Overpriced homes destroying retirement and education saving?

A few people pointed out this Rob Carrick column over at the Globe and Mail, looks like it should get front page attention here:

In February, Mr. Salvi called this client to remind her about the upcoming RRSP contribution deadline. “She said, ‘You know, I cannot put anything into my RRSP and, by the way, I need to cash it in.’”

Mr. Salvi recalls warning her about the withholding tax that applies to money withdrawn from an RRSP. Her reply was that her RRSP was her last resort. “The sad thing is that it took years to grow that RRSP, and it’s going to be used up in a few months.”

When somebody buys an overpriced house they’re giving up all the other things that money could have been used for.  It looks like those sacrifices include saving for retirement or their kids education.

Here’s the full article.

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Anonymous
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Anonymous

@RippedtoShit: ….Whistler is getting the crap beat out of it……

The crap has been beaten out of Whistler for some time now, it’s just becoming more public. And now that it is, there’s even more crap to coming, then the bile will start draining out. If you go to Whistler for a visit, take a parachute.

MM
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MM

@zrh2yvr: I overheard an (unverified) anecdote from Olympic Village, purchased for $2M, sold recently for $1.4M.

patriotz
Member

@Anonymous:
It’s a fallacy to assume a priori that a stock (or house) will go down just as it’s a fallacy to assume a priori that it will go up. It’s just the converse of the greater fool theory.

You have to see whether the dividends justify the purchase price, because that’s what the asset is actually returning to the buyer.

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[…] try {Histats.start(1,1591082,4,0,0,0,""); Histats.track_hits();} catch(err){}; I think this comment from zrh2yvr is worth highlighting, so I’m pasting it into the submission […]

Anonymous
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Anonymous

@JR:

I think what this is saying is that Dunbar is ground zero for the correction (with honourable mention to Kits and PG). I’m a life long resident of the Westside, including Dunbar. Its going to tank more than anyplace in this country.

Have to agree. The thing that will make it so enjoyable is so many people who have bought in Dunbar think it is virtually impossible for it to correct. As safe as a Bank GIC with a yield of a Greek bond. The westside will get slaughtered. Imagine your house going down by a million or so. That would suck. Greek bonds may fair better.

Anonymous
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Anonymous

@UnagiDon:
It was anything but a soft landing back then. I recall west side detached down about 35%

Devore
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Devore
@vangrl: “presales of concrete condos in the right location and at the right price point continue to escalate with Asian investors largely driving the market” Just came back from Calgary, visiting family for Easter. Met up with an asian couple friends of mine, he’s an IT contractor with the city, she’s an account manager at a big 5 handling high net worth customers (hockey players, oil execs and such). They’re trying to rent out their (very underwhelming, studio-with-sliding-partition masquerading as a 1 bedroom) condo. They’re holding out for $1600(!!!) haven’t looked at Craigslist, no idea how realistic that is. Don’t quite have possession yet, building just completed. A bunch of units became available recently after pre-sale buyers backed out now that market value is well below contract price. Tales of people overpaying $500k for a penthouse. Apparently the sales center… Read more »
good-format
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good-format
Copied from PaulB’s number http://www.laurenandpaul.ca Date Listing Price(+-) Sold Inv Inv(+-) S/L(%) Apr-02 450 139 125 16,074 27.8 Apr-03 319 133 224 16,124 50 70.2 Apr-04 302 131 147 16,230 106 48.7 Apr-05 277 118 117 16,345 115 42.2 Apr-10 403 211 159 16,475 130 39.5 Apr-11 416 151 202 16,618 143 48.6 Apr-12 333 140 103 16,736 118 30.9 Apr-13 289 146 150 16,807 71 51.9 Apr-16 341 170 137 16,883 76 40.2 Total-Cur 3,628 1,561 1,619 900 44.6 5 day-avg 356 164 150 108 42.1 Total-Est 7,192 3,197 3,121 17,959 1,976 43.4
UnagiDon
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UnagiDon

@jesse: Wow, pretty high inventory numbers in 1995-1998, even with the smaller population then.

Is it accurate to call that a “soft landing” from the 1995 bubble?

Laibach
Member
Laibach

@Anonymous:

Trafalgar, they used to call it. A patch of urban plain between West 16th Avenue and King Edward in Arbutus Ridge on Vancouver’s West Side. Prime real estate in a beautiful city. And ground zero of the investor invasion.

Read more: http://www.vancourier.com/Chinese+investors+shutter+Vancouver+neighbourhood+while+apologists+racism/6468126/story.html#ixzz1sGbFVjZd

mac
Guest
mac

@vangrl: Don’t be too down on these promotional advertorials, VG. We need them very badly. Mostly because we need the developers’ greed to keep up and to keep building for the 50% of Asians (local or otherwise) who line the block on opening day. More inventory. More inventory. It should become your mantra .

Anonymous
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Anonymous

@Laibach:

Really,where?

RippedtoShit
Guest
RippedtoShit

RJ

I have to agree

I think a lot of younger professionals on the westside feel like geniuses, their RE has doubled and they’ve all gone and bought Prada and Range Rovers

It’s going to hurt bad as prices fall. We should see signs of stress (ie. more Botox) by late summer.

They felt their shit didn’t stink. Now they are going to smell a stench of epic proportions.

Ground Zero, you nailed it.

JR
Guest
JR

@zrh2yvr: I think what this is saying is that Dunbar is ground zero for the correction (with honourable mention to Kits and PG). I’m a life long resident of the Westside, including Dunbar. Its going to tank more than anyplace in this country.

jesse
Member

@RippedtoShit: Not to worry, I’ve heard most purchases on the west side are for the “long term”. Most.

RippedtoShit
Guest
RippedtoShit

Whistler is getting the crap beat out of it.

Anyone sensing any trends in OK and the Valley?

RippedtoShit
Guest
RippedtoShit

Chinese shit stinks like crap.

Just watch as the market gradually implodes, HAM will begin pulling money out and hitting the bid within 5 months.

Suck on that egg.

jesse
Member

@b5baxter:

April month end inventory
1995 19298
1996 19374
1997 18969
1998 20578
1999 16958
2000 15823
2001 14921
2002 12275
2003 10213
2004 9913
2005 11637
2006 9638
2007 12135
2008 15218
2009 14891
2010 15620
2011 14187
b5baxter
Member

@Mclovin:

This will be the earliest 17k party in the last 7 years. IN 2010 it was held at the end of April. 2008 was the middle of May and last year it wasn’t until September. The other years three was none.

I don’t have inventory number in front of me for those years prior to 2006 but I think someone has posted them. Can anyone point me to those?

vangrl
Member
vangrl
vangrl
Member
vangrl
yvr2zrh
Member
OK – Some more interesting data – Again just the facts. Van-West Detached, a market which seems to be suffering, can be described as three markets. One where there are over 350 units for sale in excess of 3.2 million with MOI of over 18 months, 185 units for sale at 1.9M or less with a MOI of 3.8 months and approx 340 units for sale between 1.9M and 3.2M with MOI at 6.7 months. For units priced at under 1.9M, there is a severe lack of inventory which could be a reason for lower sales volumes. One has to wonder however, what will become of this high-end with properties for sale over $3.2 million? They are selling only at a slow pace but at 18 months, I would say many sellers would be happy to just wait for thay… Read more »
crashcow
Member

I have an inkling that HAM is largely driving the score of paulb’s posts.