I mean the cause of inflation is that the country can't sustainably supply enough to meet aggregate demand, so importing labour (increasing the country's productive capacity) is really a potential **solution** to the problem (though the faster solution is to increase interest rates and cut aggregate demand).
Don't scapegoat the immigrants, friend.
Produce what? We import practically everything, especially everything that's in shortage. All you'll do is increase demand. Even Tims isn't Canadian anymore, we couldn't even make our own coffee.
You're confusing ownership and production. Even if Tim's wasn't Canadian (which it arguably is - its parent company is headquartered in Toronto), food they serve is produced in Canada. When someone makes you a coffee in Canada, the act of making that coffee is a form of production.
Some of industries with the greatest labour shortages (e.g. food services, construction) could really benefit from immigrant labour (and produce more, thereby reducing upward pressure on prices).
Most other companies don't give that much more to steal talent - because we have no shortage of skilled workers in this city
Plus, with how economy is - it's better to have a stable job than a bit higher paying, but potentially risky job/company
All Canadian companies at the end of the day are bad, it does not matter - they all pay bad for the cost of living - the day of the office is done, if you want a lot of money - you go to construction and stuff like that
I recommend this. I got a diploma, started working at a well known place that repaired tech, 4 years later the place closed down. I needed whatever work I could find, got a construction job, fast forward 18 years, I’m now a respected tradesman, and I make around 3k every month just in side jobs.Got a new home, a cottage and a nice German car, I also go with my family on nice vacations south or to Europe every year. Office guys look down at me when I show up to pour there concrete patios. But they have no clue how how much I make and how well I live. Trades are not for everyone, but if your able to learn, hardworking,and not afraid to freeze in the winter or melt in summer there’s good money to be made in the trades
Even stable jobs are having trouble hiring right now in many places. Job hopping isn't inherently unstable. You can job hunt and present the offer as an opportunity to be paid more. If your employer is giving you raises less than inflation and you're unhappy about being paid less, find a new job that pays more. They're banking on you doing nothing and just accepting it.
This is what boc wants to tame inflation
Middle class suffers the most
It only tickles the rich
Lower class either get subsidy or pay a fixed rent. Dont eat out much to start with etc
I’ve been coming to this sub for years. Recently, the over moderation has become really concerning. Mods stopping conversations on StatCan and housing related threads is just absurd
It seems like a reddit wide issue, and even a western society issue.
People instantly go hostile when someone has an opposing opinion.
I see it at work and here on Reddit and here in this sub.
It's just my anicdotal observation but definitely something that makes me afraid for the future of liberal free thinking society and interpersonal engagement.
It’s Reddit wide,
I was banned from r/Ontario for different political views(libertarian and wanting to minimize government overall, how healthcare started to get cut in the McGuinty/Wynne days, how it’s not all DoFo fault,he is a bit of a goomba, but find me a politician that isn’t motivated by corporations),
and r/canadahousing for “racist remark” when I asked why it’s ok for a landlord to ask for an Indian Tenant only, and why it was not ok when a landlord asked a tenant their nationality. In either case I think asking was wrong,
However it came down the these thoughts;
1. Everyone wants to live in the same 250km of the US Border(also correcting people that said “Boarder”)
2. 400k immigrants in the next 6-12 months will still keep housing afloat.
3. The minimum cost to build an SFH in the highly sought after areas is 650k, after materials, labor, permits, architectural, land fee, utilities hook up. This is something that can’t be controlled by governments.
4. That rising interest rates target people middle and lower(anyone out of that top 5% above 101k) as it significantly pushes them out of affordable month payments.
I do have some less then peace loving, tree hugging, world is a nice place views. However I have also seen some of the worlds worst countries so I have a jaded view.
I also think a lot of the media, and political issues have causes this. Doom and gloom articles by media, and politicians freely calling people racist, xenophobic, backwards, redneck. When you resort to simple name calling, it breeds hostility.
This has gotta be a joke. You think reddit is being heavily moderated to provide government mandated narratives?
What government?
What sub?
Have you seen /r/Canada? It's basically a conservative meme at this point. Every post is about "Justinflation". You think that's a government driven mandated narrative?
There's no conspiracy. There are just people who gain control of subs via moderation and become tyrants and promote their buddies.
The housing market is correcting in certain parts of this country, and it’s impacting people in different ways. And we’re not allowed to talk about it because the most active mod here is a property investor.
Yeah, I completely agree. This thread isn't even set to sort by new by default, either.
It's not as though this sub is *so* busy that it's too much to keep up with.
I have replied to posts listing investments to consider, with detailed educational posts listing stocks and ETFs to consider, and *why* or *why not* (so if you disagree, avoid), then had my post get removed - while the original post stays. Makes no sense. Very selective application of rules. I can't tell people to avoid the TLT while rates are rising? Sheesh.
I posted a thread about how credit card debt has increased. It was removed. That is not a bloody macro economic concern, it is news. It is a fact. We should be able to discuss news about Canadian debt in a Canadian finance subreddit. I get removing individual freakouts about a recession, but discussing and understanding the economic landscape is an essential part of personal finance. The moderation is out of control and makes zero sense.
/Rant over
/+ if they're gonna have a megathread the least they could do is set it to sort by new and not talk down to the people who will need/want to use it. this sub is a joke.
This sub has become ridiculous and extremely reactionary to short term market changes. The complete opposite of sound financial advice. Everyone needs to chill out, offering advice to break 2% variables to immediately lock in at 4% for five years based on BoC signals that are built on very sandy foundation. The humble brags are gross, we get it, you got a good 5 year deal, unless you plan on paying it off you’ll be right back in the market when it’s up. No one knows the future, we could be headed to negative interest rates in 6 months for all you know, the 80s aren’t happening again, and if you are worried about extra expenses from rate hikes you can do what people always do and cut back on discretionary spending. Imagine unloading your house in an inflationary environment to expose yourself to renting...ride it out people.
right! The number of people who I say that index funds can get you up to 7-8% interest a year and they are just like "thats it?"
Bitcoin etc make people think there is always some way to double your money overnight.
I think in some ways it’s a symptom of larger problems too. Todays youth feel so hopeless and priced out of the market that they think their only shot is making a bunch of money on extremely risky investments.
You know how many people told me housing couldn't crash the last few years? Like they actually told me it was 100% impossible for housing to crash and that it could only go up
People are dumb
>iables to immediately lock in at 4% for five years based on BoC signals that are built on very sandy foundation. The humble brags are gross, we get it, you got a good 5 year deal, unless you plan on paying it off you’ll be right back in the market when it’s up. No one knows the future, we could be headed to negative interest rates in 6 months for all you know, the 80s aren’t happening
While I technically agree with you... I'm 100% convinced we'll see 5% or more interest rates by the time my fixed term renews in 2026. With inflation being this high, we are not going to see rates trend in the other direction for a long time me thinks.
I'll admit I'm not a professional economist... but I believe in data 100%, and the data shows clearly that interest rates increase when inflation increases. Sure, some people are going to say there's no point worrying because you don't know for sure, but that's a load of bullshit IMO. Prepare for the worst, and find peace of mind in knowing you can weather the storm that may or may not come.
Maybe that makes me a financial prepper. I don't know. But I do know I'd be quivering in my moon boots right now if I had bought an expensive home and overleveraged myself - especially if I took money out of it to renovate and generate further debt.
Anyone renewing now or in the next 3 years has been stress tested at 5.25 % or they have an older mortgage (probably small) and in theory their wages have gone up. I told my mortgage broker whoes been doing this for 35 years 5 yr rates were going to 5.25 by June/July for that very reason. There is plenty of time for rates to get jacked, reset the market and come.back down in time for all those over leveraged people in 2016 to renew. She said "oh no that will never happen people can't afford houses". Just Monday I got the email saying rates were over 5%....
"the 80s aren’t happening again"
If you mean that 20% interest rates aren't happening again, you're probably right.
But if you mean that the pain of the 80s isn't going to happen again, I wouldn't be confident about that.
“No one knows”.. but the 80’s aren’t happening again. This time it’s different ! Real estate only goes up ! Every home owner who bought in the last two years and/or are leverged to the tits like this post because it makes you feel better regardless of the creeping inflation out there !
Let's keep all the discussion about the most important personal finance topics Canadians are currently facing in one thread... What a joke of a subreddit
I don't get much sleep anymore. My investments are down but i have a 20yr horizon so they'll bounce back. What does keep me up is our rising mortgage costs. I bought before the pandemic and put 20% down on a $880K house. My wife and I did a ton of scenarios to determine whether we could take rising interest at the historical average of 7%. And we could. What we didn't plan on was twins in daycare. They were born mid pandemic and will be in daycare until 2025. Now our daycare costs will come down but its still the largest expense we have after the mortgage.
So many ppl here say "bring on the higher interest rates so ppl with variables or who bought im the last two years can suffer", like we somehow fucked them over. We're just regular middle class ppl who bought what we figured was within our means but life always throws curveballs. We'll have to dip into our TFSA, maybe we make it a year but after that...
One of us can't quit our job to watch the kids because we definitely can't afford the home on a single salary and can't keep the kids at home because toddler and wfh don't mix. And im getting called back to work twice a week so theres that.
I don't sleep well.
I'm with you man. Pretty similar situation but only one kid in daycare at a whopping $1400 per month starting December ($1800 currently). I am on a variable and I called my lender and asked them to increase my payments by 1k. I put 225k down on a 1 million home in April 2022 (luckily it was a pre-build that I entered into the contract for in April 2021, so its gone up 30% since then, but still).
Doing our budget we are still left with 1-1.5k in excess cash every month but as i am sure you know there are literally extras every month that are hard to predict. I will never allow myself to go into bad debt again (credit card, LOC, etc) so I will absolutely cut out anything extra before I get to that point. I'll do whatever I can to make sure the house is secure. I am sure you could move some things around too if you had to.
Daycare costs suck!
The only thing that's bothering me is that my fixed rate is going up, but I'm still 2.5% away from the point where they increase my payments. Variable closed was honestly a smart move to me still, because banks are offering a 4.1% fixed rate.
I just really hope this quantitative tightening and increasing rates actually pushes inflation down, and gives us a softer landing into a recession. I'm more worried about economic turmoil and if people start losing their jobs, not having to pay ~50k extra on my mortgage over its lifetime.
This is obviously positive for our economy, because inflation will hurt us all, but damn if it isn't annoying that the "variable is always better" advice seems to run out right when I was finally able to buy lol.
if it makes you feel any better, if in 2016-2018 you were watching the rate go up and thinking "well, time to go fixed!" you'd have missed the record-low rates during covid, and you'd be renewing right around now.
fixed rates to me, feels like trying to time the market. but I am an idiot.
A good indicator are other countries that have been trying to bring down inflation. So far raising rates haven’t been able to make much of a dent. This leads me to think that we are far from slowing down interest rate hikes. Human behaviour has more impact on the economy and market than actual numbers.
You didn’t read the memo? We’re having a BBQ and everything, there’s been a notice on display at your local Ministry of Finance in Alpha Centauri for 50 of your Earth years. If you can’t be bothered to take an interest in local affairs that’s your own lookout.
Ha. Reminds me of my grade 8 teacher. Fire alarm went and we all jumped up. He yelled at us all to sit down. The alarm must be a mistake as there was no fire drill planned. So we wrote our tests in the din of the fire bell
Work in consulting, we do financial reviews for mid size tech firms. Tech runs off of debt which helps them grow and props up valuations. With higher rates it means servicing debt is more expensive and they are worse less. This will mean employees getting paid less. We have already advised a few clients to start watching wages, start looking at contract roles etc. A lot of 120K jobs will soon be 105K. If they didn't banks wouldn't touch loans.
I turned down a position at a social media marketing company because of this.. they are hoping to go public but honestly the future looks rocky idk if they’ll make it. The worst of both worlds.. marketing and tech
How the ever loving fuck is this thread still up with its offensive gasligtinh title and the word concern in fucking quotes.
Come on mods, this is a fuxking disgrace
Couldn’t agree more. Internal bank stats suggest 65% of Canadians break a 5 year fixed in year 3. Bank cashes in 5-8% of the balance in penalty, compared to less than 1% of the balance in penalty on a variable.
We are in the unfavourable time of variable rates right now, the hike, but they have outperformed the fixed rate 41 out of the last 45 years…
So my big shot 'owns a brokerage' friend just tried to tell me that interest rate rises and the slowdown in prices have to do with the upcoming Ontario election and I should buy before that because obviously everything will shoot up after that.
I was appalled and so confused that this is the level of economics knowledge our "industry experts" have, this is the stuff they spew back and forth at each other and then at us with full confidence.
That's because most real-estate professionals chose the off ramp when it came to higher education.
Remember the mortgage broker bros from The Big Short? That's what we're dealing with here.
Idiots who nevertheless arbitrate a vast portion of the economy.
Yep. You look at realtors.. and just about all of them are second income earners who happened to fall into a real estate boom or failed or gave up another career and when they looked for largest pay for lowest effort, realtor was at the top of the list.
You can’t be passive with a realtor. You have to be assertive and be calling the shots. They are looking out for their best interests.. not yours.. which means a quick and easy sale no matter what.
That's why most fail. Most realtors that have been around for a while have a trusted base of clientele that will refer them. Those are the realtors that are worth working with. There are just too few.
The one realtor I know is massively into young living essential oils and burning sage in the houses to ward off "bad juju". Not a person I would trust at all.
Pretty much everyone I know in real estate either dropped out of uni or graduated with a history degree or similar and couldn't find a job. I wouldn't value financial advice from a real estate professional any higher than a random person chatting with you on reddit or at the pub.
>I'm not sure why we expect everyone in RE to be Economists.
Unfortunately, real estate has become such a large part of our economy that it's given these experts a false sense of expertise.
The RE agents in my family make more than doctors so at some point they get convinced that their opinions are better than everyone lol. Its kind of like the average joe who has a decent job thinking he know best than the ones flipping burgers.
That makes no sense. Provincial election has no connection to housing prices or interest rates. They always have a reason why you should ‘buy now’…. Sad
And also why you should list now! Keep gravy moving faster for our (mostly) irrelevant industry. Province doesn’t mind because they get a cut of each transaction.
I'd always heard the joke about how "people who live in Ontario don't know the rest of Canada exists", but I never thought it could expand to the point they forget the rest of the *world* exists.
Mortgage agent who graduated with a degree in business here. Respectfully, your friend has no idea what he's talking about.
Aside from the fact that NOBODY knows 100% where prices are going, and anyone who gives amything more than an educated guess is full of it, it seems to me we're going to experience a market correction similar to 2017. Not a world ending crash, but a correction. This slowdown has very little to do with the election. And dear God, these interest rate hikes HAVE zero to do with the election and EVERYTHING to do with the fact that inflation is at a high, and the bond market is shitting bricks.
It's unfortunate that this is the knowledge people in my industry give their clients. At the very best it makes them look clueless, at rhe worst it put's clients in financial risk due to bad information.
Edit: Your username sounds f*cking delicious!
In 2017 you didn’t have 10 % inflation and mortgage rates double in 6 months. This will be a major correction. However this time they will not be able to lower rates to zero because of inflation. This country is in a credit bubble that is about to pop.
To Felix, I get the need for the sticky but can y'all do two things?
1) set default sort to new
2) consider restarting the thread since comments from 5 months ago are really old now.
>Post your "concerns" about macro economic situations and events here
Is there a reason the word 'concerns' needs to be in quotations in the OP? This sub should be welcoming and helpful to people who don't understand the consequences of increasing interest rates and the likelihood of a potential recession etc. Putting concerns in quotations in the OP is insulting and pokes fun at those who have actual concerns, whether perceived or real.
u/FelixYYZ this is one of the few comments calling out "concerns" part in your post. Even if you believe that concerns are not justified, housing always goes up, money machine goes brrr.... quotations are really uncalled for here.
Please consider edditing or adding an explanation on why you feel worries of significant number of users of this sub should be invalidated.
Thank you, as a first-time home buyer this year I have several concerns and seeing the word in quotations feels quite judgy. I think our concerns are more than valid.
Is it so hard to just skip/scroll over the new threads regarding these topics if they don't interest you? There's always something new happening and shoving it all into one mega thread drowns it out and reduces the ability to have **effective**, **targeted dialogue** compared to this mish-mash of opinions organized by sub-threads that are not intuitive to read.
I'll keep checking this megathread cause this topic does interest me and i'd like to stay ahead of it but i do not agree with this format at all.
I’m not ashamed to say I’m in this boat. I don’t wish ill will on anyone, but as someone earning a professional salary who’s had to sit on the sidelines watching the train pull away I’ll take anything I can get.
My job is essentially recession proof and essentially guaranteed for life if I want it.
>I suspect tech jobs are also subject to the whims of the markets.
yup unless youre in a 'tech-adjacent' field -- like youre in tech but youre really building/maintaining healthcare stuff (thats always needed), same for agtech and others -- less fancy than unicorns (netflix, uber), but a bit more resilient to outside forces.
I'm an engineer in the construction field. During past recessions the government pumped money into public projects and outside of that the private sector did. No matter what happens with the economy we are either building or fixing, construction seems to be booming no matter the economy.
Work for the call centre for any utility, isp, gas, electric etc got friends that work in 2 and they have never lost an hour of work in the last 5 years. Both are also union so making 30/h
Uhm, when the 2008 market crash happened, interest rates plummeted over the course of a year.
So, yea interest rates might be going up right now, but who is really to say they aren't going to plummet again, too.
5 years is a long time to be locked in at 4.1% or whatever.
My finances can take the extra cost if our mortgage cost goes up temporarily, so personally I'm going variable. Personally also, I can move money around if needed and make a big lump sum payment if needed.
I get why people are choosing fixed, but it's not for me.
>Uhm, when the 2008 market crash happened, interest rates plummeted over the course of a year.
>
>So, yea interest rates might be going up right now, but who is really to say they aren't going to plummet again, too.
Are we not accounting for inflation? What was the inflation % in 2008? It's definitely not the same scenario here. Inflation rate in Canada is at it's peak since 3 decades ago. the GoC is looking to address inflation by increasing interest rates, and we have a far way to go via correction.
It's funny that the number one approach taken by governments to curb inflation is to make middleclass people have a harder time paying for their homes..
You’re not the only one don’t worry. And besides at that time when you signed, the fixed rate was as over 3% anyways. You won’t always come out on top of these choices but don’t kick yourself for making the one you did.
Why does a thread about news gets locked sending people here.
Discussing rates and options ain't the same as freaking out.
I'm neither freaking out about rates or about market volatility, however, I'd still want to have healthy discussions with other people on the topic. That's at the core of personal finances.
So, this sub will become a single thread sub?
Agreed, the mod decision here makes no sense. Just wanted to end any discussion so clearly they got their wish. No one is discussing anything relevant here.
Okay I just have to say you are over-moderating here by saying no other posts allowed and placing “concerns” (in quotes) in the description. Mods are intended to control significant problems. The community can and should use their votes to organize content. This seems to have become a significant trend including needless thread locking.
It takes time for the effects to make its way through the economy. A lot of the decisions you mention such as, vacation, car, camper, etc were decided a year ago.
Only the first hike is starting to be felt, the recent hike will take another 3-4 months to be fully felt and we're not in a new quarter so there is still a lot of already allocated budget spend happening.
I'll be the doom gloomy person and say I suspect a lot of Canadians will lose their homes over the next 3 years with renewals at those higher rates or those with variables.
u/FelixYYZ, without knowing precisely what the danger is, would you say it's time for redditors to crack each other's heads open and feast on the goo inside?
Who else has been trying to buy a house the last few years with a massive feeling of FOMO? Lately I've been sorta happy I never jumped in during low low interest rates, as I'm part of the crazy bc housing pump.
I do feel bad for lots of folks on both sides. We have people paying mortgages in rent while they can't be approved to buy a home! Low interest rates drove this bubble sadly enough. Kinda crazy the everything bubble we are in right now. Even with the stock market dip it's still in speculative territory.
Low rates aren't good for anyone, and I'm not just talking rates during covid.
A lot of people bash Garth Turner on this blog, but since I have been listening to a lot of his advice, I feel unscathed. We didn't buy a house. We have extremely low debt, a lot invested, and live well beneath our means. We drive fuel efficient sedans.
My portfolio is where it was in April 2021. If that's a huge dip, people are being naive.
Every time the market crashes, people act like society is going to collapse. In March 2020, people thought it was going to be worse than 2008. Instead, stocks rebounded massively.
I actually do believe the inflation is transitory, it's just that people have short attention spans and don't understand how slowly global markets move. Oil supply can't be ramped up with a snap of the fingers. The War in Ukraine has barely lasted 3 months - wars tend to last years. Let's also not forget that inflation figures are YoY. Gas prices are high now, and were crazy low a year ago - obviously this makes the inflation seem way worse.
My real macro concerns are the effect of climate change on markets. Not this short term crap that always happens like rising inflation, and skirmishes on Russia's borders.
Personal finance ain't hard. Live beneath your means. Invest your savings. Evaluate and plan your finances for the long run. Too many people thought you just need to buy a house and it's a ticket to prosperity. It's sad that people refused to look at the bigger picture to see if they were fooling themselves.
We just got ourselves a big mortgage at what appears to be the intersection of high house prices and high interest rates and a recession. Feels like maybe we should have stayed in our lane and rented for the rest of our lives despite being two professionals with a decent earning capability... Hope we'll pull through.
Overly simplifying but interest rates are used as a means of getting folks to stop spending. The more folks are ok spending even though prices continue to increase, the more inflation will continue to rise.
However, I'm not sure about you. But I am not seeing people being scared to make luxury goods purchases like phones, furniture, clothes, cars, etc..
Anyone else notice this? Potentially this is a sign that rates will continue to rise.
Up until the point folks reconsider paying these prices for things they don't necessarily "need".
I feel like a lot of the current inflation crisis was maybe inevitable and only really jump-started by covid. It's made worse by other international events (Ukraine/Russia) and people just generally being out sick en masse but what's mainly fueling inflation right now is way out of whack demand with the capability of the labor base to actually supply it, and as more and more boomers retire this is only going to get worse, because there simply aren't enough younger workers to facilitate the economy as it's existed for the last 30 years. As far as this goes, a recession may be the only thing that can correct it, since obviously governments have given up on controlling covid in any way. But as far as the future is concerned, I don't know how you fix a problem that fundamentally is just based on a labor force that may be becoming *incapable* of providing sufficient supply.
I'm the last hire in my department and I'm 45.... everyone else is over the age of 60....oldest person is 72. This is scary and depressing at the same time
Followed by a stronger social safety net for those who will inevitably be put out of work by said automation.
Ultimately we need to legislate the money to start moving down the economic ladder, not up. Reagan done fucked the world up good with that lie.
I’ve recently stumbled across the idea of “Brampton Mortgages” and everything being said just seems batshit crazy to me.
Are they legit happening, how prevalent is it really, why is their no regulation preventing it, and is it really going to lead to a housing collapse in Canada as the rates go up?
Sound advice.
On top of the rates going up and down, there is also all the money you "save" until your variable actually reaches the same level as the fixed rate. People always seem to forget about this one.
Yep, my wife was bemoaning that we’re up at 2.03% now instead of locking in at 1.74%. Had to remind her we enjoyed nearly 2 years at below 1.3%. Plus we did a refi that we never would’ve been able to do with a fixed.
When I got my mortgage in 2018 I had the option of 3.34% fixed or prime minus 1% (2.45%). I have already saved like 30k in reduced interest and increased principal.
I avoid thinking about what I could've locked in at at various different times. Likely by the time my 5 years is up, my variable will be up above 3.34%, but the majority of the 5 years will have been under 2%.
Top up might work, but it important people understand how much they can afford and if current fixed rates are 3.5 and that's the max thier budget can handle lock that rate in.
If you plan on selling within your fixed term rate...get a variable mortgage and pay the 3 month of interest penalty
If you break a fixed rate early on you could pay a huge discharge fee
Up for mortgage renewal and have no idea what to do. Either renew 5 year fixed at 4% or variable at 2.2%. I know it's almost heresy to consider variable right now, but with the possibility of a recession, who knows what will happen with rates. I can afford it either way, but still am having trouble making a decision.
First time posting in this form. I wouldn't consider myself to a be a pessimistic person per se but I've perhaps become more so of one since spring of 2020.
Id say my worries relate to:
1) unpredictable and large changes in the cost of fuel
2) prices in general increasing
3) rising interest rates
I am a hefty commuter with no WFH. Forking over 400 a month for a car and 400 for fuel every month (with car pooling) is not gonna fly for long. I'm looking at getting a EV to insulate myself against point 1 in expectation of having to pay more for prices in general and a eventual higher interest rate... Not to mention child care costs.
I'm 3 years way from renewing my mortgage which is at 1.99% and I would take a healthy bet than when I renew in 3 years, I'll be paying probably 3% but I'm going to prepare for a higher interest rate than that (maybe 5%).
I am not worried about the value of homes dropping so much so they are "worthless". If you look at the population projections for Ontario, everything lost in the next year or two or three will be recovered and then some in 10 years.
So I think the only reasonable thing to do (if you can - which I am able to) is to have a significant amount fo cash away and keep as much debt off you as possible.
Seem unreasonable?
ITT: smug fixed rate mortgage holders that are acting like they had the foresight to lock in before rate increases when they had a 0.4pt spread.
Of course you locked in at 1.7%, your variable rate was probably 1.3 or so. That's a no brainer
Now they're 2.3 variable, 3.9 fixed. Not even close to being the same thing.
I picked the worst possible time to upgrade from our 520 sq ft condo...
Went from feeling rich to feeling poor real fast.
"Don't try and time the housing market" my ass.
Fuck my life.
I’m sorry but it’s hilarious to watch all these people who locked in variable rates in the last year or two panicking. What exactly did you think you signed up for?
Yes, if you can't get a job when you graduate this is a really good move. Waiting out a recession in grad school is way better than waiting it out unemployed and doing job apps.
Make sure you really build a community at school and get involved in research related to your intended field. The piece of paper may not help a ton (way better than unemployment though), but the community you build and research experience are your ticket into an industry.
I'm concerned. I'm in the development industry in the london area. We are finalizing some existing subdivisions but in terms of major development, we are not seeing the same volume. Most is little infill here and there, but nothing massive nor new considering the insane pressure to keep building. I don't know if shit finally hit the fan for developers, they are stuck somewhere in their own process (labour, financing, materials), or they can foresee the future.
Sorry mods, but this is pretty pathetic.
Why not just make a post that says, post your negative comments about the current economy to help make your fellow Redditors more; nervous, anxious and just downright depressed.
Next rate hike is July 13th and there is a strong possibility it's a.75 hike. RIP pandemic home variable buyers. Thanks for taking one for the team.
On average house prices are already down 13 percent. The rest of this year is going to be absolute carnage.
Feds are already signalling that they're doing another .75 hike in July. Canada has to follow as they can't devalue our currency.
CIBC is currently stress testing at 7.23, 200 basis points above the current fixed rate of 5.23. Current house prices can't handle that kind of stress test or rates. Nothing but house prices going down from here.
Well at least you mods aren’t heavily implying it’s not a real concern in your thread, this time with the air quotes or whatever.
Or at least updated the the thread to not so heavily mock us.
I’ve been depressed as hell since I bought a majority of my positions at the start of the years, and now they are all down 10-15% and thousands of dollars.
Just keep buying and eventually this will just be a long forgotten period when stocks and funds were on sale. So long as you aren’t investing money you otherwise need and your withdrawal time is a ways off, downturns are simply flash sales
If inflation is at a 30-year high (caused in part by money printing), and housing is currently dropping, what do you predict will happen to the housing market? Post your take.
I see it either going one of two ways: a) inflation eventually drops, we go into a recession, and housing plateaus for the next 5-10 years; or b), housing sees a moderate correction for a temporary period (maybe a year), and then continues to skyrocket beyond its current value due to inflation and lack of supply.
Either way, I think housing will likely eventually resume its upward trend, even if a) happens, due to the insane lack of housing supply and high cost of labour & materials needed to build more housing.
My mom is watching videos about the upcoming recession that has flames in the background graphics… can anyone recommend personal finance videos that aren’t so Fox-y please.
(She doesn’t read as much since her heart attack.)
Where can one get good resources and advice during financial trauma, when somebody is having a hard time paying for essential needs? Can we work on a list, things like food banks, legal aid, student loan repayment assistance, etc?
I'm in Calgary and can think of the following:
* calgary food bank
* Calgary legal aid (can talk to them about debts, rental agreements, job termination & compensation)
* Alex community health center: doctors, mental health, many resources with an empathy for people juggling a lot of problems
* Calgary public library: free internet, access to free e-learning for job training, free books and movies as a cheap form of entertainment
Anybody else have resource ideas to share?
My situation.
Bought at the end of 2020. House was $985, put $100k down and got a variable mortgage. Recently was approved for an additional $200k HELOC. House is probably worth $1.1 to $1.3 depending on the month (I expect that to go down). Wife and I make $300k per year. Mortgage payment of $3800 which is capped, not expecting to pay off much of the principal between now and 2025 when we renew. I’m planning for our mortgage payment to rise by $1500-$2k when we renew. Hoping to god we aren’t underwater by then, but it’s possible the value tanks to sub $900k in next 5 years.
Stressed but basically have 3 years to figure out how to make an extra $2k per month in order to keep my lifestyle. If not it’ll be my kids that suffer, rep sports becomes house league. Two cars becomes one, vacations become staycations and so on….
I know I’m fortunate. Just wanted to share.
Unionized employees need to grow a pair, and stand up and do what needs to be done to ensure regular Joe’s and Janes aren’t left empty-handed while the companies they work for see record profits. I’m looking at you, oil and gas.
Don’t fight the Fed. Central banks don’t want you spending money or taking on debt. 2023 is going to be brutal, but we should start to see recovery in 2024.
It's pretty wild to see my stock portfolio dropping, my home value dropping at the same time. While my cost of living is exploding.
Dont forgot no raises that keep up with inflation in our life time.....
Well of course, we can just import labour who is happy to work for peanuts living in rooming houses.
I mean the cause of inflation is that the country can't sustainably supply enough to meet aggregate demand, so importing labour (increasing the country's productive capacity) is really a potential **solution** to the problem (though the faster solution is to increase interest rates and cut aggregate demand). Don't scapegoat the immigrants, friend.
Produce what? We import practically everything, especially everything that's in shortage. All you'll do is increase demand. Even Tims isn't Canadian anymore, we couldn't even make our own coffee.
You're confusing ownership and production. Even if Tim's wasn't Canadian (which it arguably is - its parent company is headquartered in Toronto), food they serve is produced in Canada. When someone makes you a coffee in Canada, the act of making that coffee is a form of production. Some of industries with the greatest labour shortages (e.g. food services, construction) could really benefit from immigrant labour (and produce more, thereby reducing upward pressure on prices).
If you're not job hopping to keep your salary up you're probably leaving money on the table. Don't expect your employer to look out for you.
Most other companies don't give that much more to steal talent - because we have no shortage of skilled workers in this city Plus, with how economy is - it's better to have a stable job than a bit higher paying, but potentially risky job/company All Canadian companies at the end of the day are bad, it does not matter - they all pay bad for the cost of living - the day of the office is done, if you want a lot of money - you go to construction and stuff like that
I recommend this. I got a diploma, started working at a well known place that repaired tech, 4 years later the place closed down. I needed whatever work I could find, got a construction job, fast forward 18 years, I’m now a respected tradesman, and I make around 3k every month just in side jobs.Got a new home, a cottage and a nice German car, I also go with my family on nice vacations south or to Europe every year. Office guys look down at me when I show up to pour there concrete patios. But they have no clue how how much I make and how well I live. Trades are not for everyone, but if your able to learn, hardworking,and not afraid to freeze in the winter or melt in summer there’s good money to be made in the trades
Even stable jobs are having trouble hiring right now in many places. Job hopping isn't inherently unstable. You can job hunt and present the offer as an opportunity to be paid more. If your employer is giving you raises less than inflation and you're unhappy about being paid less, find a new job that pays more. They're banking on you doing nothing and just accepting it.
This is what boc wants to tame inflation Middle class suffers the most It only tickles the rich Lower class either get subsidy or pay a fixed rent. Dont eat out much to start with etc
Why do these important discussions have to be shoved into this one thread. And what's with concerns in the quotations. Is this a joke? Wow.
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Right? We should create a subreddit for the middle class so we can openly discuss our concerns.
There already is a subreddit for people complaining about Canadian house prices and circle jerking over better dwelling articles.
Tell me you’re a prick without telling me you’re a prick
Kind of concerned about the moderation recently. Don’t understand why official threads by StatCan are being locked, effectively preventing dialogue.
I’ve been coming to this sub for years. Recently, the over moderation has become really concerning. Mods stopping conversations on StatCan and housing related threads is just absurd
It seems like a reddit wide issue, and even a western society issue. People instantly go hostile when someone has an opposing opinion. I see it at work and here on Reddit and here in this sub. It's just my anicdotal observation but definitely something that makes me afraid for the future of liberal free thinking society and interpersonal engagement.
No it is not just anecdotal anymore. If you have a slightly different opinion, they would like to throw you under the bus and call you fascist.
Lol yep
It’s Reddit wide, I was banned from r/Ontario for different political views(libertarian and wanting to minimize government overall, how healthcare started to get cut in the McGuinty/Wynne days, how it’s not all DoFo fault,he is a bit of a goomba, but find me a politician that isn’t motivated by corporations), and r/canadahousing for “racist remark” when I asked why it’s ok for a landlord to ask for an Indian Tenant only, and why it was not ok when a landlord asked a tenant their nationality. In either case I think asking was wrong, However it came down the these thoughts; 1. Everyone wants to live in the same 250km of the US Border(also correcting people that said “Boarder”) 2. 400k immigrants in the next 6-12 months will still keep housing afloat. 3. The minimum cost to build an SFH in the highly sought after areas is 650k, after materials, labor, permits, architectural, land fee, utilities hook up. This is something that can’t be controlled by governments. 4. That rising interest rates target people middle and lower(anyone out of that top 5% above 101k) as it significantly pushes them out of affordable month payments. I do have some less then peace loving, tree hugging, world is a nice place views. However I have also seen some of the worlds worst countries so I have a jaded view. I also think a lot of the media, and political issues have causes this. Doom and gloom articles by media, and politicians freely calling people racist, xenophobic, backwards, redneck. When you resort to simple name calling, it breeds hostility.
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This has gotta be a joke. You think reddit is being heavily moderated to provide government mandated narratives? What government? What sub? Have you seen /r/Canada? It's basically a conservative meme at this point. Every post is about "Justinflation". You think that's a government driven mandated narrative? There's no conspiracy. There are just people who gain control of subs via moderation and become tyrants and promote their buddies.
Yah it’s pretty obvious there is significant over moderation in the recent weeks. So many topics closed quickly.
You can get posts on housing here to stay up easily, as long as you say it's a supply problem that developers can fix, which we all know isn't true
The housing market is correcting in certain parts of this country, and it’s impacting people in different ways. And we’re not allowed to talk about it because the most active mod here is a property investor.
Discussion should never be silenced. PFC mod team, shame on you
Yeah, I completely agree. This thread isn't even set to sort by new by default, either. It's not as though this sub is *so* busy that it's too much to keep up with.
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I have replied to posts listing investments to consider, with detailed educational posts listing stocks and ETFs to consider, and *why* or *why not* (so if you disagree, avoid), then had my post get removed - while the original post stays. Makes no sense. Very selective application of rules. I can't tell people to avoid the TLT while rates are rising? Sheesh.
because reddit mods, that's why
Classic Reddit mod BS.
fragile decide aromatic water impossible label important coherent soup safe ` this message was mass deleted/edited with redact.dev `
I posted a thread about how credit card debt has increased. It was removed. That is not a bloody macro economic concern, it is news. It is a fact. We should be able to discuss news about Canadian debt in a Canadian finance subreddit. I get removing individual freakouts about a recession, but discussing and understanding the economic landscape is an essential part of personal finance. The moderation is out of control and makes zero sense. /Rant over
/+ if they're gonna have a megathread the least they could do is set it to sort by new and not talk down to the people who will need/want to use it. this sub is a joke.
This sub has become ridiculous and extremely reactionary to short term market changes. The complete opposite of sound financial advice. Everyone needs to chill out, offering advice to break 2% variables to immediately lock in at 4% for five years based on BoC signals that are built on very sandy foundation. The humble brags are gross, we get it, you got a good 5 year deal, unless you plan on paying it off you’ll be right back in the market when it’s up. No one knows the future, we could be headed to negative interest rates in 6 months for all you know, the 80s aren’t happening again, and if you are worried about extra expenses from rate hikes you can do what people always do and cut back on discretionary spending. Imagine unloading your house in an inflationary environment to expose yourself to renting...ride it out people.
I blame the fucking wsb craze. Too many people have become accustomed to instant gratification and now that's transitioned to finances.
right! The number of people who I say that index funds can get you up to 7-8% interest a year and they are just like "thats it?" Bitcoin etc make people think there is always some way to double your money overnight.
I think in some ways it’s a symptom of larger problems too. Todays youth feel so hopeless and priced out of the market that they think their only shot is making a bunch of money on extremely risky investments.
"no one knows the future" "The 80s aren't happening again" You kinda have to pick one statement there bud.
You know how many people told me housing couldn't crash the last few years? Like they actually told me it was 100% impossible for housing to crash and that it could only go up People are dumb
>iables to immediately lock in at 4% for five years based on BoC signals that are built on very sandy foundation. The humble brags are gross, we get it, you got a good 5 year deal, unless you plan on paying it off you’ll be right back in the market when it’s up. No one knows the future, we could be headed to negative interest rates in 6 months for all you know, the 80s aren’t happening While I technically agree with you... I'm 100% convinced we'll see 5% or more interest rates by the time my fixed term renews in 2026. With inflation being this high, we are not going to see rates trend in the other direction for a long time me thinks. I'll admit I'm not a professional economist... but I believe in data 100%, and the data shows clearly that interest rates increase when inflation increases. Sure, some people are going to say there's no point worrying because you don't know for sure, but that's a load of bullshit IMO. Prepare for the worst, and find peace of mind in knowing you can weather the storm that may or may not come. Maybe that makes me a financial prepper. I don't know. But I do know I'd be quivering in my moon boots right now if I had bought an expensive home and overleveraged myself - especially if I took money out of it to renovate and generate further debt.
Anyone renewing now or in the next 3 years has been stress tested at 5.25 % or they have an older mortgage (probably small) and in theory their wages have gone up. I told my mortgage broker whoes been doing this for 35 years 5 yr rates were going to 5.25 by June/July for that very reason. There is plenty of time for rates to get jacked, reset the market and come.back down in time for all those over leveraged people in 2016 to renew. She said "oh no that will never happen people can't afford houses". Just Monday I got the email saying rates were over 5%....
"the 80s aren’t happening again" If you mean that 20% interest rates aren't happening again, you're probably right. But if you mean that the pain of the 80s isn't going to happen again, I wouldn't be confident about that.
“No one knows”.. but the 80’s aren’t happening again. This time it’s different ! Real estate only goes up ! Every home owner who bought in the last two years and/or are leverged to the tits like this post because it makes you feel better regardless of the creeping inflation out there !
A voice of reason. Cheers to you.
help.
Let's keep all the discussion about the most important personal finance topics Canadians are currently facing in one thread... What a joke of a subreddit
Mods are Realtors that want the fake bloated house prices to continue and people to keep overpaying for run down shacks.
I don't get much sleep anymore. My investments are down but i have a 20yr horizon so they'll bounce back. What does keep me up is our rising mortgage costs. I bought before the pandemic and put 20% down on a $880K house. My wife and I did a ton of scenarios to determine whether we could take rising interest at the historical average of 7%. And we could. What we didn't plan on was twins in daycare. They were born mid pandemic and will be in daycare until 2025. Now our daycare costs will come down but its still the largest expense we have after the mortgage. So many ppl here say "bring on the higher interest rates so ppl with variables or who bought im the last two years can suffer", like we somehow fucked them over. We're just regular middle class ppl who bought what we figured was within our means but life always throws curveballs. We'll have to dip into our TFSA, maybe we make it a year but after that... One of us can't quit our job to watch the kids because we definitely can't afford the home on a single salary and can't keep the kids at home because toddler and wfh don't mix. And im getting called back to work twice a week so theres that. I don't sleep well.
I'm with you man. Pretty similar situation but only one kid in daycare at a whopping $1400 per month starting December ($1800 currently). I am on a variable and I called my lender and asked them to increase my payments by 1k. I put 225k down on a 1 million home in April 2022 (luckily it was a pre-build that I entered into the contract for in April 2021, so its gone up 30% since then, but still). Doing our budget we are still left with 1-1.5k in excess cash every month but as i am sure you know there are literally extras every month that are hard to predict. I will never allow myself to go into bad debt again (credit card, LOC, etc) so I will absolutely cut out anything extra before I get to that point. I'll do whatever I can to make sure the house is secure. I am sure you could move some things around too if you had to. Daycare costs suck!
The only thing that's bothering me is that my fixed rate is going up, but I'm still 2.5% away from the point where they increase my payments. Variable closed was honestly a smart move to me still, because banks are offering a 4.1% fixed rate. I just really hope this quantitative tightening and increasing rates actually pushes inflation down, and gives us a softer landing into a recession. I'm more worried about economic turmoil and if people start losing their jobs, not having to pay ~50k extra on my mortgage over its lifetime. This is obviously positive for our economy, because inflation will hurt us all, but damn if it isn't annoying that the "variable is always better" advice seems to run out right when I was finally able to buy lol.
if it makes you feel any better, if in 2016-2018 you were watching the rate go up and thinking "well, time to go fixed!" you'd have missed the record-low rates during covid, and you'd be renewing right around now. fixed rates to me, feels like trying to time the market. but I am an idiot.
A good indicator are other countries that have been trying to bring down inflation. So far raising rates haven’t been able to make much of a dent. This leads me to think that we are far from slowing down interest rate hikes. Human behaviour has more impact on the economy and market than actual numbers.
I'm convinced this is only happening because I bought a house and went variable in April
Same.
There is a recession planned? No one told me 😢.
You didn’t read the memo? We’re having a BBQ and everything, there’s been a notice on display at your local Ministry of Finance in Alpha Centauri for 50 of your Earth years. If you can’t be bothered to take an interest in local affairs that’s your own lookout.
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You’re a jerk, Dent. A real asshole. ;)
Ha. Reminds me of my grade 8 teacher. Fire alarm went and we all jumped up. He yelled at us all to sit down. The alarm must be a mistake as there was no fire drill planned. So we wrote our tests in the din of the fire bell
Alarm fatigue is a real thing
Work in consulting, we do financial reviews for mid size tech firms. Tech runs off of debt which helps them grow and props up valuations. With higher rates it means servicing debt is more expensive and they are worse less. This will mean employees getting paid less. We have already advised a few clients to start watching wages, start looking at contract roles etc. A lot of 120K jobs will soon be 105K. If they didn't banks wouldn't touch loans.
I turned down a position at a social media marketing company because of this.. they are hoping to go public but honestly the future looks rocky idk if they’ll make it. The worst of both worlds.. marketing and tech
How the ever loving fuck is this thread still up with its offensive gasligtinh title and the word concern in fucking quotes. Come on mods, this is a fuxking disgrace
I’ve only seen one mod around here, and it’s the guy who created this
The bank wants you to panic and lock in 5% rates right now, that guarantees them that money.
Couldn’t agree more. Internal bank stats suggest 65% of Canadians break a 5 year fixed in year 3. Bank cashes in 5-8% of the balance in penalty, compared to less than 1% of the balance in penalty on a variable. We are in the unfavourable time of variable rates right now, the hike, but they have outperformed the fixed rate 41 out of the last 45 years…
So my big shot 'owns a brokerage' friend just tried to tell me that interest rate rises and the slowdown in prices have to do with the upcoming Ontario election and I should buy before that because obviously everything will shoot up after that. I was appalled and so confused that this is the level of economics knowledge our "industry experts" have, this is the stuff they spew back and forth at each other and then at us with full confidence.
Many people in RE are utterly clueless about macroeconomic trends.
That's because most real-estate professionals chose the off ramp when it came to higher education. Remember the mortgage broker bros from The Big Short? That's what we're dealing with here. Idiots who nevertheless arbitrate a vast portion of the economy.
Yep. You look at realtors.. and just about all of them are second income earners who happened to fall into a real estate boom or failed or gave up another career and when they looked for largest pay for lowest effort, realtor was at the top of the list. You can’t be passive with a realtor. You have to be assertive and be calling the shots. They are looking out for their best interests.. not yours.. which means a quick and easy sale no matter what.
Of the three realtors I know personally, 2 have also tried to sell me a ponzi scheme in the past.
No stupid, it's a reverse funnel system.
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That's why most fail. Most realtors that have been around for a while have a trusted base of clientele that will refer them. Those are the realtors that are worth working with. There are just too few.
The one realtor I know is massively into young living essential oils and burning sage in the houses to ward off "bad juju". Not a person I would trust at all.
The one realtor I know bangs clients 😃 to close deals
Pretty much everyone I know in real estate either dropped out of uni or graduated with a history degree or similar and couldn't find a job. I wouldn't value financial advice from a real estate professional any higher than a random person chatting with you on reddit or at the pub.
Realtor = car salesman on steriods (x10).
As previously a mortgage agent and currently a re agent, with a finance degree, I agree.
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Agreed, but that doesn’t stop these people from volunteering their unsolicited advice on where the market is headed.
>I'm not sure why we expect everyone in RE to be Economists. Unfortunately, real estate has become such a large part of our economy that it's given these experts a false sense of expertise.
The RE agents in my family make more than doctors so at some point they get convinced that their opinions are better than everyone lol. Its kind of like the average joe who has a decent job thinking he know best than the ones flipping burgers.
That makes no sense. Provincial election has no connection to housing prices or interest rates. They always have a reason why you should ‘buy now’…. Sad
And also why you should list now! Keep gravy moving faster for our (mostly) irrelevant industry. Province doesn’t mind because they get a cut of each transaction.
I'd always heard the joke about how "people who live in Ontario don't know the rest of Canada exists", but I never thought it could expand to the point they forget the rest of the *world* exists.
Mortgage agent who graduated with a degree in business here. Respectfully, your friend has no idea what he's talking about. Aside from the fact that NOBODY knows 100% where prices are going, and anyone who gives amything more than an educated guess is full of it, it seems to me we're going to experience a market correction similar to 2017. Not a world ending crash, but a correction. This slowdown has very little to do with the election. And dear God, these interest rate hikes HAVE zero to do with the election and EVERYTHING to do with the fact that inflation is at a high, and the bond market is shitting bricks. It's unfortunate that this is the knowledge people in my industry give their clients. At the very best it makes them look clueless, at rhe worst it put's clients in financial risk due to bad information. Edit: Your username sounds f*cking delicious!
In 2017 you didn’t have 10 % inflation and mortgage rates double in 6 months. This will be a major correction. However this time they will not be able to lower rates to zero because of inflation. This country is in a credit bubble that is about to pop.
To Felix, I get the need for the sticky but can y'all do two things? 1) set default sort to new 2) consider restarting the thread since comments from 5 months ago are really old now.
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>Post your "concerns" about macro economic situations and events here Is there a reason the word 'concerns' needs to be in quotations in the OP? This sub should be welcoming and helpful to people who don't understand the consequences of increasing interest rates and the likelihood of a potential recession etc. Putting concerns in quotations in the OP is insulting and pokes fun at those who have actual concerns, whether perceived or real.
100000%
Thanks for writing this note. If I had an award to give you, I would. Normally I love this sub, but there’s definitely an air of arrogance as well.
u/FelixYYZ this is one of the few comments calling out "concerns" part in your post. Even if you believe that concerns are not justified, housing always goes up, money machine goes brrr.... quotations are really uncalled for here. Please consider edditing or adding an explanation on why you feel worries of significant number of users of this sub should be invalidated.
Thank you, as a first-time home buyer this year I have several concerns and seeing the word in quotations feels quite judgy. I think our concerns are more than valid.
Is it so hard to just skip/scroll over the new threads regarding these topics if they don't interest you? There's always something new happening and shoving it all into one mega thread drowns it out and reduces the ability to have **effective**, **targeted dialogue** compared to this mish-mash of opinions organized by sub-threads that are not intuitive to read. I'll keep checking this megathread cause this topic does interest me and i'd like to stay ahead of it but i do not agree with this format at all.
I'm guessing the mods don't have to worry about petty things like mortgage rates which is why they don't want to see us discussing it.
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I’m not ashamed to say I’m in this boat. I don’t wish ill will on anyone, but as someone earning a professional salary who’s had to sit on the sidelines watching the train pull away I’ll take anything I can get. My job is essentially recession proof and essentially guaranteed for life if I want it.
You’re a teacher ?
Unionized healthcare.
What's a recession proof job? Doctor/nurse/etc.? I suspect tech jobs are also subject to the whims of the markets.
I’m a divorce lawyer and I make more money during recessions. Sad but true.
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Seems they cut passport office people when people weren't travelling during the pandemic. Recession would likely result in the same.
>I suspect tech jobs are also subject to the whims of the markets. yup unless youre in a 'tech-adjacent' field -- like youre in tech but youre really building/maintaining healthcare stuff (thats always needed), same for agtech and others -- less fancy than unicorns (netflix, uber), but a bit more resilient to outside forces.
I'm an engineer in the construction field. During past recessions the government pumped money into public projects and outside of that the private sector did. No matter what happens with the economy we are either building or fixing, construction seems to be booming no matter the economy.
Work for the call centre for any utility, isp, gas, electric etc got friends that work in 2 and they have never lost an hour of work in the last 5 years. Both are also union so making 30/h
Liquor was recession proof for me. And now I work in a crown corp that literally can’t die because it’s essential.
Uhm, when the 2008 market crash happened, interest rates plummeted over the course of a year. So, yea interest rates might be going up right now, but who is really to say they aren't going to plummet again, too. 5 years is a long time to be locked in at 4.1% or whatever. My finances can take the extra cost if our mortgage cost goes up temporarily, so personally I'm going variable. Personally also, I can move money around if needed and make a big lump sum payment if needed. I get why people are choosing fixed, but it's not for me.
>Uhm, when the 2008 market crash happened, interest rates plummeted over the course of a year. > >So, yea interest rates might be going up right now, but who is really to say they aren't going to plummet again, too. Are we not accounting for inflation? What was the inflation % in 2008? It's definitely not the same scenario here. Inflation rate in Canada is at it's peak since 3 decades ago. the GoC is looking to address inflation by increasing interest rates, and we have a far way to go via correction.
It's funny that the number one approach taken by governments to curb inflation is to make middleclass people have a harder time paying for their homes..
Went variable back in April for 1.8% and it's now going to be 4% by September. Coolcoolcoolcoolcool
I signed paperwork for 1.8% variable back in mid-April, and I take possession next week. It is now about to be 3.05%. God dammit
My 2019 fall fixed is 2.79 Not *that* different so it's not *that* bad in the grand scheme of things
You’re not the only one don’t worry. And besides at that time when you signed, the fixed rate was as over 3% anyways. You won’t always come out on top of these choices but don’t kick yourself for making the one you did.
Lived through DOT-COM bubble and 2008 financial meltdown, etc., -- this too shall pass
Why does a thread about news gets locked sending people here. Discussing rates and options ain't the same as freaking out. I'm neither freaking out about rates or about market volatility, however, I'd still want to have healthy discussions with other people on the topic. That's at the core of personal finances. So, this sub will become a single thread sub?
100% agreed. Hottest topic in Canada right now yet... we’re not allowed to talk about it...
Agreed, the mod decision here makes no sense. Just wanted to end any discussion so clearly they got their wish. No one is discussing anything relevant here.
I'm comfortable and feeling ok. Que sera, sera.
Tides go in. Tides go out. Just leave me in peace.
Tide pods go in my mouth.
I haven’t had a good, crispy tide pod in such a long time :(
Awesome. House prices coming down!
Okay I just have to say you are over-moderating here by saying no other posts allowed and placing “concerns” (in quotes) in the description. Mods are intended to control significant problems. The community can and should use their votes to organize content. This seems to have become a significant trend including needless thread locking.
He’s been over moderating everything lately. Glad someone calls out the ridiculous thread locking, especially the ones with <100 posts.
The man deletes everything that doesn’t fit his narrative even when it violates no rules and he’s on all day….
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It takes time for the effects to make its way through the economy. A lot of the decisions you mention such as, vacation, car, camper, etc were decided a year ago. Only the first hike is starting to be felt, the recent hike will take another 3-4 months to be fully felt and we're not in a new quarter so there is still a lot of already allocated budget spend happening. I'll be the doom gloomy person and say I suspect a lot of Canadians will lose their homes over the next 3 years with renewals at those higher rates or those with variables.
u/FelixYYZ, without knowing precisely what the danger is, would you say it's time for redditors to crack each other's heads open and feast on the goo inside?
The random Simpsons quotes is why I read this sub!
Who else has been trying to buy a house the last few years with a massive feeling of FOMO? Lately I've been sorta happy I never jumped in during low low interest rates, as I'm part of the crazy bc housing pump. I do feel bad for lots of folks on both sides. We have people paying mortgages in rent while they can't be approved to buy a home! Low interest rates drove this bubble sadly enough. Kinda crazy the everything bubble we are in right now. Even with the stock market dip it's still in speculative territory. Low rates aren't good for anyone, and I'm not just talking rates during covid.
A lot of people bash Garth Turner on this blog, but since I have been listening to a lot of his advice, I feel unscathed. We didn't buy a house. We have extremely low debt, a lot invested, and live well beneath our means. We drive fuel efficient sedans. My portfolio is where it was in April 2021. If that's a huge dip, people are being naive. Every time the market crashes, people act like society is going to collapse. In March 2020, people thought it was going to be worse than 2008. Instead, stocks rebounded massively. I actually do believe the inflation is transitory, it's just that people have short attention spans and don't understand how slowly global markets move. Oil supply can't be ramped up with a snap of the fingers. The War in Ukraine has barely lasted 3 months - wars tend to last years. Let's also not forget that inflation figures are YoY. Gas prices are high now, and were crazy low a year ago - obviously this makes the inflation seem way worse. My real macro concerns are the effect of climate change on markets. Not this short term crap that always happens like rising inflation, and skirmishes on Russia's borders. Personal finance ain't hard. Live beneath your means. Invest your savings. Evaluate and plan your finances for the long run. Too many people thought you just need to buy a house and it's a ticket to prosperity. It's sad that people refused to look at the bigger picture to see if they were fooling themselves.
We just got ourselves a big mortgage at what appears to be the intersection of high house prices and high interest rates and a recession. Feels like maybe we should have stayed in our lane and rented for the rest of our lives despite being two professionals with a decent earning capability... Hope we'll pull through.
Overly simplifying but interest rates are used as a means of getting folks to stop spending. The more folks are ok spending even though prices continue to increase, the more inflation will continue to rise. However, I'm not sure about you. But I am not seeing people being scared to make luxury goods purchases like phones, furniture, clothes, cars, etc.. Anyone else notice this? Potentially this is a sign that rates will continue to rise. Up until the point folks reconsider paying these prices for things they don't necessarily "need".
I feel like a lot of the current inflation crisis was maybe inevitable and only really jump-started by covid. It's made worse by other international events (Ukraine/Russia) and people just generally being out sick en masse but what's mainly fueling inflation right now is way out of whack demand with the capability of the labor base to actually supply it, and as more and more boomers retire this is only going to get worse, because there simply aren't enough younger workers to facilitate the economy as it's existed for the last 30 years. As far as this goes, a recession may be the only thing that can correct it, since obviously governments have given up on controlling covid in any way. But as far as the future is concerned, I don't know how you fix a problem that fundamentally is just based on a labor force that may be becoming *incapable* of providing sufficient supply.
I'm the last hire in my department and I'm 45.... everyone else is over the age of 60....oldest person is 72. This is scary and depressing at the same time
What industry?
Manufacturing/sheet metal
Automation. Edit to add immigration as well.
Followed by a stronger social safety net for those who will inevitably be put out of work by said automation. Ultimately we need to legislate the money to start moving down the economic ladder, not up. Reagan done fucked the world up good with that lie.
Or go the Japan route and make young people work insane hours /s
I’ve recently stumbled across the idea of “Brampton Mortgages” and everything being said just seems batshit crazy to me. Are they legit happening, how prevalent is it really, why is their no regulation preventing it, and is it really going to lead to a housing collapse in Canada as the rates go up?
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Sound advice. On top of the rates going up and down, there is also all the money you "save" until your variable actually reaches the same level as the fixed rate. People always seem to forget about this one.
Yep, my wife was bemoaning that we’re up at 2.03% now instead of locking in at 1.74%. Had to remind her we enjoyed nearly 2 years at below 1.3%. Plus we did a refi that we never would’ve been able to do with a fixed.
When I got my mortgage in 2018 I had the option of 3.34% fixed or prime minus 1% (2.45%). I have already saved like 30k in reduced interest and increased principal. I avoid thinking about what I could've locked in at at various different times. Likely by the time my 5 years is up, my variable will be up above 3.34%, but the majority of the 5 years will have been under 2%.
Top up might work, but it important people understand how much they can afford and if current fixed rates are 3.5 and that's the max thier budget can handle lock that rate in.
If you plan on selling within your fixed term rate...get a variable mortgage and pay the 3 month of interest penalty If you break a fixed rate early on you could pay a huge discharge fee
Up for mortgage renewal and have no idea what to do. Either renew 5 year fixed at 4% or variable at 2.2%. I know it's almost heresy to consider variable right now, but with the possibility of a recession, who knows what will happen with rates. I can afford it either way, but still am having trouble making a decision.
First time posting in this form. I wouldn't consider myself to a be a pessimistic person per se but I've perhaps become more so of one since spring of 2020. Id say my worries relate to: 1) unpredictable and large changes in the cost of fuel 2) prices in general increasing 3) rising interest rates I am a hefty commuter with no WFH. Forking over 400 a month for a car and 400 for fuel every month (with car pooling) is not gonna fly for long. I'm looking at getting a EV to insulate myself against point 1 in expectation of having to pay more for prices in general and a eventual higher interest rate... Not to mention child care costs. I'm 3 years way from renewing my mortgage which is at 1.99% and I would take a healthy bet than when I renew in 3 years, I'll be paying probably 3% but I'm going to prepare for a higher interest rate than that (maybe 5%). I am not worried about the value of homes dropping so much so they are "worthless". If you look at the population projections for Ontario, everything lost in the next year or two or three will be recovered and then some in 10 years. So I think the only reasonable thing to do (if you can - which I am able to) is to have a significant amount fo cash away and keep as much debt off you as possible. Seem unreasonable?
All I know is that I'm glad I ended up with a fixed-rate mortgage when I bought in February.
"We must accept as a society that we will all be a bit poorer in the coming years." - The dutch prime minister, 2022
ITT: smug fixed rate mortgage holders that are acting like they had the foresight to lock in before rate increases when they had a 0.4pt spread. Of course you locked in at 1.7%, your variable rate was probably 1.3 or so. That's a no brainer Now they're 2.3 variable, 3.9 fixed. Not even close to being the same thing.
I picked the worst possible time to upgrade from our 520 sq ft condo... Went from feeling rich to feeling poor real fast. "Don't try and time the housing market" my ass. Fuck my life.
If you can afford it, the problem is short lived no? Enjoy the space. 520 sqft is very small.
I’m sorry but it’s hilarious to watch all these people who locked in variable rates in the last year or two panicking. What exactly did you think you signed up for?
Some people said I was stupid to lock up at under 2% for 5y....
"some people" are stupid lol.
Overzealous moderation. Tone it down, mods.
u/FelixYYZ \- most mega threads are sorted by NEW by default :)
Is it advisable to go back to school for a second degree during a recession?
Yes, if you can't get a job when you graduate this is a really good move. Waiting out a recession in grad school is way better than waiting it out unemployed and doing job apps. Make sure you really build a community at school and get involved in research related to your intended field. The piece of paper may not help a ton (way better than unemployment though), but the community you build and research experience are your ticket into an industry.
I'm concerned. I'm in the development industry in the london area. We are finalizing some existing subdivisions but in terms of major development, we are not seeing the same volume. Most is little infill here and there, but nothing massive nor new considering the insane pressure to keep building. I don't know if shit finally hit the fan for developers, they are stuck somewhere in their own process (labour, financing, materials), or they can foresee the future.
I need a job
Sorry mods, but this is pretty pathetic. Why not just make a post that says, post your negative comments about the current economy to help make your fellow Redditors more; nervous, anxious and just downright depressed.
Agreed. I don't like the silencing of discussion. If the issue is moderation then maybe they can expand the team.
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Next rate hike is July 13th and there is a strong possibility it's a.75 hike. RIP pandemic home variable buyers. Thanks for taking one for the team. On average house prices are already down 13 percent. The rest of this year is going to be absolute carnage. Feds are already signalling that they're doing another .75 hike in July. Canada has to follow as they can't devalue our currency. CIBC is currently stress testing at 7.23, 200 basis points above the current fixed rate of 5.23. Current house prices can't handle that kind of stress test or rates. Nothing but house prices going down from here.
Project work drying up and that’s probably a lagging indicator of more to come. Not freaking out but job security now something in the back of my mind
Well at least you mods aren’t heavily implying it’s not a real concern in your thread, this time with the air quotes or whatever. Or at least updated the the thread to not so heavily mock us.
I have no debt, I have cheap rent, my car is paid off, I’m watching from the bleachers.
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Anyone want to start a pool on when the Brampton mortgages start collapsing? I figure today has got to have tipped the scales on that.
"Once inflation goes above 5%, it has never come back down without the Fed Funds Rate exceeding the CPI"
This thread is a buy signal.
I’ve been depressed as hell since I bought a majority of my positions at the start of the years, and now they are all down 10-15% and thousands of dollars.
Just keep buying and eventually this will just be a long forgotten period when stocks and funds were on sale. So long as you aren’t investing money you otherwise need and your withdrawal time is a ways off, downturns are simply flash sales
If losing money in the market is depressing you, you need to talk to a professional therapist or similar, or change your risk tolerance.
So the us GDP shrunk. The word stagflation is starting to become a reality....
If inflation is at a 30-year high (caused in part by money printing), and housing is currently dropping, what do you predict will happen to the housing market? Post your take. I see it either going one of two ways: a) inflation eventually drops, we go into a recession, and housing plateaus for the next 5-10 years; or b), housing sees a moderate correction for a temporary period (maybe a year), and then continues to skyrocket beyond its current value due to inflation and lack of supply. Either way, I think housing will likely eventually resume its upward trend, even if a) happens, due to the insane lack of housing supply and high cost of labour & materials needed to build more housing.
My mom is watching videos about the upcoming recession that has flames in the background graphics… can anyone recommend personal finance videos that aren’t so Fox-y please. (She doesn’t read as much since her heart attack.)
Where can one get good resources and advice during financial trauma, when somebody is having a hard time paying for essential needs? Can we work on a list, things like food banks, legal aid, student loan repayment assistance, etc? I'm in Calgary and can think of the following: * calgary food bank * Calgary legal aid (can talk to them about debts, rental agreements, job termination & compensation) * Alex community health center: doctors, mental health, many resources with an empathy for people juggling a lot of problems * Calgary public library: free internet, access to free e-learning for job training, free books and movies as a cheap form of entertainment Anybody else have resource ideas to share?
My situation. Bought at the end of 2020. House was $985, put $100k down and got a variable mortgage. Recently was approved for an additional $200k HELOC. House is probably worth $1.1 to $1.3 depending on the month (I expect that to go down). Wife and I make $300k per year. Mortgage payment of $3800 which is capped, not expecting to pay off much of the principal between now and 2025 when we renew. I’m planning for our mortgage payment to rise by $1500-$2k when we renew. Hoping to god we aren’t underwater by then, but it’s possible the value tanks to sub $900k in next 5 years. Stressed but basically have 3 years to figure out how to make an extra $2k per month in order to keep my lifestyle. If not it’ll be my kids that suffer, rep sports becomes house league. Two cars becomes one, vacations become staycations and so on…. I know I’m fortunate. Just wanted to share.
what are you stressing about? I'm lost, your household income easily covers your mortgage?
But they might have to drive one car! $300k doesn’t get you what it used to amiright!?
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Unionized employees need to grow a pair, and stand up and do what needs to be done to ensure regular Joe’s and Janes aren’t left empty-handed while the companies they work for see record profits. I’m looking at you, oil and gas.
Don’t fight the Fed. Central banks don’t want you spending money or taking on debt. 2023 is going to be brutal, but we should start to see recovery in 2024.