FFFA! Debt! RRSP! Cars!

It’s that time of the week again – Friday Free For All time!

This is our regular end of the week news round up and open topic discussion thread for the weekend, here are a few recent links to kick off the chat:

Canada’s skidding economy
Fear of the Looney
Blanket on head for driving
Debt ridden young flee BC
Inventory back to 2005
Debt monster killing RRSPs
Canadians take on longer auto loans
Comox Valley: Rent too damn high

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

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everywhereyougo
Guest
everywhereyougo
2 years 6 months ago

Just a rough summary:

The Canadian economy is sliding, mostly because of ridiculously high debt to income levels for canadian consumers. This is driving the looney lower and generates a high risk of rising interest rates in the near future.

If you have short term debt and are stretching… might be a time to look at changes. Either lock in a longer interest rate at current low rates or get out while house prices are near record highs? I dont know, this advice is worth what you paid for it.

patriotz
Member
2 years 6 months ago

Comox landlord: “It’s not just rent that is high, it’s mortgages that are high. The cost of living is high.”

The landlord doesn’t seem to understand that he is responsible for the high price he paid for the property. Nobody is forcing him or anyone else to buy properties and rent them out.

It’s like a stock market investor complaining: “Look at the terrible yields I’m getting. Stock prices are so high”.

patriotz
Member
2 years 6 months ago

@2:

I should have added, but yields on stocks are better than yields on RE. Stock market investors tend to be smarter, and the government doesn’t assist the dumb ones to buy by guaranteeing 95% margin. You can also short sell stocks if you think prices are too high.

patriotz
Member
2 years 6 months ago

As Ottawa pushes for foreign students, universities worry about spaces for Canadians

Yep, Harper & Co. aren’t just stopping at recruiting foreigners to keep Canadians out of work, they’re recruiting foreigners to keep Canadians out of university.

Of course, this would have no effect if provincial governments simply gave priority to Canadians for university admission… er right Crusty?

Many Franks
Member
2 years 6 months ago
Mish casts his baleful gaze North of the border: Over the course of the past five years, every time I thought a major Canadian housing correction was coming, none did. Canadian housing has been like the “Energizer Bunny”, going and going and going. Nonetheless the housing bust calls keep on coming. […] No one knows for sure precisely when any bubble will burst. I got the US housing bubble correct but missed Canada by a mile. […] The safest thing to do with bubbles is avoid investing in them at all, either way. There is no rule that says “one… Read more »
CanuckDownUnder
Member
CanuckDownUnder
2 years 6 months ago
If Canadian real estate is the Energizer Bunny, what does that make Australian housing? When all was done and dusted Sydney prices were up 13.5 per cent in 2013. The only people not making money on Australian real estate are lowly renters and celebrities. It was just reported that Adam Scott sold a Surfers Paradise property he paid $4.4 million for in 2004 for $1.94 million. Ouch! Everyone’s predictions for 2014 are suggesting that it will be a good year for property and shares here, and by everyone I mean pundits who take what happened last year and assume it… Read more »
Neil
Guest
Neil
2 years 6 months ago

The Comox landlord has it worse than he thinks. $326 mortgage payments biweekly is equivalent to $706 per month, not $652. So he is $54 per month worse off than he calculates. Why doesn’t he sell his rental condo?

jesse
Member
2 years 6 months ago

Neil, oops, that’s another $600 down the tube…

I’m sure he could sell but let’s be realistic, what else is this guy going to do with his investment dollars? Once he looks at alternatives, given his mathematical nous, maybe he should stick with his losing hand.

southseacompany
Member
southseacompany
2 years 6 months ago

CBC reports on house poor Vancouverites. No talk of bubble, though. But talk of how some will be surprised when interest rates eventually go up.

http://www.youtube.com/watch?v=S1ZLQLE-8BQ

George
Guest
George
2 years 6 months ago

.

You are going to be flooded with rich international students who are going to buy property, displace your kids from getting an education, and try to get PR any way they can.

Oh wait, they are coming here for the education….hahaha

Snake
Guest
Snake
2 years 6 months ago

B.C. residents owe much more than the rest of Canada
Life and debt in B.C.: Sandwich generation finds that extravagant habits don’t add up
Life and debt in B.C.: Many young people are thinking of fleeing the province to get out of hock
Life and debt in B.C.: Over-55s feeling a heavy burden

https://www.google.ca/search?q=SUSAN+LAZARUK%2C+THE+PROVINCE&oq=SUSAN+LAZARUK%2C+THE+PROVINCE&aqs=chrome..69i57&sourceid=chrome&espv=210&es_sm=122&ie=UTF-8

aa4
Guest
aa4
2 years 6 months ago

If it was my money I was lending out, I would charge substantially higher interest rates to people who were heavily in debt relative to their income. As it is blatantly obvious to anyone not enthralled by the ‘housing always goes up’ mantra that it is much more likely for such a person to get into financial difficulty.. eg.. divorce, job loss, disability of one of the couple, declining business income etc.

Instead our banks have chosen another path, charging amongst the lowest rates on mortgages in the history of Western civilization.

VMD
Member
2 years 6 months ago

@CanuckDownUnder
And as AUDUSD continues its plummet, wonder how the holders of AUD RE will feel…
(AUDUSD = 1.0580 in Jan 2013)
(AUDUSD = 0.8773 in Jan 2014)
(17% drop in 1 year)

An Observer
Guest
An Observer
2 years 6 months ago

@aa4, they can do this because they are pushing all of their risk on to Canadian tax payers through CMHC. Nice system we have, isn’t it?

gokou3
Guest
gokou3
2 years 6 months ago

How much do you need to retire? Rich British Columbians say they need at least $2.3 million

http://www.vancouversun.com/news/much+need+retire+Rich+British+Columbians+they+need+least+million/9399673/story.html#ixzz2qgRY3bGo

“The majority of respondents among the affluent — 70 per cent — expected stocks to generate the most solid returns over the next five years, well ahead of real estate, bonds and cash.”

Interesting. This opinion contrasts with the RE bulls of this board. Is it a logical inference that the RE bulls here are not affluent? Yet they keep dishing out “buy buy buy” advices like it’s now or never.

Son of Ponzi
Guest
Son of Ponzi
2 years 6 months ago

The water mains in Richmond are 60 years old and are bursting.
And still they build like there is no tomorrow.
http://www.richmondreview.com/news/240579251.html

Turkey
Guest
Turkey
2 years 6 months ago

@Son of Ponzi,

If you think Greater Vancouver’s infrastructure is crumbling, I’d encourage you to visit Montreal. We could redirect all maintenance funding directly to organized criminals and it would still take 20 years to “catch up.”

(…although when it comes to Translink, it seems like the BC Liberals are trying to fast-track the process.)

tedeastside
Member
tedeastside
2 years 6 months ago

if you were rich would you waste your time in vancouver canada

Son of Ponzi
Guest
Son of Ponzi
2 years 6 months ago

@turkey.
The Economists estimates that Canadian Municipalities have about 280 billion in aging infrastructure that are in need of upgrading.
the reason why I’m pointing out Richmond is because I live here and all these new highrises build on a floodplain on top of rottening infrastructure seems insane.

Turkey
Guest
Turkey
2 years 6 months ago
the reason why I’m pointing out Richmond is because I live here and all these new highrises build on a floodplain on top of rottening infrastructure seems insane. Sure — but a month-long water-main rupture at Peel and Sherbrooke in -25° weather might change your definition of “insane” a little. The water here gets from point A to point B, with a minimum of lead or leakage, and it’s pretty tasty stuff. Water main ruptures happen, and it sucks to be downhill. As far as I know, it doesn’t mean city works is particularly dysfunctional. It also doesn’t have much… Read more »
Stu
Guest
Stu
2 years 6 months ago
I am 34 years old, and I actually left Vancouver in August to move to Whitehorse. This place is amazing. I hated my old career in Vancouver that took up 60 hours a week for mediocre pay, the constant congestion of Vancouver’s streets (my job had me on the road often), and the rain honestly bummed me out. I was literally spinning my wheels. Whitehorse has been amazing. There is a strong sense of community here, perfect strangers say “hello” to you on the street, and I was quickly able to get involved with some organizations that share the same… Read more »
Snake
Guest
Snake
2 years 6 months ago

Low morale runs rampant for City of Vancouver employees: survey

Employees feel stressed and overworked, results reveal

Read more: http://www.vancouversun.com/business/morale+runs+rampant+City+Vancouver+employees+survey/9392422/story.html#ixzz2qhOnjmFM

Randy Randerson
Guest
Randy Randerson
2 years 6 months ago

#15

Do what the rich do, and not follow those who are indentured.

alexcanuck
Member
alexcanuck
2 years 6 months ago

Car loans. Heard on CKNW today, Maple Ridge Chrysler-Fiat is advertising a 96 month, zero down, no payments until June, $12K cash back deal for a $13000 Fiat. When all the extra costs are in, their target customer will probably have a $30K loan for a car worth 10K once they drive it off the lot! $10K cash back has been around for a while, first time I’ve noticed $12K.

“Nothing to see here, move along folks.”

Son of Ponzi
Guest
Son of Ponzi
2 years 6 months ago

Just finished reading “The Buy Side, A Wall Street Trader’s Tale of Spectacular Excess”.
Fascinating story.

ok
Guest
ok
2 years 6 months ago

paulb
Member
2 years 6 months ago

New Listings 207
Price Changes 55
Sold Listings 87
TI:12499

http://www.paulboenisch.com

Funky monkey
Guest
Funky monkey
2 years 6 months ago

The comox landlord sounds like a genus!

ILoveCharts
Guest
ILoveCharts
2 years 6 months ago

I’m a bear but I think the Comox landlord is actually doing fine.

Each month, he is putting $40 as an investment into a condo and his tenants are putting in a few hundred into his condo for him (I have no idea if he bought the place last year or twenty years ago.)

There are subtleties (the lost opportunity of his downpayment, the risk of the house losing value, etc.) but this is not a dramatic case in either direction.

southseacompany
Member
southseacompany
2 years 6 months ago
Canada’s real estate making headlines in Time Magazine: “Canada Has Its Own Housing Bubble—And It’s About to Burst” Jan 17, Time. http://business.time.com/2014/01/17/canada-has-its-own-housing-bubble-and-its-about-to-burst/ First paragraph: “Ever since the real estate bubble burst in the United States in 2007, observers have pointed to Canada as an example of a well-regulated financial system that has avoided many of the regulatory mistakes that helped lead to an American crash. But Canadians weren’t able to perch on their high horse for very long, as a bubble of their own has been inflating for the past couple years. And now many analysts are watching for that… Read more »
Dave
Member
2 years 6 months ago

Southsea, there has been an article like that every week for the last five years. You can find an article that the stock market is about to crash in some paper every day. There is always a market for fear.

condo_day_ftw
Guest
condo_day_ftw
2 years 6 months ago

There have been articles questioning the soundness of the Canadian housing market for the past 5 years, and rightly so. However without a doubt the amount of negative international attention directed at our housing market has picked up significantly in the past 6 months.

Crabs In A Bucket
Guest
Crabs In A Bucket
2 years 6 months ago

vancouver is defined by it’s colonial mentality.

Dean B.
Guest
Dean B.
2 years 6 months ago

We are 12,000 listings less than 3 weeks into 2014. Does this mean we will be at 24,000 In less than 6 weeks? If so, this is going to be a crazy crash.

UBC in crisis mode
Guest
UBC in crisis mode
2 years 6 months ago
Vancouver housing: it is DIFFERENT here: From Hurun Report (about China’s super rich): In recent years,purchasing holiday homes has become very popular. 60% of high net worth individuals are interested in purchasing a holiday home, representing a 5% increase from last year. Yunnan has entered the top 6 for the first time ever as an increasingly popular location in which to buy such homes. Sanya, however, remains the preferred location, especially among the super-rich. Nearly 40% of high net worth individuals are planning to use private jets on a regular basis, with half of those opting to time share. The… Read more »
YLTNboomerang
Member
2 years 6 months ago

This seller is delusional, I actually feel for the Realtor who is never going to get a sale. Prices in general in this area (Edgemont) are delusional however this one is out to lunch not just compared to Price/Rent but just comparing to other houses for sale in the area:

Delusional:
http://beta.realtor.ca/PropertyDetails.aspx?PropertyId=13982687

Here is what $100K less gets you just down the road:
http://beta.realtor.ca/propertyDetails.aspx?PropertyId=13461833

patriotz
Member
2 years 6 months ago

@31: “Southsea, there has been an article like that every week for the last five years.”

The Canadian RE market (coast to coast) actually was crashing 5 years ago.

ILoveCharts
Guest
ILoveCharts
2 years 6 months ago

If I am going to get downvoted for my comment on the Comox Condo, does anyone care to explain to me how he is in a bad situation?

At $40/month, he will invest $12,000 over 25 years (plus his downpayment,) and will end up owning 100% of a condo unit.

patriotz
Member
2 years 6 months ago

@38:

Condos depreciate down to zero because they have negligible land value. That is of course, without substantial future renovations which you are not accounting for.

ILoveCharts
Guest
ILoveCharts
2 years 6 months ago
@patriotz, this is Comox so he is almost certainly talking about a three or four story building. I don’t think that the land value is completely negligible. Besides, lots of 20 – 30 year old condos in Vancouver are still selling for significant $$. I think there are three categories: Landlords win: Renters are paying all of your costs(interest, tax, etc.) and all of your principal and giving you additional cash flow at the end of the month. Renters win: Renters aren’t even covering costs (interest, tax, strata.) Landlord has to pay all of the principal and some of the… Read more »
jesse
Member
2 years 6 months ago

“At $40/month, he will invest $12,000 over 25 years”

You mean he pays $40/month and eventually will own the whole condo outright? That kinda seems to be the wrong direction. Typically investments pay you, not the other way round.

Juuuuuuuust sayin’!

patriotz
Member
2 years 6 months ago

@40: “this is Comox … I don’t think that the land value is completely negligible”

This is Comox… I think that the land value is completely negligible.

Melba
Guest
Melba
2 years 6 months ago

….I’m a bear but I think the Comox landlord is actually doing fine…..

I have large sum of money to invest and would like to realize some significant ongoing losses. Would you be kind enough to provide me with some advice?

Melba
Guest
Melba
2 years 6 months ago

…..“Canada Has Its Own Housing Bubble—And It’s About to Burst” Jan 17, Time…..

And they’re referring to Canada in general! When Vancouver bursts, the detritus is going to land in the prairies.

TTFN suckers!

Melba
Guest
Melba
2 years 6 months ago

……It is worth noting that of the 64%, only 15% are looking to give up their Chinese nationality, with the majority looking to a permanent residency overseas.

Emigration Destination
1 United States
2 Europe
3 Canada
4 Australia
5 Singapore
6 Hong Kong

So, there’s a whack of rich Chinese that want permanent residency overseas in Hong Kong? Riiiiiight! I’m so pissed off at Canada I’m considering moving offshore to Vancouver Island. Why can’t we get smarter rich people wanting to move here? 🙂

Yunak
Guest
Yunak
2 years 6 months ago
Son of Ponzi
Guest
Son of Ponzi
2 years 6 months ago

#46
what’s wrong with expecting immigrants to have some basic English skills.

Son of Ponzi
Guest
Son of Ponzi
2 years 6 months ago

167 open houses in Maple Ridge !!!
And it’s not even spring.
Sellers are tired of 2 hours commute and no prospect of Skytrain to

Son of Ponzi
Guest
Son of Ponzi
2 years 6 months ago

Another ESL challenged Realtor in Ditchmond.
MLS listing V1042386
________________
First time homebuyer alert!! Nicely kept and renovated 2-storey townhome in Woodwards!! This unit functions practical layout with three bedrooms and one bathroom on above and kitchen, living room, dining room and powder room on main. Right beside reputable Steveston-London Secondary School and bus stops. Few mins drive to malls and community centre. Quiet but not far!! Strata fees even include annual city utilities!! This is where you wanna raise your children. Searching no more. Call now for your private showing!!!

Son of Ponzi
Guest
Son of Ponzi
2 years 6 months ago

How can Realtors with limited English get a License?
Another example:
-____________
Astoria, locate near Blundell and Heather St. Quiet inside unit with 9′ high ceilings on main floor. 3 bedrooms up and 2 bathrooms. Well managed complex with a spacious playground for kids. Spacious tandem parking where owner has built in big shelves to keep stuff. Well keeping by original owner. Walking distance to Garden city shopping mall. Debeck elementary and Palmer secondary. A pleasure to show. All measurements are approximately. Buyer to verify if important.

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