Canada's 'housing bubble' deemed close to bursting

[st7860]

Originally Posted by urbandreamer

^Sure. The 20% involved in the biz will always be wealthier than your average renter.

There are better ways to invest your money--eg: oil or timber stocks. Or start a business that could employ all those unemployed realtors someday...

If the stocks are put into a TFSA, gains and withdrawals are tax free, however annual deposits are limited to $10,000. If the stocks are put into an RRSP, gains are tax free but withdrawals are not.

[Berklon]

Originally Posted by st7860

Doesn't look like the Governor of the Bank of Canada is a politician nor an agent http://en.wikipedia.org/wiki/Governor_of_the_Bank_of_Canada

"There's No Housing Bubble to Go Bust"
-- Ben Bernanke (2005)

[Berklon]

Originally Posted by urbandreamer

There are better ways to invest your money--eg: oil or timber stocks. Or start a business that could employ all those unemployed realtors someday...

Exactly. The more people that use RE as an investment, the more it hurts Canada's economy as a whole because much needed investments in other sectors aren't happening.

[urbandreamer]

TFSA's are great--I fully take advantage of that savings/investment tool.

[st7860]

Originally Posted by Berklon

"There's No Housing Bubble to Go Bust"
-- Ben Bernanke (2005)

Stated income loans were never that common in Canada as there were in the US.

[st7860]

Originally Posted by Berklon

Exactly. The more people that use RE as an investment, the more it hurts Canada's economy as a whole because much needed investments in other sectors aren't happening.

real estate benefits many industries including banking, trades, lumber, and many others

[Berklon]

Originally Posted by st7860

real estate benefits many industries including banking, trades, lumber, and many others

Only up to a certain point. When you're in bubble territory, it's impact on the economy is more negative than positive - the few get rich, while the average Joe just piles on mountains of debt.

Canada's personal debt numbers are alarming and are higher than any other country in the world. When most of people's money is tied up on servicing mortgages, that's less money spent elsewhere in the economy - including investments.

[Berklon]

Originally Posted by st7860

Stated income loans were never that common in Canada as there were in the US.

The point is not to trust someone who has a vested interest in the outcome... and don't kid yourself, the Governor of the BOC has an interest.

[WhipperSnapper]

Originally Posted by urbandreamer

^Sure. The 20% involved in the biz will always be wealthier than your average renter.

There are better ways to invest your money--eg: oil or timber stocks. Or start a business that could employ all those unemployed realtors someday...

Resource stocks is one of the last place you want to park your money if real estate suddenly went bust. Most realtors are also speculators and a fair amount have built a nest egg over the years. You will also have a wide range of Bay Street types available.

[WhipperSnapper]

Originally Posted by Berklon

Exactly. The more people that use RE as an investment, the more it hurts Canada's economy as a whole because much needed investments in other sectors aren't happening.

Sure another dominate sector would emerge leaving other sectors still clamoring for much needed investment.

[urbandreamer]

Where did I say anything about parking money? I flip stocks like you flip condos.:p

[st7860]

Originally Posted by Berklon

When most of people's money is tied up on servicing mortgages, that's less money spent elsewhere in the economy - including investments.

Except by using a TFSA, how can an average citizen put in more than $10,000 a year into something and have the returns taken out tax free except by buying a primary residence?

[ssiguy]

Originally Posted by st7860

real estate benefits many industries including banking, trades, lumber, and many others

I certainly agree that a strong real estate market has many positive economic benefits. Like all things there are also down sides...........less money being spent on clothing, vacation, cars, to say nothing of, god forbid, actually putting some money away for a rainy day, your child's education, or your retirement.

Where the danger lies is when a healthy real estate market has become the backbone of an economy and not the result due to a strong economy. That is a very dangerous game.

Real estate is, by its very nature, a Ponzi-scheme. You buy and hope to sell at a higher price and the person buying yours does the same etc, etc. That is much like basing your economy on the stock.............while times are good they are very good but when it tanks it lands very hard very fast.

When your real estate market becomes the backbone of your economy the resulting soaring in prices also greatly inhibits the rise of other industries as the cost of land for those industries is prohibitively high. It also keeps many young and educated from moving to the city or those there move away as is happening in Vancouver. This leads to even more dependence on real estate to keep the economy humming.

Cal/Edm has strong real estate markets due to a rapidly growing economy, population..............it reflected a strong economy which is not the case in Vancouver.

[st7860]

http://www.vancitybuzz.com/2015/05/vancouver-top-destination-international-meetings/
'The Honourable Todd Stone, Minister of Transportation and Infrastructure adds: “This prestigious ranking truly underscores Vancouver’s strong reputation as a global meetings destination and the appeal of the award-winning Vancouver Convention Centre,” noting how “vital” the conferences and meetings are for the local economy."

[Berklon]

Growing popularity of home equity lines of credit spurs debt warnings

DEBT: CANADA’S BORROWING BINGE... A house-poor couple confronts a looming cash crunch

[Berklon]

Low rates, high risk: Behind debt's record climb

[vanman]

Originally Posted by ssiguy

Cal/Edm has strong real estate markets due to a rapidly growing economy, population..............it reflected a strong economy which is not the case in Vancouver.

So I guess the multiple office towers under construction and recently completed allover the metro are mainly to house condo showrooms?

Vancouver's diverse economy is doing very well across the board, and BC is set to lead the country in growth.

http://www.itbusinessnet.com/article/BMO...h-for-the-First-Time-in-a-Decade-3879279

[ssiguy]

I didn't say BC was doing poorly. My concern is that much of the growth is based on a strong real estate market and not the other way around.

Also nice little piece in the Sun today. CBRE sold a commercial piece of land in Vancouver for $30 million to foreigners. The kicker is that the seller only wanted it shown and sold to foreigners..............forget Canadians needing not to reply, now in Vancouver they don't even get to look.

[st7860]

http://www.vancouversun.com/business/Van...ate+interests+insist/11050024/story.html

Why are you getting upset about that? Its not a living space for a family, and since that commercial property went 5 million over asking, that provides for lower property taxes for Vancouver families since commercial properties pay (3 to 4 times) more the rate of taxes than residential ones do.

[kwoldtimer]

Originally Posted by st7860

http://www.vancouversun.com/business/Van...ate+interests+insist/11050024/story.html

Why are you getting upset about that? Its not a living space for a family, and since that commercial property went 5 million over asking, that provides for lower property taxes for Vancouver families since commercial properties pay (3 to 4 times) more the rate of taxes than residential ones do.

I don't follow how that relates to who bought the property?