Is Canada's real estate bubble about to burst?
Canadian home prices are now showing many of the signs of a classic bubble, according to a recent report from Bank of America Merrill Lynch.
Factoring in record low mortgage rates, the housing market nationwide is at least 10% overvalued, say Merril economists. More importantly, under more normalized interest rates, home prices would actually look about 25% overvalued based on current prices, they estimate.
“In our view, the housing market is one of the most vulnerable sectors to this weakening economic environment, showing classic signs of over valuation, speculation and over supply,” says the report. “We are not calling for an all out rout in the market — but caution is now decidedly warranted.”
Home prices will likely contract slightly in the first half of 2012 as housing demand slows on tougher jobs and income growth environment, but flatten as the economy picks up in the second half of the year, they predict.
Of course, it all depends on where you live. According to economists at the TD Bank, "a larger-than-average price and sales correction looks to be in store" for the housing market in Vancouver, for instance. TD forecasts a sales drop of 15% and a home-price decrease of 12% over the 2012-2013 period.
But that's nothing compared to the dire predictions of Steve Kaplan, writing at Seeking Alpha. He sees the U.S. housing meltdown slowly spreading throughout the developed world, cutting housing values in half in many instances.
What does the future hold? Looking at the rest of the world, click here for an interactive chart where you can enter the country of your choice to see how housing prices have fluctuated relative to the rate of inflation.
Do you see such a bubble forming where you live? Does this concern you at all? Or Kaplan's prediction simple scare mongering?
By Gordon Powers, MSN Money
Posted by: jon doe | Jan 4, 2022 9:07:16 AM
we've been hearning this bubble is going to how many years now? I mean come on...enough is enough, it's all scare mongering.
Posted by: cjr | Jan 4, 2022 11:10:57 AM
Hey jon doe, everyone i know who has purchased a home recently all maxed out their borrowing power and spent the maximum. Once interest rates go up (which they will do) to even 6% none of these people will be able to afford their home. Worse yet if house prices do fall, people will owe thousands more than what their house is worth. If you think mortage rates are going to stay this low forever you are wrong. And if your one of the lucky ones who already owns a home, you should be worried also as your kids can no longer afford to own a home. The prices are totally based off low interest rates, period.
Posted by: Canadian Mortgage Inc | Jan 4, 2022 7:26:34 PM
Canada is walking a tightrope when it comes to the housing market and has been for a while. So far, it has done well in keeping values up and rates down, and with care, should be able to continue this for some time.
The only market that looks scary is Vancouver - prices have soared there last year and if they continue, they may see a crash in their market. That could cause the whole bubble burst effect that everyone fears.
Posted by: Clear & Focused | Jan 5, 2022 9:30:27 AM
It is only the baby-boomers who view the purchase of a home as reasonably attainable. This is because the boomers grew up during the infancy of the financial scam - when banks needed boomer-equity to balloon themselves into the "too big to fail's". My father's generation amassed wealth as a side effect of a larger agenda. But agenda's evolve.
The need for homes have not reduced since the day my father was born, yet they are out of reach for most people now. (Unless those people are willing to shackle themselves under bank-subordination for the rest of their lives; while not knowing what sort of economic scams they have coming down the pike in the future.)
I don't see a house (something we all NEED to live) as something that should be so unattainable... so financially binding for so long. A house shouldn't take a lifetime of crippling payments (or a lifetime of crippling payments for two people in most cases) to pay off. The only reason houses cost as much as they do now is because people in the boomer generation bought them as investments, expecting their investment to increase in value. In essence, baby-boomers bought houses (more than one in many cases) hoping that some poor schmuck from their children’s generation would come along and pay double what they paid. This is the definition of a Ponzi Scheme or a pyramid-scheme. In other words – a Ponzi Scheme is when the those who got in first get paid off by the those who get in last – Except, in a Ponzi Scheme – those who come in late, are the ones who get screwed. And why? Because of their birthday? Because they were born too late? WTF??
So lets look at multiple property owners… Most were born decades before many young families who are now shopping for a home. So obviously they were able to acquire those properties at a much cheaper price. But because of GREED, they acquired more than they needed. Long story short – supply and demand says that the young people are going to pay exorbitant amounts for a home because all the properties have already been acquired. In other words – for some reason, we have accepted that a Ponzi Scheme is OK as long as we are taking necessities from our children and grandchildren’s generation and turning them into debt slaves for the rest of their lives.
When in reality, what is the value of a necessity? Where does the true increase in value come from?... especially when houses deteriorate over time!?
All I know is that this is unsustainable. I know that our economy is heading for a cliff because it is all make-believe... and once we go over it and slide into martial law, no one’s home will be their own any longer. I know this because this was the plan all along. I know this because you can read it in their own published words. We are not supposed to be able to afford a home. Property is for the propertied class!
There are elite's in this world who see you and I as useless eaters. They have extracted what they needed from the baby-boomers and unfortunately will soon disregard you entirely. This is what the coming hyper-inflation is for.
Buy weapons now and realize the fight you are in, or reap the consequences of complacency.
Posted by: Bad Credit Mortgage | Jan 5, 2022 4:49:14 PM
I think the prices might drop dramatically this year.
Bad Credit Mortgage
Posted by: Northern Ontario | Jan 5, 2022 6:46:29 PM
I have to say that Clear & Focused finally said something intelligent without blasting the world. The last 3 lines could have been avoided but he simply couldn't resist. He is going in the right direction.
Posted by: SP | Jan 6, 2022 2:09:40 AM
The bubble will remain until well after the last idiot who can get financing to purchase their 'one chance to get on the housing ladder' has bought. Sadly this point is much further in the future than any logical person can imagine (check Japanese or British housing prices if you are in any doubt).
Over indebted purchasers and people with no other retirement savings than their house will take a long time to come to terms with the fact that an average home is long term only worth 2.5x - 3.5x the average income or 9x - 12x the rental income.
Don't look to Ottawa for any help though, elected officials understand that falling house prices lead to political churn and will do everything in their power to keep the balloon inflating until they retire.
I'd probably give Canadian house prices 10 - 20 years till correction, when they start to dip the immigration floodgates will be opened and other tricks used to keep the party going as long as possible.
Posted by: Keith | Jan 6, 2022 9:14:38 AM
Inflation and market bubbles are all man made. The markets are based on and speculated by greed. Look when a bank burrows you money with interest owed that's in fact usury no matter how low the interest rate really is. Usury creates inflation regardless of the regulation put in place. This is why the ancient Romans created the laws of usury, hence the term "An eye for an eye". Now we have an eye for 2 eyes or an eye for a human life to for ever be indebted. When inflation and the cost of living is going up 3% and wages are only going up 1% and those wage increases are mostly for the top 1% of society, then over the course of time were working more for less. It's not right and it definitely isn't equality. Major proof of usury hitting Canada is when our government decided to sell the country's monetary system down the drain to foreign international banking entities in the 1970's. Look at Canada's deficit before 1973-74 during and after. The banks took over in 73-74 and after that our debt has sky rocketed. It's day light robbery and today's current economic model goes against our very own laws according to the Bank of Canada Act and Acts 91&92 of the Canadian Constitution. Of course this is allowed because those people we vote into power are the government. Keep this in mind next time you idiots vote for a party that establishes martial law here in Canada in order to protect the world's biggest criminals, our so called world leaders.
Posted by: Jessica | Jan 6, 2022 10:03:31 AM
I have been hearing about this "bubble bursting" effect going on 5 years now....living in Toronto I am patiently awaiting. I am a young, 20-something professional, currently renting in downtown Toronto with what I use to consider a reasonable down payment (over 100K) and I earn a good salary working for the Ontario government.
4 years ago, I was about to buy a condo in a hot spot area, Yonge and Eglinton for 330K, for about 600sq. ft and a small balcony. I was told to wait…the bubble will bust. I kept my money in smart investments and now I see that same condo could sell for probably close to 400K if not more. Where is the bubble?
Fast forward a few years, a wedding on the horizon and house shopping, the prices have increased even more. To the point that two young professionals with no debt cannot afford to purchase a home in a reasonably safe and secure neighborhood in Toronto. How is it that a ‘starter’ home can cost well over half a million dollars? Do I really have to move out of town or to a unfavorable neighborhood in order to purchase? The housing prices have gone crazy and even with this impending burst I am skeptical that the prices will come down drastically…will we end up housing prices from 3-4 years ago, still too high in my opinion.
Am I the only one wondering how my generation is affording these homes? Is caring a super high mortgage our only option?
Posted by: Mike | Jan 6, 2022 10:56:52 AM
Jessica....I am with you. I am 32 years old and have been wondering the same thing. I have a sizeable down payment (120K) and have scrimped and saved as much as I can. I make a decent salary and have job security and can't comprehend how these prices continue to escalate at the rate that they are. I fear being the fool that purchases right before the bubble bursts, however it is frustrating to look back 3 or 4 years ago and see how prices have risen over this period of time. History would indicate that a buble is looming, but I keep being told that it is foreign investment and money that is driving these prices. The problem that this is causing is that it is driving young post secondary educated professional Canadians out of the market.
Fingers crossed for a correction!
Posted by: Jason | Jan 6, 2022 12:34:56 PM
You think Toronto is expensive, please try to buy a house in a descent neighborhood in Vancouver. I have a 100k downpayment but that does nothing because the least expensive house I can find in the neighborhood I grew up in is $750,000 3 bedroom 1300sq. Nothing will change until interest rates go up to atleast 5-6% and the government restricts foriegn ownership. This might not happen for another decade or two. I'm going to continue renting and saving or I might move out of this overpriced rain soaked city.
Posted by: Tom G | Jan 6, 2022 1:15:33 PM
As one of the Boomer generation, I resent being called greedy; this is just socialist-type envy politics.
My wife and I bought a small house when we were young and scrimped on other nice things in life until such time as we could afford to pay for them, normally by cash. Debt was always a four-letter word to us. The trouble with today's generation is that they "want it all now" and have never adopted the strategy of deferred gratification followed by earlier generations. Today's young people have never lived thru a deep recession and so they have loaded themselves up to the hilt with cheap loans.
Sorry if I feel sorry for you 30 yea- olds who want it all now. Get real. Look up the meaning of words like "save", "earn", "cash" "deferred gratification".
Posted by: Max C | Jan 6, 2022 1:55:10 PM
I also think that Clear & Focused is on the right track. But the point that most people seem to be missing, in my opinion, is the rate at which the baby boomers will be retiring over the next 10 years. Sadly, most of these individuals (my parents and aunts and uncles) purchased homes with the primary intent of using them as retirement income as they downsize (which they are just starting to do). I don't think the issue is now, but in 10 years when all these 'homes' starting coming on the market - who is going to buy them? Let's face the facts, over the next generation, more people will be retiring than entering the workforce - if there is a bubble to burst, I would anticipate that it will happen then. As for myself, a single parent struggling to make ends meet; I'm renting but at the cheapest rate possible - we may not live in luxury but hey, we have a roof over our heads. I always make sure most, if not all utilities are included and then, the extra that I would have spent on a mortage/upkeep/insurance of a house, I put away. Even if I never buy a house, by my estimates, when I retire in 15 years, I will have enough equity saved to either purchase a house outright or, have enough residual income from my interest to cover my rent for the rest of my life.....Personally, I think that too many people only look at mortage costs when purchasing a house, I feel that they forget to factor in the additional monthly toll that insurance and upkeep can play on one's finances....
Posted by: scott k | Jan 6, 2022 1:57:11 PM
A lot of anger and resentment seems to be the order of the day.
While it may be a generation ago that home ownership was viable for the average family, reality is what it is, and as a baby boomer who is looking at interest rates of 1 to 2% on savings, we are in the same boat as everyone else in that we have to adapt to a new reality of not being able to retire and live off the interest as our parents did earning 10 to 12%.
And for cjr, what on earth leads you to believe interest rates will go up with the economic crisis facing the world right now. Be thankful you can borrow money to buy a house or a car and not have to pay 11% for much of you life as I did.
Posted by: it costs what it costs | Jan 6, 2022 2:11:01 PM
House prices will go down is if the cost to build a house goes down and/or people have no money to buy.
further there is the location factor. There are only so many locations and as they build more houses these houses are further and further away from your work, etc and are less valuable (but they cost a certain ammount to build so they will not be sold for less, unless everything goes to hell).
Further, there are benifits to owning, like if you want two cats and kids, you can have two cats and kids and no landlord telling me you otherwise.
Bubble or no bubble, as long as people have money and the cost to build doesn't magically fall, house prices have only so much downside and a fairly certain upside.
Posted by: David V | Jan 6, 2022 2:13:01 PM
my wife and I were only 19 when we bought our first place... a $100K townhouse. We put all our savings as a down payment, lived there for 4.5 years had 2 kids, and were pregnant with our 3rd when we moved, took 100K profit, and bought a house in town for 300K. We scrimped and saved and made double payments as often as possible. was it where we wanted to be, NO, but it's where we had to start. Even now we are looking at moving again (another 4.5 years later), and with the equity in this house we are looking at $550K places. How can we afford that with 3 children in child care? Fairly easily really.
Here's what we have a 1996 toyota corolla that I have owned since highschool, a 2008 ford F150 crew cab (also fully payed for with cash at purchase) and the money that we invested into the house.
Now more importantly heres what we DON'T have!!!
big screen HD TV
No HD cable
cell phone yes, but smart phone with expensive data plan NO!!! (thats what we have internet at home for isn't it?)
no snowmobiles, or skidoos (you get the Idea)
NO X-box, and a plethora of $50 games
When we take vacations they are always payed for with cash, and it might be a week of tenting if thats all we can afford for the year, but we enjoy it more knowing we don't have to pay it off when we get back.
now here's the kicker.... our COMBINED annual income..... under 80K GROSS.
So can you afford to buy a home, if your a young person YES!!! it might not be where you want to be NOW, but it's a stepping stone. it's called setting goals, and identifying the steps to getting there.
We are 27 years old, and about to own the better part of a half a million dollar home, and I'm a FARM LABORER. I'm sure if we can do it that all you "professionals" can surely figure out how to do it.
one last thing. Ask your parents / elders what they ate everyday for dinner. ask them how often they went to restaurants, or on expensive vacations. they worked their asses off for what they have now, and who are you to think that it should be given to you without the same sacrifices.
Ps. our next place is hopefully our forever home, and the big screen tv is only a few more years away, until then I'll have to put up with my 20 inch, board games, and good old family time hiking / swimming / CHEAP activities.
Posted by: Clear & Focused | Jan 6, 2022 2:58:48 PM
First of all, Jessica and Mike, you erroneously think that when the bubble bursts that the prices will simply come down. But you fail to see the larger police state agenda and the history of socialism in all its guises. This is the new form of serfdom. Foreign investment is Orwellian speak for feudalism. They want you renting, they don’t want you owning property. As I said: Property is for the propertied class.
So, for example, when people hear things like the-rarely-talked-about “Nova Scotia Land Acquisition Project”, the fools will take it on face value and believe their government when they say “oh we’re just trying to save the environment blah blah, but the person utilizing their neo-cortex knows that it is the new zoning strategy for the serfs – to slowly congregate folks into super-cities, and designate rural areas as “natural reserves – not to be tainted by the unwashed masses”… And, when martial law comes, cities will be the easiest to control. This is their plan; and this is how they will deal with overpopulation.
And those of you who think you are so smart by registering your acreage as farmland so that you can get out of paying land-taxes… do you really think the government is that benevolent? You might want to look up your province’s Emergency Management Act. Each province has one and so does the federal government. All it takes is the next “emergency” and your farmland can be CONFISCATED by the government for the socialization of production. “From each according to his ability, to each according to their need” will be the motto of the day.
This will be the next phase of the zoning strategy for serfs.
Homeownership by the commoner is out, and renting is in. Soon all the home-owning boomers will die off and another phase of the program will be complete. If you can afford a house now, what makes you think you can afford the next financial scam and resulting chaos? What they want is your down-payment as well as your property. What you have to realize is that everything is Orwellian. When they say we have a trickle down system, what they mean is we have a trickle up system, with the boom-bust cycle baked into the cake so hard assets will always eventually get shuffled upwards to creditors and their ilk. What trickles down is their sh!t.
The only thing that has changed since the days of overt serfdom in the Middle Ages has been the “overt” part.
You, oh Jessica and Mike, foolishly think you are not serfs because you work for the government. And you are therefore temporarily financially buffered from the effects of your “employer’s” stupidity, by way of the bribes they give you for doing next to no work. But your complacency is your folly.
The government is the only sector that is experiencing job growth – and this at a time of severe depression! If this doesn’t sound off alarm bells to you, than you are delusional and unfortunately cannot see the forest through the trees. You are oblivious to the current problems because you are part of the problem. Read “1984” and wake the f*** up! The only reason why government would be ballooning its numbers right now (along with its police numbers), is because that is the only self-preservation mechanism it has. But when the only people who are working enough to contribute taxes are the mindless minions of bureaucracy and government, than you are, in fact, suckling at the tit of a dead cow with your eyes closed. Soon you will open your eyes and realize you have become infected and diseased by it.
Anyone who complains about the system, while enabeling it, deserves what they get.
Posted by: Diamond Dave | Jan 6, 2022 3:41:58 PM
With immigration into Canada at an all time high ,the demand for housing can only continue. Canada alone stands as a sanctuary , for others in the world who are not as fortunate as we are and these people will do almost anything to bring their families here. Our health system schools programs , social safty nets are the envy of the world. Our ability to accept others into our deversified lifestyle and relatively cheap cost of real estate on a global scale will only reinforce the demand for a "quality of life" found only here in Canda and should maintain an unprecedented demand for " Canadian Realestate" now and the years to come. There is not a bad time to buy in most areas of Canada now or in the future .
Posted by: ttfh | Jan 6, 2022 3:57:08 PM
What I am sooooooooo waiting for and have been saying this since 2007 and everyone thought I was nuts, including the banks is I soooooooooo predict that the real estate market will T-A-N-K in Calgary this year!!!! There is gonna be one heck of a bubble burst there!!! In 2007 when prices went THROUGH THE MOON, everyone was soooo terrified that they would NEVER be able to get into the market, that they were buying homes (condos/houses) at record highs. Well, it is 2012 and all those 5 year mortgages of the nutbars who bought then will have their mortgages up for renewal. Most people put down the minimum on their mortgage, as that was all they could afford. They are not making near as much money (if even at all right now) and the value of their home is far less than what they paid for it. They say the first 5 years of ANY new mortgage, you are just paying the interest. So they will have NO equity in their home and will not be able to qualify to renew their mortgages! I truly think we are going to see what happened in California in Calgary. I "cashed out" in 2007 and was waiting for this moment. In 2007, I sold my place for 240% MORE than what I paid for it in 2002. It was a 1 bdrm condo. As of today, there are only 3 bdrm units available in the same complex and the LISTING price is $40,000 LESS than what I got for my 1 bdrm. I even sold mine at the lowest possible end as I had to sell fast! I sold my place in less than 24 hours. I now have a house where I am mortgage-free because of these nuts. THANK YOU!!! (o:
Posted by: joe | Jan 6, 2022 4:04:51 PM
Well, I'm in Vancouver, have been hearing about the bubble-burst imminent catastrophe for almost 20 years now - we bought our first (tear-down pos) house in the "high" market in 1996 for just under 500K, did the renos, scraped and saved, now we're mortgage free, house valued at 2.2M. Prices in Vancouver are insane, but someone's paying them - 2M+ houses in our neighbourhood (Kitsilano) get snapped-up within days of getting listed. So, in Vancouver, until cheap money is still available (raise int. rates to 6-7%, you'll see many walking away from their mortgages) and there are thousands of people dragging money out of China and investing in safe havens like Canada, that bubble is safe and sound imo.
Posted by: Mike | Jan 6, 2022 4:37:09 PM
Clear and Focussed? You certainly seem clearly focussed on the wrong things (negatives!). You should consider looking into some anger management courses to get you clear and focussed on the right track.
Last I checked "1984" was a fictional book...Fiction, fake, made up, fantasy...much like the clouded and unclear world you are living in. It made for a great read in my high school days. I prefer to focus my energy now as an adult on reading educational books about real life issues like personal finance and career growth and family.
David V and Clear and Focussed - I can't speak for Jessica but am I not being a responsible young adult by not feeding into the system and buying a home that I can not afford? Last I checked a 25% downpayment on a home was a responsible amount to save. At 120K that would allow me to purchase a home valued at 480K, however I still feel that Real Estate is over valued and that was my argument. David K - I too do not have any toys...I drive a 2000 Honda with 407,000 Km's on it, I pay minimal rent, have zero debt and save up cash for my purchases before buying them. I applaud you David for what you have accomplished at such a young age, and I definitely live within my means, so to assume that I don't is not correct. I'm not saying that we all have to be "professionals", I was merely just trying to paint a picture of my demographic. I have spent many hours working hard labour on my Uncle's Farm and in Construction so I do know what hard labour is all about.
Posted by: FlatFee495 | Jan 6, 2022 6:03:44 PM
If these type of news are not posted on the sites, nobody would comment on them... Traffic is very important factor in getting advertisers coming to the site...
Posted by: BOOM | Jan 6, 2022 6:29:12 PM
It's been a long time coming.
Opportunity knocks for the prudent and wise.
Posted by: Clear & Focused | Jan 6, 2022 6:39:56 PM
Yes, 1984 is a fictional book, but what isn’t fiction is how the plot of this book has left the realm of fantasy and has now become a reality. You would know that if you read it. You would know that if you looked around at our police state. When fantasy books start becoming reality, people need to stop and think. Which begs these questions: who was this author, why did he write it, and what information was he privy to so long ago?
You obviously know none of these things, so why make yourself look foolish by commenting on them.
One thing I noticed is how you never refuted my assertion that you work for the government. Jessica I knew, but you… I went out on a limb there. Looks like I’m correct.
I only included your name because you say you are “hoping for a correction”. And it is this mindless faith that is ruining us. People need to open their eyes. What are you hoping is going to “correct”?
People should be wondering why the system is out of whack. People should be asking themselves how did we get to the point where we need to blindly hope that something will correct. How does that correction look in your mind’s eye?
But a better question is “What are you doing to bring about that correction?” What are you doing to bring about the total correction that is needed across the board? Are you working for an illegitimate government (regardless of sector), which, at the top doesn’t even follow its own rules? Are you working for the biggest street gang in North America – the police?
It is a sad fact that most of these sub-humans who occupy such positions are either willingly living in contradiction to their own philosophy, or else they have no philosophy.
Either way you get a world that looks like our current one.
I quote you: “am I not being a responsible young adult by not feeding into the system and buying a home that I can not afford?”
You are missing the point. If you want to be a responsible adult, you would want to contribute to fixing the system. And if you want to contribute to fixing the system, then you would be smart to withdrawal ALL of your money and assets etc. from any sort of bank or financial institution, and use that money to quit your government job and buy survival supplies and seeds – enough for at least two or three years. That would enable you to hunker down with your family, friends, and community, without contributing taxes, for as long as it takes to starve the beast. That would entail utilizing survival instincts, something that has been largely bread out of the populace.
But starving the criminals of cash, tax, and liquidity is the only way to bring it down. And make no mistake, it needs to come down. The system will not self-correct. It will only hire more pigs.
However, the problem is - I suspect this strategy would need to be implemented by at minimum 70% of the global population, all within a few days of each other, if not - on the same day as each other. Only then would there be a critical mass of liquidity simultaneously exiting the system along with all tax revenue. Only then would the man behind the curtain be revealed, and the fraud be laid bare by the resulting chaos.
We are at class warfare. And this is precisely why we are doomed… because there are only so many alpha males out there who haven’t been totally feminized yet. Sadly, the only thing most of the “proles” excel at is laying down to die rather than standing up for themselves.
Posted by: world guy | Jan 6, 2022 7:46:22 PM
buble schmuble more bs from another overpaid paper shuffler and scammer
Posted by: karla | Jan 6, 2022 8:20:50 PM
I also have grown tired of hearing of this so called "bubble". I have been saving up to buy a home for 4 years now and every year the prices just go up. Even if you purchase a home at 300000 and live in that home for 5 years and prices go down 15%, you have still spent less than you would have on rent. Let alone having your own washer and dryer and living in a decent area.
Posted by: observation | Jan 7, 2022 4:31:38 AM
look at things from your own perspective. if you can afford a house, like the city you are living in, and would like to stay there, buy a house. the other thing is, even if prices do go down a bit, so what? if you panic and sell, you will be the one selling yourself short (not even including realtor fees, lawyer fees, moving costs, and any other costs). stay there, and continue making your payments. in time, you will own your house, and will have made a nice bit of equity to boot. if you play the housing game like you play stocks, and play them both with fear as your number one guiding force, you are setting yourself up for failure, almost certainly. you will run from any risk, and try to go for a "sure thing". this is why booms and busts happen in the first place. everyone jumping on the bandwagon, thinking they are riding a golden chariot. it always leads to disaster. think things through for yourself, and take the course of action that is best for you. don't set up your entire life on the thought that you hope this or that happens. think things through rationally. hoping prices will go up or go down is like hoping you will win the lottery. set goals in your life, and whatever you would like to do or achieve, work towards it.
i know of people who sold and want to rent, waiting for the market to crash. waiting for what? your money is also dwindling. even if the amount coming in is more than your rent and expenses, you might have got a lot of equity in that time, and even if you have say a $400,000 mortgage on a house, with a good interest rate, like in the 3% range, you will have paid off $50,000 in 5 years, even though you pay a lot of interest during that time. and the longer you pay your mortgage, the higher the percentage of principal you pay off with each successive payment. there is a lot more to it than just the total monthly mortgage payment relative to monthly rent. rents tend to lag behind housing prices as well.
Posted by: observation | Jan 7, 2022 4:32:05 AM
if you keep a level head about things, you will be fine. to anyone who thinks it's greedy to have a rental property, what about the person who wants to spend all their money in the bar, on clothes, on cars, showing off, being a player? that is a true waste of life. millionaires go broke playing this way. the ones that spend their money foolishly, wanting everything right now, splurging on everything, will be the ones who are jealous of the ones who lived modestly and now have many rental properties bringing in enough money for them to live comfortably. and, if it is to be that less people will be able to afford a home, they will need to live somewhere, so i see no way that rental properties are a bad investment, provided they are geared towards being rental properties, not large homes well outside the downtown core that will never get you adequate rent. (multi-units, small condos, that sort of thing, should always make a good return. whatever gives you the highest rent to value ratio. the smallest, least expensive thing you can buy basically, or a number of those in one building, a 10 or 20 unit apartment if you're really getting into it. maybe a strip mall or an industrial warehouse. historically, an industrial warehouse has the greatest return on investment of any kind, aside from buying in to microsoft or mcdonalds or something like that when they first started. this is in terms of everyday investments). if you want a steady life, and have a steady head about yourself, you will see clearly what is happening. never mind about fads. never mind about what this or that is in right now. that is all meaningless. keep in mind what really matters. your health. your family. your peace of mind.
and kitsilano. that's the most expensive area in canada. as if that factors into anything as far as canada wide real estate trends. half a mil for a shack in 1996 is ludicrous. i wouldn't drop 2-3 mil for a house that has a view of oil tankers and barges all day, with the filthiest water imaginable out in front of me, and going to the dock to see enormous jellyfish in that disgusting filth of a bay. canadians don’t even have regulations preventing sewage runoff into the ocean. and i thought that was only in third world countries. who in their right mind would buy there? just because it’s expensive and there are a lot of other rich people around? so you can say you live in the most expensive neighborhood in canada? ridiculous.
Posted by: observation | Jan 7, 2022 4:32:31 AM
i bet a lot of the real estate bubble starts with uber rich people buying up and selling properties in rich neighbourhoods, showing a trend is starting there, and then i have thought it possible that they might affect prices in moderately priced neighborhoods as well, by, again, buying up the houses, then selling it to their friends for more than they paid for it, in a very short time. this could be done with an entire network of people so that the rich people can never be traced. a true mafia-style rigging of prices. the person putting their name on the paper might get a piece, but the big wigs get the spoils. in a world as crazy as this, with all the crap going on, it’s really not that far-fetched. (now there are more monitoring systems in place, but they will find other ways around it. maybe they will wait a bit longer before they sell again, but at a higher price, of course. maybe they will buy up many homes in one or a few neighborhoods, and then start selloff sprees after longer wait periods than before, with their friends buying all of them up, of course, or at least initially, starting a trend that follows through to other areas, or that is formulated to be so, homes in the other areas having been bought up as well). if the entire monetary system, the banks, and the fed in the us is rigged, there could be any number of other things going on. why someone would want to do that is beyond me, but why someone would want to do any of these things speaks enough about the contents of these people’s character and sanity.
anyway, back to the conversation. a pretty safe way to buy (for a married couple) is if both people work, and one of their salaries is enough to pay the mortgage, and cover all the expenses. this is if you want to minimize risk. and it likely only applies if one or both are professionals. if you want to get into a more expensive house sooner (thinking that it might be out of reach in time if you don't act on it), then go for it, but make it somewhere in the middle, not something you can barely afford. the other thing is, if you are talking about a hot spot or trendy area, of course it will be pricey, and likely will continue to increase in value even if most of the city is more or less steady. the more the city is developed, the more the inner or desirable established areas will be worth. that is a factor to keep in mind. but, first and foremost, never mind what anyone else says about this or that maybe happening. go with what you like, and with what is best for you, and don't overstretch yourself, and you'll be fine.
Posted by: observation | Jan 7, 2022 4:32:59 AM
finally, banks cannot be allowed to lend more than they have, period. i don't care who says what about it taking longer to make profits or whatever, all the money has to be accounted for, so that if everyone wanted to withdraw their money, they could, and then some. any investment the banks want to make has to be with additional money they have. if they even touch someone else's money, they go to jail. or, even better, they will be forbidden from ever being able to have money, and they will be dependent upon the handouts of others. wouldn't that be a laugh. proper retribution for a greedy banker if there was any. if empoyers lay off workers, then have record profits, they should give all their profits to the people they just laid off. it should be illegal for mass layoffs just to make greater and greater profits every year. that is the only thing that creates the danger of people not being able to afford their homes, and any kind of real estate collapse (aside from the rigging of the market by the powers that be). if the governments of any nations are serious about having sustainable housing, and as a direct result the preferred state of their economy and the smooth operation of their society as a whole, they should impose harsh penalties on those looking to make a quick buck off others (or off of dumping them). look at the employees of oil companies. the companies laid off all of their higher level, experienced workers, and re-hired new graduates at a fraction of the cost. then, when their production ramps up, they scramble to find someone with 20 or 30 years experience, to get them through their busy time. anyone caught doing this should be fined for half the value of their company, or for half of the company’s income for the next ten years. it really has to be strictly enforced. all of these scumbags need to be weeded out of the workforce, and out of any kind of position of power. if that means the majority of upper management and executives, so be it. they asked for it, and they deserve it, with their behavior. profits and satisfying stockholders is nice and dandy, but upholding the rights of the people to have a decent standard of living and being treated fairly for their loyalty and hard work must come first.
all of the bankers and forecasters are scammers. the very definition of a corporation is an entity whose sole purpose is to make maximum profits. for banks and the other "untouchable" organizations like oil and insurance companies, this means make maximum profit at any cost. and let's not even get into governments and world organizations. at that point it becomes making profit at the cost of lives. that is just how unbelievable it is. anyone that says there is a slated decline of 10-20% is scaremongering, and will affect the storm that ensues, should enough people listen to them. it is so easy to be scared by these people when the most valuable investment you have is your home. you want it to be safe, you don't want to lose it, but if these people can convince you it should be worth less soon, you may dump it on the market and throw away the best investment you ever made, all in an effort to re-buy later at a lower price. that is a two-stage swindle, only you never get to act on the second stage. you get duped out of your house, but you can't buy it again for cheaper, and if you wait too long, you might not be able to buy it back at all.