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FFFA! Debt, Money, Numbers, Investing Fail

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124 Comments

It’s that time of the week again!

Time to do our regular end of the week news round up and open topic discussion thread for the weekend, it’s Friday Free-for-all time!

Here are a few recent links to kick of the chat:

–Tax auditors hunt for condo flippers
–Brace for mortgage renewal time
–Local data macro and filtered
–Debt burden keeps on climbing
–Massive interest rate shock?
–Napkin math
–Population growth and construction
–Some not delighted by Trump U
–Sechelt price drops
–Experts didn’t see India debt bubble
–12 signs you’re a renter
–12 signs you’re an owner in Vancouver
–

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

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Hibernating Renter

Saver: You’re doing something wrong. Have a look at the Canadian Couch Potato blog. I spend about 10 minutes a month purchasing index funds and I’m gaining about 8% a year, all from my regular old bank account.

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CanuckDownUnder

If your grandchildren are studying in Sydney you may as well spend $8.5 million on a property there, especially if you’re holding a golden ticket. And I thought it was just 8s that were lucky in Chinese:

“The street address was 64 Captain Pipers Road when first listed with a price guide of more than $8 million last October with Marion Badenoch, of Richardson & Wrench Double Bay, and passed in at auction at $8.2 million.

The address was changed to No. 66 in March (a luckier number for Chinese buyers), and the buyer was introduced by Asian luxury property specialist Monika Tu, of Black Diamondz.”

http://smh.domain.com.au/real-estate-news/golden-ticket-holder-snaps-up-85m-vaucluse-designer-home-20130903-2t2nh.html

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Atomic Frog

Just came back from a dinner with some ex-coworker Apparently, a guy at the dinner just bought an old-timer in the Commercial area for $800K, the part that make me drop my jaw is that the wife insist on spending $200K to do an extreme makeover for the old-timer His so call logic is this: they basically live in a new house with brand new renos everywhere. The house is an old-timer, so property tax will not go up as quickly as a real brand new house. Well let say 5 yrs from now, his family decided to sell the house due to raising interest rate. Unless the buyer really like the renos he put in, this 200K renos is basically nothing but an expenditure. They paid 1M for a old-timer in the Commercial area of Van. I am speechless.… Read more »

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Aggregator

“Now, where can these values possibly crash to?”

Just look at Japan who kept rates low for too long and tried to print its way out of deflation after their housing bubble burst. http://i.cubeupload.com/G2FOSU.png

People still don’t realize how big this housing bubble is and how long its going to take to deflate. We’re talking decades, not years.

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It's simple

looking at history I’d say they will drop to 2005 levels

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elf

“Lot 380K, Building $300K”

Nobody is saying prices will fall to $300k. But that’s your floor. Not $551k.

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Fax Knot Ohpinionz

2013 Central Surrey: New house costs $680K

–> Lot 380K, Building $300K

2002 Central Surrey: New house costs $320K

—> Lot 170K, Building 150K

Therefore, Lot price increased by 210K and Building costs by $150K.

Now, where can these values possibly crash to? If land values fall by a catastrophic 33%, then new builds like this will fall to $551K. There simply isn’t any building lots left.

Use these fax to your advantage.

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Devore

@Observer “A $25 million and 66% price drop from their initial price! Where is the media coverage now?”

This is likely the largest price drop in Canada, the headlines practically make themselves!

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holga

Sorry on the mistakes
… who currently HAS 4 mortgages under his name.

… Also he THINKS prices will now go u

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holga

Does anyone thinks is a wise move …. I have a friend in Calgary who currently house 4 mortgages under his name. 3 are investment properties in which he shares with a friend. The other one is from his mother’s home in which she added her 2 kids to the mortgage. Now he wants to use his mother’s house to take a Heloc out to pay off the house and to use it for the down payment on a new house for himself. This is the only way he can secure a loan at the moment. He is also planning on using the Heloc to pay for an upcoming wedding expense… To me this a very bad idea, he’ll be a poster child for Garth when things so south. Also he things prices will now go up in Calgary because… Read more »

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Skook

@Renter

“Then what should be the reasonable price for these condo?”

I’m not the one who can answer that question. What I would suggest is that you go visit Garth Tuner’s blog (www.greaterfool.ca) before you decide to buy anything no matter what the cost. (If you never been there before)

Check out the posts for the last month or so

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Renter

Then what should be the reasonable price for these condo?

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Skook

Forgot to add – in Tower 1

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Skook

@Renter #110

Holy Crap. Just checked some of the floor plans:

http://www.wallcentrecentralpark.com/floor-plans/

With plans 02, 07, 09 the apt entry is into the kitchen which you have to walk through to get to the rest of the apt. Last time I saw a set up like that was in my Gram & Gramps itsy bitsy home.

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Renter

Wall Center new condo on Boundary & Vanness for 999 or 899 a month;is it a good deal.pls advise.

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Skook

Vancouver Island Real Estate Board (VIREB) basic August Sales data has been uploaded in VanPeak…

http://vancouverpeak.com/Thread-VIREB-2013-Sales-Data-Vancouver-Island-REB?pid=5277#pid5277

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Skook

For those interested, the Sunshine Coast August Sales data is now posted in the VanPeak forum…

http://vancouverpeak.com/Thread-SC-Listings-Sales-2011-2013?pid=5276#pid5276

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Aggregator

Banks can’t keep up with demand http://www.mortgagebrokernews.ca/news/banks-cant-keep-up-with-demand-174863.aspx

—Brokers say they are experiencing longer than average turnaround times with the banks, suggesting it could be a result of a flooded market due to collective client fears that rates will continue to increase.

“I would divide the segment into two parts; the adjudication part with the banks in general is probably twice or three times as long because of the rush of people trying to rush deals,” Andrew Galea of The Mortgage Management Group told MortgageBrokerNews.ca. “The monolines are still adhering to much faster turnaround times.”—

What may be good news for resale (in the near short-term) is even worse news for presale owners as sideline demand rushes for spot delivery, leaving futures speculators (presales) and developers with less or no bids.

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kabloona

#104: Yeah, that’s pretty much Harper’s whole Economic Action Plan, isn’t it – encourage the Canadian consumer to load up on more debt so they can purchase a spec condo and a flat-screen TV…..

😉

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Big PA

Fracking Brings Employment, August 7, 2013

http://blog.heartland.org/2013/08/fracking-brings-employment/
‘Visits to several Anadarko Petroleum drilling and fracking sites explained why. The operations are far more high-tech than what I had seen previously on rigs in the Rocky Mountains, off the Louisiana and California coasts, and last fall in Alberta’s oil sands region. ‘

http://www.zillow.com/homes/for_sale/Williamsport-PA/pmf,pf_pt/34849_rid/41.25342,-76.884041,41.183047,-77.010899_rect/12_zm/

Just look at these gorgeous Williamsport PA houses, forsale at Eye Popping Cheap Prices!

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patriotz

Harper’s advisers dismissed warning about low interest rates The Prime Minister’s advisers have dismissed a warning by a respected think tank that ultra-low interest rates need to start rising now to avoid damage to the Canadian economy. In a paper for the C.D. Howe Institute, economist Paul Masson argued in May that the Bank of Canada should nudge rates higher to forestall real-estate bubbles, excessive household debt, pension-fund woes and other dangers. But a May 31 briefing note requested by Stephen Harper’s office on the controversial paper notes that Masson’s arguments are “at odds” with the views of most economists. More likely at odds with the Cons’ economic strategy, which is to pump the economy though increasing consumer debt. And it says the central bank cannot act as if Canada is an island while the United States, Europe, Japan and… Read more »

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Les2

after many enjoyable years following this great forum and enjoying all the stats (thanks paulb) and lively discourse, I finally found some time to join up.
I am a long time bear. I guess you could also consider me a somewhat “lucky” owner – but only in restrospect – because I made a huge financial stretch and bought a humble SFH in 2001 due to painful pet restrictions I was encountering for most decent rentals. But not a month goes by when I don’t wonder at the craziness of our local market. I just stumbled across a chart in this article which nicely shows the extent of the “disconnect” over the last 15 years.
http://tinyurl.com/lhmtr4w
This is my first attempt at a tinyurl, so I hope it works…

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Aggregator

All looks on track by the latest numbers as Van’s average price heads lower while lagging HPI gets pulled up. http://i.cubeupload.com/PkWxmY.png

Like skiing moguls: you might catch some air with a stunt, but you’re still heading down.

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patriotz

“In bustling Houston, it’s a case of ‘Build, baby, build!’”

That’s nice. The new employees shouldn’t have too much problem buying houses, since a comparable house goes for about 1/4 what it would in Vancouver.

But is the US energy boom good or bad news for BC?

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Best place on meth

@An Observer

RE: $38 million listing reduced to $12.8 million – what a shockingly stupid used house salesman.

“Who’s going to buy this house?” Tsavdaris asked rhetorically. “A king of China will buy this house, or a Bollywood movie star will buy this house.”

More likely, a developer will buy the house and subdivide the property into three separate estates. In fact, there has already been some movement on it.

“We’ve had offers on it but unfortunately they haven’t come up to the price that’s wanted by the seller,” Tsavdaris said. “All the offers we’ve had have been from developers to build three monster homes there. But we’re hoping to find that one candidate from Bollywood or from China that would want to keep it as one property.”

http://www.northshoreoutlook.com/news/191436111.html

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