Saving for mortgage vs leaving Canada

[cankosker]

I'm graduating school soon, will be making reasonable pay.

In 4 years, I should have 60k usd equity saved up, on top of anything else I manage to save, I was hoping to use that for a down payment on mortage. Rent and mortgages are increasing at a frightening rate though.

I'm weighing the financial pro's/con's of leaving Canada (born and raised here).

I feel like buying a house in Canada is a lot like buying an NFT; not worth it's cost, and mostly speculative. It'll probably be the better part of a million by the time I'm ready to buy. I'm also worried that the line can't go up indefinitely; how risky is that asset? I'd really hate to overpay for a house, and then see all the money disappear.

I also don't want to overpay for rent much longer.

Is moving away from Canada a viable option? I feel like if I can live somewhere where housing is reasonable, and if I can land another good job in software development, I can try to save up until the housing market crashes in Canada?

Is this viable? Or is it still better to hold out hope in Canada? Any recommended countries? I'm probably willing to learn other languages.

Update: seems the main opinions are: (a) go the the US or (b) it sucks everywhere, suck it up and pay. Option b is so depressing. The optimist in my wants to believe there's somewhere affordable, so I'll keep looking. Sounds like a lot of people seem to be pushing towards b though; if that's the case I think we're kinda just screwed and might as well give up.

 

[belovedmiyo]

@cankosker

Is moving away from Canada a viable option? I feel like if I can live somewhere where housing is reasonable, and if I can land another good job in software development, I can try to save up until the housing market crashes in Canada?

Where would you go, and who would sponsor you?

You can't just walk into the US or EU and live there, for example.

 

[cankosker]

@belovedmiyo Can you explain what you mean?

A few of my friends got jobs in the US and moved. One of my friends moved to Oxford to finish his PhD.

Besides getting a visa and job to move, are you saying I'm missing something?

Like I wasn't expecting to literally walk to another country, and I have a few years to prepare. Not 100% what you mean by "sponsor"; id probably "sponsor" myself like my friends have? Like as long as I have an employer, is there something I'm missing?

I'm not sure where I'd go, I'm open to options though.

 

[belovedmiyo]

@cankosker

A few of my friends got jobs in the US and moved. One of my friends moved to Oxford to finish his PhD.

Besides getting a visa and job to move, are you saying I'm missing something?

In your examples, the employer sponsored your friends to move there using an H-1B or something, which is the route you'd have to take as well.

Lots of Canadians mention moving to the US like it's a trivial exercise. It isn't: if an employer there won't hire/sponsor you, good luck with your move.

What field are you moving into? What degree are you completing?

 

[darryl50]

@belovedmiyo Maybe one more note for OP, on top of what you're saying is that you can also consider a TN Visa r/tnvisa (assuming you're Canadian, you said born & raised here).
This is NOT a path for living in the US but more to move for a job.

It depends on what field you work in, this is not applicable for all fields.

 

[cankosker]

@darryl50 Yeah fair enough. I'm not sure if I'm looking for US specifically.

Do you think there would be a financial benefit of doing this, over trying to buy a house in Canada?

 

[darryl50]

@cankosker I think it all depends on YOUR life plans.
If you're planning on only making money and staying single the US would keep more money in your pocket.

If you want to get married and have kids then even though the US has higher salaries, they also have 5 times the cost of canadian universities and education in general so you need to factor that in your calculations.

I can't tell you what's more beneficial, can only give you information.

 

[cankosker]

@darryl50 Sure. Well right now I'm recovering from a tough road trying to get back onto my feet. I spent several years working full time minimum wage to pay for school out of pocket to get out of poverty

I've finally worked my way out of almost. But it looks like housing here is going up really fast.

If I were to bite the bullet and try to buy a house, I feel like I'm over paying several hundred thousand dollars, with a bad gamble on a housing market collapse. I feel like buying now might just be a loosing deal? (Or not?)

Given this situation, I think maybe I'd prefer to buy a house somewhere that isn't on such a large bubble?

The US keeps getting mentioned... Is that the most affordable place to live right now?

 

[dof7]

@cankosker I would wait and save whatever you can for another 3-4 years and ride it out, see if things stabilize in Canada and the US, Presidential elections coming up, US is literally involved in multiple wars as a proxy, A.I possibly replacing jobs? Many other problems on Canadian side.

Curious where you see your job with advancements in the a.i field? Is this gonna help you? Hinder you? Or squeeze down that industry?

 

[cankosker]

@dof7 Honestly, if I did all this work to get out of poverty, working full time minimum wage while in school, only to see myself be pushed right back into poverty, I'd truly just give up.

Working yourself out of poverty isn't something that's typically possible. I've just been interested in the field for so long, that I don't actually need to attend class to get good grades - gives me time to work full time during class.

Yeah, I'm not going anywhere for the next 4 years. But I don't want to be left with no plan after that - especially if learning a language and finding a job would be involved.

 

[dof7]

@cankosker Any thoughts on the A.I question, generally curious on your perspective since your in software development?

 

[ledinhminhhoan]

@cankosker Globally there is an affordability crisis. So it’s not something you can just avoid. People moving is creating more chaos - eastern provinces got a lot of people moving from Ontario, etc. everyone is trying to find the more “affordable” option. I read a post about a woman who retired from the US to Mexico, and now her cost of living there has now doubled. People don’t realize that relocating causes the exact same problems they were trying to avoid.
Good for you for working your way out of poverty. Keep saving and investing that money and see what happens with the housing market over the next few years. 2024 is a big year for mortgage renewals and many people won’t be able to afford what they have at their new rates.

 

[johnpatmos211503]

@cankosker I spent 5 yrs in the USA on a TN (you have to work with the same employer) - had to renew every year - it was very cumbersome.

The thing about living in the USA on a temporary visa - you still need to file Canadian taxes every year if you are intending on moving back.

Living in the USA is OK when you are young and healthy - but even with good insurance with an employer - you really don’t want to be living down there if you are sick - you could be laid off because you are no longer healthy (and useful to your employer) and left with no insurance. Then you will have no money because the insurance company or medical system will bankrupt you. I worked in the healthcare field and saw this a lot.

You would be better off staying in Canada. Find a job in rural Canada where you can afford to live. (A friend of mine does tech with the government and works remotely in a town 8 hour drive from the office) The same thing happened in the 1980s where the value of the price of houses dropped significantly - my brother had to wait 10 years to sell his house and finally broke even. I was paying 25% on my mortgage… I thought 7-10% was a great deal when interest rates finally dropped

The decision is yours of course but I think, from experience, moving to the USA is as much of a roll of the dice as staying in Canada

 

[cankosker]

@belovedmiyo Yeah. I'd get a job first, and then move after, ideally. I wouldn't leave my job without another one lined up.

Suppose I have an employer who's willing to hire me (I mean, I have 4 years to throw darts at the board), I'm assuming that there's still hoops to jump through.

But housing is awfully expensive in Canada - honestly seems hopelessly so. Are the hoops extreme enough that it's not worth it? I mean, we are talking about the better part of a million dollars here.

Software engineering; have a job lined up at a global software company right now. Might even be able to transfer from within the same company.

Say we were to weight the pro's/con's of moving, what would they look like?

Also, I'm not specifically locked to the US. I'm open to most NATO countries really.

 

[anissa16]

@cankosker If you’re a software engineer and single, it’s a no brainer. Leave Canada for the US, your salary will double and your taxes will decrease significantly. Once you have family and kids, you can reconsider.

 

[belovedmiyo]

@cankosker

But housing is awfully expensive in Canada - honestly seems hopelessly so. Are the hoops extreme enough that it's not worth it? I mean, we are talking about the better part of a million dollars here.

Where?

You can get detached homes in Calgary and Edmonton for well under $500k.

If you're stuck tot he GTA or GVA, then sure, you've got a problem.

But in the rest of the country there is lots of affordable houses out there.

A million in Calgary is buying you one helluva house, after all.

 

[cankosker]

@belovedmiyo Okay, interesting.

Is the housing bubble just in Ontario? Ie, how much have housing costs increases over the last 10 years in Calgary?

500k is definitely more affordable. It still sounds inflated, but maybe I'm wrong. I do want to avoid gambling on housing not crashing.

How might housing costs in Alberta compare to abroad? Is cost of living low compared to other countries?

 

[mythman]

@cankosker There are similar problems all over the world. Most big cities are too expensive. Most countries have more rural or less desirable areas where housing remains more stable. It tends to corelate with locations where it's possible to have good jobs or where people would want to raise kids and live long term.

Start by graduating and getting a feel for adult life and explore where you might want to live and what lifestyle you're after. If your job can be done from a smaller and cheaper Canadian city, look into that for those 4 years you want to stay in Canada. Use some of the savings to travel a bit to discover more of the world.

 

[darryl50]

@mythman Yeah, I mean don't think prices won't be inflated in europe or the USA.
And if they aren't it's because they have other issues.

The grass is always greener on the other side.

 

[cankosker]

@darryl50 Tbf, I'm just looking for an improvement. I've noticed the pricing rises pretty fast, and I see headlines about how Canada is on the largest housing bubble in the world.

Like I was paying 375 rent when I started university in 2011 and now I'm paying 1100 for the same thing.

If Canada is on the largest housing bubble, my question is where is there a smaller housing bubble?

I understand getting used to "adult" life (I'm 30 - more like getting used to non-poverty life), but I hear it's a good idea to have a financial plan for the next few years early. That's especially true if I'll need to pick up another language lol.