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Old Posted Jan 8, 2014, 5:16 AM
b5baxter b5baxter is offline
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Join Date: May 2008
Posts: 169
Disaster

Over the last five years condos prices in Metro Vancouver have increased by 11.9%. That is the official number from the REBGV.

It is highly unlikely that we will see the same return over the next five years. The last 20 months have seen prices decline. And I would expect the next five years to see flat or declining prices.

But let's pretend that condos do follow the same trend. That means your condo is now worth $23,800 more. Sounds great right? But you spent $500 / month for your mortgage (assuming you had it rented the whole time). That means you spent $30,000 to make $23,800. In other words you lost over $6,000!!!

And your money could have been in a bank making more money!

And that is probably the best case scenario.

Buying a condo as an investment under the current conditions in Vancouver is a financial disaster.

It CAN make sense to buy real estate as an investment under conditions where there is a reasonable price to rent ratio. But Vancouver has one of the highest price to rent ratios in the world.

How does it make any sense at all to buy real estate as an investment in Vancouver right now?

Last edited by b5baxter; Jan 8, 2014 at 5:22 AM. Reason: change LM numbers to GVRD numbers
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