[Admiral Beez]

No doubt, and its not just cities. Thunder Bay is traditionally in the crime rate Top Ten (it's top of the charts in homicides),

Homicide rates never really bother me, as usually, Jane Crebas aside, it’s the right people getting smoked (drug dealers, violent thugs, gangs). But property crime touches us all, so it’s definitely something to be considered.

Getting back on topic, some of the things the real estate bubble or huge growth brought to downtown east where I live is massive gentrification, public housing regeneration and resulting increase in sane and sober folks walking the neighbourhood, enjoying the parks, visiting the shops and cafes. All this “eyes on the streets“ has helped to reduce crime.

 

[Northern Light]

Back on topic here.............a 100 basis point increase in the Bank of Canada rate, 25 points higher than the consensus, and the largest single hike in 24 years......

Be interesting to see what impact his has........

For someone with a variable rate mortgage of 1M, they just saw their monthly payments bumped by $833..........

 

[kEiThZ]

As much as I like having them close I will suggest to my two young adult children to seek their fortunes elsewhere other than Toronto. As a 25 y/o, recent uni graduate (studied int'l biz) back in 1996 I was able to get a decent $40k job as a global sales manager and by 1998 after steady pay increases, married and then bought our five-bedroom semi in Cabbagetown for well under $300K, or about four times our combined after tax income. My kids will graduate in 2025-26, and a similar job as mine will today start around $65-$70k, if they're lucky. If they marry or pair up a combined pre-tax household income of about $130k is probably reasonable. But at $1.5 million, a house like mine would be over sixteen times their after tax income! That's nuts. So, if they want to stay in the city and own their home they'll have to own a condo, or if they find work and leave the GTA they can afford land rather than a box in the sky. We'll see where they land.

I would go a step further. If they are young and adventurous, tell them to leave Canada. The OECD is predicting that Canada will be dead last in the OECD for economic growth for the next 40 years. Building an economy around trading real estate and money laundering for foreigners has consequences.

'm personally not confident that my kids can be prosperous in Canada. Despite all the talk about innovation, there's zero interest in making the hard choices that would create a high innovation, high value economy. Mine have multiple citizenships they can leverage and can find a place that works for them. So I'm tailoring their education to ensure they can do just that.

On the topic at hand, this multi-decade real estate bubble is evidence of our terrible decision-making. Decades of low interest rates. Did we build lots of amazing infrastructure? Did we accelerate the transition to a low carbon economy and diversify our economy away from dependence on fossil fuel exports? Did we deleverage personal and public debt levels? Heck no. We sent real estate to the moon so Boomers could get cushier retirements. A country that can waste such opportunities so easily is not going to have it great in the post fossil fuel era that our grandkids will live in.

 

[lead82]

Agreed. The issue is that we got the government we voted (or not voted) for. Our crappy leadership is a reflection of society today that values short term thinking and instant gratification instead of long term thinking and making hard decisions thst are critical to growing wealth. Much like savings, we are now taught to spend spend spend.

Same with government. We reward governments that give us tax cuts, or new benefits but don’t boot government that doesn’t grow economic prosperity or invests in long term infrastructure or improved governance. Look no further to our gridlock in getting things done despite having a political system where a plurality gives a defacto majority to do what is needed, yet nothing serious is done. We can’t build railroads in this country or pipelines or ports. Heck we can’t even process passport renewals or deal with surges in travel at our airports or invest in new systems to deal with a health care system that’s falling apart.

Most are apathetic and our leaders focused on tarring each other but not delivering any real solutions. I don’t care what party, it’s all BS talk and photo ops with platitudes.

Until the people say enough is enough and it’s time to build our country again and rebuild our institutions- create new ones, destroy or completely reform old ones bottom up/top down.

Sadly I don’t see this happening. I’m predicting we will see more Trump like authoritarian populism in charge to burn things down and in decades from now it will get so bad that the opposite force will kick in to build up from the ashes of our current society and governance.

An orderly transition I do not see happening.

 

[kEiThZ]

This video about sums up the bleak situation for younger generations:

Expensive real estate is the tip of the iceberg. At this point, Boomers haven't just screwed over their kids in Canada. They've probably screwed over their grandkids too.

Does it hurt to see your kids go far? Absolutely. But if they have even a modicum of talent or ambition that is above average, success is probably going to be outside Canada. That's the plain and awful truth.

 

[afransen]

Oh IDK about that. Here’s all the houses with 3+ bedrooms and 2+ bathrooms in Thunder Bay, Ontario under $350,000. Some of these look really nice. And here’s all the jobs in Thunder Bay paying $90k or more. Many look attractive to me. If you’re starting out in your career within a couple of years you’re making $90k and can afford a house. If it’s my kids I could fly from Billy Bishop to visit them throughout the year. Total airfare incl. tax Toronto-Thunder Bay return on Porter is $320. So, what’s the upside of Toronto?

Thunder Bay is almost another province. At my employer, we consider that part of Ontario to be part of 'western Canada'.

 

[Admiral Beez]

Thunder Bay is almost another province. At my employer, we consider that part of Ontario to be part of 'western Canada'.

That’s kinda my point. It’s a big country, with job and housing opportunities for those willing to skip the Golden Horseshoe. If I was a young Torontonian starting out, that’s what I would do to avoid overinflated real estate costs, and massive housing debt relative to income.

 

[evandyk]

Given what's happening in Peterborough, Guelph, Waterloo, etc., you probably have to go as far as Thunder Bay to get any relief on home prices.

 

[kEiThZ]

That’s kinda my point. It’s a big country, with job and housing opportunities for those willing to skip the Golden Horseshoe. If I was a young Torontonian starting out, that’s what I would do to avoid overinflated real estate costs, and massive housing debt relative to income.

I will never understand theb regular attempt to pitch these small distant cities in Canada as alternatives. Especially to Torontonians. If you're from Toronto, Ottawa and Calgary are barely alternatives. And if they are willing to move to Thunder Bay, might as well open up the scope to international.

 

[kEiThZ]

Given what's happening in Peterborough, Guelph, Waterloo, etc., you probably have to go as far as Thunder Bay to get any relief on home prices.

Hopefully not. I suspect these exurbs that saw insane increases during COVID might see just as much in declines during the coming months.

 

[Admiral Beez]

If you're from Toronto, Ottawa and Calgary are barely alternatives.

Truly? I have several mates who’ve in their early 30s left Toronto for Atlantic Canada. My neighbour‘s son just graduated medical school and has taken a doctor position in Sudbury. Your money goes a lot further in the sticks.

. I suspect these exurbs that saw insane increases during COVID might see just as much in declines during the coming months.

I think you’re right there. Interest rate hikes are going to tear a hole into the values of more distant yet still GTA homes outside of Toronto.

 

[lenaitch]

I'm not convinced it's all doom and gloom, but it is certainly a different world for the current younger generations, however labeled. I grew up in an era when you could parlay a high school diploma into a decent job. Community colleges were only starting out and were still pretty close to 'trade schools' and heading off to university wasn't as common as today. Of the folks I grew up with, many did leave the city and had fulfilling lives and careers. Of our offspring, off the top of my head, some are in the GTA but many are not.

I think it is still possible to be personally and financially comfortable, but they need to have a plan, or at least a better one. The educational system and, admittedly, my generation as parents, pushed kids into general arts programs at university without have a clue what they were going to do with it. While these BA programs have value, they don't impart graduates with many marketable skills. Hitting the job market with a degree in comparative literature or gender studies is going to be tough in any market but brutal and dispiriting in places like the GTA.

Many professions and trades are indeed portable, some to just about anyway, others likely to urban centres. The attitude that I have little time for is the lack of willingness to leave the 'home turf' regardless. It sometimes seems that proximity to friends, family, favourite bars and bistros is of overriding importance to many; which, to me, is pretty shallow and myopic.

I suppose a lot depends on how each individual defines "prosper'. It's not always in dollars.

 

[lenaitch]

Truly? I have several mates who’ve in their early 30s left Toronto for Atlantic Canada. My neighbour‘s son just graduated medical school and has taken a doctor position in Sudbury. Your money goes a lot further in the sticks.

I think you’re right there. Interest rate hikes are going to tear a hole into the values of more distant yet still GTA homes outside of Toronto.

I suppose it's relative to what you are used to. To a Torontonian, NS prices are still a steal; to locals, they are off the dial.

I think everyplace will see an adjustment, but one thing that will keep prices high in some places in Southern Ontario is whether they remain practical as bedroom communities to the GTA. GO commuter service will impact that. Barrie prices were climbing rapidly long before Covid.

 

[kEiThZ]

Again. The OECD says we will be last in economy growth for the next 40 years. Look up the countries in the OECD. Take in the implications of that projection.

Anybody who says it'll all work out is in for a rude awakening. We're in for some real trouble. But that's neither here nor there on our bubble.... We can keep that propped up while impoverishing more young people forever.

 

[evandyk]

Interest rate hikes may reduce some prices, but they aren't going to improve affordability. And places like Guelph, Peterborough and Kitchener are never going back to the old days in terms of affordability, just because it's easily workable to commute from there to Toronto for 1 or 2 days a week, even if you would never want to do it every day.

But somehow, the fact that all of these people want to live in those cities when they still work in Toronto has had no cooling effect on Toronto prices...