FFFA! tiny boxes and debt glorious debt

Hey! You made it to the end of another work week! Let’s do our regular end of the week news round up and open topic discussion thread. Here are a few recent links to kick off the chat:

Families leave Vancouver
Get back in your box!
Carney warns of rate hike
Ontario to crack down on debt settlement
Tax man looks at condo flippers
Big money anecdotes!
Competition Bureau loses MLS case on technicality
17k party party
Sunshine coast active listings
Dead end for Chinas economy?

So what are you seeing out there? Post your news links, thoughts and anecdotes here and have an excellent weekend!

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kem merino

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What the again

Joe mainlanders said why would he invest in condo if it goes up or down when he is earning 20000 over his rent on his investments

Any investment including preferred shares go up or down so I would think it prudent to worry about it

You can protect your investments with insurance like a derivative but it will cost you lowering your returns

To earn 20,000 now close to risk free it is million dollar so 40000 means he has 2 million invested and therefore wealthy in my opinion
If he is making 40000 on 800000 his investment contains risk

He implied that his investment was risk free from his post so it is a “what the” from me or perhaps he has some great investing strategy that he could share with us

What the

Joe mainlanders said why would he invest in condo if it goes up or down when he is earning 20000 over his rent on his investments

Any investment including preferred shares go up or down so I would think it prudent to worry about it

You can protect your investments with insurance like a derivative but it will cost you lowering your returns

To earn 20,000 now close to risk free it is million dollar so 40000 means he has 2 million invested and therefore wealthy in my opinion
If he is making 40000 on 800000 his investment contains risk

He implied that his investment was risk free from his post so it is a “what the” from me or perhaps he has some great investing strategy that he could share with us

LOTPRICE

painted turtle;

no offence, but c’mon, This crash isn’t happening anytime soon.

was at a party last nite…guy had bought a house (with big mortgage). All the hotties were enticed by him….another guy there was renting…has well into 6 figures invested but the hotties no where near him…

That is the real world my friend. Its what you have rite now!

How much is that worth? priceless in my opinion. wonder how his nite ended.
Nothing has changed! Survival of the fittest still!

Anonymous1

From this day onward,

Anonymous1 —> is LOTPRICE

That’s all I’m gonna track these days if you’re interested in a sfd home. Not condos nor townhouses! I don’t care what happens to those.

jesse

“2.75% mtg – 0.5% (present inflation rate) = 2.25% real rates”

Long GoC rate 2.49
RRB rate 0.48
Inflation expectation 2.00
5y GoC bond rate 1.29
Real 5 year rate -0.70

These are calculations, not my opinion. Watch the dislikes on this one.

painted turtle

@anonymous1

If the world is turning upside down, as you say, then better be mobile and not stuck with an overpriced house in Vancouver.

Anonymous1

Posters 118 and 119:

Do you really think the herd analyzes like you do? if you think the herd bases their decisions on analyses like these then man are you guys so wrong.

Joe Mainlander #112:

Go ahead and rent. You will never leave your kids with an advantage (paid off residence). Canada/usa is less than 5% of the global population. the centre of the universe has shifted to Asia. We like leaving a legacy at all costs.

To all others:

We’ve been blabbing about a real estate crash for years. Do you really think its coming? in a globalized worl, most of us missed the boat. You may be waiting a lifetime!

Goldmember

The 2.75% mortgage rate doesn’t mean much until you know what inflation is doing. The biggest misunderstanding people have in real estate is regarding interest rates vs. RE price. It always confuses people how prices can fall when rates are falling (and vice versa)until of course you adjust the rates for inflation. Then it makes sense.

Goldmember


“Maybe it’s the commodity super cycle, but 2.75% for a five year mortgage kinda makes more sense to me.”

The key is real interest rates have been moving higher (with inflation slowing):

2.75% mtg – 0.5% (present inflation rate) = 2.25% real rates

If inflation turns negative later this year, real rates will go much higher.

Eg. 1981:
14% mtg – 12.5% (inflation) = 1.5% real rates (prices stall and start dropping)

1982:
16% mtg – 9% (inflation) = 7% real rates (home prices drop quickly)

BRIBERY by any other name is still Bribery

Call it what you may,
Buyers agent is paid(bribed) a portion of sales commission so that
he will screw his client, the buyer.
Use fancy words like, reciprocity, buyers commission or whatever.
For practical purpose it is still bribery.
Put lipstick on a pig, it is still a pig.
All realtors work like that, including
the darling agent (PaulB) of the bloggers at VCI

http://www.youtube.com/watch?v=t65Dsa9m_Qw

Anonymous

What the- $800k in investable assets hardly qualifies one as very wealthy.

Anonymous

Where did he say anything about risk free? There are many investments like pref shares and corp bonds that fluctuate in value yet pay very steady income in the 4.5-6.5% range

Boombust

#113…

It’s all BS.

What the

Joe mainlanders what kind of investment do you have that produces that kind of income with no chance of a capital loss?
Do you have it all in a 2% GIC

If so you are very wealthy producing over 40,000 dollars a year estimated by your statement that it covers rent plus an extra 20,000 dollars a year

Joe Mainlander

Reality is that it’s cheaper for me to rent. My investments pay my yearly rent plus 20K left over. Why lose that by putting my nest egg in a condo that may go up or may go down? And I have to pay interest, condo fees, heat and property tax while I’m waiting to find out? Fugettaboutit.

HPI IS UP

@Joe Mainlander

there is good sense in what you are saying. if HPI is up again this month, will it still be to early to tell? when do we realize that that bottom is really in? let’s not be a vancouvercondiot who is wrong for 7 years, and let’s use our brains and look at reality instead of sticking our heads in the sand.

Joe Mainlander

# 106 HPI is up

Correction is over? Too early to tell. Even in the US there was the yearly ‘spring bounce’ that occurred on the way down.

jesse

Maybe it’s the commodity super cycle, but 2.75% for a five year mortgage kinda makes more sense to me.

Short'em High

@#104. I’m glad to read your comment on global energy supply fundamentals. My comment on energy transportation projects was more a point of view on commodity prices relative to large government investment not geology, future supply, or future demand. You could be right that asian LNG prices and new pipeline destination crude prices stay at profitable levels. If not, it’s a hell of a gamble hitching the entire economy to a couple of huge energy transportation projects. If energy commodity prices weaken, traders won’t be worried about BC’s bad bets. They’ll be shorting. It is an interesting thought experiment to wonder, if Alberta crude and BC nat gas are so vital and profitable elsewhere, why are we still talking about transportation projects that are years away. That theoretical arbitrage profit from those missing transportation modes should have bulldozed capital and… Read more »

Guy Smiley

That may be true that German union workers are not lazy like those here in BC. Can you give me some examples of a productive union (like the ones that fund the NDP) and a unionized industry that thrives here in North America?

From conversations i’ve had with people that were involved with construction of the FastCat Ferries, surely one of the NDP’s most famous union-supporting triumphs, workers were neither lazy nor unproductive. It sounds like everyone of them managed to walk off the grounds with enough material to finish their basements and build new garages in their backyards. It was probably one factor that helped push the cost from projected $210M to final $460M, but it’s hardly lazy.

I can’t wait to see what the NDP will build this time around.

HPI IS UP

I wonder why the vancouvercondiots are talking about cars and germany. It’s probably because the HPI was steady and last month turned up. Looks like the long awaited correction is over.

Anonymous

“The German car industry is able to pay high wages and make profits because its workers are very productive.”

That may be true that German union workers are not lazy like those here in BC. Can you give me some examples of a productive union (like the ones that fund the NDP) and a unionized industry that thrives here in North America? I doubt it.

Dumbest time in 31 years to buy RE

Sort’em High #100 You had me thumbs up until you went off the rails with energy. The US is indeed increasing energy production and their rate of consumtion has also been slowing due to technology and the sluggish economy. That said, aside from the Baaken fields in North Dakota the increasing production is entirely based on fracking from many small fields that were previously uneconomic to extract. These fields will be exhausted within a few years even if fracking is not legislatively curtailed because of ground and water contamination. A sizable portion of the Baaken fields also happen to be in Saskatchewan. Texas refineries are starved for heavy bitumen from Alberta, and the Keystone pipeline will also be the most efective way to move oil from the Dakotas and Motana to refineries. The proposed export of Canadian nat gas is… Read more »

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