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[AndyUK]

Hi folks ,I am back I was really busywith work,how is things going here?saw lot of guys got ita happy for them.
I saw something interesting in canada ,some of you guys may be able to give some insights.(obviously I knew prices were high)
A home in calgary now is sitting at 500-700k I am not talking about fancy stuff just average home ,let us assume 20% down payment that is 100k to 140 k and monthly payments approximately 2500-3000 ,utilities 500 ,how are new immigrants affording this homes ,I think I am getting decent salary according to canadian standards but If it is this way it is almost impossible to buy something and I forgot to add taxes .I feel like if I have to afford this I will have to work to death ,here am I missing something. Not to spread panic it is a great place to live I think this is the number 1 problem.if you get this sorted out then you are good ,trust me with good skills getting a job in a good company is easy but housing prices gave me chills.inorder to afford down-payment it will take 2 yrs that time this will be 700 to 1M$ which will again push the needle.
Obviously if you have generational wealth and get handout from your parents it is easy else it is a very tough road ahead.(which is my case).
Even with 100k you will be house poor.
Is there anything I am missing.

I think at the moment the situation is similar in most big cities (and desirable smaller cities) around the world. The prices or properties and the cost of living have been spiralling out of control for a while.
That being said - interest rates keep going up, big companies are reporting earnings below target so lay-offs will likely follow, and the world is on a brink of recession (if not already in recession). The stock market will probably rally for the rest of the year as it's always the case when there are midterms in the US but I expect a BIG market pullback in 2023.
All of the above will likely lead to property prices going back down at least a bit - it has already begun in the UK. People simply can't afford mortgages when properties are becoming more expensive, interest rates are going up and the cost of living is going up... yes you can squeeze it to a certain point but it all has to implode eventually. Just like it did in 2008.
Since governments started printing money left, right and center at the beginning of the pandemic, it's been pretty clear that there are going to have some 'interesting' times ahead. Canada is not isolated here.
It sucks but it cannot last forever - we're due for a market pullback and I'm fairly certain that it will make things at least a little bit more 'normal'.... whatever this means these days

 

[ivicts]

@mushymush @AndyUK @MajorGrom @Mashathebear @RSub @OneStepAtATime thanks guys for the answer on the LOE, I guess I would put the LOE for every section instead!

 

[Deleted member 1083629]

I think at the moment the situation is similar in most big cities (and desirable smaller cities) around the world. The prices or properties and the cost of living have been spiralling out of control for a while.
That being said - interest rates keep going up, big companies are reporting earnings below target so lay-offs will likely follow, and the world is on a brink of recession (if not already in recession). The stock market will probably rally for the rest of the year as it's always the case when there are midterms in the US but I expect a BIG market pullback in 2023.
All of the above will likely lead to property prices going back down at least a bit - it has already begun in the UK. People simply can't afford mortgages when properties are becoming more expensive, interest rates are going up and the cost of living is going up... yes you can squeeze it to a certain point but it all has to implode eventually. Just like it did in 2008.
Since governments started printing money left, right and center at the beginning of the pandemic, it's been pretty clear that there are going to have some 'interesting' times ahead. Canada is not isolated here.
It sucks but it cannot last forever - we're due for a market pullback and I'm fairly certain that it will make things at least a little bit more 'normal'.... whatever this means these days

Recession won't change the situation much. Canada is in recession already. Many people will lose jobs but you will have many new immigrants are coming in. I have some hope that rent prices will go down as soon as Canada decreases interest rate. The question is when will it happen.

However, I both agree and disagree with you in regards to other cities. If one wants to live in Berlin, be ready to pay good chunk of money. However, the further one is from the center of Berlin, the cheaper it becomes. Not the case in Toronto. Sure, a place in Markham will be cheaper than in downtown Toronto. The problem is that Markham doesn't have public transportation so you will have to get a car. Boom and we are back to original price. That's not the case in Berlin, where public transportation doesn't end with the downtown area.

 

[AndyUK]

Recession won't change the situation much. Canada is in recession already. Many people will lose jobs but you will have many new immigrants are coming in. I have some hope that rent prices will go down as soon as Canada decreases interest rate. The question is when will it happen.

However, I both agree and disagree with you in regards to other cities. If one wants to live in Berlin, be ready to pay good chunk of money. However, the further one is from the center of Berlin, the cheaper it becomes. Not the case in Toronto. Sure, a place in Markham will be cheaper than in downtown Toronto. The problem is that Markham doesn't have public transportation so you will have to get a car. Boom and we are back to original price. That's not the case in Berlin, where public transportation doesn't end with the downtown area.

Maybe you're right but I think it will take a bit longer before we will see the full extent of the damage caused by the current macroeconomic situation. For example, in the UK (and I'm assuming it's similar in many other countries) many people still have their mortgages locked at 1.5-2.5%. But these deals will end over the next months (well, couple of years) and suddenly they will be hit with rates around 5-7% or more. Some people simply won't be able to afford it, which will lead to them downsizing (or foreclosures in extreme cases) and property prices overall going down. In October prices of properties in the UK went down by 1% - it's not much but it's the first time they went down in almost 1.5 years. Estimates are that they can dip around 7-10% next year.

At the end of the day no market (including real estate) goes up forever. Sure, on the longer timeframe - yes. But on the shorter timeframes there are always pullbacks. Property market has been going up for a while and eventually, it must come back down.

Fair point regarding other cities. I guess it's hard to make exact comparisons.

 

[GandiBaat]

Recession won't change the situation much. Canada is in recession already. Many people will lose jobs but you will have many new immigrants are coming in. I have some hope that rent prices will go down as soon as Canada decreases interest rate. The question is when will it happen.

However, I both agree and disagree with you in regards to other cities. If one wants to live in Berlin, be ready to pay good chunk of money. However, the further one is from the center of Berlin, the cheaper it becomes. Not the case in Toronto. Sure, a place in Markham will be cheaper than in downtown Toronto. The problem is that Markham doesn't have public transportation so you will have to get a car. Boom and we are back to original price. That's not the case in Berlin, where public transportation doesn't end with the downtown area.

My friend, what is likely looking to happen is stagflation. A double whamy of inflation and stagnation/recession. Its the reason why central banks are increasing the rate, to counter stagflation and turn it into just a recession.

There is an oversupply of cash from quantitative easing (basically money printing) of pandemic and there is a supply crunch from russian war (china lockdowns, russian blockade of oil, gas and grains). This is not a good situation. Even a recession is better than this becuase in recession, prices go down atleast.

The way out is to suck money from market so prices become rational even if it causes a recession and then let people restart production to meet demands. Last time it was done like this was in 80s. People took mortgages at 14-15%.

 

[GandiBaat]

Maybe you're right but I think it will take a bit longer before we will see the full extent of the damage caused by the current macroeconomic situation. For example, in the UK (and I'm assuming it's similar in many other countries) many people still have their mortgages locked at 1.5-2.5%. But these deals will end over the next months (well, couple of years) and suddenly they will be hit with rates around 5-7% or more. Some people simply won't be able to afford it, which will lead to them downsizing (or foreclosures in extreme cases) and property prices overall going down. In October prices of properties in the UK went down by 1% - it's not much but it's the first time they went down in almost 1.5 years. Estimates are that they can dip around 7-10% next year.

At the end of the day no market (including real estate) goes up forever. Sure, on the longer timeframe - yes. But on the shorter timeframes there are always pullbacks. Property market has been going up for a while and eventually, it must come back down.

Fair point regarding other cities. I guess it's hard to make exact comparisons.

The only issue here is massive oversupply of cash. Its late 70s all over again! too much cash chasing too less stuff. That and supply constrains. This is why there is inflation. And correction of inflation is recession. I hope banks do not pussyfoot and take hard measures fast. Like increasing rate of interest fast.

 

[AndyUK]

The only issue here is massive oversupply of cash. Its late 70s all over again! too much cash chasing too less stuff. That and supply constrains. This is why there is inflation. And correction of inflation is recession. I hope banks do not pussyfoot and take hard measures fast. Like increasing rate of interest fast.

Yep, that's why I think we're heading for a hard crash in 2023. It's going to be rough for a while but once we will start coming out of the recession (whenever this may be), things should look a bit more normal.

 

[cansha]

I still remember my interview at TD. Data structures and algorithms (level medium -> hard), system design, 2 rounds of behavioral interview. For what? To use Informatica GUI tool for ETL pipelines. I am like, dude, get out of there. I am not doing this crap.

More and more people need to call out the BS on these hiring practices and just bow out of the recruitment process. The work these banks do is not cutting-edge tech work. No disrespect but if someone has those level of skills why would they work at TD and not try their luck at bigger real tech companies. These companies are out of touch of reality and taking advantage of recent immigrants' hopes and fear.

 

[Deleted member 1083629]

More and more people need to call out the BS on these hiring practices and just bow out of the recruitment process. The work these banks do is not cutting-edge tech work. No disrespect but if someone has those level of skills why would they work at TD and not try their luck at bigger real tech companies. These companies are out of touch of reality and taking advantage of recent immigrants' hopes and fear.

That's exactly what I told the recruiter lol. Well, not the last "immigrant" part but everything else.

 

[Deleted member 1083629]

Maybe you're right but I think it will take a bit longer before we will see the full extent of the damage caused by the current macroeconomic situation. For example, in the UK (and I'm assuming it's similar in many other countries) many people still have their mortgages locked at 1.5-2.5%. But these deals will end over the next months (well, couple of years) and suddenly they will be hit with rates around 5-7% or more. Some people simply won't be able to afford it, which will lead to them downsizing (or foreclosures in extreme cases) and property prices overall going down. In October prices of properties in the UK went down by 1% - it's not much but it's the first time they went down in almost 1.5 years. Estimates are that they can dip around 7-10% next year.

At the end of the day no market (including real estate) goes up forever. Sure, on the longer timeframe - yes. But on the shorter timeframes there are always pullbacks. Property market has been going up for a while and eventually, it must come back down.

Fair point regarding other cities. I guess it's hard to make exact comparisons.

Not in Russia but you are correct about countries with more free market.

Real estate market has been steadily increasing for a looooong time. At least since 2014-2015. The issue is that if the market in Canada is an actual bubble (which it is) and it bursts one day, then it will be a nightmare for the economy and older generation. Will be a blessing in disguise for younger folks, though.

 

[Deleted member 1083629]

Like increasing rate of interest fast.

Which results in increase in rent. Which will worsen already crappy situation.

 

[Deleted member 1083629]

(whenever this may be)

That's an issue. 2008 market crash lasted for a long time. Surely, the recession in Canada wouldn't have that level of ripple effect but being in recession for extended period of time will have long lasting effects on the generation.

 

[AndyUK]

That's an issue. 2008 market crash lasted for a long time. Surely, the recession in Canada wouldn't have that level of ripple effect but being in recession for extended period of time will have long lasting effects on the generation.

Oh yeah, I totally agree - like I said a couple of posts above - it's going to be rough for a while but eventually it will lead to a more normal situation and plenty of great opportunities (not just in the property market). But I'm under no illusion that the near future is going to be a pretty bumpy ride.

 

[Alysson]

Hi folks ,I am back I was really busywith work,how is things going here?saw lot of guys got ita happy for them.
I saw something interesting in canada ,some of you guys may be able to give some insights.(obviously I knew prices were high)
A home in calgary now is sitting at 500-700k I am not talking about fancy stuff just average home ,let us assume 20% down payment that is 100k to 140 k and monthly payments approximately 2500-3000 ,utilities 500 ,how are new immigrants affording this homes ,I think I am getting decent salary according to canadian standards but If it is this way it is almost impossible to buy something and I forgot to add taxes .I feel like if I have to afford this I will have to work to death ,here am I missing something. Not to spread panic it is a great place to live I think this is the number 1 problem.if you get this sorted out then you are good ,trust me with good skills getting a job in a good company is easy but housing prices gave me chills.inorder to afford down-payment it will take 2 yrs that time this will be 700 to 1M$ which will again push the needle.
Obviously if you have generational wealth and get handout from your parents it is easy else it is a very tough road ahead.(which is my case).
Even with 100k you will be house poor.
Is there anything I am missing.

Unfortunately only those with built equity are capable of buying houses now. You sell a house to buy one and so on. It’s pretty ridiculous.

 

[Alysson]

New immigrants aren't affording sh*t.

If you take into account metropolitan cities like Toronto or Vancouver, they are just surviving. Good for you for moving to Calgary. The further away you move from them the richer you will be and live a more balanced life. Imagine buying a condo for $400k and paying like $600+ condo fees monthly and in some instances an additional $2k in property taxes yearly, on top of your mortgage. Freaking ridiculous. You are better off renting. A $50k yearly salary there is the bare minimum to survive.

Yeah, I am planning on moving to Toronto and was making calculations. My current salary is 50k and it would be barely possible to survive if I don’t have a car for car payments/insurance. To not have a pay cut, I need to earn an extra 10k just for the extra 500-600 in rent. It sucks though because in pharmaceutical, they don’t pay that much more in Toronto, compared to other Ontario cities.