My wife and I had to beg, borrow, and move 2 hours outside Toronto to afford our first home. Yes we own our home and yes we are better off compared to 5 years prior, but we are FAR from being wealthy. Even if we look at the average home owners who don’t have a mortgage, most of those people again are better off but not wealthy. I feel like this article is trying to shift the blame away from the top 0.1% and put it on the slightly better off but still struggling population.
There’s no actual dividing line anywhere on the wealth or income curve. I know splitting into tribes is our species’ thing, but this isn’t that kind of problem. People above the very porous median point need to come down (to some degree, somehow), and people below need to come up, simple as.
Yup. This article is trying to turn the conversation in to another battle against eachother rather than the ones who are actually fucking us all.
I’ll just leave this here to further my point.
https://www.readthemaple.com/canadas-top-0-01-of-earners-saw-income-growth-of-30-in-2021/
What does an article about the top 0.1% have to do with home ownership? Are you for real?
EDIT: I misunderstood this post. I thought it was somebody calling out the homeowner as rich ( I had just come off another comment and was reeling ). I realized after I posted that the poster was responding to himself.
Wealth is not money, can’t buy bread with a staircase.
Yeah you can, you can leverage your equity to buy basically anything. Another house for instance…
If you leverage your equity to buy bread, you’ll be homeless very soon.
Not if your equity is always increasing
It doesn’t increase out of thin air.
In Canada it does lol
You’re confusing house price with equity.
Yes and no. Wealth can be used as a proxy, usually via debt, to acquire more wealth. If this wasn’t the case, Elon Musk would not have been able to buy Twitter.
This is why renters are absolutely screwed: not only are they spending the same as someone with a mortgage in many cases, but they can’t leverage equity at all. Need a car repair done? Send a kid to school? Retire? Invest? If you rent, you’re screwed.
We’re not talking about Musk here. Most home owners can’t leverage their equity to buy some bread.
Yes, they can.
Many (many!) have leveraged their equity into buying more houses to rent out for income, and/or into all sorts of HELOC-related silliness.
I don’t think peolle realize how stark the divide is between people with homes and people without, especially for anyone who bought before 2020. We’ve created, almost overnight, a massive and likely permanent underclass, and we have no intention of putting the kinds of supports in place to deal with the problems that will create over the next few decades as renters are broken by retirement and AI.
We’ve substituted paying fair wages and having real retirement plans with house value, and now we’re on the verge of slamming the door on a huge portion of our society by locking them out of home equity at the same time we’re diluting their earnings.
Yes, Musk et al are an extreme example, but the equity gap is real.
Do you even read?
You can’t buy bread with stocks either but Elon is still rich.
The difference is that you can’t earn a living by owning your primary residence, so you’re still working class.
That’s my point. Owning a home doesn’t make anyone rich. Owning multiple homes which generate income is a different thing, but people here assume is that if you bough a house in London 20 years ago for pennies, then today you are a fucking Bezos swimming in money. That’s not the case.
If you conflate home ownership with wealth, more people will view themselves as targeted by policies that target the rich - even if that is not the reality. Useful for getting voters to oppose taxing the rich.
Ding ding ding.
This is why the rich try to muddy the waters.
They try and make it appear as if the homes and retirement funds of the middle class are somehow equivalent to the hundreds of billions owned by the rich.
Fun fact: if we would tax the rich and lower taxes on the middle class, we would get something closer to socialism. Under pure socialism, where everyone owns an equal share of the total wealth, the average household would actually be worth $1.6M.
Any household with less wealth than that is actually doing worse under the current system compared to full equality.
I disagree. Homeowners of multi-million-dollar properties have something others really want — property — but they also usually don’t actually OWN the property; they have mortgages.
And if they sold their property, some of them would be wealthy, but they’d also be homeless. And as soon as they attempted to buy another property (or even rent), they’d be back to having very limited disposable income.
So yeah; they’re still middle class. Someone else is holding the purse strings; the purse is just bigger.
Ownership rates are around 65%, but mortgage rates in Canada are only about 30%.
So less than half of homeowners have a mortgage, and another good chunk of those mortgages were small to begin with and are approaching being paid off.
You don’t need to sell the house to benefit from owning it or it having a higher price either. You get to live in it for the cost of taxes and maintenance, that’s a massive amount of freed up monthly cash flow. The house value being higher means you’re paying less comparable to someone who has to rent at current market values (like a young adult moving out)
It would be less beneficial to own the house if the value was lower and rents were dirt cheap.
I certainly agree. Seeing as all property values skyrocketed in the past few years, those whose homes are now worth $1 million only kept up with everyone else.
Seeing as over 60% of Canadians own their home, that means that the rise of property costs merely widened the gap between those that own and those who rent. While the rise of property costs certainly isn’t a good thing, those who own property realistically aren’t any better off than they were before.
What’s the statscan definition of homeowner? Aren’t myself and my partner considered owners because we live with my parents in their house, so there are 4 “homeowners” living in the house.
I could be wrong but I remember reading what they consider a homeowner does not match what common sense says it is. Please point me in the direction of something if I’m wrong, I’ve tried looking but can’t find anything.
That’s a great question, and I can’t seem to find an answer. I got my information from stats Canada, but I can’t seem to find how they define a home owner.
Looks like it’s people who report ownership on their taxes, i.e. legal owners. So either one or both parents would be a “homeowner”, depending on whether it’s singly or jointly owned, but other adult tenants wouldn’t be (unless they were partial owners).
For anyone who purchased a house in the last 5ish years sure. Much longer than that and they are sitting on a whole lot of equity.
Yes if they sold the house they would have 1/2 - 1 million dollars in cash and be homeless. But that’s a lot of dollars better than all the other people who currently also don’t own a home and don’t have all that cash.
Which is sorta the point the article is trying to make.
Yeah; I agree with that point, but not how they couched it — those people are still middle class.
The real kicker is that all the people who currently don’t own a home and don’t have the cash… are lower class. Despite thinking of themselves as middle class.
I don’t agree with that take.
Those house owners likely fall into upper middle class rather than middle class.
Another way to look at it. Depending on who you ask middle class roughly covers household income of about 75k-150k
If one of those home owners sold their home and made 1 million in equity, that money could be expected to make them ~50k a year. For many current home owners that hypothetical raise would push them above the middle-class bracket.
1 million in equity, that money could be expected to make them ~50k a year
Except that they will need to take the lion share of that and buy a new also-very-epensive home. Certainly wont leave a lot of investment cash.
Did you not read the earlier comments in theis thread? That very point was already addressed.
The point the article is trying to make is that after selling the house, even after mortgage is settled, these homeowners have a lot of cash. Much more than their renter peers who are in the same position (house less) and trying to find something they can afford.
The point above seems obvious when it’s out like that, but it’s still hard for people to grasp.
This is why the article argues that people who are in the privileged position of having huge equity in their house need to also consider what that does to their wealth class, even if they themselves don’t believe it. A lot of home owners who have had a house for 10-15 years (and even more who paid off their house years ago) have no clue how much harder it has gotten for middle class income people to buy houses.
“We’re not middle and lower class, we’re all working class”
Most home owners, if they cash out their home, and either rent or downsize, will still absolutely need to work to eat, and if they don’t they will find themselves homeless before long.
For that small portion that could actually live on the equity from downsizing their housing, yeah, they are upper class, but there are a lot fewer of those than you would think. For a single person, a million in equity (50k a year) might get you by, but not luxuriously and not safely, and most houses are owned by couples though (so cut that in half), and many have dependents.
Mmm, headline mentions ‘impact on renters’ though - so we’re already talking about people who not only own a house, they own a house that is not their residence and earns money for them
It kinda sorta does, but even the article body flip flops between “homeowner” and “owner of $3.2mil property” and likewise between “landlord” and “airbnb magnate”. The headline implies that landowners don’t understand the plight of the renter, and asserts that the landowner isn’t middle class anymore.
While there are good points in there, the headline misses the point that the “wealthy” don’t need to work, and can be independently wealthy purely through extracting rent from use of what they own.
Most property-rich householders aren’t there; their equity isn’t enough to sustain them.
There’s no denying the gap between renters and landholders. Renters are way worse off. But those renting out a carriage house or basement suite to be able to make the mortgage payments aren’t in the same class as the likes of Dorset Realty and those who own them.
They are middle class. In fact, there is no middle class, they are working class!! They do not own their own means of production, they are wage slaves like everyone else.
That isn’t the definition of working class, or middle class
I can’t tell if you’re joking or not. Poe’s Law.
If you own a $3.5 million home in Vancouver, or you’re complaining about not being able to rent out four condos on AirBnb like one woman in the article, then, no, you’re not middle class.
Yeah no, owners of an expensive property are not only not in the “rich” class, they’re likely working class as much as gig drivers and cashiers. Unless they liquidate this asset and actually go live somewhere LCOL where they can live off of the labour of others, they’re still working class.
That doesn’t make any sense. If you have a million dollar house, you can borrow against it or sell it like any other asset. Yes you’re rich.
What if you have already “borrowed against it” and the thing you bought is the house itself? You know, a mortgage. How is a regular family with a mortgage not middle class?
Any age considerations here? 50+ year olds with no pension whose entire net worth is tied up in their home are not middle class?
A retired couple that have a reverse mortgage on their home to supplement their insufficient income are not middle class?
Honestly, even a regular person that busted their ass to pay off their house and who eventually bought a run-down property that they poured all their free time for years to fix up and rent out is not suddenly a member of the 1%.
You know what, I “own” the house my 4 kids call home. I owe pretty close to what it is worth and I can barely afford anything else with mortgage rates where they are ( certainly more than rent would be ). It needs some repairs that are going to force me to borrow from somewhere. I work two jobs ( decent ones ) trying to keep it all going. If I lose the house, I will end up with a net worth lower than a homeless person. And I have dipshits on the Internet lashing out at my wealth and privilege. For the love of God, who are you people?
For the love of God, who are you people?
People who have no idea how mortgages work. People who dont grok that 99% of “homeowners” pay a bank every month just like a renter pays a landlord and can still get the boot if they fail to do so. People who are mad and lashing out in the wrong direction like teenagers.
“Owning” the home my family lives in does not make me rich, it means I took on a huge debt. Now if they want to have a discussion about investment properties then I am all ears.
Lol nobody thinks a mortgage is an asset, it’s a liability duh.
On the “sell it like any other asset”, you still have to live somewhere, those places cost money. On the “borrow against it”, now you’ve got debt (that costs money to have), I guess your saying anyone with that much money should be able to make more money off it via leverage than they use?
When i think rich, i think doesn’t have to work, but maybe that’s independently wealthy.
We’re using different definitions of the word “rich”. In my definition, the one I personally see as more useful because it aligns with class struggle and shared policy interests, having a bunch of wealth parked in a passive asset is not enough to tip you over to the group of people who benefit from inequality.
Exactly, articles like this are just confusing the meaning of class.
What makes you a member of “the working class” is that you are forced to sell your labour to survive. Fullstop. A tradesperson, and a lawyer, and a burgerflipper are all in the same class from that point of view.
As soon as your accumulated capital becomes large enough that you earn your income only as a result of your capital, then you are no longer working class, and that’s when your interests diverge from the average worker and average homebuyer or renter.
A landlord with no other job, the major shareholders of a profitable business, a wealthy heir, those people make their money by siphoning value off of other people’s work without actually needing to spend their time on work.
As soon as your accumulated capital becomes large enough that you earn your income only as a result of your capital, then you are no longer working class, and that’s when your interests diverge from the average worker and average homebuyer or renter.
Interestingly, almost everyone in government is a member of the capitalist class, largely because people that sell their labour can’t afford the time, let alone the money, to run for office.
In case you wondered why the interests of labour are grossly underrepresented in government, despite that vast, vast majority of both citizens and voters being of the working class, this is why.
If you’re dicing things up that way, there’s no middle class in the first place.
There never has been. You either sell your body and labour, or own enough capital for it to self sustain, or at least be sustained by the labour class.
If we’re doing Marx, don’t forget the petite bourgeoisie, who draw significant income from both. They were minor in Marx’s day, partly because very little was publicly traded, but they’re actually the wealthiest group by far now, taken as a whole.
Exactly, you’re either a part of the working class or capitalist class
:-) the middle class is the subset of the working class that has no food insecurity but has a lot of social & image insecurity
But like the rest of the working class, the middle class is one or two tragedies away from becoming homeless and marginalized, despite the lack of awareness regarding so
That’s as good a definition as any I guess.
Of course there is no middle class!
That is the point though, if like the article says l, 1/5th of owners have an investment property, they could sell it and still live in the current place and have a ton of cash. or sell both and move to a cheaper city and retire. Compared to people struggling to save for a mortgage in this crazy market.
1/5th of owners have an investment property, they could sell it and still live in the current place and have a ton of cash
That’s fair, and the article goes through a few key points that I agree with. The article title is just clickbait, but annoying because it’s alienating. I don’t think it makes sense to write a headline based on 1/5th of that group being land speculators.
A lot of people in this thread are claiming that homeowners are not really rich. A bunch are citing some Marxist definition of “rich” or raising the bar to “never having to work again”. OK, fine: they’re “rich enough” to be a problem, then.
The truth is, homeowners in Canada have enormous power, both economic and political, and they have been advocating for policies at every level of government that have both exacerbated the housing crisis and grown their own wealth.
“But they’re working class because they can’t enjoy their wealth without selling their home!”
That’s just not true. Homeowners enjoy enormous privileges at the cost of renters, most notably blocking new developments, which homeowners do with passion. Their mortgages are guaranteed by the government, subsidized effectively at the cost of taxes by non-homeowners, i.e. renters. And homeowners have enormous generational wealth to pass on, which if we don’t address, will cause an economic caste system to permanently root itself. Yes, this is real wealth, causing real social problems. This article is right to call it out!
