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Old 01-24-2018, 01:19 PM
 
6,121 posts, read 3,316,354 times
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Quote:
Originally Posted by freemkt View Post
I am astonished to learn that (2012 data) Canadian renters have nearly 20 times the net worth of US renters - about $120K (~$95K USD) vs ~5K. FWIW, Canadian homeowners are about 4 times as wealthy as US homeowners.

How did Canadian renters get so wealthy relative to US renters?

https://thetyee.ca/News/2017/02/22/The-Big-Give/
One of the first paragraphs in the article you site says:

"By 2012, the average Canadian homeowner was worth $824,000óthe average renter just $120,000 (in constant dollars). Thatís a seven-fold increase in wealth gap between owners and renters over 28 years. Itís doubtless even wider five years later. In Vancouver, roughly half of households are in each camp."

This shows Canadian homeowners have almost seven times the worth of Canadian renters - apples to apples. Comparing two countries brings in way too many uncontrolled differences.
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Old 01-24-2018, 02:59 PM
 
Location: Aurora Denveralis
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Quote:
Originally Posted by PHL10 View Post
When we compare our countries it's also important to remember that the entire population of Canada is less than that of California.
And the population of Norway is about that of the two small states I've lived in recently:

Norway, 5.2M
Colorado, 5.2M
Connecticut, 3.2M

National economies do not scale linearly.
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Old 01-24-2018, 03:28 PM
 
11,304 posts, read 5,834,479 times
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Quote:
Originally Posted by s1alker View Post
Absolutely. This misconception of renters has always bugged me.
For most of us, it's the freemkt misconception that home ownership is the path to wealth that bugs us. For anyone who has ever owned a home, you have a lifetime of $1,000 plumber bills, roof replacements, dead appliances, and all the rest that a landlord magically takes care of.
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Old 01-24-2018, 03:52 PM
 
Location: Aurora Denveralis
2,975 posts, read 1,012,279 times
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Quote:
Originally Posted by GeoffD View Post
For most of us, it's the freemkt misconception that home ownership is the path to wealth that bugs us. For anyone who has ever owned a home, you have a lifetime of $1,000 plumber bills, roof replacements, dead appliances, and all the rest that a landlord magically takes care of.
If you're lucky. And for $1000-3000 a month.

I once listened to some idiot relatives-by-marriage explain how because their pickup needed tires that would cost $400, they bought a new pickup for which the payments were the same $400. A month. On a 60mo loan.

Most arguments for the financial advantage of renting/leasing don't come up to that standard.

I won't argue that home ownership is some kind of perpetual gold mine or even a net wealth builder in the long run, not with mortgage costs and those $1,000 plumbing jobs. But historically long-term ownership has shown appreciation that more than exceeds most routine maintenance and minor repairs. Flippers, suckers and millennials who are going to chase jobs across the country every two years excepted.
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Old 01-24-2018, 08:50 PM
 
Location: Kuwait
3,038 posts, read 1,179,326 times
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Quote:
Originally Posted by freemkt View Post
I am astonished to learn that (2012 data) Canadian renters have nearly 20 times the net worth of US renters - about $120K (~$95K USD) vs ~5K. FWIW, Canadian homeowners are about 4 times as wealthy as US homeowners.

How did Canadian renters get so wealthy relative to US renters?

https://thetyee.ca/News/2017/02/22/The-Big-Give/
Cool story bro. Actually according to the internationally recognized OECD, the US average wealth per capita is more than double Canada:


OECD Better Life Index
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Old 01-24-2018, 09:45 PM
 
Location: East of the Sun, West of the Moon
14,933 posts, read 16,520,894 times
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Quote:
Originally Posted by Quietude View Post
Well, yes. And when you're done totting up those lists, Canadians differ from Americans in more fundamental ways than they match us.

I didn't say Canadians == Norwegians. I said more in common. With Scandinavians, with the UK, with the countries that actually give two sh*ts about their citizens. (You know, the ones without stock portfolios.)
Well if you want to reduce culture to the minutia of socio-economic theory, google "r/last stage capitalism" and hang out there.
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Old 01-25-2018, 12:29 AM
 
Location: Sydney Australia
597 posts, read 302,176 times
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Quote:
Originally Posted by American Expat View Post
Cool story bro. Actually according to the internationally recognized OECD, the US average wealth per capita is more than double Canada:


OECD Better Life Index
From my reading of this report, the measure of wealth is of financial wealth eg shares and cash, and does not include the value of property, saying that statistics on that are not widely available.
The figure quoted for Australia for wealth is very low and I wonder if it includes superannuation, which are private retirement accounts. There could also be a similar omission in the Canadian statistics.
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Old 01-25-2018, 02:38 AM
 
Location: Clown School
9,999 posts, read 4,218,599 times
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My husband and I could afford to buy a house almost anywhere (in full), and we'd still rather rent.

Owning just seems like an insurmountable headache, and it necessitates staying in one place for a long time. I've never lived anywhere longer than 3 years in my life.

Jobs, economy, opportunities, and lifestyle tend to have that effect. I don't like feeling chained down at all. A 1 year lease is much better than being stuck in a house that is a months long ordeal to sell/close, not including the big ordeal it'd be to buy another.

And in this litigious society, there's no way I'd ever consider buying property to rent out.
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Old 01-25-2018, 05:50 AM
 
Location: Kuwait
3,038 posts, read 1,179,326 times
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Quote:
Originally Posted by MarisaAnna View Post
From my reading of this report, the measure of wealth is of financial wealth eg shares and cash, and does not include the value of property, saying that statistics on that are not widely available.
The figure quoted for Australia for wealth is very low and I wonder if it includes superannuation, which are private retirement accounts. There could also be a similar omission in the Canadian statistics.
OECD measures financial wealth and does not include the house you own and living in. Obviously if you included the estimated value of a house minus mortgage and added to the wealth numbers, everyone's wealth average would change.
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Old 01-25-2018, 06:56 AM
 
1,789 posts, read 1,345,713 times
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Quote:
Originally Posted by Quietude View Post
I won't argue that home ownership is some kind of perpetual gold mine or even a net wealth builder in the long run, not with mortgage costs and those $1,000 plumbing jobs. But historically long-term ownership has shown appreciation that more than exceeds most routine maintenance and minor repairs. Flippers, suckers and millennials who are going to chase jobs across the country every two years excepted.
I disagree strongly with this. I think owning a home is a lifestyle choice and/or an investment. For full disclosure, I do own, more than 1 home.

Now, there are situations where home ownership is a good investment and there are situations where its bad. If you want to talk average numbers then its fairly clear that owning a home is not a good investment and your lucky to break even. Most long term home owner don't.

Take the median US home price 50 years ago. It was $22,700 in 1967. Last year it was $307,000. Sounds great right. Thats an average annual return of 5.35%.

Well not so fast.

There is this thing called inflation. $22,700 in 1967 is actually $170,000 today. So now including inflation our return is down to 1.19%

Then you got to pay those taxes every year. Average property taxes are about 1%. Add in repairs and insurance costs and your looking at a total price tag that is very close to what your home is worth today, or about $307,000.

It gets worse.

The average home size in 1967 was about 1600 sqft. Today its 2400 sqft. So if you go by sqft that same home is actually only worth about $210,000, not $307,000.

You would need to experience outstanding gains to come out ahead. Now certainly in the runup to the last bubble home owners come out great, up until the market crashed. They only recently regained those loses and in some areas passed them. In the meantime they paid all those costs for nearly a decade of treading water in home value. If your in an area experience surging home prices like the DFW metro, then buying is a no brainer. You can get great short term gains.

Buying a home in a hot market is like buying stocks in a bull market. You almost can't go wrong. Except unlike a stock, you can't hold onto it for 10 years after a crash because a home is a stock you pay taxes on for owning, you pay to repair it, and you pay to insure it.

I haven't even talked about interest costs.

Renting isn't a gonna automatically save you money either. Where most people save money on renting is they rent a smaller lower quality place than they would buy. So the LL's cost to own that property are lower. He is gonna be paying less taxes, less insurance premiums, less on repairs which means you pay less on rent.

I am not saying don't own a home.

I am just saying its not a sure way of making money like most people think. You have to look at it like an investment. You might come out ahead buying in some areas, you might come out ahead by renting. Chances are for most people, its not gonna make a big difference and in the end its just a matter of paying for somewhere to live, which we all have to do.
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