.
Dude - there have been folks saying this exact same thing for the last 30 years. Trust me... I've heard and read it over and over. Whatever needs to happen to give people a chance isn't going to be a slow leak... its going to take something big that just shifts the entire ground and scares people completely away from RE as an investment. Until then... costs are going to be too high, salaries too low.
>folks saying this exact same thing for the last 30 years People say this thing constantly today, but the thing is prices have shot up like 70-100%+ in 3 years. Things are drastically different today than they were 30, 20 or even 10 years ago. Past performance is not an indicator of the future. People also said all throughout late 2022 and 2023 that interest rates would plummet and the housing market would explode upwards again, but what has happened? Nothing even close, rates barely moved and the housing market dipped.
Watched it all from 2000 on... 'it can't go any higher!' 'Its a bubble' etc etc and yet... its never changed. Yes... its all Musical Chairs and don't be the last one holding the bag but Musical Chairs doesn't end with a slow fade out... its sudden and dramatic and thats not happening. It will eventually end... but if you're hoping for something to help in the next 5 or 10 years... it won't. Your salary will move in low fractional percentages while housing will keep on moving along...
Again, the past 4-5 years have drastically changed the housing landscape. To suggest that the 600k, 500 square foot condo is going to continue moving up in price is something else. People would love you to believe that it will be worth 800k in a year or two. Who is going to buy this? who can actually afford a unit like that?
"Again, the past 4-5 years have drastically changed the housing landscape." No it hasn't. You just think so. But its not.
The average home price in 2019 was 520-540k. The average home price in 2022 was 720-840k. The average price of houses across the country in this 3 year period shot up around 65% but sure, that data doesn't mean anything. Housing always go up right? so presumably in the next few years the average home price should be 1 million right? That seems to be the point you're trying to make.
In 2000 in Vancouver you couldn't give a condo away with free TVs because of the leaky condo crisis. House prices were what people considered ridiculous then but now - they'd call them bargain basement. It all shot up. The point I'm making is that what you're seeing today isn't telling you what you want it to. Nothing is going to change so much in 1-2 years that there's going to be flood of relief and those that can't buy today will be able to then. The numbers will fluctuate but the sentiment will remain - 'it can't go higher', 'it must be a bubble', 'look at the charts - its weakening!' etc etc. Its all the same... the changes needed have to be gigantic and obvious.
How can they?
No plans because no money. Unless I'm looking at a house that's going to require just as much money put into it as purchasing it, I likely need a 60k deposit and/or an income >$100k a year.
Besides money, there is also the issue of the career landscape shifting towards back in office and short term contracts. Unless you are a senior employee with highly demanded skills, you have absolutely no say in where you want a live if you want a decent shot at getting any job.
I decided that I don't want my plans to fail anymore than they already do.
Hard to plan for impossibilities
>“The rental sector is not immune to the significant affordability challenges stemming from Canada’s acute housing shortage. High mortgage rates have made it difficult for many to purchase a home, forcing some to move into, or remain longer than planned, in the rental market,” Phil Soper, president and chief executive officer of Royal LePage, said in the press release. Yes Phil, It's those pesky interest rates and lack of supply. Nothing to do with the price. Meanwhile, in the most populated city in the country: [At the end of May, Greater Toronto had the highest number of condos for sale for any month in recent history with 8,183 apartment units on the market. The last highest number of active condo listings was 7,600 in October 2020.](https://www.thestar.com/real-estate/the-condo-market-right-now-is-a-ghost-town-toronto-has-a-record-number-of/article_60f20a98-24e0-11ef-8d75-376ea6f76eaf.html)
Government trying to convince people really hard that the 400k+ concrete dog-sized apartment is a great place to buy & raise a family in.
It's not that I don't "plan to" it's that even when I'm trying to save for a simple condo, on my own without a SO or family help, the inflation rises much faster than my pay raise and ability to save. I'm WFH and I was glad in the beginning because it saved me money on a train/metro pass, on work clothes, makeup, etc. Today, with my rent increase, food increase, general increase of everything I have less money at the end of the month. So really, "don't plan to" needs to be worded as "can't afford to" without a SO or family help. My rent is much higher than my friends' mortgages who bought houses a few years ago. I rent a 1 bedroom.
No one can afford both .the market is broken
Yeah I currently have no plans buying out telus either. But, doesn't mean I won't.
All the realtors that are hyping up the hot market that's about to hit because of built up inventory and lower rates will soon default on their bmw payments when nobody buys anything.
Jokes on them, I’m in it for the long run, *when I’m 100*
I decided that I don't want my plans to fail anymore than they already do.
🤣 "near term" .. try "not at all" RLP.
I have no plans to buy, ever
Well, prices and interest rates are too high.
No plans because it’s never going to be an option. Would love to! Will never be able to
Even if they had money, why would they invest in a housing bubble?
Why plan for the impossible?
Soon, it will be that most Canadians don't plan to buy or rent.
This is the dumbest thing I've read today. And I've been on reddit all day!
Mean while I as a landlord am scrolling through real estate listings at work today