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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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.


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”.



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.


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
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 »
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 »

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?


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.


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.




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


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



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.


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

@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?


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


“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

The water mains in Richmond are 60 years old and are bursting.
And still they build like there is no tomorrow.


@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.)


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

Son of Ponzi

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.

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 »
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 »

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


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


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

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