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July 15th, 2010 at 2:36 pm
@Purp1: I like to keep a few hundred thousand in People Trust account bear. The rest I keep in market. People trust highest rate in Canada but for tiny $5k or whatever bear savings not much difference.
July 15th, 2010 at 2:19 pm
@Rediculous: Beware the advice given to you at your bank. I was appalled at the advice we got recently at Royal when trying to figure out where to put our DP after selling our home. I told the rep that we wanted to preserve capital and keep it liquid. She said I should in invest in mutual funds! That got me going, so then she mentioned maybe I would like GIC’s (non-redeemable). Even better she suggested the market linked GIC’s. I asked her twice point blank what the historical return is of these products and she didn’t know or couldn’t tell me! Brutal. Then a manager came to bail her out and we talked about regular GIC’s for a bit, 2 year for 1.4%. I asked how this was attractive when I could dump it in a high interest savings account, get a larger return and have access to my money at any time. I asked if that’s the best rate they can give. Apparently they could offer 1.9%. Terrible service and rates. I think we’ll look at ING, Ally and other online banks to park the cash. Curious what other people are doing with their DP’s?
July 15th, 2010 at 2:14 pm
Well a piece of good news for the bulls. This survey shows that Vancouver currently have fairly high level of household savings & investments and net wealth relative to debt, despite our lower household income. So looking at this survey, it seems that there are still a lot of buying power left and doesn’t square with the bear view that a lot of households in Vancouver, especially homeowners, are very stretched and up to their eyeballs in debt.
http://www.theglobeandmail.com.....le1640442/
Anyone know how this survey was done? I’m a bit curious because I save a lot of money (ok I also lost a lot of it in the stock market), paid off mortgage, have a higher than average income, and yet I cannot come anywhere near the average level of savings & investment levels cited. My sis and her husband probably comes close but then they are probably in the top 5% of household income I think.
Among my friends, I only know two that might come close in terms of savings and investment but then their incomes are even higher than me, and/or did well in the market. However their net work would not come close due to the mortgage debt.
So how do people make/have that much $$ in Vancouver? I was asked recently what are major industry in Vancouver, and frankly outside of tourism & service, I can’t think of any major industry in this town? I realize lawyers, doctors, police, nursing, realtors & RE related can all make $100K+/year but are there really that many jobs out there in the last few years?
I think I’m a pretty smart guy but I can’t fathom how the average person/household can make enough $$$ to achieve the average net worth, saving & investments cited in the survey by say 45, without taking some large risks and getting lucky. So how do people do it here? Seriously I want to know!
July 15th, 2010 at 2:08 pm
I was in CIBC today trying to get some money transferred. While the service rep was waiting on the phone to speak to a rep at the bank where I want the funds sent, she took the opportunity to throw in a little hustle.
Her: Make sure you come see me if you need anything – I do it all – banking, mortgages, insurance, investments, everything!
Me: Ok. (with a smirk)
Her: Do you have a Mortgage?
Me: No.
Her: Do you plan to buy a house?
Me: Not for a while, at least a couple years.
Her: You should buy now – interest rates are so low!
Me: Prices are rediculous and a 5 year term on a 35 year amortization would expose me when interest rates go back up. In 5 years, I could be paying 10%!
Her: You know a house is one of the best investments you can buy – values just keep going up!
Me: Since 1890 housing has returned 0.5% after inflation. A diversified stock portfolio has returned 7% after inflation. Housing has been a good investment in Vancouver for the last 10 years, but you can’t really even call it that as since at least 2004, there has been no fundamental indication that there would be reasonable security of principal and a reasonable expecation of return that reflects the risk involved in holding the real estate.
Her:…. starts talking on the phone. Couldn’t tell whether she had gotten through or was just trying to hide behind her phone.
Once she got off the phone, she tried to offer me a higher limit on my LOC, which is secured by nothing. I have 50k in available credit from CIBC with no collateral. I don’t use any of it.
The Banks are still serving up the Koolaid in Costco sized batches and money, for all intents and purposes, is still basically free in Canada. Absolutely boggles my mind. This cannot and will not end well.
July 15th, 2010 at 2:05 pm
@patriotzed
Yeah, that’s what I meant.
Thanks for clarifying.
July 15th, 2010 at 2:03 pm
@Jonathon:
I believe the numbers you’re quoting are for people who actually report their income… from what I can tell most of the money that flocks here is proceeds of crime.
July 15th, 2010 at 2:03 pm
Bear what we witness in Japan is not going to happen here or USA. Japan have no immigration and japanese too lazy to rear children. Europe same issue just look at greece. China has same problem but government made them do it. USA have domestic growth and we import people. Everything ok with this plan bear. Sit back have crantini and dream about paying 25k for yaletown condo never gonna happen.
July 15th, 2010 at 1:46 pm
@Drachen:
2009 # of millionaires
1 United States 2,886,200
2 Japan 1,650,000
3 Germany 861,500
4 China 477,400
5 UK 448,100
6 France 383,000
7 Canada 251,300
8 Switzerland 222,000
9 Italy 179,000
10 Australia 173,600
11 Brazil 146,700
12 Spain 143,000
over 2 million millionaires in Europe compared to under 1/2 a million Chinese. Canada has half as much as China but why would China be dominating our RE market so much then?
July 15th, 2010 at 1:44 pm
@metalhead:
A home should not be a speculative investment.
Its value to you is a place to live.
The only way you can determine the proper price to pay for a house is to treat it as an investment. Just like the way value investors determine the proper price to pay for a stock.
July 15th, 2010 at 1:30 pm
reality check on Canada (go to 14:16 in the video):
http://www.youtube.com/watch?v=xZJm7zWpuII
July 15th, 2010 at 1:23 pm
A home should not be an investment.
It is a place to live.
I’m a baby boomer, late one, and it amazes me the amount of people in my age group that are relying on their home to get them through retirement.
I have a 3200 sq. ft. house in Abbotsford paid for and it only represents about 1/3rd of my net worth.
I know people my age and older where the home is 100% of their net worth.
What is going to happen when all these old fucks try to cash in at the same time?
July 15th, 2010 at 1:10 pm
@Samantha
“Everyone knows that realestate is a long term investment. You can’t let short term ups and downs throw you off your long term plan.
If you don’t have a plan or are too impulsive to stay the course then you might not be mature enough to invest in realestate.”
Yes, thats it, my lack of maturity has kept me out of the real estate market. I am old enough to remember when Michael J. Fox didn’t shake.
A million dollar home with a 15% rate of return will double in value in just about 4.5 years. Since you are long term, a million dollar home will be worth 66 million in 30 years.
You either got really excited at that last statement, or just realized that you are maybe kind of an idiot.
July 15th, 2010 at 1:06 pm
Ahh but they had to rely on those flaky, notoriously unreliable European buyers flocking to their rescue. We have the uber wealthy Chinese rescuing things here. I mean the average income in China is $6,600 US! How can locals compete with such massive buying power, our average isn’t even ten times theirs!
July 15th, 2010 at 12:57 pm
http://www.theglobeandmail.com.....le1641279/
Reminds of that old Bruce Springsteen song, about the last big recession in the ’80s…
“Is a dream a lie if it don’t come true
Or is it something worse?”
I guess we all can’t be millionaires…
July 15th, 2010 at 12:20 pm
@VRENGD:
Very true…and IMO, rising rates would be more devestating than recession.
I was really hoping for the recovery/higher rates decline, but I’ll have to make do with the Gnawing deflation decline.
I have a question for everyone that I’ve been wondering. Given that we are in a textbook deflationary deleveraging scenario, where in the world has any national government actually successfully battled deflation through monetary and fiscal policy.
USA is failing.
Japan Failed.
For example, if deflation hits, socially, people will become debt adverse by the time the guv acts. If they throw out 10,000 to each canadian out of a helicopter…they would most likely just throw it on their debt and nothing really changes.
ie…is deflation not just as much as a behavioural force as much as a financial force?
Please post any relevant examples.
July 15th, 2010 at 12:20 pm
where is Dave? … er .. lost his voice… ahem, job at the City?
July 15th, 2010 at 12:19 pm
Reversion to the mean is a bitch. Frankly, we are still (on average) a bunch of backwater yokels here, no matter how cosmopolitan we pretend to be, and the average home/condo owner has about as much financial acumen as a lumberjack in a strip club. We’re driving straight off the cliff with this one, no soft landings for us. Just wait for the greater fools to rush in when prices are 20% off the peak next Spring. And then the prices continue the march down.
July 15th, 2010 at 12:14 pm
@“A-Sharp” Accountant:
If the economy improves, emergency interest rates are gone. Higher rates means lower prices. It also means lots of bankrupt variable rate mortgage debtors in Vancouver.
July 15th, 2010 at 12:12 pm
@SamanthaD:
LOL Samantha. you are saying this as if bears have not made a little cash in LML RE in the last 7 years. Whats the difference between you and me? We’ve both seen paper gains in RE. I’ve cashed them out, and they earn enough after tax CF’s to rent a place twice as nice as I could own with the equity.
2004 was “The warning”—in that it became understood that RE was overvalued. The smart bear said: “OK, we are on the wrong side of the value equation…it may still go up, let’s watch for the sell signal”
2008 ad 2010 Spring was the “Sell signal” MOI and the indicators showed that price declines are in the cards.
July 15th, 2010 at 12:09 pm
Only the first comment is from me the other ones are someone pretending to be em.
July 15th, 2010 at 12:02 pm
@“A-Sharp” Accountant: I already am rich beyond my wildest dreams. Investing in Vancouver real estate has set me up for a lifetime of investing in things I love like trendy artists and heritage homes. This is the greatest city in the world too bad you all didn’t realize this fact 6 years ago… sorry!
July 15th, 2010 at 12:02 pm
@SamanthaD:
Thank you Samantha.
Now back to your little real estate job and your cranteeny’s.
July 15th, 2010 at 11:57 am
@SamanthaD:
Remember us when you’re rich
July 15th, 2010 at 11:57 am
SamanthaD, permit me to introduce Robert J. Shiller
http://www.econ.yale.edu/~shiller/
and the latest update of his famous graph:
http://img101.imageshack.us/im.....er2010.gif
Enjoy!
July 15th, 2010 at 11:56 am
@SamanthaD: great spreading of wisdom there Samantha. So real estate is a long term thing – who’d have thought. The fact that the market is utterly overvalued based on price/income ratio doesn’t seem to bother you at all.
I’m assuming you’re one of these Vancouverites that stricly follow the mantra “Buy high, sell low.”
It’s good to know that only smart people like you invest in Van RE…otherwise we’d surely be in a bubble, no?
July 15th, 2010 at 11:56 am
My required rate of return is doing just fine thank you, 15% a year is pretty conservative for Vancouver and interest rates have never been above 6% in a generation. I’ll be just fine for your information.
July 15th, 2010 at 11:53 am
@SamanthaD:
Well if you think RE is a long-term investment, then I’m sure you are factoring in 25 year mortgage rates into your Required rate of return.
July 15th, 2010 at 11:52 am
@patriotz:
The CREA President also says: “While the pricing environment is becoming more challenging, a recovering economy and job market will provide support for housing activity and prices.”
OK fine, so if there is an economic recovery (from this already fairly strong point GDP-wise), and if the job market gets better…then the realtor says prices will only be flat. People…in a best case scenario, the head salesperson says: “you wont make money on appreciation any time soon”
To me this begs two questions:
1) Well then…why buy if rent costs are 30% less than cost (not monthly pmt BTW) of ownership?
2) What if the economy and job market do not improve?
July 15th, 2010 at 11:47 am
@SamanthaD: “If you don’t have a plan or are too impulsive to stay the course then you might not be mature enough to invest in realestate.”
I hope you have a long-term plan for a 200bps rise in mortgage rates. “Impulsive” is a nice word until you have negative equity.
July 15th, 2010 at 11:40 am
Everyone knows that realestate is a long term investment. You can’t let short term ups and downs throw you off your long term plan.
If you don’t have a plan or are too impulsive to stay the course then you might not be mature enough to invest in realestate.
July 15th, 2010 at 11:25 am
George Ure is a guy the pimps love to hate. He prints data points in a no shit, no spin way. Not reading George in the morning and reading the Vanshit Scum or Province to get your ‘news’ it is probably why you’re in so much shit all the time. The facts are a bitch, and the truth will make you rich.
http://urbansurvival.com/week.htm
The fact that the MSM is an advertising medium for the liars seems to go right over the majorities heads. Case in point, the RE market and the number of people who have been sucked in to massive mortgages they have no way of ever paying off. The MSM was a bubbly cloud floating in never never land when they signed the docs…but now…..oh shit…what have we done boooby, we’re stuck in a cat box condo for thirty five years and we owe a half a million.
Thank the MSM and your own stupidity for your plight.
July 15th, 2010 at 11:21 am
@realpaul:
Thank you once again fecalpaul for your disturbing yet colourful analysis.
You just can’t have analysis without the anal.
9.3 MOI for all of BC says Dch. Muir?
Not good, buddy. Not good at all.
July 15th, 2010 at 11:11 am
So, as Cameron Muir watched the sales collapse in the spring he tried to stem the flow by calling it a ‘balanced market’ instead of ‘deteriorating market conditions’ so as to keep the game going a bit longer and suck a few unwary losers into the boiling fat. It was an amazing site of how the truly stupid kept licking at the dregs on the bottom of the trough after all the pigs had backed off in horror. After all , weren’t the numbers obvious with the falling building permit and increased listings as representations of the actual conditions? Did he have to say ‘alls clear, we’ve balanced the market? What he was referancing was the death cross as the inflection point went through the balloon. Why so many idiots choose to get their information from these pimps is a source of amusement for me. Some people have their heads stuck so far up their asses that they’re licking the kool aid as it drains down the colon.
http://www.vancouversun.com/re.....story.html
July 15th, 2010 at 10:54 am
I love deflation, it’s murder on first time buyers.
http://finance.yahoo.com/news/.....amp;ccode=
July 15th, 2010 at 10:36 am
@Vansanity:
Les Twarog changed the layout of his website, so the code which scrapes the data from his site probably doesn’t work anymore.
July 15th, 2010 at 9:26 am
@jesse:
My cited properties did indeed have rennovations.
July 15th, 2010 at 9:17 am
@SuperSmartBull:
Is it my imagination that I have heavy coats and boots in my closet? I forgot to mention all those half broken umbrellas because winds are so strong.
Nobody listens to Gloria Estefan anymore anywhere. How old are you anyway, 50?
I hear Lady Gaga more than Sarah in this town.
July 15th, 2010 at 8:55 am
What’s with the condo tracker number? 507 to 407 overnight?
July 15th, 2010 at 8:34 am
Also, have Miami ever hosted Olympic? Paddling an old car from Cuba to Florida doesn’t count as sport.
July 15th, 2010 at 8:32 am
Miami? Problem Miami was everyone thought Miami only sunny skies and beach. Then when move in realize that also many hurricane and having to listen to Gloria Estefan music everywhere. Vancouver have mild weather, no storm, and we have Sarah McLachlan. She is much easier on ear. See, it always different hear bear.
July 15th, 2010 at 8:09 am
@BoB:
Good thing we don’t have any of that in Canada, eh?
July 15th, 2010 at 8:07 am
jesse Says:
July 15th, 2010 at 7:16 am
Come on Jesse these are just mortgage fraud examples…
July 15th, 2010 at 7:59 am
Bar this market going to take off like peleton today trying to shut down break away. Bars you should learn from Andy Schleck. If you want to live good life you have to work for it bar. You can’t sit around like Cadell Evans cry like girl. You should try to get better job or something.
July 15th, 2010 at 7:50 am
inventory/paulb/others
any sense of price movement for June based on first 1/2 of month?
any sense of how much lower sales will be vs june and july 09?
thanks
July 15th, 2010 at 7:16 am
“Boght in 2004 for $400,000 on Ontario Street. Sold in 2010 for $1,2000,000″
Check out Sacramento:
Boght in 2005 for $768,500. Still not sold, asking $390,000
Boght in 2005 for $775,000. Still not sold, asking $250,000
etc.
And that’s ignoring if they had any renovations done, which I’m pretty sure your cited properties had.
July 15th, 2010 at 7:05 am
@VRENGD:
Florida bubble of the 20′s dwarfs them all.
http://en.wikipedia.org/wiki/F....._the_1920s
But post-WWII in North America, this may be the biggest. I think South Africa holds the prize for the recent global bubble.
July 15th, 2010 at 6:48 am
If a 40% rise in three years is a bubble what do you say about vancouver? Here are two recent sales from people I know.
#1 – Bought in 2005 for $2,000,000 in Shaugnessey. Sold in 2010 for $6,000,000.
#2 – Boght in 2004 for $400,000 on Ontario Street. Sold in 2010 for $1,2000,000.
Obviously, some Vancouver neighbourhoods have seen 300% prices increases in 5-6 years. Can anyone give me an example from anywhere in the history of mankind that matches the this magnitude?
July 15th, 2010 at 6:16 am
Miami’s problem was that they had too many investors. Vancouver has more owner occupiers who will pay a premium to own.
Also Miami doesn’t have a large Chinese community who don’t care about price to rent ratios and only but when prices are high.
So you see because buyers want to pay a premium prices will stay high.
July 15th, 2010 at 4:54 am
This is the end
My realtor friend
This is the end
My flipper friend, the end
Of your elaborate plans, the end
Of everything that stands, the end
No safety or surprise, the end
You’ll never sneer at my face…again
Housing sales fall sharply in June
July 15th, 2010 at 2:09 am
Why does the graph begin at 1/1 2007? There was a double-top in Miami in 2006, with the second occurring at the beginning of the fourth quarter. So the drop in prices has been even more dramatic than that realtor’s graph would suggest.