ductonius posted:

Accounting for compound interest and a very modest 5% return (historically, returns on capital have been around 9%) with 2% inflation, if you saved 800,000 of your income over 7 years, you'd get to about $877k in your seventh, and you would most certainly have over $1,000,000 in your eighth. In just under a decade, you could have $1.3 million in equity and four years after that have just shy of $2mil (assuming you saved as consistently as you had). All figures in today's dollars, adjusted for inflation.

So, no, it's not as simple as Baronjutter said, he was off by exactly one year.

Conclusion: These people are batshit insane, have their priorities completely backwards and need to get their heads screwed on straight.

on the left posted:

Expensive hobbies and activities ain't poo poo compared to the cost of kids. You could even buy a plane, get a pilots license, and fly regularly for less than the cost of a child. DINK couples can elect to live in a studio apartment all their lives, which drastically cuts living expenses as well.

ductonius posted:

Accounting for compound interest and a very modest 5% return (historically, returns on capital have been around 9%) with 2% inflation, if you saved 800,000 of your income over 7 years, you'd get to about $877k in your seventh, and you would most certainly have over $1,000,000 in your eighth. In just under a decade, you could have $1.3 million in equity and four years after that have just shy of $2mil (assuming you saved as consistently as you had). All figures in today's dollars, adjusted for inflation.

So, no, it's not as simple as Baronjutter said, he was off by exactly one year.

Conclusion: These people are batshit insane, have their priorities completely backwards and need to get their heads screwed on straight.

blah_blah posted:

Did you even read the post? Taxes take you down to ~110k. Spending money on things like rent, a car, a spouse/children, and food probably takes you to something around 70-80k assuming a reasonable level of frugality. That + investments gets you to the number that he mentions. Saving 800k of your income over 7 years is not reasonable on a 165k pretax salary.

Jobs that pay in the 165k range typically are situated in high CoL areas. Your coworkers generally will spend money like crazy, and while imitating their spending habits is generically poor, you probably will want to partake in some number of the expensive activities that they do, because they help you climb the corporate ladder within the company (people who nobody likes have a hard time getting promoted) and also help you build up a professional network.

Grand Theft Autobot posted:

I'm assuming their house has a market value of $800k, and they didn't take out their original mortgage on it for $800k. Because who the gently caress would give somebody an $800k loan on $165k income? Especially when you consider their credit card debt, that mystery loan, student loans. Once you factor in their line of credit, their monthly debt-to-income is 48 loving %. Are you goddamn kidding me?

Oh, and kids can pay for their own loving cellphones by mowing lawns, shoveling snow, and raking leaves. When I was 12-14 I pulled in roughly $150 a month doing simple poo poo like this a few hours a week. Kids, if they need loving phones (they don't), don't need iPhones, they need burners and prepaid cards, and they can pay their own bills. If they've got a problem with that, they can pound sand.

Cultural Imperial posted:

Albino Squirrel posted:

Yeah, but how many people put 20% down these days?

I would hope - though I'm certain this thread will crush it - if you've got the scratch for a 20% downpayment you can afford the payments on a 20- or 25-year amortization.

Albino Squirrel posted:

Yeah, but how many people put 20% down these days?

I would hope - though I'm certain this thread will crush it - if you've got the scratch for a 20% downpayment you can afford the payments on a 20- or 25-year amortization.

ocrumsprug posted:

If I sold my townhouse, it would form a 20% down payment on something I couldn't really afford. The 30-35 year amortization would make the monthly possible I assume.

etalian posted:

Yeah longer loan periods means lower montyhly payments but you give more interest money to the bank

Sassafras posted:

According to affordability calculators, "everybody". Put a single income of 165k in this affordability calculator and it spits back a max purchase price of 1.4 million, (1.123m loan). 800k loan? They're being downright responsible!

(And this is why I'll end up never buying a place until interest rates are higher, by which point I'll no doubt have 100% of the purchase price in cash)

Grand Theft Autobot posted:

Yeah, I have friends who want to buy a place that, coupled with existing debt, would take them to the fha 45% limit. 45% loving percent of their pre-tax income going to debts, before they even factor in actually living in the goddamn thing, and fixing poo poo, and driving downtown to work each day from their hellish bedroom community.

Cultural Imperial posted:

So what have you been telling them? Are you avoiding telling them not to buy?

Sassafras posted:

According to affordability calculators, "everybody". Put a single income of 165k in this affordability calculator and it spits back a max purchase price of 1.4 million, (1.123m loan). 800k loan? They're being downright responsible!

(And this is why I'll end up never buying a place until interest rates are higher, by which point I'll no doubt have 100% of the purchase price in cash)

quote:

First-time homebuyers are feeling the weight of Canada's housing boom
By Melissa Leong
With rising home prices and hefty student debts, more first-timers are being locked out of the market. What they need is a strategy

Many times over the last few years, John Norquay has been stricken with pangs of anxiety over not being a homeowner.

They strike when he attends housewarming parties for friends. They hit when he hears that friends bought in the condo building where he is renting and the value of the unit has already shot up.

But the 35-year-old Toronto immigration and refugee lawyer graduated in 2005 with $75,000 in student debt and while he tackled his loans ahead of saving for a down payment, home prices have only climbed. "I decided to wait but I don't know if I'll end up regretting that," he says. "It seems like every other month there's an article about the condo market bubble bursting; I kind of gambled there and I think I lost."

It used to be a rite of passage for young people, a way to announce your adulthood to the world by buying your first home. But fewer young people today are able to achieve this dream. A recent CIBC report showed that the home ownership rate among first-time homebuyers (25 to 35) fell from 55% in 2012 to the current 50%.

With the rise in housing costs, many first-timers are locked out of the market, unable to save the gargantuan down payment or qualify for a mortgage.

According to a BMO report released in March, first-time homebuyers plan to spend an average of $316,000 on their first home, up from $300,000 in 2013. (Those in Vancouver expect to spend $506,500 while those in Montreal plan to pay $237,900.) Respondents to the study expect to put an average down payment of 16% or $50,576.

Now, considering that the average home price in Canada was more than $416,000 in May, if you wanted to put 20% down, you'd need $83,200. That's a daunting figure for anyone.

Six in 10 hopeful homeowners say their home-buying timeline has been delayed, with 39% citing rising real estate prices as the main reason for delay.

"You've been in the workforce for a few years and you don't have a lot of assets; it can take several years to break into the financial market," says Penelope Graham, an editor at Ratesupermarket.ca.

As tuition fees rise and students graduate with more debt, many find that they're devoting funds to debt repayment versus saving for a down payment. (Mr. Norquay's debt payments amount to $750 a month.)

And if graduates don't find steady employment right away, accumulating a lump sum is even harder; more young people today compared to previous generations opt to return to school when they have trouble breaking into their fields.

The youth unemployment rate in 2012 was 2.4 times that of adults - marking the biggest gap since 1977, a Statistics Canada report said.

"If you look at youth unemployment and underemployment, that's definitely another factor. The ability of young people to earn has been compromised," says Benjamin Tal, deputy chief economist with Canadian Imperial Bank of Commerce.

He calls today's young adults "the lost generation" - a group that is falling behind economically.

A new report by the Conference Board of Canada echoes his findings: the average disposable income of Canadians between the ages of 50 and 54 is now 64% higher than that of 25- to 29-year-olds. That's up from 47% in the mid-1980s.

With young workers facing lower wages, rising home prices and tighter mortgage restrictions (reducing total amortization to 25 years, capping maximum debt ratios for households to qualify for a mortgage loan), the goal of home ownership moves further away for many.

So what are people doing instead? They're spending more time living with mom and dad. They're renting. Renting often suits a younger demographic who might appreciate mobility and fewer responsibilities. Plus, home buying comes with maintenance costs and upkeep and each time you buy a home, extra funds are needed to cover things such as lawyer fees, land-transfer taxes, and other transaction expenses that typically add 10% to the purchase price.

Some experts argue that investing one's savings in assets with higher potential returns is a better option than sinking everything into the housing basket, especially if you might be planning to move anytime soon.

"The one compelling argument I have seen in support of renting is that if someone is wisely investing, it can be a bigger payout in the end," Mr. Norquay says. "I am not at all the saver type, and those articles have only increased my desire to want to own. Basically it would be a way of forcing myself to invest."

Why is he a bad saver? "I like to go out and have fun and I like to travel." More than two-thirds of Gen X Canadians told a TD survey that they wanted enough flexibility to be able to afford things like travel after paying their monthly mortgage.

Mr. Norquay now rents a $1,950 two-bedroom condo unit with a roommate near his downtown legal aid clinic. Three years ago, he hoped to buy a home with a friend and got pre-approved for a joint mortgage; but they couldn't find the right property.

Though some say people should take advantage of the record low mortgage rates and get into the housing market as soon as possible, Sadiq Adatia, chief investment officer at Sun Life Global Investments, suggests first-timers should continue to wait.

"First-time home buyers should wait to buy as the market is quite frothy at the moment and it is only a matter of time before we see a pullback," Mr. Adatia says.

"Though rates will also go up at some point, our belief is that housing values will decline prior to that, giving buyers a great opportunity to take advantage of lower prices, but also lower rates. Those opportunities do not come often."

As it stands today, houses are becoming less affordable, according to RBC's most recent affordability index which measures the percentage of pre-tax household income that is needed to service the cost of owning a home (including mortgage payments, utilities and property taxes). In Vancouver, 82.4% of household median pre-tax income is needed to service the cost of owning a bungalow at current prices. That compares with 56.1% in Toronto and 34.5% in Calgary.

In places like Toronto and Vancouver, competition is steep so first-timers could face bidding wars which ratchet up prices and prompt some buyers to drop important conditions such as a home inspection.

"Without having a bit of help from friends and family or being able to sell something, it's very difficult for a first-time homebuyer even on two incomes," says Mike Bone, a 31-year-old account manager at a marketing consulting firm. He and his wife are looking to buy a home in Toronto for $550,000 to $700,000 but have found that bidding wars inflate all of the prices.

"We're trying to balance getting in there and not making a stupid decision. It's frustrating but we understand the high demand and the low supply of single-family homes. Lately, we've been looking at new builds and low-rise condos."

Mr. Bone says he hopes that they'll have some luck as the weather cools and in the interim, they'll continue to build up their savings.

But how do you even start saving up that big chunk of money, especially if you're doing it alone?

The majority (61%) of first-timers told a BMO survey that they've made cutbacks to their lifestyle in order to save for their first home. Meanwhile, 30% expect parents or family to assist in their purchase; this percentage rises to 40% in Montreal and Vancouver.

The minimum down payment for a home is usually 5%, says Jeff Cody, managing partner of Mortgage Brokers City Inc. in Ottawa. "But if you put less than 20% down, the mortgage has to be insured against default," he adds. The more you put down, the lower your insurance premium, which start as high as 3.15%.

You need a strategy.

Mr. Norquay will finish paying off his student loans in October; then, he'll start accumulating more for his future home. He also has savings in an registered retirement savings plan and wants to take advantage of the home buyers' plan. Under the home buyers' plan, Canadians can take $25,000 out of their RRSP and pay it back over the next 15 years without incurring any penalty.

Save as much as you can before taking the plunge, Ms. Graham says. "Aim to pay more than a 5% down payment," she says. "No one wants to hear this but if you go into your first home purchase with more capital up front, it means you're going to take out less of a mortgage and over the long run, you're going to pay less interest and you're going to build your equity faster."
• Email: mleong@nationalpost.com3 | Twitter: lisleong4

quote:

Though some say people should take advantage of the record low mortgage rates and get into the housing market as soon as possible, Sadiq Adatia, chief investment officer at Sun Life Global Investments, suggests first-timers should continue to wait.

"First-time home buyers should wait to buy as the market is quite frothy at the moment and it is only a matter of time before we see a pullback," Mr. Adatia says.

"Though rates will also go up at some point, our belief is that housing values will decline prior to that, giving buyers a great opportunity to take advantage of lower prices, but also lower rates. Those opportunities do not come often."

Cultural Imperial posted:

This is the biggest loving load of BS I think I've ever loving seen in print. Yeah, SOME PEOPLE SHOULD loving BUY NOW BUT HERE'S WHAT'S GONNA HAPPEN TO THE HOUSING MARKET SO SOME PEOPLE SHOULD SIT THIS poo poo OUT AND UH

gently caress you sadiq you loving piece of poo poo

HookShot posted:

Uh if you bothered to read the article instead of angrily hitting your keyboard and hoping it made words you'd realize Sadiq thinks young people shouldn't be buying now.

Cultural Imperial posted:

I'm angrily hitting the keyboard precisely because he thinks the conditions under which young people should not be buying doesn't apply to those people who "should be taking advantage of low interest rates". That's the most loving baldfaced lying I've ever seen typed out by some guy who has a loving C in his job title

Cultural Imperial posted:

Also, just loving burn Vancouver to the ground and lay a trail of crucified realtors and mortgage brokers to victoria, pointing in the direction of the legislature. We need a year zero.

ocrumsprug posted:

You're ok in my book.

Cultural Imperial posted:

i've lost my mind

Cultural Imperial posted:

Also, just loving burn Vancouver to the ground and lay a trail of crucified realtors and mortgage brokers to victoria, pointing in the direction of the legislature. We need a year zero.

peter banana posted:

guys chill. We're all cool here. No subprime here.

http://conservatorygroup.ca/properties/the-infinity-condominiums-phase-3/#content

etalian posted:

It's pretty much using the 30 percent rule without looking at things like after tax income or pre-existing debt load.

quote:

The lawyer who is taking on Toronto’s condo developers



From his cramped corner offices at Bloor St. and Avenue Rd., lawyer Ted Charney has a real-time view of Toronto’s exploding condo market.
He can see the cranes dotting the downtown, he can watch the concrete skeletons climb into the sky — and he can feel condo owners’ pain.
Charney, 54, knows first hand what it’s like to buy a condo from a set of blueprints and then, when you finally open the front door for the first time years later, find you didn’t get what you paid for.
In his case, what was supposed to be 11 feet of floor-to-ceiling glass, overlooking the balcony and an expansive view south from King St. W., was cut in half by a concrete fire wall.
Charney had no warning the glass would be gone, and with it much of the light into the two-bedroom unit. He decided to sell the unit.
“If I ever buy a condo again, I won’t buy preconstruction.”
This week Charney launched his sixth class-action suit against a major Toronto condo developer. In this latest case he’s seeking $29 million over what amounts to plumbing problems — water valves that allow for extreme temperature fluctuations in Great Gulf’s X Condominiums project on Charles St.
Earlier this year he launched a $30 million suit against North York developer Elad Canada Inc., alleging that it failed to deliver the “easy underground access” to the Don Mills subway station and nearby Fairview Mall, promised in its glossy marketing materials.
Four of his condo class-action suits have already been certified by the court — essentially given the green light to go ahead — seeking compensation for owners in downtown highrise projects inconvenienced by falling glass and faulty balconies.
Charney believes there will likely be more lawsuits to come as the condo becomes the only option for many buyers in a city where house prices have virtually doubled in a decade.
Some 53,614 condos were under construction across the GTA as of the end of June. Another 31,372 were in the sales stage, according to condo research firm Urbanation.
And a staggering 277,108 more are proposed.
“Generally, the condo industry is pretty good. Most of the developers who are building the majority of the buildings are very experienced and reputable,” says Charney.
“But there is always going to be the odd one that isn’t okay.”
Charney is far from a newcomer to class actions, where lawyers take on the costs, and the risks, of helping a bunch of Davids — people who have suffered the same wrongs, but otherwise couldn’t afford a lawsuit — take on Goliath, major corporations with the money and time to fight back.
In exchange, the lawyers typically get about 25 to 30 per cent of any settlement.
Charney recently won $23 million on behalf of people impacted by the Sunrise Propane explosion in Downsview back in 2008. He’s also handled some of the largest food contamination lawsuits in Canadian history: The $27 million settlement reached with Maple Leaf Foods over listeria-tainted meat and the Menu Foods case in which thousands of North American pets became ill or died from contaminated pet food.
The condo suits have sent shock waves through an industry where sales agreements have typically been heavily weighted in favour of developers and so full of disclaimers, buyers like Charney find themselves with few options but to sell if the unit doesn’t turn out as expected.
“One of the goals of class actions is behaviour modification. I hope this will have that effect on the industry.”
Developers have traditionally insulated themselves from legal liability by using their reputation and their brand to drum up sales. Then they create a separate corporation to manage and build the project.
That means once the building and land are handed over to the new owners and their condo board, that company becomes a mere shell, with no assets of its own should someone sue.
Charney has already won a critical victory in the falling glass and faulty balcony cases that could change all that: The court has agreed that the development companies are just as much a part of the lawsuit as the affiliated building companies they created.
So far, most of Charney’s class actions have focused on material defects and compensation for owners banned from using balconies that are their only backyards.
But now emerging is a new class of cases which he describes as breaches of contract or misrepresentations. Basically at issue is what the glossy preconstruction sales brochures promise and what ends up being built.
It’s those cases that could have the biggest impact, especially given the tens of thousands of units under construction.
The cases are being closely watched by developers who say they are just as upset as everyone else when glass turns out to be defective or changes required to accommodate heating and air conditioning systems or city building officials’ concerns, leads to unexpected, last-minute design changes.
“Builders strive to deliver a final product that fulfils the desires and expectations of new-home buyers,” says Bryan Tuckey, president and CEO of the Building Industry and Land Development Association.
“Engineers do their best to ensure final design drawings are in keeping with the original sales material. However, in some unique circumstances, practical construction requirements often lead to minor changes to suite and amenity designs.”

Defenistrator posted:

188 pages and here's what I've learned:


loving Vancouver man.
God drat those rich Chinese people buying out Vancouver.
loving baby boomers man.
God drat Vancouver, I hate you.
Student debts a birch up the butt.

How about we hate on Toronto now? I love how the commuter cities have insane rent and house prices...

Cultural Imperial posted:

i've lost my mind