COVID and the housing market

[ChrisCBR]

This is what houses have become in Canada

Been this way for many decades. There is nothing wrong with it. House appreciates a little above inflation and what you put in you get back.

Seems like the new model is: A smaller % of people will own homes, everyone else will rent. Renters are left with little to nothing and many cant retire, taxing our already taxed healthcare system more. Investors can retire wealthy with little to no effort.

 

[ChrisCBR]

Cheapest

Property Prices in Toronto

Analysis of prices for investment in residential properties in Toronto, Canada. Average price per square meter, rents, apartment price to income ratio, mortgage affordability and other relevant economic indicators improtant to look at when considering to invest in Toronto, Canada.

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Property Prices in Tokyo

Analysis of prices for investment in residential properties in Tokyo, Japan. Average price per square meter, rents, apartment price to income ratio, mortgage affordability and other relevant economic indicators improtant to look at when considering to invest in Tokyo, Japan.

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Property Prices in New York

Analysis of prices for investment in residential properties in New York, NY, United States. Average price per square meter, rents, apartment price to income ratio, mortgage affordability and other relevant economic indicators improtant to look at when considering to invest in New York, NY...

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What the ****

Property Prices in Hong Kong

Analysis of prices for investment in residential properties in Hong Kong, Hong Kong (China). Average price per square meter, rents, apartment price to income ratio, mortgage affordability and other relevant economic indicators improtant to look at when considering to invest in Hong Kong, Hong...

www.numbeo.com

Small sample sizes.
Hong Kong cant be compared to Canada. Its proximity to China with its 1.5B population. Its one of the big 3 global economic hubs. Its population density is far higher than the GTA.

Looks like rent outside the city center for a 1 bedroom apartment is double in Toronto what it is in Tokyo.
Tokyos infrastructure and transit is vastly superior to Torontos. It would be interesting to see prices compared vs commute time to downtown Tokyo. Hamilton is an hour outside Toronto. Id be pretty confident an hour outside Tokyo that prices are below Hamilton.

Looks like all things being equal Toronto is more unaffordable than NYC.

 

[nobbie48]

They exist. I was lazy and doing it from memory. Roughly tracking the probable sale price of our house at the time. Even if a year is a more accurate magnitude, that is still almost inconsequential.

In approximately 2005, house prices were roughly five times income and people were panicking that a crash was coming as that was the historical trigger. To meaningfully correct house prices to income and allow a median wage to afford a house, a reset to pre 2005 would be required (imo, need to include inflation in the numbers too). That would decimate many homeowners and quite likely further concentrate wealth as many of the truly wealthy have a very low percentage of net worth in housing and the middle class has most of their net worth there.

For trivia:

In the mid 1960s we were living in a rented house in Parkdale. A decent wage for a male would be about $5000 a year and we could have bought the house for three times that. That $15,000 house sold for $1.5 million a few years ago. We're probably looking at 15 to 20 time a year's wage.

We bought the family home a few years later for $20,000, a semi backing onto the 401. The wages hadn't gone up much and we would be looking at four year's wages. Now that house would be $800,000, similar payoff time of 15 years wages.

Someone from Winnipeg asked how people in Toronto could afford a house. I said we mortgaged our youth.

Food for thought: If you could pay of your house in five years, what would you spend your newly freed income on?

What other businesses would have grown instead of housing and banks?

Would you travel more, dine out more, have nicer furniture, upgrade your education, invest in stocks or just eat drink and be merry?

Who would be the loser? Banks??

 

[nobbie48]

If your plan is to use your house to fund your retirement (as I believe many think they will) you should come up with another plan.

I don't think it is wrong if it is done with planning but if someone assumes anything with regard to future finances they better have good shock absorbers on their wheelchairs because there will be speed bumps.

Health is the big thing. A million dollars is nice but decent LTC for a couple with dementia could run $15,000 a month, $180,000 a year. You're broke in five or six years.

 

[nobbie48]

What % of Canadians do you think are able to fund their retirement without using their home?
What happens when the vast majority of people cant afford to retire? Canada can barely afford to take care of its aging population already.
In the past any idiot could get a career that required little to no education. Many of those jobs/careers were enough to own a home and have a family. Pensions were also more common.
There is more than enough land to go around in Canada. The current housing crisis is a result of failed government.
Too much red tape in construction.
Too low interest rates.
Far too many local and (worse) foreign speculation in our housing market.

Grade 12 used to be OK for a lot of positions that now require a degree. Grade 10 and work ethics did wonders for getting ahead.

As more women took on careers couples had more spending money. Did the developers see that and massage the prices up to fit the available coin?

Was it a chicken / egg thing? Women started working because prices were going up or prices went up because women were working? That spurred the whole daycare problem, the government raising our children.

Add the daycare to the financial skewing. If wages are too low subsidized daycare is needed. In other words we are subsidizing the employer's low labour costs with taxpayer dollars.

Don't misunderstand. I'm not for going back to the male dominated society but we haven't handled the change well. While we were doing a player change the opposition scored a few unanswered goals.

Pensions used to be a negotiating point when a person was hired as an employee. Now with contract positions you go with our own RRSP and expect no severance payouts. The pay may be a little higher than the employee rate but how many set that aside?

 

[nobbie48]

There are a ton of useless lazy losers out there with well off parents. Its not as simple as your making it out to be.
An average income should be enough to afford housing in this country. It currently isnt.

When the average person has to work two jobs to even attempt to save for a downpayment, something is very wrong. Especially when there are people who dont even live here, sitting on millions of dollars worth of empty housing.

Our birth rate is trash and our population will continue to get older. People arent having as many children because cost of living is getting out of control here. I know several couples that are delaying having kids because they are not where they need to be.

A lovely elderly lady I used to know mentioned that expectations in the pre baby boomer times was that a man's first weeks wage would cover the house. The second weeks wage would pay for the utilities, groceries and basic needs. The third weeks wage would be for vacations, gifts, clothing, education and additional furniture. The fourth weeks income would be for savings. This would have been before CPP.

That could still work if a person made $3,000 a week, $150,000 a year. Actually the food and utilities would be in good shape but the housing prices and future finances are in doubt.

If we immediately increased wages (Destroying companies) more people could afford houses without subsidies. Then the supply demand factor would kick in and prices would go up again.

Our declining native birth rate is problematic. We need immigration to provide for our senior years, a Ponzi scheme. We need imported labour to pick our crops because our unemployed refuse the jobs.

Are people postponing having children just because of house prices or have they tacked on the 4X4 pickup with leather for him and Porsche for her, destination wedding on a tropical beach, five figure engagement rings, designer clothes, multiple stress vacations, spas, big electronic packages. Many have been brainwashed into thinking these are necessities. So many have been brainwashed into the cult that the market for practicality has largely disappeared.

 

[油井緋色]

Grade 12 used to be OK for a lot of positions that now require a degree. Grade 10 and work ethics did wonders for getting ahead.

As more women took on careers couples had more spending money. Did the developers see that and massage the prices up to fit the available coin?

Was it a chicken / egg thing? Women started working because prices were going up or prices went up because women were working? That spurred the whole daycare problem, the government raising our children.

Add the daycare to the financial skewing. If wages are too low subsidized daycare is needed. In other words we are subsidizing the employer's low labour costs with taxpayer dollars.

Don't misunderstand. I'm not for going back to the male dominated society but we haven't handled the change well. While we were doing a player change the opposition scored a few unanswered goals.

Pensions used to be a negotiating point when a person was hired as an employee. Now with contract positions you go with our own RRSP and expect no severance payouts. The pay may be a little higher than the employee rate but how many set that aside?

My fiancee often jokes with me about how feminists were short sighted cause instead of being a house wife she has to work full time lol

Only way to setup retirement without too much pain is a power couple dynamic without kids. Some exceptions I know are ppl with heavy parental support or the one guy who went with trades and got his house at 20.

Small sample sizes.
Hong Kong cant be compared to Canada. Its proximity to China with its 1.5B population. Its one of the big 3 global economic hubs. Its population density is far higher than the GTA.

Looks like rent outside the city center for a 1 bedroom apartment is double in Toronto what it is in Tokyo.
Tokyos infrastructure and transit is vastly superior to Torontos. It would be interesting to see prices compared vs commute time to downtown Tokyo. Hamilton is an hour outside Toronto. Id be pretty confident an hour outside Tokyo that prices are below Hamilton.

Looks like all things being equal Toronto is more unaffordable than NYC.

Not disagreeing with any of this. But Derek J. de Solla Price - Wikipedia

This guy's law seems to apply to every system with limited resources. Maybe somebody who knows this stuff better has some suggestions against this?

 

[Deleted member 50930]

Are people postponing having children just because of house prices or have they tacked on the 4X4 pickup with leather for him and Porsche for her, destination wedding on a tropical beach, five figure engagement rings, designer clothes, multiple stress vacations, spas, big electronic packages. Many have been brainwashed into thinking these are necessities. So many have been brainwashed into the cult that the market for practicality has largely disappeared.

^
nobbie48 is funny

According to Stats Canada....
-- the average salary for people between 25 - 34 years old is $47,000
- after-tax your take home is $37,948.00
- which per month is $3,162.00

Let's take Guelph as an example

Rent is ~$1800 - $2000
Internet is ~$50
Tenant insurance is ~$40
Groceries is ~$150 - 200 now unless you want to get fat and obese from junk food
Car payment ??
Car insurance ??
Savings ??

How the heck do you expect people our age to have kids?

 

[油井緋色]

^
nobbie48 is funny

According to Stats Canada, the average salary for people between 25 - 34 years old is $47,000

Canada has to fix this via immigration. But immigration introduces cultural chaos =) Get ****** no matter what lol

Also that's why I'm trying to slam in your head you're significantly above average, should take pride in it, and not absorb the loser mentality that's dominated online; I absorbed it too and caught myself a few months ago. Still trying to reverse the mental state.

 

[Deleted member 50930]

Canada has to fix this via immigration. But immigration introduces cultural chaos =) Get ****** no matter what lol

Also that's why I'm trying to slam in your head you're significantly above average, should take pride in it, and not absorb the loser mentality that's dominated online; I absorbed it too and caught myself a few months ago. Still trying to reverse the mental state.

I feel so bad for them but I'm too broke to donate so I volunteer my time

 

[mimico_polak]

Only way to setup retirement without too much pain is a power couple dynamic without kids. Some exceptions I know are ppl with heavy parental support or the one guy who went with trades and got his house at 20.

Yup...I went to university...buddy went to trade school and started a painting business. Without asking him, I'm assuming he's making 2-3x more than I am...and that's what he declares on his tax lol.

House paid off? maybe in the next 2 years
Condos? Sure. He had 3 of them and has about 300-400k in his bank account
Cottage? Check.
Boat? Check x2
ATV? Check
Vacations? Check x 2/year

Are people postponing having children just because of house prices or have they tacked on the 4X4 pickup with leather for him and Porsche for her, destination wedding on a tropical beach, five figure engagement rings, designer clothes, multiple stress vacations, spas, big electronic packages. Many have been brainwashed into thinking these are necessities. So many have been brainwashed into the cult that the market for practicality has largely disappeared.

Some of my other buddies are like this.
Car paid off? Sure is...tack it onto the mortgage
Vacations? No cash...put it on the LOC
Newer car? No cash...put it on the LOC
New TV? LOC
New new new? LOC LOC LOC!

Why LOC? Because I 'deserve it'

Honestly I feel like an idiot...and I'm a little bitter that the mortgage broker doesn't want to help me put in an LOC but he's actually helping me out, and making less money by pushing me off that lifestyle.

^
nobbie48 is funny


According to Stats Canada, the average salary for people between 25 - 34 years old is $47,000

- after-tax your take home is $37,948.00
- which per month is $3,162.00

Let's take Guelph as an example

Rent is ~$1800 - $2000
Internet is ~$50
Tenant insurance is ~$40
Car payment ??
Car insuance ??

How the heck do you expect people our age to have kids?

It's extremely difficult for the younger generation to get ahead. My buddy just joined our company (early 30s) and he's making 100k/year. His wife is around 100k/year at another consulting firm. They're still not able to afford a place within a reasonable distance from Toronto. Mind you he was making 85k/year and she was making about 80k/year as of a few months ago as they've both move up to diff companies within the last 3 months.

And @george__ please remember that @nobbie48 is older, and lived through different expectations. I agree with him though, a lot of younger people (and my age) just ride the LOC lifestyle and not worry about making payments. I think if I refinanced now, I could get a lower rate, and additional 50k, and my mortgage payments go DOWN 80/bi-weekly!

Canada has to fix this via immigration. But immigration introduces cultural chaos =) Get ****** no matter what lol

Also that's why I'm trying to slam in your head you're significantly above average, should take pride in it, and not absorb the loser mentality that's dominated online; I absorbed it too and caught myself a few months ago. Still trying to reverse the mental state.

Agreed. Less time on the Reddit ecochamber. They hate anyone and anything that is better than them. And blame the rest of the world for their problems. I stopped going to PFC because it was getting ridiculous.

 

[Deleted member 50930]

^
Yikes that is scary

PFC = Personal Finance Canada?

 

[油井緋色]

Yup...I went to university...buddy went to trade school and started a painting business. Without asking him, I'm assuming he's making 2-3x more than I am...and that's what he declares on his tax lol.

House paid off? maybe in the next 2 years
Condos? Sure. He had 3 of them and has about 300-400k in his bank account
Cottage? Check.
Boat? Check x2
ATV? Check
Vacations? Check x 2/year

Sounds about right. Dude has 2 cars, a nice house, a kid, and a lot of video games.

I have a condo, and a lot of video games lol

 

[timtune]

This is what houses have become in Canada

But it doesn't work. You retire only to have to move into some small apartment because you had to sell your house to finance your retirement.

 

[Deleted member 50930]

But it doesn't work. You retire only to have to move into some small apartment because you had to sell your house to finance your retirement.

Doesn't it make sense to move into a smaller unit as you age and have no more kids?

 

[Deleted member 50930]

Sounds about right. Dude has 2 cars, a nice house, a kid, and a lot of video games.

I have a condo, and a lot of video games lol

ALL my trade friends are making mega wack job amounts of money too

Bonus. The work means they are in very good shape and now they can be picky and date only women making good money

I'm happy for them :]

 

[timtune]

that depends on your retirement goals. it's fine** if you don't want to spend your retirement working in your garden or wrenching on toys in your garage. great if your hobbies are netflix and gaming but it's not for me.

** asuming you have sufficient equity in the house

 

[mimico_polak]

ALL my trade friends are making mega wack job amounts of money too

Bonus. The work means they are in very good shape and now they can be picky and date only women making good money

I'm happy for them :]

It’s awesome until your body breaks down by 40 OR you get injured.

The money isn’t in the trade...it’s having people working for you!

There’s no way you can paint enough houses solo to make stupid money. Have a crew and be good (cut throat) in business with good networking and it’s easy to get 50-100k jobs.

 

[Deleted member 50930]

It’s awesome until your body breaks down by 40 OR you get injured.

The money isn’t in the trade...it’s having people working for you!

There’s no way you can paint enough houses solo to make stupid money. Have a crew and be good (cut throat) in business with good networking and it’s easy to get 50-100k jobs.

Yup. Some are trying to become trade teachers or have started their own business

 

[油井緋色]

It’s awesome until your body breaks down by 40 OR you get injured.

The money isn’t in the trade...it’s having people working for you!

There’s no way you can paint enough houses solo to make stupid money. Have a crew and be good (cut throat) in business with good networking and it’s easy to get 50-100k jobs.

Vertical engineer/elevator mechanics.

They pull in $200k+. Not pulling this out of my ass. Make some good financial choices w/ that and you're retired by 40-50 if they started at 18 (wouldn't be $200k at 18, but it'll be around that by 30.)

But yeah, if you're talking $500k+...only guys I know who do that are doctors or own a business. Owning a business is too much work <_<