FFFA! Income, Losses, Investment

Its the end of another beautiful week and a long weekend to boot!

And that means it’s time for our regular Friday Free-for-all post, this is our end of the week news round up and open topic discussion thread for the weekend.

Here’s a few recent links to kick off the chat!

19.8% Avg loss at Olympic Village 2011-2014
Retirement savings at risk?
Oliver sees no bubble
CMHC brings risk to taxpayers
BC buyers seek investments
Canadian RE among most overvalued
$1000 house

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

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long legs vs short legs

FFFA! Income, Losses, Investment

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Read full report

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[…] the weekend we found out that a bearish poster on this site just bought a house.  Not in Vancouver mind you, but […]

taylor192
Member
@#63 patriotz There is nothing “right” about Stitsville either. I used to work in Kanata and played softball in the surrounding area. Stitsville was a hole in the ground until developers realized they could sell high end properties for a premium near the hockey stadium. As my brother’s partner found out when they moved to Bridlewood, commuting downtown is close to 90 mins on the bus, and over 60 mins in a vehicle. The transitway is fast, although getting to the transitway is not, and the park and ride locations fill up early! While $330K is cheaper than the GVA, don’t fool yourself into thinking it represents value. Stitsville is a redneck town that developers slapped lipstick on cause no-one wanted to live there previously. While Kanata may have well paying tech jobs it has little else. It is a… Read more »
Shut It Down Already
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Shut It Down Already

Patriotz, now you’re splitting hairs. You clearly thought back then that buying should be cheaper than renting, for numerous reasons. If break-even is now acceptable for you, that’s fine too. Also, your comments about opportunity cost don’t quite make sense. It’s like saying if you use the cash under the mattress to buy a house then the opportunity cost on that equity was always zero.

It’s perfectly reasonable that you might have changed your tune since buying.

Westside Realtor
Guest
Westside Realtor
Ya Oracle, US housing boomed when it’s currency way in the tank, eh?… Moving on, I wonder how the crash in oil prices will impact on Alberta jobs/economy/taxes? I know folks who busted out here who now fly to ft mac two weeks on one week off and make $150,000 in fairly low skilled positions – could we see cutbacks there and even locals taking some job hits and this whole flying workers at great expense get curtailed? I don’t know to be honest (only Oracle has all of the answers and secrets to the universe, which he is glad to tell you of is omnipotence), but I can’t help but think of that old saying “a market that is an accident waiting to happen…will eventually find its accident “…is this it? Anyways for us oil users vs producers this… Read more »
patriotz
Member

@215:

That’s not what you claimed I said.

Oracle
Guest
Oracle

Told you guys the correction would be in foreign currencies. Dollar approaching 87 cents.

Already a 15% correction in US dollars.

If CDN $ goes to 80 cents, consider the crash done. Foreigners will swoop in and purchase.

Its not about locals anymore. You voted for this.

Bull! Bull! Bull!
Guest
Bull! Bull! Bull!

is patriotz a great fool, or are they the greatest fool?

southseacompany
Member
southseacompany

“China is not the cause of Australia’s housing bubble” Sunshine Coast Daily, Australia

http://www.sunshinecoastdaily.com.au/news/china-not-cause-australias-housing-bubble/2418700/

“The Sydney Morning Herald continued with the same theme listing several recent examples of Chinese-funded projects with values reaching into the billions. But all these reports lack one critical factor: context. Even if Chinese investment is rising, it is still a small proportion of the market”

“At first blush this seems an impressively large figure. But it is actually less than 10% of the total value of foreign investment approvals in the sector.”

“Approvals to Chinese investors have lagged behind those from the United States. They have also not been much more than those from the United Kingdom, which has an economy around one quarter the size of China’s and less than 5% of the population.”

Shut It Down Already
Guest
Shut It Down Already

@patriotz, “Well then you should be able to give us a quote”

Sure thing. In this thread you say that there are many reasons why buying should be cheaper than renting (namely those mentioned in the article).

http://vancouvercondo.info/2012/04/ye-olde-rent-vs-buy-argument.html

“Those aren’t 10 reasons not to buy, those are 10 reasons why buying should be cheaper than renting.”

Egg Hunt
Guest
Egg Hunt

>#212 Patriotz

You don’t refer Mortgage rate when you talk about opportunity cost.
Opportunity cost is your down payment towards your purchase if otherwise making investment income.
So, best to compare how much your house would yield, instead of mortgage rates.

For instance, if you put $100K D/P, 4% dividend yield, you could have earned $4,000/Y – tax efficient dividend income.
It is barely equal if your house yield a bit lower than 4% going forward. (plus ownership cost)

Anyways, with about $350K purchase, you don’t lose much.
When you talk about Van SFH, oportunity cost is like $5~$6K per month.

patriotz
Member

@182: “Don’t let the fact the so called ‘first nations’ were also immigrants ruin your point.”

They weren’t immigrants. An immigrant is someone who moves from one state or nation into the jurisdiction of another.

patriotz
Member

@191: “But I remember you saying before that buying should be much cheaper than renting, to offset the lack of mobility or whatever”

Well then you should be able to give us a quote.

“It also seems that your opportunity cost is quite high”

In this case opportunity cost is the after-tax yield on the assets used to buy the house. Some of the stocks were yielding higher than the current mortgage rate, some very close to it. And I also had a large amount of cash with negligible after tax yield. Average it out and you get perhaps 4% or so.

And no I didn’t bother to take a week of my spare time to work it out to the penny.

I also had a feeling that it was a good time to lighten up my stock holdings. I was right.

ostritch
Member
ostritch

Just when you thought Australia had enacted curbs to foreign ownership in the real estate market, major Chinese companies… the long arm of the PRC itself… is investing more than ever. And it’s been going on for a long time.

http://www.smh.com.au/business/chinese-investors-are-pushing-into-melbourne-and-sydney-20141010-113q7x.html

The new government knows that real estate is tapped out back home, but not abroad. The next 8 years of Chinese investment will be marked by a relaxed requirements that money stay in China. Why not? They must diversify or lose the value of money they’ve made and printed over the last two decades.

Watch out.

If you think the stock market is high now, wait until global hot spots in English-speaking RE top out and they turn to US equities. (If and when they are allowed… you can expect the officials to get in first. And quietly).

ostritch
Member
ostritch

Declining oil prices will be good for the gloabal economy. Just another way to avoid inflation, leaving central banks free to keep interest rates low.

New breakthroughs in sciences will also propel stocks higher. Like these guys here. No one expected it, least them, but there’s lots of money to be made in technology.

http://www.nytimes.com/2014/10/13/science/researchers-replicate-alzheimers-brain-cells-in-a-petri-dish.html?action=click&pgtype=Homepage&region=CColumn&module=MostEmailed&version=Full&src=me&WT.nav=MostEmailed&_r=0

Heard Herd selling
Guest
Heard Herd selling

@ Herd if gas is a pain you can’t afford to drive, I could care less what the price of gas is, I spend average $1000 month on gas, who cares if it were a pain I wouldn’t drive, fact is is may ease your pain, but rapidly falling oil prices will give the economy a spanking, in terms of unemployment

Westside Realtor
Guest
Westside Realtor

Marco

You nailed it.

I say that the pizza scheme is running out of greater fools.

It is as simple as that.

Construction of residential real estate in Canada is now running at 50% of all construction related employment, vs 30% historically. This is going to be one he J of a mean reversion.

Interesting times ahead.

ham deadzone
Guest
ham deadzone

What is the problem? We are doing Gods work!

Personally, my solution is for Government to increase welfare distribution. The very best way is to cut deals with Native community.. they can take over Ham foreclosures, when they come.

Marco
Guest
Marco
Joe sells his house for 2mil in a nice area. Some time passes and the house is relisted for double by a realestate agent with foreign investment connections, it sells over asking. That whole block is now double and more in price. More people on the same block sell to rich investors. Rich investors dry up. Locals can’t afford the hefty price tag because interest rates are a bit higher or it’s just not feasible, or they just feel the house is not worth that amount of money to begin with. Investor tries to sell, no buyers has to keep lowering price because due to a financial situation or not they need to or want to sell. They take a hit. No problem has a ton of cash anyway. The whole block is now worth less. And the lower end… Read more »
@Heard Herd
Guest
@Heard Herd

20.5% in 4 months and actually up last two days, but who’s counting. Maybe it’ll fall into the $70s like in 2012 and lessen some of the pain at the pumps for us Vancouverites 🙂
P.S. The BDI is up 25% last 3 months

Oracle
Guest
Oracle

I like to eat turkey.

You are what you eat.

Gobble gobble.

Heard Herd selling
Guest
Heard Herd selling

Oil down 25% in 3 months, and falling further daily, a worldwide energy surplus, this is crash and yes TSX still fallen further, BDI down below 1000, shi has hit the fan the splatters are still landing, glad I sold in July

@Heard Herd
Guest
@Heard Herd

Crashing??

Oil at $85 and TSX up 5% for the year. Where are you seeing this crash? In bitcoin??

tedeastside
Member
tedeastside