Canadians 'drowning in debt': 47% will borrow to cover costs, survey says

[blankall]

Originally Posted by Enoch Root

Blame boomers. Hell of a way to live your life.

I'm actually doing quite well personally. I have a property I acquired pre-boom and have a corporation. I'm taking advantage of the current policies that have allowed existing wealth to spiral out of control, and I'm also earning new income.

However, can are really deny what's going on here. How the government is using fiscal, foreign, zoning, etc.. policy to concentrate wealth in the hands of the people who already have it. Apparently earning wealth now means holding onto a property, you bought for pennies on the dollar 30 years ago, borrowing from it, and then spending that "earned wealth".

If the boomers aren't to blame for the current economic climate.... Who is? Is this not the root of everything people are completing about in this thread.

[Scroopy Noopers]

Originally Posted by blankall

That's kind of the point.

You know other age groups still invested in their properties right?

[blankall]

Originally Posted by Scroopy Noopers

You know other age groups still invested in their properties right?

The quality and quantity of homes has steadily deceased across generations. It takes people a higher percentage of their income then ever before to buy a property, either commercial or residential. If this situation is not corrected our economy will continue to stagnate.

I'm not arguing that we should force every senior and boomer out of their home at once. However, the government should stop manipulating the economy to support the capital owners.

[Enoch Root]

We have had this conversation. There are a lot of factors, primarily lower interest rates. The lower the interest rate, the more home you can afford within your monthly budget. The long term drop in interest rates has allowed home prices to rise faster than incomes.

That is not boomers' faults. That is a function of a great number of variables.

There has always been a generational wealth divide. Young people don't have a lot of savings. Older people, who have been working and saving for decades, have more. Shocking, I know - details at 11

[blankall]

Originally Posted by Enoch Root

Blame boomers. Hell of a way to live your life.

Originally Posted by Enoch Root

We have had this conversation. There are a lot of factors, primarily lower interest rates. The lower the interest rate, the more home you can afford within your monthly budget. The long term drop in interest rates has allowed home prices to rise faster than incomes.

That is not boomers' faults. That is a function of a great number of variables.

There has always been a generational wealth divide. Young people don't have a lot of savings. Older people, who have been working and saving for decades, have more. Shocking, I know - details at 11

But getting your foot in the door is considerably harder now than it was a generation ago, and things continue to get worse. Would you not agree?

It's always been tough for young families to start outm now it's considerably harder.

You speak of a number of factors being the cause. Yet dance around who put thev policies into place that resulted in those factors. The college graduate with piles of debt trying to find a job is to blame? The 30 year old couple trying to buy a house with enough room for the kids they probably can't afford? Or maybe the boomer who's property is worth ten times what they paid and who has just used a HELOC to buy yet another luxury vehicle?

[Shazam]

Originally Posted by blankall

But getting your foot in the door is considerably harder now than it was a generation ago, and things continue to get worse. Would you not agree?

Nope. Buy a crappy house for $90K @ 18%. That's almost $1400/month - in 1980s dollars!

That's what my dad did back in the late 80s.

I also find it astounding that people actually think houses were better built back in the day. Mmm, knob and tube wiring. Or aluminum wiring. Or no insulation. Or asbestos. Or vermiculite. Single pane windows.

[Enoch Root]

Originally Posted by blankall

But getting your foot in the door is considerably harder now than it was a generation ago, and things continue to get worse. Would you not agree?

It's always been tough for young families to start outm now it's considerably harder.

You speak of a number of factors being the cause. Yet dance around who put thev policies into place that resulted in those factors. The college graduate with piles of debt trying to find a job is to blame? The 30 year old couple trying to buy a house with enough room for the kids they probably can't afford? Or maybe the boomer who's property is worth ten times what they paid and who has just used a HELOC to buy yet another luxury vehicle?

You want to lay blame. That is your problem.

[GirlySports]

Originally Posted by blankall

But getting your foot in the door is considerably harder now than it was a generation ago, and things continue to get worse. Would you not agree??

I'm not sure I agree. Is getting your foot in the door harder now when people are getting married and having kids later? 40 years ago, people got married and had kids straight out of high school or maybe college.

If you take a guy born in 1990 as an example. He could have started working casual/part time in 2005 (grade 10). Then if he chose to go the post-secondary, the money he earned the last 3 years would help or he found a trade and continued working, not going to school.

If he doesn't marry until he's 28, he's got 6-10 years of earning income as a single person with little expenses. I would rather have that situation then married at 21 with a kid in 1980.

We've talked about this but I believe kids are just getting a later start and they're behind the 8-ball. Our society of 'getting an education' has prolonged adolescence. Used to be, 18 years old, you were out the door working and living on your own. Now kids stay at home until at least 22 and maybe more if they do more school. Chicken and egg. More school is making kids not get out into the workforce, not getting into the workforce is making kids stay to home longer.

[Scroopy Noopers]

Originally Posted by blankall

But getting your foot in the door is considerably harder now than it was a generation ago, and things continue to get worse. Would you not agree?

It's always been tough for young families to start outm now it's considerably harder.

You speak of a number of factors being the cause. Yet dance around who put thev policies into place that resulted in those factors. The college graduate with piles of debt trying to find a job is to blame? The 30 year old couple trying to buy a house with enough room for the kids they probably can't afford? Or maybe the boomer who's property is worth ten times what they paid and who has just used a HELOC to buy yet another luxury vehicle?

Considerably tougher for young families than boomers maybe, but every generation prior in Canada? Absolutely not. At least if you consider everything that we have access to, like healthcare, most working people own a reliable car, travel is easier than ever, etc...

Listen, I’m still renting, and been trying to get into the bottom end of the housing market for a long time. Obviously I wish it was easier.

However, there has never been a better time to be alive in Canada. As mentioned above, the quality of these pop up townhomes crushes most of what was being built 60 years ago. At least for the most part. Yes they are squished into less and less land, but some people find that desirable.

So yeah, the game has changed. It’s frustrating and needs some fixing but there are a lot of factors (oversea money, student debt...). The last thing I’m going to do is just outright blame an age range of normal people who I never expected to be economists. They were just living their lives, and things will adjust going forward.

[DoubleF]

Originally Posted by blankall

Seniors staying in their detached homes past the point they need to, or in many cases can, be there is a huge societal problem. There's a massive housing shortage for young families.

If a senior can't upkeep their home, they should downsize to a condo. Instead we have families crammed into the condos.

This is part of a bigger issue of baby boomers being detached from reality. Back on topic, it's shocking how many baby boomers are carrying debt when they should have money saved up for retirement. Instead of saving they're just taking advantage of Canada's fiscal, zoning, and foreign investment policies which have pushed the value of property through the roof. Essentially forcing young people into cramped living spaces and then forcing the ones that get ahead to spend their lives paying off their homes, inheriting the massive debt levels that there boomers created.

Detached from reality? So someone who has lived in a home for decades, have thousands upon thousands of great memories there, some of which cannot be replaced, must move out so that a young family can rip it all apart and live there for cheaper because housing shortage?

Why the heck do you think seniors are insistent on staying in a detached home in the first place even to the detriment of their financial situation? It's a huge generational gap. Older generations put so much emotion and meaning into things. New generations do not.

[blankall]

Originally Posted by GirlySports

I'm not sure I agree. Is getting your foot in the door harder now when people are getting married and having kids later? 40 years ago, people got married and had kids straight out of high school or maybe college.

If you take a guy born in 1990 as an example. He could have started working casual/part time in 2005 (grade 10). Then if he chose to go the post-secondary, the money he earned the last 3 years would help or he found a trade and continued working, not going to school.

If he doesn't marry until he's 28, he's got 6-10 years of earning income as a single person with little expenses. I would rather have that situation then married at 21 with a kid in 1980.

We've talked about this but I believe kids are just getting a later start and they're behind the 8-ball. Our society of 'getting an education' has prolonged adolescence. Used to be, 18 years old, you were out the door working and living on your own. Now kids stay at home until at least 22 and maybe more if they do more school. Chicken and egg. More school is making kids not get out into the workforce, not getting into the workforce is making kids stay to home longer.

The problem is that later and later start keeps getting later, and is now at the point where many people just aren't having kids or are spending large parts of their adult life dependent on their parents, which brings us back to the point of social mobility.


It's a major societal issue, and the fact that people are accepting it as normal is disturbing.

[blankall]

Originally Posted by DoubleF

Detached from reality? So someone who has lived in a home for decades, have thousands upon thousands of great memories there, some of which cannot be replaced, must move out so that a young family can rip it all apart and live there for cheaper because housing shortage?

Why the heck do you think seniors are insistent on staying in a detached home in the first place even to the detriment of their financial situation? It's a huge generational gap. Older generations put so much emotion and meaning into things. New generations do not.

People can stay in their homes as long as they want. Should the government find that through lower interest rates or overtaxed social programs.. No.

[DoubleF]

Originally Posted by blankall

People can stay in their homes as long as they want. Should the government find that through lower interest rates or overtaxed social programs.. No.

Lower interest rates do not only benefit seniors.

Social programs for senior wise, I'm not aware of anything significantly extra they are receiving that derailing the later generations in a way that forces them into major debt.

Are there stats that show the breakdown of that 47% in the OP? I'd love to know the ratio of the debts by age group instead of assuming anything.

[GirlySports]

Originally Posted by blankall

The problem is that later and later start keeps getting later, and is now at the point where many people just aren't having kids or are spending large parts of their adult life dependent on their parents, which brings us back to the point of social mobility.


It's a major societal issue, and the fact that people are accepting it as normal is disturbing.

I hear you but I don't know how this problem is solved. If kids are going into fields that have no job prospects and are not making money and parents are supporting them into the late 20s or 30s. It's just going to be a society norm.



We maybe going Hunger Game here. The kids that are successful, can get jobs and spend money wisely, will get ahead of those who cannot and have to live at home. How do we close this gap? Is the government going to subsidize the ones living at home?

[81MC]

Originally Posted by blankall

If the boomers aren't to blame for the current economic climate.... Who is? Is this not the root of everything people are completing about in this thread.

Media for aligning self worth to net worth?
Marketing firms for selling dreams as attainable?
Developers for buying large plots of land and subdividing properties at incredible profit margins?
Low paying corporations lowering income potential for middle class workers?
Post secondary institutions for increasing debt burden on students futures?
Young families for being willing to wear golden handcuffs as a source of pride?
Government for insuring insanely high mortgages because they get some more money out of it?
And most likely, the banks for setting the value of a home as high as possible, for the most obvious of reasons?

Pretty much anyone but the group who happened to own property while the rest of us were being groomed to value it at any cost.

[DoubleF]

Originally Posted by GirlySports

I hear you but I don't know how this problem is solved. If kids are going into fields that have no job prospects and are not making money and parents are supporting them into the late 20s or 30s. It's just going to be a society norm.



We maybe going Hunger Game here. The kids that are successful, can get jobs and spend money wisely, will get ahead of those who cannot and have to live at home. How do we close this gap? Is the government going to subsidize the ones living at home?

Now that you mention it, I am a bit surprised that the Bank of Mom and Dad and Chateau Mom and Pop aren't widely thrown around in this thread.

Staying at home isn't an issue. Staying at home and blowing every cent you make on dumb things rather than saving it up is an issue though.

[Wormius]

Originally Posted by DoubleF

Detached from reality? So someone who has lived in a home for decades, have thousands upon thousands of great memories there, some of which cannot be replaced, must move out so that a young family can rip it all apart and live there for cheaper because housing shortage?



Why the heck do you think seniors are insistent on staying in a detached home in the first place even to the detriment of their financial situation? It's a huge generational gap. Older generations put so much emotion and meaning into things. New generations do not.

I also don’t think some of this is realistic. I know in my family’s neighborhood in Kelowna, they are basically buying up the llots where small 2 bedroom houses stand for about $500k, tearing them down and putting up 4-plexes and then selling them at 600k a piece! I am not sure how that helps young families get into affordable homes.

[blankall]

Originally Posted by GirlySports

I hear you but I don't know how this problem is solved. If kids are going into fields that have no job prospects and are not making money and parents are supporting them into the late 20s or 30s. It's just going to be a society norm.



We maybe going Hunger Game here. The kids that are successful, can get jobs and spend money wisely, will get ahead of those who cannot and have to live at home. How do we close this gap? Is the government going to subsidize the ones living at home?

Kids for decades have been pushed to get meaningless degrees. With the amount of pressure on them to get these degrees, you can't turn around and blame them when they do. You worked too hard in school... Should've dropped out, despite loads of pressure from parents, society, teachers, etc. telling you otherwise.

The major issue is the state is the economy. Hard working fully employed people should be able to get by without help from their parents.

[blankall]

Originally Posted by Wormius

I also don’t think some of this is realistic. I know in my family’s neighborhood in Kelowna, they are basically buying up the llots where small 2 bedroom houses stand for about $500k, tearing them down and putting up 4-plexes and then selling them at 600k a piece! I am not sure how that helps young families get into affordable homes.

Increasing density, under normal conditions, would alleviate housing demand. However when interest rates are controlled, foreign investment is rampant, zoning is archaic and corrupt, and purchasing power is stagnant, only developers and people who already own property profit.

[flames_fan_down_under]

So what does the central bank do then.

I am not an economist by any means but it seems like they're damned if they do and damned if they don't.

Keep interest rates low and and people continue to borrow too much money and they become overwhelmed with debt. Or raise interest rates and all these homeowners who are already over-leveraged won't be able to withstand the rise in their monthly mortgage payments.

I guess this is what the stress test is supposed to prevent but there are many people who got their mortgages before that was implemented so I imagine they will be the ones to get hit the hardest with even modest interest rate rises.

I suppose the banks don't care and want to keep interest rates low.