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You need an account to read this: http://www.ft.com/intl/cms/s/0/06e556b4-48d1-11e3-a3ef-00144feabdc0.html?siteedition=intl#axzz2kHMwqxdQ quote:
Nothing new in the article that hasn't already been discussed. I think it is notable that the FT is taking notice.
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# ? Nov 10, 2013 22:08 |
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# ? May 13, 2024 06:35 |
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Cultural Imperial posted:You need an account to read this: Surely this sort of thing is troubling for the housing pumpers. They dismiss Canadian bears as being bitter or jealous or whatever... But that's now the FT, the Economist, and a big American news property recently also (Bloomberg?).
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# ? Nov 10, 2013 22:23 |
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I liked the classic quote about how Canada will not get a bubble pop from the inflated housing market since the economic and credit controls are so good:quote:“It’s a mistake to think that what happened in US will happen in Canada,” said Gregory Klump, CREA’s chief economist said. “There was a lowering of credit quality in the US that has not happened in Canada. If anything, over the past four years tightened mortgage regulations have successfully prevented a housing bubble.”
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# ? Nov 10, 2013 22:55 |
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etalian posted:I liked the classic quote about how Canada will not get a bubble pop from the inflated housing market since the economic and credit controls are so good: It's brilliant because tighter lending was no good for Canada because so many people needed easy access to credit and Uh something about jobs blah blah blah.
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# ? Nov 10, 2013 23:18 |
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Lexicon posted:Surely this sort of thing is troubling for the housing pumpers. They dismiss Canadian bears as being bitter or jealous or whatever... But that's now the FT, the Economist, and a big American news property recently also (Bloomberg?). Never mind Goldman Sachs saying that it's a problems either. This country I tells ya
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# ? Nov 10, 2013 23:19 |
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Lexicon posted:Surely this sort of thing is troubling for the housing pumpers. They dismiss Canadian bears as being bitter or jealous or whatever... But that's now the FT, the Economist, and a big American news property recently also (Bloomberg?). Not really, it's been somewhat well-known for awhile that lots of hedge funds have or have had fairly significant short positions in the Canadian housing market.
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# ? Nov 10, 2013 23:26 |
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blah_blah posted:Not really, it's been somewhat well-known for awhile that lots of hedge funds have or have had fairly significant short positions in the Canadian housing market.
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# ? Nov 10, 2013 23:31 |
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LemonDrizzle posted:How do you short a housing market? There are piles of stocks/ETFs which targeted the real estate market.
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# ? Nov 10, 2013 23:55 |
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LemonDrizzle posted:How do you short a housing market? I think the theory is you short the retail/wholesale construction material vendors, the mortgage insurance companies and the mortgage companies. I believe most of the companies that directly build are private, but a number of their lenders or supplies are probably shortable. Home Capital Group (HCG) is one financing company that gets mentioned that will be particularly vulnerable to a housing correction and should be shorted if you think a market correction is coming. It's stock has increased by ~45% since July though, so good luck with that. Something, something, something about market irrationality outlasting your solvency, something...
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# ? Nov 11, 2013 01:19 |
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ocrumsprug posted:I think the theory is you short the retail/wholesale construction material vendors, the mortgage insurance companies and the mortgage companies. I believe most of the companies that directly build are private, but a number of their lenders or supplies are probably shortable. The US bubble has lots of interesting examples for the ripple effect in which everything from REIT to direct home builder stocks tanked. Canadian financial stocks would also get burned in a big way in the aftermath of a housing bubble.
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# ? Nov 11, 2013 01:21 |
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etalian posted:The US bubble has lots of interesting examples for the ripple effect in which everything from REIT to direct home builder stocks tanked. Canadian financial stocks would also get burned in a big way in the aftermath of a housing bubble. Would they really? I thought all the lovely non-existent subprime risk was insured by the CMHC. The banks have very little skin in this game.
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# ? Nov 11, 2013 06:04 |
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Cultural Imperial posted:Would they really? It isn't all with the CMHC as there are private insurers in the mortgage business too. The government just gave a large loan guarantee to one of them last year. The problem with the banks would potentially arise in the case that loan defaults started to happen and the banks got asked for their documentation. All of the liar loans that got made could get their insurance invalidated. (Thoough I cannot imagine the government letting the banks suffer too much.) ocrumsprug fucked around with this message at 19:16 on Nov 11, 2013 |
# ? Nov 11, 2013 08:23 |
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This is so meta. http://m.theglobeandmail.com/report...?service=mobile
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# ? Nov 11, 2013 19:13 |
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ocrumsprug posted:Something, something, something about market irrationality outlasting your solvency, something... Yeah. It's often easy to predict the future. It's hard to predict when the future will arrive. If you'd shorted RIM the day after the 2007 iPhone announcement, you would have been bleeding cash and incurring sleepless nights for quite some time, possibly bankrupting yourself in the process.
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# ? Nov 11, 2013 23:37 |
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Lexicon posted:Yeah. It's often easy to predict the future. It's hard to predict when the future will arrive. If you'd shorted RIM the day after the 2007 iPhone announcement, you would have been bleeding cash and incurring sleepless nights for quite some time, possibly bankrupting yourself in the process. I forget the quote... but something along the lines of "the market can remain irrational longer than you can remain solvent."
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# ? Nov 12, 2013 00:31 |
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Speaking of interesting parallels: http://www.businessweek.com/articles/2013-11-11/south-koreas-debt-culture-fueled-by-spending-on-housing-education
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# ? Nov 12, 2013 00:32 |
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Pixelboy posted:I forget the quote... but something along the lines of "the market can remain irrational longer than you can remain solvent." Yeah, occumsprug alluded to it and that's who I just quoted.
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# ? Nov 12, 2013 02:00 |
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http://www.cbc.ca/doczone/m/episodes/the-condo-game
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# ? Nov 15, 2013 00:47 |
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Looks like they already posted a summary of the points here: http://www.cbc.ca/doczone/m/features/facts-from-the-condo-game I like the fun fact about the quality of construction being much worse than a rental property since the whole pay on sale gives developers the incentive to trim construction quality since someone else can pay to fix the problems down the road through a condo fee jump.
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# ? Nov 15, 2013 16:41 |
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A frankly-bizarre cheerleading op-ed about condo construction in Toronto. Conspicuously absent from the piece: the set of incentives from the Bank of Canada and CMHC, and the general housing hysteria, that caused this in the first place. The Toronto Star posted:http://www.thestar.com/opinion/commentary/2013/11/14/torontos_amazing_condo_boom.html
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# ? Nov 15, 2013 16:52 |
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etalian posted:I like the fun fact about the quality of construction being much worse than a rental property since the whole pay on sale gives developers the incentive to trim construction quality since someone else can pay to fix the problems down the road through a condo fee jump. Look at all those towers of glass in Vancouver -- and whisper to yourself: "This was built by the lowest bidder."
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# ? Nov 15, 2013 19:43 |
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Pixelboy posted:Look at all those towers of glass in Vancouver -- and whisper to yourself: Plus all the condo gimmick features like a pool on the roof or massive glass windows, imagine what will happen 15-20 years if things such as the pool on the roof aren't properly maintained. It's pretty much a smash and grab speculative business, putting down piles of condos without sense of city planning and also not worrying about long term durability since someone else can pay for the repairs. etalian fucked around with this message at 21:19 on Nov 15, 2013 |
# ? Nov 15, 2013 21:15 |
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etalian posted:Plus all the condo gimmick features like a pool on the roof or massive glass windows, imagine what will happen 15-20 years if things such as the pool on the roof aren't properly maintained.
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# ? Nov 16, 2013 04:41 |
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http://www.cbc.ca/news/business/average-house-price-in-canada-rises-8-to-391-820-1.2427778quote:The average selling price of a Canadian home was $391,820 in October, up 8.5 per cent compared to last year. NO BUBBLE HERE JUST SUSTAINABLE ECONOMIC GROWTH
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# ? Nov 16, 2013 16:52 |
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Not housing related but an indication of what kind of money is flowing around Vancouver: http://vancouver.en.craigslist.ca/van/cto/4185946557.html quote:I'm selling my Murcielago SV. 1 of 350, less than 10 in Canada.
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# ? Nov 17, 2013 17:17 |
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Cultural Imperial posted:Not housing related but an indication of what kind of money is flowing around Vancouver: An indication of the kinds of idiots who live in Vancouver maybe. http://www.cars.com/go/search/detai...onal&listType=1 ...but sure why don't I go ahead and pay a shitload more money to some random craigslist nutjob who can't be bothered to list what transmission the car has or take photos better than a 640x480 circa 2003 cellphone pics.
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# ? Nov 17, 2013 18:35 |
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All moved into my new downtown apartment, probably the best financial decision we've made (vs buying a condo) and a lot of this was thanks to this thread. We're paying about $1300 when you include utilities and everything a month on a great 2br place. People don't understand that the base mortgage is NOT what you'll be paying each month for a condo. We could have gotten something about the same size and location for about $1300 a month mortgage but that would not include transaction costs, condo fees, and all the other amazing little situations that come with pride of ownership, which, being pretty conservative, would be around another $300-400 a month. My only question though now is how do I lay this out to family and stuff who say we're throwing our money away and "paying someone else's mortgage!!!" ? What is the math one uses to prove rent vs buy in these situations? I'm sure if we lived here for 20 years straight maybe buying would have been better. I know Victoria has one of the worst rent/buy ratios, almost as bad as Vancouver. But can someone explain this again ? Baronjutter fucked around with this message at 20:32 on Nov 17, 2013 |
# ? Nov 17, 2013 20:29 |
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Baronjutter posted:All moved into my new downtown apartment, probably the best financial decision we've made (vs buying a condo) and a lot of this was thanks to this thread. We're paying about $1300 when you include utilities and everything a month on a great 2br place. People don't understand that the base mortgage is NOT what you'll be paying each month for a condo. We could have gotten something about the same size and location for about $1300 a month mortgage but that would not include transaction costs, condo fees, and all the other amazing little situations that come with pride of ownership, which, being pretty conservative, would be around another $300-400 a month. Basically just plunk your figures in here (don't forget the advanced settings for condo fees, etc.) and then look for a good benchmark people would understand such as "if I bought it would take me xx years just to break even vs. renting an equivalent unit".
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# ? Nov 17, 2013 20:40 |
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Lexicon posted:A frankly-bizarre cheerleading op-ed about condo construction in Toronto. at the quality of research in this op-ed. Average rents are lower in Toronto than in major US cities (single source: rentjungle.com, no actual figure given)! Well yeah, except it doesn't look like he made any attempt to normalize on any factors like the long transit times and poor services in some of the unattractive corners of the city, or the tiny vacancy rates in desirable neighbourhoods. Also no mention of the fact that rents are only stable because we have rent controls, and how there's very little new rental housing being built. Also no mention of the shoddy, substandard quality of many new condos or how sometimes windows fall off and kill people. Oh well, surely someone will be around in 15-20 years to pay for the repairs when these shitboxes start crumbling. Oh, and speaking of which, a lot of the (better-quality, but less sexy or glass-clad) apartments built in the 50's and 60's are due for some pretty serious repairs and revitalization. Who's going to pay for that, exactly?
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# ? Nov 17, 2013 21:11 |
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eXXon posted:at the quality of research in this op-ed. Average rents are lower in Toronto than in major US cities (single source: rentjungle.com, no actual figure given)! Well yeah, except it doesn't look like he made any attempt to normalize on any factors like the long transit times and poor services in some of the unattractive corners of the city, or the tiny vacancy rates in desirable neighbourhoods. Also no mention of the fact that rents are only stable because we have rent controls, and how there's very little new rental housing being built. Also no mention of the shoddy, substandard quality of many new condos or how sometimes windows fall off and kill people. Oh well, surely someone will be around in 15-20 years to pay for the repairs when these shitboxes start crumbling. Oh, and speaking of which, a lot of the (better-quality, but less sexy or glass-clad) apartments built in the 50's and 60's are due for some pretty serious repairs and revitalization. Who's going to pay for that, exactly? Yeah I remember reading some story about toronto condos being forced to do window repairs due to bad water leaks or even windows crashing into the streets due to shoddy workmanship. Let me list the ways why the condo boom is a bad thing, even though there's plenty of blame to go around on the regulation side -Low quality construction and workmanship due to the whole pay on completion and walk away business model -On the flip in the rental model there's a bigger incentive for the company to do a higher quality construction and add in other improvements since keeping repair costs low is really important -The whole shiny toy nature of the condo machine encourages impractical architecture which makes long term cost and financial stability much more challenging -Adds in US style subsidized private sector credit risk into the economy due to things such as the CMHC -Bad city planning leads to isolated neighborhoods which aren't adequately connected to good local amenities, too many single bedroom units or not enough connection mass transit -The whole condo boom model focuses on appreciation not affordability as the overall end goal for the owner -Massive growth of housing creates additional credit risk through things such as HELOC Pretty much a more sane policy would be to subsidize new rental development to at least get buildings would last much longer before getting torn town and also be more practical by not having things like rooftop pools. etalian fucked around with this message at 21:40 on Nov 17, 2013 |
# ? Nov 17, 2013 21:35 |
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Baronjutter posted:
Congrats on the rental. Re: explaining the benefits of renting; connect your laptop to a large screen tv, load up google spreadsheet and start adding up the costs of renting vs. owning. Cite NOBEL PRIZE WINNING ECONOMIST Robert Shiller and his thesis that housing prices revert to the mean that is inflation.
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# ? Nov 17, 2013 21:46 |
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Cultural Imperial posted:Congrats on the rental. Re: explaining the benefits of renting; connect your laptop to a large screen tv, load up google spreadsheet and start adding up the costs of renting vs. owning. Also the whole amortization table is another good one about "throwing" money away, the first few years of mortgage payments are mainly interest handed over to the bank. Many sites also offer handy tools you can tweak to include information such as property tax and insurance costs: http://www.nytimes.com/interactive/business/buy-rent-calculator.html etalian fucked around with this message at 23:04 on Nov 17, 2013 |
# ? Nov 17, 2013 23:01 |
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etalian posted:Also the whole amortization table is another good one about "throwing" money away, the first few years of mortgage payments are mainly interest handed over to the bank. Keep in mind the NY times site may be including some US only tax breaks.
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# ? Nov 17, 2013 23:54 |
Baronjutter posted:My only question though now is how do I lay this out to family and stuff who say we're throwing our money away and "paying someone else's mortgage!!!" ? What is the math one uses to prove rent vs buy in these situations? I'm sure if we lived here for 20 years straight maybe buying would have been better. I know Victoria has one of the worst rent/buy ratios, almost as bad as Vancouver. But can someone explain this again ? You really can't win honestly, just say you looked very hard at the numbers and renting fits in with your lifestyle and future plans. Keep it vague to prevent them from having anything specific to try and weasel in with. Even if you were to completely annihilate any of the money arguments a true believer in the power of the housing market (or someone desperately clinging to the hope that they didn't mess up by buying themselves) will just fall back to how you don't get the intangible warm fuzzy feeling of owning your own place.
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# ? Nov 18, 2013 00:39 |
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Whiteycar posted:Keep in mind the NY times site may be including some US only tax breaks. It doesn't include any tax breaks:
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# ? Nov 18, 2013 00:54 |
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Fitch Rating report that Canadian housing is 21% overvaluedcbc posted:Sky high prices in the Canadian real estate market won't be climbing for much longer, says a report by global rating agency Fitch Ratings. With the recent CREA release that Canadian home values are on average 390K, the wealth evaporation is going to be staggering. And in the specific areas that are skewed significantly above the average, it is going to be horrible to live through.
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# ? Nov 19, 2013 23:18 |
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ocrumsprug posted:Fitch Rating report that Canadian housing is 21% overvalued Even more since Canadian household debt number also passed the worst levels of the US bubble.
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# ? Nov 19, 2013 23:23 |
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gently caress all the shitheads in my building buying new bmws
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# ? Nov 20, 2013 01:27 |
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etalian posted:Even more since Canadian household debt number also passed the worst levels of the US bubble. This is going to be so bad when it bursts. I'm a bit worried because my sister is living in Toronto and she will probably feel the poo poo tornado once it comes blazing. It sounds pretty much exactly the same that happened in Estonia during 2000-2008. More and more money pumped into one sector, prices went out of control while everyone kept telling themselves that things are OK and there is no immiment crash. I mean there is no way that the situation in Canada will not end in a big horrific crash, right? And nevermind 20% reduction in the value of real estate, once the bubble burst in Estonia, the crappy low-quality, built during the boom years real estate dropped by a staggering 50-60% in some places.
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# ? Nov 20, 2013 01:51 |
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# ? May 13, 2024 06:35 |
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So knowing all this, why aren't you telling your sister to save her cash?
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# ? Nov 20, 2013 02:09 |