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[KAL2006]

I remember the old days. Where parents had 5 kids, and only 1 person needed to work to provide for the family and mortgage would be paid off around late 30s as well as having an investment pot. Back in those days there were more family gatherings, dinner parties and etc.

Nowadays it seems like shit has taken a turn. People can't even decide if they want even 1 child as it's unaffordable. Both parents have to work to keep the lights on. People are too tired and end up not having that many family gatherings and dinner parties as after 2 people working long hours all you want to do is just put your feet up and watch TV.

Let's look at how we came to this. The biggest issue is housing, prices of houses have gone mental mainly thanks to polititions, landlords and builders back door deals. BTL properties became a massive busines. Obviously nowadays both mum and dad have careers that push prices up that means a sole earner can't compete so now both parents parents have to work even if the partner doesn't even want to work there is no choice it's either a house or not. Rent has rised alot so it's hard to save as your money just goes to a landlords pocket.

Recently the taxes, enerygy prices and car prices have come up.

here is a article that shows how bad it is
https://www.theguardian.com/money/2...households-unable-to-pay-bills-finds-research

It's crazy how we have come to this back in the old days you knew if you worked and wasn't lazy you would be okay, nowadays it's not about if you work it's about being in a good situation, do you have bank of mum and dad to help for a deposit, can you live rent free, can you get that massive high pay job etc. You can't just simply work 40 hours in a low income job and expect to have a comfortable life after 50 and own a house and have kids. Also due to lack of people having kids we have more immigration as we need workers to pay for a aging population and of course these workers need to rent to help landlords.

Taking a step back and seeing what's happening I'm just thankful I own my own house and can pretty much pay my mortgage off. It's not my ideal house but now I'm thankful. I got to this stage by living at parents rent free until 33, even rented my first house out for years before I moved into so someone else can pay my mortgage off. I managed to bag a job where I was a contractor and didn't pay much tax thanks to a good accountant. It's like nowadays you need luck or need to feed into the system (being a landlord, being tax efficient) just to make it.

Now I'm thinking of buying a 2nd property just as an investment to act like a pension pot as well as it being a source of help for my kids it's like I am in a cycle and feeding into the system and becoming a landlord. But I feel like 8f I don't do this my kids will struggle and time is money I'm better off just buying a property and leaving it and letting it pay itself off. So I have a asset for retirement and for kids.

 

[BigBooper]

Housing prices and auto prices are too high, you're right. I don't know if low income people will even be able to afford any car once we go all electric.

Also though, back in the old days people had one tv that they kept for 20+ years until it broke. Unless you were wealthy, branded clothing indicated the quality of the clothing and not the status or price. People cooked meals at home most of the time, and only occasionally went to restaurants. Nowadays, every millennial I know lives like they're wealthy even though they aren't.

I'm not convinced people take into account the conveniences available to the modern poor when they compare to the past.

 

[Irobot82]

What time period was your "old days"?

 

[funkygunther]

we're levelling up!

 

[KAL2006]

Housing prices and auto prices are too high, you're right. I don't know if low income people will even be able to afford any car once we go all electric.

Also though, back in the old days people had one tv that they kept for 20+ years until it broke. Unless you were wealthy, branded clothing indicated the quality of the clothing and not the status or price. People cooked meals at home most of the time, and only occasionally went to restaurants. Nowadays, every millennial I know lives like they're wealthy even though they aren't.

I'm not convinced people take into account the conveniences available to the modern poor when they compare to the past.

I think it depends how far back you go. Pre 80s it was actually harder. But between 80s and 200s that was the time to live it up.

And I know plenty of people who cook at home. Or never gone on holiday in there life. And are still broke. We shared 1 Tv because those days a TV was bulky as hell and there was no streaming services. I remember when I was a kid we had 2 TVs in our household. To this day we still have 2 TVs.

 

[KAL2006]

What time period was your "old days"?

90s

 

[Irobot82]

90s

Lucky you, that shit ended in America in like the 60's. Welcome to the New World. Just getting by.

 

[Wildebeest]

I don't see how you can say that only "recently" things have got worse. Do you live in the south-east or London?

 

[nightmare-slain]

the uk is a backwards ass country now. it's fucked up after years of tory rule. i live in the UK and it's fucking depressing. the only sliver of hope i have is that i live in scotland and we might get a second chance of getting the fuck out off this stupid country. i was proud to be british growing up but now i can't stand the place. fuck england and boris johnson.

 

[INC]

Been shit all my life, parents worked full time, could afford a house and still had fuck all. I cant afford a mortgage having to pay high rent.

Is what it is

 

[KAL2006]

I don't see how you can say that only "recently" things have got worse. Do you live in the south-east or London?

Midlands. Yes London was worse a long time ago. I think house prices took a turn around 2016 I midlands but we just got another massive bump since covid.

 

[nightmare-slain]

op sounds like a middle/upper class kid with no idea what the rest of the UK is dealing with. oh no now some of the english are feeling the pinch. guess it's time to worry now, right? maybe i should go read that article...

fucking hell.

 

[Wildebeest]

Midlands. Yes London was worse a long time ago. I think house prices took a turn around 2016 I midlands but we just got another massive bump since covid.

I guess there was a good period in the 90s to invest in property if that is really all you care about.

 

[KAL2006]

op sounds like a middle/upper class kid with no idea what the rest of the UK is dealing with. oh no now some of the english are feeling the pinch. guess it's time to worry now, right? maybe i should go read that article...

fucking hell.

Yep you got it 100 percent correct I'd consider myself middle upper class. Although I'm not a kid lol. And yes I do know what's going on cause I have friends and family in all backgrounds renters, multiple property owners, poor working 7 days a week, comfortable high earners etc. My family background is from a working class where my parents immigrated.

 

[p_xavier]

In Canada it's just plain insane. Inflation is at 4.2% YoY and that's not including house prices which only top 5% earners can afford now if they don't already own a house or got an inheritence.

 

[Jose92]

House Prices Over the last 30 years more than quadrupled in some areas or double in other areas, there has been a substantial inflation in house prices, car prices, and general life cost. Yes minimum wage has increased, but it has not kept with the real inflation.

Average salary in the 90s was about £20k and today is about £31k [1]. That is only £10 grand a year increase over 30 years. it may sound a lot but realistically is even less compared pound to pound. Inflation devaluing of the purchasing power of the pound and the high increase in house prices with lack of realistic increment of salaries have caused this current status quo.

 

[Cyberpunkd]

Housing prices and auto prices are too high, you're right.

Housing prices are not high - it's always a matter of supply and demand. What is high is the price for a house / an apartment in the city center. The more you move out the more affordable housing becomes.
I give you the example of probably the most expensive city in Europe except London - Paris. The city itself is rather small, enclosed by a highway. Everyone wants to live inside Paris to go to restaurants, cinemas, meet with friends etc. So you have fixed supply but constantly raising demand.

Another factor is the unprecedented quantitative easing going on for 12-13 years now. Low interest rates = easier credit = more people buying = prices go up. Without massive and large-scale building plans (assuming you don't mind living in the suburbs) you will not rapidly scale the housing supply. And even then I don't know about you (Paris spoiled me) - I am not interested living in an apartment complex that looks the same, bordered by other apartment complexes looking the same.

 

[KAL2006]

I guess there was a good period in the 90s to invest in property if that is really all you care about.

You act like property isn't the biggest cost. Rent or mortgage is the biggest cost of living. Someone on a low income who bought there property when it was cheap is better off with someone with a moderate income who is looking to buy now.

 

[BigBooper]

Housing prices are not high - it's always a matter of supply and demand. What is high is the price for a house / an apartment in the city center. The more you move out the more affordable housing becomes.
I give you the example of probably the most expensive city in Europe except London - Paris. The city itself is rather small, enclosed by a highway. Everyone wants to live inside Paris to go to restaurants, cinemas, meet with friends etc. So you have fixed supply but constantly raising demand.

Another factor is the unprecedented quantitative easing going on for 12-13 years now. Low interest rates = easier credit = more people buying = prices go up. Without massive and large-scale building plans (assuming you don't mind living in the suburbs) you will not rapidly scale the housing supply. And even then I don't know about you (Paris spoiled me) - I am not interested living in an apartment complex that looks the same, bordered by other apartment complexes looking the same.

I live in the US, in a rural area. Thanks to the work from home initiative, people are moving here from wealthier cities and buying property and houses at 200-400% what they were five years ago. This has caused property values, and thus taxes, to rise and the poor people who've lived here their whole lives can no longer afford to pay them.

So their properties are worth more, but all the surrounding property is worth more too, so it's not like they can just sell and buy somewhere else with ease. They would have to move far away, leaving their job, family, and friends behind to move to a dumpier place than they've lived all their lives. Either that or give up their equity and become permanent renters.

I do imagine eventually it will balance out. More of the unskilled workers will become skilled builders and there will be more houses available, but that can't even start to happen while the price of materials is sky high.

 

[StreetsofBeige]

In Canada it's just plain insane. Inflation is at 4.2% YoY and that's not including house prices which only top 5% earners can afford now if they don't already own a house or got an inheritence.

Low mortgage rates of 1.5 - 2% and tons of people coming to Canada (especially metro hubs), and not enough homes being built. Even if someone's area has enough new units built, it'll probably skew to condos which not everyone wants. So what happens is all the towns, semis and detached houses zoom up the charts. And Canada's immigration policy skews to people who have decent jobs, skills and money to begin with. So it becomes a tug of war of tons of people fighting for homes.

Anyone can always live in places like Saskatoon or Halifax for cheap, but most people (esp. foreigners) want to live in Toronto, Vancouver, Montreal kinds of metros.

Great for existing homeowners. My place has gone up around $300k in 3 years. Awful for anyone wanting to transition from renting to owning. And people with not a lot of money to start with to buy probably have to start with a modest condo and go through the chain of home ownership.... Small --> Med --> Large. But at giant premiums to start with.

The first condo I bought around 20 years was $170k and that included a parking spot.

 

[*Nightwing]

Welcome to “progress”

 

[KAL2006]

Low mortgage rates of 1.5 - 2% and tons of people coming to Canada (especially metro hubs), and not enough homes being built. Even if someone's area has enough new units built, it'll probably skew to condos which not everyone wants. So what happens is all the towns, semis and detached houses zoom up the charts. And Canada's immigration policy skews to people who have decent jobs, skills and money to begin with. So it becomes a tug of war of tons of people fighting for homes.

Anyone can always live in places like Saskatoon or Halifax for cheap, but most people (esp. foreigners) want to live in Toronto, Vancouver, Montreal kinds of metros.

Great for existing homeowners. My place has gone up around $300k in 3 years. Awful for anyone wanting to transition from renting to owning. And people with not a lot of money to start with to buy probably have to start with a modest condo and go through the chain of home ownership.... Small --> Med --> Large. But at giant premiums to start with.

It's not actually great for existing owners unless you have 2 properties or more already. Because if you want to go up the ladder and sell to buy a another you end up paying more. As percentage of growth on a cheaper how's isn't as much as percentage growth on the next step up. I guess you naturally feel richer if everyone is poorer around you but trust me it's not good for existing owners unless you have 2 properties or more.

 

[Wildebeest]

You act like property isn't the biggest cost. Rent or mortgage is the biggest cost of living. Someone on a low income who bought there property when it was cheap is better off with someone with a moderate income who is looking to buy now.

Property is a measure of inequality but far from being the only one. It used to be that homes were not an "asset class" and it only made sense to buy a house as a safe investment if you planned to live in it. You can split that up into two parts.
Your question: are upper middle class people being pushed out of the real estate market by the super rich? The answer is simple. Yes. Question answered. Welcome to the fall with all the rest of the plebs.
The other question: why are these mad lads investing in housing instead of in economic growth in the real economy? Good wages for workers, and so on. When did this start?

 

[Cyberpunkd]

I live in the US, in a rural area. Thanks to the work from home initiative, people are moving here from wealthier cities and buying property and houses at 200-400% what they were five years ago. This has caused property values, and thus taxes, to rise and the poor people who've lived here their whole lives can no longer afford to pay them.

Today I learned in the US you pay taxes corresponding to the value of your property.

 

[Irobot82]

Today I learned in the US you pay taxes corresponding to the value of your property.

You don't have property taxes in the UK? It mostly funds the county and town you live in and a large chunk is also for school funding.

 

[StreetsofBeige]

It's not actually great for existing owners unless you have 2 properties or more already. Because if you want to go up the ladder and sell to buy a another you end up paying more. As percentage of growth on a cheaper how's isn't as much as percentage growth on the next step up. I guess you naturally feel richer if everyone is poorer around you but trust me it's not good for existing owners unless you have 2 properties or more.

Sure it's great. Nobody says you have to move. And not everyone is upgrading to a bigger place paying closing costs and land transfer taxes over and over again. I'm not moving anytime soon. Unless there's a giant financial crisis and huge mortgage rates killing prices, my home is worth a ton more than I bought it. It's all paper assets, but its still a gain.

When I retire, I'll cash out and move to a smaller town an hour or so away and bank the difference.

If I stayed in that first condo I bought 20 years ago for $170k, it might be worth $400k now(?). It was a tiny 1 bed 1 bath condo. I've moved around a few times and my current detached house I live in has way better gains (ka-ching!) than if I stayed in that condo even after paying closing costs.

I know lucky bums my age who bought brand new homes back then for an "OMG, $350,000 is so much". They're worth $1.5M. Some people I know bought homes for $800k which sounds insane at the time they bought it. $2M now. My brother is one of those lucky ass $2M'ers.

 

[AJUMP23]

A lot of Cost of living is tied to location. If you can get a good job and not live in the city or high rent areas that is a smart move. The suburbs in the US exist for people that worked in the cities but couldn't afford to live there. Over time the cost of living in the Suburbs has increased as well. Home values go up over time. Many things factor into the increase in cost, from government interference to labor cost, material cost, scarcity and so on. I would advise you to find a way to move out of the high cost area and find an affordable area to live, or do things that increase your value as an employee and get higher wages.

 

[Kilau]

Today I learned in the US you pay taxes corresponding to the value of your property.

Taxed assessed value and market value aren't the same thankfully, at least where I live. Though of course tax assessed goes up when market goes up just not at the same level.

 

[AJUMP23]

Today I learned in the US you pay taxes corresponding to the value of your property.

In some places you do, in some places you don't. In some states there is not tax on income, but a higher tax on property. In other states there is no sales tax. Taxes vary by state and that is why a lot of companies in the US incorporate in Delaware or TX due to the taxes.

 

[AJUMP23]

Taxed assessed value and market value aren't the same thankfully, at least where I live. Though of course tax assessed goes up when market goes up just not at the same level.

and most of the time if your land is a primary residence or a farm you get a tax rate deduction.

 

[Jezbollah]

I dunno about equality.

But this has never been more true in this world:

 

[Cyberpunkd]

You don't have property taxes in the UK? It mostly funds the county and town you live in and a large chunk is also for school funding.

I live in France. We have several taxes but they do not correspond to property value. There is one tax that does but to give you an estimate: approx. 70m2 (700 square feet) in Paris valued at around 800 000 - 1 000 000 € at market has an annual tax of approx. 800€. On top of that you pay the habitation tax, but that is fixed (paid 400€ for the whole year) and will be abolished anyway in 2023.

There is a separate tax on real estate holdings but it doesn't kick in until your real estate holdings are in excess of 1.3mln € in value.

 

[Irobot82]

I live in France. We have several taxes but they do not correspond to property value. There is one tax that does but to give you an estimate: approx. 70m2 (700 square feet) in Paris valued at around 800 000 - 1 000 000 € at market has an annual tax of approx. 800€. On top of that you pay the habitation tax, but that is fixed (paid 400€ for the whole year) and will be abolished anyway in 2023.

There is a separate tax on real estate holdings but it doesn't kick in until your real estate holdings are in excess of 1.3mln € in value.

Neat. That's different form us. Where does state/county/city gets funding? Do you have those in France? Provinces or something?

Where does school funding for kids come from?

 

[Cyberpunkd]

Neat. That's different form us. Where does state/county/city gets funding? Do you have those in France? Provinces or something?

Where does school funding for kids come from?

Apart from central government the districts got funding from the habitation tax, but that is going away. The property-adjusted tax will go up in 2026 (probably to compensate for the other tax going away), where the reference values (used in calculation) will be re-adjusted, last time it happened was...1970.

Other than that a lot of things are paid differently given your income e.g. food kids get at school - parents earning more pay more.

 

[StreetsofBeige]

I live in France. We have several taxes but they do not correspond to property value. There is one tax that does but to give you an estimate: approx. 70m2 (700 square feet) in Paris valued at around 800 000 - 1 000 000 € at market has an annual tax of approx. 800€. On top of that you pay the habitation tax, but that is fixed (paid 400€ for the whole year) and will be abolished anyway in 2023.

There is a separate tax on real estate holdings but it doesn't kick in until your real estate holdings are in excess of 1.3mln € in value.

Annual Toronto property tax for single homes is 0.6% based on assessed property values by the city (not the same as market value). The good thing is the assessed value is always less than the actual saleable value.

So if the city says your property is worth $1M, that's $6000 tax per year, which you can pay spread out across many months according to the payment schedule. So getting back to that other thread many of us chatted about landlords and rent, a landlord renting out a unit like this has $6000 tax to pay to the city just for this. So $500/mth of rental fees is really just paying city tax.

So for sake of property tax grabbing, the city always wants property to go up in value so when they do their new assessments every 4 or 5 years, its more tax revenue. So any time the gov says housing is unaffordable for renters and poor people, they are right. BUT, they like it that way.

Property Tax Rates & Fees

Find information on property tax rates and fees.

www.toronto.ca

 

[p_xavier]

Low mortgage rates of 1.5 - 2% and tons of people coming to Canada (especially metro hubs), and not enough homes being built. Even if someone's area has enough new units built, it'll probably skew to condos which not everyone wants. So what happens is all the towns, semis and detached houses zoom up the charts. And Canada's immigration policy skews to people who have decent jobs, skills and money to begin with. So it becomes a tug of war of tons of people fighting for homes.

Anyone can always live in places like Saskatoon or Halifax for cheap, but most people (esp. foreigners) want to live in Toronto, Vancouver, Montreal kinds of metros.

Great for existing homeowners. My place has gone up around $300k in 3 years. Awful for anyone wanting to transition from renting to owning. And people with not a lot of money to start with to buy probably have to start with a modest condo and go through the chain of home ownership.... Small --> Med --> Large. But at giant premiums to start with.

The first condo I bought around 20 years was $170k and that included a parking spot.

And immigration rates are going way up with no way near construction needed, and zoning limiting density and building heights. Plus a vast majority don't want to live into condos. My condo in Ottawa was 178sf, my 512sf condo in Montreal I sold for 460k$ last year. Ridiculous. This is not affordable for the vast majority. Like many I headed out to the country last year and cashed out.

 

[p_xavier]

Annual Toronto property tax for single homes is 0.6% based on assessed property values by the city (not the same as market value). The good thing is the assessed value is always less than the actual saleable value.

So if the city says your property is worth $1M, that's $6000 tax per year, which you can pay spread out across many months according to the payment schedule. So getting back to that other thread many of us chatted about landlords and rent, a landlord renting out a unit like this has $6000 tax to pay to the city just for this. So $500/mth of rental fees is really just paying city tax.

So for sake of property tax grabbing, the city always wants property to go up in value so when they do their new assessments every 4 or 5 years, its more tax revenue. So any time the gov says housing is unaffordable for renters and poor people, they are right. BUT, they like it that way.

Property Tax Rates & Fees

Find information on property tax rates and fees.

www.toronto.ca

Vancouver and Toronto have outrageous development fees too, which can add hundreds of thousands of cost to a property. Montreal doesn't have one and most small towns either, which skew prices ever more for the first two.

 

[Patrick S.]

I'm an IT guy in Germany, and earn slightly above the average salary in my field for the non-metropolitan area where I live, and I struggle to make it paycheck to paycheck.

 

[Fuz]

Eat the rich.

 

[Bernd Lauert]

I'm an IT guy in Germany, and earn slightly above the average salary in my field for the non-metropolitan area where I live, and I struggle to make it paycheck to paycheck.

This is me. I don't struggle to be fair, but I will never be able to afford a decent home. Of course, I could tie myself down to a 30 year mortgage, but that would be very stupid of me.

 

[cd_jakevas]

This is me. I don't struggle to be fair, but I will never be able to afford a decent home. Of course, I could tie myself down to a 30 year mortgage, but that would be very stupid of me.

This doesn't make sense. Not sure where you live or your exact situation but I can give you an example where your statement doesn't make sense.

We had an apartment, these are real figures by the way, and our rent was $750 a month. This is about 10 years ago. We decided to get a 30 year mortgage with a payment of about $850 (included property taxes and insurance) <$100k USD house. We never planned to live at the house for more than 4-5 years. After 5 years, we sold the house, made about 10k in profit and moved on.