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Oh....in more good news, Ford said today that he's targeting the May two four weekend for the first round of lockdown relaxation assuming we keep on the current trajectory. I'm personally wondering if some things may actually happen earlier considering that's still 3 weeks away, and if numbers keep falling at the trajectory we are currently seeing.. there's going to be a lot of (potentially cranky) people wondering exactly what we're waiting for whilst more businesses and households cross the line of no return.
It's only just peaking, we have weeks to go yet easily.
 
Fauci is a good man. Unfortunately there is an expiry date for people like him in the current administration. He won't last the end of the summer before he's out and replaced with a Yes man. And quite probably somebody with zero medical background.

This is the way it is down there. Dog have mercy on them.

Jared can do that job easy....along with all the others.
 
On the topic of renting vs buying in the GTA, I did some quick calculations using excel, historical mortgage rates and average home costs

Avg GTA home in 2000: $245000
Avg GTA home in 2020: $910000

Put 20% down in 2000, mortgage payment is $1254 per month
Renew every 5 years, payment from 2015 to 2020 is $619.75 per month

Total payments $218903
$100K property taxes
$100K for maintenance
Total $418903

Renting a home from 2000-2020 with rent payment being $1250 in 2000, 3.5% a year increase, 2020 payment = $2487 payment
Total spent on rent $454042

So $35139 extra spent on rent over those 20 years.
$910K - $114472 remaining on mortgage = $795528 equity

Conclusion is you would be $830667 ahead by buying in 2000, rather than renting.

Renting might be better in some places at sometime throughout the past but most certainly not in the GTA over the past two decades.
 
On the topic of renting vs buying in the GTA, I did some quick calculations using excel, historical mortgage rates and average home costs

Avg GTA home in 2000: $245000
Avg GTA home in 2020: $910000

Put 20% down in 2000, mortgage payment is $1254 per month
Renew every 5 years, payment from 2015 to 2020 is $619.75 per month

Total payments $218903
$100K property taxes
$100K for maintenance
Total $418903

Renting a home from 2000-2020 with rent payment being $1250 in 2000, 3.5% a year increase, 2020 payment = $2487 payment
Total spent on rent $454042

So $35139 extra spent on rent over those 20 years.
$910K - $114472 remaining on mortgage = $795528 equity

Conclusion is you would be $830667 ahead by buying in 2000, rather than renting.

Renting might be better in some places at sometime throughout the past but most certainly not in the GTA over the past two decades.

The problem with your math is that you chose a rental with the exact same cost as a mortgage payment.

Typically a place will rent out cheaper than what the mortgage will cost if you had bought it. If it didn't, then everyone would just get a mortgage. Why would you rent a place for the exact same cost as the mortgage? Doesn't make sense.

The idea is then to take the delta between rent and mortgage+prop tax+maintenance+etc and invest the difference. Choose a 7% average year over year return compounded.

That's where the math works out in favour of the renter.
 
The problem with your math is that you chose a rental with the exact same cost as a mortgage payment.

Typically a place will rent out cheaper than what the mortgage will cost if you had bought it. If it didn't, then everyone would just get a mortgage. Why would you rent a place for the exact same cost as the mortgage? Doesn't make sense.

The idea is then to take the delta between rent and mortgage+prop tax+maintenance+etc and invest the difference. Choose a 7% average year over year return compounded.

That's where the math works out in favour of the renter.
Was hoping someone else would catch that, i had a good chuckle.

That being said, tell those morons renting luxury 1 bedroom downtown condos for $2500+/month to get a grip.
 
Why would you rent a place for the exact same cost as the mortgage? Doesn't make sense.

I'm going to respond to this myself, because I know someone on here's going to nitpick it.

You may rent it because you want to move in a couple of months
You may rent it because you get some special tax write-off with work
You may rent it because of money laundering

yadda yadda yadda...
 
The problem with your math is that you chose a rental with the exact same cost as a mortgage payment.

Typically a place will rent out cheaper than what the mortgage will cost if you had bought it. If it didn't, then everyone would just get a mortgage. Why would you rent a place for the exact same cost as the mortgage? Doesn't make sense.

The idea is then to take the delta between rent and mortgage+prop tax+maintenance+etc and invest the difference. Choose a 7% average year over year return compounded.

That's where the math works out in favour of the renter.
You would rent instead of mortgage because you couldnt save enough for a down payment. That happens to many people.

Many people do rent a place that is close to a mortgage payment because they can. Why not live downtown with a nice view of the lake? You can afford it. You are paying the same as your buddy who bought something in the boonies. Sure there are some renters that realize the game and come out ahead, but my guess is most people closely align their monthly mandatory expenses with their income.
 
The problem with your math is that you chose a rental with the exact same cost as a mortgage payment.

Typically a place will rent out cheaper than what the mortgage will cost if you had bought it. If it didn't, then everyone would just get a mortgage. Why would you rent a place for the exact same cost as the mortgage? Doesn't make sense.

The idea is then to take the delta between rent and mortgage+prop tax+maintenance+etc and invest the difference. Choose a 7% average year over year return compounded.

That's where the math works out in favour of the renter.
Wrong.

The average house is 3-4 bedroom, 2000 sqft, cost $250K in 2000. How much do you think one of those rented for in 2000? If anything I did the rental argument a favour because its likely back then it would have cost more than $1250 to rent. Its also likely that to rent one of those today it would cost more than $2500.

You are making a mistake, your assuming the rental payment is always less than the mortgage etc.
Gloss over the payment structure again and realize that in year 15 to 20 of that mortgage the payment is $619 a month!

Fact is the rental vs own argument gets completely crushed when you look at the GTA over the past 20 years.
The math might work out in some place with increasing interest rates and a housing market that only rises with inflation but not here in the past interest rate environment and demand we have had.
 
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Personally, also being an Architect ironically I don't see a house as an investment. Esp the GTA, nothing here is worth it's price tag, I can buy land and build a custom home up north for 1/5th the price and will do that, and continue renting in the concrete jungle.

For me, a house is just a place to sleep, eat, and move on. The work I do, skills I learn, and people I meet are my investment. There are many reasons people don't buy a house, in fact all my co-workers my age and one of my siblings rent. One reason is freedom, freedom to move, change cities, or not get tied down with a mortgage. My dad is a contractor/architect as-well, and I've personally seen the differences between owning and renting from a lifestyle perspective and generational perspective.

Also, a big reason i won't own is student debts, same with my friends, my monthly is more than most of your mortgages, i'll be dead before having a down payment. I don't come from a wealthy family with rich parents, my friends who have got homes, got their down payments from mummy and daddy, in fact my parents did help my younger sister get a place. I refused, they don't even have money for retirement cause they used all their savings to move to Canada for us, I rather give them money vs take it or even get a house for myself.
 
I don't see a house as an investment.
Historically they have been. There is a reason GTA and Vancouver real estate were being advertised in Chinese magazines.

For me, a house is just a place to sleep, eat, and move on. The work I do, skills I learn, and people I meet are my investment. There are many reasons people don't buy a house, in fact all my co-workers my age and one of my siblings rent. One reason is freedom, freedom to move, change cities, or not get tied down with a mortgage. My dad is a contractor/architect as-well, and I've personally seen the differences between owning and renting from a lifestyle perspective and generational perspective.
My landlords house is worth $2.5-3m and its paid off. He barely works. He spends winters in Florida. He could sell tomorrow and spend the next 25 years traveling and doing whatever he wants, without doing a minute of work. To me that's freedom.

Also, a big reason i won't own is student debts, same with my friends, my monthly is more than most of your mortgages, i'll be dead before having a down payment. I don't come from a wealthy family with rich parents, my friends who have got homes, got their down payments from mummy and daddy, in fact my parents did help my younger sister get a place. I refused, they don't even have money for retirement cause they used all their savings to move to Canada for us, I rather give them money vs take it or even get a house for myself.
I hear you on being unable to afford here. All the people I know who bought also had help from their parents.
Is it that expensive to become an architect?
 
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Wrong.

The average house is 3-4 bedroom, 2000 sqft, cost $250K in 2000. How much do you think one of those rented for in 2000? If anything I did the rental argument a favour because its likely back then it would have cost more than $1250 to rent. Its also likely that to rent one of those today it would cost more than $2500.

You are making a mistake, your assuming the rental payment is always less than the mortgage etc.
Gloss over the payment structure again and realize that in year 15 to 20 of that mortgage the payment is $619 a month!

Fact is the rental vs own argument gets completely crushed when you look at the GTA over the past 20 years.
The math might work out in some place with increasing interest rates and a housing market that only rises with inflation but not here in the past interest rate environment and demand we have had.
kaboom!

 
kaboom!

:\ We couldn't find those prices in the eighties. It was difficult to even find a place period. We did find one place that was subsidized at $275/month for a two bedroom, but the landlord or manager told us she was renting it to her kid instead. It was full of people who graduated from med school, so that their income was below the threshold when they moved in. Unfortunately, they never moved out. We ended up paying 1100/month, until we found another place for 875. When we moved out of the 875 place, the neighborhood had gone way downhill, and become crime infested.
 
kaboom!

Yeah compare rental prices that include bachelor apartments to my study that was for house prices.
You show me where 2000 sqft house could be rented for $750 in 2000. Nice try though.
I can repeat the same study for condos and it will find the same thing, that renting has been highly disadvantageous over the last 20 years.
 
Yeah compare rental prices that include bachelor apartments to my study that was for house prices.
You show me where 2000 sqft house could be rented for $750 in 2000. Nice try though.
I can repeat the same study for condos and it will find the same thing, that renting has been highly disadvantageous over the last 20 years.
Okay find it then!

good night.
 
Yeah compare rental prices that include bachelor apartments to my study that was for house prices.
You show me where 2000 sqft house could be rented for $750 in 2000. Nice try though.
I can repeat the same study for condos and it will find the same thing, that renting has been highly disadvantageous over the last 20 years.

A few things:

1) You've cherry-picked the hottest RE market (well, next to Vancouver) in one of the highest growth periods in Canadian RE history with the benefit of hindsight. There's a saying in investing: "Past performance is not an indicator of future returns". If you buy a house in Toronto in 2020, it may stay stagnant or even decline in value, despite what's happened between 2000-2020.

2) In your calculations, you've missed the 20% down payment that the renter would have invested. 20% of $245K = 49K, which 7% compounded over 20 years is $190K, after cap gains tax is probably $160-$170K net, depending on your tax bracket

3) As per cherry-picking the RE location and the time period, if you're going to do that for RE instead of using national historical averages, then you must do that for your stock picks as well. So instead of investing the 20% downpayment of 49K in an S&P ETF, say the renter bought Apple stock instead in 2000. The renter's $49K would be worth close to $10MM today! Far outstripping the RE returns in the Toronto market over the last 20 years.

It's an interesting thought experiment to play "What If?" but nobody has a crystal ball. All we can do is rely on aggregate averages, otherwise we'll all be cherry-picking the best data to prove our points.
 
A few things:

1) You've cherry-picked the hottest RE market (well, next to Vancouver) in one of the highest growth periods in Canadian RE history with the benefit of hindsight. There's a saying in investing: "Past performance is not an indicator of future returns". If you buy a house in Toronto in 2020, it may stay stagnant or even decline in value, despite what's happened between 2000-2020.

2) In your calculations, you've missed the 20% down payment that the renter would have invested. 20% of $245K = 49K, which 7% compounded over 20 years is $190K, after cap gains tax is probably $160-$170K net, depending on your tax bracket

3) As per cherry-picking the RE location and the time period, if you're going to do that for RE instead of using national historical averages, then you must do that for your stock picks as well. So instead of investing the 20% downpayment of 49K in an S&P ETF, say the renter bought Apple stock instead in 2000. The renter's $49K would be worth close to $10MM today! Far outstripping the RE returns in the Toronto market over the last 20 years.

It's an interesting thought experiment to play "What If?" but nobody has a crystal ball. All we can do is rely on aggregate averages, otherwise we'll all be cherry-picking the best data to prove our points.
Don't the average rentals also include all of the subsidized and low income rentals that exist, but you wouldn't be able to access?
The site is GTAM, so GTA prices would tend to be more relevant than others, for most people here.
 
Don't the average rentals also include all of the subsidized and low income rentals that exist, but you wouldn't be able to access?
The site is GTAM, so GTA prices would tend to be more relevant than others, for most people here.

I don't know. My post wasn't even looking at rental costs. It was looking at rates of return in the stock market vs RE market.

Focusing on the GTA RE market is fine. As long as you're also okay with comparing returns to individualized stock picks as well, as opposed to an average rate of return like the S&P/TSX. That was the point.
 
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