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

[Wormius]

Originally Posted by GirlySports

Those stay at home parents charge as well nowadays.



Did our parents ever pick us up from school? We'd hang out or just go home. And school gets out earlier now. $700/month for an 11 year old not to go home is a money sink.

Technically I was probably what was called a latchkey kid, but your 11 year old is more than capable of staying home alone after school.

If you are worried they have some classes to provide some essentials about how to stay home alone, but you can also teach them too. Since grade 4 our kids have come home and just entertained themselves until we get home. It’s only 2 hours alone.

I think you are presenting a good example of how worry wart parents are over coddling and making kids soft. The only thing that concerns me is if somehow they can’t open the door on a cold day if the lock is stuck or something, and it’s basically walk straight to the convenience store and wait.

[GGG]

nm - wormius beat me to it.

[mikephoen]

Why on earth would an 11 year old need after school care? Buy the kid a Switch or Playstation or something and they'll be at home when you get there.

[Sliver]

Originally Posted by GGG

Did you add up your list? 5% on a 500k home is 25k per year. You’d pay for everything in your list by year 4. Over 50 years you could spend 250k on your home at 1% per year. Your list matches up pretty close to about 5k per year on a 20 year cycle to maintain your home in the condition it is today.

But my list wasn't even exhaustive. I just rattled off a few examples off the top of my head. Kitchen cupboards and counters don't last forever. Toilets and sinks don't. Carpet, and tile, and linoleum don't. Plumbing leaks. Pipes burst. Doors wear out. Renovations need to be done to accommodate changing needs.

I know you don't need to do some of this stuff. I was at an estate sale yesterday where the house hadn't been upgraded since it was built in 1969. Well, now it will be gutted by the new owners because the old ones didn't stay on top of keeping it current. If you're not going to keep an updated home it eventually catches up to you in decreased value.

[V]

And then you’re dead.

Walk into any 80 year old’s house and I don’t think you’ll see the most updated of houses there.

[bizaro86]

Originally Posted by Sliver

But my list wasn't even exhaustive. I just rattled off a few examples off the top of my head. Kitchen cupboards and counters don't last forever. Toilets and sinks don't. Carpet, and tile, and linoleum don't. Plumbing leaks. Pipes burst. Doors wear out. Renovations need to be done to accommodate changing needs.

I know you don't need to do some of this stuff. I was at an estate sale yesterday where the house hadn't been upgraded since it was built in 1969. Well, now it will be gutted by the new owners because the old ones didn't stay on top of keeping it current. If you're not going to keep an updated home it eventually catches up to you in decreased value.

Sure. But eventually you're dead too. Are you really going to replace the kitchen cupboards in your house when you're in your eighties for aesthetics/house value reasons?

I think it's really likely wood cupboards and hard surface counters will functionally last longer than you'll be alive. Replacing them is an aesthetic choice, not a necessity. I'm not saying not to do it (and I've renovated a dozen kitchens solely for aesthetics) but it isn't a need. I doubt I would do the one in my house as a senior. It's already nice and fits my taste. If the young people/home buyers after I'm dead don't like it my heirs can take a discount.

[GGG]

Originally Posted by Sliver

But my list wasn't even exhaustive. I just rattled off a few examples off the top of my head. Kitchen cupboards and counters don't last forever. Toilets and sinks don't. Carpet, and tile, and linoleum don't. Plumbing leaks. Pipes burst. Doors wear out. Renovations need to be done to accommodate changing needs.

I know you don't need to do some of this stuff. I was at an estate sale yesterday where the house hadn't been upgraded since it was built in 1969. Well, now it will be gutted by the new owners because the old ones didn't stay on top of keeping it current. If you're not going to keep an updated home it eventually catches up to you in decreased value.

I think we are talking past each other a bit here. This conversation started around a poster saying they could live off of 24k a year and you challenged that isn’t enough for home maintenance.

A person living off of 24k per year likely is doing the work themselves, and only replacing when broken and not for aesthetics.

Then it migrated to retirement scenarios where again it’s unlikely in a normal length retirement to be doing major aesthetic renovation. Though RedForevers points of needing more contract work done are well taken.

Your position of NEEDING more than 1% and saying 5% is probably close is just wrong. However if the goal is keeping a modern house that is in today’s style I agree 5% would be required. I think that is a separate discussion from where this one started.

[Sliver]

Ah yes, you are correct GGG. I did get carried away. Point conceded.

[Fuzz]

Originally Posted by Sliver

Ah yes, you are correct GGG. I did get carried away. Point conceded.

Woooa, easy there. That's not how arguing on the internet works.

[CliffFletcher]

Canadians spend twice as much on home renos as they did 20 years ago.

https://www.macleans.ca/economy/real...novation-boom/

Both times we bought homes we looked in older neighourhoods built in the 50s through 70s, often still occupied by original owners. Most of the houses had 20+ year old kitchens, bathrooms, flooring, lighting etc. Canadians didn't routinely reno their homes for style purposes until recently.

[nik-]

Originally Posted by CliffFletcher

Canadians spend twice as much on home renos as they did 20 years ago.

https://www.macleans.ca/economy/real...novation-boom/

Both times we bought homes we looked in older neighourhoods built in the 50s through 70s, often still occupied by original owners. Most of the houses had 20+ year old kitchens, bathrooms, flooring, lighting etc. Canadians didn't routinely reno their homes for style purposes until recently.

This is such an indicator of how advertising has turned us into an inherently unhappy species. Just keep facelifting your home so it's a little bit more on trend, just a little bit more current. What a waste of money.

[OMG!WTF!]

I think home reno spending has a lot to do with creeping incrementalism. Like hey our dishwasher broke and we need a new one so why don't we rip the house down to the studs and add a second floor and a pool. I mean we'll have the plumber here anyway. People didn't really project manage like that in the good ole days. It's the buy big save big mentality.

[GirlySports]

Do people have company over/dinner parties more often to show off their newly renovated homes?

[The Fonz]

Blaming boomers for why you can’t afford a home is just silly. When those boomers bought homes in 1980 for ~$80k (am I high? low?), interest rates were around 18%, with a government rebate getting them down to around 12% (someone please correct me if I’m wrong).

$80,000 over 25 years @ 12% interest
= $826/month, in 1980
= $2726/month, in 2019 buying power (https://data.bls.gov/cgi-bin/cpicalc...1&year2=201909)

$2700 is the monthly payment on a $590k mortgage @ 2.7% interest, today.

[Roughneck]

Originally Posted by OMG!WTF!

I think home reno spending has a lot to do with creeping incrementalism. Like hey our dishwasher broke and we need a new one so why don't we rip the house down to the studs and add a second floor and a pool. I mean we'll have the plumber here anyway. People didn't really project manage like that in the good ole days. It's the buy big save big mentality.

The real push to consider a renovation an investment rather than an expense would be a big contributor for this. Starter homes, house flipping and the like meant you could easily justify piling 100K renovations onto $300K worth of mortgage debt since 'we'll make it back and then some when we sell in a year or two.'

[blankall]

Originally Posted by The Fonz

Blaming boomers for why you can’t afford a home is just silly. When those boomers bought homes in 1980 for ~$80k (am I high? low?), interest rates were around 18%, with a government rebate getting them down to around 12% (someone please correct me if I’m wrong).

$80,000 over 25 years @ 12% interest
= $826/month, in 1980
= $2726/month, in 2019 buying power (https://data.bls.gov/cgi-bin/cpicalc...1&year2=201909)

$2700 is the monthly payment on a $590k mortgage @ 2.7% interest, today.

Yes, but you never actually mortgaged 100% of the home.

You're also comparing the time just after a major crash, when the government was doing as much as possible to stop people from borrowing money.

So basically you're argument is that people now can buy a home in an undesirable area now, and the new norm for that is comparable to the worst time in Canadian history to mortgage a home.

In what way was the housing climate in 1980, just after the government jacked interest rates, considered positive. People complained non-stop about their inability to buy houses and it was a major national crisis.

[Scroopy Noopers]

Originally Posted by blankall

In what way was the housing climate in 1980, just after the government jacked interest rates, considered positive. People complained non-stop about their inability to buy houses and it was a major national crisis.

Well, that would put about 90% of boomers at 30 or younger...

[blankall]

Originally Posted by Scroopy Noopers

Well, that would put about 90% of boomers at 30 or younger...

And that was a temporary state that was considered a major national issue. So once again, purchasing power for undesirable areas is considered comparable to possibly the worst housing crisis in national history...sounds about right.

[GirlySports]

I think the low interest rates are giving this generation the false sense of security that a long mortgage is ok.

But the money saved from low interest rates isn't being saved or invested, it's being blown on the things we've talked about in this thread.

[The Fonz]

Originally Posted by blankall

And that was a temporary state that was considered a major national issue. So once again, purchasing power for undesirable areas is considered comparable to possibly the worst housing crisis in national history...sounds about right.

Does it seriously cost 600k to buy a home in an undesirable area? I don’t live in Calgary.

As for my previous post, the point I was making is that it wasn’t so easy for Boomers to buy their 1st home either. They struggled much like the 25-35 year olds of today.