Uccmal Posted April 9, 2015 Share Posted April 9, 2015 Canada wide: 89/90 about 25% drop: http://www.macleans.ca/economy/realestateeconomy/a-canadian-housing-chart-that-puts-the-bubble-in-perspective/ Link to comment Share on other sites More sharing options...
Uccmal Posted April 9, 2015 Share Posted April 9, 2015 Toronto Real house prices from TREB: http://www.wheretrustbegins.com/4a_custpage_9237.html ~ 30 % drop in 89/90 Anecdotally, I recall headlines of 50% drops in some areas such as the Beaches. Link to comment Share on other sites More sharing options...
Phoenix01 Posted April 9, 2015 Share Posted April 9, 2015 Hi Al, The Central Banks have created a major global stretching for yield that has affected everything (Sovereign debt, Corporate Bonds, Junk Bonds, Real Estate, Stocks, ...). When the elastic snaps back (don't know when & don't know how) it has the potential to be colossal. Do you have plan for this possible long tail event? What if RE is down 50% and stock are down even more and the Cdn $ is crushed? Will you be OK? Will you be able to take advantage of the amazing bargains that will be offered up? Do you have some sort of insurance policy against this scenario? Link to comment Share on other sites More sharing options...
wisdom Posted April 9, 2015 Share Posted April 9, 2015 From what I recall, in the US an argument that was often used was that they have never had a nation wide drop in housing prices. That real estate was local. But, after a long run up in RE prices across the country prices dropped on average 34%. RE prices have been a one way bet in Canada since 1999 - 15+ years. What are the odds that this continues? If this does stop and Canadians realize they have taken on too much debt and sucked up future demand, what happens? The norm in recessions is for immigration to drop as the locals struggle to get jobs and do not like additional competition for jobs. Investments coming into the country drop because money coming from outside can find a better home. What happens, if after a 15 year run up in housing prices it comes to halt and 7% of our GDP is housing. In the US it was 6% at peak and currenlty it is running at 3%. Personal debts are going to be tough to pay back unless commodities rebound in a big way or the loonie drops a lot to bring back manufacturing. I am unable to figure out how this can continue. Though it has for longer than I would have expected. Link to comment Share on other sites More sharing options...
Guest 50centdollars Posted April 9, 2015 Share Posted April 9, 2015 http://business.financialpost.com/personal-finance/canadians-embrace-idea-of-paying-rent-and-condo-fees-with-their-credit-cards I hope these people actually pay off their credit cards. Link to comment Share on other sites More sharing options...
Liberty Posted April 9, 2015 Author Share Posted April 9, 2015 http://business.financialpost.com/personal-finance/canadians-embrace-idea-of-paying-rent-and-condo-fees-with-their-credit-cards I hope these people actually pay off their credit cards. Unless I'm misreading that, it sounds like people are paying 2.75% extra for the privilege of paying with their credit cards: The credit card fee is 2.75 per cent of the transaction to the consumer, making the lure of gaining points on your card a less attractive option. “Somebody has to pay for the cost of acceptance [of the credit card],” says Postrehovsky. “We are giving the consumer the option to pay [through a credit card].” Crazy. Guessing people desperate or illiterate enough to do that are probably not always paying it every month... Link to comment Share on other sites More sharing options...
Phoenix01 Posted April 9, 2015 Share Posted April 9, 2015 http://business.financialpost.com/personal-finance/canadians-embrace-idea-of-paying-rent-and-condo-fees-with-their-credit-cards I hope these people actually pay off their credit cards. WOW!!! It looks like millennials have completely missed the point that cash as a store of value. As long as the cashflow covers the expenses, all is good. There are going to be a lot of people living in their parent's basements for a long time. Link to comment Share on other sites More sharing options...
Guest 50centdollars Posted April 9, 2015 Share Posted April 9, 2015 http://www.macleans.ca/economy/realestateeconomy/the-vacant-truth-about-rental-condos/ Link to comment Share on other sites More sharing options...
Liberty Posted April 9, 2015 Author Share Posted April 9, 2015 http://business.financialpost.com/personal-finance/canadians-embrace-idea-of-paying-rent-and-condo-fees-with-their-credit-cards I hope these people actually pay off their credit cards. WOW!!! It looks like millennials have completely missed the point that cash as a store of value. As long as the cashflow covers the expenses, all is good. There are going to be a lot of people living in their parent's basements for a long time. It's human nature. I don't think people have ever liked this whole concept of "you can only buy what you can afford with the money that you have saved" concept. If credit had been as available as it is now in the 60s or whatever, the boomers would've gorged on it to buy muscle cars with no seatbelts, turntables, and bell bottom pants or whatever. Most people have no idea how to manage money and don't think very far ahead, which is sad. Link to comment Share on other sites More sharing options...
Liberty Posted April 9, 2015 Author Share Posted April 9, 2015 http://www.macleans.ca/economy/realestateeconomy/the-vacant-truth-about-rental-condos/ Good piece, thanks for posting. Link to comment Share on other sites More sharing options...
Phoenix01 Posted April 9, 2015 Share Posted April 9, 2015 http://www.macleans.ca/economy/realestateeconomy/the-vacant-truth-about-rental-condos/ Good piece, thanks for posting. 1+ Link to comment Share on other sites More sharing options...
Liberty Posted April 9, 2015 Author Share Posted April 9, 2015 Nothing wrong here.. http://m.theglobeandmail.com/globe-investor/personal-finance/mortgages/good-things-come-in-small-packages-for-millennial-buyers/article23671953?service=mobile Link to comment Share on other sites More sharing options...
Phoenix01 Posted April 9, 2015 Share Posted April 9, 2015 Nothing wrong here.. http://m.theglobeandmail.com/globe-investor/personal-finance/mortgages/good-things-come-in-small-packages-for-millennial-buyers/article23671953?service=mobile Developer Jon Stovell of Reliance Properties specializes in delivering housing to those young people who are eager to purchase real estate, and also willing to live small. He believes that the millennial market has a lot of untapped potential, but he says cities such as Vancouver aren’t keeping up, with their outmoded regulations. They must be outmoded since THIS TIME IS DIFFERENT! Link to comment Share on other sites More sharing options...
Uccmal Posted April 9, 2015 Share Posted April 9, 2015 Hi Al, The Central Banks have created a major global stretching for yield that has affected everything (Sovereign debt, Corporate Bonds, Junk Bonds, Real Estate, Stocks, ...). When the elastic snaps back (don't know when & don't know how) it has the potential to be colossal. Do you have plan for this possible long tail event? What if RE is down 50% and stock are down even more and the Cdn $ is crushed? Will you be OK? Will you be able to take advantage of the amazing bargains that will be offered up? Do you have some sort of insurance policy against this scenario? Well, I am not convinced. As you know, We, whom were on this board, went through one of these a few years back and came out stronger. Do you have a plan Phoenix? I for one have been buying dividend payers in an assortment of industries. It is interesting to note that in 2008/2009 the majority of companies did not cut their dividends - they didn't raise them, but they didn't cut either. The major income hits were among US financials. At the same time I have been exiting most of my leveraged bets (Leaps), slowly. I cant speak to CDn. Real Estate. It is certainly frothy but has never dropped by 50% - see above evidence. I try to get my head around the scenario you propose. With central bank ammunition used up, the outcome is nothing short of worldwide disaster. Nothing will be safe, certainly not cash. This time around no one will be buying stocks because we would be in a deflationary spiral. I guess that is why the fed. is unwilling to shrink its balance sheet or raise interest rates in any hurry. I also think the Fed. and worldwide governents want to inflate their way out of debt. Like Y2k, there is enough people worrying about it to make it a non-event. This wasn't the case in 2007, when no one seemed worried about anything. I had SPY puts by summer 2008, that I sold out way, way too early. I am not seeing that as necessary right now. Link to comment Share on other sites More sharing options...
Phoenix01 Posted April 9, 2015 Share Posted April 9, 2015 Good article with Ben Tal on vacancy rates in TO http://landlordrescue.ca/the-truth-about-current-vacancy-rates/ As for your concern, about a sell off, I think that there is a very real possibility. I have been disseminating a cap rate spread sheet for the use of small investors for years and it does include such things as maintenance and vacancy. What you find when evaluating real estate in Toronto is that it makes no financial sense at all unless capital appreciation is relied upon to make the investment. Link to comment Share on other sites More sharing options...
wisdom Posted April 10, 2015 Share Posted April 10, 2015 Vancouver RE has been there for a few years. You can look at European debt for example - why would people buy an asset that guarantees them a loss. Obviously the majority does not think about the outcomes of their actions. Link to comment Share on other sites More sharing options...
Guest 50centdollars Posted April 10, 2015 Share Posted April 10, 2015 Almost Warren buffett like returns on this condo. Toronto is littered with crap like this. It's funny because in the investment world its illegal to post returns like this but in RE it's ok. Feel bad for people who fall for this.CAqrJPAUIAEJrjS.jpg-large Link to comment Share on other sites More sharing options...
Matson125 Posted April 10, 2015 Share Posted April 10, 2015 Debate on housing and debt in Canada http://www.marilyn.ca/AtHome/segments/Daily/April2015/4_9_2015/KevinOLearyScottMcGillivray Link to comment Share on other sites More sharing options...
Aberhound Posted April 13, 2015 Share Posted April 13, 2015 There is are two trends which are new to me in Vancouver. Both probably will further drive up prices. First, the new model for Condos is for the developer to retain ownership of the land and to sell the units to buyers on 50 year leaseholds. The other trend has come from Hong Kong where landlords owning rental properties separate the land ownership from the building ownership by leasing themselves the building for long terms, then when they go to the bank for financing the only security offered is the assignment of rents and the leasehold interest. I recall the Empire State Building being split into a leasehold so what is new may be the ability to borrow on the lesser security. The structure is an attempt to get around the problem that you risk losing the entire property merely because there is a short term crash in market values. Link to comment Share on other sites More sharing options...
Guest 50centdollars Posted April 21, 2015 Share Posted April 21, 2015 http://business.financialpost.com/personal-finance/mortgages-real-estate/heres-whats-really-scary-about-high-ratio-mortgages-in-canada?utm_source=dlvr.it&utm_medium=twitter Link to comment Share on other sites More sharing options...
Phoenix01 Posted April 21, 2015 Share Posted April 21, 2015 http://business.financialpost.com/personal-finance/mortgages-real-estate/heres-whats-really-scary-about-high-ratio-mortgages-in-canada?utm_source=dlvr.it&utm_medium=twitter Thanks 50cents for the post. 1.8M households with a -13% savings rate. Ouch!!! Link to comment Share on other sites More sharing options...
Liberty Posted April 22, 2015 Author Share Posted April 22, 2015 http://business.financialpost.com/personal-finance/mortgages-real-estate/heres-whats-really-scary-about-high-ratio-mortgages-in-canada?utm_source=dlvr.it&utm_medium=twitter Great one, thanks for posting! Link to comment Share on other sites More sharing options...
Liberty Posted April 22, 2015 Author Share Posted April 22, 2015 http://www.economist.com/news/finance-and-economics/21648624-housing-markets-across-globe-both-underperform-and-overwhelm-property-puzzles?frsc=dg%7Cd http://cdn.static-economist.com/sites/default/files/imagecache/original-size/images/print-edition/20150418_FNC602.png Link to comment Share on other sites More sharing options...
Jurgis Posted April 22, 2015 Share Posted April 22, 2015 I should buy a house in Japan... Never mind, I think they don't sell to foreigners. Maybe a Greek island... 8) Link to comment Share on other sites More sharing options...
cwericb Posted May 5, 2015 Share Posted May 5, 2015 Prices still rising.............. CBC News: April house sales surge 17% in Toronto, 37% in Vancouver Huge demand for homes and tight supply make for a seller's market in both cities The Toronto Real Estate Board reported 11,303 house sales in the Greater Toronto Area in April, and a five per cent surge in new listings as buyers decided to test the market. The average selling price rose 10 per cent year over year to $635,932, with a detached single-family home in the 416 area code region selling for an average of $1,056,114. Residential property sales in Metro Vancouver reached 4,179, compared to the 3,050 sales in April 2014, and up 2.9 per cent from March, which also saw record sales numbers. http://www.cbc.ca/news/business/april-house-sales-surge-17-in-toronto-37-in-vancouver-1.3061755?ref=fh,content.ighome.com Link to comment Share on other sites More sharing options...
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