real estate prices in Canada sustainable?
#271
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Re: real estate prices in Canada sustainable?
Although I am in Ireland, we made sure that our mortgage for a house here and in Spain is covered through job seekers allowance.
#272
Re: real estate prices in Canada sustainable?
If you buy a home for personal use then I would assume that you want to be able to afford it. The higher paid job I have today could be gone tomorrow, so worst case I can still afford the mortgage if I lose that job.
Although I am in Ireland, we made sure that our mortgage for a house here and in Spain is covered through job seekers allowance.
Although I am in Ireland, we made sure that our mortgage for a house here and in Spain is covered through job seekers allowance.
#273
Re: real estate prices in Canada sustainable?
A single wage earner on $125 can borrow 375. They need 125 for a deposit giving $500,000. Orangeville offers a selection of homes for $500,000. So, that's someone in middle management or a starter role in a profession buying a home commutable to Toronto. Lots of people buy houses together, as couples, and so have lots more buying power than that; if they did not houses would not generally cost more than that. You can only sell something for a price people can afford, thus we know that lots of families are willing and able to buy a house somewhere not very nice for a million bucks, it happens every day.
entering those numbers into the calculator, zero deposit, 100% mtge
https://wowa.ca/calculators/affordability
comes out that I cannot afford a mortgage even on a outhouse
imagine a 2 wage earner situation on minimum wage buying their first lowest possible priced property of say $100,000, even if someone could get a 100% mtge 5% cash back earning $56,000/yr gross/$44,000 net, they'd have property tax, utilities, living costs, phones, internet, transportation ...not in Ontario, maybe in rural somewhere Canada where there are no jobs.
I also entered New Brunswick as a potential purchase, again based on minimum wage, zero down ... zero mortgage qualification
my guess is that Jsmith & his wife combined income could not afford a house anywhere in BC
#274
Re: real estate prices in Canada sustainable?
I may have mislead you...the condo we viewed is a few miles west of where you are. It was sold for over ask within 48 hrs of it going on the market. Property is still selling very quickly here. The realtor was talking about properties in the GTA, not particularly downtown condos.
I know the area I work in is very close to the safe injection site at St Paul’s Hospital and I’m wondering if they that had an impact. (I know the local community has advised crime has gone up) plus Granville Street is getting worse!
I can’t wait until our move to the Langley area.
#275
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Joined: Apr 2009
Location: SW Ontario
Posts: 19,879
Re: real estate prices in Canada sustainable?
A single wage earner on $125 can borrow 375. They need 125 for a deposit giving $500,000. Orangeville offers a selection of homes for $500,000. So, that's someone in middle management or a starter role in a profession buying a home commutable to Toronto. Lots of people buy houses together, as couples, and so have lots more buying power than that; if they did not houses would not generally cost more than that. You can only sell something for a price people can afford, thus we know that lots of families are willing and able to buy a house somewhere not very nice for a million bucks, it happens every day.
#276
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Re: real estate prices in Canada sustainable?
The assumption most people (and most banks) make is that someone taking out a mortgage will be able to maintain an income sufficient to make their payments. If someone is earning 5X minimum wage, they won't (and don't) buy a house where repayments are near what they can afford if they were to become unemployed or work at minimum wage. Your own prudent financial management is commendable, but it's not realistic to suggest that it can be generalised for everyone.
#277
Re: real estate prices in Canada sustainable?
Well as you say maintain. If you borrow 150K over 25 years 2.5%, that's just under 700 monthly. f somebody is earning 5X minimum wage means they can save more and wouldn't need to borrow so much in the first place. If that's not the case, then they might have a job that pays well now but can't manage their money. What happens if they lose the job and can't get one with similar pay, market crash etc.?
#278
Re: real estate prices in Canada sustainable?
The daughter in BC? I don't have any children in Ontario, the others grew up and emigrated, one of them to Tower Hamlets! She is eight years out of university. She married a chap from her class. At graduation they owed about $150,000 in student loans. They have paid off the loans and saved a house deposit. Obviously they're not on minimum wage. One needs a decent job to buy a house in a city.
Last edited by dbd33; Apr 13th 2021 at 4:24 pm.
#279
Re: real estate prices in Canada sustainable?
I currently work with two people who have separately lucked out, they were at home when the lock down started so they've both had their pay (one at that level, one way up from there) paid in their home countries where it's worth a lot. Neither had been in Canada for a year when Covid struck.
Lots of people make that amount of money, actuaries, pharmacists, middle managers. Again we know this because someone is buying all those new houses.
#280
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Joined: Feb 2013
Posts: 6,148
Re: real estate prices in Canada sustainable?
I think you are focussing on just one side of the coin. People do lose their jobs or do mismamage money and end up not being able to afford their mortgage. However, the majority of people are not in that boat. Consider a doctor, she's not going to buy a house at a fraction of her income simply so that she can afford to pay the mortgage if she is unable to work. Most people stretch themselves to the absolute limit to buy as nice a property as they can afford. In a rising market that often turns out to be a far more successful strategy than buying a modest house with some money in a low return savings/investment account.
#281
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Re: real estate prices in Canada sustainable?
Last edited by scrubbedexpat091; Apr 13th 2021 at 5:10 pm.
#282
Re: real estate prices in Canada sustainable?
Again, an unhelpful chart as it includes all of Canada, Someone earning a high income in Nova Scotia in 2017 might have be able to buy in Nova Scotia but not in the Yukon. It also seems to include all people in Canada, some of whom don't work. Local charts of people working 40 hours a week or more would be more informative.
That said, at what level of income do posters here think one should be able to buy a house; one person alone on minimum wage, two people together where each is in the top 50% of earners, only Avril Lavigne?
#283
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Re: real estate prices in Canada sustainable?
I know we will never own at this point, impossible for us to have a 6 figure income needed. But at least we should be comfortable rent wise, just have to accept I will never have an aquarium or hobbies again since my hobbies cannot be done in an apartment due to space constraints and landlord rules.
If I can get into school next year and take the training I want, assuming 40 hours a week (might not be doable as most jobs tend to be casual in that field.) after taxes but before any other deductions like union dues, extended health, parking and such, would be about 39,000/yr net add in the partial disability we would still get for part of the year, at beast we will net 50,000 to 52,000 per year combined all income sources.
Looking at TD bank site, seems at that income with 25,000 down, max mortgage would be 288,000 assuming no other expenses and $0 debt.
Last edited by scrubbedexpat091; Apr 13th 2021 at 6:05 pm.
#284
Re: real estate prices in Canada sustainable?
When I bought my first house in 1995, the bank said it would only lend me 3.5x my household income. My Wife did not work so it was based purely on my income of £25,000 so I think I borrowed about £85k in all. My parents lent me £5k and I put down the rest to buy a £97k house.
That 3.5x ratio would still work here in Kamloops for a 1st home. $60k income x 2 = $120k x 3.5 = $420k for a mortgage.
Sucks for my Son though - him and his GF earn about $120k combined and could buy a nice mobile home in Langley.
That 3.5x ratio would still work here in Kamloops for a 1st home. $60k income x 2 = $120k x 3.5 = $420k for a mortgage.
Sucks for my Son though - him and his GF earn about $120k combined and could buy a nice mobile home in Langley.
#285
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Re: real estate prices in Canada sustainable?
Maybe a condo in Chilliwack? Assuming they could find comparable jobs in Chilliwack pay wise.
When I bought my first house in 1995, the bank said it would only lend me 3.5x my household income. My Wife did not work so it was based purely on my income of £25,000 so I think I borrowed about £85k in all. My parents lent me £5k and I put down the rest to buy a £97k house.
That 3.5x ratio would still work here in Kamloops for a 1st home. $60k income x 2 = $120k x 3.5 = $420k for a mortgage.
Sucks for my Son though - him and his GF earn about $120k combined and could buy a nice mobile home in Langley.
That 3.5x ratio would still work here in Kamloops for a 1st home. $60k income x 2 = $120k x 3.5 = $420k for a mortgage.
Sucks for my Son though - him and his GF earn about $120k combined and could buy a nice mobile home in Langley.