A buyer’s guide

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  By Guest Blogger Sinan Terzioglu
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It has never been a riskier time to be a first time home buyer in Canada. Valuations such as price to median income and price to local average rent makes cities like Toronto and Vancouver rank as some of the most expensive cities in the world for real estate affordability. At this stage of the interest rate cycle first time buyers are taking on significant valuation risk so every buyer, not just first time buyers, should be stress testing their financial lives to ensure they can absorb a potential real estate price decline of 20%+.

Since 2000 Canadian real estate has appreciated by a compounded average annual rate of approximately 7% which far exceeded the average annual rate of inflation during that period. The price appreciation over the last few decades is not sustainable so going forward expectations for real estate price appreciation should be a lot lower. Two decades ago it took approximately 5 years for the average Canadian household saving 10% of their household income to save up enough for a 20% down payment on an average price home in Canada. Now it takes over 15 years for the average Canadian household saving 10% of the average household income to save up enough for a 20% down payment.

While some will argue that the fundamentals for Canadian real estate are very strong with immigration and a robust economy the real risk is a change in sentiment and valuation with interest rates rising. All assets move in cycles and real estate prices have already dropped by double-digits since their February peak and can easily drop further. Those stretching to purchase can easily see their down payment equity drop significantly, so this is not the time for new buyers to put a significant portion of their assets in Canadian residential real estate. Losing $200,000+ in equity can have a significant impact on long term finances. Those that are able to be patient and hold off from stretching to purchase real estate and instead focus on maximizing tax advantaged accounts and prioritize building a long term balanced and diversified investment plan will be in a much stronger financial position over the long run.

Rule of 90

Garth’s rule of 90 is a good way to measure if you are in a strong position to purchase real estate. The rule implies that a 30 year old should have no more than 60% (90-30) of his/her total assets in real estate equity. For example, let’s assume a couple, both 30 years old, have total assets of $150,000. The rule indicates that they should have no more than $90,000 in real estate equity. Assuming this couple wants to put 20% down that would mean a purchase price of no more than $450,000 which won’t get much in a city like Toronto therefore it would be best for this couple to continue saving and hold off from purchasing real estate for the time being.

Tax-Free First Home Buyers Savings Account (FHSA)

The FHSA is expected to be implemented in 2023. To be eligible you must be at least 18 years old, a Canadian resident and not have owned a home in the preceding four calendar years. The yearly contribution limit is $8,000 and like RRSP contributions,  tax deductible. The lifetime limit is $40,000 but unused room cannot be carried forward. So if you don’t contribute $8,000 in 2023 you would not be able to contribute $16,000 in 2024. FHSAs can stay open for 15 years and funds grow tax free. Just like TFSAs and RRSPs you can invest in a variety of fixed income and growth assets in FHSAs.

When funds are withdrawn from a FHSA and used to purchase real estate there would be no tax implications so the account combines the best of RRSPs and TFSAs. If the withdrawn funds are not used to purchase real estate the withdrawal would be taxed as income but another advantage of the FHSA is you can defer taxes by transferring the funds to your RRSP even if you do not have available RRSP contribution room. However, it would not count as a new RRSP contribution so there wouldn’t be an additional tax deduction. If you are over 71 then you will be able to transfer the FHSA to your RRIF.  So for those that are not even planning to purchase real estate or are unsure if they ever will opening and contributing to a FHSA still makes a lot of sense for building up additional retirement savings while giving you the optionality to use the funds to purchase real estate at some point.

Home Buyer’s Plan vs Tax-Free First Home Buyers Savings Account

The HBP allows withdrawals of $35,000 from your RRSP tax-free but you must repay the amount over 15 years (a minimum of 1/15th per year). Funds withdrawn from the FHSA do not have to be paid back.  You cannot use the both the HBP and the FHSA when purchasing a home. Both plans have pros and cons but for those that are planning to purchase a home in the next couple of years the HBP will likely be more beneficial but for those planning to purchase in 5 or more years I recommend going with the FHSA because you get the benefits of both a TFSA and a FHSA as well as the flexibility to transfer funds from a RRSP to a FHSA at any time.  For those with defined contribution RRSP plans this would allow them to transfer from their RRSPs to their FHSAs and give them more options.

Holding Your Mortgage In Your RRSP

A little known strategy is the CRA allows homeowners, as well as real estate investors, to hold mortgages in their self-directed RRSPs. So instead of borrowing from and making interest payments to a bank property owners can borrow from their own RRSPs and pay interest to themselves which do not count as RRSP contributions. The strategy sounds appealing especially as interest rates rise but I don’t recommend this for most home buyers for the following reasons:

  1. Not many financial institutions allow this strategy and the ones that do are trust companies and smaller banks. To qualify borrowers would still have to go through the same approval processes as they would with a regular mortgage so income verifications, appraisals, etc.
  2. Set up costs, time to set up and ongoing annual fees can be significant.
  3. The interest rate will be higher because it will be the posted rate and not the discounted rate most of us would get by getting a conventional mortgage.
  4. For most people, especially first time buyers, the mortgage amount will be a significant portion of their overall portfolio so their total assets would be out of balance and not optimally diversified.

The strategy can make sense for some people in certain circumstances because property owners don’t have to hold the entire mortgage in their RRSP – a portion can be held in their RRSP and the balance held as regular mortgage with a bank.  The CRA allows commercial property mortgages and rental property mortgages to be held in self-directed RRSPs so for investors collecting rental income the interest they pay is tax deductible on their personal tax return.  Also, if the interest rate on the investment property is higher than the interest rate on a primary residential property that would result in higher interest payments to an RRSP and higher tax deductions personally.

Develop a Long Term Plan

Needless to say for those that don’t own property it has been disheartening to see real estate prices get out of reach and fear that you will never be able to purchase real estate but, as Garth says, you can always rent a roof over your head but you cannot rent cash flow. It’s very important to ensure you develop a long term plan when thinking about purchasing real estate to ensure you are not stretching yourself too thin. By utilizing savings plans such as the FHSA patient first time buyers can put themselves in a position of strength and at some point in the future be in a much better position to purchase real estate and not negatively impact their long term savings plan.

Sinan Terzioglu, CFA, CIM, is a financial advisor with Turner Investments, Private Client Group, Raymond James Ltd.  He served as vice-president of RBC Capital markets in New York City and VP with Credit Suisse in Toronto.

 

106 comments ↓

#1 Big Bucks on 06.16.22 at 3:46 pm

What a steaming load! Bitcoin is approaching a huge bounce.

#2 TurnerNation on 06.16.22 at 3:49 pm

Supply Chain/Food Supply. Cut off during War-time.
I’ve maintained we were plunged into global WW3 that fateful week March 2020. By design.
Say we back to normal, yet?

Just another day in the Former First World Countries.

https://www.railwayage.com/regulatory/nmb-starts-clock-toward-rail-shutdown/

The National Mediation Board (NMB) on June 14 set in motion a ticking time bomb toward an economy-jolting national railroad shutdown within 90 days, its two Democratic members agreeing with rail labor—and over the remonstrance of carriers and the NMB’s lone Republican—that a voluntary agreement to amend unionized rail worker wages, benefits and work rules is not within reach.

Negotiations, dating to January 2020, involve 12 rail craft unions (bargaining in two coalitions collectively representing some 115,000 rail workers), most Class I freight railroads and many smaller ones. Management is represented by the National Carriers Conference Committee (NCCC). CSX is negotiating separately with two unions, representing train and engine workers, over wages and work rules (not benefits). Canadian Pacific negotiates separately with all its U.S. unions.

#3 Elon Fanboy on 06.16.22 at 3:52 pm

Suspect this is happening all over the place now. Q1 buyers now trying to back out of deals.

https://www.reddit.com/r/PersonalFinanceCanada/comments/vdp1vd/anyone_else_who_sold_this_year_at_the_high/?utm_source=share&utm_medium=ios_app&utm_name=iossmf

#4 The Original Jake on 06.16.22 at 3:59 pm

My DOW target is almost here… 29.5k to complete the triple bear. Media will make a splash with the news. It will likely overshoot as always so maybe another 5% off on top of that before we bottom and slowly trend sideways to up.

Real estate, however, will continue to bleed for years as rates go higher and turn the property bulls on their heels… or hoofs.

#5 Caffeine Monkey on 06.16.22 at 4:02 pm

If you think about it, personal finances are extremely simple. The guidelines Sinan laid out are brief and easy to understand.

However, human beings are a bunch of irrational, emotional savages who are often incapable of regulating themselves. We as a species have failed the marshmellow test, which is why we buy crypto and watch HGTV all day long.

#6 ElGatoNeroYVR on 06.16.22 at 4:06 pm

Now it takes over 15 years for the average Canadian household saving 10% of the average household income to save up enough for a 20% down payment.
============
I don’t see the issue here. 25-40 Save for downpayment .40-65 pay off the mortgage .65 Retire. Marry someone compatible ,with same life goals, Stay married and keep to the plan ,don’t ever get a HELOC ,for any reason…oh yeah and never confuse entertainment media for reality.
That is IMHO what should be taught in schools ,more of the financial literacy, afterll even even artists need to eat,live somewhere and manage their budget.

#7 Stone on 06.16.22 at 4:08 pm

For those with defined contribution RRSP plans this would allow them to transfer from their RRSPs to their FHSAs and give them more options.

———

Is that tax-free contribution from the RRSP to the FHSA or do you have to pay tax on the transfer of funds between the two plans?

#8 The Northern Pikes on 06.16.22 at 4:12 pm

How is this Canadian Treasure and absolutely flawless song only at 250,000 views?

Let’s post this on our social, push this over 1M…minimum!
Just the guitar deserves it. …and the sharp lyrics?

https://www.youtube.com/watch?v=7FnrC0JPEAI

The things I do for money, I’ll never understand
I used to be quite critical but now I find I’m cynical
A lady with a starving baby miles away from me
No problems there, just life and death
What the hell is wrong with me
And everybody else

No questions asked
Just get receipts and write them off
Expenses – taxes are a bitch these days
Yet the lady and the baby starve
Waiting for a contribution in a UNICEF box
In a drugstore in this ugly little town

The things I do for money
I’ll never understand
The world is just a marble
In the palm of my hand
The palm of my hand
The palm of my hand
The things I do for money
I’ll never understand
The world is just a marble
In the palm of my hand

The things I waste my time on, I’ll never understand
I used to be quite practical but now I find I’m tactical
I scrape and scheme and struggle hard
To get myself ahead
Have no concern for anyone but me

The things I do for money
I’ll never understand
The world is just a marble
In the palm of my hand
The palm of my hand
The palm of my hand
The palm of my hand
The palm of my hand
(instrumental)

The things I do for money
I’ll never understand
The world is just a marble
In the palm of my hand

#9 Andrewski on 06.16.22 at 4:16 pm

Interesting findings from Cullen’s most recent report:

https://financialpost.com/news/economy/vancouvers-housing-crisis-wasnt-caused-by-dirty-money-probe-finds

https://cullencommission.ca/com-rep/

#10 Faron on 06.16.22 at 4:25 pm

#211 Re-Cowtown on 06.16.22 at 3:20 pm
#203 LSC on 06.16.22 at 2:21 pm

It’s revenue neutral. There are no proceeds to dedicate to other programs. All funds are returned to taxpayers. Additional amounts to people in the north and in colder climates.

Pain at the pump acts as a disincentive and thus the tax has strong impacts on consumer demand and thus emissions. Has it solved the problempire? No, the tax is too small and fuel demand is too inelastic.

the Government of Canada uses approximately 90 per cent of fuel charge proceeds to directly support families through Climate Action Incentive payments, delivered through annual tax returns

Read further to see where the remaining 10% goes.

#11 yvr_lurker on 06.16.22 at 4:41 pm

#215 6.16.22 at 3:58pm

Give it up. There is no correlation in BC between money laundering and house prices. My interest in this ends there. – Garth
————————

I don’t mean any disrespect, but I certainly hope that the Gov’t in BC doesn’t share your sentiment that the “interest” in this multi-year report ends only with the Cullen’s conclusion that there is no correlation between money laundering and OVERALL housing price increases.

Most importantly, there are 40+ other recommendations that should be implemented to curtail money laundering in the real estate sector. Thankfully, Horgan and his gang are in power and will implement many of these. If Falcon was in power, the report (costing taxpayers significant $$$) would be filed into the bin and trivialized.

I put down my sword….but the report is not some “strawman”.

#12 Sail Away on 06.16.22 at 4:45 pm

You can bet your bottom dollar that all eligible Sail Away dynasty Cdn youths will be signing onto the FHSA at first opportunity. Should be six of them at age of majority next year.

Support the kids early, support them often. Build their credit, build their stability.

#13 Ballingsford on 06.16.22 at 4:49 pm

Quite a few newly built homes in the south Ottawa area that were put up for sale around possession time over the last month aren’t moving.

Investors missed the prime Greater Fool timing by a couple of months and won’t get what they are asking.

About a third or more of the new homes here are investor owned.

#14 Dishonest Realtor Carjacker on 06.16.22 at 4:51 pm

Sinan, every time you guys tell people now is not the time to buy I have to spend even more nights working on my side hustle to pay my Audi lease. I haven’t had a full night’s sleep in weeks.

Please be more considerate.

#15 wallflower on 06.16.22 at 4:53 pm

Super strategies but if this market is going down down down like I foresee, they won’t be so integrally important within 5 years.

And regarding the immigration theme (or is it a meme)… what our country fails to do is track/share metrics on the reality. Permanent residents are leaving for more housing affordable terrain. The numbers of emigrating immigrants grows. (For a set of years leading up to 2020, two to one ratio – for every new Canadian or PR emigrant, 1 born Canadian, meaning more immigrants emigrating than born Canadians, meaning, they are not staying so long.)
Ask a simple question, why do we have to continually ratchet up the gross numbers of target immigrants per year? Is it because retention rates are falling?
How many ‘immigrants’ reside full-time in Canada?
Canada does not track these metrics.

Finally, pandemic tactics combined with growing programs like TFW, ensured that the people ‘admitted’ to Canada were already living here. No net new housing required.
Ask a simple question, if born Canadians are struggling to afford housing, how do TFWs do so?

#16 No Usury on 06.16.22 at 4:53 pm

But the banks had no problem issuing debt at these levels. Is this not a form of economic terrorism. Otherwise known as predatory lending.

Everybody hating on little Justin but cant name the CEO of the Royal Bank of Canada.

These bank CEOs should receive a bit of the Fallujah treatment.

Silly. Nobody forced anyone to borrow. – Garth

#17 crowdedelevatorfartz on 06.16.22 at 4:56 pm

Great info Sinan
The FHSA and the RRSP “mortgage” is also interesting.

Does Raymond James touch that RRSP mortgage with a barge pole or avoid it like the plague?

#18 Ballingsford on 06.16.22 at 5:07 pm

#14 Dishonest Realtor Carjacker on 06.16.22 at 4:51 pm
Sinan, every time you guys tell people now is not the time to buy I have to spend even more nights working on my side hustle to pay my Audi lease. I haven’t had a full night’s sleep in weeks.

Please be more considerate.

*****
Trade it in for a KIA. You’ll sleep better.

#19 Dr V on 06.16.22 at 5:14 pm

Rule of 90. Hmmmm.

couple 40 years old. So 50% in RE equity.

$800k house. No mortgage. $200k savings/investments

Result – 80%. Grade = fail

Same Couple:

$800k house. but $300k mortgage, meaning $500k
savings and investments.

Result – 50%. Grade = Pass.

So you would recommend borrowing to invest for the former situation?

#20 unbalanced on 06.16.22 at 5:15 pm

#196. Sail away. Real classy statement. Pick on someone’s figure. I wish and pray you really would sail away.
.

#21 Dr V on 06.16.22 at 5:31 pm

“property owners can borrow from their own RRSPs and pay interest to themselves which do not count as RRSP contributions. The strategy sounds appealing especially as interest rates rise but I don’t recommend this for most home buyers for the following reasons:……..

….The interest rate will be higher because it will be the posted rate and not the discounted rate most of us would get by getting a conventional mortgage.

Couple of points here Sinan:

Is there not an acceptable range permitted for the interest?

And would not the preferred rate be at the low end of that range?

That may sound counter-intuitive, but the RRSP mortgage is paid back with after-tax dollars. That money then is then re-invested. So say at a rate of 4% the payment is $1200, and at a higher rate $1500.

Assuming you have the room, you could add $300 pre-tax to the lower payment.

I think a lot of things have to line up to make the RRSP mortgage work, but the higher interest environment may be one element.

#22 crowdedelevatorfartz on 06.16.22 at 5:31 pm

@#16 No Usury
“Everybody hating on little Justin but cant name the CEO of the Royal Bank of Canada.”

+++
When the CEO of RBC posts a trillion dollar Debt…..
Then we’ll remember his name.

#23 Sinan Terzioglu on 06.16.22 at 5:39 pm

#7 Stone – Is that tax-free contribution from the RRSP to the FHSA or do you have to pay tax on the transfer of funds between the two plans?

The transfer from an RRSP to a FHSA will be tax free. When the funds are withdrawn from the FHSA they must be used to purchase real estate otherwise the withdrawal would be taxed – Sinan

#24 -=withwings=- on 06.16.22 at 5:40 pm

She ain’t pretty, she just looks that way.

#25 CJ on 06.16.22 at 5:46 pm

DELETED

#26 J on 06.16.22 at 5:59 pm

I do my best to use solid data and analysis when making decisions, especially financial ones. Here is some interesting analysis: “Those who buy stocks the day the S&P 500 enters a bear market have made an average of 22.7% in 12 months”. Gulp, time to ignore emotions and put my money where my mouth is…

https://www.marketwatch.com/story/those-who-buy-stocks-the-day-after-the-s-p-500-enters-a-bear-market-have-made-an-average-of-22-7-in-12-months-11655224023

#27 tkid on 06.16.22 at 6:02 pm

If you hit youtube with a “Toronto real estate” search some fun videos pop up. The funnest:

Home Sales Drop Nearly 50% In Vaughan, Richmond Hill & Markham – June 8
https://www.youtube.com/watch?v=mwBKdR7p6qE

By funnest I mean the most hair-raising.

A 50% drop in sales?!?!?! Is everything crashing this week?

#28 Reality is stark on 06.16.22 at 6:05 pm

How about my rule?
Find out what the place was worth Feb/22 and multiply by .5, that is your offer. That is what the house is worth.
Is this so difficult to understand?
For years I have tried to tell people that selling houses to one another does not constitute economic growth. An economy grows on the strength of it’s productive assets.
Your government will print money and tell you how wonderful they are but the true test of good governance is how well they control costs.
T2 and his father never gave a rat’s ass about controlling costs so we end up in the same soup again.
The whole thing was a house of cards.

#29 Rent4life on 06.16.22 at 6:05 pm

You can always rent a roof, as long as someone is willing to rent one to you!

After you get booted around a couple times and struggle to find a home for your kid and your pup, you’ll find that the optional aspect of renting is really just something investment people sell to single folks who’s only expenses are rent and video games.

So find a purpose-built rental. – Garth

#30 the jaguar on 06.16.22 at 6:22 pm

A wonderful recap of intelligent strategies from Sinan.
Any restrictions on HBP? Age, previous home owner, etc.?

As an aside to Old Boot….can you explain the Q?
I have the rest of the letters figured out but not that one. It seems complicated…

As an aside to Sail Away….a caboose is a caboose and cannot be denied when it’s on the loose.

#31 Sinan Terzioglu on 06.16.22 at 6:26 pm

#19 Dr V – Thank you for the question. I generally do not recommend borrowing to invest for most but for some in certain circumstances such as this scenario it can make sense but only if the couple is prepared to invest for the long term and understand that the strategy may come under pressure at times such as the last few months. When borrowing to invest in a non-registered account an advantage you would be able to deduct the interest expense for tax purposes – Sinan

#32 Truth or Consequences on 06.16.22 at 6:31 pm

#24
She ain’t pretty, she just looks that way.

She’s a three dressed up as a nine…

#33 Stone on 06.16.22 at 6:33 pm

#23 Sinan Terzioglu on 06.16.22 at 5:39 pm
#7 Stone – Is that tax-free contribution from the RRSP to the FHSA or do you have to pay tax on the transfer of funds between the two plans?

The transfer from an RRSP to a FHSA will be tax free. When the funds are withdrawn from the FHSA they must be used to purchase real estate otherwise the withdrawal would be taxed – Sinan

———

Thank you, Sinan.

#34 Sail Away on 06.16.22 at 6:36 pm

#30 the jaguar on 06.16.22 at 6:22 pm

As an aside to Sail Away….a caboose is a caboose and cannot be denied when it’s on the loose.

——-

What’s good for the gander is good for the goose.

We can deduce that a caboose on the loose gives magical finances their juice.

#35 Mattl on 06.16.22 at 6:36 pm

So find a purpose-built rental. – Garth

Sure, if you are single and/or ok with living in a condo. SFH? Nearly impossible. For a family with pets, that wants some space, renting is not a great option. There just isn’t inventory in good neighborhoods and you can expect to have to move fairly regularly, which is a nightmare if you have kids in a school system or sport programs.

Thats the reality…for lots of us “just rent” is not a viable option.

#36 Sinan Terzioglu on 06.16.22 at 6:38 pm

#30 the jaguar – Any restrictions on HBP? Age, previous home owner, etc.?

So long as you have not owned a primary residence in the previous four years you can potentially qualify as a first time home buyer again under the HBP. Since you cannot contribute to an RRSP past the age of 71 the HBP should only be considered before the age of 70. If you have repayments remaining on the HBP in the year you turn 71 you would have some options such as repay the amount owing to your RRSP or be taxed on the outstanding balance of the HBP – Sinan

#37 Bezengy on 06.16.22 at 6:42 pm

The number and value of unlawfully obtained assets that British Columbian authorities have seized is also “shockingly low,” Cullen said.

————–

That’s my issue. I don’t mind paying more taxes, but why not let the criminals pay up first?

#38 Sinan Terzioglu on 06.16.22 at 6:46 pm

#21 Dr V – As you noted a lot of things have to line up to make the RRSP mortgage work and interest rates are one of them as well as the the total value of one’s RRSP. When interest rates are very low I think the strategy should not be implemented since you would have a high probability of earning a higher average rate of return by investing. If interest rates are less than 4% I would suggest to avoid the strategy – Sinan

#39 The Northern Pikes on 06.16.22 at 6:47 pm

#22 -=withwings=-
She ain’t pretty, she just looks that way.

—-

Give me a kiss, give me a kiss
I want to find out what I missed

#40 Rica on 06.16.22 at 6:51 pm

Nice post Sinan.

Question: I have read about a strategy called Smith Maneuver (https://www.investopedia.com/terms/s/smith-maneuver.asp) that allows making mortgage interest payments tax deductible? Is this strategy legit?

Should it be legit, could we use our own RRSP for the loan to be used with the Smith Maneuver?

Thanks.

#41 Barb on 06.16.22 at 7:00 pm

Great exec summary, Sinan!

Wish hubs and I had heard of you guys many years ago (despite the “rules” being different at that time).

But all of you would be in diapers…

#42 Tom from Mississauga on 06.16.22 at 7:14 pm

At The Empire Club today June 16th 2021 one of the biggest globalists on planet, Chrystia Freeland, admitted, in public, globalization is over.

#43 cuke and tomato picker e on 06.16.22 at 7:20 pm

Interesting for me today met Jann Arden on Beacon
in Sidney B.C. She was getting take out from a Thai
restaurant along with her 7 month dog Poppy. We had a
brief conversation about Poppy and how she takes him
everywhere. I told her we had the pleasure of seeing her at the Butchart Gardens some years ago.

#44 Ed on 06.16.22 at 7:30 pm

The FHSA is also good for those of us that have owned many homes but not in the last 5 years.

Wife & I will be each maxing it although the only home we’ll be in in the future is the funeral home.

#45 Linda on 06.16.22 at 7:35 pm

Sinan, thanks for the very clear explanation as to the rules re: FHSA, RRSP withdrawals to buy RE etc. Most helpful to anyone who might be taking advantage of these tools.

Have to say, given that so few manage to make even a minimum contribution to a TFSA can’t see that there will be a lot of folks having the ability or the discipline to use a FHSA to its full advantage. Those that do will be those much envied ‘rich’ folks who happen to have the spare cash available. Or someone who busts their butt to ensure that they can utilize this new tool to their advantage. The real deal for many is being able to roll FHSA funds into one’s RRSP if they do not end up purchasing RE. Again, don’t think a huge number of folks will be able to take advantage of this. If most can’t manage to salt away $6K in a TFSA on an annual basis, stands to reason they won’t be setting aside $8K in a FHSA. Especially when they can’t roll forward unused contribution room like they can with a TFSA.

#46 earthboundmisfit on 06.16.22 at 7:35 pm

#1 Big Bucks

Clearly more wishful than insightful. I know, I know … thinking is hard.

#47 Ohm on 06.16.22 at 7:40 pm

I will never understand for an average so called smart person that would pay 1 million plus, yes, that is 1 million plus for a peace of crap home (in a city) that is probably worth a couple hundred thousand. The mind boggles??

Next interest rate in Canada will be 1%; those greater fools deserve what they get.. Seriously 1 million plus in the second largest country in the world???? Why???

#48 Søren Angst on 06.16.22 at 7:41 pm

Looking at the US Fed rate projections as of June 15, end of year:

2022 = 3.4%
2023 = 3.8%
2024 = 3.4%
Longer run = 2.5%

So, you know, there’s 2.5 to 3 more years of misery for the RE market.

Mirror on the wall for Canada as Garth says BoC raises rates 80% of the time when the US Fed does – I’d say near 100% nowadays unless BoC wants to devalue the CAD $ and further fuel inflation via imports (purchasing power parity theory on the $).

https://www.federalreserve.gov/monetarypolicy/fomcprojtabl20220615.htm
[Table 1]

US FEd has downgraded Real GDP from March. 1.1% less in 2022, 0.5% less in 2023 and 0.1% less in 2024.

Pessimistic GDP forecast for 2022 when you compare to The Conference Board * estimate of 2.3% vs. US Fed 1.7%.

https://www.conference-board.org/research/us-forecast

* A nonpartisan, nonprofit entity operating in the public interest since 1916…”the greater good”.

—————–

It’s going to get ugly for a lot of people with mortgages. In 2019, number of economic families, individuals with mortgages:

Mortgage on principal residence = 5.5 million people, 34.6% of the population.
Mortgage on other real estate = 1.055 million, 6.6%.

That was 2.5 years ago. That’s a lot of people. Numbers will be higher yet 1/2 way thru 2022.

Rough ride for large debt holders be it mortgages, LOC, credit card etc. for…

2.5 more years. THAT’S a long time squandering money away because of higher rates.

#49 AlbertaLib on 06.16.22 at 7:51 pm

thank you Sinan for the awesome overview of a few strategies.

#50 Ponnaps on 06.16.22 at 7:51 pm

A viable strategy would be for parents to fund FHSA of their 18+ Offspring invested for the long term and ripe for deploying as a significant down payment in their 30s..

All the more better if one can time those contributions to when the offspring are working..

#51 Observer on 06.16.22 at 7:53 pm

#23 Sinan Terzioglu on 06.16.22 at 5:39 pm
#7 Stone – Is that tax-free contribution from the RRSP to the FHSA or do you have to pay tax on the transfer of funds between the two plans?

The transfer from an RRSP to a FHSA will be tax free. When the funds are withdrawn from the FHSA they must be used to purchase real estate otherwise the withdrawal would be taxed – Sinan

^^^^^^^^^^^^^^^^^^^
What happens if you move the funds from the RRSP to the FHSA, then decide not to buy, but rather than withdrawing, move the funds back to the RRSP? Can this also be done with no tax implications?

#52 Sinan Terzioglu on 06.16.22 at 7:58 pm

#40 Rica – The strategy known as the Smith Maneuver is a legitimate tax strategy that effectively converts the interest one pays on their residential mortgage into a tax deductible investment loan interest. To implement the strategy you would need to obtain a re-advanceable mortgage which is a traditional mortgage combined with a home equity line of credit. If you use your own RRSP for the loan for a principal residence the interest is not tax deductible – Sinan

#53 Søren Angst on 06.16.22 at 8:07 pm

Sinan * I like that you explored many options for a First Time Home Buyer. Thorough and with some good advice as well.

But let’s call a spade a spade here.

Those options are for the wealthy or Junior’s Bank of Ma & Pa donations to the cause (Ma, Pa, have to be wealthy as well).

66% of ALL Cdns as of 1.5 yrs ago fell into this tax bracket, 77% of Under 35 yrs old, 84.5% of 15 to 29 yrs, 57.6% of 30 to 39 yrs:

$46,605 or less.

Your basically talking about programs that will not be of much help to 77% to 84.5% of Cdns in their prime nesting years due to cash flow, diminishing by the day with High Inflation.

Even BofMaPa will think twice at the LOC, HELOC costs of financing Junior.

————–

Pretty sure Gov Canada knows this, as they have to budget, still it makes for:

Great Headlines. Garner votes from the financially illiterate.

*
Sorry I call you “Other Guy” when referring to Garth, Ryan and Doug. Your name does not compute in my now Italian mind…SCUSI. Will try harder!

#54 Doing my Part on 06.16.22 at 8:12 pm

Bitcoin, going to zero at a location near you, get out while you can.

#55 Faron on 06.16.22 at 8:22 pm

#34 Sail Away on 06.16.22 at 6:36 pm
#30 the jaguar on 06.16.22 at 6:22 pm

magical finances their juice.

Are those the kind of finances wherein one takes out a HELOC to buy a bunch of equities right before they crash another 11%? I’ma pass on that.

Cool, bro.

#56 Søren Angst on 06.16.22 at 8:24 pm

Off Topic:

Fans of Stranger Things going ga ga over Kate Bush “Running Up That Hill” song (S4E4).

https://www.nytimes.com/2022/06/13/arts/music/kate-bush-stranger-things-billboard-chart.html

Next year, Stranger Things should add characters named Catherine and Heathcliff so I can hear *:

https://www.youtube.com/watch?v=YGTQVJG8Beg
[Original BBC Top of the Pops version]

https://www.youtube.com/watch?v=_Qf1XMYPSvI
[Version after the song went #1]

Watched her 44 years ago on BBC when studying in England (My England!).

That voice. Those eyes.

Oy vey.

Paleo me.

——————-

* From the “Kick Inside”. A lot of other good songs in there (e.g., The Man with the Child in His Eyes, Strange Phenomena, Them Heavy People, Feel It, Oh To Be In Love – [ignore video, minimize window, listen instead, read the lyrics – let her take you away]).

#57 TurnerNation on 06.16.22 at 8:26 pm

___ in May and go ____?

Welcome to the Everything Bear Market.
Treasury Blondes; Stonks; Craptocurrencies; now, homes too.
The Vulture Funds cleaned up on foreclosed USA housing in 2008-09. Let’s see who wins in this round. Just a guess…hmmm…
Yep they’ll stone you just like they said they would.

— A glimpse into the future (our coming Winter natch) this is not designed to “be over” — not until 2025 at least. The mandates are designed for your submission Comrade. We are in Year 3. But we will be so healthy right guys?
Let’s see how many will go along with Year 4.

.LA County moves closer to possibly returning to indoor mask requirement as hospitalizations increase (abc7.com)

.Princess Cruises and Holland America requiring masks for Alaska voyages amid COVID uptick (usatoday.com)

.African Nations Should Receive Monkeypox Vaccines First To Avoid Covid Inequality, Agencies Warn (forbes.com)

.Shanghai to Mass Test Whole City Weekly to Keep Covid at Bay (msn.com)

#58 Fed up on 06.16.22 at 8:34 pm

Absolutely agree Mattl! We’ve been evicted 4 times in 5 years from SFHs due to landlords selling their investments. It is incredibly stressful to be moving constantly with two young kids in tow. Getting farther and farther away from their school and friends. Combine that with a complete lack of inventory for a family sized place of any kind and it feels pretty hopeless. Renting is awful with kids, I wouldn’t recommend it at all!

#59 cramar on 06.16.22 at 9:10 pm

In the U.S….

Amid record inflation, 36% of employees earning $100,000 or more say they are living paycheck to paycheck

https://www.cnbc.com/2022/06/16/more-high-earners-are-living-paycheck-to-paycheck.html

#60 Quintilian on 06.16.22 at 9:16 pm

#29 Rent4life on 06.16.22 at 6:05 pm
“You can always rent a roof, as long as someone is willing to rent one to you!
After you get booted around a couple times and struggle to find a home for your kid and your pup, you’ll find that the optional aspect of renting is really just something investment people sell to single folks who’s only expenses are rent and video games”

You think buying into a bubble, with the worst yet to come would be better?

The rental crunch is temporary, and just a nuisance relative to being underwater and trapped under a crushing debt for most of your productive life.
Life is about choices and trade offs; be careful with your choices, and your value system.

Be smart, think, don’t envy the crowd headed for financial suicide.

#61 crowdedelevatorfartz on 06.16.22 at 9:19 pm

Oh where oh where is IHCTD9?

#62 Ponzius Pilatus on 06.16.22 at 9:22 pm

#34 Sail Away on 06.16.22 at 6:36 pm
#30 the jaguar on 06.16.22 at 6:22 pm

As an aside to Sail Away….a caboose is a caboose and cannot be denied when it’s on the loose.

——-

What’s good for the gander is good for the goose.

We can deduce that a caboose on the loose gives magical finances their juice.
——————-
Haha,
You guys are crazy.
But much better than CEFs stupid Haikus.

#63 Ponzius Pilatus on 06.16.22 at 9:27 pm

Dolce,
I read that there is a major drought in Northern ITALIA.
Drinking water is getting scarce.
You o.k.?

#64 Albertistan on 06.16.22 at 9:28 pm

Thanks Sinan, well presented as usual.

#65 Faron on 06.16.22 at 9:31 pm

#185 Sail Away on 06.16.22 at 12:46 pm

Ah, it does my heart good to see the shift toward centrism

By shift toward centrism, do you mean the attempted violent overthrow of the will of US Americans or are you referring to the popularity of the bitcoin shilling, likely leader of the conservative party in Canada? Or does that mean clogging Canada’s capital with trucks illegally filled with people with replacement theory intent?

Point is that your media diet seems far more far-right than even slightly centrist.

#66 THE DANDADA on 06.16.22 at 9:33 pm

What if I were to tell you that we are all just pawns in someone’s game of chess?

#67 crowdedelevatorfartz on 06.16.22 at 9:45 pm

@#59 Cramar
“Amid record inflation, 36% of employees earning $100,000 or more say they are living paycheck to paycheck”

+++
100k US and lower tax rates in the US.
And “greaterfools” are living “pay cheque to pay cheque”?

Well…..
Nothing like a brutal recession and a govt short of taxpayer cash to hand out…..to smarten up the “fiscally challenged”.

Time to let your cell phone age like cheese?
Instead of financing a new $1000-$2000 phone every 2 years?
Time to hold off on an awesome new tattoo from the local artist?
Time to vacation locally instead of a $10,000 vay-cay in Machu Pichu with the obligatory “selfies”?

Lots of ways to “survive ” on $100,000 US per year….if you’re not stupid.

#68 Shawn on 06.16.22 at 9:59 pm

Assets versus equity

Garth’s rule of 90 is a good way to measure if you are in a strong position to purchase real estate. The rule implies that a 30 year old should have no more than 60% (90-30) of his/her total assets in real estate equity. For example, let’s assume a couple, both 30 years old, have total assets of $150,000. The rule indicates that they should have no more than $90,000 in real estate equity. Assuming this couple wants to put 20% down that would mean a purchase price of no more than $450,000 which won’t get much in a city like Toronto therefore it would be best for this couple to continue saving and hold off from purchasing real estate for the time being.

******************************
Hello, the full value of the house is the asset and is $450,000 in your example and not the $90,000 down payment / equity.

This is according to the rules of accounting.

And the amount at risk has nothing to do with the down payment / equity. The risk is the amount the asset might fall in price.

Putting zero down certainty does not mean zero at risk.

#69 Ali on 06.16.22 at 10:12 pm

Thank you Sinan. I always love your posts. They are down to earth, informative, and so dang practical. Keep ‘em comin.

#70 Flop… on 06.16.22 at 10:23 pm

Thanks for all the advice.

So I called my Dad.

Put my wife on first to break the ice and to get him talking and then she said there’s someone here who want to talk to you.

I got “Hey Dad” out and we both started bawling.

First words exchanged in nearly 20 years, I didn’t focus on any negative subject.

There was no animosity, as pertains to this blog he wanted to know how I was doing financially, I told him I had up until recently fed my superannuation in Australia, and explained to him what a TFSA was, and that I put 5k in today because I didn’t go to work because I was processing the fact that I’m going to lose my father to cancer.

I told him I’ve got a newer job and pay into a pension and stay out of debt, and am not living paycheque to paycheque.

The doctors were coming to see him and he wanted to go outside and sit in the sun for an hour or so.

He doesn’t want my Mum, his partner of 50 years to be there when he passes, so he’ll probably die alone, that’s pretty heart wrenching stuff, but I told him that’s between him and Mum to sort out.

He realizes I try to look after my elderly In-Laws, and even if the family had never broken ties, I could never have been in two hemispheres at once.

He said he understood I just wanted to live in peace.

He said he was proud of me and that I was a good boy…

M47BC

#71 Pylot Project on 06.16.22 at 10:36 pm

#24 -=withwings=- on 06.16.22 at 5:40 pm
She ain’t pretty, she just looks that way.

===

That’s the official song of British Columbia.

#72 meslippery on 06.16.22 at 10:40 pm

I think some people don’t like renting for the same reasons people would rather live on the street as apposed to a shelter.
You know lots of rules like, No Dogs, No smoking, No using Garth’s flag for curtains, No BBq, No clothes lines ect. ect.

#73 Lower the Boom...er not on 06.16.22 at 11:31 pm

#66
I would then say “it’s your turn for the check, mate!”

#74 Overheardyou on 06.16.22 at 11:31 pm

From what my elders tell me, as long as you can pay your mortgage, you’ll be fine. Banks don’t check if your situation has changed so long as you keep making payments.

#75 crowdedelevatorfartz on 06.16.22 at 11:33 pm

@#70 Floppie

A good call.
And no regrets in making it.
Well done.

#76 Satori on 06.17.22 at 12:15 am

Great Post Sinan, something I will pass on. Realistic, Authentic and a clear dose of reality that most young people and new buyers absoutely need to know.

Not every first home buyer has the resources or the knowledge to fall back on.. considering mom and pops lucked out. Sage advice that often people DO Not have access to is sooo valuable.

Thank you for clarifying the ‘basics’… good job!

#77 Satori on 06.17.22 at 12:38 am

#70 Flop

That brought tears to my eyes.

Your exchange, that I saw, and of course ‘in my humble opinion’… your dad wondered how your were doing financially because in his generation a man provides. He was wondering how you were doing, if you would be ok. That was important to him and he likely slept at night wondering about you.

And that was the first thing he was concerned about, he wants you, in his heart to be Safe, to know you are safe. What a beautiful exchange! And that you put your lady on first was so beautiful you pre-thought of that ‘buffer’ shows me you are not much different than your pops. He knew you had rifs, but turned it to be about your safety, as to you being financially safe… that is a dad, that is what dad’s worry about. They provide – hydro, lights, shelter, safety. I am so happy that you spoke to him…. I do hope you get the opportunity to speak to him again.

Love is Love.
What Time and distance cannot divide.

Hugs to you both. Best of Wishes as well…

#78 Rent4lyfe on 06.17.22 at 12:40 am

#60 Quintilian on 06.16.22 at 9:16 pm

My friend it’s not about envy, it’s about the reality of life. Where I live, you can’t raise a family in that which you can rent. As others have said, you’re just living in some speculator’s investment until he finds a sucker family to buy it off him. Long term STABLE tenancy in a single family home is impossible.

But yes you can live a long, affordable, lonely life in a 1 bedroom purpose built rental condo for the rest of your days. Don’t envy the suckers buying tiny condos.

#79 millmech on 06.17.22 at 1:51 am

#35 Mattl
If rates keep going up I am sure the people who bought will justify the joy they get from the backyard when they are resting in between the two fulltime jobs it will take to just pay the mortgage.
There are quite a few people at my work renewing next year and the payment will be increasing at a conservative $1800/mth on average if the rates keep trending up and one guy figures the monthly will go up almost another $3000.
It use to be difficult to get people to come in for helpers on the weekend, not anymore.

#80 millmech on 06.17.22 at 1:57 am

Wow another buyer backing out story.
https://www.reddit.com/r/PersonalFinanceCanada/comments/ve05zn/ontario_buyer_backed_out_of_purchase_im_stuck/

#81 under the radar on 06.17.22 at 5:07 am

So find a purpose-built rental. – Garth

No SFH are purpose built rentals in Ontario. Some townhouse complexes available in the greater GTA, but these are tired and resemble minimum security prisons. Raising a growing family in an Apartment is, I dare say, not an aspirational choice for many.

#82 Bezengy on 06.17.22 at 7:36 am

Once you FTHB figure out how to finance that new shack with Sinan’s advice, I have another piece of advice for you. Learn to do maintenance and renos yourself. The days of hiring a contractor to do anything at a reasonable price are long gone. If you can’t replace the toilet, or rip up a carpet and put down flooring yourself then maybe owning a house isn’t your best option. If you are bound and determined to own, I suggest you start acquiring some skills if you don’t already have them, everything from plumbing, electrical, drywall, etc. So the next time someone tells you their doing a reno, offer some free help, and maybe learn a thing or two, you’ll need the knowledge if you’re a home owner. Also buy some good tools, quality used ones are better than cheap new ones from you know where.

And to Flop…….that was deep, and a reminder to what is truly important in life. Thanks for sharing.

#83 Selling points on 06.17.22 at 7:41 am

#72 meslippery

No Dogs
No smoking
No using Garth’s flag for curtains
No BBq
No clothes lines ect.

…reads like a list of features to why one should rent, not objection.

Have the person who wants this buy the slanted $1.5m semi and move next door to your $1.5m slanted semi.

Hopefully they play drums too. Maybe work on their Harley all day and night tuning that amazing “high-tech” motor. Maybe they like to mow their lawns early on Sundays too.

#84 Saul Goodman on 06.17.22 at 7:49 am

Ha ha ha

https://www.theglobeandmail.com/business/international-business/article-elon-musk-sued-for-258-billion-over-alleged-dogecoin-pyramid-scheme/

I mast say…the lawsuit claims are accurate in my view.

#85 crowdedelevatorfartz on 06.17.22 at 8:07 am

@#80 millmech
“Wow another buyer backing out story.”

+++
Not the first and it wont be the last.
The lawyers will be busy.
A the greaterfools will learn an expensive lesson

#86 Stone on 06.17.22 at 8:21 am

#81 under the radar on 06.17.22 at 5:07 am
So find a purpose-built rental. – Garth

No SFH are purpose built rentals in Ontario. Some townhouse complexes available in the greater GTA, but these are tired and resemble minimum security prisons. Raising a growing family in an Apartment is, I dare say, not an aspirational choice for many.

———

A good portion of the world just rolled its eyes at what you consider to be their aspirational choices.

Quite a few of my fellow Canadians are a bit too insular and not well travelled. I match your generalizations with a few of my own.

#87 Mel Bourne on 06.17.22 at 8:52 am

Tax-Free First Home Buyers Savings Account (FHSA)
I don’t own our marital home. Can I open one of these in 2023 because the house is in my wife’s name? Put $8000 per year for 5 years ($40,000) and then transfer the assets into my RRSP? Seems like another way to shelter $40,000 from taxes.

#88 Dharma Bum on 06.17.22 at 9:17 am

#60 Quintilian

Life is about choices and trade offs; be careful with your choices, and your value system.

Be smart, think, don’t envy the crowd headed for financial suicide.
——————————————————————————————————

Very sound advice.

People need to take stock of their own reality.

Individuals must realistically assess their abilities, intelligence, skill sets, limitations, prospects, shortcomings, potential, and aptitudes.

Too many bite off more than they can ever chew, and end up in a serious pickle due to greed, FOMO, jealousy, narcissism, lack of self awareness, and the inability to adapt.

Loose and easy credit has fuelled this phenomenon.

The fallout has yet to commence.

#89 DON on 06.17.22 at 9:24 am

#70 Flop… on 06.16.22 at 10:23 pm
Thanks for all the advice.

So I called my Dad.

Put my wife on first to break the ice and to get him talking and then she said there’s someone here who want to talk to you….

**********

Good for you Flop.

That’s truly what life is about.

#90 Linda on 06.17.22 at 10:23 am

Just read an article illustrating the issue of offer vs. appraisal. Buyer had offered $920K which was the winning bid. Bank appraisal came in at $800K; then a 2nd appraisal was done which dropped even further to $740K. In this case the buyer was lucky; the seller agreed to lower the asking price & they closed at $810K. Apparently this scenario is rife right now. Buyers are scrambling to find ways to finance their purchase because the mortgage the bank is willing to provide falls far short of the actual purchase cost. Caveat emptor in action.

#91 RyYYZ on 06.17.22 at 10:56 am

The FHSA just pisses me off. The government is outright subsidizing the purchase of homes (again) with taxpayer money. Where’s my free house buying money? I saved up my downpayment (20%) myself, from after-tax dollars. I guess the only good news is that with the bottom falling out of the real estate market, it’ll shake a lot of the speculators and people that had no business buying real estate out of the market.

#92 Sail Away on 06.17.22 at 11:04 am

Re: The rule of 90

I personally like the FIRE doctrine more where financial independence by 40 is the goal.

When I was 42, we took a year-ish off work, pulled the teens from school and did a major sailing expedition to San Fran, Hawaii, home, then visited many countries for a month or more each, with much hiking and exploring, then returned to a few months of not-working home life, before starting up again. The cash mountain had been built, so at the end of the year off, our situation was more secure than before.

Now at 50, we have full freedom to do whatever, whenever, while also enjoying working.

Our doctrine might be: ‘Financial Independence by 40… but then keep working if you want (FIB40BTKWIYW)’. Catchy!

#93 jess on 06.17.22 at 11:06 am

The Smash-and-Grab Economy
Private equity billionaires are looting the country, leaving everyday Americans to clean up the mess—and fight for the scraps.

https://www.motherjones.com/politics/2022/05/private-equity-buyout-kkr-houdaille/

https://www.washingtonpost.com/archive/opinions/1989/04/23/how-to-kill-a-company/6c4ecddb-a0a6-47c7-a810-4c552f6e2205/

Max Holland is the author of “When the Machine Stopped, When the Machine Stopped: A Cautionary Tale from Industrial America”, with a new title. It traces the life and death of a small tool company to illustrate how speculation trumps enterprise

#94 Sail Away on 06.17.22 at 11:24 am

A huge piece of financial independence is… no debt, or debt more than backstopped by assets. Then cash outflow can always be controlled.

Buy only when (or where!) RE is reasonable, and create your family’s freedom.

Heck, look at mortgage rates tripling in the last few months. Then imagine being a last-year mortgagee in Van or Vic! Whoopsie.

#95 Ponzius Pilatus on 06.17.22 at 11:28 am

#90 Linda on 06.17.22 at 10:23 am
Just read an article illustrating the issue of offer vs. appraisal. Buyer had offered $920K which was the winning bid. Bank appraisal came in at $800K; then a 2nd appraisal was done which dropped even further to $740K. In this case the buyer was lucky; the seller agreed to lower the asking price & they closed at $810K. Apparently this scenario is rife right now. Buyers are scrambling to find ways to finance their purchase because the mortgage the bank is willing to provide falls far short of the actual purchase cost. Caveat emptor in action.
——————
That’s why you always make it subject to appraisal and financing.
Gotta protect yourself.

#96 Sail Away on 06.17.22 at 11:30 am

@Flop

Glad to hear it went ok. Regrets get stronger with age.

#97 jess on 06.17.22 at 11:37 am

friday humour private equity city!

https://www.youtube.com/watch?v=DXgYhDuyaJg&t=21s

Everything Everywhere All at Once: How Private Equity Rules Your World
From your favorite burger joint to your local dentist, PE titans are invested in almost everything you do.

#98 crowdedelevatorfartz on 06.17.22 at 11:42 am

” Demand Destruction”

The catchy term all the Economists are over using for obscenely high fuel prices.

https://www.ctvnews.ca/business/when-could-demand-destruction-trigger-gas-price-relief-1.5951145

And the Media, of course, will flog this term to death over the next two years.

Shoot me now.

#99 Barb on 06.17.22 at 11:46 am

#70 Flop

Glad you spoke with him.
You created his peace.
And the hurt of 20 years evaporated for you both.
Bet you both slept better than ever.

#100 DON on 06.17.22 at 12:24 pm

#98 crowdedelevatorfartz on 06.17.22 at 11:42 am
” Demand Destruction”

The catchy term all the Economists are over using for obscenely high fuel prices.

https://www.ctvnews.ca/business/when-could-demand-destruction-trigger-gas-price-relief-1.5951145

And the Media, of course, will flog this term to death over the next two years.

Shoot me now.

***********
Had the same thought. I would be surprised if demand decrease till after summer.

With employment numbers still positive. I plan on driving more in July.

#101 pBrasseur on 06.17.22 at 1:18 pm

Only sane thing to do if you plan to buy a home in Canada (same in the US):

Wait for the RE crash to unfold, eventually it’s going to take the economy down with it. At that point prices will be completely depressed and rates will start to come down again, that will be the time to buy if you need a mortgage. Don’t have to wait that long if you got cash.

Tumbling real estate prices do not mean the sector goes dark. House-building, financing and selling will continue, but at a different price point. The Canadian economy will not ‘crash’ just because idiot real estate values change. Such drama. – Garth

#102 pBrasseur on 06.17.22 at 2:10 pm

Tumbling real estate prices do not mean the sector goes dark. – Garth/I>

Why not, different this time? New paradigm?

As stated. – Garth

#103 RyYYZ on 06.17.22 at 3:55 pm

#70 Flop… on 06.16.22 at 10:23 pm
Thanks for all the advice.

So I called my Dad.
=====================================
Nice. Got me a little teary, too. My dad said something similar to me just before he passed.

#104 Tony on 06.18.22 at 5:06 pm

Re: #6 ElGatoNeroYVR on 06.16.22 at 4:06 pm

I know it was 40 years in Vancouver. Two thirds of Canada is mostly in Ontario and British Columbia. The 40 year figure was something like 6 months ago before interest rates rose.

#105 Tony on 06.18.22 at 5:33 pm

Re: #70 Flop… on 06.16.22 at 10:23 pm

If your father lives in Canada remember there’s no gift tax to anyone 18 or older. That was all my father cared about before he died. Giving virtually everything to everyone in his will before he died.

#106 Tony on 06.18.22 at 5:53 pm

Re: #51 Observer on 06.16.22 at 7:53 pm

You can do that even if you have no more RRSP room. If you’re 71 or older you can also shift it into a RIF. No tax implications. The definition of what constitutes a house could change in the future.