Canadian Housing

October 16, 2021

The Canadian housing market is insane. Three years ago, you could buy a decent 4-bed house in this area of Quebec for about 250k. Now those same houses are going for 500k. A 33% increase every year! This really only helps retirees who have already paid off their homes - they can sell and downsize, skimming quite a profit from the sale. Anyone else who wants to move to the same size or larger home, or is a first-time home buyer is screwed. Just the 20% down payment is a problem. How many people can afford 100k down on that 500k, 4-bed house? Not many. It's even worse in the big cities like Vancouver and Toronto. Even if you had the down payment, and enough equity to somehow make a modest profit, I'd be reluctant to buy at what seems like the peak of a crazy market. We did that in late 2006 when we lived in the States, and regretted it when the market crashed in 2008 and we lost half of our home's value. When we eventually sold in 2016, the value of our home had crawled back enough so that we just about broke even on the sale, even with 10 years of equity behind us. Never again. We bought our current home three years ago, and we're staying put for now.

Rentals are not much better, I think renting a house used to be a good option for young families, but now it is too unstable. Landlords are kicking out renters so they can sell for a huge profit, or are having a family member move in for a year so they can renovate and massively increase rent on the next tenant (Quebec has pretty decent tenant protections, but one of the holes is that a landlord can force someone out if they or their family are moving in, or they are selling the house). Our previous landlord did that to us - she tried to get us to buy the house we had been renting for two years, but when we refused (it had lots of issues we could overlook as renters but not as owners), she told us her brother was moving in. We moved out, and she renovated while her brother was there, then more than doubled the rent to new tenants when he moved out a year later.

CC BY-ND 4.0 -- slugmax _at_ tx0 _dot_ org -- Hosted by SDF