Look I agree that some people get rich betting on rising property prices but that doesn't change the fact that loans cause problems for lots of people.

My stance is to avoid loans unless you have to (mortgage) and pay back loans as fast as possible.

Vancouver and Toronto are exceptionally skewed right now. The price increase of homes to real wages is atrocious and with rising values of course comes the burden of an increase to property tax. We are seeing a pretty big shift to downstairs livable unit style situation to generate rent to help offset costs. With that said I haven't done a rent vs own analysis in those areas since I have no interest in investing there or living there, but rents have also risen significantly.

I think you're going to see a migration to Calgary, Edmonton, etc where you can still get a 3bedroom home 25 minutes from downtown metro for a fraction of a Vancouver or Toronto price. I look at areas like Kelowna Kamloops, etc. You have an explosion of development where buying a home makes sense and you still have enough population that there's actual employment and expansion in what presumably down the road will become small city centres and as a result you will see continued appreciation from owning a home in those areas.

Saskatoon and Regina have also been favourable cities due to Saskatchewan's fast track immigration program, making it one of thoe most desirable immigrant provinces. Its the easiest to obtain permanent residency but of course you have to be employed and tick certain boxes which is good for a population.

Toronto and Van though. Certainly not appealing from any perspective right now. I don't know what you do as the average person in those cities to be honest, my financial advice is to just leave but that isn't feasible for everyone, obviously, its where employment is and if everyone floods to the next place you have the same problem there.

This post was edited by SBD on Apr 21 2023 11:17am

Not all properties are created equal.

Buying a new built or <50 year old home, generally you could say its going to be accretive.

Buying a home built in the early 1900s and possibly overpaying will come with tons of continual upgrade work and limited home appreciation because of it's age. In something like that you're taking an actual risk in thinking you're automatically going to make money.

I am in this dilemma right now as we've moved to surrounding GTA and bought a home last year for around 780k + land transfer/closing costs takes us to 800k. Appreciated value right now is 1050k, but, my mtg is approx 600k at 6% right now cause I went variable. Within 5 yrs that interest cost is 180k which eats into my gains. The home would need to appreciate even more to offset those costs.

It was new build with no assignment sale clause (my fault for not looking into what else was available or considering a 1-2 yr old new build) and we originally purchased in 2020 during covid. The builder delayed our closing so we got fucked on rates (lost my rate gaurentee at <3%).

We were looking more southwestern ontario (where our commercial property is) but the price sprawl has hit those areas as well which is making it difficult. the only reason we have a mtg is because we invested our funds into a commercial property that is doing really well and took no outside help from parents.

However, if the GTA is going to move in teh direction of New york or London (Eng) in terms of more and more population, then there is still potential for even greater gains to rely on.

This post was edited by Budgeting on Apr 21 2023 11:22am

average household income needed to afford anything reasonable is 250k-300k+, but, you are house poor.

This post was edited by Budgeting on Apr 21 2023 11:24am

Anecdotally, I have good friends living in Ottawa and the GTA that have wives that also make six figures, combining to make for a 300K household income and they have TFSA and RRSP room left. It flabbergasted me. Both i'd say are pretty financially responsible chartered accountants. House poor indeed.

There's really a multitude of other factors in your decision as well other than financial, some people just enjoy the lifestyle or have family and friends and will be house poor to maintain that. That's really the case for them. It's about family for them and proximity to those members. They have a skill set where they could work anywhere and live quite well off but choose to be in an inflated area. They are not the average person though.

This post was edited by SBD on Apr 21 2023 11:30am

and by "a bunch of people get lucky" you mean "literally everybody who bought and held for more than 10 years".

You're basically arguing hammers are bad because some people use them poorly or inappropriately.

Loans are just a financial tool. Understand them and use them appropriately. Failure to use tools properly just leaves you banging rocks together in the woods.

This post was edited by NetflixAdaptationWidow on Apr 21 2023 11:33am

this is bascically us lol, i am a CPA and my wife is an RN. combined we are in that range. My parents live about 30 minutes away. Hers reside where our commercial property and their own business is. We used the savings in our RRSPS/TFSAs for a portion of the down payment. Looking forward to be able to replace those funds and get them working again.

Are you a fan of Dave Ramsey