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Sign(ing) Of The Times? Many Young Canadian Adults Co-Own Properties With Their Parents
AnalysisWhen homes sell, the bank doesn't give a shit how you came about that money. Maybe fine for some but quality of life dipping because not just one or two people contribute to a mortgage is unfortunate.
Basement tenants, 10 people in the home all paying the mortgage, mom n dad tossing you cash every month, etc. just makes lenders, real estate agents and so on go "hey! Homes are selling, everything's fine!"
We always fail to examine quality of life at the end of the day
I keep saying this but people don't get it. If the prices keep rising, and wages don't, then that is a very bad sign for our society.
The generational wealth divide is growing. Youth don't have the opportunities their parents did, and their parents don't understand because they've had windfall increases on their property values. They think their kids should buy an overleveraged mortgage and rent the basement to pay it, because "the prices just go up".
Trust me, you don't want a generation of young men feeling this hopeless and desperate
Why do you think weed was legalized as well as MAID? Soylent Green doesn't seem so ridiculous a plot for a movie anymore.
We're on the route to something similar absolutely.
Next is privatization of prisons for all the destitute young men who end up there making owners a killing. That is if substance abuse and suicide don't end them first.
Canada has done an amazing job at demoralizing youth, pretty much anywhere else in the world things would come to revolution before it got this bad.
Well when their parents treat them like babies until they're 30+ is it any surprise? Canadian youth haven't been uncomfortable enough to take action
You're blaming youth for this problem?
Blaming government and parenting that failed at managing expectations. The youth aren't perfect but are largely blameless, imo
Oh yes we have. Do you have any idea how many suicides there are, how many drug overdoses?
The issue isn't comfortability, the issue is the only solution is revolutionary violence and we've had it banged into our heads since birth that violence is wrong, in the school system from tv shows, parents etc.
The ability to socialize and gather has also been screwed over by stuff like stranger danger, tv/internet/phones/social media and of course Lockdowns.
So what action is there to take? People who can leave just leave, people who can't can't phantom taking on an entire country in solitude and some even feel bad for having violent thoughts so they turn the anger on themselves they self-harm until it kills them.
I'm relatively resilient to that kind of pressure compared to my peers, I saw the writing on the wall a long time ago but I had enough faith in the country and my elders that we would change course before it got to bad so I didn't do my damndest to get out of the country then. Now it's my biggest regret and in terms of actually fixing anything there's no meaningful options anyone my age has outside of straight up terrorism.
This comment is nothing but absolutely delusional conspiracy bullshit.
People who can't work are better off dying, ask any rich person
Youth don't have the opportunities their parents did,
I’d argue they have much more now. You have professional hot dog eaters making $100k every contest.
Professional gamers, influencers, people working remotely anywhere in the world. It’s not boomers doing these jobs.
How old are you?
Most youth are not influences, pro gamers, or hot dog eaters. They are normal working people. Most are not making anywhere near that (and $100k isn't enough for a studio apartment these days), and yet the cost of homes are 10x their annual income. In other words, they will never own a home.
Boomers (if they weren't stupid) bought nice homes with basic factory jobs, and collected massive profits off of said homes.
Their kids will never have this opportunity.
You’re describing an exception to the generational rule.
The only reason I have even a sliver of hope I can maybe own a small home in the next 20 years is because my dad died. That was a harrowing reality check.
Can confirm, I own my own home. My husband and I are the only ones of our friends that bought and paid for our houses all by ourselves. Everyone else has had help (lucky bastards)
I want to see stats on people who have no parents or whose parents died and didn't own property. Because it's bleak. There is a ceiling if you aren't inheriting from the Boomies.
The future will be properties bought by multiple people to build affordable communes.
If you are inheriting from the Boomies the government will be taking more out of your inheritance through capital gains tax increase, with the exception of principal residence.
There’s plenty of ways to skip out on paying the government a dime when handing off money. People have done it for ages and will continue to do so.
Housing inflation needs to be stabilized to allow wages a chance to catch up. I’m convinced that the asset-owning class will never accept a reduction in property valuations so a flat-line is the only out I see.
Flat-line is impossible, too much money is in real estate, too much investment. If it flat-lines they'll stop investing and the bubble goes pop causing a massive crash. That's why they are keeping it going up because that it's or collapse.
Of course the collapse is what needs to happen and it's inevitable it's just a matter of how much can be sacrificed to delay the pop.
The immigration is to make price and demand sticky so they don't fall
I don’t see them accepting that either. The line MUST go up.
Not sure how the asset owning “class” has any control over this.
The only people with any control over housing are those setting the interests rates, those controlling immigration numbers and the rate at which we can build new homes (very slowly).
Well everyone has a say in our political system, and since there’s such a high home ownership rate in Canada that’s a majority of voters who would likely not vote for a candidate putting forth any policies to decrease home prices. People might tolerate flat prices.
Edited to add: I agree with you though, it’s overall an immigration / supply issue. We can’t build fast enough to keep up with immigration.
Yep, boomers have the voting power, so the policies that we see coming out of government are all going to be representative of them. They want to keep prices high.
Baby boomers do not control the majority of voting, Gen X and millennials do.
The problem is more complex than simple supply and demand. Builders are now holding off on completing projects until they can see a profit to be made, which is only exacerbating the supply issue.
We need to do things like make policies to lower interest rates for builders who are building a certain type of housing, such as "missing middle", condos with enough family space and some affordable units, and townhomes.
Municipalities need to stop putting up every costlier barriers to housing getting built, such as ever expanding green standards. We need to freeze the OBC where it is and other municipal codes, they keep adding more and more requirements which keep adding to the costs (eg. Huge underground SS utility vaults instead of a trad MH, or now considering mandating hurricane ties in all new homes, etc).
Neighborhood residents who live in SFH should not get to stall and cancel housing being built on property that someone else owns. The setbacks and angular plane that are required away from SFH in a lot of cities, especially those with the worst housing situation, need to be seriously reigned in.
Arbitrary height restrictions need to be eliminated. Sometimes this stuff makes sense but many times it does not at all.
Biggest thing is the federal governments used to build so much housing for Canadians but this tapered off in the 80's and has declined to almost nothing. It's never before in our history ever been so bad. Traditionally the feds have built hundreds of thousands.
Etc.
I take issue with the first part of this statement. They can make a profit they are holding off until they can make a huge profit from building more homes. Not a regular profit.
The problem is more complex than simple supply and demand.
No it's not.
Builders are now holding off on completing projects until they can see a profit to be made, which is only exacerbating the supply issue.
That's basic bitch supply and demand.
We need to do things like make policies to lower interest rates for builders who are building a certain type of housing, such as "missing middle", condos with enough family space and some affordable units, and townhomes.
Types of housing are barely relevant. We are bringing in 1.5 million people a year that require 600k housing units as our record is 280k on tract for 215k this year.
Municipalities need to stop putting up every costlier barriers to housing getting built, such as ever expanding green standards. We need to freeze the OBC where it is and other municipal codes, they keep adding more and more requirements which keep adding to the costs (eg. Huge underground SS utility vaults instead of a trad MH, or now considering mandating hurricane ties in all new homes, etc). Neighborhood residents who live in SFH should not get to stall and cancel housing being built on property that someone else owns. The setbacks and angular plane that are required away from SFH in a lot of cities, especially those with the worst housing situation, need to be seriously reigned in. Arbitrary height restrictions need to be eliminated. Sometimes this stuff makes sense but many times it does not at all.
Again this will barely move the needle and a lot of times those are there for good reasons, do you want gridlock traffic or housing collapsing a year after being built?
Biggest thing is the federal governments used to build so much housing for Canadians but this tapered off in the 80's and has declined to almost nothing. It's never before in our history ever been so bad. Traditionally the feds have built hundreds of thousands.
No our record is 280k, we need 600k just to keep up with migration then another 100-200k to replace old stock that's falling apart then add 30% to keep it out of the investors buffer so they can juice it. I don't think government can build 910,000-1,040,000 housing units a year when the all time record for the country is 280k. Lowering migration is only option.
A simple action we could demand is that they need to make a law that you can only own one home. Until we get out of the deficit we are in. Investors now make up the largest chunk of home ownership. It's not even foreign investors, it's Canadians who were lucky enough to have bought when a house in Toronto cost 10x less what they do now.
Also, no owning a home if you don't live here. Forget about these measly foreign investor taxes, which barely do anything because people are just so wealthy.
Yea people aren't going to go for that, many Canadians have had a small cottage or cabin in the family for generations (often used by the extended family) that they're not going to give up just because the liberals are causing this issue with their mass immigration policy.
Thats some crazy political overreach that completely changes the fabric of Canadian society, it would mean you either live completely in a rural area or completely in an urban one.
It would not be for existing owners.
I own a house and frankly I don't care if it drops in value if it means that we have a healthier society. I'll take the fucking hit man, people need homes.
I've basically decided that the only way I'm owning a home in Canada is when my parents die, and only then if I kick my brother and his kids out. I'd rather keep my parents and my brother needs a place to stay so that's me not owning a home in Canada.
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28d
So what do young Canadians do when they can't afford a home?
Serious question. I don't see how this ends well for Canada.
It doesn't end well. Anyone currently not owning a home is going to be renter for life, as conditions for renters continually get chipped away. We're a couple years out from the norm being 5 people sharing a 2 bedroom and paying $1500 to $2000 a piece because that's going to be the only option
People can't even afford rent though. A studio apartment is $2500/mo. You need to be in the top 5% to pay a rent like that without becoming poor.
Probably violence. I really hope things turn around in the housing market before we get a Mao situation here and people start dragging landlords into the street and shooting them. Property owners seem oblivious to this danger I fear though.
Seriously. They're ignoring their children because it makes them money. Won't be long before were putting property owners into hotpots.
Isn't that why they lobby government to take away firearms?
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28d
Immigrants are all thinking the same thing though. Those places will all be expensive soon as well. Kids in highschool can't exactly get ahead of that and buy a house in the Prairie. They are utterly fucked.
It's not sustainable so by definition it's not permanent and it's taking more and more to keep the bubble from popping, eventually either the housing market goes or the country goes and the housing market with it.
So no we don't need to accept it, we just need to accelerate the inevitable.
I'd be curious to know what the rate was in 2004, and 1994, and further back.
I have a "good job", mid 6 figures, a few hundred k for a downpayment, and I still rent a basement apartment at 2010 rates because it's what makes the most sense. I moved to the city from rural Canada as a kid, and fought to make it here. Unfortunately I missed the window for income to really matter much in terms of having a home, but I am optimistic that if I keep on things will get better. My bigger worry, and I've seen this with many in my generation and situation, is that people stop feeling like working makes sense because there's little incentive besides survival. I think that's the bigger issue imo.
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28d
By definition it would be 4-600k but I doubt it based on this scenario.
I presume the latter
About 200
Just lol @ making 200k and living in a basement. If any of what you say is true, you could easily afford a house.
He could afford a shitty fixer upper at the cost of all his disposal income.
Houses are about 1.5 average on my block.
I definitely could, but it'd be uncomfortable going from about 1k rent to mortgage at current rates and probably a lot of refurbishing and repairs - most of the houses in my area are quite old. It would be possible, but not pragmatic.
I'm actually looking more this year and might settle on a condo or townhouse if they continue to drop.
If you’re paying $1k rent on 200k income you could easily be saving close to $100k a year… housing is definitely within your reach, although it shouldn’t be that hard with that income.
I would guess that the 200k number is pre-tax
My statement stands… he spends $12k on housing even with a misc ~$2k spending per month they would be able to save close to $100k.
They will!! Keep on trucking and it will happen
Are you in Toronto?
Do you want to co-own a home with me? We split it into separate units, with the aim of eventually condo-izing it so we each have separate ownership. Are you in Toronto?
I make about half of what you make but it's a pretty secure job, anyway, if interested DM me.
I honestly don't think prices are ever going to improve in Canada's major cities. Especially Toronto. The math doesn't make sense at all. Any decline in price and there will be 200 people waiting to pounce. Condos are decreasing slightly but not homes. And they never will.
Home ownership is so much better than renting it gives you control, equity, ability to do work on the house as you wish, and a bit of grass.
You would actually go into co-ownership of a home with someone off Reddit?
That’s fucking wild
Not immediately. You have to vet them entirely.
Still crazy you’d be that trusting with random ass strangers.
You must not have any friends…
Why does this bother you so much? My friends are too broke, don't care about living in Toronto, and one is locked into a condo.
Anyway, they make apps for this so it's not that crazy. You do a complete investigation and you don't buy with a stranger. You get to know them first.
People will buy with someone they married after dating for 6 months, with way less investigation and zero contract 🤷
While I didn't get fat payout from Bank of M&D, they did basically pay for my university education and I chose to live at home until around 26 paying only $400 a month in rent after graduating.
Those two factors alone is the difference between still in debt and living paycheck to paycheck or having a sizable investment account by 30.
Yes. I was one of those lucky people. I made the down payment and pay the mortgage amount/ property taxes but my parents were willing to co-sign so I would get a better interest rate.
I feel really bad for people who don’t have that option.
And there are those parents who can, but don't want to cosign because it sets themselves up in a potentially risky financial situation
Yes, sadly. I’m pretty reliable so I think my parents trusted me.
Reliability has nothing to do with it lmao
Regardless of how good I(or anyone) is at consistency, I can still entirely understand the stress of putting your life in others hands, can have on your mental health
True.
I’m very grateful to my parents for doing that. I feel for people that have parents who aren’t willing or in a place to help their kids obtain a home. I personally would do the same for my own kids
That is me. Without them, we’d be stuck in an apartment forever.
I feel like with our kid it'd have to be us buying and gifting them the property, especially in Vancouver. It's like if you didn't buy when you're young and stupid you can't afford anything now
Born in the 90’s, partners parents gave us $120,000 for a down payment (of the $225,000 we had to collect).
Survivorship bias kind of feels bad
It's not unreasonable to expect the value of your most important asset to at least hold where it is. A 50 percent reduction would cost current owners hundreds of thousands of dollars.
All this country does is think about "current home owners" and look at where it got us. Nobody else can get into a home but FUCK THEM because we can't let the current home owners house decrease in value.
Newsflash its a fucking physical structure made from materials that depreciate every single day. Just like a car. How can a person truly think buying a brand new home for say $500,000, living in it for say 5 years, and then selling it for close to a million makes any logical sense unless there was major additions/upgrades? Every day that house gets one day closer to needing repairs, one day closer to the end of it's ability to be used as shelter. It is insanity to think a house price should move upwards. It is literally brain dead capitalism in action.
Yeah its definitely one of those bizzare things not questioned. Flatlining in value already means its beating depreciation. Matching wages and inflation would mean its doing extremely well. Beating wages means something is wrong.
The homeowners are spending money constantly on upkeep. Like you said, houses deteriorate. If the homeowners allow the place to fall into disrepair, the price will drop as it should.
The people who aren't in the market yet haven't dropped their life savings on a property. It's easy for them to say that the market should drop, they would benefit.
That's not true. People are doing no work on their houses and selling at prices way over what they paid.
It’s also often the value of the land vs the value of the actual home.
The value of SFH land in and around Toronto goes up because - they ain’t makin any more of it. You have to either go up or out.
Some tear downs in Oakville are 1.5M because of the size of the lot, and the 3500 house that can be built on it (replacing the 1500 bungalow) and then resold for 3.5M+.
This is a live case where neighbors of where I grew up are currently selling. 1968 built bungalow on a 65x150 lot. It will 100% be torn down. Most of the houses around it have already been done.
Who can afford that shit? No idea.
So yes the house adds value but in many cases it is the land you’re really buying.
Why? The value of that asset was artificially inflated by policies that heavily favoured homeowners at the expense of younger working people. Why should you assume that those gains are guaranteed? We’ve done everything humanly possible to pump real estate while productivity in this country has cratered.
When we've been inflating a housing bubble for 18 years yes it is. It's insane to expect it to hold.
That'd be a silly way to view a stock, why should housing be different?
I own a home... its just in my parents name. In a few years we'll collectively decide to sell it and after a few more years I will receive the earnings from that.
In the meantime, I pay $16k in rent which I feel equates to what is paid in interest, taxes, maintenance etc.
So in the end... it all comes out in the wash. Thats how I look at it now.
So you're privileged and your parents bought you a house and you pay way less than anyone who has to rent.
No. It’s a different way to view most people’s position. It’s just renting until inheritance.
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