# How do people afford these ridiculous new home prices in the GTA?



## moofur

This has been on my mind for quite a while.

My wife and I make a pretty good living on a combined salary and I for the life of me cannot understand how people can afford all of the new houses (or even resales for that matter) around the GTA.

We live in a modest 2 bedroom condo right now in North York, and lead a comfortable living, but would like to move to a house when we have kids in a few years, so we've been looking at houses. Just for kicks we've been looking at north of Toronto around 404 and Major Mackenzie/Elgin Mills, etc., and everywhere you look you can't see even a town that lists for less than $500k new. Factor in the added costs of upgrades, fencing, air conditioning, closing costs etc., for a new house and you are looking at around $550k EASY for a new town home. Let's not even talk about a detached... You are easily looking at 600-700K bare minimum.

Factor in the cost of commuting to work (I don't think anyone really works at 404 and 19th avenue and at least have to commute to Markham for their job) which is getting more and more expensive everyday whether you drive or take the GO and it really costs quite to be able to afford living in those areas. Not to mention the time that it even takes to commute since the 404 is packed enough as it is... Local streets really aren't that much faster due to the increasing traffic and lights...

I believe that my wife and I make an above average salary in comparison to the national average, but I find it crazy that every new development that we look, all the sites are pretty much all sold out! Even as far north as Elgin Mills you are looking at half a million dollar townhomes, and I don't think you can even get that now.

I know that the cost of houses are more expensive along the 404, but even if you look at bit off to the east/west of that, it really doesn't get that much cheaper. Resales are obviously cheaper, but really not by much (15% or so for something equivalent).

My theory is that people take out the biggest mortgage that they can afford to get with the longest amortization period that they get, and then put every last penny that they have in toward their mortgage payments. When they "retire", they will just sell the house with the logic that housing prices will continue to go up, and then downsize and retire with their capital gain in their equity. Is that exactly what everyone is doing? Either that, or they're creating (illegal) multiplexes out of their converted basement apartments and not reporting the income. I'm really puzzled by this phenomenon, as ignorant as it may sound.

Any thoughts?


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## iherald

I'm a bit confused, if you don't work in that area, and you find it too expensive, why are you looking there? you say the highways are too busy, the roads are too busy, but you're looking there. Obviously that's a popular area because it's easy to get onto the 404 / DVP and get downtown. 

I did an MLS search there are 81 properties I found under $450 around Major Mac and the 404 (west of the 404). 

I'm not saying people aren't heavily leveraged. But it's sort of like me saying "I was looking for a place in Rosedale and I just can't afford it. Everyone must be crazy". If I looked in another area, it might be different. 

Sorry, I just get a little annoyed with the posts of "I looked in a specific area and it's really expensive, so therefore all places must be really expensive and no one can afford it."

Real estate is about compromise. Live by a highway that's easy to get downtown, it costs more. Live in Whitby, it costs less.


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## moofur

I never said that there aren't houses that are $450 in that area, if not less. My question was more geared towards how people can afford these kinds of prices and how they getting snatched up like hotcakes at these prices.

I never said all places are expensive, but in general I do believe that housing is too expensive in relation to average incomes.

Also, you are comparing Rosedale to 404 and (insert street here). I don't think that's comparable.


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## sags

I think a lot of people probably really can't "afford" these prices, but they qualify for the mortgage, and home ownership is something that seems to be ingrained into our pysche.

We owned homes for years. We struggled most of the time to make the payments and all the other bills. We sold the house when we retired.

I absolutely KNOW that renting is the most advantageous financially for us at this time, in our retirement. 

Nevertheless, the longing to own a home still persists. 

It is just something about owning your own place, that makes people willing to suffer financially and forgo other things to pay for it.

Advertising plays a key role as well. What is the point of going to Home Depot for the "big sale", if you don't own a home. We are also bombarded with the subtle message that home owners are happy and successful, while renters are.......you know,........losers.

Fortunately for me, our landlord allows us to decorate at our own expense. I have torn up the carpets to leave the hardwood floors underneath, repainted the entire place, fixed a lot of areas, landscaped outside, and am contemplating removing all the old trim and replacing it with new trim and crown mouldings, changing the bath fixtures, changing the lighting fixtures and anything else that I can do without changing the structure of the building.

Maybe it is nuts, because we don't own it, but it satisfies my desire to control my surroundings.


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## marina628

I thought my Friend was full of crap when she said she put an offer on a $560,000 townhouse last month but it was at Major Mac and Keele .My husband drove from Brampton to Scarborough every day for 16 years and not once did he ever suggest we go and buy in the city.My brother in law drives from Orangeville to Scarborough every day still and has been doing it for about 23 years .He has about 4 years to retirement and has been mortgage free for years .People have choices,they may not like them but they are there.I think the variable rate and really long amortization is a fact but many do have large down payments as well


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## GoldStone

moofur said:


> Either that, or they're creating (illegal) multiplexes out of their converted basement apartments and not reporting the income.


There is no need to break the law to make the numbers work. Remember that you can deduct all kinds of expenses against the rental income. A portion of your mortgage interest, a portion of your property taxes, etc.


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## marina628

Try dealing with the municipal office to turn a single family home into Two family home with a LEGAL basement suite.The fire codes is what will get you ,proper sized windows and you need a completely separate entrance with fire door and a sprinkler system.Most of them will be illegal especially those $550,000 townhouses !


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## slacker

If indeed your household income is "above average", I think the banks will probably give you enough rope to ^H^H^H^H a big enough mortgage for the house in the GTA area. And we all know that house prices always goes up, so it'd be a great investment. ;-)


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## marina628

We are real estate investors , I no longer count on my homes going up ,I count on my tenants paying them off for me .We just bought house #5 which closes next month ,we put 20% down and took a 15 year mortgage which will be cash positive about $187 a month .Not a lot but probably enough to take another 2-3 years off the bank loan.If you think you can afford this home and can stay there long enough to build equity then I would buy the house you want.Having renters in the basement is not the way I would go ,I bet your family will be happier living where you are .
I would look at MLS try to find the house you like with fence ,Driveway etc already done for you.I was shocked that even in my town an hour + east of Toronto a house was sold for 108% of the sale price and received multiple offers.


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## marina628

moofur said:


> I never said that there aren't houses that are $450 in that area, if not less. My question was more geared towards how people can afford these kinds of prices and how they getting snatched up like hotcakes at these prices.
> 
> I never said all places are expensive, but in general I do believe that housing is too expensive in relation to average incomes.
> 
> Also, you are comparing Rosedale to 404 and (insert street here). I don't think that's comparable.


A family earning $100,000 a year with only $30,000 down qualifies for a $530,000 mortgage .Pretty much describes all families with one professional .


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## financialnoob

marina628 said:


> A family earning $100,000 a year with only $30,000 down qualifies for a $530,000 mortgage .Pretty much describes all families with one professional .


That's right on the mark. And a bit terrifying.


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## I'm Howard

Inheritances also help, a young couple save $100,000, inherit another $200,000, buy a house for about $550,000.

Yes you can save $100,000, no restaurants, no booze, no fancy holidays, after about five years, there is a nest egg.

Leaside is mainly kids who grew up in Leaside now returning, thanks to Parents and Grand Parents.


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## HaroldCrump

IMHO, there is no one clear "profile" of current home buyers.
This RE bull market has brought out all kinds of buyers.

There are, for example, those that started buying in the 2002 - 2003 time frame and have sold and bought half a dozen houses by this time.
Those that planned and timed this strategy well should, by now, have a fully paid off house by now.

Then there are those that bought mid-way through the boom and have stayed put, trying to aggressively pay down their mortgage.

There are those that simply buy and flip, often making little or no improvements to the porperty.
Purely because of the bull market, this has worked out for them.

Then there are the more serious flippers that buy undervalued properties, make substantial improvements, and then re-sell for a handsome profit.

Then there are the RE investors i.e. the rental property investors.
Some were already in the game, and simply accelerated their acquisitions, while others got into the game, egged on by their peers and their own desire for profit.

And, of course, there are the over-extended folks that have bought big houses with big mortgages based purely on the current interest rates, and the hopes of having low interest rates in the future.

There are all kinds, to answer your question.
That's the thing with bull markets - it brings out all kinds.


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## bltman

Even though the issue comes up very few months on this message board, I don’t disagree with the OP. I think the issue is not what can I afford but how in the world is everyone else affording. A neighbour on my street just sold his 3000 sq/ft house located on a 45ft by 83ft lot (really shallow lot with tiny front and back yards) for somewhere probably approaching $800,000. He was asking $750,000 and got 5 offers. Absolutely ridiculous. I can’t imagine why anyone would pay that to live in my cramped and overpopulated subdivision. My house is much smaller than this one but I would still be priced out of my subdivision (including townhouses) if I was looking for a house now.


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## I'm Howard

We live in the Georgian Triangle, house prices have exploded, the buyers are mainly refugees from the GTA who have sold their homes and now wish to move to a safe area with good Hospitals and easy access to Hospitals and the City.

Reality is that after about two years, the trips back to TO cease, no time, would interfere with the sea kayacking, bike riding, golfing, tennis, fishing, hiking, bird watching etc etc.


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## Dana

marina628 said:


> I no longer count on my homes going up ,I count on my tenants paying them off for me .


Ditto. Any appreciation we earn is a bonus.


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## marina628

Before somebody comes along and says I will get in trouble if tenants do not pay ,we keep adequate cash budget each property.But more importantly we can pay these mortgages out of our monthly income if we ever had to .Do not become a landlord if you count on tenants to make the payments and you have no backup finances.


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## realist

marina628 said:


> A family earning $100,000 a year with only $30,000 down qualifies for a $530,000 mortgage .Pretty much describes all families with one professional .


$530,00!!! Wow. We are considering buying a place next year. We probably made a decent amount over $100k this year, hope to have a DP in the $40k-60k range depending on when we actually buy, and we are still thinking that the $300-$350k condo market is expensive if we want to still be able to travel/not worry about the payments.


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## andrewf

Marina, your properties may be cash flowing enough to cover the mortgage, but are you seeing a good rate of return on your equity investment? 

Property is not a 'safe' investment, so it puzzles me why you're loading up on it while also loading up on GICs. Seems like a lack of diversification in your risky asset allocation. Just my two cents.

Edit: I also have to ask, why do you have GICs at all if you also have mortgages on your investment properties? Does not compute.


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## Jungle

Nobody mentioned these 5 income families living in one big, expensive house. I saw many of them buying a new housing development in Rouge Hill. 
They also live in my sister's neighborhood. 

You have the parents, they both work. Then you have the kids, they both work. The kids also have kids, and they are babies or go to school. 4 income immigrant family. 6-10 people living in a 3-4 bedroom house. Very common.


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## Cal

andrewf said:


> Marina, your properties may be cash flowing enough to cover the mortgage, but are you seeing a good rate of return on your equity investment?
> 
> Property is not a 'safe' investment, so it puzzles me why you're loading up on it while also loading up on GICs. Seems like a lack of diversification in your risky asset allocation. Just my two cents.
> 
> Edit: I also have to ask, why do you have GICs at all if you also have mortgages on your investment properties? Does not compute.


I have wondered the same about alot of LL's in regards to ROI. Yes, the tenants rent can pay off the property, but IMO it is currently easier to find an equity with a better dividend than a property with the same ROI.


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## kubatron

I guess that's the cost of living in a big city like T.O., to the original poster.

Many good questions and points were raised, but one I didn't see is;

How can people *not* afford to live in good areas, closer to work etc?

marina, with all due respect, I'd rather put a bullet in my head than drive from Orangeville to Scarborough every day for 16 years or whatever, just to be mortgage free. Like you said, different priorities for different people. 

To the original poster - what's your definition of "good money"? meaning, what you earn?

Inheritances and gifts is a very good answer to "how" people are doing it.


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## marina628

andrewf said:


> Marina, your properties may be cash flowing enough to cover the mortgage, but are you seeing a good rate of return on your equity investment?
> 
> Property is not a 'safe' investment, so it puzzles me why you're loading up on it while also loading up on GICs. Seems like a lack of diversification in your risky asset allocation. Just my two cents.
> 
> Edit: I also have to ask, why do you have GICs at all if you also have mortgages on your investment properties? Does not compute.


Andrew I have a GIC ladder for years and I keep renewing them , have not bought many GIC this past year or two.
Obviously I do not want to have mortgage free investment homes then I will be paying tax on all the rental income.
I have Definitely made a huge return on my real estate and I am not looking so much at future values but the fact my tenants will be paying these houses off for me in next 8-15 years.I am very happy with the return I am getting or else we would not be buying
My brother in law still drives Orangeville to Scarborough Daily he loves living there.
We live East of the City now and hate going even to Oshawa ,once you move in country setting you think 5 cars is a traffic jam


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## realist

Jungle said:


> You have the parents, they both work. Then you have the kids, they both work. The kids also have kids, and they are babies or go to school. 4 income immigrant family. 6-10 people living in a 3-4 bedroom house. Very common.


I think that this reflects a broader trend of people being willing to live in smaller spaces to live closer to work or amenities. Many people I know in their early thirties just don't aspire to huge houses like they used to.

I would personally live in a shoebox before putting up with the 2 hour car commute some of my friends do. These are lifestyle choices as much as they are financial ones. That said, I find it amazing how many people ignore the cost of their commute when comparing housing costs in one cities vs another.


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## the-royal-mail

Excellent point, realist. The whole city thing, as Harold and I discussed recently, is really silly and unnecessary, but as long as companies continue to locate in congested, crime-infested areas that hardworking middle class don't want to live in, we will have these issues. Fortunately there are some companies that have located themselves away from downtown cores and if they are far enough away then there is a chance for middle class workers to be able to afford to live nearby. I've been in that situation and I chose to live 2KM from work, rather than ruin my health on the hwy every day. From a lifestyle and cost choice, it was a good one and meant I was home in 6 minutes vs 60 minutes. Twice a day, add-in the cost of gas, insurance, oil changes, more new cars needed and you quickly learn that living close to work is quite important. Commuters don't seem to realize that they're not "getting away" from anything by commuting, unless their office happens to be in a high-crime/unsafe/unpleasant area.


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## andrewf

marina628 said:


> Andrew I have a GIC ladder for years and I keep renewing them , have not bought many GIC this past year or two.
> Obviously I do not want to have mortgage free investment homes then I will be paying tax on all the rental income.


The GICs are not in a registered account, so you're paying tax on the interest there, right? It sure sounds to me like it would be cheaper to skip the GIC and pay off the mortgages.


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## MoneyGal

realist said:


> I would personally live in a shoebox before putting up with the 2 hour car commute some of my friends do.


This. There's the concept of the "car mortgage." I have one OLD car which is rarely driven. Husband and I both bike-commute to work, and he rides the bike he's had since high school (and I paid about $500 for my ride a few years ago). If the average cost of owning and maintaining a car which is used for a daily is something like $10,000 per year, we are ahead by a significant amount.


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## Jungle

We are aiming to do the same thing next year. Live closer in the core, so I can ride my bicycle to work. I have done the math, and it seems better to pay more, to be closer to work. 

You spend more on an asset (house) and less on expenses (transit and two cars). Paying those expenses never show up on your net worth, but using that money to pay off an asset does. 

Plus you get the time value. More time saved every day. 

Although there is a new development just outside of toronto, we could buy a new town home, the list price is $299,000. We could be mortgage free very soon with that price. Staying in Toronto, we will have a spend a lot more than that.


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## marina628

andrewf said:


> The GICs are not in a registered account, so you're paying tax on the interest there, right? It sure sounds to me like it would be cheaper to skip the GIC and pay off the mortgages.


Andrew I have a tax accountant and not going to discuss particulars of my holdings or reasons for doing so .But be assured on INVESTMENT PROPERTIES the 3.49% mortgage is a good thing .The 2009 GICs I have are paying me 3.25% and in year 5 will pay 7%.At my age of 44 the GIC are a big part of keeping my portfolio balanced.
It would take too long to show you numbers on all investment properties but 
Property A cost us $5300 in interest in 2010 and we received a rental income of $16,000 .After we paid water bill and property taxes,insurance we were left with a net $6200.We added a deck and a driveway and managed not to pay any income tax on this property.The tenants paid all mortgage payments and in 2010 this house increased $45,000 .

We buy houses 1-5 years old 1300-1600 sq ft and power of sales in Durham region .I am not buying in neighborhoods where you are paying $400,000+ for a house ,we are buying SINGLE family homes with a single garage unfinished basements .My husband is handy so he has done two basements now to add extra rec room ,nice laundry rooms with storage cupboards and full bathrooms which cost us about $6000 and will get us a higher rent.

Our most expensive house has been $240,000 and cheapest $169,000.Forum member Jungle has seen our $169,000 house which is a detached 1308 sq ft on a 40 x 155 ft lot and built in 2005.It was power of sale from Scotiabank ,they had it listed for $192,000 in 2009 but had a tenant.We low balled them and took tenant and gave them whatever closing they wanted.That house is worth $230,000 -$240,000 and we spent $8000 on it to do Deck ,driveway and landscaping.
I do not consider my real estate investments to be risky ,we have done very well and I always have the option to sell off one property to boost our cash reserves if we ever need it .Once mortgages are paid off we will have a $10,000 monthly income at today's rate .The first house will be paid off in 2018 and the last one will be paid off in 2024 when i will be 57 ,nice pension plan


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## MoneyGal

Jungle said:


> You spend more on an asset (house) and less on expenses (transit and two cars). Paying those expenses never show up on your net worth, but using that money to pay off an asset does.


These discussions are always so relative. We paid just over $200K for our downtown Toronto house 10 years ago. It has appreciated significantly in price, but buying that house then did not involve any discussions of financial trade-offs. 

I suppose we could have paid significantly less if we moved to Durham or wherever (I personally love Port Perry) but we wanted to live in a densely-populated, walkable (and bikeable) area with a school, grocery stores and library close by. And we had a super-hard upper limit of, I think, $250K when we bought, because mortgage freedom is important to us. 

My point is just that the tradeoffs being discussed here are transitory. Someone (me) making these decisions 10 years ago would not be in the same position (my earnings have not appreciated in ANY way close to the way my house has). And I suspect and predict that the discussions in 10 years will be different again...but I will still be living in my 1200-square-foot, semi-detached, original floors and walls house....and it will actually be a century house by then.


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## the-royal-mail

Although some may perceive this as off-topic, you may want to consider the risk you are taking on when you drive a bicycle on roadways used by motorized traffic. Unless you have special segregated paths I don't know about, the risk of injury to your person is very high given how people drive these days and how fast traffic moves. I would never bike to work. It's not worth ending up in a wheelchair over and you're inhaling all sorts of exhaust fumes and getting into arguments with motorists.


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## andrewf

Hey Marina, I don't mean to pry. I automatically get curious when I hear about people borrowing large amounts of money at the same as they are holding large amounts of low-yield bonds. It's usually more efficient to lend to yourself, and having a GIC while simultaneously borrowing through a mortgage is usually a negative spread. Not sure I understand about the 3.5% - 7% GIC from 2009 (escalator?). Was the before rates were cut to zero? Best offer I can see now is 3.5% 5 year GIC, which is probably less than you'd be able to get a 5 year fixed rate mortgage for now.

It doesn't make a huge difference, I just find it puzzling why you're following that strategy.


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## MoneyGal

the-royal-mail said:


> Although some may perceive this as off-topic, you may want to consider the risk you are taking on when you drive a bicycle on roadways used by motorized traffic. Unless you have special segregated paths I don't know about, *the risk of injury to your person is very high* given how people drive these days and how fast traffic moves.


Or maybe not: http://www.kenkifer.com/bikepages/health/risks.htm


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## marina628

andrewf said:


> Hey Marina, I don't mean to pry. I automatically get curious when I hear about people borrowing large amounts of money at the same as they are holding large amounts of low-yield bonds. It's usually more efficient to lend to yourself, and having a GIC while simultaneously borrowing through a mortgage is usually a negative spread. Not sure I understand about the 3.5% - 7% GIC from 2009 (escalator?). Was the before rates were cut to zero? Best offer I can see now is 3.5% 5 year GIC, which is probably less than you'd be able to get a 5 year fixed rate mortgage for now.
> 
> It doesn't make a huge difference, I just find it puzzling why you're following that strategy.


Andrew back in 2009 the 5 year stepper rate paid 7% in year 5 .I have a ladder GIC and have had it for years although in 2007 I got a $xxx,xxx payment and split that in 5 equal amounts.The most i put in GIC now is maybe $2000 a year.
My husband and i have 5 homes between us probably worth $1.5 million and we have total $650,000 in mortgages.Last house we had to put 35% down and honestly that house will probably be our last investment property for 2+ years or longer.Now we are concentrating on paying them off while still doing monthly purchases in our RSP and Stocks.I don't mind sharing with you that I buy $5600 a month in Canadian dividend stocks , I have 6 stocks that I am cost averaging and We do not pay any fees with TD Bank .
The absolute earliest I need to touch any of this is in 14 years but by that time i will have a few houses mortgage free bringing me a monthly income.


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## HaroldCrump

marina628 said:


> Andrew back in 2009 the 5 year stepper rate paid 7% in year 5.


How is the 7% relevant?
What matters is the effective annualized yield, however whichever way the bank chooses to market/advertise it.
Ever wonder why they offer 7% in the last year and not the first year? 

Your situation is perhaps quite unique and as you've stated, you have a qualified tax consultant advising you, but in general buying unregistered GICs while you still have an outstanding mortgage doesn't work out.
You are borrowing long term and lending short term, yielding a negative spread, as Andrew said.


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## marina628

Ideally with investment property you have EXPENSES to offset the REVENUE.In any case my 3.49% 5 year mortgage makes sense over having no mortgage and paying top tax rate on all my revenue from the properties.Effective yield is 4.87% on my GIC .I did not have any GIC renew yet in 2011 but we have no intention to take any GIC to pay on any mortgages on investment properties .Our mortgages are low compared to values of the homes and I do not want a bunch of net revenue from rentals to have to declare on my personal income taxes right now.I have an accountant for my Corporation and a tax accountant trust me they have done many calculations and we are doing things the best way for us .


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## Plugging Along

kubatron said:


> Many good questions and points were raised, but one I didn't see is;
> 
> How can people *not* afford to live in good areas, closer to work etc?


Where I work actually has very little to do with where we choose to buy our house. It was a small factor, but there were many other factors that were much higher than the distance for work. In my spouses case, he changes work all the time as a consultant, and we would be moving all the time. 

Many people buy homes further out, and take further commute because of what that community offers them. In our case, the schools were a large factor, safety, accessibility to other activies we enjoy. We would easily commute a lot farther, if it meant have a better thing for our kids. 

Also, for us, more people (aka kids and nanny) means that we would have to have a much more larger house, and that's much more expensive near the core.


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## m3s

the-royal-mail said:


> Excellent point, realist. The whole city thing, as Harold and I discussed recently, is really silly and unnecessary, but as long as companies continue to locate in congested, crime-infested areas that hardworking middle class don't want to live in, we will have these issues. Fortunately there are some companies that have located themselves away from downtown cores and if they are far enough away then there is a chance for middle class workers to be able to afford to live nearby. I've been in that situation and I chose to live 2KM from work, rather than ruin my health on the hwy every day. From a lifestyle and cost choice, it was a good one and meant I was home in 6 minutes vs 60 minutes. Twice a day, add-in the cost of gas, insurance, oil changes, more new cars needed and you quickly learn that living close to work is quite important. Commuters don't seem to realize that they're not "getting away" from anything by commuting, unless their office happens to be in a high-crime/unsafe/unpleasant area.



I really don't understand the allure to living in and congesting all the country's population on a few square kms when you see the size of Canada.. Every time I have to drive through a major city I think to myself I would have to take myself off this planet if I had to do that everyday

It's just so peaceful to live in a normal sized (as in, not outrageously crowded) city with a bit less income. When you factor in the savings in commuting and property taxes etc it doesn't even work out to less at all. You can still afford a house with a yard.. you just have to leave the GTA!

People say "but I can go to concerts and stuff" Yea..... so when I want to go to a major event I commute 2 hrs... you commute 2 hours every single day!..


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## kubatron

So,

today I was reading the newest Toronto Life. They profiled a couple in their mid 20s whose parents were "tired of them paying rent at $1500/m."

So the parents loaned out $150,000 as a down payment to their kids, (parents who own a daycare from their home), on a $650,000 semi-detached home in college/bathurst area, so that the kids could live on their own.

*that's* how people can "afford" to live in the GTA.


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## kubatron

I disagree that living farther is safer.

Sure, a suburb could mean a safer place to grow up, possibly, but I don't think we live in a crime-ridden world in Toronto where living in woodbridge is safer, for example.

I don't want to raise my kids in a bubble world.


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## Sherlock

the-royal-mail said:


> Excellent point, realist. The whole city thing, as Harold and I discussed recently, is really silly and unnecessary, but as long as companies continue to locate in congested, crime-infested areas that hardworking middle class don't want to live in, we will have these issues. Fortunately there are some companies that have located themselves away from downtown cores and if they are far enough away then there is a chance for middle class workers to be able to afford to live nearby.


Excellent points, and another thing worth mentioning is that companies are increasingly allowing their employees to work from home at least some days. In the future it's likely that most office workers will only be required to come in to the office once or twice a week. I'd tolerate a 100 km commute twice a week if it meant I could afford a much nicer house.


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## Addy

kubatron said:


> I don't want to raise my kids in a bubble world.


My husband and I think the same... we take my daughter to hand out granola bars to the homeless people.... when they beg for money she tells them she has no money but will share her granola bars with them. I don't want my kids to grown up without knowing there are people much less fortunate out there... and I especially don't want my kids to grow up in fear of homeless and street people.


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## financialnoob

MoneyGal said:


> Or maybe not: http://www.kenkifer.com/bikepages/health/risks.htm


Yeah, but in Toronto, the risk increases 1500% 

Okay, I made that up. But it wouldn't surprise me if that was true.

I mean I've almost been hit dozens of times each year just walking when I had the right of way.


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## andrewf

financialnoob said:


> Yeah, but in Toronto, the risk increases 1500%


This was not intended to be a factual statement.


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## the-royal-mail

What's a bubble world? And why should I be forced to work in an undesirable part of town where I nor anyone I work with want to be? I don't see how anyone (other than restaurants with lunch menus and coffee joints and parking authorities and transit) in society benefits just because we bring more customers to panhandlers. I live a life that has nothing to do with a bubble world. I have all the expenses and challenges of life in my part of town, less the incessant screams of fire engines and other emergency vehicles, pollution, rude people, panhandlers, drunks on the streets, cyclists who run red lights and demand rights to the road, but flaunt their responsibilities whenever it doesn't benefit them to follow the rules and on and on. There is NO reason office workers need to be located in crowded, congested areas where there is no room for them to be!


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## kubatron

You went off on a tangent there, so let me continue.

Cyclists who "run" red lights do not need the same rules as the cars. Let me explain it to you simply (because clearly you have never chosen the mode of transportation that hundreds of millions of people in this world do, and rather drive a car countless kms to/from your choice destination).

A bike is 25 pounds + 200 pounds for the rider. A bike takes much longer (4-5x) to get "up to speed" and can't travel as fast as a car. A bike needs to compensate for this. A bike is also extremely dangerous (but very effective, clean, and healthy) way to get around. 

A car is 3 tonnes, usually the driver is distracted from the radio/telephone/passenger, and is 99/100 at fault for hitting a motorbike OR cyclist.

A cyclist is not close to being the same thing. They/we get no respect from drivers, from sidewalk patrons. Where, pray tell, should they/we go? 

LEARN TO DRIVE BETTER. OPEN YOUR EYES. DON'T WHINE that a 25 pound vehicle has taken up 1/10th the lane BECAUSE YOU'RE TOO IDIOTIC TO BE ABLE TO PASS YOUR OVERUSED OVERSIZED PIECE OF CRAP SUV car, because you can't parallel park since you don't know how BIG it is.

<rant OVER>

............back to your regularly scheduled program.


----------



## kubatron

the-royal-mail said:


> What's a bubble world? And why should I be forced to work in an undesirable part of town where I nor anyone I work with want to be? I don't see how anyone (other than restaurants with lunch menus and coffee joints and parking authorities and transit) in society benefits just because we bring more customers to panhandlers. I live a life that has nothing to do with a bubble world. I have all the expenses and challenges of life in my part of town, less the incessant screams of fire engines and other emergency vehicles, pollution, rude people, panhandlers, drunks on the streets, cyclists who run red lights and demand rights to the road, but flaunt their responsibilities whenever it doesn't benefit them to follow the rules and on and on. There is NO reason office workers need to be located in crowded, congested areas where there is no room for them to be!


a bubble world is raising a child to believe that the serenity of the heathwood homes commercials will last forever, that the suburbs where you are shuttled from home to suv / minivan / to costco / walmart / to high school and back is "reality", that the main culture of people is white, that cars are and will be the #1 mode of transport, that crime and poverty are only things seen on A&E or Law and Order, and that god forbid a firetruck, cop car, or ambulance would dare ake noise, or people thrown out of their homes or (unfortunately) addicted to crack would dare ask you for change, or that the pollution that you're directly responsible for by living so far away from work, because you choose to live in said bubble world, yet dare complain about it when you bring your *** downtown to enjoy a nice 5* gourmet restaurant then get shuttled back in your SUV home to your ... bubble world.

*THAT* is a bubble world.

Enjoy!


----------



## financialnoob

andrewf said:


> This was not intended to be a factual statement.


Okay okay, it's only 1100% 

Though there are some areas of Toronto where I wouldn't feel safe driving a tank, let alone a bike.


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## realist

the-royal-mail said:


> but as long as companies continue to locate in congested, crime-infested areas that hardworking middle class don't want to live in, we will have these issues... Commuters don't seem to realize that they're not "getting away" from anything by commuting, unless their office happens to be in a high-crime/unsafe/unpleasant area.


I'm curious what areas you think are "crime infested" since the areas with *actual* crime are often the suburbs and not the urban areas where people just perceive the crime rate to be high. I suspect that most places that are legitimately sketchy are those that have a lack of companies and jobs in them. 

Statistically speaking you may be safer walking to work in a slightly rough neighbourhood than you are racking up commuting miles in a car. The bad guys typically target their victims, the car accidents are usually more random.


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## NotMe

You know this is playing into people's perception that where they live is best. People who live in the country say country living is best and don't get why anyone would want to live in a crime-infested traffic-clogged drug-flooded sushi-eating urban centre. And people who live at Bay/Bloor would ask who wants to live in a mesquito-plagued banjo-playing yokel-infested non-sushi eating hick burg.

In the end, people live where they want to live and should try not to judge others. Personally I grew up in a bubble world (Markham) and nobody hates a bubble like an ex-local but at times I still like visiting from my toronto home. As to the original posted question, while it's true that some people may overextend and put themselves at risk, many more people especially people in their 30s really do prefer to live in the city and just prioritize to make it happen. I also have a personal belief that there's an awareness of the monthly cost of commuting that people in their 40s didn't have to deal with - a GO train pass is $300+$100 for a metropass adds up, especially if both partners commute - and some people have to pay for parking ontop that. There are some people in my office (big financial) that are the sole-breadwinner, but not one of those people is under 40. Everyone 40 and under has two working partners . Factor that out over 15 years and it adds up fast - especially since commuting costs usually move at best sideways and never down. And yes some people can telecommute but the reality is the majority of people (>90%) are expected to show up in the office everyday.

PS I would question though why people who don't live in Toronto always say the yards are all so small and the houses all next to each other. Come to Don mills, come to Leaside, etc and see big houses on massive lots. It's the outerburbs that seem to have smaller lots, especially those built in the last 15 years (Oshawa, Pickering, Ajax, I'm looking at you).


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## Jungle

Very good post NotMe. I grew up in the subburbs and now live in the city. With both my wife and I working downtown, it would cost a lot of money and time to do the commute every day. Yes you could get more land and a newer place for less money than in the city, but again you are paying more money in transit and car expenses and losing another 2-5 hours per week commuting.


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## the-royal-mail

NotMe makes a lot of excellent, accurate points in the post above. My response supports that post. It's certainly true that every individual and family makes their own personal choices about where to live. I have just grown tired of the incessant mightier-than-though labelling that anyone who doesn't live in crowded, downtown areas (with no room for cars) is living in a bubble or "suburbs" (which usually leads to a racial comment as well). Nobody on this planet lives in a bubble. We all make our individual choices and as long as we're respecting others and obeying the law, I see no reason to continually attack those who choose to live in areas with larger yards, ample free parking and clean neighborhoods (frequently labelled "the suburbs").


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## MoneyGal

But TRM, you are often leading that charge.


----------



## andrewf

TRM, I think you might be overstating the crime-ridden, poverty-stricken meme about cities. Cities may be more crowded, but they are more diverse, have more things to do, and more opportunities. Suburbs are often great for quality of life and cost of living. And believe it or not, but there is a third group of rural dwellers who think suburbs are awful, traffic-snarled, concrete-laden eye-sores that are expensive to live in. 

Go with whatever floats your boat, I'd say.


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## Four Pillars

MoneyGal said:


> But TRM, you are often leading that charge.


+1


----------



## Four Pillars

kubatron said:


> ...
> 
> 
> LEARN TO DRIVE BETTER. OPEN YOUR EYES. DON'T WHINE that a 25 pound vehicle has taken up 1/10th the lane BECAUSE YOU'RE TOO IDIOTIC TO BE ABLE TO PASS YOUR OVERUSED OVERSIZED PIECE OF CRAP SUV car, because you can't parallel park since you don't know how BIG it is.
> 
> <rant OVER>
> 
> ............back to your regularly scheduled program.


Yeah!!! 

Down with cars! (unless it's raining, of course)


----------



## brad

andrewf said:


> Go with whatever floats your boat, I'd say.


When I lived in the Boston area I was friends with a couple who lived in downtown Boston for a couple of years, then moved to a suburb 20 miles to the west, then decided that was too crowded and ugly for them so they moved another 20 miles to the west to a small village, and then decided even that was too crowded so they moved to the backwoods of New Hampshire. After a few years they felt the neighbours were too close (their closest neighbour wasn't even visible from their house) so they packed up and bought a few hundred acres in the middle of nowhere in Wyoming. Last I heard they were happy there.


----------



## andrewf

brad said:


> Last I heard they were happy there.


That's good, otherwise they might want to consider a move to the dark side of the moon.


----------



## NotMe

the-royal-mail said:


> We all make our individual choices and as long as we're respecting others and obeying the law, I see no reason to continually attack those who choose to live in areas with larger yards, ample free parking and clean neighborhoods (frequently labelled "the suburbs").


Yeah.. .no judgement there.....

(yes, implying that living in the city is small yards, no parking and dirty neighbourhoods IS a form of judgement RM)


----------



## iherald

NotMe said:


> PS I would question though why people who don't live in Toronto always say the yards are all so small and the houses all next to each other. Come to Don mills, come to Leaside, etc and see big houses on massive lots. It's the outerburbs that seem to have smaller lots, especially those built in the last 15 years (Oshawa, Pickering, Ajax, I'm looking at you).


I live in the Annex and my property is 15 feet wide, but it makes it easy to shovel!


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## I'm Howard

Anyone who says they don't like Toronto doesn't know Toronto.

The facts however are that not only has the landscape in TO changed, the culture has.

My Leaside was basic middle class, Today with a million dollar entry it is Volvos and 2.3 children with Foreign nannies.

Eleven years ago we bought a piece of land and built a home in a small village that has huge recreational opportunities, but Demographics have caught up with us and weekends it is either Spandex warriors on their $3,000 bikes or leather clad grey beards on their Harlies, winter , forget getting into a restaurant, TO crowds have taken them over.

Winter we flee South where we listen to all the locals complain about all the Snowbirds taking over the restaurants.

TO stops at Leslie, Bathurst and the 401.


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## the-royal-mail

Why don't you respond to what I have said rather than attacking me personally and poking holes in my posts?


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## marina628

We had a condo on Prince George in late 90s , I loved it there .We loved going to Four Seasons for lunch ,Shopping on Avenue Road and Bloor.Parking is an issue now for us whenever we go now but My daughter and her friends take the train downtown every couple weekend and they also love it there.

We sold the condo 10 years ago and i think I have been downtown once a year since then.


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## andrewf

Isn't poking at your post a response?

I don't think anyone was attacking you all that much, but maybe calling you on some contradictions. You can dish it out, so why not learn to take it. We can disagree without being too disagreeable.


----------



## andrewf

I'm Howard said:


> Demographics have caught up with us and weekends it is either Spandex warriors on their $3,000 bikes or leather clad grey beards on their Harlies,


Hilarious and too true. I don't know who those cyclists are kidding.


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## brad

I'm Howard said:


> Anyone who says they don't like Toronto doesn't know Toronto.


I'm from Montréal and even I love Toronto, although as a Montréaler I'm not supposed to admit it.


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## Berubeland

Personally I love my neighborhood, until 3 years ago I even had a large 3 acre ravine behind my house, I had steps going down there and for a former country dweller it was a bit of an oasis. Alas, they are 50 townhouses on that property now. 

Still I like my 60 x 120 lot although as iherald points out, the 60 foot driveway is less than fun in the winter. 

I've been in a bit of a pocket of non development for the last while, but they're putting up a Walmart not far from here. 

The other problem is the schools around here are so bad it's not even funny. I'm holding back my son from Jr Kindergarden this September so he can go directly to the French Immersion school that's better up the road.


----------



## Cal

moofur said:


> This has been on my mind for quite a while.
> 
> My wife and I make a pretty good living on a combined salary and I for the life of me cannot understand how people can afford all of the new houses (or even resales for that matter) around the GTA.
> 
> We live in a modest 2 bedroom condo right now in North York, and lead a comfortable living, but would like to move to a house when we have kids in a few years, so we've been looking at houses. Just for kicks we've been looking at north of Toronto around 404 and Major Mackenzie/Elgin Mills, etc., and everywhere you look you can't see even a town that lists for less than $500k new. Factor in the added costs of upgrades, fencing, air conditioning, closing costs etc., for a new house and you are looking at around $550k EASY for a new town home. Let's not even talk about a detached... You are easily looking at 600-700K bare minimum.
> 
> Factor in the cost of commuting to work (I don't think anyone really works at 404 and 19th avenue and at least have to commute to Markham for their job) which is getting more and more expensive everyday whether you drive or take the GO and it really costs quite to be able to afford living in those areas. Not to mention the time that it even takes to commute since the 404 is packed enough as it is... Local streets really aren't that much faster due to the increasing traffic and lights...
> 
> I believe that my wife and I make an above average salary in comparison to the national average, but I find it crazy that every new development that we look, all the sites are pretty much all sold out! Even as far north as Elgin Mills you are looking at half a million dollar townhomes, and I don't think you can even get that now.
> 
> I know that the cost of houses are more expensive along the 404, but even if you look at bit off to the east/west of that, it really doesn't get that much cheaper. Resales are obviously cheaper, but really not by much (15% or so for something equivalent).
> 
> My theory is that people take out the biggest mortgage that they can afford to get with the longest amortization period that they get, and then put every last penny that they have in toward their mortgage payments. When they "retire", they will just sell the house with the logic that housing prices will continue to go up, and then downsize and retire with their capital gain in their equity. Is that exactly what everyone is doing? Either that, or they're creating (illegal) multiplexes out of their converted basement apartments and not reporting the income. I'm really puzzled by this phenomenon, as ignorant as it may sound.
> 
> Any thoughts?


Back to the OP....I think that most people are just looking at what the monthly payments are to carry the property. Regardless of amortization period.

Also IMO, I think that many cannot afford the home they live in. They just haven't realized it yet. A few coming rate hikes, or unexpected expenses, and I think many will find themselves stretched a little too thin financially.


----------



## MoneyGal

the-royal-mail said:


> Why don't you respond to what I have said rather than attacking me personally and poking holes in my posts?


TRM, I like you. But you've essentially called my house and neighbourhood small and dirty, you've suggested I live and work in a crime-ridden, noisy, panhandler-infested location, and you've implied I don't understand risk very well because I ride my bike to work. 

What is it you'd like me to say in response? 

I have never "attacked" living in the suburbs (where I was raised) or in the country (I personally lived on a farm for 10 years in my 20s). I like the variety of choices I've had and made in my housing situation. In my world, they're all good. People have different preferences, and that makes life more interesting and, as a result, more enjoyable. 

But if you make categorical statements about cities or an urban way of life or the inherent riskiness of cycling (or! heaven forbid! a particular investing style) you can expect disagreement. Because you are expressing opinions, but you aren't framing them as opinions, but fact. And sometimes people don't like their choices being disparaged by others, even if you feel as though "the facts" are on your side. It feels mean.


----------



## Homerhomer

kubatron said:


> A cyclist is not close to being the same thing. They/we get no respect from drivers, from sidewalk patrons. Where, pray tell, should they/we go?
> 
> .


If you get no respect from nobody then check the mirror and look for what causes the implied lack of respect ;-)


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## kubatron

I should look in the mirror to see why I get no respect from drivers while I'm riding my bike down the street?


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## the-royal-mail

Are you trying to say something, kubatron? This isn't about what the previous poster said, but if you have an opinion feel free to share it with us.


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## Sherlock

You know, the choice between downtown and a long commute from the suburbs only exists in large metropolitan areas like the GTA and GVA. In most of the rest of the country, people live in mid-sized towns and can live within 10 mins of work and still have an affordable home on a nice sized lot.


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## Sherlock

I'm Howard said:


> Anyone who says they don't like Toronto doesn't know Toronto.


Haha no... I moved here a few years ago from a mid-sized southwestern ontario town (where a brand new brick-to-roof 2000 sq/ft house costs 300k) and hate it. There are a few pluses, but they are outweighed by the many negatives. I'm on the lookout for a good job in a town like Waterloo or London or Barrie and then I'm outta here. Unfortunately as said earlier in this thread, so many companies are located in Toronto and it's hard to find a job in some fields anywhere else.


----------



## Sherlock

kubatron said:


> A cyclist is not close to being the same thing. They/we get no respect from drivers, from sidewalk patrons. Where, pray tell, should they/we go?


As someone who drives AND bikes a lot, I don't think blanket statements like that are accurate. I've encountered rude drivers while riding and I've encountered rude cyclists while driving. There is plenty of blame to go around from both sides. An inconsiderate jackass is gonna be an inconsiderate jackass whether you put him in a car or on a bike.


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## slacker

Anyone who doesn't live where I live, or invest the way I invest, or vote the way I vote, is wrong.


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## Homerhomer

kubatron said:


> I should look in the mirror to see why I get no respect from drivers while I'm riding my bike down the street?
> 
> Are you stupid?
> 
> Sorry, have to ask.


How rude and classless.

This forum is from what I have seen pretty well behaved and usually posters are pretty respectful of each other, it's pretty obvious you don't fit in.


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## J0ni

Try moving farther away from Toronto, Like Whitby maybe ? House prices are ridiculous the closer you are to Toronto I find. Besides have you seen the highways in the morning 

Try the GO train if possible is so convenient !


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## NotMe

Homerhomer said:


> How rude and classless.
> 
> This forum is from what I have seen pretty well behaved and usually posters are pretty respectful of each other, it's pretty obvious you don't fit in.


+1


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## Berubeland

slacker said:


> Anyone who doesn't live where I live, or invest the way I invest, or vote the way I vote, is wrong.


Slacker you really outdid yourself and you couldn't be more right. I'd go even further and state that people who don't think exactly like me, style their hair in the same way, and go to the same church and eat the same foods are also definitely wrong....


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## I'm Howard

Sherlock, you can buy cheap real estate in small towns like london, but it stays cheap,a nd as a former Londoner, you may not live to be a 100 in london but it will sure feel like it.

I am looking to relocate back to London, Riverbend probably, but only because we are here for six months and the amount of cash we will gain will allow our son to buy R.E in, gasp, downtown TO.

That's how they afford it, personal savings plus family help.

A large inheritance, one day, from Grand Parents wil also help

You hate TO, which part, and don't say Scarborough etc, that isn't TO, that is GTA.

What do you hate, the buildings or the population,?

Waterloo is nice, dull but nice, and an hours drive from TO.


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## crazyjackcsa

I'm Howard said:


> Sherlock, you can buy cheap real estate in small towns like london, but it stays cheap,a nd as a former Londoner, you may not live to be a 100 in london but it will sure feel like it.
> 
> I am looking to relocate back to London, Riverbend probably, but only because we are here for six months and the amount of cash we will gain will allow our son to buy R.E in, gasp, downtown TO.
> 
> That's how they afford it, personal savings plus family help.
> 
> A large inheritance, one day, from Grand Parents wil also help
> 
> You hate TO, which part, and don't say Scarborough etc, that isn't TO, that is GTA.
> 
> What do you hate, the buildings or the population,?
> 
> Waterloo is nice, dull but nice, and an hours drive from TO.


At what point did a city with a population of roughly 400,000 become a "small town"

So the big city life is for you, good for you, glad you like it. But it isn't for everybody. 

I hate everything about it. The noise, the population size and density, the buildings. I can't "breathe" It's not just Toronto, I don't like cities and I don't do well in them. My tiny town of Chatham Ontario (which would be a wide spot in the road for you) has a population of 40k. It's still too big for me, so I moved out to the country, and will live out my long term boring days here perfectly content.


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## Berubeland

I agree thoroughly with Crazy... and I live in Scarborough, which is actually part of the city of Toronto although Howard would like to divorce it from Toronto. 

Howard, you can't do it, just like you can't pretend your bad *** kooky uncle isn't part of your family


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## kcowan

Sherlock said:


> I'm on the lookout for a good job in a town like Waterloo or London or Barrie and then I'm outta here. ...


I was living and working in London and called on the Elgin County School Board in Aylmer.

The head administrator said that he could not stand big cities, and I was agreeing with him and then it becames apparent that he was referring to London!

Different strokes for different folks. There are no stupid people on this board (at least not for long)!


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## kcowan

I'm Howard said:


> I am looking to relocate back to London, Riverbend probably, but only because we are here for six months and the amount of cash we will gain will allow our son to buy R.E in, gasp, downtown TO...


You will give up that nice seasonal rental that you get up in Thornbury very winter.


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## the-royal-mail

Yes, when someone says "small town" I am thinking of populations between 5 and 1000 people. 400,000 is most certainly a fully-fledged city.

As far as getting work in smaller cities like London, KW and the like, I've found the competition to be fierce. Harold and I discussed this recently. There are thousands of commuters who live in beautiful cities such as KW who would love nothing more than to eliminate that commute to any part of the GTA. These people are constantly applying for work in the communities they live in but it's difficult. So they end up being trapped on the highway until they can find something close to home. It's not easy.


----------



## HaroldCrump

the-royal-mail said:


> As far as getting work in smaller cities like London, KW and the like, I've found the competition to be fierce. Harold and I discussed this recently. There are thousands of commuters who live in beautiful cities such as KW who would love nothing more than to eliminate that commute to any part of the GTA. These people are constantly applying for work in the communities they live in but it's difficult. So they end up being trapped on the highway until they can find something close to home. It's not easy.


Also, I have found in my experience and social circles that salaries are disproportionately lower in such places.
It seems to over-compensate for the perceived lower cost of living.
For instance, the exact same job function and exact same responsibility/accountability can sometimes have between 40% and 50% salary differential.
Varies widely by industry and job function, but IMHO, the adjustments are too far low.
And given the rapidly rising cost of living in places like K/W, Cambridge, Burlington, Hamilton, etc. I don't think salaries are catching up fast enough.


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## Helianthus

Harold, I certainly agree with you. My salary is well below that of my peers working in Toronto, and my cost of living is not proportionately lower.


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## I'm Howard

crazyjack, Chatham is a nice place to be from,but if that was too big you could always try Merlin or Newbury.

London is a Town of 400k, a City is like Chicago or London, England, a metropolis.

Scarborough, as a Grad of Cedarbrae, the first class, and former resident of Agincourt, without the s, you could not pay me to live there now..

The Annex, Lawrence Park, interesting areas.

We did the country thing, Lucan and St Marys, my wife go tired of talking to cows.


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## Berubeland

But Howard... they're building a Walmart just down the street, classy eh!


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## GeniusBoy27

Like the OP, my wife and I find it hard for people to afford the multi-million dollar houses in our neighbourhood. But having said that, the pressure to "get in" as soon as possible was palpable, because housing prices went 40% higher in about 3 years.

We notice many of them are older and probably more well-established, and we're talking many double income families with at least 1 high earner.

Living in the city versus in the suburbs isn't an option for some of us. Our jobs are downtown, and not transferrable elsewhere. And honestly, I like being able to go walk to a nice restaurant, and hop over to my family in 5 minutes.


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## realist

crazyjackcsa said:


> I hate everything about it. The noise, the population size and density, the buildings. I can't "breathe" It's not just Toronto, I don't like cities and I don't do well in them. My tiny town of Chatham Ontario (which would be a wide spot in the road for you) has a population of 40k. It's still too big for me, so I moved out to the country, and will live out my long term boring days here perfectly content.


While I don't feel the same about cities as you do, if i am not going to live in the city proper, I tend to agree with the urge to move to the "country". If I am giving up the advantages of the city I'd like to gain the serenity of the sticks.


----------



## martinv

I have never been to Toronto. It is 4000 km away in the east somewhere.
Saw the CN tower once in a movie though!
Wonder where that leaves me? In a bubble I guess.
And a terrific Western bubble it is.


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## Square Root

While we are on the topic of location lifestyle, we find it fun to experience the disparate lifestyle. What I mean is have the choice to be in urban, rural, mountain, dessert environments. We currently have a condo in downtown Toronto, a cottage on a lake, and a house in the mountains(Canmore). May get a place in Arizona to round it out. We really enjoy the stimulation of being one place one day than somewhere totally different the next. Obviously, this wouldn't be possible for most people but I thought might be of interest to some of you.


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## Four Pillars

Square Root said:


> While we are on the topic of location lifestyle, we find it fun to experience the disparate lifestyle. What I mean is have the choice to be in urban, rural, mountain, dessert environments. We currently have a condo in downtown Toronto, a cottage on a lake, and a house in the mountains(Canmore). May get a place in Arizona to round it out. We really enjoy the stimulation of being one place one day than somewhere totally different the next. Obviously, this wouldn't be possible for most people but I thought might be of interest to some of you.


I find that very interesting.

Please let me know when some of your properties are available, so I can plan my holidays.


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## marina628

We sold our Toronto Condo but we enjoyed living in the suburbs and going downtown for weekends for many years.Today we have a Waterfront Cottage ,home in Newfoundland and live in a Country House in Ontario.Shopping for a home Antigua ,I will need offshore banking when I win WSOP LOL .We go downtown a couple times a year and stay in a nice hotel , cheaper than paying the property taxes


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## andrewf

Square Root said:


> While we are on the topic of location lifestyle, we find it fun to experience the disparate lifestyle. What I mean is have the choice to be in urban, rural, mountain, dessert environments. We currently have a condo in downtown Toronto, a cottage on a lake, and a house in the mountains(Canmore). May get a place in Arizona to round it out. We really enjoy the stimulation of being one place one day than somewhere totally different the next. Obviously, this wouldn't be possible for most people but I thought might be of interest to some of you.


You can rent vacation properties in many locations like this for very reasonable amounts. It's a good alternative to owning 6 properties that are vacant most of the time.


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## brad

andrewf said:


> You can rent vacation properties in many locations like this for very reasonable amounts. It's a good alternative to owning 6 properties that are vacant most of the time.


Exactly. I've been renting the same vacation home every couple of years in Maine for about 15 years now; total cost to date amounts to about $9,000 and I've never had to worry about maintenance, repairs, taxes, mortgage, finding renters, etc. It's enough work (and expense) for me to own just the house I live in.


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## marina628

This is why we sold our condo ,we went there for the food and shops and spent little time inside.We stay at four seasons with our kids 2-3 weekends a year .My future plans are summers in Newfoundland , winters in Caribbean and in between here in Ontariur Caribbean place will be rented out part of the year.We are currently looking at a $460,000 house that rents for $3000 a week.Our friends have owned in Antigua for 4 years and it has been very profitable for them so we are looking at purchasing this in our business name for cash.


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## the-royal-mail

Renting a house for vacation or summer snowbird living sounds like a great idea. From those of you who do this, are there any good websites (such as those B&B websites, or something robust like mls) that give the details for renting such places? How do you find them?


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## I'm Howard

Time Shares are at bargain prices, in
some cases you just pay for the transfer and then the annual maintenance costs.

We Summer in the Blue Mountains,Winter in Lakeland , Florida, the thought of any more properties doesn't make sense to us, visits to TO , Hotels are available.

Son just got back from Scotttsdale, chomping at bit to Buy, prices and what you get compared to Toronto are very seductive, and you can buy a gun.

I would really recommend anyone thinking of Florida to look now, many bargains and lots of choice, many Canadians already buying.

Renting your unit out is very easy if you don't want to use yourplace.


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## the-royal-mail

I'm looking for summer house rentals in Canada, not USA. Not here in the winter.


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## andrewf

marina628 said:


> This is why we sold our condo ,we went there for the food and shops and spent little time inside.We stay at four seasons with our kids 2-3 weekends a year .My future plans are summers in Newfoundland , winters in Caribbean and in between here in Ontariur Caribbean place will be rented out part of the year.We are currently looking at a $460,000 house that rents for $3000 a week.Our friends have owned in Antigua for 4 years and it has been very profitable for them so we are looking at purchasing this in our business name for cash.


That's actually an interesting proposition. Is that $3000 average over 52 weeks, or peak season? If you can get a property management company to handle rentals, this would be very lucrative.


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## K-133

the-royal-mail said:


> Renting a house for vacation or summer snowbird living sounds like a great idea. From those of you who do this, are there any good websites (such as those B&B websites, or something robust like mls) that give the details for renting such places? How do you find them?


http://www.vrbo.com/

I list my US properties there, and find it to be very active.

There are also properties listed there from Canada.


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## kubatron

http://www.theglobeandmail.com/glob...ud-knocking-is-falling-prices/article1998280/


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## marina628

Andrew that is averaged out as in peak season the house gets about $5500USD per week .It was listed for $580,000 last year ,for that price there is a maid that comes twice a week .We just got back three weeks ago from there.Our friends live there 10 months a year ,even during the storm seasons.http://www.antigua-villa-rentals.com/antigua_villas_5bedroom.htm


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## kubatron

What I don't understand about arguments like the one from the Globe article is this:

You don't ever get $400K or so to invest in the stock market, but you do when you buy a house.

When your paltry $50K rrsp goes up 10%, that's nothing compared to 5% of a home.

You can't get an unsecured loan to invest the same amount that you woudl when you get a mortgage, so isn't this argument complete bunk?

PLUS - no taxes on principle residences, doesn't that make up for a huge difference?


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## financialnoob

kubatron said:


> What I don't understand about arguments like the one from the Globe article is this:
> 
> You don't ever get $400K or so to invest in the stock market, but you do when you buy a house.
> 
> When your paltry $50K rrsp goes up 10%, that's nothing compared to 5% of a home.
> 
> You can't get an unsecured loan to invest the same amount that you woudl when you get a mortgage, so isn't this argument complete bunk?
> 
> PLUS - no taxes on principle residences, doesn't that make up for a huge difference?


True, but you also have to factor in the interest on that loan. On a $400K house with $50K down over 30 years and 5-year closed rates, you can expect to pay an extra $250K in interest with payments around $1,700/month. If you took that $1,700/month and contributed it to an RRSP starting with your $50K down, it projects quite favourably to the $400K house ($1.7M vs. $2.2M when using 5% annual growth).

It's not a clear apples-to-apples comparison since home ownership comes with lots of other fees and costs, while the RRSP contributions doesn't include the cost of renting, and as you mentioned, there's the no taxes on principle residence (though we're not factoring in tax breaks for RRSP either or tax-free growth). But it does speak of different alternatives depending on circumstances.


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## kubatron

Yes but so the interest average is 5%, and your average return is 8%, but 8% on a principal residence is tax-free, it's still not fair to compare:

Buying a house vs investing the money, is it?

If you buy a house with $50K down, vs invest the $50K, and the house grows at 8%/year over 10 years so does your $50K in an investment, it's not fair to compare because the house will always win.

Secondly, it's not RRSP-locked in so you can do what you want with the money..

no?


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## kubatron

Check out this madness:

http://www.theglobeandmail.com/life...tm_source=CanadaRealEstate&utm_medium=twitter

http://www.theglobeandmail.com/life...ndreds-sells-at-80000-premium/article1994332/

and

the best one

http://www.theglobeandmail.com/life...tm_source=CanadaRealEstate&utm_medium=twitter


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## MoneyGal

Kubatron: Here is a better calculator which takes most of those factors into account:

http://www.ic.gc.ca/eic/site/oca-bc.nsf/eng/ca01821.html

(Read all the notes to the calculator for a discussion of real rates, the use of leverage, etc.)


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## kubatron

plugging in the numbers I see a 3x benefit of buying a house over the past 10 years.


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## petea4

kubatron said:


> Check out this madness:


Yup, that is the area I grew up in. Easy to sell, very hard to buy back into the neighborhood. 

My parents bought their house in '67 for $26,000. It was renod and updated a few times over the years. 25x110, detached, 3story, 5bedroom 2 bath, double garage in the back with lane access, and a finished basement. Sold it in 2004. Listed on a Thursday at 389k, open house through the weekend, with offers being accepted on Tuesday at 4pm. At 9m that same Tuesday it was sold "as is" for 480k after 16 offers with about a dozen agents outside on the sidewalk. 

It has changed hands 3 times since then, and sold last summer for 720k.

What recession?


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## Cal

kubatron said:


> Yes but so the interest average is 5%, and your average return is 8%, but 8% on a principal residence is tax-free, it's still not fair to compare:
> 
> Buying a house vs investing the money, is it?
> 
> If you buy a house with $50K down, vs invest the $50K, and the house grows at 8%/year over 10 years so does your $50K in an investment, it's not fair to compare because the house will always win.
> 
> Secondly, it's not RRSP-locked in so you can do what you want with the money..
> 
> no?


If you were to invest the 50K you could invest in equities that could reasonably pay you 2-4K per year. Putting it into the house, yes you would increase your net worth if RE goes up, but it would cost you 2-4K in property taxes.

I am not saying that investing in RE or Mr. Market is either right or wrong either way.

I don't get people who own RE, yet do nothing with the equity. Imagine sitting on 400K and not investing it. Yet people routinely buy a home, pay it off, and just live in their 400K asset. I don't get it.


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## crazyjackcsa

What would you have them (me) do then Cal? Use the equity to secure a loan to invest? Rent out rooms? 

I don't get people that pay a plumber $150 for a 10 dollar job. I don't get it


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