- 2010 mortgages are not that low, unless you bought a travel trailer
- $1million actually doesn't buy you much in Toronto, Vancouver, or even a smaller city like Victoria
- a millennial working at big tech ($200k+) can still afford one of these absurdly priced homes
Yes housing in Canada is messed up. But very well paid tech workers are actually some of the few young people that can still make it work.
Heck, I know some millennials that managed to buy in the Bay Area where it's even worse (they work at Tesla).
> At the end of the day, those 'low' salaries are only low relatively. They are more than enough for most people and only a reason to move south if your main driver is money. Otherwise they're good enough.
The average Canadian house costs $585k now[0]. That's over 10x these average Canadian tech salaries. Housing prices contributed to our decision to move from Toronto to Seattle 10 years ago. I imagine that they are even more of a motivator nowadays.
>Well, what could his parents afford when they were his age?
[Article is from 2019, before Trudeau boosted the Immigration numbers to astronomical numbers] "In 1971, those in the top 20 per cent by income had a home-ownership rate approximately 10 per cent higher than those in the bottom fifth. This difference has grown severalfold in the ensuing decades. Millennials are entering home ownership in small numbers and later than their forebears: 50 per cent of millennials own a home today compared with 55 per cent of people their age in 1981."
https://thetyee.ca/Analysis/2019/08/01/Gov-Created-Housing-C...
The housing situation in Canada (not just Toronto and Vancouver) is on a scale unlike any other developed country.
We do in fact have an affordability crisis in Canada. I bought a home in a small town outside Toronto (too far to be a commuter town) in 2017 for $425000, and sold it in 2020.
We're friends with the people that bought it from us and on the same street in that same small town in Ontario, houses are going for $1M+ now. This is not entitled millenials wanting to live in Vancouver. This is the place where things are supposed to be affordable. This is exactly the sort of place where Boomers love to tell us to go live if we can't afford the city.
Housing is cheaper if you are willing to relocate to e.g. Swift Current, Saskatchewan where a 2-bedroom home with 900 square feet will cost you $175000, but of course there are very few jobs in a small town of 15000 people that's 3 hours away from the nearest big city and the unemployment rate is among the highest in the province.
That may be true, but houses aren't really all that expensive. If you're, say, Austin Matthews making $13MM per year, you can still buy a lot of houses. It doesn't matter if some tech mogul in SF makes $130MM per year.
The question is, as always, will something better come along? Housing is the purchase of last resort. People in Canada especially are happy to buy real estate like mad because, frankly, what else is there to buy? You're not going to work to make $13MM just to inflate an artificial bank account number.
The US housing market crashed back in 2006 because tech started showing promise and the money left housing to buy tech companies. It's not clear what Canada is going to bring to the table.
I live in the Waterloo region and affordability is questionable. Not terrible for most tech workers, but definitely not great for the "working class". All of Canada is in a serious housing bubble, but definitely worse in Toronto and Vancouver.
I love that people who don't work in tech can still afford to live in Toronto.
Isn't the average cost of a home nearing $1M in the GTA core? From what i've read, Toronto isn't that far behind SV when it comes to real estate price inflation.
I've also lived in Toronto and Vancouver. Did the obligatory move to work as a software dev in California and now live in Australia. The fact is that tech salaries in Canada are still much lower than the US while the cost of living, especially housing, is still very high, for Vancouver and Toronto in particular. Not to mention the lousy winters.
Spend any time browsing /r/vancouver or /r/toronto and you'll quickly realize that the cost of living is a huge problem. The Vancouver housing market in particular has been absurdly inflated by out of control money laundering. Local salaries and house prices are totally out of whack.
Follow https://twitter.com/mortimer_1/ to see what money laundering has done to the Vancouver housing market. https://twitter.com/mortimer_1/status/1221315000897163264 is a particularly amusing recent thread showing where a would-be landlord writes: "This home is in rough shape and needs painting, and TLC. Looking for long term tenant willing to put labour in while landlord covers all material costs." All this for only $5650/month!
Toronto and Vancouver are Canada's big insane housing markets. There are smaller tech communities in Ottawa, Waterloo, and Montreal, and those cities have normal housing markets.
>>Feel sorry for the kids who finish a degree in STEM from Waterloo or UoT and end up working for 40k a year.
The starting salary for STEM grads seem to be well above 40K CAD, perhaps even >65K CAD [1].
>>A down payment on a Toronto house should take 24 years to accumulate
When you pair your linked article with the fact that the GTA has experienced net-positive population growth every single year since 1971[1] then it makes a little more sense why property prices have risen and continue to rise inexorably over the years.
I also note that in your linked article a GTA condo downpayment can be accumulated within 4 years at the assumed 10% savings rate for a HHI of $124K CAD, and that's a 2-bedroom condo. If a new grad wants a starter property in the city then perhaps start with the purchase of a studio/1-bed.
> In a way, Canada pays decently. You'll be very comfortable as an engineer in Canada, even with a large family. But compared to certain US cities, it's abysmal.
Hmmm depends on where you live. In some places a large family would be quite unaffordable. The average cost of a detached house in February in Metro Vancouver was $1.76 million. Vancouver has become so unaffordable that even those with great (for Canada) six figure salaries would find it very hard to cobble together enough money to buy property.
Plenty of affordable homes in Canada at the $500,000 mortgage + down payment range. Go find a smaller city and grow with it because you have the same affordability problem in San Francisco or New York. Your tech salary isn't getting you a house there either. The time to buy a house in Toronto was when they cost $5,000 after the war or was the time to buy in 1975 when the property cost $30,000 or in the 90s when you could have gotten a house for $200,000. In 2012 for $500,000 you could get a house in 2021 it was 1.3 million now it's 1.1 million. In 2015 you could have purchased a home in New Brunswick for $25,000..
Your 1.1 million dollar home you buy today will be worth 5 million in 50 years at least 2 million in 20 years. Still as good of an investment as ever.
It's like bitcoin sure it would have been great buying coins for 5 cents and today and you would be a billionaire but you weren't able to make that bet. If you want to buy at the 5 cent level you need to find another coin because that opportunity passed. You weren't able to buy a home in 2010 or 1947 so you are never getting those prices again. You can buy today but don't expect the same prices on the same properties as if you lived in the past
The entire concept of "affordable" housing makes no sense when even people with average incomes struggle to afford a decent quality of life. The government acts like people who only make 50-60k or less are middle class, but they don't even make enough to rent without roommates right now. Charity prices for minimum wage workers should be the last thing on their mind.
The Canadian government is working as hard as they can to divide the country into owners who have homes that make more money than they do, and a permanent underclass of renters that can't possibly catch up with the price increases no matter how much of their money they save. Canada (or at least Southern Ontario and BC) is at a point where being born 5-10 years earlier is a bigger quality of life difference than the difference choosing to be a customer service worker or a lawyer.
Toronto homes were up 30% through 2020. They doubled in the 5 years before that. Being born 5 years earlier is the difference between renting with roommates forever, and being a home owning real estate millionaire. It's going to start creating really weird social dynamics soon.
Having lived all over the world, all over Canada, and in Texas and Cali for many years, I can assure you that Canada is pretty good.
You have clearly never lived in the Silicon Valley if you're talking about housing.
Housing in the Valley is beyond unaffordable. A choice job at Google and you still won't be buying a home.
You're probably young, and single. Your class has always struggled with home ownership. Most couples can afford to get in on the housing ladder by buying and apartment, and in some year, buy a home.
That said - Toronto and Vancouver are distorted markets right now. Everywhere else in Canada is pretty normal and home ownership is similar to most places in the US that are not NYC/SF.
Average house in Toronto or Vancouver costs about the same as in the valley. Senior devs rarely make more then 100-110k USD. No wonder people, myself included, at least consider moving.
> So now house prices in Mountain View and Sunnyvale go from $800K -> $2.4M, and you must be a dual-tech-income family to afford a house.
Weird that this is a problem in Vancouver, Toronto, etc. The larger trend that you're ignoring is that global capital finds real estate in these areas to be good investments compared to their domestic options for storing value.
Instead of competing locally or domestically for real estate, people in the US, Canada, etc are competing with the richest people on the planet for a slice of the pie.
the housing market is definitely bad - but are tech workers really a significant driver? Here in Vanouver the amount of tech workers overall are still low (far below 1% of population) - and a lot of them are younger singles which maybe are in the market for 1 bedroom condo. However prices for all housing types exploded, including single-family homes being now at an average sales price of 2M which isn't even affordable to lots of tech workers.
What I also found interesting about link [2] is that Alberta households have the highest average income, and despite that housing is a lot more affordable there. That somewhat contradicts that housing cost is driven by income.
>Canada is a great place to live for most people, frankly, probably better than the US.
No it's not. Most youth have zero dreams related to property ownership, as everything near the core and cities that are near the core are prohibitively expensive. There is a general apathy and malaise here.
"Just move outside of the city" they say, to suburbs that are also priced 500k+, and just far enough to only have to spend an hour and a half commuting to your city job.
Back in 2010-2011, everybody I knew in Vancouver was earning ~45-60k after graduation (With multiple semesters of co-op experience). No stock, no bonuses, maybe a bit of RRSP matching. I was an outlier at ~95k CAD (At an investment bank).
Eight months later, I got an offer from Google for ~180k USD total comp.
Since then, only three people from my school that I know have broken 100k CAD - one of them works for Amazon, one of them worked for SAP for a decade, and one of them gets paid in USD.
The cost of rent in Vancouver is not as high as SF, but the cost of home ownership may as well be. Single-family homes at a 40-minute commute are north of half-a-million, and a home in Vancouver proper will run you more then a million.
I hear things are better out east, but I don't want to spend a third of my life living in a frozen hellscape.
Yes housing in Canada is messed up. But very well paid tech workers are actually some of the few young people that can still make it work.
Heck, I know some millennials that managed to buy in the Bay Area where it's even worse (they work at Tesla).
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