Canada Housing/Debt: Trust me, I'm a landlord.

The Something Awful Forums > Discussion > Debate & Discussion > Canada Housing/Debt: Trust me, I'm a landlord.

Bob Ross Nuke Test: Jul 12, 2016; by Games Forum

ITT: people with poo poo careers and shittier budgeting habits, who get real salty when other people escape the rat race and enjoy their lives.

Bob Ross Nuke Test fucked around with this message at 00:45 on Aug 16, 2016

# ? Aug 16, 2016 00:39

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# ? May 28, 2024 18:05

Subjunctive: Sep 12, 2006; ✨sparkle and shine✨

THE BEATWEAVER posted:

ITT: people with poo poo careers and shittier budgeting habits, who get real salty when other people escape the rat race and enjoy their lives.

If you were projecting any more I'd buy skittles and popcorn.

# ? Aug 16, 2016 00:52

blah_blah: Apr 15, 2006

tagesschau posted:

So you're saying that Powershift underestimated the gains in house prices, because I didn't overestimate the gains in the stock market. (In fact, since my figures above were in USD, I underestimated the gains; C$280,000 invested in the S&P 500 on August 12, 2009, would become C$723,699 by August 12, 2016. Eyeballing the REBGV's house price chart indicates that the stock market outperformed Vancouver detached housing by about 23% over seven-year period ending in January 2016.)

The numbers don't "work out better" unless you can get out of the market before the bubble pops. It's a known fact that, over the long term, housing tracks inflation at best, and the stock market goes up.

Liquidity is important, because sometimes you need to come up with $10,000 in cash without having to cash out $400,000 worth of equity at once.

Don't try to handwave numbers away in favor of feelings about how the market has performed.

I'm not sure exactly what you think I'm arguing here, but if it's anything beyond 'people who bought before the peak of a massive bubble with substantial leverage made a lot of money' you're probably wrong. I assure you that I understand the long-term historical trends for both the stock and housing markets, the carrying costs associated with owning a home, the inability of the typical investor to time markets, and so on. The only point I'm responding to are the cheerleaders saying things like:

Dreylad posted:

Luck and advantages they had aside, the actual take-away from the article is to smash the myth that real estate is the smartest investment for your savings.

Even if you could conclude something from a single data point, this isn't a positive one -- buyers of detached homes in a similar situation in either Vancouver or Toronto who bought in 2009 and sold in 2016 did substantially better than them. And that's fine, and it doesn't undermine any of the conventional wisdom in this thread. Some idiots make money in asset bubbles. That doesn't mean that they are smart or should be emulated.

BTW 100% S&P 500 for a Canadian investor is a sufficiently atypical portfolio that it represents a form of market timing/cherry-picking unto itself. Over the same time period the TSX is up less than 40%, and bonds and international equities would also be up substantially less. Something like the 3-fund Canadian Couch Potato portfolio is likely only up 50% or so over the same time frame (didn't actually do the math, so forgive me if I'm off by 20% in one direction or the other here).

# ? Aug 16, 2016 01:18

tagesschau: Sep 1, 2006; D&D: HASBARA SQUAD
THE SPEECH SUPPRESSOR

Remember: it's "antisemitic" to protest genocide as long as the targets are brown.

blah_blah posted:

buyers of detached homes in a similar situation in either Vancouver or Toronto who bought in 2009 and sold in 2016 did substantially better than them

Except that that's not even the case. Even if you ignore the carrying costs and assume that the entire change in price is profit, you still do better with the S&P 500 portfolio. When you have historically huge price appreciation, and it still doesn't outperform a growth-oriented portfolio, there's no colorable claim to housing being the best investment over the seven years in question, and even less of one in general.

blah_blah posted:

BTW 100% S&P 500 for a Canadian investor is a sufficiently atypical portfolio that it represents a form of market timing/cherry-picking unto itself. Over the same time period the TSX is up less than 40%, and bonds and international equities would also be up substantially less. Something like the 3-fund Canadian Couch Potato portfolio is likely only up 50% or so over the same time frame (didn't actually do the math, so forgive me if I'm off by 20% in one direction or the other here).

A portfolio of representative stocks from the world's largest economy is not an atypical or bizarre investment choice.

# ? Aug 16, 2016 01:33

Powershift: Nov 23, 2009

Throatwarbler posted:

I'm having a kid next month. Can someone calculate when I will be able to retire and travel the world tia

Just put $20,000 in the bank every month instead of $10,000 and you'll be able to retire in 10 years. easy peasy.

# ? Aug 16, 2016 01:36

Postess with the Mostest: Apr 4, 2007; Arabian nights
'neath Arabian moons
A fool off his guard
could fall and fall hard
out there on the dunes

tagesschau posted:

Except that that's not even the case. Even if you ignore the carrying costs and assume that the entire change in price is profit, you still do better with the S&P 500 portfolio. When you have historically huge price appreciation, and it still doesn't outperform a growth-oriented portfolio, there's no colorable claim to housing being the best investment over the seven years in question, and even less of one in general.

A portfolio of representative stocks from the world's largest economy is not an atypical or bizarre investment choice.

You're both right. In 2009, if the people had put their 200k into S&P, they'd be up %150 and sitting with 500k, up 300k. If they'd used the 200k to put 20% down on a 1m detached house in Vancouver, it would have appreciated 120% to 2.2m, they could sell and be happily up 1.2m (minus expenses but I think we can agree that it'd be substantially higher than 300k).

The difference is that canadians are soooo happy to leverage their investment when it's in real estate but it's very uncommon for us to leverage ourselves to invest in the stock market so your "average canadian" would have done better putting 20% down on a vancouver house in 2009 than straight investing it into an S&P ETF but it's not really a fair comparison.

# ? Aug 16, 2016 02:12

blah_blah: Apr 15, 2006

tagesschau posted:

Except that that's not even the case. Even if you ignore the carrying costs and assume that the entire change in price is profit, you still do better with the S&P 500 portfolio. When you have historically huge price appreciation, and it still doesn't outperform a growth-oriented portfolio, there's no colorable claim to housing being the best investment over the seven years in question, and even less of one in general.

The relevant factor here is that the government and banks are glad to let your average Joe borrow at anywhere from 5-20x leverage to own a house (and assume most of the risks here). 250k in 2009 could have (at a 'modest' 20% down) bought you a 1.25M house, which would likely be worth nearly 4M today in Vancouver. There is also the nontrivial issue of differing capital gains treatments.

tagesschau posted:

A portfolio of representative stocks from the world's largest economy is not an atypical or bizarre investment choice.

A Canadian investor investing in 100% S&P 500 is not a typical or recommended investment choice. A more typical diversified portfolio has significantly lower returns. If we examine the actual case at hand, the particular portfolios recommended by Garth Turner (who is the financial advisor of the bloggers in question) are roughly 40% bonds (or bond-equivalents) and 60% equities, with only 1/3rd of the equity portion in US large-cap ETFs (see here). This is not a portfolio that would have come even close to keeping up with a 100% S&P 500 portfolio.

I really don't understand why you've picked this hill to die on; saying that some small fraction of people who leveraged themselves to the hilt and had perfect once-in-a-lifetime market timing outperformed a much lower-risk strategy doesn't invalidate the general principles of low-cost indexing or the historical fact that equities outperform housing.

# ? Aug 16, 2016 02:37

Precambrian Video Games: Aug 19, 2002

What advisor in their right mind would tell two high earners in their late 20s to put 40% of their investments in bonds?

e: are you calling preferred shares bond equivalents because they're not.

Precambrian Video Games fucked around with this message at 03:24 on Aug 16, 2016

# ? Aug 16, 2016 03:17

ocrumsprug: Sep 23, 2010; by LITERALLY AN ADMIN

Eventually my father in law will pass away, and my spouse and I will retire like kings.

Should I make a blog about our retirement planning or just get the NatPost to cover us?

# ? Aug 16, 2016 03:33

blah_blah: Apr 15, 2006

ocrumsprug posted:

or just get the NatPost to cover us?

Only if you have a defined benefit pension.

# ? Aug 16, 2016 03:34

ocrumsprug: Sep 23, 2010; by LITERALLY AN ADMIN

blah_blah posted:

Only if you have a defined benefit pension.

Perhaps we can be the cautionary tale?

# ? Aug 16, 2016 03:35

PT6A: Jan 5, 2006; Public school teachers are callous dictators who won't lift a finger to stop children from peeing in my plane

Considering the number of people who manage to blow an amount of money that would provide a comfortable retirement on stupid poo poo, like an unfortunate percentage of lottery winners, I don't think it's to be so easily dismissed that, "oh, they have plenty of money to begin with, of course they'll be responsible with it and have an easy retirement!"

Yeah, it's a gently caress sight easier to be affluent when you start with money, but that doesn't mean it's not easy to gently caress it all up.

# ? Aug 16, 2016 03:47

James Baud: May 24, 2015; by LITERALLY AN ADMIN

James Baud fucked around with this message at 11:17 on Aug 25, 2018

# ? Aug 16, 2016 03:47

ocrumsprug: Sep 23, 2010; by LITERALLY AN ADMIN

James Baud posted:

Watch out, old people like to donate all their money to charity when they think their kids have been circling like vultures for too long!

Jokes on him then, he's Japanese and is going to out live me anyways.

# ? Aug 16, 2016 03:50

UnfortunateSexFart: May 18, 2008; ð» ððð« ð·ððð·
ð ð ð ð« ð®ð ð¾ð ð ð¡ððð

ocrumsprug posted:

Eventually my father in law will pass away, and my spouse and I will retire like kings.

Hey that's my retirement plan too. Dude is one of those "I won't let my kids have any money even though I could have retired in my 40s to teach them WORK ETHIC" types but all it does is make us realize how lovely it is to be poor. No one gets wealthy by working in Vancouver anymore, and he got wealthy by buying a bunch of houses in Kits and Shaughnessy for five figures each.

UnfortunateSexFart fucked around with this message at 03:54 on Aug 16, 2016

# ? Aug 16, 2016 03:51

Scaramouche: Mar 26, 2001; SPACE FACE! SPACE FACE!

apatheticman posted:

I tried but excel just laughed at me.

Sorry

Clippy just opened a template for a suicide note and a life insurance claim

# ? Aug 16, 2016 04:18

Femtosecond: Aug 2, 2003

quote:

Vancouver�s real estate tax sparks backlash from Chinese buyers

Three years ago, Jack Li signed to buy a modest one-bedroom condo in Richmond for about $200,000, a chance to gain a relatively cheap foothold in British Columbia�s Lower Mainland.

Then he waited as his new home slowly emerged from the ground. But far more exciting than construction progress was the rapid rise in the value of his purchase as real estate prices took flight. Mr. Li, a Beijing oil and gas worker who turned to real estate when energy prices crashed, decided to buy more.

In January, he bought into another condo development in Yaletown. In July, he signed for a third, in Burnaby. His purchases are part of the rush of foreign money that has sparked a backlash in British Columbia, where Vancouver home prices were up 32.6 per cent year-over-year in July.

He was so sold on the Vancouver region he became a licensed real estate agent in the province.

Altogether, Mr. Li is on the hook for $1.7-million in property. But the ink had barely dried on his most recent purchase when the B.C. government introduced a 15-per-cent tax on foreign buyers in Metro Vancouver, at a stroke upending Mr. Li�s Canadian real estate dreams.

The change came only weeks before he expected to take possession of his Burnaby condo, which he expects to keep since it�s a relatively small investment.

But when it comes to the other two more expensive properties, which won�t be ready for another three or four years, he�s already decided what to do. If the 15-per-cent penalty stays, he won�t.

�I�m going to flip them,� he says. �I�m not going to pay that tax,� which becomes due when a home purchase is registered, even for home sales agreed to before the tax was introduced. �If the government had said 5 per cent or even 8 per cent, that�s reasonable. But 15 per cent, that�s a lot. That�s a very heavy tax.�

In China, ground zero for the foreign money that has poured into a frenzied housing market, the B.C. government�s unexpectedly severe response has stoked a fury that will not soon be resolved � even if few believe the buying will stop.

�Many people believe the government�s policy is reckless and irresponsible, and undermines its image and credibility,� blasted a report in China�s Economic Information Daily soon after the tax was unveiled.

People are �angry. I�m angry. This is not about the real estate market. From my point of view, it�s political. It�s for votes. It�s not for home prices,� said Xie Xingyu, who specializes in overseas sales for Homelink, one of China�s biggest real estate agencies.

Even the Chinese consul-general in Vancouver, Liu Fei, has publicly criticized the tax for being ineffective � building high-rises would be better, she suggested � and the B.C. government for acting hastily. �If government has no plan, any policy can be the start of a disaster,� she said in an interview with Chinese media last week.

Others, like Mr. Li, feel betrayed. Since becoming a real estate agent, he has helped Chinese investors buy 30 or 40 condos over the last two years.

He was drawn by more than roaring prices. He felt a connection to the place, too. He had lived and worked in Canada for a year and a half. He still owns a home in Fort St. John.

But the new tax is souring him on British Columbia. �It�s a tragedy,� he said. �It�s going to have an impact on me, my family and my business, even though I made a lot of contributions to the B.C. economy. I put money there. I have brought people to B.C. And I told people Canada is a good place.�

Still, he�s not done with Canada. Many of his real estate clients aren�t done with Vancouver, either.

Even among Chinese buyers, only a small number are truly mobile. Mr. Xie, at Homelink, estimates roughly 35 per cent of those looking at Canada are new immigrants, while another 25 per cent or more buy homes for students. �They really have no choice. They must have a house or a townhouse,� he said.

It�s likely, too, even those buying as an investment will eventually look past their ire directed at the B.C. Premier�s office. Canada is just too tempting to ignore.

In Beijing, the agents at Global House Buyers began advising clients last year to put their cash into Canada, as the plunging dollar made homes dramatically cheaper.

Anyone who listened then is already up more than 40 per cent as a result of home price gains and a partial loonie recovery � and far more in real terms, since most buyers invest only a small fraction of the purchase price as a down payment. A 15-per-cent tax will erase some of those gains but not enough to change minds among those who have doubled and tripled their cash in a year.

Some clients have backed out on deals, �but only a very small percentage,� said Issac Peng, a Global House Buyer agent. Others have turned their attention to Toronto � the company�s website currently features the city on its front page. But �not many,� he Peng says.

Most remain sweet on Vancouver, where a 0.6-per-cent vacancy rate has convinced Mr. Peng the overheated market will not cool down soon.

�The key issue is not how many houses were bought by foreign investors, but that too few houses have been built,� he said.

Canada still compares favourably to other places, too. Australia�s economy is so closely tied to China that it�s less useful for those looking to diversify, while Australian housing markets have been so hot for so long that Mr. Peng sees �big systemic risks,� bigger than in Canada.

The U.S. is currently the most popular destination for Chinese overseas home buyers, with economic growth that gives it prized stability. In Canada, however, mortgage rates are half as high, meaning investors can expect better cash flow out of a Canadian home.

In the U.K., meanwhile, the buying opportunity created by Brexit fears is partly offset by higher prices and stricter bank requirements that create an entry threshold many Chinese buyers can�t clear. Buying is easier in Canada.

Still, China�s wealthy face an increasing number of obstacles outside their borders. The U.S. has cracked down on home purchases through shell companies, while Singapore, Hong Kong and some Australian cities have raised taxes on foreign buyers.

Add to that the Vancouver tax and it�s enough to prompt warnings in the state-run People�s Daily.

�Buying a house abroad is not all profit and no losses,� the newspaper cautioned Monday. �The moon in a foreign country may not be rounder than it is in China.�

Seems like the tax may be having its intended effect, but Canada is still an ideal place to stash cash compared to everywhere else.

# ? Aug 16, 2016 05:01

Bob Ross Nuke Test: Jul 12, 2016; by Games Forum

Femtosecond posted:

Seems like the tax may be having its intended effect, but Canada is still an ideal place to stash cash compared to everywhere else.

Someone on Reddit pointed out that this dude appears to somehow have a Realtors license despite having been in the country less than 2 years? And went on to ponder how many people may be illegally working as Realtors in Vancouver.

Anyways gently caress that guy, nobody can buy property in China so he can go ride back to the mainland on his river of crocodile tears.

# ? Aug 16, 2016 05:45

sbaldrick: Jul 19, 2006; Driven by Hate

eXXon posted:

What advisor in their right mind would tell two high earners in their late 20s to put 40% of their investments in bonds?

e: are you calling preferred shares bond equivalents because they're not.

Someone bearish.

# ? Aug 16, 2016 05:56

Lexicon: Jul 29, 2003; I had a beer with Stephen Harper once and now I like him.

blah_blah posted:

The relevant factor here is that the government and banks are glad to let your average Joe borrow at anywhere from 5-20x leverage to own a house (and assume most of the risks here). 250k in 2009 could have (at a 'modest' 20% down) bought you a 1.25M house, which would likely be worth nearly 4M today in Vancouver. There is also the nontrivial issue of differing capital gains treatments.

Seriously this.

"Canadian society is structured around the permissiveness of huge leverage towards housing" and "the capital gains are tax free" are so so important, and the value-investor types including myself for most of my adult life tend to overlook these factors consistently. There's also the whole "governments will do virtually anything to keep homeowners happy" thing.

# ? Aug 16, 2016 06:02

Mantle: May 15, 2004

eXXon posted:

What advisor in their right mind would tell two high earners in their late 20s to put 40% of their investments in bonds?

e: are you calling preferred shares bond equivalents because they're not.

It has nothing to do with age and everything to do with timeline to withdrawal. In this case, the investors had a plan to retire in their early 30s.

If the timeline to drawing on the principal is 10 years, then I think a 40% bond allocation is very reasonable, regardless if the investor is 25 or 50.

# ? Aug 16, 2016 06:18

Mantle: May 15, 2004

# ? Aug 16, 2016 06:19

leftist heap: Feb 28, 2013; Fun Shoe

Femtosecond posted:

Seems like the tax may be having its intended effect, but Canada is still an ideal place to stash cash compared to everywhere else.

Was the intended effect a lot of :qq:

ing? It's definitely way to early to tell whether it's done anything meaningful. We don't even have a full month of sales to go by so far.

# ? Aug 16, 2016 06:20

I would blow Dane Cook: Dec 26, 2008

quote:

Want a BMW? No disposable income? No problem - have a loan anyway

BMW has been so desperate to get people behind the wheel of its luxury cars that its finance company gave loans to people with zero or even negative disposable incomes and accepted false loan documents while paying big bonuses to its most reckless salesmen.

A scathing review of BMW Australia Finance found the company had loaned $27,000 to a single mother of 10 children even though she was in casual employment and had negative disposable income. It gave $23,300 to a refugee aged 21 who had been employed for just one month and whose income was overstated. And it loaned nearly $50,000 to a 76-year-old man based on earning projections rather than real income. The loan was almost twice the value of the car.

"BMW [Australia Finance] has not demonstrated a satisfactory level of organisational competency necessary to engage in credit activities efficiently, honestly and fairly," according to the review, produced by consultant Ernst & Young and obtained by Fairfax Media.

A "strong sales culture" was to blame, one in which people with "known compliance failings" were paid "unprecedented bonuses," while risk and compliance teams were undermanned, under-trained and not taken seriously.

The review, leaked to Fairfax Media, was the first of four ordered by the Australian Securities and Investments Commission after earlier breaches of BMW's credit licence saw the car company's finance arm fined $697,000.

But even after ASIC imposed those fines, BMW still boosted the bonuses paid to sales staff who maximised the interest rates they charged on loans.

Under the incentive scheme, a dealer would receive a $375 commission if they charged a customer the base interest rate of 5.49 per cent, but if they ramped it up to the maximum, 12.29 per cent, the sales commission would be $8163.

"A steep change, rather than incremental progress, is required" for the finance company to change culture and lift competency, the Ernst & Young report said. This would take 18 to 24 months.

BMW Australia Finance was given a credit licence in 2011 and trades under brand names BMW Financial Services, Mini Financial Services and Alphera Financial Services. It's a fully-owned subsidiary of car company BMW. In the past 12 months it has written about 26,000 loan contracts.

The company budgeted just $23 per contract doing checks and compliance, with many loan contracts approved within 15 minutes. One customer, who said he was a mail courier, was approved for a loan despite claiming income of $53,000 per month.

Ernst & Young looked at 100 BMW customer files that it considered questionable. It found 98 per cent breached the consumer credit code.

In the vast bulk of these files, the finance company had underestimated people's monthly spending when assessing them for a loan. About 90 per cent of customers' general living expenses were said to be lower than the Henderson Poverty Index, even as measured against an out-of-date poverty index from 2010.

About 20 per cent of the files disclosed general living expenses as $0 per month, and some people approved for loans had negative disposable income. Half the files showed housing expenditure at less than $200 per month, and 11 per cent of them included pay slips or income documents "that appeared fraudulent".

In 19 per cent of the cases examined, the loan was worth significantly more than the car's value, meaning that, if it was to be sold to pay off the debt to BMW Australia Finance, the customer would still owe money. Some of BMW Australia Finance's clients who were dealt with under the "hardship" obligations would actually be made worse off.

"None of the 100 files assessed demonstrated that the consumer was provided with a credit guide," the report said.

BMW said in a statement that the company's financial arm had been co-operating with ASIC "to ensure the company is updating its processes to meet all regulatory obligations".

It stated BMW Financial Services was "fully committed to implementing a business model which reflects the industry's best practice compliance, business processes and customer service."

http://www.canberratimes.com.au/business/want-a-bmw-no-disposable-income-no-problem--have-a-loan-anyway-20160815-gqswtd.html

# ? Aug 16, 2016 08:51

I would blow Dane Cook: Dec 26, 2008

I hope mortgage brokers don't get paid bonuses.

# ? Aug 16, 2016 08:54

RBC: Nov 23, 2007; IM STILL SPENDING MONEY FROM 1888

Jumpingmanjim posted:

http://www.canberratimes.com.au/business/want-a-bmw-no-disposable-income-no-problem--have-a-loan-anyway-20160815-gqswtd.html

this is literally how the us housing crash happened. i guess its less bad on a small scale with cars

# ? Aug 16, 2016 11:57

HookShot: Dec 26, 2005

Jumpingmanjim posted:

I hope mortgage brokers don't get paid bonuses.

Fun fact: about five years ago now mortgage brokerage rules in Australia changed so that people who are dumbasses who blame their broker for the fact that they didn't actually read their contracts can actually sue the brokers for not telling them every single tiny little detail in the contract.

As soon as it happened my husband was like "lol nope getting out of this business" because people are god damned morons who like to blame their brokers when they don't read the most important contract of their lives.

# ? Aug 16, 2016 12:19

MiddleOne: Feb 17, 2011

THE BEATWEAVER posted:

Lol at you insufferable gits, $40k is sufficient to live like loving royalty in most of the world. They can happily retire in Central America or Southeast Asia and enjoy their loving lives in idyllic freedom, instead of working till they die just to savour the sweet delight of freezing and eating cat food as seniors in this shitheap of a nation we call home.

As someone living on a student budget in a super rich western nation I can't really comprehend how someone could be suffering off 20k per person.

# ? Aug 16, 2016 12:34

SpannerX: Apr 26, 2010; I had a beer with Stephen Harper once and now I like him.; Fun Shoe

RBC posted:

this is literally how the us housing crash happened. i guess its less bad on a small scale with cars

John Oliver just did a show on it this week.

# ? Aug 16, 2016 12:52

Cute n Popular: Oct 12, 2012

MiddleOne posted:

As someone living on a student budget in a super rich western nation I can't really comprehend how someone could be suffering off 20k per person.

Living off 20k per person with a spouse is not difficult and you can maintain a pretty good standard of living.

# ? Aug 16, 2016 12:58

MiddleOne: Feb 17, 2011

Cute n Popular posted:

Living off 20k per person with a spouse is not difficult and you can maintain a pretty good standard of living.

That was what I was inferring.

# ? Aug 16, 2016 13:25

EvilJoven: Mar 18, 2005; NOBODY,IN THE HISTORY OF EVER, HAS ASKED OR CARED WHAT CANADA THINKS. YOU ARE NOT A COUNTRY. YOUR MONEY HAS THE QUEEN OF ENGLAND ON IT. IF YOU DIG AROUND IN YOUR BACKYARD, NATIVE SKELETONS WOULD EXPLODE OUT OF YOUR LAWN LIKE THE END OF POLTERGEIST. CANADA IS SO POLITE, EH?; Fun Shoe

Cute n Popular posted:

Living off 20k per person with a spouse is not difficult and you can maintain a pretty good standard of living.

Especially if you don't have kids. I'm pretty sure my wife and I have way less than 3400 worth of expenses in an average month.

# ? Aug 16, 2016 13:46

Reince Penis: Nov 15, 2007; by R. Guyovich

Cute n Popular posted:

Living off 20k per person with a spouse is not difficult and you can maintain a pretty good standard of living.

I'd hardly call $1,600 a month a good standard of living.

# ? Aug 16, 2016 14:25

Nocturtle: Mar 17, 2007

EvilJoven posted:

Especially if you don't have kids. I'm pretty sure my wife and I have way less than 3400 worth of expenses in an average month.

There's no comparison, child care alone can easily exceed 20k per year. People spend a lot of time making fun of overleveraged homeowners when the real financial illiterates are people with children.

There's a connection between real estate prices and fertility rates, and it's about what you'd expect:
http://isites.harvard.edu/fs/docs/icb.topic1121922.files/dettling_kearney_feb2013.pdf

quote:

Our IV estimates imply that a $10,000 increase in home prices leads to a 5 percent increase in fertility rates among owners
and a 2.4 percent decrease among non-owners.

My favourite part:

quote:

Recognizing that housing is a major cost associated with child rearing, and assuming that children are normal goods, we hypothesize that
an increase in real estate prices will have a negative price effect on current period fertility.

Children are normal goods, albeit with terrible ROI.

The results are actually about the worst possible outcome, rising house prices mean terrible people (Canadian homeowners) are more likely to reproduce.

# ? Aug 16, 2016 14:37

EvilJoven: Mar 18, 2005; NOBODY,IN THE HISTORY OF EVER, HAS ASKED OR CARED WHAT CANADA THINKS. YOU ARE NOT A COUNTRY. YOUR MONEY HAS THE QUEEN OF ENGLAND ON IT. IF YOU DIG AROUND IN YOUR BACKYARD, NATIVE SKELETONS WOULD EXPLODE OUT OF YOUR LAWN LIKE THE END OF POLTERGEIST. CANADA IS SO POLITE, EH?; Fun Shoe

There are quite a few people in my social circle, including myself and my wife, who are opting to not have children partially because of the financial and time cost implications of being parents. I'm not about to subject myself to spending all my time and money for the next 20 years raising a kid.

EDIT: I'd really like to see how big an impact lengthening work hours and stagnant incomes in general is having on the populations decision to have children. Does anyone know if these numbers are available?

# ? Aug 16, 2016 14:43

Subjunctive: Sep 12, 2006; ✨sparkle and shine✨

Nocturtle posted:

terrible people (Canadian homeowners)

# ? Aug 16, 2016 14:45

Bob Ross Nuke Test: Jul 12, 2016; by Games Forum

PK loving SUBBAN posted:

I'd hardly call $1,600 a month a good standard of living.

Adjust your QOL expectations then, you entitled consumerist twat. That's over a thousand more a month than about 5 billion other humans subsist on.

# ? Aug 16, 2016 15:54

Reince Penis: Nov 15, 2007; by R. Guyovich

THE BEATWEAVER posted:

Adjust your QOL expectations then, you entitled consumerist twat. That's over a thousand more a month than about 5 billion other humans subsist on.

Yeah but we're talking about Canada here. This is the CanDebt thread.

# ? Aug 16, 2016 15:58

Bob Ross Nuke Test: Jul 12, 2016; by Games Forum

PK loving SUBBAN posted:

Yeah but we're talking about Canada here. This is the CanDebt thread.

We got in this topic by shaming some peeps who had the financial acuity to acquire a fat stack of cash, which generates enough interest to comfortably live anywhere except this frozen bastion of exorbitant living costs.

And now some neauveau-riche golf club goons keep insisting $40k per annum is dire poverty or some poo poo. :rolleyes:

# ? Aug 16, 2016 16:03

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# ? May 28, 2024 18:05

leftist heap: Feb 28, 2013; Fun Shoe

Smack dab on the front page of CBC news, another real tragic story:

http://www.cbc.ca/news/canada/british-columbia/property-transfer-tax-chinese-student-1.3719106

quote:

After completing her degree at the University of Saskatchewan last spring, Chinese student Jing Li decided to put down permanent roots in Canada.

Jing, 29, obtained a work permit, moved to the Vancouver area and made an offer on a townhouse in Langley, B.C., in mid-July.

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"The beauty and kindness of B.C. inspired me to move here," she said.

Jing cobbled together a 10 per cent deposit on the $560,000 property by borrowing from her parents in China. She said they in turn borrowed money from friends and family.

But last month, 12 days after Jing signed the purchase contract, the B.C. government threw a wrench in Jing's Canadian dream when it levied a 15 per cent property transfer tax on foreign real estate buyers in the Vancouver area.

Jing is not a permanent resident in Canada, so the tax adds $84,000 to the home's cost, something she's certain she can't afford. But if she backs out of the deal, she would lose her deposit of about $56,000.

"Now, I can't go forward and also can't go back."

Her mother cried when Jing called her parents in China to tell them about the tax. They had no more money to lend her.

Jing said her father is a geologist for a mining company. Her mother stays at home.

Parents saved for Jing's future

She said her parents saved all their lives to send her to university in Canada.

After earning a master's degree last spring in public administration from the University of Saskatchewan, she moved to Burnaby, B.C., where she lives in an apartment with some university friends.

Staying in Canada was Jing's idea, and now she feels guilty.

"I think this is my fault," she said in halting English. "If I don't want to study, work and live in Canada, this disaster would not happen to my family.

"I hope there is somebody could tell me what I can do."

Bruce Copp, managing broker at Sutton Group West Coast, the real estate firm used by Jing, confirmed Jing made the offer on the Langley property in July.

Did not expect tax

When the government introduced the tax last month, it said its stated aim was to make housing more affordable for middle-class buyers.

Langley townhouse
In July, Jing paid a deposit on this townhouse in Langley. Twelve days later, the province introduced the 15 per cent property transfer tax for foreign buyers in the Vancouver area. (Jing Li)

Real estate prices in the Vancouver area have soared in recent years. Some have argued that foreign buyers have contributed to this rise, which has left many local buyers priced out of their own city.

Jing said she never would have bought the Langley property had she known a tax was on the horizon.

She said she felt entrapped by the government when it announced the tax.

"In my mind, Canada is a democratic and fair country."

Now she is not so sure.

She never would have bought the property if she had known about the tax. But being here on a work visa? Go freakin nuts. No risks there at all.

# ? Aug 16, 2016 16:10

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