Housing costs

[nobbie48]

A thread in the legal section seems to have shifted from motorcycles to housing economics.

Rolling Chassis In Apartment

What's your take on housing costs over the years?

Our present home is worth about ten times what we paid 40ish years ago but mortgage rates are a quarter of what we paid and we had 60% equity going in.

There were a number of other things that were different as well.

No one had a $1000 cell phone and there were no internet fees.

Starbucks didn't exist here.

Brand snobbery wasn't as rampant.

People had TV antennas not cable

You got a job not a contract.

NAFTA didn't exist

China was behind the bamboo curtain.

That said, I did a math exercise based on a friend who made the minimum wage and I figure that a couple making the minimums could still own a home in Toronto. The trick is to live like what the snobs would call an ignorant immigrant.

 

[crankcall]

A couple making minimum wage in Toronto can afford to own a home?? Glad your not a financial planner.

 

[Hack]

Depending on your after tax income, "owning" a home may not be the best financial situation.
Sure... The "value" of a house generally tends to rise, but much of this supposed gain is out stripped by interest on the mortgage, inflation, property taxes, insurance, maintenance and all the other costs associated with maintaining said house.
For many, renting is in the long run cheaper... 'Freeing up money that can be invested in areas with higher returns.

That said, I still prefer owning. Life isn't always about being rational.

 

[Evoex]

I know plenty of people who make decent money and rushed to own, they're almost too broke to take a vacation every year and kids haven't even come into the picture yet.

No thanks.

 

[AllistonGT]

I know plenty of people who make decent money and rushed to own, they're almost too broke to take a vacation every year and kids haven't even come into the picture yet.

No thanks.

And there is the problem. People feel a vacation is a necessity. We didn't take a vacation for 15 years. And worked most of our holidays and took pay instead for about 10 years. Rarely went out for dinner etc. House paid off by my 39th birthday. That was at 8% mortgage. 10% first three years. Now we are laughing. Zero debt. Anyone who says in can't be done doesn't want it enough. And yes now people will say I'm full of **** because it's different now. No its not. Its called sacrifice.

 

[r3r3r3]

I'd be interested to see the math on how two people working minimum wage could even afford a condo in the GTA let alone a house.

The real problem is nothing is affordable anymore. It used to be renting was the cheap option. Now rentals have been increases exponentially the last few years. Having to move from a rental can mean financial ruin for a lot of people. Good luck saving for a down payment when a bachelor in a 1970s building starts at $1700.

 

[blackcamaro]

It’s crazy. I bought my house 10 years ago now and should’ve moved by this point but I’ve decided I’m never selling the current house. I owe about 30% of the total value and the mortgage is cheap so even when I buy another place I will keep this as my backup plan if everything else in my life comes crashing down.

I can’t believe some of the mortgages I see people carrying and rent isn’t much better. I don’t know how a lot of people are doing it.

 

[AllistonGT]

I'd be interested to see the math on how two people working minimum wage could even afford a condo in the GTA let alone a house.

The real problem is nothing is affordable anymore. It used to be renting was the cheap option. Now rentals have been increases exponentially the last few years. Having to move from a rental can mean financial ruin for a lot of people. Good luck saving for a down payment when a bachelor in a 1970s building starts at $1700.

My daughter has a nice one bedroom right on Bloor close to Christy Pits. Moved in 3 months ago. $1500.


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[shanekingsley]

We own a 1+1 condo that is rented out. 5 years ago the market rent for this unit was $1250/month. Today it is $2100. That is crazy.

 

[Trials]

7 grand for a building permit.

 

[sburns]

You can sleep in somebody's downtown Toronto office for $1,695 a month

If TV portrayals of overworked, bankrupt or soon-to-be-divorced business people are accurate, sleeping in one's own office every night is the resul...

www.blogto.com

Sent from the moon!

 

[J_F]

lots of different ways to think and still end up okay later

read an article awhile back from the corporate HR point of view
was focused on how to recruit/retain Millennials and Gen Z

part of the article that stuck with me was answers to questions posed to candidates
question was: list the things that are important to you in a position

#1 answer for last 100 years was salary, that is now #7 on the list

#1 priority is now vacation time
#2 is flexible hours

so for people with those priorities
rental accommodations make sense
but if you're not into stuff
you'd best find a way to save something
max out RSP's or learn how to manage your own $

real estate is generally pretty solid
but you cannot control the timing or the market

putting your $$ into other investment vehicles
you can move stuff around as the markets and your situation changes

 

[Evoex]

And there is the problem. People feel a vacation is a necessity. We didn't take a vacation for 15 years. And worked most of our holidays and took pay instead for about 10 years. Rarely went out for dinner etc. House paid off by my 39th birthday. That was at 8% mortgage. 10% first three years. Now we are laughing. Zero debt. Anyone who says in can't be done doesn't want it enough. And yes now people will say I'm full of **** because it's different now. No its not. Its called sacrifice.

Life's too short to live paycheck to paycheck for 15 years, but hey. Whatever floats your boat.

 

[Trials]

9 thousand worth of rebar, 350$ for the rebar drawings and engineer stamp.
Although that was almost 3 years ago now so add 20% for inflation if built today.

 

[Lightcycle]

putting your $$ into other investment vehicles
you can move stuff around as the markets and your situation changes

Yes.

It's pretty rigid and old-fashioned thinking that buying a house and getting a mortgage is the only way to build equity.

Some people have gotten fantastically wealthy by renting and not owning. It's not for everyone, but everybody's circumstances are different.

 

[ChrisCBR]

I can’t believe some of the mortgages I see people carrying and rent isn’t much better. I don’t know how a lot of people are doing it.

In a couple of years when all the mortgages from 2015-2018 come up for renewal and rates are 4-5% vs 2.5%, those people are in for a shock when they find another $500-$1000 worth of interest tacked on a month.

 

[ChrisCBR]

A thread in the legal section seems to have shifted from motorcycles to housing economics.

Rolling Chassis In Apartment

What's your take on housing costs over the years?

Our present home is worth about ten times what we paid 40ish years ago but mortgage rates are a quarter of what we paid and we had 60% equity going in.

Let that sink in for a minute, you had 60% paid before you even bought it.. do you think that is feasible at all in 2019?

There were a number of other things that were different as well.

No one had a $1000 cell phone and there were no internet fees.

Despite what you might think, not every younger person today buys and changes their phone every year. Only apple hipsters do that.
Ive had the same iPhone 6 for 4.5 years.
Good luck having any sort of social life without a smart phone today.
Even HR would flag you as socially inept and wouldnt hire you.

Brand snobbery wasn't as rampant.

Ill give you that.

That said, I did a math exercise based on a friend who made the minimum wage and I figure that a couple making the minimums could still own a home in Toronto. The trick is to live like what the snobs would call an ignorant immigrant.

Yeah sure they can buy a home in Toronto making min wage.. If they both work 80 hours a week, 50 weeks a year.

 

[AllistonGT]

Life's too short to live paycheck to paycheck for 15 years, but hey. Whatever floats your boat.

When we are both 60 I'd sooner be me then you. I will say I don't think anyone should sacrifice everything for the last 20-30 years of your life. When I was a kid I always ate the stuff on my plate I didn't like first. Like debt. Get it behind you then no worries. Nothing can be taken away. Monthly bills are doable on one income if someone loses their job. My take. No regrets. Freedom. Going to Italy in September paid cash. My boat floats. Life's good.

 

[Lightcycle]

In a couple of years when all the mortgages from 2015-2018 come up for renewal and rates are 4-5% vs 2.5%, those people are in for a shock when they find another $500-$1000 worth of interest tacked on a month.

It'll be interesting times for sure. There are a whole lot of conflicting data points in the last few days which point to different ways this could pan out:

Canadian inflation jumped to 2.4%, BoC might have to raise interest rates

However, Two banks just *lowered* their 5-year rates to 2.99%

 

[ChrisCBR]

lots of different ways to think and still end up okay later

read an article awhile back from the corporate HR point of view
was focused on how to recruit/retain Millennials and Gen Z

part of the article that stuck with me was answers to questions posed to candidates
question was: list the things that are important to you in a position

#1 answer for last 100 years was salary, that is now #7 on the list

#1 priority is now vacation time
#2 is flexible hours

Not sure who they were interviewing, maybe female humanities students from wealthy families. The vast majority of people want money.
Its also very un-PC to talk about salary or wanting the highest salary.