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

[blankall]

Originally Posted by nik-

Millennials are entering their late 30's Peter, a ton of them have bought houses in those NIMBY areas, started families are interesting in increasing their asset value. Having a more depressed economic outlook doesn't mean that they don't participate in the same economic system, often foolishly. They do.

They're not as culpable as Boomers, clearly, but I'd say Gen-X is. Boomers voted for laws, Gen-X provided the gasoline and Millennial detached homebuyers are following the same mantra.

Merely buying a home to live in is not the problem. That's normal. The problem is manipulation of our economy with a goal of preserving wealth at the cost of those trying to earn it.

Once again, I do think it's important to look outside of Calgary and look at Canada as a whole (or even the situation globally). Calgary has had a very unique scenario, with unlimited land and a high paying oil and gas industry that young people can jump into. Even then, what mellennials have acquired is of lower quality than the previous generation, despite having worked harder for it. Most Millennials are not buying detached homes in Canada.

Edit: The solution isn't for young people to just move to places like Calgary either. The last time that happened, during the last oil boom, there was a massive housing crisis. Housing in Calgary is somewhat affordable because the jobless rate is high and oil is low.

[llwhiteoutll]

Originally Posted by stone hands

im a middle millennial(31)

most of my friends who bought houses essentially did what has been stated in this thread:

asked the bank for the most money possible and bought the biggest available house, and are unable to get ahead because of it

there was an ad on the radio a little while ago that was basically saying: go to this website and we will tell you how much your mortgage payment will be! this concept is insane to me, your own budget should dictate what your mortgage payment should be. when we bought our place, we were approved for 200k more than what we ended up buying our house for. i'm all for people spending their own money however they want, but i was almost appalled at the number the bank was ready to give us, it was just completely irresponsible of them to make that an option, and then i realized that number is what most people will go for

I don't even know what I was approved for versus what I took as a mortgage, but I'm sure it was some crazy number judging by the way the bank laughed and how fast they approved what I asked for.

I found some houses that I liked and would be a good mix of not too big, but with room to grow into when I started a family, ran some numbers with the online calculators to see if I was comfortable with the down payment and monthly costs and then started shopping. Got my short list, told the bank the ballpark I was looking in and then wrote my offer on the one I eventually bought.

[Bonded]

House wise, I am pretty sure me and my wife could have qualified for a house that would have really made us house poor. We opted for a house that either of us could support on our single income and still save some. Being house poor would be awful, I have zero desire to be stuck in a job because of my mortgage.

On a side note, see more people talking about FIRE and I am interested if it is truly a new phenomenon or if it just gets a louder voice because of the internet.

[peter12]

While we are on this subject, I cannot understand the appeal of living in a house. I work about 60 hours a week and the idea of having a yard to manage or like an additional 1200 sq feet is just so unappealing to me on every possible level.

[opendoor]

Originally Posted by GGG

Except you now have an asset that you can sell. You are better off having low interest high asset price than high interest low asset price over the long term.

That only has value if you're cashing out and not buying a new property, or when you die and your heirs get a windfall. That pales in comparison to the much higher risk of economic damage due to price fluctuations that comes with higher asset values. A 10-20% drop in prices could put a homeowner underwater by 1-2 years in their salary. In the early '80s a 10% drop in value for the average house was equivalent to a few months of the median income. It'd have taken a 40-50% drop to even get to 1 year of median salary on the average house back then.

And of course that's comparing one tough market to another. Try comparing it to the mid '90s when the average Calgary house cost $130K ($201K in today's dollars) with 7-8% interest rates. A $130K mortgage back then cost about $950 ($1475 in today's dollars). So the average house cost about 2.35 times the median family income and the annual mortgage payments were equivalent to 21% of the median family income in Canada. That kind of mortgage payment these days would barely get you $300K.

[Scroopy Noopers]

Originally Posted by peter12

While we are on this subject, I cannot understand the appeal of living in a house. I work about 60 hours a week and the idea of having a yard to manage or like an additional 1200 sq feet is just so unappealing to me on every possible level.

It’s a fun hobby for some. I’d rather be outside maintaining plants than any other summer hobby. I’d buy an outhouse if it had a decent sized yard I could maintain for enjoyment.

[btimbit]

Originally Posted by Bonded

House wise, I am pretty sure me and my wife could have qualified for a house that would have really made us house poor. We opted for a house that either of us could support on our single income and still save some.

Same here. I based my house purchase on what I could afford to pay off not just what fit in a monthly budget. I feel like the majority looks at it the other way.

I just bought a vacation home in Kelowna last month, there's no way I would have been able to do that if my first home purchase wasn't a sensible townhouse in Airdrie. If I tried to buy the house I'm in now when I was a first time buyer I would have been totally screwed when I got laid off 2 years ago.

[icecube]

Originally Posted by peter12

While we are on this subject, I cannot understand the appeal of living in a house. I work about 60 hours a week and the idea of having a yard to manage or like an additional 1200 sq feet is just so unappealing to me on every possible level.

Kids & Pets. Schools nearby.

[peter12]

Originally Posted by Scroopy Noopers

It’s a fun hobby for some. I’d rather be outside maintaining plants than any other summer hobby. I’d buy an outhouse if it had a decent sized yard I could maintain for enjoyment.

Like you would prefer to poop in a hole in the ground in your yard?

[peter12]

Originally Posted by icecube

Kids & Pets. Schools nearby.

You don't need a house for either. Well, in Calgary, you do, but Calgary kinda sucks, let's be honest.

[btimbit]

Originally Posted by peter12

While we are on this subject, I cannot understand the appeal of living in a house. I work about 60 hours a week and the idea of having a yard to manage or like an additional 1200 sq feet is just so unappealing to me on every possible level.

I only spend maybe half an hour a week doing stuff like that, and I generally have a beer when I do it. It's really not bad

[Scroopy Noopers]

Originally Posted by peter12

Like you would prefer to poop in a hole in the ground in your yard?

Yeah, would probably be great for the plants.

[btimbit]

Sure beats taking an elevator ride every time my dog has to take a dump. Just boot him out the back door and back to playing video games

[mikephoen]

Originally Posted by peter12

Maybe my perception is coloured by living in Vancouver

That's the smartest thing you've ever said on these forums!

[peter12]

Originally Posted by btimbit

Sure beats taking an elevator ride every time my dog has to take a dump. Just boot him out the back door and back to playing video games

I just hold mine out over my balcony.

I love how many suburbanites think there is nothing in between their SDH and a 50 storey condo tower.

[btimbit]

Originally Posted by peter12

I just hold mine out over my balcony.

He gets a little too squirmy for that haha.

My sister's apartment neighbour just has their dog crap and pee on their balcony. It freakin stinks


There's the worst of both worlds. Condo living in the suburbs. None of the benefits of suburban living with none of the convenience of an inner city condo. Just a big ugly building on the middle of nowhere.

[opendoor]

Originally Posted by OMG!WTF!

It actually sucks for a lot of people who can't afford to live in the house they've lived in for the majority of their lives. On one hand it's a good problem to have but on the other it is a bit of an unfair or maybe unfortunate situation.

Did you read the article? These people are sitting on a $4M asset with no money owing on it and are complaining they can't afford a $2K tax increase. Never mind the fact that as seniors, they are eligible to defer 100% of their tax bill (including the new one for $3M+ houses) until they sell their house. They don't have to front a dime and yet they're still complaining about a tax increase because their kids might get $3.95M when they die rather than $4M.

[rubecube]

Originally Posted by nik-

I have disdain for them too, but I'm not just of the mindset that they're the main reason. It's just a shallow argument. They're a big part, but so are many others, including Millennials.

Except that boomers have had both the most political and economic clout to shape policy and society in the image they've wanted for the better part of five decades. Of course millennials are contributing to it because there are very few viable alternatives at the moment.

[nik-]

Originally Posted by rubecube

Except that boomers have had both the most political and economic clout to shape policy and society in the image they've wanted for the better part of five decades. Of course millennials are contributing to it because there are very few viable alternatives at the moment.

Why do we continue to ignore an entire generation of contributors to this problem.

[81MC]

Originally Posted by peter12

While we are on this subject, I cannot understand the appeal of living in a house. I work about 60 hours a week and the idea of having a yard to manage or like an additional 1200 sq feet is just so unappealing to me on every possible level.

Don’t take this the wrong way. But a good number of hobbies almost require a house. For me, I loathe large houses, empty spaces, unnecessary furniture, yard work and snow removal.

But I like drums, machines and shop work more.