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There's no inherent need to have a condo in Toronto; you always have an option to cash out and rent, or cash out and buy at a cheaper location - and in both of

There's no inherent need to have a condo in Toronto; you always have an option to cash out and rent, or cash out and buy at a cheaper location - and in both of these cases the absolute value of the increase matters a lot.

jmyeet 3y ago
And where is that cheap place to live in Canada exactly? Toronto (or the GTA more specifically) was the cheaper version of Vancouver. Now the average house price is north of C$1m in a country where average wages are a fraction of that. People live in cities often because that's where the owrk is. A lot of people like it too. Some jobs can be remote. Many can't. You can't be a nurse or a mechanic or an EMT or a firefighter remotely. Toronto needs all those so-called "essential workers" too. Where are they supposed to live? The general pattern has been in Canada (and the US and other places) is that you have starter homes like condos and then you buy a house when you want or need more space (eg you have children). The commenter I replied to buy a condo for just shy of C$600k. At that time maybe a house they might move up to was $900k. $300k is a lot but probably doable. Now their condo is $1.2m that house is probably $1.5-2m. It's actually more relatively unaffordable than at the time they bought their condo. You see what I mean when rising prices for a basic necessity you cannot live without actually don't increase wealth?
- medvezhenok 3y ago
  They do increase wealth, it’s just that the prices of your preferred consumption basket (houses in this case) increases even faster (an important nuance). Wealth is defined as the purchasing power across all possible consumption baskets - not just the one that you want though. So if you measure the value of your house in bananas, or oranges, or bars of chocolate, it’s value has definitely gone up.
- PeterisP 3y ago
  In a cheaper location outside of Canada, $1m is sufficient to never ever have to work in your life - that is one impact of the absolute numbers, because at this level of wealth suddenly there are other options than having to live where the high-paying jobs are.

jmyeet 3y ago

And where is that cheap place to live in Canada exactly? Toronto (or the GTA more specifically) was the cheaper version of Vancouver. Now the average house price is north of C$1m in a country where average wages are a fraction of that. People live in cities often because that's where the owrk is. A lot of people like it too. Some jobs can be remote. Many can't. You can't be a nurse or a mechanic or an EMT or a firefighter remotely. Toronto needs all those so-called "essential workers" too. Where are they supposed to live? The general pattern has been in Canada (and the US and other places) is that you have starter homes like condos and then you buy a house when you want or need more space (eg you have children). The commenter I replied to buy a condo for just shy of C$600k. At that time maybe a house they might move up to was $900k. $300k is a lot but probably doable. Now their condo is $1.2m that house is probably $1.5-2m. It's actually more relatively unaffordable than at the time they bought their condo. You see what I mean when rising prices for a basic necessity you cannot live without actually don't increase wealth?

medvezhenok 3y ago
They do increase wealth, it’s just that the prices of your preferred consumption basket (houses in this case) increases even faster (an important nuance). Wealth is defined as the purchasing power across all possible consumption baskets - not just the one that you want though. So if you measure the value of your house in bananas, or oranges, or bars of chocolate, it’s value has definitely gone up.
PeterisP 3y ago
In a cheaper location outside of Canada, $1m is sufficient to never ever have to work in your life - that is one impact of the absolute numbers, because at this level of wealth suddenly there are other options than having to live where the high-paying jobs are.