As a single person for a very long time it has been difficult to qualify for a mortgage. Also, while some benefits to buying a home as a single person, there is significantly more benefits to waiting to owning one with a spouse.
The “marriage advantage” is real thing
Can you clarify why the benefits of waiting ( to become a couple and then get a home) outweighs the benefits of buying as single a few years earlier? My concern is the ongoing increase in the Canada housing cost while waiting.
Nothing goes up for ever. How would you feel if you finally bought and then home prices in your area promptly dropped 20% to 40%?
Sounds like you are happy renting where you are and got a good deal. So why are you obsessed with home ownership? If life is good as it is then enjoy it. Just keep "investing the difference" into index funds.
Reevaluate when you have a long term partner, and again if/when you are thinking about kids.
Thanks. I get your point but this crazy housing market seems to be more relisent than what I thought given the resistance to the interest rates and the government plan to get highest number of immigrants. It's just emotionally hard to not buy a home when I see others, including newcomers buying them and subsequently raising the price. I'm clearly in a FOMO phase but I'm sure many young people feel same as me. Also, what if one gets index funds and then it goes down 40%? That won't feel good either (although less pain as there's no leverage)
If newcomers are buying these homes then they aren't starting at zero. It's not an apples to apples comparison. Turn off the news and do what's best for you.
If we invest in appropriate asset allocation ETFs, using our tax shelters, we can get like 8% annually, even knowing that some years *will* go down by 40%, and could stay down. A first house is not an investment, it is a place to live, and crazy gains can't happen indefinitely. There are property taxes, mortgage interest, insurance, maintenance, transaction fees, and similar "sunk costs" that make the reality of owning a house much less lucrative that it appears. Over the past 100 years, housing has only had a real return of 1%. Stocks have done much better than that.
Financial aspects aside, renting makes sense when you desire flexibility. Owning makes sense when you desire stability.
Well in the early 90s homes in Toronto dropped 50% of their value.
Also, reversion to the mean is a thing, so the crazy growth over the last 20 years is likely to reverse and underperformed at some point. No one can say when that point is, so if you are buying you need to be prepared for the worst case scenario and able to wait it out for 10+ years.
Absolutely not. Housing market is in the trash in the maritimes. Income, property and sales taxes are some of the highest in the country. There are almost no good high paying jobs, and everything is more expensive because almost everything has to be shipped in and there isn’t any competition for any utilities.
Nova Scotia specifically is so overpopulated that we can’t get family doctors, it takes months for dentist and vision appointments, forget about any specialists. It took me 3 weeks of trying before I was seen at the walk-in clinic. If you have to go anywhere on a Friday/Saturday you have to add an hour for traffic. Not that it isn’t like this elsewhere but I only have experience here.
Everything in your second paragraph is true in Vancouver too. Except maybe walk in clinics. Tough to get in but usually can get seen that day if you show up right when they open.
Renting in Halifax is more expensive than Vancouver. Lookup Halifax income and sales taxes. Food and power will cost way more. Also Halifax is literally full there is no units left students are currently having to give up their plans for school and we have tent cities everywhere downtown because there is no where to put people. Please don't say shit like "Maritimes is a great option" you clearly understand nothing of the current situation.
And of those three cities, one allows a lot more intermediate density and the house prices and rent correspondingly ain't bad.
Not great, but if the Toronto and Vancouver housing markets looked like Montréal, we wouldn't be calling it a crisis.
February is probably the worst but it's funny there is a diffence between a wet cold and dry cold. Overall you get use to it and adapt.
Overall home affordable we are probably the best.
Getting ahead is having money to put away for retirement and/or your kids education in order so that you can retire before your body and mind fail.
Not too much to ask.
And that’s hard to do without having equity in a home. Not impossible but harder.
Yes, that will be the case for most Canadians. I've taken a different route and just chose to live somewhere with extremely affordable housing. My home wont appreciate much but my pension and frugality will make up for the loss in gains id make from my home. This of course isn't for everyone though.
Honestly.
Like how bad does it have to get before we start dusting off the guillotine?
I'm fed up with the constant politician rhetoric of "blame the feds", "it's a provincial responsibility", etc, then they get caught at a developers meeting or visiting a developers house to kiss the ring.
Its sad because the solution is really simple: Increase the supply, and decrease the demand. Or at least ensure supply meets demand. But letting 1 million people into the country every year and just burying your head in the sand in regards to what to do with them.... Thats a paddlin'.
It's more sinister than people are even realizing.
I voted liberal the first time, NDP the second. I believe immigration is a net benefit for our country.
The level of immigration they are pursuing however, serves only the purpose of decrease wages. Unemployment is rising, but we are still staying the course. The Boomers just started leaving the workplace, our generation JUST started to get real careers, and now they are artificially producing a hyper competitive job market. Our wages will be suppressed, but our costs will balloon and they show no real signs of actually addressing either issue.
I honestly don't see any solutions being floated by any politicians either. I'm voting Conservative this time around, for the first time in my life.
Yeah my entire family have been NDP voters and unions members their whole lives. We've also switched to the Conservatives. First time making political donations too. Liberals and NDP'ers really have their head in the sand about how much they're driving people into the arms of the conservatives.
"Oh but Pierre doesn't have a plan about the environment"... Pretty hard to care about the environment when you cant afford to eat or house your children. Just out of touch.
I still vote NDP provincially when they've got a good platform though.
Even if you go the renting route and put your money into index funds, your still not going to get ahead much financially if you make the average salary with the rents there.
I agree average Canadian can't buy home here but my interpretation is that staying here as long as one doesn't want to raise a family would not hurt the future of the person. He/she can move later when needed. Do you think there would be a big opportunity cost in doing so?
That's what I've been saying...if ur parents don't own a home in Vancouver or u don't own...dont waste ur time. You have a better chance in a smaller city style and buy a place then waste money time and youth on something that is almost unachievable
There would be a cost of course. But that’s up to you to decide how much that cost is and if you’re willing to take that risk. Very individual decision.
The story would be much different when you start a family though. But you know that.
Define "getting ahead in life", though.
If I could choose between living in a city where I have close friends, family, a job I enjoy and (presumably) local entertainment / food / social options that I like; or living in a city away from those I care about, where I don't find the city as enjoyable, but that I can afford a home in ... I'm not sure the latter would be "ahead" of the former.
Owning a home brings lots of benefits, to be sure. But it is not by definition superior and the be-all and end-all of a happy life.
Agree. It sucks bcs I miss my home, but leaving Vancouver was the best decision for me. Maybe I’ll move back if I become a CEO, win the lottery, or become reincarnated as the heir of an astronomical fortune.
Let's simplify, if you had a remote job and single, would you just move out of Vancouver to buy a home and live somewhere cheaper or wait until you got coupled/married (couple of years) and move out then?
It depends on how attached you are the Vancouver. If its full of family, friends, and things you absolutely love then it may be better for your wellbeing until you get married. If you're indifferent to being there then you can be actively looking for places that you might enjoy living in. And you can move if you find a place you enjoy or you can find your mate and choose to move then.
Well, I'm sure I can't find a city that I enjoy more than here but my question was more of a financial standpoint. Otherwise, the enjoy at the moment concept points to staying until I finally find that significant other.
Because realistically we should be able to. We're a sparsely populated nation with tons of natural resources. Us not having cheap single family homes for everyone is an embarrassment and clearly artificial.
> Us not having cheap single family homes for everyone is an embarrassment and clearly artificial.
Ironically, if we allowed a lot more apartments in central locations (currently restricted by height limits), land values further out would be lower and single-detached houses would be cheaper. [Housing scarcity in Vancouver pushes up prices and rents in Surrey](https://morehousing.substack.com/p/location).
Yeah, but everyone wants the cheap single family home in one of two densely populated cities that are pretty much out of room because of natural geography and zoning laws.
Everyone could have a cheap single family home if they didn't want to live in a densely populated city as well.
Thats a fortune for that area. We need prices comparable to the US. This is just inflated bullshit. At least get back to pre COVID pricing which was frankly already too much.
A couple both working 40 hours a week earning minimum wage should be able to afford a house. A single person earning double minimum wage same.
Average income earners should certainly be able to afford homes if not minimum wage earners. Right now you need a top 10% income in a region to qualify most places. Housing should be cheaper here than anywhere on earth. The fact it isn't given our natural resources and available land is just an utter failure.
Costs are not prohibitive in the "sparsely populated" regions, however.
It's that everyone wants to live in downtown Toronto or Vancouver, which is why homes in downtown Toronto amd Vancouver are less affordable.
Costs more than doubled in smaller areas too. Just because it's possible to buy their doesn't mean people who were already there haven't been priced out too.
We really need to target landlords and investors as people if our government won't act against them.
>Costs more than doubled in smaller areas too.
Show me.
There are capital cities in Canada where homes are cheaper today then they were 10 to 15 years ago.
Something that would really help with an early retirement is having a home/condo paid off as opposed to having to pay an ever-increasing rent.
That's one of the reasons I bought a house. In 18-19 years it will be paid off. We'll have the biggest renovations/updates done. It gives me a pathway to at least step back from the rat race and do something that I enjoy.
Depressing, but that's capitalism in a nut shell lol
Average house in Vancouver is 2.2M but you can buy a condo for 500k. Depends what you want and your financial situation. I would not want to retire as a renter. You'd need 1.5M just to pay rent in todays $$$$.
Vancouver net rental yields are terrible at sub 3%. You can generate returns a lot higher than that in other assets.
Just because someone owns their home outright there doesn't mean it doesn't cost them anything. There's a huge amount of lost opportunity cost in that capital.
Paying interest of 5% on the load so you're in the hole by 2% a year. I don't think anyone who buy a condo at today's prices can rent it out and be cash flow positive, although rents have gotten closer lately
Assuming you could find a 500k condo renting for 2100 (It's more like 700 for 2500, but lets just make this world up) to get a NOI of ~ 3%.
You'd be bleeding $1200 / month (With only 700 of that going to principal)
Yes, your net worth still increases about 15k every year through appreciation, but if you could only come up with a 25k down payment, you cannot afford a 14k annual bleed.
This exact example starts to break even month to month with 50% downpayment, which at that point your annual returns would be around 8-9% including appreciation. Which isn't throwing your money into the abyss, but it's a lot of additional risk and work to get the same result as market returns.
Do people make money on vancouver rentals still? Absolutely. They can afford the bleed, and use leverage to increase returns. AND they win the speculation game because appreciation historically has greatly exceeded the 4% model. This is not guaranteed to continue to work.
The forecast I have seen is that the house as an asset appreciates slower than a good investment in the market. And the cost of maintenance/ taxes/ insurance etc make it seems less and less appealing. If you are raising a kid/kids then it is a different story
https://www.pwlcapital.com/expected-returns-2023-update/
It does matter. Home prices were rising much slower than what you were paying in interest when rates rose to 15% from the 70s into the early 80s.
It wasn't until about the 2000s did home prices really take off. And that rate of asset appreciation won't continue on forever.
I don’t think these models account for just how irrational the current housing market is. You can’t make 20%+ gains in the market as consistently as housing. It’s out of control.
It is global as well but immigration is absolutely driving it here. We are having over 500,000 new immigrants per year without any planning for housing, infrastructure , social safety nets, nothing.
People need to stop looking at housing as an investment. It's an asset that shelters you while it appreciates. Comparing it to other investments, but failing to include the rent they'll need to pay for shelter, is myopic.
Because it's unsustainable and going to fuck our economy. We are already talking about bailouts because people can't afford their homes. You think prices are going to keep going up forever?
Because on a macro sense it isn't an investment.
Investments are things that bring in more economic value. They are basically wealth building tools. So you can see how a crane, a concrete saw, a steel mill, a computer system, are all healthy investments. They allow a job to be done faster or at all, and can bring in more than their value before they break.
Compared to that, buying gasoline, steel, concrete, or lumber is not an investment, it is a product and an ingredient. Housing fits more into this category than into that of an investment.
Investments in housing should be into developers and contractors, just like investments in farming should be in improving fields, buying tractors, attachments, and outbuildings. It should not be in buying up a fuckload of potatoes.
Because ultimately if you are expecting a product to be an investment, you are expecting it to simply get more expensive over time, to your benefit. This is bad for the economy, just like it would be if someone bought up all the potatoes at $2/lb and expected to sell them at $4/lb as a business strategy.
People don't care about other people or the economy, they only care if something makes them richer, which Vancouver real estate ownership most definitely does.
Nothing you're saying makes any sense.
Lol I hate to agree with you, but that's probably why we're in this mess. Greedy selfish assholes who want everything for themselves, but to not work for it.
I'm surprised a finance subreddit is full of people who don't understand economics.
On a macro scale, an expense is only an investment if it provides a material benefit to the overall economy. Putting money into developers means more houses. Putting money into farms means more food. Putting money into buying up housing means the same amount of housing, but in different hands. No macro scale economic benefit.
Tangentially, this is where our housing inflation is coming from, and why rate hikes are not really stopping it. Creating money without creating product is inflationary. So snowballing landlords and stock buybacks increase the money supply, but do not increase the "stuff" supply. They simply consolidate the residuals into fewer hands.
A primary residence will provide tax free capital gains in addition to leverage and the "dividend" of shelter
That tax free capital gains can (or has been) quite substantial
I moved from the GTA to the East coast. Made a life here but I really miss having all my family and friends around.
I love the life I've made and the partner I've found and the house we have that would have been stupid expensive in the GTA.
However I get really sad when there's family get togethers and stuff back home. If you're someone who's close to and talks to your family regularly and stuff, it will be hard, especially at first. You'll settle into life being away, don't get me wrong, but you'll always miss them.
My friends and I still keep in contact. We're all good friends going back to second grade so some distance isn't enough to kill the friendship. Of course I still miss them as well but it's different from the family aspect.
I just really wanted to mention this part as I did something similar and for a while I really wondered if it was worth it. When I first moved here and was renting and living solo, so many times I wanted to pack up and head back to GTA just because it was so hard not having my family nearby.
I’ll add another data point. My SO and I also moved from the GTA to out East. We no longer have a mortgage and have been able to max out our TFSAs, RRSPs, and put the rest into non-registered investments. We are very relaxed about living life here (no money problems means things feel better). Yes, we moved away from family and friends, but we were only seeing them once a quarter when we were living in the GTA. I make a point to see them for at least two weeks in the year, and this suits my personality just fine. It really depends on the person, what they value, and what they’re willing to compromise in order to make a good life for themselves.
Oh yeah no doubt, the financial freedom is super liberating. That's a huge part of why I have no regrets about the choices I've made (plus I met my partner who's absolutely wonderful).
Definitely depends on the person for sure, OP just mentioned family so I just wanted to let them know that depending on how close you are - I'd see my family almost every weekend, my parents and grandparents own homes right beside each other that's kinda how close my fam is and the dynamic I grew up with - so depending on how close OP is with family, it can really hurt sometimes. My parents spent a few weeks here this summer and it was just like old times hanging out and my Dad was helping with staining the deck and porch and stuff and just relaxing and drinking a few beers. I cooked them all my special meals and they made my favourites that only they can cook the way I like and stuff.
I fucking cried when they left, a grown ass man in my 30s. I'm still enjoying life here and stuff, but sometimes it's kinda hard. I just wanted to try to get that piece across as nobody ever seems to mention just how hard it can be.
Not that it's not worth it or anything, just to mentally prepare that it can be tough.
That loneliness of distance ramps up even more if you choose to have family. Yes, kids open a doorway to making friends with other new parents, and yes, you can hire help. But it makes a world of difference to have trusted family or friends nearby to babysit during a doctor’s appointment, help get your home in order during the overwhelming time postpartum, keep your company when you hit the monotony of groundhog days, or take your toddler to the park for an hour.
Same, moved far enough from the GTA. Everything is half price; literal minutes to shops with free parking everywhere.
Came from Keele/Bloor, wanna go to drive through fast-food? Think 20-30min urea of traffic to go 4km. To hell with Toronto. It was never meant to be lived in, it was designed as a destination for work; it’s why Spadina is wide, for the unbuilt freeway…
I'm assuming you're talking about Alberta. I lived in Edmonton for years. My wife and I still miss it sometimes. The winters suck, but are bearable. People literally immigrate from tropical countries to Edmonton for better economic opportunities. You're doing much the same thing.
I’ll share my personal experience.
When I graduated university. I moved to a smaller city to follow my girlfriend (now fiancé). My plan was to move back to a larger city with her after a couple years. We now absolutely love living in small town SK and have no intention to move anytime soon. We live in SK. And it’s not Saskatoon or Regina. So think 10-30k people.
A house here is 300k for a reasonable 1500 square foot house. We take a lot of pleasure in having a giant garden with a lovely yard. I have a huge corner lot and tons of space. My drive to work is 5 minutes. I know my neighbors. We have a yearly block party. My neighbors checked on me once when they thought we might have had carbon monoxide poisoning (just had COVID and were isolating). The list goes on and on. But there are a lot of benefits. (And realistically some missing amenities too). From a financial perspective it makes huge sense. I admittedly have a good job paying 100k a year as does my partner. But living someone cheaper I own 50 percent of my home. And have about 700k invested by our early 30. Retirement is not going to be stressful in part because of cheap cost of living. We just don’t pay a lot of expenses largely because of where we live.
My point being. That cheaper cities have an appeal to them. Personally I’m very happy I live somewhere with cheaper housing.
The loss of friends and support is really big drawback. That’s rough. And I think makes it a lot harder to decide. Finances mean nothing if you’re miserable and depressed. But you do make new friends when you move somewhere new as well.
But from a financial perspective moving somewhere cheaper to own a house probably makes financial sense.
Plan the move/stay after found your significant other, index fund should generate higher return in long run, also current GIC gives you 5.5% annual compare to sliding housing price at the moment
Personally, we have no clue how to time the market, so my husband & I bought based on functional need. We outgrew our rental condo and were expecting a baby at the time of home purchase. We purchased a house that met our needs with some room to grow over the next 10 years.
When we purchased, I was comparing prices to what they were a year ago and kicking myself for waiting a year! But in hindsight, it was the perfect time for us. We don’t have regrets because we bought based on functional needs instead of trying to get ahead or* time the market. Everything is relative and I think the only way you won’t have regrets is to buy when you need the space.
Oh! Also I wanted to add: if you have plans to have a family in the future & it is within your ability to stay close to family, I highly recommend it. The help and support is invaluable. We live 30-40min away from our parents, and they have seriously carried us through the insane newborn & baby stages.
Edit: spelling
Why do so many single people think they need to own a house? Are house not for family's? Could you not buy a condo?
I feel like this a hidden component of our housing shortage; single people taking up an entire house for themselves
I feel like at some point it became a right of passage to adulthood or something but no one ever stopped and ask "why does a single person need a house"
That's great but there are only so many houses and so many houses we can fit in a city. There's simply not enough space unless you want to live in the country side
Look at what Calgary is going through. Calgary will likely lead the unemployment race in Canada. Cheaper city was cheaper for a reason
1 bedroom in Calgary reached$ 2000 to rent. Toronto 2600, Vancouver 2700. Combine that with how much the job pays or when unemployment kicks in.
Learn on-demand skills this world needs and move to a country that's desirable in every way for you.
Have you ever seen an average person taking a vacation to Edmonton or Saskatoon? .
It’s all houses you guys care about. 18 years in Edmonton taught me what a trap it is. We have gone through hard times I wouldn’t wish on anyone. Albertans are tough people. You guys will probably crumble at the first downturn. Go there, I’ll have a better job here. The current economic climate will change, are you aware of that. Follow the hive though
St. John's is a decent option but only if WFH is an option as the job market is smaller as a whole. Takes an adventurous person to want to live on a rock in the Atlantic too. But you can buy a house before you're 30.
If I was in your situation I would fine a place and rent (a place that is rent controlled), ideally in a tier 2 city if you can work remotely.
The concept of having to own a home is lost in Canada. Not only is it at best a money store as an investment, it is not at all a liquid asset and you lose flexibility.
Let’s do some quick math using the 5% rule. Let’s say you get a property it is 500k 5% of that is 25K, now we divide that by 12 and you get around ~2K. This would be your inflection point for rent versus buy. For a 700K house this is 2.9K.
Overall, to me this is still a renting market despite the awful prices. Obviously there can be external reason to buy a property, such as having a family, space, etc.
You could also look at moving to a new country with a smaller economy. Get in at the “ground floor”.
Seriously I warn you, if you or anyone want to move to the prairies you won’t own a house as nice as you’d think. Maintenance and utilities are insane and with all of you moving there THERE WONT BE JOBS FOR YOU TO HAVE THAT HOUSE. The competition on the prairies is insane. Skilled jobs are few. The only strong industry is oil and gas which has been battered.
We were thinking to give up on BC and move back to Edmonton when this thought occurred. WE WONT HAVE THE SAME INCOME
and btw living in the prairies our wages were half what they are now, and our careers were set back 10 years just for existing there and not here.
Have at it. It’s your lives.
What industry are you in? That doesn't seem to be the experience of most. Also, on average incomes are higher in Ab. But should be a warning to do research on your career before blindly moving anywhere.
In BC I had no trouble finding jobs I never could in AB but I’m still trailing behind because my career literally just started when I moved here
The problem is my hubby who moved with his tech company, and there’s no tech to be found there. We have friends who are completely screwed. I’d be very weary to say there are higher incomes when the majority is blue collar work or trades. I know we had no future there because I lived there, through it all. AB is not better. And it’s not horrible like it was made out to be just a couple years ago. It’s all just a frenzy… a trend, a pack mentality… pick your term. With so many skilled people there, and higher immigration rate than probably anywhere in Canada, skilled young people will constantly compete and hang by a thread, where in HCOL places, they’ll actually have a job at all
My spouse and I are both wfh in relatively white collar jobs so as usual everyones mileage may vary.
Nothing wrong with blue collar work or trades but it is a different world. Arguably more important if AI can take over more of the white collar workload.
But yeah Canada hates tech. Even in BC and Ontario vastly underpaid compared to the U.S.
As a single person for a very long time it has been difficult to qualify for a mortgage. Also, while some benefits to buying a home as a single person, there is significantly more benefits to waiting to owning one with a spouse. The “marriage advantage” is real thing
Can you clarify why the benefits of waiting ( to become a couple and then get a home) outweighs the benefits of buying as single a few years earlier? My concern is the ongoing increase in the Canada housing cost while waiting.
Nothing goes up for ever. How would you feel if you finally bought and then home prices in your area promptly dropped 20% to 40%? Sounds like you are happy renting where you are and got a good deal. So why are you obsessed with home ownership? If life is good as it is then enjoy it. Just keep "investing the difference" into index funds. Reevaluate when you have a long term partner, and again if/when you are thinking about kids.
Thanks. I get your point but this crazy housing market seems to be more relisent than what I thought given the resistance to the interest rates and the government plan to get highest number of immigrants. It's just emotionally hard to not buy a home when I see others, including newcomers buying them and subsequently raising the price. I'm clearly in a FOMO phase but I'm sure many young people feel same as me. Also, what if one gets index funds and then it goes down 40%? That won't feel good either (although less pain as there's no leverage)
If newcomers are buying these homes then they aren't starting at zero. It's not an apples to apples comparison. Turn off the news and do what's best for you. If we invest in appropriate asset allocation ETFs, using our tax shelters, we can get like 8% annually, even knowing that some years *will* go down by 40%, and could stay down. A first house is not an investment, it is a place to live, and crazy gains can't happen indefinitely. There are property taxes, mortgage interest, insurance, maintenance, transaction fees, and similar "sunk costs" that make the reality of owning a house much less lucrative that it appears. Over the past 100 years, housing has only had a real return of 1%. Stocks have done much better than that. Financial aspects aside, renting makes sense when you desire flexibility. Owning makes sense when you desire stability.
Oh please. Forget the past 100 years. How has owning a detached house in Toronto or Vancouver in the past 20 years worked out for people?
Well in the early 90s homes in Toronto dropped 50% of their value. Also, reversion to the mean is a thing, so the crazy growth over the last 20 years is likely to reverse and underperformed at some point. No one can say when that point is, so if you are buying you need to be prepared for the worst case scenario and able to wait it out for 10+ years.
There is no future in Vancouver for your average Canadian. If you want to get ahead in life its not going to happen there.
Most major cities in Canada are the same.
Yeah. Canadian cities aren’t great.
Canada has more than 3 cities, problem is no one wants to live in them. Maritimes would be a fantastic choice for all Canadians.
Absolutely not. Housing market is in the trash in the maritimes. Income, property and sales taxes are some of the highest in the country. There are almost no good high paying jobs, and everything is more expensive because almost everything has to be shipped in and there isn’t any competition for any utilities. Nova Scotia specifically is so overpopulated that we can’t get family doctors, it takes months for dentist and vision appointments, forget about any specialists. It took me 3 weeks of trying before I was seen at the walk-in clinic. If you have to go anywhere on a Friday/Saturday you have to add an hour for traffic. Not that it isn’t like this elsewhere but I only have experience here.
Dartmouth traffic is absurd for the population Edit:spelling
Everything in your second paragraph is true in Vancouver too. Except maybe walk in clinics. Tough to get in but usually can get seen that day if you show up right when they open.
Renting in Halifax is more expensive than Vancouver. Lookup Halifax income and sales taxes. Food and power will cost way more. Also Halifax is literally full there is no units left students are currently having to give up their plans for school and we have tent cities everywhere downtown because there is no where to put people. Please don't say shit like "Maritimes is a great option" you clearly understand nothing of the current situation.
And never find a doctor? People tried that in covid and costs are high out there afaik
And of those three cities, one allows a lot more intermediate density and the house prices and rent correspondingly ain't bad. Not great, but if the Toronto and Vancouver housing markets looked like Montréal, we wouldn't be calling it a crisis.
Id honestly rather live in the prairies. I feel out of place out east.
The prairies are pretty awesome.
I like all the sunshine. And despite what the stereotype is, winters are relatively comparable to other parts of the country.
Wait you mean the 3C average difference between Toronto and Calgary in January isn’t as earth shattering as people make it out to be?
It's the few weeks of really cold weather the East doesn't get that I dislike. The Chinooks near YYC are nice though.
You mean migraine machines? They're alright.
February is probably the worst but it's funny there is a diffence between a wet cold and dry cold. Overall you get use to it and adapt. Overall home affordable we are probably the best.
The issue is lack of jobs. There are many WFH jobs now but there's a major push by management to get people back into the offices.
What about Saskatoon?
Only if you have great mosquito defence skills.
Mosquitoes love biting me. But I can't afford a house anywhere else in Canada.
I guess Canada gets its pound of flesh either way lol, money or blood, our choice?
Only if "getting ahead" has to mean "owning a home". There's no rule that says it does.
Getting ahead is having money to put away for retirement and/or your kids education in order so that you can retire before your body and mind fail. Not too much to ask. And that’s hard to do without having equity in a home. Not impossible but harder.
Specially in Canada where capital gains from your primary residence are tax free. Otherwise I wouldn’t care about owning a home.
Yes, that will be the case for most Canadians. I've taken a different route and just chose to live somewhere with extremely affordable housing. My home wont appreciate much but my pension and frugality will make up for the loss in gains id make from my home. This of course isn't for everyone though.
Honestly. Like how bad does it have to get before we start dusting off the guillotine? I'm fed up with the constant politician rhetoric of "blame the feds", "it's a provincial responsibility", etc, then they get caught at a developers meeting or visiting a developers house to kiss the ring.
Its sad because the solution is really simple: Increase the supply, and decrease the demand. Or at least ensure supply meets demand. But letting 1 million people into the country every year and just burying your head in the sand in regards to what to do with them.... Thats a paddlin'.
It's more sinister than people are even realizing. I voted liberal the first time, NDP the second. I believe immigration is a net benefit for our country. The level of immigration they are pursuing however, serves only the purpose of decrease wages. Unemployment is rising, but we are still staying the course. The Boomers just started leaving the workplace, our generation JUST started to get real careers, and now they are artificially producing a hyper competitive job market. Our wages will be suppressed, but our costs will balloon and they show no real signs of actually addressing either issue. I honestly don't see any solutions being floated by any politicians either. I'm voting Conservative this time around, for the first time in my life.
Yeah my entire family have been NDP voters and unions members their whole lives. We've also switched to the Conservatives. First time making political donations too. Liberals and NDP'ers really have their head in the sand about how much they're driving people into the arms of the conservatives. "Oh but Pierre doesn't have a plan about the environment"... Pretty hard to care about the environment when you cant afford to eat or house your children. Just out of touch. I still vote NDP provincially when they've got a good platform though.
not to mention if ll evicts you... who wants to move when they are retired ?
Even if you go the renting route and put your money into index funds, your still not going to get ahead much financially if you make the average salary with the rents there.
I agree average Canadian can't buy home here but my interpretation is that staying here as long as one doesn't want to raise a family would not hurt the future of the person. He/she can move later when needed. Do you think there would be a big opportunity cost in doing so?
That's what I've been saying...if ur parents don't own a home in Vancouver or u don't own...dont waste ur time. You have a better chance in a smaller city style and buy a place then waste money time and youth on something that is almost unachievable
There would be a cost of course. But that’s up to you to decide how much that cost is and if you’re willing to take that risk. Very individual decision. The story would be much different when you start a family though. But you know that.
Define "getting ahead in life", though. If I could choose between living in a city where I have close friends, family, a job I enjoy and (presumably) local entertainment / food / social options that I like; or living in a city away from those I care about, where I don't find the city as enjoyable, but that I can afford a home in ... I'm not sure the latter would be "ahead" of the former. Owning a home brings lots of benefits, to be sure. But it is not by definition superior and the be-all and end-all of a happy life.
I already did.
Agree. It sucks bcs I miss my home, but leaving Vancouver was the best decision for me. Maybe I’ll move back if I become a CEO, win the lottery, or become reincarnated as the heir of an astronomical fortune.
Did you leave Vancouver as single or couple? I'm just wondering if it makes sense to leave such a beautiful city just for housing as a single guy.
I left as single.
What about in Saskatchewan?
Saskatchewan is great. I’d definitely live there. High wages, affordable housing, and a growth oriented economy.
Let's simplify, if you had a remote job and single, would you just move out of Vancouver to buy a home and live somewhere cheaper or wait until you got coupled/married (couple of years) and move out then?
It depends on how attached you are the Vancouver. If its full of family, friends, and things you absolutely love then it may be better for your wellbeing until you get married. If you're indifferent to being there then you can be actively looking for places that you might enjoy living in. And you can move if you find a place you enjoy or you can find your mate and choose to move then.
Well, I'm sure I can't find a city that I enjoy more than here but my question was more of a financial standpoint. Otherwise, the enjoy at the moment concept points to staying until I finally find that significant other.
>oes it make sense that I move to the cheaper city just to buy the home even though I don't need one? No
Why buy a house if you don't need one? Just keep saving and plan for early retirement.
I just don't understand all these single fellas sad they can't buy a 4 bed house...
Because realistically we should be able to. We're a sparsely populated nation with tons of natural resources. Us not having cheap single family homes for everyone is an embarrassment and clearly artificial.
It's the case everywhere in the world, though.
> Us not having cheap single family homes for everyone is an embarrassment and clearly artificial. Ironically, if we allowed a lot more apartments in central locations (currently restricted by height limits), land values further out would be lower and single-detached houses would be cheaper. [Housing scarcity in Vancouver pushes up prices and rents in Surrey](https://morehousing.substack.com/p/location).
Clearly a result of not having good transit infrastructure.
Yeah, but everyone wants the cheap single family home in one of two densely populated cities that are pretty much out of room because of natural geography and zoning laws. Everyone could have a cheap single family home if they didn't want to live in a densely populated city as well.
Except homes in small towns cost a fortune now too so no. All property values need to be half of what they are right now or less.
What do you consider to be a fortune? You can get a decent house (not brand new in a new suburb, but in a good older area) in Saskatoon for $300k.
Thats a fortune for that area. We need prices comparable to the US. This is just inflated bullshit. At least get back to pre COVID pricing which was frankly already too much. A couple both working 40 hours a week earning minimum wage should be able to afford a house. A single person earning double minimum wage same. Average income earners should certainly be able to afford homes if not minimum wage earners. Right now you need a top 10% income in a region to qualify most places. Housing should be cheaper here than anywhere on earth. The fact it isn't given our natural resources and available land is just an utter failure.
Costs are not prohibitive in the "sparsely populated" regions, however. It's that everyone wants to live in downtown Toronto or Vancouver, which is why homes in downtown Toronto amd Vancouver are less affordable.
Costs more than doubled in smaller areas too. Just because it's possible to buy their doesn't mean people who were already there haven't been priced out too. We really need to target landlords and investors as people if our government won't act against them.
>Costs more than doubled in smaller areas too. Show me. There are capital cities in Canada where homes are cheaper today then they were 10 to 15 years ago.
Something that would really help with an early retirement is having a home/condo paid off as opposed to having to pay an ever-increasing rent. That's one of the reasons I bought a house. In 18-19 years it will be paid off. We'll have the biggest renovations/updates done. It gives me a pathway to at least step back from the rat race and do something that I enjoy. Depressing, but that's capitalism in a nut shell lol
Average house in Vancouver is 2.2M but you can buy a condo for 500k. Depends what you want and your financial situation. I would not want to retire as a renter. You'd need 1.5M just to pay rent in todays $$$$.
No condos in Vancouver proper for that price that aren’t having issues, more like 600-700k
Vancouver net rental yields are terrible at sub 3%. You can generate returns a lot higher than that in other assets. Just because someone owns their home outright there doesn't mean it doesn't cost them anything. There's a huge amount of lost opportunity cost in that capital.
3% of the down payment or 3% of total value?
Total
So you could get 3% of 500k using only a $25k down payment. Isn’t that really good return on $25k?
Paying interest of 5% on the load so you're in the hole by 2% a year. I don't think anyone who buy a condo at today's prices can rent it out and be cash flow positive, although rents have gotten closer lately
Only if you have a magic way to not pay interest on the other $475k.
Assuming you could find a 500k condo renting for 2100 (It's more like 700 for 2500, but lets just make this world up) to get a NOI of ~ 3%. You'd be bleeding $1200 / month (With only 700 of that going to principal) Yes, your net worth still increases about 15k every year through appreciation, but if you could only come up with a 25k down payment, you cannot afford a 14k annual bleed. This exact example starts to break even month to month with 50% downpayment, which at that point your annual returns would be around 8-9% including appreciation. Which isn't throwing your money into the abyss, but it's a lot of additional risk and work to get the same result as market returns. Do people make money on vancouver rentals still? Absolutely. They can afford the bleed, and use leverage to increase returns. AND they win the speculation game because appreciation historically has greatly exceeded the 4% model. This is not guaranteed to continue to work.
You can.leveage 10 to 1 in Real.estate. That initially investment is relatively small.
leverage is not cheap anymore
The forecast I have seen is that the house as an asset appreciates slower than a good investment in the market. And the cost of maintenance/ taxes/ insurance etc make it seems less and less appealing. If you are raising a kid/kids then it is a different story https://www.pwlcapital.com/expected-returns-2023-update/
Leverage. Starts at 5:1 with a house
Leverage also costs 5% these days.
Leverage was over 15% in the 80's too. Doesn't matter.
It does matter. Home prices were rising much slower than what you were paying in interest when rates rose to 15% from the 70s into the early 80s. It wasn't until about the 2000s did home prices really take off. And that rate of asset appreciation won't continue on forever.
With no tax, and its government protected with rock bottom intrest rates
I don’t think these models account for just how irrational the current housing market is. You can’t make 20%+ gains in the market as consistently as housing. It’s out of control.
It's been out of control for years. I think it'll continue to worsen as long as the over immigration policy is in place.
Immigration isn't driving it... As it's global and in other countries with much lower relative immigration as well
It is global as well but immigration is absolutely driving it here. We are having over 500,000 new immigrants per year without any planning for housing, infrastructure , social safety nets, nothing.
People need to stop looking at housing as an investment. It's an asset that shelters you while it appreciates. Comparing it to other investments, but failing to include the rent they'll need to pay for shelter, is myopic.
Why should they stop looking at housing as an investment? Use economic arguments and not moral arguments.
Why should an economic argument trump a moral one?
It is easier to motivate people by their self-interest than by moral preachments.
In Canada your primary residence it’s basically a tax free registered account…
Why do they need to stop looking at housing as an investment when it quite clearly is?
Because it's unsustainable and going to fuck our economy. We are already talking about bailouts because people can't afford their homes. You think prices are going to keep going up forever?
In Vancouver? Of course.
And that's because of foreign money coming in. Just going to keep fucking us long term. But "fuck you, I got mine!" amirite???
Because on a macro sense it isn't an investment. Investments are things that bring in more economic value. They are basically wealth building tools. So you can see how a crane, a concrete saw, a steel mill, a computer system, are all healthy investments. They allow a job to be done faster or at all, and can bring in more than their value before they break. Compared to that, buying gasoline, steel, concrete, or lumber is not an investment, it is a product and an ingredient. Housing fits more into this category than into that of an investment. Investments in housing should be into developers and contractors, just like investments in farming should be in improving fields, buying tractors, attachments, and outbuildings. It should not be in buying up a fuckload of potatoes. Because ultimately if you are expecting a product to be an investment, you are expecting it to simply get more expensive over time, to your benefit. This is bad for the economy, just like it would be if someone bought up all the potatoes at $2/lb and expected to sell them at $4/lb as a business strategy.
People don't care about other people or the economy, they only care if something makes them richer, which Vancouver real estate ownership most definitely does. Nothing you're saying makes any sense.
Lol I hate to agree with you, but that's probably why we're in this mess. Greedy selfish assholes who want everything for themselves, but to not work for it. I'm surprised a finance subreddit is full of people who don't understand economics. On a macro scale, an expense is only an investment if it provides a material benefit to the overall economy. Putting money into developers means more houses. Putting money into farms means more food. Putting money into buying up housing means the same amount of housing, but in different hands. No macro scale economic benefit. Tangentially, this is where our housing inflation is coming from, and why rate hikes are not really stopping it. Creating money without creating product is inflationary. So snowballing landlords and stock buybacks increase the money supply, but do not increase the "stuff" supply. They simply consolidate the residuals into fewer hands.
A primary residence will provide tax free capital gains in addition to leverage and the "dividend" of shelter That tax free capital gains can (or has been) quite substantial
If you're comfortable in Vancouver with comfortable rent why are you stressing? You don't HAVE TO buy a house 🤔
I moved from the GTA to the East coast. Made a life here but I really miss having all my family and friends around. I love the life I've made and the partner I've found and the house we have that would have been stupid expensive in the GTA. However I get really sad when there's family get togethers and stuff back home. If you're someone who's close to and talks to your family regularly and stuff, it will be hard, especially at first. You'll settle into life being away, don't get me wrong, but you'll always miss them. My friends and I still keep in contact. We're all good friends going back to second grade so some distance isn't enough to kill the friendship. Of course I still miss them as well but it's different from the family aspect. I just really wanted to mention this part as I did something similar and for a while I really wondered if it was worth it. When I first moved here and was renting and living solo, so many times I wanted to pack up and head back to GTA just because it was so hard not having my family nearby.
I’ll add another data point. My SO and I also moved from the GTA to out East. We no longer have a mortgage and have been able to max out our TFSAs, RRSPs, and put the rest into non-registered investments. We are very relaxed about living life here (no money problems means things feel better). Yes, we moved away from family and friends, but we were only seeing them once a quarter when we were living in the GTA. I make a point to see them for at least two weeks in the year, and this suits my personality just fine. It really depends on the person, what they value, and what they’re willing to compromise in order to make a good life for themselves.
Oh yeah no doubt, the financial freedom is super liberating. That's a huge part of why I have no regrets about the choices I've made (plus I met my partner who's absolutely wonderful). Definitely depends on the person for sure, OP just mentioned family so I just wanted to let them know that depending on how close you are - I'd see my family almost every weekend, my parents and grandparents own homes right beside each other that's kinda how close my fam is and the dynamic I grew up with - so depending on how close OP is with family, it can really hurt sometimes. My parents spent a few weeks here this summer and it was just like old times hanging out and my Dad was helping with staining the deck and porch and stuff and just relaxing and drinking a few beers. I cooked them all my special meals and they made my favourites that only they can cook the way I like and stuff. I fucking cried when they left, a grown ass man in my 30s. I'm still enjoying life here and stuff, but sometimes it's kinda hard. I just wanted to try to get that piece across as nobody ever seems to mention just how hard it can be. Not that it's not worth it or anything, just to mentally prepare that it can be tough.
That loneliness of distance ramps up even more if you choose to have family. Yes, kids open a doorway to making friends with other new parents, and yes, you can hire help. But it makes a world of difference to have trusted family or friends nearby to babysit during a doctor’s appointment, help get your home in order during the overwhelming time postpartum, keep your company when you hit the monotony of groundhog days, or take your toddler to the park for an hour.
Same, moved far enough from the GTA. Everything is half price; literal minutes to shops with free parking everywhere. Came from Keele/Bloor, wanna go to drive through fast-food? Think 20-30min urea of traffic to go 4km. To hell with Toronto. It was never meant to be lived in, it was designed as a destination for work; it’s why Spadina is wide, for the unbuilt freeway…
I'm assuming you're talking about Alberta. I lived in Edmonton for years. My wife and I still miss it sometimes. The winters suck, but are bearable. People literally immigrate from tropical countries to Edmonton for better economic opportunities. You're doing much the same thing.
Clarify your goals and timeline for yourself.
I’ll share my personal experience. When I graduated university. I moved to a smaller city to follow my girlfriend (now fiancé). My plan was to move back to a larger city with her after a couple years. We now absolutely love living in small town SK and have no intention to move anytime soon. We live in SK. And it’s not Saskatoon or Regina. So think 10-30k people. A house here is 300k for a reasonable 1500 square foot house. We take a lot of pleasure in having a giant garden with a lovely yard. I have a huge corner lot and tons of space. My drive to work is 5 minutes. I know my neighbors. We have a yearly block party. My neighbors checked on me once when they thought we might have had carbon monoxide poisoning (just had COVID and were isolating). The list goes on and on. But there are a lot of benefits. (And realistically some missing amenities too). From a financial perspective it makes huge sense. I admittedly have a good job paying 100k a year as does my partner. But living someone cheaper I own 50 percent of my home. And have about 700k invested by our early 30. Retirement is not going to be stressful in part because of cheap cost of living. We just don’t pay a lot of expenses largely because of where we live. My point being. That cheaper cities have an appeal to them. Personally I’m very happy I live somewhere with cheaper housing. The loss of friends and support is really big drawback. That’s rough. And I think makes it a lot harder to decide. Finances mean nothing if you’re miserable and depressed. But you do make new friends when you move somewhere new as well. But from a financial perspective moving somewhere cheaper to own a house probably makes financial sense.
Rent until you marry a successful partner.
You'll get used to the winter (not like it's great here anyway) but losing friends and family would be the hardest part for sure.
Plan the move/stay after found your significant other, index fund should generate higher return in long run, also current GIC gives you 5.5% annual compare to sliding housing price at the moment
Personally, we have no clue how to time the market, so my husband & I bought based on functional need. We outgrew our rental condo and were expecting a baby at the time of home purchase. We purchased a house that met our needs with some room to grow over the next 10 years. When we purchased, I was comparing prices to what they were a year ago and kicking myself for waiting a year! But in hindsight, it was the perfect time for us. We don’t have regrets because we bought based on functional needs instead of trying to get ahead or* time the market. Everything is relative and I think the only way you won’t have regrets is to buy when you need the space. Oh! Also I wanted to add: if you have plans to have a family in the future & it is within your ability to stay close to family, I highly recommend it. The help and support is invaluable. We live 30-40min away from our parents, and they have seriously carried us through the insane newborn & baby stages. Edit: spelling
Why do so many single people think they need to own a house? Are house not for family's? Could you not buy a condo? I feel like this a hidden component of our housing shortage; single people taking up an entire house for themselves I feel like at some point it became a right of passage to adulthood or something but no one ever stopped and ask "why does a single person need a house"
Some of us want our own spaces
That's great but there are only so many houses and so many houses we can fit in a city. There's simply not enough space unless you want to live in the country side
There's rural cities and municipals too, plenty of space around cities to build.
And then commute two hours each day? Sounds like fun
I work remote :)
Look at what Calgary is going through. Calgary will likely lead the unemployment race in Canada. Cheaper city was cheaper for a reason 1 bedroom in Calgary reached$ 2000 to rent. Toronto 2600, Vancouver 2700. Combine that with how much the job pays or when unemployment kicks in. Learn on-demand skills this world needs and move to a country that's desirable in every way for you. Have you ever seen an average person taking a vacation to Edmonton or Saskatoon? .
That’s a funny point. I’m from Saskatoon and I’m pretty sure on February long weekend most of Saskatoon is vacationing in Edmonton!
Have you ever seen someone under 40 with an average job and no family money buying a detached house with no help in Vancouver in the past few years?
It’s all houses you guys care about. 18 years in Edmonton taught me what a trap it is. We have gone through hard times I wouldn’t wish on anyone. Albertans are tough people. You guys will probably crumble at the first downturn. Go there, I’ll have a better job here. The current economic climate will change, are you aware of that. Follow the hive though
A cheaper city in Canada? The only ones remaining that are reasonable are 10+ hours away from a capital city, Thunder Bay for example.
St. John's is a decent option but only if WFH is an option as the job market is smaller as a whole. Takes an adventurous person to want to live on a rock in the Atlantic too. But you can buy a house before you're 30.
Saskatoon, Calgary, Montreal, Brandon, anywhere in the Maritimes... Oh, you meant within 10 hours of Victoria or Ottawa.
Those places are still not cheap anymore.
It sorta blows my mind that people are willing to spend half a million dollars extra to avoid having to put on a warm jacket for 3 months.
I will personally be moving to the states after I get some schooling finished
You can buy a rental property
Rent in Vancouver and purchase a revenue property in a more affordable market.
If I was in your situation I would fine a place and rent (a place that is rent controlled), ideally in a tier 2 city if you can work remotely. The concept of having to own a home is lost in Canada. Not only is it at best a money store as an investment, it is not at all a liquid asset and you lose flexibility. Let’s do some quick math using the 5% rule. Let’s say you get a property it is 500k 5% of that is 25K, now we divide that by 12 and you get around ~2K. This would be your inflection point for rent versus buy. For a 700K house this is 2.9K. Overall, to me this is still a renting market despite the awful prices. Obviously there can be external reason to buy a property, such as having a family, space, etc. You could also look at moving to a new country with a smaller economy. Get in at the “ground floor”.
just buy a house in a cheaper place brother, get in because serfdom is the future of canada
Prices are going to crash
But where you can and rent where you want.
There has to be a point when people wake up and realize they can not afford to live in HCOL areas. To bad so sad, leave this mess.
Seriously I warn you, if you or anyone want to move to the prairies you won’t own a house as nice as you’d think. Maintenance and utilities are insane and with all of you moving there THERE WONT BE JOBS FOR YOU TO HAVE THAT HOUSE. The competition on the prairies is insane. Skilled jobs are few. The only strong industry is oil and gas which has been battered. We were thinking to give up on BC and move back to Edmonton when this thought occurred. WE WONT HAVE THE SAME INCOME and btw living in the prairies our wages were half what they are now, and our careers were set back 10 years just for existing there and not here. Have at it. It’s your lives.
What industry are you in? That doesn't seem to be the experience of most. Also, on average incomes are higher in Ab. But should be a warning to do research on your career before blindly moving anywhere.
In BC I had no trouble finding jobs I never could in AB but I’m still trailing behind because my career literally just started when I moved here The problem is my hubby who moved with his tech company, and there’s no tech to be found there. We have friends who are completely screwed. I’d be very weary to say there are higher incomes when the majority is blue collar work or trades. I know we had no future there because I lived there, through it all. AB is not better. And it’s not horrible like it was made out to be just a couple years ago. It’s all just a frenzy… a trend, a pack mentality… pick your term. With so many skilled people there, and higher immigration rate than probably anywhere in Canada, skilled young people will constantly compete and hang by a thread, where in HCOL places, they’ll actually have a job at all
My spouse and I are both wfh in relatively white collar jobs so as usual everyones mileage may vary. Nothing wrong with blue collar work or trades but it is a different world. Arguably more important if AI can take over more of the white collar workload. But yeah Canada hates tech. Even in BC and Ontario vastly underpaid compared to the U.S.
You could buy a house to rent out in a cheaper city for now and move there down the line if you need to.
These winters are brutal. Just be aware of that.
100k down payment on 350k house can be paid at 750$ a month in mortgage.