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Where to invest in Real Estate

Hi Canuck78,
I was in the process in Feb 2020 to buy my first home in Toronto after staying for 9 yrs in a rental apt. But due to the pandemic problems and housing prices soaring I put my plans on hold.
Currently my situation is I work for a Federal govt agency where transfer is possible anywhere in Canada. My wife is in the health stream where she just needs to get her licence from the province we will be moving. I am eyeing to move to Calgary where I find the housing prices lower than Toronto and taxes also much lower. My son too is currently studying in the medical field. Here I can easily buy a detached house within my budget . Could you put your views.
 
canuck78 said:
This is because real estate prices have been in bubble territory in many cities for a long time. What is different is that there is global economic pressures which we haven‘t seen since 2018. The economic hurt hasn’t really hit yet. There will be many more bankruptcies and layoffs to come. That is why I have been saying that investing in real estate is not something I would encourage for most. You would need to be very confident in your job prospects, be in the position to hold any real estate for a much longer period of time if necessary and have quite a lot of savings to carry you through any type of downturn, economic crisis, job loss, vacancy/non-payment of rent, etc.
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Everyone needs to be confident about job propects or be prepared financially when choosing to take on huge debt for 20 years whether there is economic downfall or not! Which is exactly what this pandemic has taught everyone to not spend all of your hard earned money on a holiday everyyear but to have an emergency fund ready to be accessed.

But government will do all it can to keep the economic growth stable which i believe it is doing so and hence the market stability. The recovery from the march downfall shows it all.

In terms of safe bet, tangible assets can be always be trusted upon compared to the stock market. Particularly residential real estate has never made anyone bankrupt. As cities will spread from now on tge demand for land lots are going to sky rocket which is why residential units with more land share is seeing biggest price growth.

The more you wait the more you will regret.
 
Lazymon82 said:
Everyone needs to be confident about job propects or be prepared financially when choosing to take on huge debt for 20 years whether there is economic downfall or not! Which is exactly what this pandemic has taught everyone to not spend all of your hard earned money on a holiday everyyear but to have an emergency fund ready to be accessed.

But government will do all it can to keep the economic growth stable which i believe it is doing so and hence the market stability. The recovery from the march downfall shows it all.

In terms of safe bet, tangible assets can be always be trusted upon compared to the stock market. Particularly residential real estate has never made anyone bankrupt. As cities will spread from now on tge demand for land lots are going to sky rocket which is why residential units with more land share is seeing biggest price growth.

The more you wait the more you will regret.
Click to expand...

Did you not witness what happened in 2008 in thr US? Crash in the 1980s lead to many bankruptcies and people losing thwir homes in Canada. There were bankrupticies when oil prices fell dramaticall in the mid 2010s. Residential real estate can cetainly lead to bankruptcies. The government has been spending huge ammount of money to try and shelter Canada from economic shocks but at a certain point the tapa are going to be shut and many will struggle and there will be bankruptcies. Many were already overleveraged before the pandemic hit so many were never in a position to be able to deal with a major.
 
KRP said:
Hi Canuck78,
I was in the process in Feb 2020 to buy my first home in Toronto after staying for 9 yrs in a rental apt. But due to the pandemic problems and housing prices soaring I put my plans on hold.
Currently my situation is I work for a Federal govt agency where transfer is possible anywhere in Canada. My wife is in the health stream where she just needs to get her licence from the province we will be moving. I am eyeing to move to Calgary where I find the housing prices lower than Toronto and taxes also much lower. My son too is currently studying in the medical field. Here I can easily buy a detached house within my budget . Could you put your views.
Click to expand...

Although your department may have aaid that a transfer to other offices will br possible I would start talking to your manager about whether this still possible, especially given the pandemic, and what kind of timeframe will be needed to get a transfer. I would mention potential locations like Hamilton and whether they are sure a tansfer will be possible for that office. People tend to say that tranafers eill be no problems but then when it comes to asking for a transfer it becomes more dufficult. You may need to wait before someone leaves a position in that office. Due to the pandemic they may not be doing any transfers or hiring. I seems as though your spouse is a nurse. For RNs it is actually quite hard to find a good full-time permanent position with benefits. If you work for the federal government maybe having benefits through your employer is less of an issue but I assume your spouse would like to find one of the better paid position and full-time if possible. There are a lot of nurses needed but the reality is that many of the positions are part-time or through an agency so employers don't have to provide better paid full-time positions with benefits. It may take a while to get a full-time better paid job if she is an RN. Not sure what healthcare sectoe your child is in but there is a surplus of many healthcare workers in many regions of the country ans especially in more urban areas. There is a huge surplus of dentists and pharmacist for example.

You mention both Hamilton and Calgary. Both are very different. Big healthcare cuts have been announced in Alberta so hiring in the medical field may actually be quite difficult. The Alberta economy, especially Calgary, is going through a really rough period. The housing prices have decreased and may decrease even more but I would only move to Calgary (or anywhere else) if you both have job offers. I would still remain flexible. There maybe anothrr location with more affordable housing than Toronto where both you and your spouse can find jobs. This isn't really a time when I would be uprooting my family and moving to another city because most employers are not doing a lot of hiring except in some very specific industries like anything related to shipping, IT, wharehouses filling online orders and jobs related to providing food like farming, food processing, delivery drivers and grocery workers. Your child can move elsewhere if they can't secure a job in tbe region where you are living.

Have you met with HR or your sypervisor recently and brought up yout desire to relocate. You may want to mention that your spouse is a nurse and you are looking to move to an area where you both can find employment but where the housing prices are more affordable. They may have an idea of a few potential locations where transfers may be easier to organize. If you had a few potential locations your spouse could start looking to see what the need for nurses are in the are and salary levels. I would really suggest she try to join some nursing groups so she can ask other nurses what is really going on in the location for nurses and whether nurses alrrady practicing in the area have any leads on jobs or any suggesting on who to work for and who to try to avoid. Nurses tend to be helpful and chatty people so other nurses should be willing to answer any questions about nursing prospects in the region. You have mentionned both Hamilton and Calgary so it doesn't sound like you need to move to a certain location. Wouldn't limit yourself until you have at least spoken to HR or your department leader and have really figured out what your options are and a realistic timeframe for any transfer/move.
 
canuck78 said:
Did you not witness what happened in 2008 in thr US? Crash in the 1980s lead to many bankruptcies and people losing thwir homes in Canada. There were bankrupticies when oil prices fell dramaticall in the mid 2010s. Residential real estate can cetainly lead to bankruptcies. The government has been spending huge ammount of money to try and shelter Canada from economic shocks but at a certain point the tapa are going to be shut and many will struggle and there will be bankruptcies. Many were already overleveraged before the pandemic hit so many were never in a position to be able to deal with a major.
Click to expand...

Did you not witness US housing price picked up years afterwards? I seen big apple in 2016.
 
steaky said:
Did you not witness US housing price picked up years afterwards? I seen big apple in 2016.
Click to expand...
Not everywhere. Personally know someone who bought a house in Chicago burbs for 432K in 2006 and sold for 397K just last week. Right now in the GTA and extended GTA, house prices are inflated due to low mortgage rates and everyone fleeing the city. I dont think WFH will last forever. When a vaccine is widely available and downtown cores open up again, these areas could suffer a reduction a prices.
 
Jancy said:
Not everywhere. Personally know someone who bought a house in Chicago burbs for 432K in 2006 and sold for 397K just last week. Right now in the GTA and extended GTA, house prices are inflated due to low mortgage rates and everyone fleeing the city. I dont think WFH will last forever. When a vaccine is widely available and downtown cores open up again, these areas could suffer a reduction a prices.
Click to expand...

Then we have learnt nothing from the pandemic! We are seeing permanent WFH options from many employers. Not EVERYONE will sell a house for less than the price he/she bought as clearly they were over leveraged.

The particular example you gave can have number of reasons for selling and cannot be considered as a redalert in the wider picture of the market where people are selling for HUGE profits.
 
Lazymon82 said:
Then we have learnt nothing from the pandemic! We are seeing permanent WFH options from many employers. Not EVERYONE will sell a house for less than the price he/she bought as clearly they were over leveraged.

The particular example you gave can have number of reasons for selling and cannot be considered as a redalert in the wider picture of the market where people are selling for HUGE profits.
Click to expand...
NO they weren't over leveraged luckily. They are selling because they are moving south to retire. The point is, house prices can and will go down if the increase in prices is not aligned with the economic growth of a region but merely due to availability of cheap mortgages and low supply.
 
Jancy said:
NO they weren't over leveraged luckily. They are selling because they are moving south to retire. The point is, house prices can and will go down if the increase in prices is not aligned with the economic growth of a region but merely due to availability of cheap mortgages and low supply.
Click to expand...

Thia winter, many snow birds cannot even travel south. Some travelled west to Vancouver Island in BC.
 
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