Canada's 'housing bubble' deemed close to bursting - Page 96

lio45 · #**1901** Posted **Jan 7, 2015, 6:03 AM**

Quote:

Originally Posted by sunsetmountainland

Anyways, to keep on topic I want to leave you with a very interesting article!

Best prices in the country in Vancouver for a house

https://ca.news.yahoo.com/vancouver-developer-offers-houses-free-225707495.html

Just in case you're not trolling, that's not real estate or "property", it's a bunch of wood.

Now if the land that bunch of wood is currently sitting on was really offered for the "best price in the country" per square foot, then yes it would be interesting news. The truth is, it's pretty much as far as possible from that: it's among the most expensive in the country.

lio45 · #**1902** Posted **Jan 7, 2015, 6:14 AM**

Quote:

Originally Posted by sunsetmountainland

One of the reasons the market in Vancouver is so strong is because the people in the area believe in it!

Yeah, that's basically what we're saying too: the current bubble will last until enough people realize that Vancouver real estate prices are nonsense. As long as there are enough "believers", it kinda works...

Quote:

No one goes and buys a million dollar house in Vancouver when they are young unless they are given or inherit it.

While in other areas young people can actually buy a house. Again, that's pretty much what we're saying and it's a big reason why it's unlikely to continue like that forever. Migration statistics for the younger crowd aren't favorable to Vancouver.

sunsetmountainland · #**1903** Posted **Jan 7, 2015, 6:21 AM**

Quote:

Originally Posted by ssiguy

The Vancouver {and lesser extent Toronto's} real estate prices are kept lofty by ridiculously low interest rates which encourages people to go into debt far more than they can truly afford and the nation's largest welfare program.....CMHC.

When I was young 20 years was a very long mortgage and was still easily payable by one income. CMHC has allowed people who can't afford a house to get one. That would be OK if it was the banks that took the risk but it's not, it's the taxpayers. CMHC and the rising cost of housing has been a gift to the gods to the banks as they basically get all the proceeds and the taxpayers take on all the risk.

You do not understand do you. The word is called equity. You really need to challenge yourself or think outside the box. CMHC is not a bad thing, I certainly used it before. Really it is all about confidence in oneself. If you lack confidence you will not succeed in the real estate market.
I do not buy and sell I buy never sell and I rent. The rent pays my mortgage then I use my own income to relax with.

The moral of the story is if you live in fear you will not succeed! If you live with hope maybe your dreams can come true!

sunsetmountainland · #**1904** Posted **Jan 7, 2015, 6:24 AM**

Quote:

Originally Posted by lio45

Just in case you're not trolling, that's not real estate or "property", it's a bunch of wood.

Now if the land that bunch of wood is currently sitting on was really offered for the "best price in the country" per square foot, then yes it would be interesting news. The truth is, it's pretty much as far as possible from that: it's among the most expensive in the country.

I am sorry to be the one to tell you this but it was my sad mistake at sarcasm I will give you ten years and hope you understand.

sunsetmountainland · #**1905** Posted **Jan 7, 2015, 6:27 AM**

Quote:

Originally Posted by lio45

Yeah, that's basically what we're saying too: the current bubble will last until enough people realize that Vancouver real estate prices are nonsense. As long as there are enough "believers", it kinda works...

While in other areas young people can actually buy a house. Again, that's pretty much what we're saying and it's a big reason why it's unlikely to continue like that forever. Migration statistics for the younger crowd aren't favorable to Vancouver.

Actually one of the reasons why the real estate is doing well in Vancouver is because of the older crowd. Of course the younger crowd will do well as well when they inherit from the older crowd but I would not expect you to understand this.

lio45 · #**1906** Posted **Jan 7, 2015, 6:28 AM**

Quote:

Originally Posted by sunsetmountainland

I am sorry to be the one to tell you this but it was my sad mistake at sarcasm I will give you ten years and hope you understand.

No, as I said, I was pretty sure it was sarcasm, I merely pointed it out "just in case"; you never know...

sunsetmountainland · #**1907** Posted **Jan 7, 2015, 6:32 AM**

Quote:

Originally Posted by lio45

No, as I said, I was pretty sure it was sarcasm, I merely pointed it out "just in case"; you never know...

Dude sorry man you win! I lost

lio45 · #**1908** Posted **Jan 7, 2015, 6:33 AM**

Quote:

Originally Posted by sunsetmountainland

Of course the younger crowd will do well as well when they inherit from the older crowd but I would not expect you to understand this.

You're right, you shouldn't expect me to count on that kind of phenomenon happening on a large scale.

If I currently had real estate in Vancouver I would certainly cash out now or soon and move to greener ROI pastures. Right now the only way owning to rent in Van is a decent use of capital is if you are taking for granted that you'll be eventually selling to a future sucker who's even more of a sucker than yourself. It might happen, but I personally wouldn't count on that.

sunsetmountainland · #**1909** Posted **Jan 7, 2015, 6:36 AM**

Quote:

Originally Posted by lio45

You're right, you shouldn't expect me to count on that kind of phenomenon happening on a large scale.

If I currently had real estate in Vancouver I would certainly cash out now or soon and move to greener ROI pastures. Right now the only way owning to rent in Van is a decent use of capital is if you are taking for granted that you'll be eventually selling to a future sucker who's even more of a sucker than yourself. It might happen, but I personally wouldn't count on that.

I am so sorry how many times must I say uncle! You win I have lost this debate. I just wish I had not wasted your time.

lio45 · #**1910** Posted **Jan 7, 2015, 6:38 AM**

Quote:

Originally Posted by sunsetmountainland

Dude sorry man you win! I lost

You say you enjoy intelligent conversation, let me offer you an opportunity then. How about you give me a few details about your properties? Nothing too specific... operating numbers for them, how much you bought them for, what shape they were in then, and when that was. Very rough numbers, that'd be fine.

sunsetmountainland · #**1911** Posted **Jan 7, 2015, 6:50 AM**

Quote:

Originally Posted by lio45

You say you enjoy intelligent conversation, let me offer you an opportunity then. How about you give me a few details about your properties? Nothing too specific... operating numbers for them, how much you bought them for, what shape they were in then, and when that was. Very rough numbers, that'd be fine.

Ok sorry for being rude to you earlier. I was just young well not too young I was 26 I bought my first house in nanaimo for 94,000 dollars in 96. It really was a dive a old miners shack really as nanaimo used to be a mine town. Well it was only a two bedroom house but I used CMHC and bought it.

Well I took time fixed it up while I lived in it. Worked fulltime went mountain climbing on the weekends. I thought well I have lived in it for a number of years why not find out what it is worth. So I thought when I found out what it was worth that I would use the equity in this house to buy another one in nanaimo in 2004 so I bought a second house for 149,000 dollars in Nanaimo using the equity I had in the first house.

Well to my suprise the market went crazy in 2005 so I made 100,000 on each house.

Then I went into the lower mainland market and have two higher end houses. To make a long story short.

big W · #**1912** Posted **Jan 7, 2015, 6:10 PM**

Quote:

Originally Posted by sunsetmountainland

Ok sorry for being rude to you earlier. I was just young well not too young I was 26 I bought my first house in nanaimo for 94,000 dollars in 96. It really was a dive a old miners shack really as nanaimo used to be a mine town. Well it was only a two bedroom house but I used CMHC and bought it.

Well I took time fixed it up while I lived in it. Worked fulltime went mountain climbing on the weekends. I thought well I have lived in it for a number of years why not find out what it is worth. So I thought when I found out what it was worth that I would use the equity in this house to buy another one in nanaimo in 2004 so I bought a second house for 149,000 dollars in Nanaimo using the equity I had in the first house.

Well to my suprise the market went crazy in 2005 so I made 100,000 on each house.

Then I went into the lower mainland market and have two higher end houses. To make a long story short.

Sounds similar to what my cousin did in California, however he started as a student and lived in his parents place when he first started out (one way to spend your college fund). The key however is timing. He sold all 8 houses in 2007 and 2008 as he did not have time to deal with things since he was going to move back in his dad who was having medical problems and his mother had passed away a couple years earlier. Lucky for him he sold all of them before the market crashed. My uncle has since recovered and he has gone back into the market only his 8 houses bought him a lot more. So its all timing and luck. I personally believe we will see a market correction in Vancouver -10% or so.
Finally as pointed out earlier, from an investment stand point the ROI is not that great in Vancouver vs other centres in Canada. However the right properties will always have a buyer.

Stryker · #**1913** Posted **Jan 7, 2015, 6:15 PM**

Quote:

Originally Posted by sunsetmountainland

Firstly, it is not how much money you make. It is always what do you do with your money. One of the reasons the market in Vancouver is so strong is because the people in the area believe in it!

No one goes and buys a million dollar house in Vancouver when they are young unless they are given or inherit it. I am certain it is the same in Toronto.

What you do is you invest in yourself you buy a condo live in it. You have to pay rent anyways. Then you sell make money buy a house. You move up.

People who do not live in the larger cities like Toronto Vancouver or Calgary
will not understand this idea.

Lol and what your describing are the beginnings of an aristocracy in canada.

someone123 · #**1914** Posted **Jan 7, 2015, 8:24 PM**

Quote:

Originally Posted by sunsetmountainland

Ok sorry for being rude to you earlier. I was just young well not too young I was 26 I bought my first house in nanaimo for 94,000 dollars in 96. It really was a dive a old miners shack really as nanaimo used to be a mine town. Well it was only a two bedroom house but I used CMHC and bought it.

Well I took time fixed it up while I lived in it. Worked fulltime went mountain climbing on the weekends. I thought well I have lived in it for a number of years why not find out what it is worth. So I thought when I found out what it was worth that I would use the equity in this house to buy another one in nanaimo in 2004 so I bought a second house for 149,000 dollars in Nanaimo using the equity I had in the first house.

Well to my suprise the market went crazy in 2005 so I made 100,000 on each house.

Then I went into the lower mainland market and have two higher end houses. To make a long story short.

Yeah, you're pretty much describing the best-case scenario in terms of timing and returns on investment. It seems really unlikely that 2015 will turn out to be a new 1996 for BC real estate, and even if it is many people don't have enough money to buy these properties in the first place. 20-somethings are scraping together money to buy entry-level condos, not fixer-upper houses. That's if they're lucky and they're not just paying off student loans until they're in their 30's.

Returns are pretty bad if you have tenants too. Purchase prices in my building are mostly in the $400-600K range and rents are maybe $1,400-1,600 a month. Condo fees, taxes, and maintenance will cost you around $600/month, so you're looking at maybe a $12,000 annual return on $400K (~1% real return, not accounting for the work you have to do as a landlord). Presumably that's not enough to cover a mortgage and it is worse than other investment options if you have cash. Meanwhile the prices have been pretty flat since 2009 or so and there is no guarantee they will go up instead of down. I doubt many people who decided to speculatively invest in condos after 2009 or so have done very well.

There are a bunch of causes of the current market conditions in BC but I think the attitude that real estate is always a prudent investment is one part of it. So many people think that their best option is always to get a big mortgage, and that renting is a "waste" compared to buying.

SignalHillHiker · #**1915** Posted **Jan 8, 2015, 1:55 PM**

It has officially happened in Labrador West.

Via CBC:

A year ago, a five-bedroom home averaged $5,000/month to rent in Labrador City. A two-bedroom apartment averaged $2,500. A couch in someone's house averaged $100/night.

Today the house is $1,500. The apartment is $1,275 and first month is free.

esquire · #**1916** Posted **Jan 8, 2015, 2:28 PM**

Quote:

Originally Posted by Stryker

Lol and what your describing are the beginnings of an aristocracy in canada.

There will never be the functional equivalent of a landed aristocracy in Canada as long as there are plenty of small cities and towns, as well as rural areas where land and homes can still be acquired very cheaply.

Vancouver's a nice town, but I'd wager that to many people it's not worth a mortgage that will only be paid off on the day they die.

whatnext · #**1917** Posted **Jan 9, 2015, 3:13 AM**

Deutsche Bank lists 7 reasons why Canada is in economic trouble, including a housing market overvalued by over 60%. But hey, maybe they're wrong and just don't get how special we are:

http://business.financialpost.com/2015/0...ing-with-a-63-overvalued-housing-market/

ssiguy · #**1918** Posted **Jan 9, 2015, 5:32 AM**

sunsetmountainland

I warned you on the previous page to watch your personal attacks and comments but every comment you make seems to have one. We seem to have gotten by for years without resorting to insulting name calling and comments and if you can`t live by that they go elsewhere.

Nathan · #**1919** Posted **Jan 9, 2015, 5:35 AM**

Quote:

Originally Posted by whatnext

Deutsche Bank lists 7 reasons why Canada is in economic trouble, including a housing market overvalued by over 60%. But hey, maybe they're wrong and just don't get how special we are:

http://business.financialpost.com/2015/0...ing-with-a-63-overvalued-housing-market/

That chart on household indebtedness looks a little out of whack to me... here's also another report with charts...

http://www.td.com/document/PDF/economics/special/CanadianHouseholdDebt.pdf

Seems like there's a bit of fudging going on somewhere to suit some sort of agenda...

sunsetmountainland · #**1920** Posted **Jan 9, 2015, 5:42 AM**

I am reading a lot of scenarios to my post, which is fine. I certainly have no problem with being called lucky. I most certainly am. I understand this thread, but every investment is cyclical it just so happens that real estate is not as cyclical as a lot of investments.
So when the market goes down it is a great opportunity.
I just do not think that since the first post on this thread till right now it has happened. Really it is just a great scare tactic which is great for me I do not mind if people rent. I can understand people do not have a lot of confidence in themselves.
That is why you see post from ssiguy, it really shows in negativity and insecurity.
You can take a chance to benefit yourself or you can feel negative about what others have done to improve their lives.