The plot

Welcome to the Greater Fool, saving one young butt after another, while reminding everyone else that the fool who comes after is the greater fool. Like Aaron. “Started reading your blog a month ago and I’m a big fan,” he says, little suspecting what happens when you write me for advice.

“I’m a 26 year old in Toronto who makes about 30K a year. I moved back home 18 months ago to save overhead, and now I have about 50K in savings. My parents however just sold their home and are moving into a 2 bedroom Condo, with a nice chunk of change left over they’ve offered to help me with.

“I’m not an investor, I’m not following the trend, I don’t have FOMO, I just need a place to live. I had hoped to put a down payment on a place, which my Dad will give a hand with co-signing mortgage and rounding out my down payment. The alternative is to rent, but the place I moved out of 18 month ago paying $900 is now $1800. And basically the city’s rent is even higher than buying. Everyone in real estate says get in now, prices are gonna get up to NY levels, but I take your points arguing against this and yes they are biased.

“So, in my situation, given everything you say re: not buying now/just chill, should I really feel too bad about getting into market on a 1 bedroom unit between 400-425K as opposed to throwing away half my savings on a 1 year lease at almost 2k a month on same sized unit? My logic was even a 5% loss/correction is equal to what I throw away on rent instead of building equity, no?”

No, Aaron. Let’s examine why.

First, I hope it’s not lost on you that your parents sold the family real estate, pocketed big bucks, downsized and left you homeless. So if they’re smart enough to cash out of property in these insane times, why are you hot to jump in? There’s no economic argument right now to justify buying a place in Toronto, especially a condo when tens of thousands are under construction. And, no, Toronto is not New York – which is the financial capital of the world. GTA has Drake, and the Leafs.

So with a one-bedroom apartment renting for $1,800 (you can find tons for less) is it really cheaper to buy for $425,000? Would you be further ahead even if prices corrected a little? Let’s see.

Buying that place with a 10% down payment requires $42,500 in cash, leaving a $383,500 mortgage and a $11,900 CMHC insurance premium (typically added to the borrowed amount). So, $395,000 from the bank. At the current three-year rate (2.59%), that costs $1,790 a month. Wohoo! Cheaper than rent!

But wait. There are condo fees, which would be about $400 a month on this unit, plus property tax of about $250. That comes to $2,440 – and you really should factor in the cost of the deposit, because if the $42,500 were invested for a 6.5% return it would yield $250. The true cost of ownership, then, is $2,690 every few weeks. It’s a $990-per-month premium over the average Kijiji Toronto one-bedder rent, at $1,700.

Over three years, Aaron, you’d pay an extra $35,640 to be an owner rather than a renter. Sucks.

But, I hear the realtors, specuvestors, amateur realtors and Brad Lamb cry, owners pay down principal with each monthly cheque. So even if you have to spend almost a grand extra a month to live, you’re building equity!

This is true. Over three years the loan is reduced by $35,100 – down to $387,300 – or almost exactly the extra amount sucked up away by ownership costs. So, where does this leave us?

The argument that owning is cheaper than renting in Toronto (or almost anywhere else) is false. There’s more money ‘thrown away’ by purchasing than renting – evident once the math’s correctly done and the hormones are washed away. But what happens to little Aaron, whose parents obviously don’t like him, if condo prices rise or fall?

Hmm. Well, if the unit is miraculously worth 10% more at the end of his three-year mortgage commitment, that would net him $467,500. From that he needs to pay the outstanding loan ($387,500), plus realtor sales commission ($23,375). And he must deduct his downpayment from the proceeds ($42,500) because that’s just getting his old money back. Then there’s the legal costs involved in buying and selling ($3,000 or more). And HST on the commission ($3,050). So the final profit is: $8,075 – the ultimate payback for spending almost $1,000 a month more than he needed to in order to occupy the same space.

But what if prices decline 10% (a likely scenario over the next three years for overbuilt condos). Now the sale price would be $382,500, less than the $387,500 owed to the bank. Aaron would have to pay $19,125 in commission and $2,500 in HST, and deduct his down payment of $42,500, resulting in a financial loss of $69,125. And just imagine what a 12%, 15% or 20% correction would mean.

As a renter Aaron has no market risk. The landlord carries that. He has no risk that interest rates will be substantially higher when he has to renew. He hasn’t taken the risk of concentrating all of his net worth in a single asset. If some numbnuts moves in next door, or above, Aaron can give his notice and move. If he lands a better job in Vancouver or Atlanta, he can go. And he has no financial obligation to his parents, who threw him under the bus anyway.

In short, why would a 26-year-old ever want a deed, a mortgage, a property tax bill or a chain? What am I missing? Besides, making $30,000 he doesn’t even qualify to borrow almost four hundred grand – too much risk. Unless Daddy cuts a cheque.

See, Aaron, it’s a plot. Run.


#1 This Week in Money on 03.26.17 at 6:33 pm

Garth Turner on This Week in Money:
Trudeau Budget, Trump, Real Estate in Canada, House Flippers.

#2 Millenial on 03.26.17 at 6:36 pm


A 26-year-old making $30k a year in Toronto needs to rent, and find one (or two) roommates to help pay that rent. Good on you for saving that $50k, keep it up!

God bless.

#3 Vancouverite on 03.26.17 at 6:40 pm

Interesting article on foreign buyers not paying capital gains taxes on properties and a new crack down by CRA

#4 ole Doberman on 03.26.17 at 6:41 pm

Garth just playing the devils advocate here
What happends if toronto ends up like vancouver?
People held off there and indeed are priced out forever

All these condos coming must be for a reason of need
for living accomos since houses are not affordable

#5 Vancouverite on 03.26.17 at 6:43 pm


#6 BlogDog123 on 03.26.17 at 6:46 pm

Aaron could always rent a basement from someone who overspent on their $1M house and is absolutely dependent upon having a tenant. I rented from age 24 until 33, made above-average wages and there was no shame in that…

#7 Mandria on 03.26.17 at 6:47 pm

I’ve rented in different areas of Toronto since 2009…I have no idea where the “rental crisis” concept is coming from. I think this must be a phenomenon just confined to rental condos in the core. Rents on purpose built units (and older condos) have barely moved. I rent a large 2 bedroom in a well managed building for $1475 a month, I’ve been here for 2 years. A friend is moving into the same unit size in June…the rent went up to $1505. I am not in the core but I’m 2 minutes from the Yonge Subway line. There are tons of affordable areas…the walk-ups along Eglinton between Yonge and Bathurst…Along Bathurst from St. Clair to Wilson. You just might have to live somewhere that isn’t trendy. I sometimes wonder if people do any research before they believe real-estate industry fearmongering about rents.

#8 MrWrite on 03.26.17 at 6:49 pm

All wrong, Garth we at the church of greater money respect your views, however as our preacher has told us, there is no real estate problem. Money has been made for the last 10 years. This landscape will be a New York, buy now or you’ll be lost forever in the sea of renting. My fellow believers have made $$$ just buying new homes only to flip them before the close. Give me an AMEN, We also have our followers making money buy selling spots in new home lines. Thank you lord for this blessing. Keep shining the light down on us!

#9 Dave on 03.26.17 at 6:50 pm

The reason why one would want to buy is because of what happened in Vancouver. Just when everyone thought prices were insane they continued to climb for years, and if you would have bought even 5 years ago then you would be way ahead, despite the recent correction–if you can call it a correction, houses don’t seem to be anywhere near affordable. And you yourself said that it is not Chinese money causing these prices in Vancouver so then why won’t the same thing happen in TO?

#10 common sense on 03.26.17 at 6:53 pm

Aaron please listen to Uncle Garth.

Your $30K job can be gone in moments and your life would be a nightmare.

Bunk up with some friends, travel, enjoy the world.

When this bubble explodes, the opportunities wil be there.

#11 AB Boxster on 03.26.17 at 6:56 pm


Excellent analysis Garth.
Should be required reading for any young moist millennial looking to buy in these overpriced markets.

And you did not even price in the possibility of mortage rates being 2% higher when the mortgage renews in 3 years, which make the buying option even more absurd.

The fact that a person making 30K a year thinks that purchasing something for over 400K a year makes any sense at all, is perhaps the most surprising.

I was pretty concerned when i bought my first home, that cost all of 100K, on combined annual salary of 50K.

It seems that carrying huge debt loads is a non issue these days.
Let’s see when rates rise how much of a non issue it really is.

#12 sinkable toronto on 03.26.17 at 6:56 pm

great post as always!

#13 Muhammad on 03.26.17 at 7:04 pm

Interesting read

#14 Deplorable Wisdom on 03.26.17 at 7:04 pm

Idiotic to buy a $400k condo making $30k… why would anyone even think of doing that at 26.. go have fun.

#15 45north on 03.26.17 at 7:07 pm

I’m a 26 year old in Toronto who makes about 30K a year.

if you make $10/hour and work 40 hours a week you make 30K or pretty close

so obviously you cannot afford a $400,000 home but you can afford college or university – $20,000 a year:

#16 Entrepreneur on 03.26.17 at 7:07 pm

And the buyers are drying up, very few left. Can take a chance on the merry-go-round house exchanges, might get lucky but forget the about the new buyers.

Have to read the Poll print out when have time but I would call it America Health Plan to form unity (the fighting that is going on in the streets, omg). Here in Canada our health care is the same as anything else you buy here: pay more and get less but you have it in case.

Is there a doctor is the house, lol. Btw, I think the bugs are getting stronger which we all know that would happen one day.

#17 Victoria Real Estate Update on 03.26.17 at 7:08 pm

A condo correction of only 10% in 3 years for a housing market that’s probably tied with Vancouver for the biggest housing bubble in the world. You’re funny Garth. Hometown bias?

The bottom line here is that with taking on any mortgage you end up paying 2.5 to 3.0 times the purchase price by the time the mortgage is paid off due to compounding interest (rates will normalize).

$400,000 x 2.75 = $1.1 M

The condo will end up costing approximately $1.1 M, not $400 K, over 25 years.

Note that I haven’t added in all of the extras that come with “ownership” that mortgage holders must pay that renters don’t. For example, condo fees, property taxes, etc.

Renting makes sense at this time.

I know a banker that bought a nice house in Toronto in the early 90s in a nice area. He was transferred and had to sell 2 years after buying. All he could get for the house was 50% less than what he paid 2 years earlier.

I’ve spoken with several older Toronto realtors who told me that during Toronto’s 90s correction houses were losing $10,000 per week for some time and that those buyers who refused to lower their price to market value (waiting for the market to rebound) lost a lot of money selling for a lot less three months down the road.

It took Toronto’s market 14 years to recover, but much of that recovery was a result of lax lending standards (starting in 2000, for example, 10% down payments dropped to 5% to 0%, etc.) and rates steadily falling to emergency levels.

How much longer would it have taken house prices in Toronto to recover if lax lending standards were not brought in?

Toronto’s correction will be deep and it will take a lot longer for prices to recover than it did the last time.

Housing market corrections are always underestimated by those who have a vested interest in keeping house prices high. Those who do end up predicting the depth of the correction and state their prediction while prices are at peak are ridiculed and called “doomers”.

When house prices fall to levels previously considered unimaginable by many, you’ll hear excuses from policy makers and those in the industry like “we didn’t see that coming” or “nobody could have predicted that”.

It won’t be different in Toronto, Vancouver, Victoria or anywhere else in Canada.

#18 mitzerboy aka queencitykidd on 03.26.17 at 7:11 pm

run have some fun

#19 Victoria Real Estate Update on 03.26.17 at 7:11 pm

Correction to my previous post, sellers instead of buyers.

#20 The Wet Coast on 03.26.17 at 7:11 pm

No correction coming, and the Leafs will win the cup.

#21 Another perspective on 03.26.17 at 7:12 pm

How much is the down payment? Buy the condo and lock in for 5 years at 2.5 percent, thus stabilizing your shelter costs. At 30 k per year you’ll be screwed if you don’t because rents will keep rising, just as they are in YVR. This isn’t about an investment, it’s your shelter so don’t screw with it. Trust me, rents will rise much faster than your salary will and in five years your mortgage payments will likely be the same or less than they are now. Rent certainly won’t be. Then there will be the prospect of living in the sticks and commuting, a fate worse than internment in a Mexican prison. Next up is to improve that income and build a portfolio with the extra cash, but shelter comes first!

#22 The Wet Coast on 03.26.17 at 7:16 pm

Went for a tour of Coquitlam open houses. Not a soul other than me and the realtor. Then looked on Zolo and Coquitlam detached house prices are dropping and inventory building even though new listings are down. Inventory is already well over last year at the same time. If the listings start to surge look for this to get ugly.

#23 you want to buy a condo? on 03.26.17 at 7:25 pm

buying a condo is the stupidest decision one can make. lets see.. values don’t go up.. buildings get older and decrepit. maintenance fees only get higher. special assessments are very real (even on 2 year old buildings)
umm what else.. the weekly emails about garbage chute etiquette.. don’t throw paint cans down the garbage chute.. don’t mash pizza boxes down there.. don’t throw loose kitty litter..

a condo board of directors = a group of people who live in the condo who very well could be complete freakin morons in charge of operating the building. these people may not have any knowledge of financials, building & construction or mechanical systems. this will cause you to leave condo board meetings sweaty, uneasy and believing that you could possibly smack sense into people by showing them your best conor McGregor impression.

..although I get these emails from an agent in St. Pete’s florida..

1bed 1 bath remodled 753sqft on the lake


#24 Naish on 03.26.17 at 7:31 pm

Realistically, the best advice for him is to get roommate and rent. What ever happened to sharing expenses? I’m pretty surprised you didn’t mention this option Garth, although it would have made for much less interesting reading.

#25 leon mckena on 03.26.17 at 7:33 pm

Aaron, come to Calgary. See The wages are on average 21% higher. The cost of living is on average 35% lower. You have 9 National Parks within driving distance, clean air, and 80% less people to compete with for limited space and resources. Go West young man!

#26 Long-Time Lurker on 03.26.17 at 7:34 pm

It’s always a pleasure to read your blog, Garth!


Limited Sage, since you’ve stuck around I’m going to stop writing, “Did you read that?”

I’m going back to lurking unless something interesting comes up.

#27 joe on 03.26.17 at 7:36 pm

Garth, Could you explain/comment on this BC landmark ruling please? I don’t understand why CRA would rely on dishonest RE agents for doing its job, and why would it be Buyers responsibility to not only investigate whether the seller is tax resident of Canada but be liable for unpaid taxes. If anyone should be responsible is the CRA and good for nothing real estate agents.

#28 Dobermanduke on 03.26.17 at 7:38 pm

The bottom line is Aaron simply will not qualify for the mortgage using the new 4.65% mortgage qualifying rate, unless Daddy co-signs.

#29 Warren- the lagging indicator on 03.26.17 at 7:39 pm

“His party repudiated his bill and you call it a ˜genius move.” You Trumpaholics are a riot. ” Garth”
It was not “his bill” Garth, why do you think Trump insisted on labeling the bill Ryan care… think about it. Trump is not as daft as you imply.

“Your comments are reasonable, with the exception of taking the fringe (vagina costumes) and using it to represent the mainstream (the 65 million people who did not vote for Trump). This device seriously weakens your points. ” Garth”
I guess this device only works in Canada to get your point across. Are we “all feminists now” as per your last few posts or not?

Look! Warren has learned how to cut and paste! — Garth

#30 Zinc Whiskers on 03.26.17 at 7:40 pm

Making $30k a year is only $15 an hour…and he’s talking about buying condos in Toronto…we’re all doomed…

#31 Victoria Real Estate Update on 03.26.17 at 7:42 pm

Btw Garth, I speak for many others as well who really appreciate all the time and work you’ve put into your blog over the years.


#32 I'm Not Poloz on 03.26.17 at 7:47 pm

Toronto shall becoming like NYC? LOL, ROFLMAO!

It could be partially right. Drake is constructing his mansion at Bridle Path and I’ve heard that thousands of teenagers who love his Gothic emo hip-hop music would want to live with him.

There was also The Weeknd and Selena Gomez in Toronto.

One Direction and the Wanted, are so 2011, like the CDN at 1.01 to the $US for the entire year of 2011. One Direction is considered “sexist” because their lyrics are “street harassment” or whatever buzzword they use on men who flatter women for being attractive.

Poloz and Morneau both want you to work for free on a $0.50 U.S. Loonie, while Drake artificially props up the real estate market in Toronto by thousands of clueless teenagers wanting to meet Drake in person.

Get ready Toronto—Thousands, if not millions of teenagers will be overpopulating Toronto to meet Drake in his Bridle Path mansion.

As usual if you look a certain way in Bridle Path, thous shalt expect a doughnut eater porky pig to interrogate you on the street.

Toronto is so world class, that the local law enforcement TPS stop and frisk poor people more than a Trump-supporting pig at NYPD patrolling the Bronx looking for a promotion.

#33 joeshmo on 03.26.17 at 7:50 pm


#34 APF on 03.26.17 at 7:53 pm

Aaron, at 30k a year, 26 years old, there is two things you need to do:
1) Forget investing in real estate and invest in your human capital. That salary need to go up.
2) Quit the GTA area. There is place in Canada where living cost really less and you will probably earn the same salary without even get training.

You could go to Bishop University in Québec, get schooled in English with the cheap Québec fee then go back to the GTA and enjoy the lower taxes that Ontario offer with a much better job. In Sherbrooke (the city of Bishop University) you could rent a two bedroom appartement for 700$ a month and enjoy one of the lowest cost of living in Canada.

I don’t know everywhere else, but I’m pretty sure that in NB, NS or even in Manitoba there is great Universities with a cost of living probably as cheap as Sherbrooke.

As said Garth, be mobile and invest in yourself.

#35 acdel on 03.26.17 at 7:58 pm

#7 Mandria/Garth

Koodo’s to the 26 yr old that has saved up us much; listen to Mandria in this case; the future is going to be much different then the past. Garth and Mandria are giving you valuable advice, take it!

#36 bdwy sktrn on 03.26.17 at 7:59 pm

#17 Victoria Real Estate Update on 03.26.17 at 7:08 pm
oh great, the tedium is back. still 100% wrong.

vic – rocketing up
van – condos, towns and sub 2M sfh still as high as ever (the highest in the country)
tor- uppa uppa uppa

#37 MF on 03.26.17 at 8:05 pm

#30 TurnerNation on 03.25.17 at 6:28 pm

Hey man,

Yonge and Sheppard area. Same place where I have been for a few years now. Decent area close to transportation that can have both big city and a suburban feel.

#36 I’m stupid on 03.25.17 at 7:52 pm

Great points and thanks for the solid response. It’s not even about my expenses, since I am pretty good at saving. It’s just this rent is starting to eat away at my quality of life and savings rate. What you say is correct though, moving to where rent is cheaper is the right thing to do, so is getting creative with room mates etc. But working two jobs, 7 days a week it’s frustrating having to continuously downgrade (this is my 3rd condo and I keep moving farther away). The tendency should be after hard work and sacrifice you move up in the world not down. Again it’s just really frustrating.


#38 mark on 03.26.17 at 8:10 pm

If he’s making 30k a year he can barely afford to rent, let alone buy.

#39 MF on 03.26.17 at 8:13 pm

#46 Ace Goodheart on 03.25.17 at 10:35 pm

Thanks Ace for another great response that really made me think about the lack of flexibility that comes with any potential ownership. You are right, it is impossible to imagine how that feels. The problem is, having lived here all my life, I guess I want to emulate the same life my parents were able to live and give to us kids. It’s almost instinctive..finish school then get a job, work and buy a house to start a family. Not to say an apartment or condo won’t do the same, just that as a kid we used to be in the backyards, on the porches with neighbours, bike riding on the streets etc. Our parents did it, why can’t we do the same?

Garth’s post tonight was informative and logical. But a few things coming from another millennial looking for a condo in the GTA to buy, even though he doesn’t really want to.

1) I had heard all the risks back in 2014 when I first started looking (with parental help) at condos. We decided the risks were too high and that renting is “safer”. I invested whatever savings I had and honestly, I regret it. It was just bad timing and no one’s fault really but I was negative for most of the time up until this year. Psychologically I don’t think have what it takes to invest in the market. I just don’t trust it anymore (ETF’s, stocks, Bonds, or anything). I had cash during the last few corrections and was frozen in fear since everything had gone down so much already. I don’t care for it. Sorry Garth.

2) We all underestimated the central banks of the world and this low interest rate disaster. The reality now (I think) is that they are totally out of ammo and have no other choice but to “talk up” rate hikes. Yes the FED increased a few times but I now believe it was just so they can be lowered when the next crisis hits…to say they “did something”. I think they are all incompetent (serious).

3) I’m tired of having a landlord. I just hate the idea of feeling like some serf to another human being. I’d rather be the boss of my own place of residence I am paying for. I know the risks, the rewards, and the idea of mobility, but psychologically I can’t stand it.

4) Being tied to one place is maybe not so bad if this is where your life is. Your family, friends, and job(S).

Thanks again for the response,


#40 Old Salt on 03.26.17 at 8:15 pm

Oh boy. Don’t forget to have a big chunk of change in the bank for when your condo windows start falling off.

Grab a boat. Live in the islands. Work as a deckhand and get your captains license. Double your pay and drop your housing costs at the same time.

If you get bored, haul up anchor, sail to a new spot and repeat.

Now to get my wife back on board….

#41 crowdedelevatorfartz on 03.26.17 at 8:20 pm

@#29 Warren the limping indicator

“Look! Warren has learned how to cut and paste! — Garth’


#42 Welcome to Slurrey on 03.26.17 at 8:24 pm

I rarely post, but I’m going to reiterate some points from a post here yesterday.

The home ownership dream – maintaining a home costs money. Property taxes, utility,insurance……..maintenance surprise costs – just like your car . I’m not saying renting is superb, but you will not face these costs as a renter. Your new home, the material in it will eventually start wearing, tearing and breaking down. Everyone now is building gigantic homes , just means more maintenance/upgrade costs when the time comes. Good luck keeping up with the new styles available when it comes to home design….. you renovate trying to keep up with “joneses” or “move up buying” taking on a larger mortgage. Like dogs chasing their tail. Was going to buy an “investment” property a few years ago in white rock, I missed the boat, oh well, it would have been a speculative purchase that could have gone either way. From what i’ve gained, investing should not be gambling, the house will win in the end.

#43 jay on 03.26.17 at 8:26 pm

Aaron ,you should go buy a Harley for 35 grand ,go spend $10,000.00 on tattoo’s and party, at least you’ll have a few good story’s to tell when you’re older.

Tats are ten grand? I thought they just appeared after drinking. — Garth

#44 Andrew Woburn on 03.26.17 at 8:30 pm

Those who think that GTA prices will continue to the sky should ask themselves which GTA businesses will bankrupt themselves trying to pay the salaries needed to keep up with insane housing prices. Employers don’t have to stay in Toronto any more than you do.

#45 JSS on 03.26.17 at 8:39 pm

Try telling a woman that you rent.

#46 rainclouds on 03.26.17 at 8:40 pm

At a celebration of life yesterday. Realtor actually. Great guy. When I mentioned to some old friends hadn’t seen in awhile “we are renting DT Vancouver” Silence. Slackjawed incredulity. The unspoken sympathy for me was palatable. People backed away……I didn’t even have to start droning about Garth/ fools/ interest rates /debt. Sad

#47 Andrew Woburn on 03.26.17 at 8:43 pm

Apparently you can’t scare all of the people all of the time. Not even in Russia.

#48 acdel on 03.26.17 at 8:44 pm

#42 Welcome to Slurrey

I hear you, new comers do not realize what the actual expense of owning a home or condo are. Sure the lottery winners are blessed, if they are old enough to move on to a quieter, less expensive areas, that provide the necessities, most cannot do that.

I will say that if one can find a piece of land, at a reasonable price, outside of the big cities, and be able to afford it, and make a living then why not??


Correction on my post # 35 – should have read Cudo’s as well as “Saved up as much” I hate my phone but living within the means, I know, I am a loser, oh well!

#49 TorontoSux on 03.26.17 at 8:45 pm

Don’t buy a condo….but don’t rent a condo either. As a previous poster suggested, look at the older buildings along Bathurst Street or Eglinton. Sure they are not as glamorous as the newer buildings but they all have full time supers. Move into a newer condo owned by a “foreign investor”, good luck reaching them if you have an issue of something needs repaired. How comfortable are you disclosing you financial info, S.I.N. number and tax return to some dude with a name you can’t pronounce thousands of miles away?

#50 Leo Trollstoy on 03.26.17 at 8:50 pm

Condos are expensive little buggers aren’t they?

#51 I'm stupid on 03.26.17 at 8:50 pm

I smell rent control coming at some point in the Gta. I think the provincial gov’t is going to drop a bomb on housing.

I think the bank economists that called Toronto Realestate a bubble did so deliberately (not that I think that it’s not in a bubble) but the motives aren’t to raise awareness but to try and stop Ofsi from making banks shoulder more risk. The federal Government had its hands tied because of Trump but the provincial govt is going to drop the hammer. They’re all worried after January and February sales numbers came in. Did anyone else notice how much attention the cost of rent has been given on the Msm? Something major is coming because when the Msm pays so much attention to something government acts. Wynn needs something major to increase her rating before the next election and housing will do just that. It will be sold as great for the young and those on a fixed income.

#52 Lee on 03.26.17 at 8:51 pm


Did you ever think maybe the people posting scary stories about how tough it is to find a decent apartment in Toronto are just real estate industry trolls? I mean, if Donald Trump can mail his tax returns to MSNBC why can’t some real estate agent in Toronto find it worth while to pump real estate on a blog with one billion followers? The posting today seems unrealistic. I think most people who earn 30000 which is about 20000 after taxes know they won’t get approved for a mortgage. Renting us this guys only option unless mom and dad can front him at least 200000. Good luck.

#53 Leo Trollstoy on 03.26.17 at 8:54 pm

#44 Andrew Woburn on 03.26.17 at 8:30 pm
Employers don’t have to stay in Toronto any more than you do.

And yet they still stay.

Toronto has the jobs. Always will.

#54 Leo Trollstoy on 03.26.17 at 8:56 pm

If he’s making 30k a year he can barely afford to rent, let alone buy.

Sad but likely true. Toronto isn’t a city for the mediocre.

#55 Alberta Ed on 03.26.17 at 8:56 pm

Then there are often special assessments with condos, for things such as windows falling out, major construction problems (foundations, plumbing, etc.) which can and do occur with some frequency. Not to mention, offensive neighbors. If the condo is cheaply built like some (coughCochranecough) you will also get to know your neighbours’ habits and what they’re having for dinner, which is frequently garlic-based.

#56 mathman on 03.26.17 at 8:57 pm

sorry folks – not possible to save 50k on a 30k pre tax income by the age of 26. Our young friend is clearly not providing all the details here.

Anyone making this kind of cheddar in the GTA is living in a rooming house with multiple roommates and probably barley scraping by.

Who in their right mind would by a 400k condo on this income? The fees and property taxes would eat all your net income.

#57 45north on 03.26.17 at 9:00 pm

Andrew Potter:

Why Andrew Potter lost his ‘dream job’ at McGill

here’s a quote from the original article:

Compared to the rest of the country, Quebec is an almost pathologically alienated and low-trust society, deficient in many of the most basic forms of social capital that other Canadians take for granted.

i’d feel the same way if I was stuck in a snow storm and the police didn’t tow the trucks out of the way. In Andrew Potter’s case he said it.

#58 I'm stupid on 03.26.17 at 9:01 pm


Don’t worry you’ll be vindicated one day. I’ve been in your situation it sucks. Just remember that if you make stupid decisions you’ll end up losing. Keep making the right decisions based on your circumstances and I can guarantee you that you’ll end up ahead.

If you’re going to gamble start a business. Work your ass off for yourself. You shouldn’t feel bad for being a renter but you should feel bad for letting someone else profit from your hard work. You’re obviously bright enough to make good points on a blog where any mistakes will get your ass handed to you! Good luck smile life is beautiful

#59 Bottoms_Up on 03.26.17 at 9:01 pm

Aaron on that salary there is no way. Mortgage that is 13x wages, are you nuts? You’d be crazy to do it and pops is crazy to co-sign.

#60 Freedom First on 03.26.17 at 9:02 pm

Aaron. 26. Living in Toronto. Making 30k. Aaron, read about living as a minimalist. Get really good at it. Do what you have to do to make more money. Live as a minimalist. Save money. Invest. Don’t do anything stupid. Like what you are suggesting here.

No charge.

Freedom First
Master of Freedomonics.

#61 common sense on 03.26.17 at 9:03 pm

#54 Leo

Toronto which is a part of Canada is BOOMING right?

Why can’t the lad afford to buy? The opportunities are ENDLESS for him to increase his wages and shine in the city that the earth revolves around!

#62 Shawn on 03.26.17 at 9:07 pm

Some great points from D Doyle of Macquarie Capital.

#63 Crazy times in the GTA on 03.26.17 at 9:07 pm

We went to an open house today for a property listed in the far reaches of the GTA on the outskirts of a cookie cutter suburb where mattamy homes go to die. The house that is in terrible condition was listed at 1 million. I could not believe my eyes when we drove up and saw the mass of cars and people clammering in to see this property that was actively in a flood zone and was in a state of disrepair with an active leaking roof, a bathroom that was not functioning and tapped up sliding door windows to keep out the elements etc. But it was mass hysteria in there. It was like people were infected with FOMO. People driving up in their leased luxury vehicles – pretending to be so savvy and wealthy. Crazy, when this market blows up, it’s gonna be nasty.

#64 Andrew Woburn on 03.26.17 at 9:08 pm

#53 Leo Trollstoy on 03.26.17 at 8:54 pm
#44 Andrew Woburn on 03.26.17 at 8:30 pm
Employers don’t have to stay in Toronto any more than you do.
Toronto has the jobs. Always will.

Yes, but

Rents in Megacities Can’t Go Up Forever

#65 Graphics Girl on 03.26.17 at 9:24 pm

Lots of affordable housing options in Toronto. I used to rent a room in a nice house with decent people in a great location, all for $500. If you’re a good renter: pay cash, don’t ask for a rent receipt, are tidy, and don’t cook stinky foods, then you have lots of choice. I saved a ton of money! With that freedom I was able to cherry-pick my jobs and make more money. Worst thing is to HAVE TO stay in a dead-end job just because you need to pay the mortgage.

#66 Bat Flipper on 03.26.17 at 9:26 pm

On the income here, your looking at renting a room in house. You want to keep your housing under 30% of your income or 750/month. Obv, it won’t work if you buy anywhere, but there is a decent amount available for rent.

Look at your long term earning potential, and decide if Toronto is the right city to live in. There are other great cities that don’t have absurd property values that will keep you a renter forever.

#67 OttawaGuyRenting on 03.26.17 at 9:27 pm

Live with like 5 mates in a bad hood! Cauliflower might be affordable with that kind of budgeting on 30k!

This is seriously where CDN real estate jumped the shark. A schlep with 30k salary and booster from mom and dad is going to purchase a condo.

This will not end well.

#68 AACI Home-Dog on 03.26.17 at 9:32 pm

Drake who ?
BTW…don’t forget fire insurance & water/sewer levy.

#69 Smoking Man on 03.26.17 at 9:33 pm

30k a year only covers wine, cigarettes and Timmys.

Who would work for that?

Poor kids, their Paradyme of what is not acceptable has been warped by communist teachers, to stupid to know they are themselves mind f-d infavore of the machine they so hate and despize.

Now go due your free internship little lap dog. Ahh the pay on the head….

If family income is not over 200k a year move out of Toronto now.

Wait I haven’t officaly worked since August.

Cash is king when you have power of the UCC and a near by casino that allows smoking and gives out free booze.

I’m so frightend of the T2 govt. I leave it all here.

#70 common sense on 03.26.17 at 9:34 pm

Anyone else feel gold will be easily over $1500 this year, maybe even $1800?

The reality of the lack of repeal of Obama Care is just setting in….let’s see how the US markets do this week and the USD along with oil.

#71 Walter Safety on 03.26.17 at 9:40 pm

What you’re missing Garth is that demand exceeds supply ,at least according to my condo building friend. He says they can only build 16,000 a year- not enough.
Maybe a demographer can chime in but I think you have 5 more years of fools in inventory.

#72 Smoking Man on 03.26.17 at 9:41 pm

Serious question for accounts or Garth.

If I spend more than 180 days outside canada in the usa. Who do I own taxes too?

My account has been on a two week bender. No one knows where he is.

#73 New Canadian on 03.26.17 at 9:42 pm

My 2 cents. I lived and worked in several “world class” cities before settling down in Canada. When Lehman exploded, I was in Barcelona, where the sky was the limit for RE valuations. Until it was not. Prices gradually dropped by almost 50% as unemployment went north of 20% (youth’s one north of 50%…) due to the collapse of the construction & RE sectors. You should see those ghost condo cities around Madrid left uncompleted to the mercy of the elements. Somebody posted here some weeks ago link to a really entertaining video (in Spanish) documenting the mayhem. Brutal. Luckily those Spainards have sun and do not need much to get by (unlike in Canada…). Before this all ran its course in Spain, I got transferred to a Middle Eastern emerging financial center. No sign of any Lehman related troubles, but I had my experience and thus was determined not to buy. Colleagues on the first day at work asked me where did I buy. Average villa was about 1M USD and the colleague induced peer pressure to buy was intense as everybody argued that by renting I will be just pissing money away (Garth, if you ever run out of inspiration (unlikely), you could cover the self confirmatory bias). Sure I did piss money away. Tons of it. The rent for a place acceptable to my wife was USD6,500/m + utilities paid 1 (one) year in advance with nothing paid back if I would lose the job and have to move out of the country etc. Imagine, I was still in the probatory period and was handing over to a local dude check for USD78,000. The first three months on the job I tried to think of it as “an-entreprenurial-move-that-will-pay-back-quickly” to rationalize such a crazy use of my hard earned cash. Well guess what, exactly 2 years after Lehman, the market in this city completly froze for a few weeks out of the blue, and when transactions started occuring again, the RE valuations were reset at 50 cents on the dollar (i.e., instant 50% plunge in valutions). It was more than brutal. All who bought were all of the sudden USD500,000 in the hole on average and to add insult to the injury many lost their jobs as well as the Lehman crisis swept through the place with a bit of a lag compared to Spain. As at that time debtors would go to prison, many took flight out of the country leaving everything behind… But I know, Canada is different :-). BTW, I bought my first place after entering the middle-age phase of my life as before I was too busy exploring the world and never felt any need / urge to have a mortgage. Now with kids things are a little different, but can somebody please explain me where does this crazy Canadian psyche that you need to own RE in your 20s/30s or you will end up in hell come from? Has it always been that way? What are the antecedents of this? I am a bit at a loss trying to comprehend this Canadian RE affinity and the fact that, unlike in Europe, there is often really not a well developped rental market for young professionals, families, single people, married people…

#74 Leo Trollstoy on 03.26.17 at 9:54 pm

55 Alberta Ed on 03.26.17 at 8:56 pm

Scare tactic. Maybe true in Alberta. 0.0001% chance in Toronto. Condo living is fine. Just expensive.

#75 common sense on 03.26.17 at 9:59 pm


#76 Leo Trollstoy on 03.26.17 at 9:59 pm

#64 Andrew Woburn on 03.26.17 at 9:08 pm
Rents in Megacities Can’t Go Up Forever

Even better for Toronto. Lots of jobs. Inexpensive living.

#77 Gasbag Boomer on 03.26.17 at 9:59 pm

#73, New Canadian, check out “paragraphs” with Google!

#78 Leo Trollstoy on 03.26.17 at 10:01 pm

#63 Crazy times in the GTA on 03.26.17 at 9:07 pm
Crazy, when this market blows up, it’s gonna be nasty.

You and I will be long dead.

#79 Leo Trollstoy on 03.26.17 at 10:03 pm

How comfortable are you disclosing you financial info, S.I.N. number and tax return to some dude with a name you can’t pronounce thousands of miles away?

I think it feels pretty good since renters don’t have to do any of it.

#80 The Wet Coast on 03.26.17 at 10:04 pm

Aaron reminded me of this….

JOE KENNEDY, a famous rich guy in his day, exited the stock market in timely fashion after a shoeshine boy gave him some stock tips. He figured that when the shoeshine boys have tips, the market is too popular for its own good, a theory also advanced by Bernard Baruch, another vested interest who described the scene before the big Crash:

#81 New Canadian on 03.26.17 at 10:06 pm

Re #77 Gasbag Boomer on 03.26.17 at 9:59 pm
When you are offering 2 cents only to summarize lessons learned based on 2 decades of global living and renting, you do not need to use “paragraphs” ;-)

#82 SI2K on 03.26.17 at 10:07 pm

Toronto isn’t New York. It’s never going to be New York. Toronto has more in common with Philadelphia, Chicago, or Detroit than it will ever have with New York.

This isn’t a bad thing until everyone decides they want to make it New York without a thriving culture sector, any amount of reasonable housing regulation, and a public transit system unable to support that sort of metropolitan area.

Get over it, Toronto, and just be Toronto. You used to be good at it!

#83 Deplorable Wisdom on 03.26.17 at 10:14 pm

#72 Smoking Man on 03.26.17 at 9:41 pm

Serious question for accounts or Garth.

If I spend more than 180 days outside canada in the usa. Who do I own taxes too?

My account has been on a two week bender. No one knows where he is.
Emperor trump will declare you an illegal alien and then cement you into is great big beautiful wall. Will save on the cement costs so you won’t have to pay taxes.

#84 Rhone Deely on 03.26.17 at 10:17 pm

Aaron, Give us an update in 2 years and tell us what you decided. Rents are much cheaper in other parts of the county and you are young and intelligent. Good luck to you sir!

#85 Millmech on 03.26.17 at 10:20 pm

#45 JSS
Actually if your a home owner busting your butt working two jobs trying to impress someone who does not care with, all your stuff,you will not have the time or money to date.The women who only date “home owners” are not the ones you date,like shelter you should only rent those ones(but hey if your that shallow you could always go wading together)

#86 A box in the Sky on 03.26.17 at 10:22 pm

#37 MF on 03.26.17 at 8:05 pm

#30 TurnerNation on 03.25.17 at 6:28 pm

Hey man,

Yonge and Sheppard area. Same place where I have been for a few years now. Decent area close to transportation that can have both big city and a suburban feel.


No doubt it’s tough out there but I find that there’s a lot of dispersion in the rental market all along Yonge St, from Yonge/Eg up to Yonge/Sheppard

If you don’t mind sharing, are you in a 1br or 2br? The 1 br’s obviously are a lot easier to squeeze a good rental rate out of …. the 2br not really.

The buy vs rent for condos is area and condo specific. Some spots the ratios are so out of wack that renting is by far better (ie. condos in NE Markham that are 1350/mth to rent vs 375k to buy or the new condos near the new Vaughan city center that are 1600 rent vs 450k+ to buy)

But there are other areas of the city where 350-400k condos cost closer to $2000/mth to rent and it’s not as obvious what to do.

#87 Smoking Man on 03.26.17 at 10:22 pm

I just feel, I so want to bend over T2 and go find an elaphent at the nearest circus so he would know what is like being a small business owner.

IT consulting, he’s opened the flood gates to temporary forgen workers. He’s going to in the near future disallow leaguel income splitting. My wife is crazy, she will murder her boss on the second day on the job if she ever got a job.

T2 and his party hate straight white men in spite of the fact that some of us don’t have last names like Smith, or McDonald, or Somethingburg.

I’ve never had white privlage. I had to fight or gamble huge for every dollar I’ve made. My apps had to be flawless and they are. It’s still not good enough. If I want to get a job downtown again I’ll need to take a set of sissors to Mr happy. Buy a wig and spend a lot of time in a tanning salon. That shit gives you cancer.


It’s war dogs. I’ll make sure he and Butts go down next go around.

I’m motivated.

YouTube channel soon.

Jack Daniels Courage.

#88 Bank of Millenial on 03.26.17 at 10:24 pm

Aaron’s story sounds like a cool way to run into a balance sheet recession.

Will the rest of Canada follow? Stayed for 2018.

#89 Smoking Man on 03.26.17 at 10:24 pm

Seneca Niagara. Get paid every time I say that.

#90 wally wingnut on 03.26.17 at 10:27 pm

I was born in 59. In 81 I bought a 4 bedroom townhouse in Markham Ont. at the tender age of 22 years old. I was married with a family to support. Wife did not work and a newborn child to look after. Life was not as I recall all that tough. My job was a muffler installer. Our standard of living as a society has tanked. A lot more than most people realize.

#91 will on 03.26.17 at 10:32 pm

“No, Aaron. Let’s examine why.”

The great thing about Garth’s analysis is that it’s all grade 6 arithmetic. Adding subtracting multiplying dividing. It’s not rocket science. Most people can do it. So, Aaron, DO IT. The big names in investment analysis (Buffett, Graham for easy examples) say the same thing. If someone tries to get your attention with higher math than the the basic functions run for your life.

#92 T-Rev on 03.26.17 at 10:32 pm

Aaron, the fact that you’ve saved $50k in 18 months on $30k in earnings is freaky math, but obviously you have discipline and the humility to live like a coyote. Couple this with the fact you’re able to communicate in full sentences, and I can’t figure out why you’re only making $30k. Move West, but stop before you hit the mountains. Work diligently. You’ll easily find a job paying $45k; and if you’re really willing to work for it $55-60 right out of the gate isn’t hard to imagine. Live like you do now, and you’ll have $150k in two more years. You’ll be able to put 30-50% down on a decent detached home, depending on where you settle and what your standards are. TO is not NY. Not. Even. Close.

People out East think that because of Oil and the NDP Alberta is dead- not true. Still the place to be if you want a high standard of living, low cost of living, and to be rewarded for your hard work.

#93 Smoking Man on 03.26.17 at 10:33 pm

Looking forward to May 13. Blog dog meet up at the general store. Show of hands who’s coming. You must bring your dogs. If your a cat people we still love you but. It’s a dog event.

Come on Sunday the 14th

#94 The Limited Sage on 03.26.17 at 10:36 pm

Long-Time Lurker, Your “lurkiness” is more than appreciated by me.

I’m only two years older than this guy, but hell… $30k a year and you want to buy?! That’s what, $16/h?

Ask yourself, “would this be a reasonable sound deal if mah or pah weren’t around to cover my ass?”. If you somehow answered “yes” then ask “will mah and pah always be around to cover my ass?”

If you need that much assistance to buy something, don’t buy it. It’s that simple.

#95 KYC on 03.26.17 at 10:49 pm

For all who still wants to buy in Toronto.
Buy LOW. Don’t overbid. Not an agent.
This is in Toronto as of 10.45pm at
A few of these might be sold this week.
$130,000 MLS® Number: E3738579 3bd 1bath condo
$199,900 MLS® Number: E3734877 1bd 1bath condo
$488,000 MLS® Number: E3740311 4bd 3bath townhouse
$499,900 MLS® Number: E3736258 3bd 2bath townhouse
$499,000 MLS® Number: E3733586 3bd 2 bath townhouse
$499,786 MLS® Number: E3732936 2+1 2bath store/apt.
$499,900 MLS® Number: E3734636 detached 2bd 1bath
$499,999 MLS® Number: E3732488 2bd 1bath detached
There are low price housing in other areas in Toronto.The ones listed above is about 30 minutes to downtown Toronto by car or less than 1 hour by TTC services.

#96 april on 03.26.17 at 10:50 pm

#74 – Condo living is not “fine” unless you live in a good sound proof building. Good luck with that.

#97 yorkville renter on 03.26.17 at 11:08 pm

Condo fees + taxes represent HALF of my rent.

I live in the core (you can guess where). My terrace is bigger than the backyard of the house I sold to move here.

My expenses are the same every month. No heating bills, water bills, garbage bills, no property taxes, no special assessments, no repairs.

Why would ANYONE buy in this market?

Why do people measure their success by owning RE? …and owning a condo is not real estate – it’s air rights, not land rights.

#98 Spaccone on 03.26.17 at 11:08 pm

His parents did right. I left at 29/30 with far less (wasn’t pushed out and my parents hadn’t sold their home) but built up my savings very quickly once I left and actually had some semblance of a social life. I’d feel much better if my parents sold and lived the good life with a mill instead of having it locked away in house equity subsidizing several offspring and paying huge taxes and expenses for a mediocre life in the GTA.

I’ve tried getting the idea in their head of selling, not worrying about expenses and constant maintenance/renovation taking a huge chunk of time and cash flow but they have no interest…the house is them now.

#99 cd on 03.26.17 at 11:16 pm

I think the guy needs to move away from the city. From my experience, everyday living is much more enjoyable not being in toronto. All the little things like not being stuck in traffic, cheaper rent, not interacting with rude people as much, going places that are quiet enough to think… all add up. He should think about going down the 401 to say, KW, Guelph, London, Windsor, and on occasion visiting Toronto.

#100 Victor V on 03.26.17 at 11:32 pm

B.C. first-time home program attracts more than 1,000 applicants

#101 NS Guy on 03.26.17 at 11:37 pm

Of course Garth’s analysis assumes a 6.5% return on investments.

Keeps saying there’s a real estate bubble but not an equity bubble.

Both could crash equally hard.

My advice to Aaron: move out of Toronto.

Seriously, you’re only making $30k/year – that’s peanuts in a city where the average house is near one million. Move to Halifax where you could also probably make $30k/year but houses are a tiny fraction of what you’d pay in TO. But no, you gotta live in Toronto.

A balanced, diversified portfolio is not an all-equity portfolio, and netting 6.5% on a multi-year basis is realistic. Try it sometime. — Garth

#102 Vit on 03.26.17 at 11:48 pm

I was planning to buy a condo next to UOFT Scarborough campus for my son ( student) . The lust 2 moth sales were 250-260K range .
3050 Ellesmere Rd 1411Toronto Ontario M1E5E6 Sold:$275,000 List:$260,000
So its look very reasonable not to waste 800$ a month for residency and just buy a condo .
But 3 days ago some full payed 100000$ more then all previous sales .
3050 Ellesmere Rd 708 Toronto Ontario M1E5E6
Sold:$370,000 List:$285,000
how stupid or desperate some one have to be to to this .

#103 Kilt on 03.26.17 at 11:57 pm

If you are making 30K a year, you shouldn’t be thinking of buying, nor renting a $1800 a month place. You should be renting a room. That is all you can afford. If you aren’t willing to do that, then move. Move somewhere where rent is cheaper. You can always find another $15 an hour job.

#104 John on 03.27.17 at 12:09 am

So, do any of you use a boat like in the pic to go fishing? Perch , Salmon or Walleye in Lake Ontario or Erie??
(I might be on the wrong blog…)
Make America Great Again (North America!)…….
send some of those foreign buyers here to the midwest US rust belt

#105 NS Guy on 03.27.17 at 12:19 am

Oh, Aaron, and by the way, NEW RULE:

Never Buy A Condo (special assessments, unnecessary renovations, ever-increasing condo fees, less rights than a renter has, leaky condos, Board Meetings, rules, rules, rules).

And in case you weren’t aware, a “special assessment” is the dreaded day when you receive a letter in the mail from the condo corporation stating that they must undertake “emergency repairs” to the building costing millions of dollars and each condo owner must write a cheque to the condo corporation for $30,000 or $40,000 within 60 days or else, a lien will be placed on your title. That’s when you have to go to the bank and add the $30k or $40k to your mortgage. Ouch. Never buy a condo.

I’d rather live in a van down by the river than buy another condo.

#106 Long-Timer Lurker on 03.27.17 at 12:23 am

#94 The Limited Sage on 03.26.17 at 10:36 pm

Long-Time Lurker, Your “lurkiness” is more than appreciated by me.

Thanks. Keep learning. You’ll kick the @sses of those who don’t.


#73 New Canadian on 03.26.17 at 9:42 pm

If you’re past 30 and you’ve lived in Canada all your life then your parents and most of your peers parents have owned houses with lots.

Since the earlier generations have also owned houses, they expect their offspring to also own houses at the same age they did.

There isn’t a strong rental market in Canada because up to two generations ago, most Canadians owned houses.

The big Canadian cities have grown and so it’s costlier to purchase a house there now. Plus, there’s a housing bubble in Vancouver and Toronto which makes housing unaffordable for most rational people.

Most everyone here remembers playing in the backyard and on the side streets, I think?

Yeah, I wrote again.

#107 Blobby on 03.27.17 at 12:26 am

Agree with u for most part Garth.

But he does have some risk, if, for example prices drop so his landlord sells..

(For example)

#108 Rates vs Foreign Capital on 03.27.17 at 12:29 am

Oh my, say it isn’t so, that foreign buyers are coming back after a temporary lull..

Shocking….only to those with their head in the sand and those ‘celebrating’ the ‘plunge’ in Vancouver sales..

This article is all you need to know about BC and foreign buyers:s
– foreign buyers are back, in part because the gov wants and needs them
– the entire economy is built on the real estate sector

To those of you thinking that rising rates will prick the bubble, you are clearly not aware that we live in Trudeau’s post-national state – where the needs of foreign capital outweigh those of Canadian citizens because there is no core Canadian identify.

Tick tock…tick tock…in a few short months, we will see that foreign capital, not interest rates, is the driver in the affordability crisis in Vancouver and its surrounding communities…

Looking forward to the explanation in a year as to how prices have kept going up despite ‘3 US interest rate hikes’….

#109 Smoking Man on 03.27.17 at 12:29 am

When you find your voice.

Senica Niagarafalls.

#110 jane24 on 03.27.17 at 12:30 am

Aaron your two best choices are:

Move to somewhere in the world where you can afford to live and get ahead. Nicer weather would be bonus.

Rent a 2/3 bedder for not that much more and find two hot girls as room mates.

Do not gamble your parents savings in the current TO RE market.

#111 Doug t on 03.27.17 at 12:31 am

30k? – don’t listen to anyone who is over 40 – travel, live, explore – plenty of time to become like all of us here – serious, only worried about money/retirement – have some fun and NO regrets – this saving /investing stuff can be kill fun.

#112 Jeff on 03.27.17 at 12:39 am

Aaron, have you considered to move to a city where house are cheaper ? You can leave your job, a 30k / year salary job is not interresting in toronto.

#113 Rexx Rock on 03.27.17 at 12:42 am

Its all about cash flow,if all expenses exceed the rent then its no good,end of story.Realtors will say oh there is no more cash flow its all about appreciation.Then tell them its a risky speculation and not an investment.

#114 Smoking Man on 03.27.17 at 12:46 am

When you can look into mirror. Love yourself.

Void of your programing.

That is the day made it.

Dr Smoking Man
PhD Herdonomics

#115 Cici on 03.27.17 at 12:49 am


What #2 Millenial said; he’s absolutely right. But interview future said roomies and pick only ideal candidates (responsible, clean, respectful, gainfully employed, etc.). And keep the lease in your name ONLY, just in case…

#116 NoName on 03.27.17 at 12:56 am

@ MF

Why dont you get that nurse girlfriend of yours move in with you, that will help greatly both of you, lot easier as a couple than on our own. Best part of having nurse in the house is they all know mouth to mouth resuscitation.

I wonder how much WUL would charge you guys to draft an agreement, “whats mine is mine whats yours is yours, before and after”.

If that moving in is not an option, i suggest lots caffeine when you wake up and alcohol before sleep.

#117 Blobby on 03.27.17 at 1:00 am

At his age, hell maybe even at my age.*

I’d at least get a 2 bedder so I can rent out other room to a Hotty

* lol – maybe not for me, wishful thinking!

#118 Leo Trollstoy on 03.27.17 at 2:15 am

All these pansies scared of condo living. Need soundproofing. Lol. Want quiet? Go live in the prairies or maritimes. Big Cities not for the timid and poor.

#119 David on 03.27.17 at 3:10 am

The current GTA real estate market dwarfs the 90’s!

Those that grew up in the GTA understand that this is unsustainable, but are afraid to admit to it, the Kool-Aid is just too damn good.

Unfortunately, over the years, we have bread way too many individuals on how to leverage cheap money and exploit loose lending practices, which now have caused a pandemic that we have yet to uncover. There must be blood on the streets before this returns to normalization and reflects economic fundamentals.

#120 Dave from Kincardine on 03.27.17 at 5:48 am

26 making $30, can’t you just get new parents or a rich GF. Problem solved.

Get out of TO and the rat race is my best advice.

#121 OMERS on 03.27.17 at 7:58 am

Wow! 450k for a condo at age 26, Dude you really are itching to be a slave to a mortgage! I’ve owned my house now with my wife for 4 years or actually the bank owns it technically, and wow I feel like a slave to this mortgage and I don’t live in Toronto I live an hour North where prices have shot up 30% or so….and I have a detached two story for not even close to what your about to pay, we got in just before prices went north.

I was always told don’t buy a house worth more than 3 times your annual salary, so far it’s done my wife and I good.

With 50k in the bank I wonder how long you could live in Thailand for relaxing on the beach drinking pink drinks with little umbrellas and not being a slave to a mortgage???

#122 Julia on 03.27.17 at 8:21 am

Most posters here agree with you. Try posting your response on any other social media comment page and get ready to get skewered. Nothing but comparing rent to a mortgage payment only ignoring every other expense.
Disagree with buying in situation like this one (and many others) and you’re just jealous, trying to get people to stay behind in life by not buying, don’t know what you’re talking about etc…
It’s just scary.

#123 crowdedelevatorfartz on 03.27.17 at 8:35 am

@#72 Smoking Man
“My accountant has been on a two week bender. No one knows where he is.”

I see you also do your own taxes….

#124 Dups on 03.27.17 at 8:54 am

Is this guy for real? He makes 30K/year and wants to buy a 425K property? What the “F” is wrong with you dude?

From my own experience, i was making 55K at your age and bough a condo for 238K and could not afford it. I was not able to save 100$/month. It was costing me 65$ a day to live there.

Do not do it. I wish i had seen this blog back in the day. I would have saved a lot more. Also what is the obsession with GTA? Get out if it, it is a rat race at a large scale.

#125 Euro Observer on 03.27.17 at 8:55 am

Talking about delusions:

Trudeau minister hopes budget will help ‘aggressive’ push to woo foreign brains

Increasing taxes apparently will bring in high talents to Canada. Pass me what these guys are smoking.

#126 A Reply to #91 will on 03.27.17 at 8:56 am

Do you mean like Sharpe ratios and beta coefficients?

#127 Aaron's Advisor on 03.27.17 at 8:58 am

Aaron, invest your money in growing weed.

T2 + THC = $$$$

#128 IHCTD9 on 03.27.17 at 9:15 am

Aaron – Just move to small/medium town Ontario. Get a job in construction and you’ll make 40-45K or so, and your mortgage will be like 1200.00/month for a nice place. Take the 600.00/month you are saving and buy a brand new Grizzly 700 1.5 years later to soothe your soul on the week ends :).

Even a 125K place is perfectly nice – might need a little work, but that’s a 600.00/month mortgage payment. That is the same cost as I paid for rent on a 2 bedroom in the mid 90’s!

If your financial situation does not have a high likelihood of massively improving – you will lead a subsistence lifestyle if you stay in the GTA.

#129 A Reply to #105 NS Guy on 03.27.17 at 9:35 am

Your last paragraph gave me my first chuckle of the day. (Been there, done that.)

#130 45north on 03.27.17 at 9:45 am

Shawn: from your link: Doyle said house-poor Canadians will cause an unprecedented divergence in economic growth between the Canada and the United States.

family friend just got a transfer from Toronto to San Francisco. Her moving is not going to do anything to boost Toronto

#131 Mini-Trump on 03.27.17 at 10:19 am

I’ve been trying to stay away from political topics lately, but I couldn’t resist sharing this article.

#132 Mandria on 03.27.17 at 10:33 am

There are lots of nice rentals available North of Bloor. Here’s Yonge and St. Clair…great area. $925 for a one bedroom.

#133 Mandria on 03.27.17 at 10:36 am

@Lee #52

Yes I think a lot of the scaremongering about “skyrocketing” rents is realtor BS (or it’s people that will only consider condos at Bay/Front). Renting in Toronto has never been “cheap” but rents absolutely ARE NOT rising in purpose built buildings by 30% per year (they are basically going up a bit more than inflation 3-4%). Real estate industry folks are using these stories to sell condos to unsavvy investors and apparently some scared parents of young people.

#134 not 1st on 03.27.17 at 10:49 am

A balanced, diversified portfolio is not an all-equity portfolio, and netting 6.5% on a multi-year basis is realistic. Try it sometime. — Garth


A direct and honest question; if a balanced diversified portfolio and investing in general is a great wealth generator, then should a person borrow to invest? And I mean large sums. Hundreds of thousands.

Never hear you talk about that.

Leverage means enhanced risk. Inappropriate for many people who worry about portfolio fluctuations, like you. — Garth

#135 Johny Boy on 03.27.17 at 10:50 am

#72 Smoking Man on 03.26.17 at 9:41 pm

Serious question for accounts or Garth.
If I spend more than 180 days outside canada in the usa. Who do I own taxes too?
My account has been on a two week bender. No one knows where he is.
Don’t remain in the United States continuously for more than six months as a visitor. Aggregate time frames in excess of six months do not violate any immigration law, but they might create more CBP scrutiny at the border, requiring the person to prove how he or she qualifies as visitor. For the business visitor, this might require some advance planning and the implementation of record-keeping techniques that easily and credibly explain the number, nature, and duration of prior trips.
The second part of the “180-day rule” relates to U.S. taxes. Too much time in the United States can cause a Canadian visitor to be deemed a resident for U.S. federal income tax purposes, requiring that person to file a U.S. income tax return and report all worldwide income even if there is no earned income in the United States or any other activity that would require a U.S. tax filing. The Internal Revenue Service (IRS) uses a “substantial presence” test to determine if someone is a resident for U.S. federal income tax purposes in a given calendar year. The “substantial presence” test is a mechanical formula based solely on the number of days on which an individual is present in the United States. The formula is applied to make a determination each calendar year. To be classified as a U.S. resident under the substantial presence test for a particular year, an individual must be physically present in the United States on at least 31 days of the current calendar year, and the sum of the following must equal 183 or more days: 1) all days in the United States in the current year, plus 2) one-third of the days in the immediately preceding year, plus 3) one-sixth of the days in the second preceding year.
The general rule of thumb is to keep presence in the United States under 120 days each year. (The designation “resident” for federal income tax purposes has nothing to do with immigration status or actual place of domicile; it just means that the person must file a U.S. resident return and report his or her worldwide income.) Thus, someone who consistently visits the United States for around 180 days a year is going to satisfy the substantial presence test and be deemed a U.S. resident for federal income tax purposes. That isn’t the end of the analysis, however, because there are exceptions, including the “closer connection” and “tie-breaker” rules under the Internal Revenue Code and U.S.-Canada Tax Treaty that may allow the person to avoid being subject to U.S. tax on their worldwide income even if the actual number of days creates substantial presence. Notably, the closer connection exception is only available if the individual is present less than 183 days in the current year. In order to claim the application of one of these exceptions, the individual is required to affirmatively file a tax return or other information statement with the IRS. The closer connection exception is generally preferred because it does not require additional information filings with the IRS as does the treaty exception. Accordingly, most people try to limit their days of physical presence in the United States to 120 days or less per year to avoid any U.S. tax filing obligations or to less than 183 days so that he or she may claim the closer connection exception, if applicable.
Tax rule summary. A person will not be considered a resident for U.S. federal income tax purposes if he or she keeps the number of days in the United States to 120 days or less on a consistent basis. Individuals who do satisfy the substantial presence test may nevertheless still avoid residency status under the closer connection or treaty tie-breaker rules (though they do not avoid U.S. tax filings altogether).

#136 TurnerNation on 03.27.17 at 10:58 am

MF – Y&S I know it..dated a girl there for a while.

And when I said I’m comfortable anywhere from 2 star to 5 star places…have you checked out Congress?
Owners Barry, Angie super friendly. It’s cheap…free pool. …don’t be scared away by super divey appearance ;-)

#137 Shortymac on 03.27.17 at 11:13 am

Bud, get yourself on Bunz home zone and find a room for about 600/month in the junction.

If you don’t want to have roommates, I would suggest looking at:

The bachelor’s are rather spacious and the rent is decent considering you are a 5 min walk from a subway station (kennedy).

It’s where young shortymac lived while she was completing her MBA at Ryerson.

I would also recommend looking at the apartments by glencarin station, along the sheppard subway line, Dufferin-Steeles (short bus ride to finch), the greydon hall apartments (york mills-leslie), etc as well. You could get bachelors and 1 beds for under a 1000 in those areas.

You can barely afford rent, let alone a condo. Trendy neighborhoods are for trust fund kids.

#138 Alex N Calgary on 03.27.17 at 11:31 am

Great writing! fridays was a real treat too, nice job! Here in Calgary the word is that oil and gas maintenance are still busy enough, keeping the existing wells going and pumping (albiet I imagine at lower employment levels, more for less) and they are the smaller and medium companies doing well (as the large ones had too many liabilities? loan to income ratio badddd maybe?) but new wells are still not happening, this isn’t news to you though.

At least the unbriadled arrogance of buy buy buy investment units is over and upgrade more more more isn’t the tip of everyones tongue. It’ll be nice to see actual realtor reports on buy\sell list time as the list prices we see are getting better but not plunge. Looks like the slow melt like you said, always the trick is finding the time to get in, year or two perhaps? Hot damn these things are hard to predict!

I think you’re on fire lately, keep up the great writing!

#139 Contrarian Coyote on 03.27.17 at 11:32 am

#111 Doug t on 03.27.17 at 12:31 am
30k? – don’t listen to anyone who is over 40 – travel, live, explore – plenty of time to become like all of us here – serious, only worried about money/retirement – have some fun and NO regrets – this saving /investing stuff can be kill fun.

Do this. I did the ESL thing in 2003 and “A Year abroad” turned into a decade abroad – totally unplanned and one of the best decisions of my life.

You’re 26, go out and see the world and don’t worry about Real Estate. Put your savings in a balanced portfolio and go teach somewhere in East Asia. You’ll be banking decent money and be able to travel at least every other month. A trip to Beijing, Seoul, or Tokyo is a lot cheaper when you’re in the region that from the GTA.

#140 For those about to flop... on 03.27.17 at 11:42 am

Check out this article hot off the press…


Believe It or Not – the Richest Americans DO Pay Most of the Federal Income Tax

#141 Centre Wing on 03.27.17 at 11:51 am

Geez… I don’t even want a $400k mortgage with a household income of nearly 100k.

#142 A Reply to #122 crowded on 03.27.17 at 11:56 am

Inductive reasoning?

#143 bdwy sktrn on 03.27.17 at 11:57 am

he’s alive!!!!

where u been flop?

#144 JimH on 03.27.17 at 11:59 am

#72 Smoking Man on 03.26.17 at 9:41 pm
“Serious question for accounts or Garth.
If I spend more than 180 days outside canada in the usa. Who do I own taxes too?(sic)”
These folks can give you some professional help on this question;

In the meantime, here’s my two-bits…
The “180 day rule” not withstanding, you will always be 100% safe from taxation worries and free from any unwanted scrutiny by CBP if you keep your visits to less than 120 days each calendar year.

Nevertheless, lots of snowbirds spend their 6-months of winter down here without issue. As a Canadian, if your ‘visit’ extends more than 182 days IN A CALENDAR YEAR, you MIGHT be considered as a normal “resident alien” as far as tax is concerned as must file a regular U.S. tax return.

However, Canadians who have had “substantial presence” do not automatically have to file a regular tax return or pay US taxes, but they have to file a Form 8840 “Closer Connection Exception Statement for Aliens” with the U.S. Internal Revenue Service (IRS). Failure to do this can lead to substantial fines even without taxation.

While the main criteria is 182 days or less in a CALENDAR YEAR, CPB agents can and do sometimes apply a simple test to see if you qualify as having had a “substantial presence” for tax purposes, so if you think the following formula applies to you, DO NOT go out of your way to piss them off! (this is easier to do than you might think)

Canadians who have been in the US for more than 30 days but less than 183 days in a single calendar year might still meet the “substantial presence” criteria as per the following formula:

Begin with the total the number of days visited during the current calendar year; add 1/3 of the days visited in the previous year; add 1/6 of the days visited in the year before that.

If this adds up to more than 182 days, the criteria for a “substantial presence” has been met and you will be required to file Form 8840 with the IRS.

If you know you are going to want to stay in the US longer than usual, then stipulate this at the time you enter the USA. Canadians who qualify for a Visa waiver under rule 8 CFR 212.1(a) can do so at that time.

In the meantime, Smokey, learn how to count or travel under the guidance of a responsible adult.

#145 Bytor the Snow Dog on 03.27.17 at 12:08 pm

I echo what many here are saying Aaron. GTF outta Dodge. You can’t survive on $30k in Toronto.

$30k jobs are a dime a dozen in places that are a lot cheaper.

#146 For those about to flop... on 03.27.17 at 12:08 pm

I might as well put this one up as well from a couple of weeks back showing the handful of U.S states where immigrants out earn U.S born people.

As a couple of people noted ,I took a bit of a break from the blog during Spring break as my wife was off work for a couple of weeks.

Didn’t do anything exciting,just concentrated on my health although after visiting The Garth Turner Travel Agency a few doors down ,we did book a trip to Monterey in a couple of weeks so now I am in a race against time to be fit enough to travel.

I will take a walking stick and hopefully I don’t stick out too much from the grey crutches ,although I don’t imagine Carmel-by-the-sea is a hipster hangout.

Been wrong before though…


#147 For those about to flop... on 03.27.17 at 12:22 pm

Pink Pollen falling in Richmond.

Hey Broadway,wanna do one for old times sake?

These guys paid 685k and the last time I saw after many months on the market they were asking 628k.

Sold a couple of weeks back apparently and most likely crystallized a loss.

Go on,tell me…


6019-5511 Hollybridge Way, Richmond, BC, V7C 4N3

P.S thanks to Freedom,Common and Contrarian Coyote for the nice messages…put a smile back on my face…

#148 A Reply to #138 Flop on 03.27.17 at 12:24 pm

Flop! Where’ve you been?

Are those figures and percentages pre- or post-Trump?

#149 spot on on 03.27.17 at 12:39 pm

‘Its all about cash flow,if all expenses exceed the rent then its no good,end of story.Realtors will say oh there is no more cash flow its all about appreciation.Then tell them its a risky speculation and not an investment.’



#150 Ace Goodheart on 03.27.17 at 12:41 pm

“Aaron” and anyone else like him, does not want to enter this real estate market right now. All of the essential spare parts are setting themselves up for one giant market crash and correction.

Recently, after banks started getting more careful about whom the loaned millions of dollars to, secured against rickety old dilapidated Toronto houses, people found a new way of affording homes.

This method is called “shadow financing” and involves the same kind of subprime lending that collapsed the US housing market.

Basically what is happening now, is people are refinancing their own vastly over valued houses, at low rates, and then using the money to loan out, at higher rates, to people who cannot qualify for a mortgage. They do this through corporations, who sell debt and shares through the same kind of tiered system that led to the US housing collapse (remember securitization? credit default swaps?).

Junk housing mortgage debt is now being funneled through legitimate home equity credit lines, through corporations, and into the stock market and through bonds and bond funds. You probably own some of this junk mortgage debt yourself, if you have an ETF that includes Chartered Bank stock or investment grade corporate debt.

When the junk becomes investment grade debt through financial arbitrage, the system is about to collapse.

It’s over. Best to sell your house now, if you want the millions. I would not suggest buying into this market.

#151 Euro Observer on 03.27.17 at 12:47 pm

#133 Johny Boy on 03.27.17 at 10:50 am

Determination of residency status for tax purposes is based on joined treaties with other countries and nature of the stay.

I can stay over a year in Europe on leisure trip and still be considered Canadian citizen for tax purposes if the country I reside at here does not deem me as resident and if I choose to maintain sufficient ties with Canada.

CRA has questionnaire for that.

#152 Alex B on 03.27.17 at 1:03 pm

– Overbuilt condos?

Condo market currently has the record low inventory…

– Increase by 10% in 3 years?

One bedroom condos increased almost 20% in last 3 months….

#153 Ponzius Pilatus on 03.27.17 at 1:20 pm

#138 For those about to flop… on 03.27.17 at 11:42 am
Check out this article hot off the press…


Believe It or Not – the Richest Americans DO Pay Most of the Federal Income Tax
Makes sense!
Many Americans are living the American Dream working for minimum wage.
Alas, pay little in taxes.
Just back from Phoenix.
Met 3 oldtimers in their late 70s.
All on social assistance and still working.

#154 Kathleen on 03.27.17 at 1:23 pm

I can’t get over how crazy people are to consider buying at such high prices on so little.

I did buy when I was 26 and making $31,500. The full cost of the house was $86,000. But that was 10 years ago and in Hamilton, and I had to deal with some really questionable (but entertaining!) neighbours for a couple of years.

#155 Victor V on 03.27.17 at 1:25 pm

Why Bill Morneau hasn’t ended tax breaks for the wealthy: Walkom

#156 Euro Observer on 03.27.17 at 1:27 pm

We, the Canadian, are stupid, according to the Economic Development Minister Navdeep Bains:

Bains, however, believes the biggest impact on innovation from the budget could come from the feds’ previously announced “global skills strategy.”

The program, set for launch in June, will accelerate the entry of skilled workers into Canada and give high-growth firms faster access to in-demand talent. Its goal is to reduce wait times for visas and work-permit applications from months to just two weeks.

“You can have all the money, you can have all the buildings, but without the people and the creativity and without their skills we really can’t grow the economy,” said Bains, who also pointed to the research chairs as an important change.

“In terms of the target, we want to be as open and as flexible as possible at this stage. If the demand is high, we want to accommodate that demand because we really believe that’s at the core of our economic agenda.”


A friend of mine receive 200 (two hundred) job applications from Canadian new grads for an entry level IT job.

Now they will bring in legally foreigners/aliens for that.

True dope selling Canada.

#157 bdwy sktrn on 03.27.17 at 1:42 pm

#145 For those about to flop..
6 even

#158 Tina on 03.27.17 at 1:48 pm

Aaron, you are 26 and making 30k, don’t consider buying a 400K condo even if your parents are helping you with down payment, you won’t have enough to pay the mortgage and all the other fees associated with living. In fact, you should not even consider renting as you will be throwing away $1800 a month.. I’m going to assume that’s almost as much as you take home! Live with your parents, save up more money and wait until you start making at least 60k before moving out. That’s my genuine advice from a fellow 26 year old. My bf and I pay $2,000 in mortgage on our house each month and we make 160K combined yet we still find it hard to splurge often because our other bills just stack up so fast.

#159 Blobby on 03.27.17 at 1:53 pm

We need the CMHC or banks to start demanding no one borrows more than 3x their pre tax income again…

#160 Jake Baxter on 03.27.17 at 1:55 pm

Just bought a 2 weeks ago long term 30 year strip bonds at 3.65% to 3.70% and they are already up 7% to 7.5% in market value.

Interest rates are going down again today and they continue to go down.

#161 Vit on 03.27.17 at 2:14 pm

If I were you I would not listen to any above but buy a semidetached bungalow $600000 in east Mississauga area
rent a upper floor $1800 and use walkout basement for your self . You will pay another $900 to cover mortgage and prop. tax . Much better deal then condo . Go to mortgage broker for a mortgage if you have a good credit score they will create an extra part time job for you ( on a paper) and mortgage is yours …

#162 For those about to flop... on 03.27.17 at 2:16 pm

#155 bdwy sktrn on 03.27.17 at 1:42 pm
#145 For those about to flop..
6 even


Wow! That low?

Just so everyone is clear on this,these people bought a condo in Richmond a year ago and just took a 85k plus expenses hit if the numbers hold.

Bought 685k
Sold 600k

The amazing thing about some of these sales that I have found is that they are in the condo market that we are constantly told is still on fire ,not some Westside mansion where the average sales price is down by 50%.

The could have just gone to the River Rock Casino and lost 100k instead.

Cabbage Patch Clark and Bob Rennie are gonna be pissed that I’m back on the blog ,but they can’t have it their own way all the time…


#163 rainclouds on 03.27.17 at 2:17 pm

Aaron you blew it…………

Waay better shape than the Pictou building Gatho profiled a few yrs ago (which I drove by and is still for sale as of last summer)

#164 Victoria D. on 03.27.17 at 2:19 pm

And what if prices increase ‘miraculously’ much more than 10% in three years (I bet they will)? What if rents increase likewise?

#165 Victoria D. on 03.27.17 at 2:34 pm

at #95 KYC
Those are not real sale prices – all those properties will sell for way more than their asking prices.

#166 Grey Dog on 03.27.17 at 3:20 pm

Really Blog Dog Meetup with dogs in Belfountain May 13? What time?

Free sprinkles at 2 pm. — Garth

#167 crowdedelevatorfartz on 03.27.17 at 3:22 pm

@#144 Flop
” don’t imagine Carmel-by-the-sea is a hipster hangout…..”

A beautiful little town. Even the gas stations are nice to look at.
Go to the Hogs Breath Inn. You might see Clint at the bar………….,d.cGc

#168 common sense on 03.27.17 at 3:23 pm

Welcome home Flop!

Now where has Mark been lately?

#169 Jane Pascal on 03.27.17 at 3:30 pm

Jake Baxter, I know what you mean. I bought back in 2013 some longer term zero coupon bonds at 4.25% to 4.3%.

They are up total 50.1945% in 4 years which is 12.5486% per year.

This is not the environment in which to buy strips. — Garth

#170 A Reply to #158 Jake Baxter on 03.27.17 at 3:37 pm

Strip bonds have a duration equal to their maturity, making them highly sensitive to interest-rate changes, and highly risky in a low-interest-rate environment.

#171 SilverSon on 03.27.17 at 3:47 pm

People need to stop thinking that making money on their home is an entitlement. As this post clearly points out, the mathematics involved here is not that complicated. In the explanation offered to Aaron, note that the real estate agents would earn 3 times what Aaron would earn if he was lucky enough to experience a 10% increase in value. Furthermore the real estate agents make almost the same if Aaron sucks $70k in losses as a result of a 10% decrease in value (and Aaron would be paying that). It takes no time (and no particular talent) to sell a house in the current market, plus real estate agents are not the ones laying out the cash or taking the risk on the investment. On average they are getting paid about $1000/hour for very mediocre service by the chumps foolish enough to buy a residential property in this market. Anyone who thinks the seller pays the real estate commissions should think again and follow the money. Buyer pays everything and all the seller does is collect (along with his/her real estate agent). If there was no buyer the real estate agent would get NOTHING so clearly the commissions are paid by the buyer.

#172 Londoner on 03.27.17 at 3:55 pm

#37 MF

Mr. MF! I didn’t think I would ever reply to another one of your posts. A few of us tried telling you what the central banks would do but you chose not to believe it. Anyways, regarding your situation:

1. Stop feeling sorry for youself
2. If you don’t trust the markets then stop looking at them but don’t stop investing
3. Try and find ways to increase your income (moving companies, countries or self-employ, etc.)
4. Do what ever it takes to (legally) reduce your tax liabilities
5. Don’t blindy accept what you read or what others tell you – investigate and reach your own conclusions.

There’s a few commenters that speak from experience. You’ve been here long enough to know who they are. Good luck!

#173 Chris Hanson on 03.27.17 at 3:55 pm

To Reply to #158 Jake Baxter

I was told this many times. I went against my own advisor’s opinion back in 2010. He told me not to buy 4.90% 30 year strip bonds. He said interest rates were low and have to rise.

7 years later, interest rates are 46% lower and we have negative interest rates in Europe, Japan plus very low bond yields 1.0% to 1.5% 30 year rates in Europe, Japan.

When BREXIT happened last summer,2016, Canada 30 year bonds were as low as 1.55% which we are at 2.28% today. Interest rates have leveled off or will go lower soon.

My strip bonds have almost doubled in 7 years, up 95.75%.

#174 Freedom Bird on 03.27.17 at 4:00 pm

#45 jss
Try telling a woman that you rent.
One did. Almost two decades later best ROI ever.

#175 Freedom Bird on 03.27.17 at 4:10 pm

Assuming JSS is male.
BTW the hubby said he’s met many men who have their name to a home/ condo, car etc and swimming in debt. Others who are renting temp and (very) financially secure.
I think that’s a point this blog tries to make?

#176 re: #120 on 03.27.17 at 4:10 pm


don’t you know that this is good for our generation? it’s a huge struggle to get a (decent) job in this economy, and if you move out of the city, even harder. minimum wage retail/service jobs have been in high demand on queen west for years with many young ppl selling drugs to supplement their income to pay their rent and still live

even with higher ed, you’re lucky to find any job these days.

it’s bizarre to me how he gets slammed for making 30k on here. is everyone making 90k in toronto. i should move to toronto.

#177 Alice on 03.27.17 at 4:21 pm

Such a dumb move to exhaust your budget for this market. In the event of a correction, many young people will hold onto their toxic asset because they won’t accept the loss.

#178 Blacksheep on 03.27.17 at 4:23 pm

Flop 160,

“6 even”


“Wow! That low?”

“Just so everyone is clear on this, these people bought a condo in Richmond a year ago and just took a 85k plus expenses hit if the numbers hold.

Bought 685k
Sold 600k”
This seems like a real, documented loss.

This is all I ever suggested.

I of course, have my bias, but also need to hear the truth.

Good job Flop.

#179 Alice on 03.27.17 at 4:27 pm

@ #72 Smoking Man on 03.26.17 at 9:41 pm

If you earn your income outside of Canada, spend more than 180 days outside of the country, and the income is not from a Canadian company – you likely don’t owe any Canadian taxes on the income. Any of those aren’t true, and the regular rules apply.

You might owe tax money in another country however, depending on your residency, and citizenship. So check with your accountant if you plan on actually doing it, but it’s one of the bigger “loopholes/conveniences” of being Canadian. In the US, you can’t do that.

#180 Blobby on 03.27.17 at 4:35 pm

@174: he’s not “getting slammed” for only making 30k

But only making 30k, and wanting to buy a 400k property.. that’s nuts!

#181 april on 03.27.17 at 4:38 pm

#118 – You sound like a realtor or someone with skin in the game. When ones lives in a house one doesn’t usually hear their neighbours tv, stereo, talking, , banging around etc, behind the walls and above and below. Most people would never buy a condo if they could afford a house.

#182 Graham Rowlands on 03.27.17 at 4:43 pm

Interesting analysis but I think some very important information was skipped over:

1) How much will Aaron’s parents help him out on the mortgage? Your 10% down analysis assumes nothing from them. Also is this a loan or gift?

2) How can he qualify for a loan based on 30k salary unless his parents are on title or that downpayment is substantial?

3) Why would the person even consider renting something that high with that salary?

4) There is currently an issue with landlords jacking rent up by huge amounts because new condos are not rent controlled. So there is much risk as a renter to go into one of these. The financial analysis assumes no increase.

5) 10% increase is very conservative given recent year results. That works out to less than 3% per year when compounded annually.

6) Aaron can always rent his condo out and doesn’t have to sell later on. Holding for just 3 years is a bad financial plan from the beginning.

7) If the value has gone down that means whatever Aaron is moving up to has also gone down.

8) $3000 in legal fees assumes another purchase and only the sell legal costs should be included.

#183 Jack Manning on 03.27.17 at 4:53 pm

Talking about strip bonds, my investment coach bought a bunch of them back in 2000 for my RRSP’s.

They are all more than tripled by now. My $178,000 in RRSP’s are now worth $544,662.

I don’t see how we can get back to 6.4% to 6.6% longer term strip bond yields.

#184 For those about to flop... on 03.27.17 at 5:13 pm

Hey Blackie,remember what I told you before?

I can only report in real time if Broadway helps me out.

I have 20/25 recent sales in my Pink Snow/Pollen folder that I will have to wait months for the paperwork to be done on and entered into the database.

What happened to these guys below?

I don’t know ,but I suspect like a lot of my Pink Pollen cases they probably got out plus or minus 7%

I didn’t look for any fresh meat for two weeks and last night within 5 minutes I was up to my waist in Pink Pollen,it is everywhere if you just look…

I will try to help people out but I have limited means…


5398 Springdale Court, Burnaby sold or removed by late March

Bought 1.71
Sold ?
Asking 1.69

Nov 10:$1,849,900
Mar 4: $1,699,900
Change: – 150000.00 -8%,%20Burnaby&ptype_house=1&max_price=1300000&min_price=800000&filter=1

#185 jess on 03.27.17 at 5:15 pm

“ask the four M’s: What would your mother, your mentor, the media and—if you’re inclined—your maker think?
would we get away with it ? or is it the right thing to do?

on-call ethicist to change culture

Who’s Trying Now to Save Citigroup’s Soul?
By Richard Bowen: March 27, 2017

In the U.S., Kane argues, the Dunning–Kruger effect — a cognitive bias named for two Cornell researchers in which people can’t recognize their own weaknesses — compounds the problem. If you don’t recognize your inability to make sense of things using an ethical code, for example, then how can you overcome the shortcoming?

#186 Deal with it folks! on 03.27.17 at 5:19 pm

Hello Garth, Minister Sousa apparently announced that the spring budget may include some efforts to cool housing in GTA/Hamilton. Much appreciated if you would speculate a bit as to what those efforts may be? in the next blog? cheers!

#187 Victor V on 03.27.17 at 5:28 pm

Housing affordability measures will be in spring budget: Ontario Finance Minister

Ontario Finance Minister Charles Sousa confirmed Monday he plans to include housing affordability measures in his upcoming budget.

Premier Kathleen Wynne has said her government is working on a “comprehensive set of plans,” to deal with rising home prices in the Greater Toronto and Hamilton Area (GTHA), as well as rising rental rates.

Sousa said he’d like to include those plans in the spring budget.

#188 jess on 03.27.17 at 5:45 pm

“Greater financial transparency has the potential to simultaneously curtail every transnational crime in every part of the world.

Transnational Crime is a $1.6 trillion to $2.2 trillion Annual “Business”, Finds New GFI Report

March 27, 2017

Counterfeiting $923 billion to $1.13 trillion
Drug Trafficking $426 billion to $652 billion
Illegal Logging $52 billion to $157 billion
Human Trafficking $150.2 billion
Illegal Mining $12 billion to $48 billion
IUU Fishing $15.5 billion to $36.4 billion
Illegal Wildlife Trade $5 billion to $23 billion
Crude Oil Theft $5.2 billion to $11.9 billion
Small Arms & Light Weapons Trafficking $1.7 billion to $3.5 billion
Organ Trafficking $840 million to $1.7 billion

#189 rainclouds on 03.27.17 at 5:54 pm

So the meme in the media and politicians now is “we need more housing to solve the crisis”

Apparently 1m shacks are normal and using readily available methodologies to reduce prices is unpalatable.

We are screwed…….

#190 A fellow millennial on 03.27.17 at 5:58 pm

My husband and I just bought our first home for $486k in outskirts of GTA 1 year ago. We have a household income of $130k and we put 20% down.
This is comfortable for us. We don’t want to push it incase anything happens – you need a buffer of savings.

So with $30k salary I would stick to renting cheap. Find a roommate.

#191 Guy in Calgary on 03.27.17 at 6:06 pm

Have made 3 offers on properties in Calgary and all have ended up going over asking with multiple offers. Interesting considering we assume this is a down market.

#192 jess on 03.27.17 at 6:07 pm

Ponzius Pilatus on 03.27.17 at 1:20 pm

maybe you should read all 52 pages

The findings should open one’s eyes
This analysis shows the power of the new transparency data in revealing the scale of this problem. The data disclosed by the banks is far from perfect and further improvements need to be made, but this level of data availability is already a game-changer demonstrating concrete terms just how widespread tax abuse is.

…” In Europe, only one sector is required to publicly report its profits and tax on a country-by-country basis – the banking sector, as a result of regulation following the fi nancial crisis. Since 2015
all banks based in the European Union have been obliged to report on their operations in this way. This report showcases research by Oxfam that uses this new transparency data in depth for the first time to illustrate the extent to which the top 20 EU banks are using tax havens, and in which ways. Corporations, including banks, have for a long time been articially shifting their profit to countries with very low, or zero, corporate tax rates. This accounting trick, used to avoid paying tax, is widespread and is evidenced by corporations registering very low profits or even losses in countries that have fairer corporate tax rates.”…

A large proportion of these profi ts is made despite the banks not employing a single person in the countries concerned. Overall, at least €628m of the European banks’ profi ts were made in countries where they employ nobody 6.
Fifty-nine percent of the EU banks’ US subsidiaries were domiciled in Delaware and 42 per cent of those subsidiaries for which an address could be found were located at the exact same address7, a building famous for being the legal address of more than 285,000 companies. Low levels of profit in countries that are not tax havens translate into low tax revenues for those countries’ governments. For instance, Indonesia and Monaco have a similar level of economic activity by European banks, but the banks make 10 times more profit in Monaco than they do in Indonesia8. Such gaps, which can hardly be explained on the basis of ‘real’ economic activity, lead to the loss of vital tax revenues to fight inequality and poverty to countries like Indonesia, where 28 million people live in extreme poverty.

#193 Kris on 03.27.17 at 6:09 pm

This is an absolutely insane time to buy in Vancouver or the GTA. I can’t see who would buy now, and who the hell has the money frankly!

Having said that, this blog has been saying the same thing for what, 7-8 years now..? In these few years, anybody who sat out the real-estate market has seen lifetime opportunities pass them by. (Unless Garth thinks prices are returning to 2008 or even 2010 levels.. I’d like to see that in writing)

Garth’s analysis is good, on the hidden costs of real estate, family indebtedness and so on. But… any economic analysis is only as valid as the factors it considers. There’s one factor that Garth (and others who say “Toronto is no NYC”) didn’t see.. Thus, they got totally blind-sided by the runaway real-estate train of the recent years.

To say all this is due to a feeding frenzy is a tad naive and simplistic.. Sounds like a ‘cop out’ to point fingers at others, to take the onus off one’s own incomplete economic analysis, no?

#194 Alice on 03.27.17 at 6:23 pm

@Garth first off, love the blog.

Have you ever thought of adding reply buttons to the comments? That way you commenters would get a notification when they get a reply.

(no need to publish this comment, just curious).

#195 ML on 03.29.17 at 1:45 pm

1. Looking forward to your shoppe reopening

2. other costs condo owners should consider:

– most new condos are metered, 600 sq feet unit hydro costs are approx $50 per month.

– insurance on the unit as homeowner, for a high deductible-low pay out policy, approx $70 bucks per month.

– everyone who watches HGTV knows that renos/repairs/updates are needed, setting aside at least 1% for for repairs and 2% for renos in future if you want to keep your place on trend and Pin-worthy

Plus there’s a price for limited risk. With renting, there’s no price-fluctuation and no over-consuming risk.

Forget the price-downside.

If a tenant gets laid off, most can tell his/her landlord who will run screaming for the hills and allow them to exit the least early. If you get fired as a homeowner and miss mortgages, lenders will power of sale & destroy creditworthiness of homeowner & then pursue you for shortfalls (if any).