FSW WORLDWIDE

[Windsor37]

What other western countries don’t have is America as its niebhour. Canada has America. We all have America. At some point most us will figure out a way to move to the US. With right planning, one can do well in the US.

It has been said that Canada's greatest advantage is that it's the only country in the world that has a land border with the US with favorable terms.

 

[GandiBaat]

You mean 250K each parent right? Good luck ever purchasing a home with just a 250K income, given that nearly half of that are going to taxes, and houses here in Vancouver are easily $2-3M ea. plus rent at 3K/month, you'll probably have enough saved for a down payment when you're close to retirement. I recently got an ad in the mail offering reasonable houses starting at $2.25M, how is $2.25M reasonable? And it's not even anywhere near downtown Vancouver. At this rate I might have to move to Ottawa, LOL. May the winters have mercy on my Filipino blood - and I already find Vancouver too cold.

Good thing with Vancouver is that mobility is fairly high and predictable. So, if you are ready to compromise to townhouse (2/3 bedroom) or a condo, you can get place for 700-900K. Not insane if you are making 250K per year.

Plus, why will you like to live near downtown? Its noisey and dodgey.

 

[GandiBaat]

Calgary is good if you can own a house. My friend bought a place 1.5years ago. Already up 15-20% lol. Better returns than most stocks and ETF plus equity

Yup! Best time for buying in Calgary was 2021 or so.

 

[PRANIT01]

Good thing with Vancouver is that mobility is fairly high and predictable. So, if you are ready to compromise to townhouse (2/3 bedroom) or a condo, you can get place for 700-900K. Not insane if you are making 250K per year.

Plus, why will you like to live near downtown? Its noisey and dodgey.

900k this is what really scares me ,250k income hmm that is 125 k for each person in a couple ,it is not very easy to sustain 125k job for a period of 30 yrs not being pessimistic but being realistic. Yeah inflation can be advantageous for the debtor ,but still a risk especially with 5 yr fixed term max that is the main issue of canada 5 yr fixed term.

 

[GandiBaat]

900k this is what really scares me ,250k income hmm that is 125 k for each person in a couple ,it is not very easy to sustain 125k job for a period of 30 yrs not being pessimistic but being realistic. Yeah inflation can be advantageous for the debtor ,but still a risk especially with 5 yr fixed term max that is the main issue of canada 5 yr fixed term.

For a person/family, making 250K per year at an age of 28-35, I expect them to have some saving as well. If they are taking a mortgage, this should be minimum 200-300K downpayment. That leave them with a debt burden of 600K - 700K.

Now I will also expect them to take out a mortgage insurance and a buffer of about 75-100K for emergencies. Also, since this is going to be a Condo anyways, I expect them to look into the strata budget. If the strata has some large expense planned or some major issues that were found out during last engineering check of the building, They will mention how much special levy will come on to people living there.

Also, I expect them to try and pay the mortgage earlier by increasing their income --promotions and what not. That means bulk payments capped at 20% per year AND may be some more at the end of 5 years.

So lets do the numbers ... Yup!

125 K per partner is 87K post taxes and deductions. About 7.0 K per month per partner. Thats a good start.

At 700K, for 25 year mortgage at 5.7% for 5 years term is $4350, a fairly reasonable amount if other partner is generating an equal amount of 7.0K per month. I mean in a mess, one can manage with one income of $4350 and may be a bit of dipping into saving if needed but in dual income even with kids it will be workable. If the bad goes to worse, one can reschedule debt to 30 years and reduce mortgage burden.

Any bonus on top of this (stock award, or earlier stock award maturing) will go into paying off the debt. If one can FULLY use their 20% pre-payment limit given, all of debt will be gone in 4-5 years. If not then I expect it to be gone in 10-12 years.

 

[Lord_Tony]

For a person/family, making 250K per year at an age of 28-35, I expect them to have some saving as well. If they are taking a mortgage, this should be minimum 200-300K downpayment. That leave them with a debt burden of 600K - 700K.

Now I will also expect them to take out a mortgage insurance and a buffer of about 75-100K for emergencies. Also, since this is going to be a Condo anyways, I expect them to look into the strata budget. If the strata has some large expense planned or some major issues that were found out during last engineering check of the building, They will mention how much special levy will come on to people living there.

Also, I expect them to try and pay the mortgage earlier by increasing their income --promotions and what not. That means bulk payments capped at 20% per year AND may be some more at the end of 5 years.

So lets do the numbers ... Yup!

125 K per partner is 87K post taxes and deductions. About 7.0 K per month per partner. Thats a good start.

At 700K, for 25 year mortgage at 5.7% for 5 years term is $4350, a fairly reasonable amount if other partner is generating an equal amount of 7.0K per month. I mean in a mess, one can manage with one income of $4350 and may be a bit of dipping into saving if needed but in dual income even with kids it will be workable. If the bad goes to worse, one can reschedule debt to 30 years and reduce mortgage burden.

Any bonus on top of this (stock award, or earlier stock award maturing) will go into paying off the debt. If one can FULLY use their 20% pre-payment limit given, all of debt will be gone in 4-5 years. If not then I expect it to be gone in 10-12 years.

125 or even 150k in GTA is a average pay in IT for a mid tier IT worker. I talk to people from other professions e.g. Bankers, non-IT white collar office goers most seem to make less than 70 k even in Greater Toronto. The most shocking I have seen is where my team is implementing Warehouse software for a F500 Manufacturer, the warehouse operators make like 50k generally, the senior most supervisor with 15+ years of experience makes 85k or so. These are all GTA pays, I was shocked to hear and learn of these jobs and people. I can't even imagine how they survive or pay their mortgages.

I can understand PRANIT01's dilemma and I was thinking last week where 'Windsor37' is getting his data from when he was talking about 500k Family income and 2.5M house prices.

 

[iSaidGoodDay]

900k this is what really scares me ,250k income hmm that is 125 k for each person in a couple ,it is not very easy to sustain 125k job for a period of 30 yrs not being pessimistic but being realistic. Yeah inflation can be advantageous for the debtor ,but still a risk especially with 5 yr fixed term max that is the main issue of canada 5 yr fixed term.

I know someone in your situation and they grinded their way through it. I'm talking specifically about Calgary. The person makes ~$50-60k/yr, got a condo(or apartment, I'm not 100% sure) for mid $200k. Rented the other two rooms for $1k each, now is living in the third room while paying minimal for the mortgage. It would cost him 2x less to have a primary suite with attached washroom than what it is costing you to rent right now. This person doesn't necessarily seem to be someone who'll ever grow into their career, so they are assuming their income to be $50-60k/yr for the foreseeable future. All what they will do is to save on renting, wait for property values to appreciate further. There's no guarantee that it will happen in 5 years, but in 10 years, it is very very likely to happen. This person will then move to another Tier 2 city that's cheap and find work there, buy a house using the savings they'll have by then+whatever they can get out of the sale and will stay worry free.

 

[iSaidGoodDay]

Calgary is good if you can own a house. My friend bought a place 1.5years ago. Already up 15-20% lol. Better returns than most stocks and ETF plus equity

I'll pay off my house in 2-3 years as well - which will make is super easy for me to move elsewhere without taking any large mortgage simply by selling this property. It has gone up in value significantly too. One thing about Calgary though, while houses are still affordable here. Most are fooled into buy way beyond their means. I know someone who moved from GTA to Calgary to buy an "affordable" house, who ended up buying a $700k house. The realtors hype everything up here whereas the market here is pretty seasonal and stagnates for an entire decade.

 

[seadrag0n]

For a person/family, making 250K per year at an age of 28-35, I expect them to have some saving as well. If they are taking a mortgage, this should be minimum 200-300K downpayment. That leave them with a debt burden of 600K - 700K.

Now I will also expect them to take out a mortgage insurance and a buffer of about 75-100K for emergencies. Also, since this is going to be a Condo anyways, I expect them to look into the strata budget. If the strata has some large expense planned or some major issues that were found out during last engineering check of the building, They will mention how much special levy will come on to people living there.

Also, I expect them to try and pay the mortgage earlier by increasing their income --promotions and what not. That means bulk payments capped at 20% per year AND may be some more at the end of 5 years.

So lets do the numbers ... Yup!

125 K per partner is 87K post taxes and deductions. About 7.0 K per month per partner. Thats a good start.

At 700K, for 25 year mortgage at 5.7% for 5 years term is $4350, a fairly reasonable amount if other partner is generating an equal amount of 7.0K per month. I mean in a mess, one can manage with one income of $4350 and may be a bit of dipping into saving if needed but in dual income even with kids it will be workable. If the bad goes to worse, one can reschedule debt to 30 years and reduce mortgage burden.

Any bonus on top of this (stock award, or earlier stock award maturing) will go into paying off the debt. If one can FULLY use their 20% pre-payment limit given, all of debt will be gone in 4-5 years. If not then I expect it to be gone in 10-12 years.

You didn't mention anything about what to do if anyone or both lose their jobs which is highly likely to happen in this recessionary time.

 

[Windsor37]

Good thing with Vancouver is that mobility is fairly high and predictable. So, if you are ready to compromise to townhouse (2/3 bedroom) or a condo, you can get place for 700-900K. Not insane if you are making 250K per year.

Plus, why will you like to live near downtown? Its noisey and dodgey.

For a condo, you can probably push for 500-700K, but a townhouse that is about an hour ride from downtown typically cost around $1.5M. At least that's what I'm seeing with all the flyers coming in my mailbox, the ads in the Skytrain, and when I look for new ones online. I don't like living in downtown as well, too crowded, but the price from the ad is from Port Coquitlam far from any sky train access, I imagine that living closer to downtown would exacerbate the cost.

You have to go all the way to Surrey, Maple Ridge or Abbotsford before you see housing fall down to six digits.

 

[Windsor37]

125 or even 150k in GTA is a average pay in IT for a mid tier IT worker. I talk to people from other professions e.g. Bankers, non-IT white collar office goers most seem to make less than 70 k even in Greater Toronto. The most shocking I have seen is where my team is implementing Warehouse software for a F500 Manufacturer, the warehouse operators make like 50k generally, the senior most supervisor with 15+ years of experience makes 85k or so. These are all GTA pays, I was shocked to hear and learn of these jobs and people. I can't even imagine how they survive or pay their mortgages.

I can understand PRANIT01's dilemma and I was thinking last week where 'Windsor37' is getting his data from when he was talking about 500k Family income and 2.5M house prices.

The 2.5M house price came from an ad in the flyer from the mail. The home next to where I live, was sold for ~$2.2M last year. The townhouse price of $1.5M is from the listings I see just a few blocks from the SkyTrain stations near my place. I live quite far from downtown so these prices are relatively tame compared to downtown Vancouver, Burnaby or even Richmond.

Assuming you just immigrated in Canada from a 3rd world country meaning you don't really have substantial savings to begin with at least not enough for a house downpayment, and you want to start saving up for that downpayment.

> The average price of a new home is $2.5M, and you want to make a 20% downpayment, then you should save up 500K first.
> If the couple is only making 250K (125K per person). Their total post-tax income is 90K x 2 = 180K per year or 15K per month, if 3K goes to rent and 2K/month on food, utilities, etc. then they can save 10K per month. This means the couple needs at least 50 months before they can put in a downpayment, and this assumes that the price of the house doesn't change in the next 4 years.
> But average house inflation is around 5-10% per year, at 5% and 4 years, the average price of a new home would have gone from 2.5M to 3M, and at that point they have to wait 5 years before they can even place a downpayment.

So it will take you on average 5 years to place a downpayment on a home if you are perfectly fine of placing all of your income to the downpayment. This means NO retirement saving, NO education plans for the kids, NO family vacations, NO emergency funds, etc. But what if you DO want to save some money for retirement, maybe saving 5K/month for a downpayment sounds reasonable, and 5K/month goes to retirement, etc.

At that point, 500K / 60K = 8.3 years, but because of the natural housing inflation the minimum downpayment would have increased from 500K to 750K, so roughly 12 years. If you started this when you're 35, then you'll be ready to place a downpayment by the time you're 47, and that assumes that we're only looking at an average price increase of 5%.

So that's my viewpoint on it, and that's the viewpoint of some of my co-workers who had been living here several decades before, and they themselves admit that Vancouver's housing market is crazy, they were even sharing that once their kids got out of college, they all looked to move out of Vancouver simply because of how bad housing is. My co-workers are just staying because they were very lucky to be able to buy a property here 10+ years ago, and they're pretty much settled here.

Sure you could go for a condo or a townhouse, or drive 1+ hr a day everyday to work (one-way) and settle in a place far enough that it's cheap, or just pour all your hard-earned money on that downpayment with no regard for retirement. But at that point, I feel you're just lowering your standard of living/quality of life, and to me it's just isn't worth.

Don't get me wrong, Vancouver is NOT bad a city at all, and I'll rather be here than in Manila, any day of the year including winters. If you're perfectly fine renting for life, and you have enough to get by, then it's awesome, spring is great, winters calm (compared to the rest of Canada), great nature views if you're into that. It has enough interesting things to offer in the city, though not as much as Toronto; but that's just it. Vancouver is a city good enough to get by, but if you want to truly settle, I feel you'll probably want to look somewhere else.

 

[Impatient Dankaroo]

The 2.5M house price came from an ad in the flyer from the mail. The home next to where I live, was sold for ~$2.2M last year. The townhouse price of $1.5M is from the listings I see just a few blocks from the SkyTrain stations near my place. I live quite far from downtown so these prices are relatively tame compared to downtown Vancouver, Burnaby or even Richmond.

Assuming you just immigrated in Canada from a 3rd world country meaning you don't really have substantial savings to begin with at least not enough for a house downpayment, and you want to start saving up for that downpayment.

> The average price of a new home is $2.5M, and you want to make a 20% downpayment, then you should save up 500K first.
> If the couple is only making 250K (125K per person). Their total post-tax income is 90K x 2 = 180K per year or 15K per month, if 3K goes to rent and 2K/month on food, utilities, etc. then they can save 10K per month. This means the couple needs at least 50 months before they can put in a downpayment, and this assumes that the price of the house doesn't change in the next 4 years.
> But average house inflation is around 5-10% per year, at 5% and 4 years, the average price of a new home would have gone from 2.5M to 3M, and at that point they have to wait 5 years before they can even place a downpayment.

So it will take you on average 5 years to place a downpayment on a home if you are perfectly fine of placing all of your income to the downpayment. This means NO retirement saving, NO education plans for the kids, NO family vacations, NO emergency funds, etc. But what if you DO want to save some money for retirement, maybe saving 5K/month for a downpayment sounds reasonable, and 5K/month goes to retirement, etc.

At that point, 500K / 60K = 8.3 years, but because of the natural housing inflation the minimum downpayment would have increased from 500K to 750K, so roughly 12 years. If you started this when you're 35, then you'll be ready to place a downpayment by the time your 47, and that assumes that we're only looking at an average price increase of 5%.

So that's my viewpoint on it, and that's the viewpoint of some of my co-workers who had been living here several decades before, and they themselves admit that Vancouver's housing market is crazy, they were even sharing that once their kids got out of college, they all looked to move out of Vancouver simply because of how bad housing is. My co-workers are just staying because they were very lucky to be able to buy a property here 10+ years ago, and they're pretty much settled here.

Sure you could go for a condo or a townhouse, or drive 1+ hr a day everyday to work (one-way) and settle in a place far enough that it's cheap, or just pour all your hard-earned money on that downpayment with no regard for retirement. But at that point, I feel you're just lowering your standard of living/quality of life, and to me it's just isn't worth.

Don't get me wrong, Vancouver is NOT bad a city at all, and I'll rather be here than in Manila, any day of the year including winters. If you're perfectly fine renting for life, and you have enough to get by, then it's awesome, spring is great, winters calm (compared to the rest of Canada), great nature views if you're into that. It has enough interesting things to offer in the city, though not as much as Toronto; but that's just it. Vancouver is a city good enough to get by, but if you want to truly settle, I feel you'll probably want to look somewhere else.

Toronto is fun for people in their 20s. Can’t imagine living here in mid 30s or if you have kids. Good for meeting people though

 

[Windsor37]

Toronto is fun for people in their 20s. Can’t imagine living here in mid 30s or if you have kids. Good for meeting people though

Exactly, same in Vancouver, if you just want to get by, have an activity from time to time, and live renting for the rest of your life..... like in your 20s, then Vancouver is fun. But once you're ready to settle, then it kinda gets tough.

 

[GandiBaat]

For a condo, you can probably push for 500-700K, but a townhouse that is about an hour ride from downtown typically cost around $1.5M. At least that's what I'm seeing with all the flyers coming in my mailbox, the ads in the Skytrain, and when I look for new ones online. I don't like living in downtown as well, too crowded, but the price from the ad is from Port Coquitlam far from any sky train access, I imagine that living closer to downtown would exacerbate the cost.

You have to go all the way to Surrey, Maple Ridge or Abbotsford before you see housing fall down to six digits.

Dont trust those flyers or ads. Those are all new constructions and builders are trying their level best to drag people into stupid deals.. You want real prices, look at realtor.ca. Also given the situation right now, there is a massive scope of some aggresive negotiation.

I purchased my place for a price even less than its 2019 assessment because I pushed them hard over a period of 2-3 months while they kept on doing open houses after open houses with no offer even after price drop.

It is note worthy that I failed in this tactic atleast 10-15 times before I succeeded. But then I was never going into the market to buy now. I wanted to buy at the best price I could get.

I dunno where your workplace is, but I assume it is in downtown, by choosing the right location, even port moody or coquitlam is less than 30-40 minutes journey in west coast express. Very reliable and very comfortable journey. Plus you have skytrain as back up as well. Coquitlam has some great schools to boot.

Even in vancouver proper, there are some decently priced places for that kind of income.
And you can also look at burnaby too.

https://www.realtor.ca/real-estate/26380371/58-6528-denbigh-avenue-burnaby#view=neighbourhood
https://www.realtor.ca/real-estate/26396845/130-6588-southoaks-crescent-burnaby
https://www.realtor.ca/real-estate/26085967/6-1263-w-8th-avenue-vancouver#view=neighbourhood
https://www.realtor.ca/real-estate/26382584/4795-slocan-street-vancouver#view=neighbourhood

https://www.realtor.ca/real-estate/26357487/186-james-road-port-moody
https://www.realtor.ca/real-estate/26396313/276-balmoral-place-port-moody

https://www.realtor.ca/real-estate/26155401/1-6391-cooney-road-richmond

 

[GandiBaat]

> The average price of a new home is $2.5M, and you want to make a 20% downpayment, then you should save up 500K first.
> If the couple is only making 250K (125K per person). Their total post-tax income is 90K x 2 = 180K per year or 15K per month, if 3K goes to rent and 2K/month on food, utilities, etc. then they can save 10K per month. This means the couple needs at least 50 months before they can put in a downpayment, and this assumes that the price of the house doesn't change in the next 4 years.
> But average house inflation is around 5-10% per year, at 5% and 4 years, the average price of a new home would have gone from 2.5M to 3M, and at that point they have to wait 5 years before they can even place a downpayment.

The typical tactic that is suggested is called "Climbing the housing ladder". You start with a 1 bedroom condo before marriage when you moved out of college in the job -- may be with some help from mom and dad. Then you find a partner, hopefully not a total bum and get married. For few years your 1 bedroom is enough. Then you move to townhouse by selling the 1 bedroom condo and using proceeds as downpayment for townhouse. Have a kid or two in next 4-5 years. Then sell townhouse and move into a house.

Anyhoo, I come from India and in Mumbai, the equivalent of Vancouver for India, families live in condos very typically and in small condos to boot. Famously, one of the highest paid cricketer in India grew up in a condo and I believe till some point used to live there even after getting rich. I heard same is in Tokyo. So in these costly places, condo life is very common.