The problem with wealth locked up in housing

Barbara Yaffe has a column in the Vancouver Sun where she points out some of the problems with ‘paper riches‘.

A recent study reveals Vancouverites have the highest net worth in Canada as a result of their pricey homes; so why do so many of us feel like we’re in the poor house?

It’s probably because, with median incomes below the national average, Vancouver residents are grappling with monster mortgages, as well as the highest consumer debt loads in the country.

And while it’s great building home equity, this does little to improve financial positioning until a place is sold and a profit realized.

Read the full article in the Vancouver Sun.

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Softy
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Softy

“yet the bubble he admitted to never popped so where did it go”

It landed softly. It’s a soft landing.

lolzlolzlolz
Guest
lolzlolzlolz
@Best place on meth The world is changing. Change with it or be left behind. Most people in the coming generation are going to be working some 40-50 years before they retire now. Life expectancy is going to be an average of 100 years for this coming generation and there is going to be 10B in the world by 2050. Let me guess, with that in mind, you’ll still be sticking by 1960s era “3X annual income for a family to buy a detached house in the city argument???” Whatever works for ya pal!! Land inflation in Vancouver goes up in spurts and crests, and then goes up in spurts again. When the average condo price in Vancouver is 700-800K in 2030 are you still going to be babbling this nonsense? Fiat is easy to print. Land, not so much.
jesse
Member
“he said that what we saw last decade with people standing in line-ups around the block overnight” Somerville’s correct that in 2006-2007 there was more construction activity and that will mean more presales. Inventory was tighter before 2008, we can look at the MOI graphs to validate this. The prevalence of 0-40 loans meant there was more opportunity for speculation using “free” money. Price-rent ratios on condos have dropped about 15% from their pre-2008 peaks, even in the face of improving price-payment ratios. That completely ignores the underlying business case argument. Price-rent ratios are still high, even without the aforementioned factors. The only argument that passes any muster is the reliance on low costs of capital relative to wage/rent growth to maintain current affordability measures ad infinitum (I’m talking about lower priced condos; SFH and higher end stuff is detached… Read more »
paulb
Member

New Listings 162
Price Changes 94
Sold Listings 131
TI:17524

http://www.paulboenisch.com

Best place on meth
Member
Best place on meth

@lolzlolzlolz

Stupid fucking cheerleader.

Real estate has gone up 150% since 2002 and you’re trying to tell me that inflation was 150%?

http://www.bankofcanada.ca/rates/related/inflation-calculator/

23% over 11 years, that’s how much inflation we’ve had.

lolzlolzlolz
Guest
lolzlolzlolz

@Best place on meth

LMAO.

You still don’t get it do you? THERE IS NO BUBBLE

It’s called INFLATION

Many Franks
Member
Active Member

@VMD: Lets’ call it “It’s Always A Good Time To Buy.” Bag it by posting based on the template at the bottom of http://piratepad.net/ep/pad/view/ro.SXqM61It83r/latest.

Best place on meth
Member
Best place on meth
So about an hour ago I’m listening to CBC radio and Turd Sommerville comes on (feel free to bag a trophy for “Turd”, I’ll gladly take the credit) and he was actually being quite sensible for most of the interview until the very last question when he was asked about the “bubble”. His answer was that he’s still looking for this bubble that people are talking about and hasn’t been able to find any. Ok, he’s a bubble-denier. Fair enough. But in the next sentence he contradicted himself again, as this stupid, lying motherfucker tends to do every time he’s interviewed – he said that what we saw last decade with people standing in line-ups around the block overnight for pre-sales with intentions of flipping them in bunches was more of what bubble behavior looks like. What we’re seeing now… Read more »
questions for the bears
Guest
questions for the bears

Vmd…

Its fine and dandy to mock, but that just tells me you have no rebuttal.

And no, a thumbs down isn’t an intelligent rebuttal, though its likely all you have

VMD
Member

can I bag a trophy? not sure how to play this
genus: bull
“Folks hoping to time the market for a primary residence will be no further ahead”
(ie. “Don’t Time the Market”)
(ie. It’s always a good time to buy)

questions for the bears
Guest
questions for the bears

At the end of the day, homeowners will come out on top as a central bank can print unlimited fiat, but they can’t produce unlimited land, hence the dollar will continuously decline relative to housing prices….

Key to a successful freedom 55??…live within your means, and before you’re 40, pay off your mortgage and shovel the rest in growth stocks. This is pretty simple…

Folks hoping to time the market for a primary residence will be no further ahead, as they’ll always have to compromise and trade off when doing so….its different for investment property, as you don’t have the rent replacement benefit you have with a primary residence…for investment property, there are lots of straight forward valuation methods to use..

Best place on meth
Member
Best place on meth

Shifty is a snake-oil salesman and should be treated as such.

Mocked, ridiculed, pelted with various objects and run out of town.

crabman
Guest
crabman

There are only 2 financial reasons to ever buy RE:

1. It’s cheaper than renting.
2. It will appreciate enough to make up for the difference.

Softy knows that #1 isn’t true, and he concedes that #2 isn’t true either.

Deep down, he knows that buying RE now is a bad financial decision. He just won’t admit it.

Burnabonian
Guest
Burnabonian

Unlike you, I have not claimed to be smarter than everyone else.

My mix doesn’t matter, except for the fact that it contains 0% direct RE holdings and the rest in other asset classes.

I have put my money where my mouth is, and am practicing what I preach.

Are you? Have you put your money where your mouth is?

If so, how much — in dollar value and percentage?

Burnabonian
Guest
Burnabonian

Post the details of your house purchase.

Month and year, price, amount financed, and current assessment. Round to the nearest 10,000 to keep it anonymous.

Your contention is that you’re a big swinging dick in the real estate world. A savvy investor who knows something that the rest of us don’t.

Prove it.

Softy
Guest
Softy

“The two above to not match.

Are you trying to say that you own no real estate and have no other significant assets?

ARE YOU FUCKING 15??”

I am saying that I have X% in real estate just like you said that you have X% in cash.

And try to control yourself.

Anonymous1
Guest
Anonymous1

Monthly housing affordability ( Interest rates + CMHC) is the biggest factor in high housing prices in areas of low immigration. Places like Kelowna, Abbotsford, Victoria.

Fuel is put on the fire in areas of high Immigration. Large cash inflows, astronaut families, and land use restrictions, openly accepting secondary suites, etc. add this fuel.

Burnabonian
Guest
Burnabonian

The two above to not match.

Are you trying to say that you own no real estate and have no other significant assets?

ARE YOU FUCKING 15??

Do you have no skin in the game?

If so, time to go play with your pokemons and otherwise shut the fuck up because we are talking about important grown up subjects that you don’t know anything about.

Anonymous1
Guest
Anonymous1

On Garth’s blog he states that Toronto will see a correction of 5-20% in total.

He cites that housing prices are out of whack with a whole whack of ratios and stats (income, rent, etc.).

BUT, those stats are way out of whack to only merit a 5-20% correction. More like a 40-60% correction needed if he’s going to use those stats to say how crazy RE prices are.

The Bearded Deceiver is always hungry to invest other peoples money. the irony is that those that follow him think he cares for them…lol

Best place on meth
Member
Best place on meth
Softy
Guest
Softy

“Here are my real estate holdings:

0%

Here are my other assets:

x% cash
x% value equities
x% other”

Ok. Following your strange methodology:

X% Real estate
X% cash
x% Other
0 equities

What an illuminating exercise.

It's simple
Guest
It's simple

I think he’s gone to get his viagra

It's simple
Guest
It's simple

VMD YOU DA MAN

Burnabonian
Guest
Burnabonian

…maybe he just received the first visitor of the day to his open house?

…or maybe he’s taking a Coke break? (I do mean the drink, just to be clear…)

Burnabonian
Guest
Burnabonian

Quote = ““Here are my real estate holdings”

I think you mean direct holdings. I would be surprised if your equities didn’t contain at least some real estate, and likely some that will eventually be sold off for residential development (think CN Rail or Telus selling off its prime land in cities).”

Correct. Everything is related to real estate.

I meant to say that I don’t have my or my family’s names on the titles of any RE, anywhere, nor are we wholly or partially the direct owners of a single square inch of land.

That will change…but not until I am no longer legitimately concerned that it is highly overvalued and subject to an imminent and severe price correction.

Umm, Softy? Have we lost you?