Canada Housing/Debt: Trust me, I'm a landlord.

The Something Awful Forums > Discussion > Debate & Discussion > Canada Housing/Debt: Trust me, I'm a landlord.

The Dipshit: Dec 21, 2005; by FactsAreUseless

OhYeah posted:

Out of curiosity, what is the sort of "average" size for a 2-bedroom apartment in the city? We are a family of three and we just moved in December to a new apartment, which is a bit bigger than our last one, we're at 91 sqm now and it feels just right. Not too cramped, not too big, plus we have a separate kitchen which is nice. I do know that a lot of new development projects here tend to keep the 2-bedroom apartment size around 70 sqm rather than 90, I was wondering if it was the same in Canada.

Congrats on getting out of Estonia.

# ? Mar 24, 2014 01:34

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# ? May 18, 2024 09:08

Baronjutter: Dec 31, 2007; "Tiny Trains"

70 sqm is only 750 square feet, that's ridiculous for a 2 bedroom. There's a trend with condos saying they're 2br but in reality there's one tiny 10x10 or smaller bedroom then an "office" with some tiny code-complying window that could maybe fit a single or child's bed.

I have a pretty spacious 2br with quite a nice sized living room and two good sized bedrooms (12x11 and 11x10) and the whole thing is just a touch over 900 sqft. Anything below that and you're going to end up with some of the rooms being cramped. 700 would be a great spacious 1br with a big bedroom or maybe a little office/den, but the poo poo they're calling 2br these days is ridiculous.

The worst I saw was a 680 "two bedroom" where the main bedroom was about 9x10 and the 2nd bedroom was like 8x8 and the living room/kitchen was maybe 12x15 at best then a tiny tiny shower-only bathroom, and they wanted 250k for it.

Also I heard estonia is pretty nice.

# ? Mar 24, 2014 01:45

Paper Mac: Mar 2, 2007; lives in a paper shack

Where are you guys pulling these figures from? I'd be surprised if the average 2bdr in Toronto proper is much larger than 750-800.

# ? Mar 24, 2014 01:52

OhYeah: Jan 20, 2007; 1. Currently the most prevalent form of decision-making in the western world

2. While you are correct in saying that the society owns

3. You have not for a second demonstrated here why

4. I love the way that you equate "state" with "bureaucracy". Is that how you really feel about the state

Claverjoe posted:

Congrats on getting out of Estonia.

I'm still here.

# ? Mar 24, 2014 01:53

shrike82: Jun 11, 2005

Do people have a sense of how much prices are expected to fall once the bubble implodes?

# ? Mar 24, 2014 02:09

Franks Happy Place: Mar 15, 2011; It is by weed alone I set my mind in motion. It is by the dank of Sapho that thoughts acquire speed, the lips acquire stains, stains become a warning. It is by weed alone I set my mind in motion.

shrike82 posted:

Do people have a sense of how much prices are expected to fall once the bubble implodes?

The research to date in other regions shows that it will likely fall to the point where it overshoots the point where the total cost/rent ratio (or price/income if there's an employment boom, but good fuckin' luck with that) to the downside, then recovers to float around that level.

So say House X costs $3,000 a month to own, and currently rents for $2,000 a month. So far what we've seen in the U.S. is that, barring unusual economic strength like in San Francisco or Seattle, you could expect total cost to fall to like $1,800 a month before people are willing to throw capital back into the market (because there is real savings to be gained).

# ? Mar 24, 2014 02:15

Kalenn Istarion: Nov 2, 2012; Maybe Senpai will finally notice me now that I've dropped :fivebux: on this snazzy av

If you want to see some rental data, I just found this: https://www03.cmhc-schl.gc.ca/catalog/productList.cfm?cat=79&lang=en&fr=1395628400261

# ? Mar 24, 2014 03:34

tagesschau: Sep 1, 2006; D&D: HASBARA SQUAD
THE SPEECH SUPPRESSOR

Remember: it's "antisemitic" to protest genocide as long as the targets are brown.

Fears of a housing bubble in Canada overblown, report says

CBC News posted:

Fears that a housing bubble is brewing in Canada are overblown, according to a new report by the Conference Board of Canada.

...

The report says those calling it a bubble are looking at the wrong statistics � by focusin on the ratio of house prices to incomes and the ratio of house prices to rents.

Instead, the report looks at the ratio of principal and interest costs to incomes and to rents, and finds that they are in the same range they have been in for the past 20 years.

So if we ignore the market-distorting effects of prolonged low interest rates, we can say there's no market distortion. Got it.

# ? Mar 24, 2014 12:36

Bleu: Jul 19, 2006

When debt is cheap, people go into debt, reports rugged blonde stranger, while shuffling a stack of Polaroids and examining his own tattoos in the mirror.

# ? Mar 24, 2014 13:10

namaste friends: Sep 18, 2004; by Smythe

quote:

"(In the US), HELOCs amount to 2.9% of GDP, and only reached 5% at the peak... In Canada, though, that figure is 14%"

https://twitter.com/BenRabidoux/status/448093807402549248

but thatz ok because the total amount of debt doesn't matter since interest rates are so low!

# ? Mar 24, 2014 15:15

Lexicon: Jul 29, 2003; I had a beer with Stephen Harper once and now I like him.

Jesus loving Christ.

That's the scariest stat I've seen in some time.

# ? Mar 24, 2014 15:16

namaste friends: Sep 18, 2004; by Smythe

http://www.macleans.ca/economy/money-economy/living-beyond-our-means/

quote:

The wind-up of Sears Canada�s flagship store in downtown Toronto was a sorry sight. Deal-hunters roamed the cavernous and half-empty building in search of deep discounts on everything from watches to washing machines. Even the dented fixtures were sold off at cut-rate prices�all while an army of suddenly unemployed mannequins looked on.

Over the next two years, the tired, three-level department store will be overhauled in preparation for the arrival of Nordstrom, a U.S. retailer that serves a decidedly higher-end crowd. Meanwhile, at the other end of Toronto�s Eaton Centre, a new Saks Fifth Avenue store will open inside the old Hudson�s Bay building, whose U.S. parent bought the luxury retailer for US$2.9 billion last year.

The mall�s changing face, where $2,000 handbags threaten to crowd out affordable housewares, reflects Canada�s increasingly well-to-do image. Nordstrom stores are slated for Calgary, Vancouver and Ottawa, while as many as seven Saks are slated for Canadian cities. Brynn Winegard, a Toronto-based marketing consultant, says the shift stems from Canadians� growing preference for �prestige shopping,� the act of buying one�s socks and underwear at Wal-Mart and then splurging on a $400 pair of jeans from Holt Renfrew.

The aspirational attitude extends far beyond Canadians� wardrobes. Luxury vehicles are now the fastest growing segment of the Canadian auto market, which had a record year in 2013. Nearly 70 per cent of Canadian households own their own home, which is about four percentage points higher than in the U.S. and about the same as in America before the crash. For households maintained by someone age 25 and under, the home ownership rate in Canada is a lofty 24 per cent, compared to 15 per cent in the U.S. That�s even more astounding given Canadians in that age group face an unemployment rate twice the national average of seven per cent. Moreover, our houses are fancier than ever thanks to a decade-long housing boom that, due to the soaring popularity of condominiums, reset expectations of urban living to include gourmet kitchens and luxurious amenities like juice bars and splash pools.

We�ve got so much stuff, we�re paying others to hold it for us. Canada now boasts the biggest self-storage industry in the world outside of the United States�an achievement worthy of our very own Storage Wars Canada TV franchise, which debuted last August. All that, and more than 2,000 people managed to scrounge up $40 each to attend a grilled cheese sandwich festival last month (and then had the audacity to complain on Twitter that they hadn�t gotten their money�s worth).

It�s conspicuous consumption of the sort normally associated with free-spending Americans, not practical-minded Canadians. And it�s not being fuelled by growing paycheques so much as by the wallets of maxed-out credit cards. While a recent Statistics Canada study found Canadian families� median net worth rose nearly 45 per cent, to $243,800, over the past nine years, when adjusted for inflation, the gains have been almost entirely on paper thanks to recovering pension portfolios and skyrocketing home prices. At the same time, Canadians carry close to $1.7 trillion in consumer and mortgage debt�$1 trillion more than in 2003. In other words, there�s growing evidence to suggest we merely feel richer than we used to, thanks to the wealth effect of soaring house prices, and are using a ready supply of cheap money to pursue an affluent lifestyle.

There�s certainly evidence Canadians, even more than Americans, see their homes as ATMs from which they can draw for spending money. At the end of 2013, according to the Office of the Superintendent of Financial Institutions, Canadians had borrowed $225 billion through home-equity lines of credit (HELOCs)�a figure that doesn�t even include loans from credit unions and other lenders. That�s just less than half the US$500 billion Americans owe in HELOC debt. But America is a far larger economy. Down there, HELOCs amount to 2.9 per cent of GDP, and only reached five per cent at the peak of the U.S. housing bubble. In Canada, though, that figure is 14 per cent, and is up from 12 per cent in 2012, showing that even though Canada�s economy has grown, the pace at which homeowners tapped their properties for cash grew even faster.

Banks and other mortgage lenders point to default ratios that are less than one per cent as evidence everything is okay. The same goes for figures that show the pace of debt accumulation among households has slowed, rising 4.6 per cent last year, compared to nearly 10 per cent in 2011. But, as the U.S. experience showed, default rates can suddenly skyrocket if the economy falters, and Canadians� already considerable debt load could be difficult for individual families to manage if interest rates were to rise. Some believe the entire economy could suffer. Eric Lascelles, the chief economist at RBC Global Asset Management, points to the $65 billion gap between what Canadians consumed and what they produced last year (including net flows of money) as evidence the country is collectively living beyond its means. �Canada now runs a pretty meaty current account deficit, just about the biggest we�ve seen going back the past few decades,� he says. �It�s ominously similar to the one we sported in the early 1990s, which was one of the things that demanded such aggressive consolidation at the federal government level and required people to really get down to business.� Not only is it unsustainable, but the cost of servicing that debt as interest rates rise threatens to suck money from more productive areas of the economy, he says.

Once lauded for self-restraint and a sober approach to finances, Canada�s spendthrift ways suggest we haven�t learned all that much from the U.S. experience leading up to the crash. We now risk undermining the very qualities that saved us from economic calamity in the first place.

Whether they can afford it or not, the responsibility for growing the Canadian economy has come to rest uncomfortably on the shoulders of shoppers. Household spending in Canada now accounts for 56 per cent of GDP, according to Statistics Canada. While that still pales in comparison to the consumer-driven U.S., where households contribute to 69 per cent of GDP, it�s still well above the roughly 51 per cent average Canada maintained for the past three decades.

The heavy reliance on consumer spending for GDP growth can partially be blamed on businesses not pulling their traditional weight. Before he left to head the Bank of England, former Bank of Canada governor Mark Carney in 2012 urged Canadian firms to start spending their cash hoards, which he dubbed �dead money.� Canadian companies, Carney said, were being overly cautious and needed to start reinvesting in their businesses in order to take advantage of the global recovery. Two years later, however, some on Bay Street blame Carney for the conundrum, suggesting he allowed the dollar to become overvalued. By keeping interest rates low, he kept the housing market booming, all the while adopting a hawkish tone that fuelled the dollar�s rise. �In effect, monetary and exchange rate policy traded off more condos for fewer factories, and we see the signposts of that in recent data trends,� wrote CIBC chief economist Avery Shenfield in a recent report.

Regardless of who is to blame, the fact consumers continue to spend at heightened levels is worrying. Household spending on goods and services grew by 2.2 per cent in 2013, slightly faster than the economy as a whole. Perhaps shoppers bought in to the foreign accolades about our sound banks and vast resources. Or maybe it was because the once-soaring loonie made us feel richer when shopping online, or going on vacation�according to the World Tourism Organization, Canadians now rank third in international travel spending when measured on a per capita basis, spending $1,007 each and putting us just behind Germany and Australia.

Either way, the trend is set to continue: �Retail sales have been surprisingly robust, especially in light of modest job gains, lacklustre wage growth and slowing household credit growth,� the Canadian Chamber of Commerce said in its 2014-15 outlook.

Steven Scott has had a front row seat to Canadians� changing behaviour. The CEO of Access Storage says the company has more than doubled the number of self-storage facilities it operates in Canada to 50 locations in just the last five years. Ranging in size from 25 to 300 sq. feet, the lockers are used to shelter everything from old furniture to barely used fitness machines. Scott says most customers come looking for extra space during a big move or renovation, but end up keeping their belongings there much longer than they originally plan�either because they�re lazy or because they end up buying more things and can�t bring themselves to part with their old stuff. With costs for a 50 sq.-foot locker ranging from $99 to $135 a month, depending on the location, that means a good chunk of the population is shelling out as much as $1,620 a year just to house their unused desktop computers and camping gear. That would go a long to help pay off the $27,300 in non-mortgage debt that credit-monitoring agency TransUnion says is currently owed by the average Canadian�a figure that�s up 43 per cent from six years ago. Or to buy a new car, which is far more likely these days.

A key factor driving such uncharacteristic profligacy is that we are a lot more comfortable with debt than we used to be. The country�s debt-to-income ratio already sits at close to a record 164 per cent, or $1.64 for every dollar of after-tax income. A slight decline in the ratio last week, from 164.2 to 163.97 drew cheers from economists, yet it remains the highest rate in the G7 and among the highest for developed nations as a whole. By contrast, 10 years ago, Canadians owed closer to one dollar for each buck available to spend.

As is the case with any addict, it�s easy to point to someone with a bigger problem. For Canadian consumers, that�s historically been our American counterparts. However, a December report by TD Economics found that Canadians have significantly narrowed the consumer spending gap between the two countries since the recession, with Canadians shelling out about $17,000 per year each on average, compared to $17,900 in the U.S. When it comes to debt, as measured relative to disposable incomes, Canadians still have a way to go before they reach the levels hit by American households prior to the crash. After adjusting for discrepancies in the way the two countries gather figures, TD Bank estimated last year the Canadian debt-to-income ratio stands at around 156, compared to 177 in the U.S. in 2007. Then again, the adjusted ratio in Canada that year was just 131, showing again just how fast its risen in recent years. Meanwhile, it�s the Americans who�ve found frugality in the intervening years�the debt-to-income ratio in the States has fallen to 152.

It�s perhaps no surprise, then, that American retailers see Canada, in the words of one analyst, as �a 51st state.� In addition to Nordstrom and Saks, a long list of U.S. stores have announced plans to occupy Canadian malls and shopping centres in recent years. New arrivals include: Brooks Brothers, J-Crew, Ann Taylor, Kate Spade New York. Even Target, which suffered $1 billion in losses due to its first year in Canada, still plans to operate 133 locations here by the end of this year, up from 124 now. Not to be outdone, Wal-Mart recently announced a $500-million expansion in Canada to boost the number of stores to 395 next year, up from 389 today.

Car purchases, fuelled by cheap loans amortized over up to eight years, are another spending category that has roared ahead. TD found Canadians spent slightly more than Americans on vehicles in 2012 on a per capita basis, although that�s mostly because cars, trucks and SUVs generally cost more in Canada than they do in the U.S. Even so, there�s no denying that Canadian dealerships are moving more than their fair share of metal. Carmakers sold 1.7 million vehicles in this country in 2013, an all-time high, while gains by luxury carmakers like BMW and Mercedes-Benz outstripped those south of the border. �The boomers are retiring in record numbers and they�re treating themselves to a luxury vehicle,� says industry analyst Dennis DesRosiers.

Nowhere is Canadian profligacy more evident than in the real estate market. In Toronto, for example, frenzied buyers recently drove up the price of a semi-detached house full of fluorescent lighting and old linoleum tile to more than $1 million. �This is shocking,� wrote one commenter on a popular real estate blog. �I�m thinking now is the time to put [my house] on the market and move to somewhere more affordable . . . like Malibu.� A few weeks earlier, a similar-sized house in a formerly industrial neighbourhood made headlines when it drew 33 offers and sold for nearly $850,000�$200,000 over asking. In Vancouver, meanwhile, home sales rose 30 per cent in January and the benchmark price for a detached house was just shy of $1 million. For homes on the city�s west side, the price more than doubles. Across Canada, the Teranet-National Bank Composite House Price Index showed the price of a single-family home rose nearly half a percentage point last month from December, the largest gain in five months.

To many observers, though, the boom in condos is fast becoming the most dangerous asset bubble. Toronto�s skyline is festooned with cranes as developers erect towers as fast as construction workers can build them. With names like Chaz and Yonge+Rich, the tiny, cookie-cutter units are marketed as the key to a hip lifestyle. But critics have raised concerns about heavy-handed sales tactics�most units can be had with as little as a five per cent down payment, and even that can be financed in some cases (one enterprising Vancouver developer is offering to let prospective buyers trade in their cars). CIBC deputy chief economist Benjamin Tal recently estimated that there were as many as 1,000 too many units being built every year in both Toronto and Vancouver, creating fears of a glut.

The spending doesn�t stop once home buyers have been handed the keys, either. Buoyed by the popularity of TV shows like Holmes on Homes and Property Brothers, Canadians have boosted their spending on renovations and other home improvements by an average of seven per cent per year since 2003, according to another TD report last fall. Even though economists predict the pace will slow over the next few years as the housing market loses steam, the bank still expects home-renovation spending to amount to $45 billion in 2015, about double what it was in 2005.

How much is too much? Consumer confidence�and the spending it fuels�is key to determining whether an economy thrives or falls into recession. On the other hand, if spending isn�t underpinned by companies investing and adding jobs, there�s a risk the whole enterprise will crash down. Although many economists expect the Canadian economy to finally receive a boost this year from the U.S. recovery, so far there has been disturbingly little evidence of increased demand for Canadian exports�even with a US90-cent loonie that should make Canadian goods more competitive. At the same, the employment picture in Canada remains unclear at best. The country shed 7,000 jobs in February. Last year employers added roughly half the number of monthly jobs they did in the previous year.

As for that widening current account deficit, the real issue isn�t that it exists, but what�s causing it. Current account deficits are common among developed nations and occur when the value of goods and services they import exceed the value of goods and services they export. It�s also impacted by flows of money across borders, including interest and dividends paid out on investments, as well as transfers like foreign aid. Where deficits become worrisome is when the gaps are persistent and growing over time, suggesting an uncompetitive economy.

Ailish Campbell, the vice-president of policy and international and fiscal issues for the Canadian Council of Chief Executives, recently advised those fretting about Canada�s trade deficits to remember that they are offset in the current account by �positive and significant capital inflows, which feed the long-term growth of the Canadian economy.� In other words, we should feel good about the fact foreigners are effectively lending Canada money that can be used to fund future growth. For example: factory owners who borrow to buy new technology and machinery to modernize their operations. Where countries run into trouble, by contrast, is when that foreign capital is simply being used to fund high levels of consumer consumption, as was the case in Greece prior to the debt crisis.

Canada, of course, isn�t Greece. But all that debt-fuelled spending could still have undesirable effects on the economy just the same. At the moment, interest rates are low and Canadian households don�t have trouble making their monthly payments. But that will change when interest rates inevitably begin to rise, particularly if they�re not accompanied by corresponding increases in wages. Indeed, that was the conclusion of an unreleased report prepared for the federal government and obtained by Canadian Press. It found wages for middle-income workers had stagnated between 1993 and 2007, making the middle class �increasingly vulnerable to financial shocks.� Many in the middle class, it warned, are �mortgaging their future to sustain their current consumption.�

In effect, Canada�s economy is now running on borrowed time. While much of the rest of the world is now positioned for growth after going through a painful period of deleveraging�housing foreclosures, shuttered banks, bankrupted companies and belt-tightening consumers�Canadians will be forced to look on from the sidelines while they nurse a collective hangover brought on by a debt-fuelled party that went on for several years.

�I view high debt as both a friction and vulnerability,� RBC�s Lascelles says. �The friction is that Canadians will be spending money on servicing debt that could otherwise be spent on goods and services. It�s money squandered, in a sense.� Meanwhile, it leaves Canadian households exposed to a financial crisis, he adds. They will still have those onerous interest payments to make, but �they will be grappling with very high debt loads relative to diminished incomes�perhaps amid falling asset [house] prices.� In addition, Lascelles says Canadians will likely soon begin to feel poorer than we actually are as a cheap loonie makes online shopping from U.S. websites and foreign travel more expensive.

None of it sounds like much fun, but it�s a fitting outcome for a once-modest but hard-working country that came to think of itself as a world-beater: all those hewers of wood and drawers of water who deluded themselves into thinking it was reasonable to wear $400 jeans.

All of these motherfuckers deserve the bankruptcy purgatory waiting for their dumb asses.

# ? Mar 24, 2014 15:38

namaste friends: Sep 18, 2004; by Smythe

Lexicon posted:

Jesus loving Christ.

That's the scariest stat I've seen in some time.

It's actually higher than 14% gdp because that figure doesn't include loans from credit unions (from the mcleans article).

Also what the gently caress is happening. McLean's is writing articles worth reading. What's next? cats sleeping with dogs

# ? Mar 24, 2014 15:45

namaste friends: Sep 18, 2004; by Smythe

hahahah there's a condo in toronto called 'yonge and rich'

# ? Mar 24, 2014 15:56

Guest2553: Aug 3, 2012

Cultural Imperial posted:

McLean's article

That

part was whem they said Sears has affordable household goods.

# ? Mar 24, 2014 16:10

sitchensis: Mar 4, 2009

Ugh. loving ugh. Boomers are retiring so they "treat themselves" to luxury cars. As if the self entitled ninnies hadn't gorged themselves enough through their working years.

And "splurging" on $400 jeans? For me, "splurging" is having a meal out at a sit-down restaurant once a month. Who are these people?!

# ? Mar 24, 2014 16:19

Baronjutter: Dec 31, 2007; "Tiny Trains"

sitchensis posted:

Ugh. loving ugh. Boomers are retiring so they "treat themselves" to luxury cars. As if the self entitled ninnies hadn't gorged themselves enough through their working years.

And "splurging" on $400 jeans? For me, "splurging" is having a meal out at a sit-down restaurant once a month. Who are these people?!

A very temporary economic anomaly called "the middle class". It's like they had money to own property and luxury items even though they weren't capitalists or aristocracy. It's very strange but society seems to be quickly correcting this oddity.

# ? Mar 24, 2014 16:21

PT6A: Jan 5, 2006; Public school teachers are callous dictators who won't lift a finger to stop children from peeing in my plane

sitchensis posted:

Ugh. loving ugh. Boomers are retiring so they "treat themselves" to luxury cars. As if the self entitled ninnies hadn't gorged themselves enough through their working years.

And "splurging" on $400 jeans? For me, "splurging" is having a meal out at a sit-down restaurant once a month. Who are these people?!

Well, they're people with jobs that can afford it. There's plenty of people that can comfortably afford to eat out regularly, and people that can comfortably afford to spend $400 on jeans. This is something that you'll just have to accept until you become a billionaire: other people will have more money than you. If you let it upset you, you're going to be unhappy. Now, you can be upset when their spending habits gently caress over everyone else, but that's not the case for everyone buying luxury products.

# ? Mar 24, 2014 16:26

JawKnee: Mar 24, 2007; You'll take the ride to leave this town along that yellow line

When I think 'middle-class' I don't tend to think 'wears $400 pairs of pants'

# ? Mar 24, 2014 16:26

PT6A: Jan 5, 2006; Public school teachers are callous dictators who won't lift a finger to stop children from peeing in my plane

JawKnee posted:

When I think 'middle-class' I don't tend to think 'wears $400 pairs of pants'

Why not? Middle-class can include, fairly reasonably, up to around $100,000/year earners. If you're single and live in a modest dwelling, there's easily $400-jeans budget available.

# ? Mar 24, 2014 16:29

Lexicon: Jul 29, 2003; I had a beer with Stephen Harper once and now I like him.

PT6A posted:

Why not? Middle-class can include, fairly reasonably, up to around $100,000/year earners. If you're single and live in a modest dwelling, there's easily $400-jeans budget available.

Way to miss the point. I could spend thirty-seven dollars on a muffin - I have the money available to do so. But there's no loving way that I would, because that's bananas.

$400 jeans are the same.

# ? Mar 24, 2014 16:34

Lexicon: Jul 29, 2003; I had a beer with Stephen Harper once and now I like him.

I would support a thread ban on the term 'middle class', honestly. It must be the most meaningless and ill-defined term in Western politics.

Talk about the 'middle three income quintiles' if you want a meaningful population subset (they sure as hell aren't buying $400 jeans).

# ? Mar 24, 2014 16:40

sitchensis: Mar 4, 2009

I have nothing against $400 pairs of jeans. But when it seems like those jeans (among other things) are being financed only by credit and not by any real standard of wealth increase, that's when I start to have a problem with them.

Hell, if I wanted to, I could get another credit card with an obscene limit and "splurge" at the local Holt and just pay off the minimum every month. Does that mean I'm rich or middle class?

# ? Mar 24, 2014 16:42

namaste friends: Sep 18, 2004; by Smythe

I honestly don't give a poo poo what people spend their money on. It's the fact that they're afforded the debt to buy poo poo that hacks me the gently caress off. Hopefully all these dumb asses will be the first to die in the measles epidemic inside their massive abbostford multigenerational homes.

People can't loving understand risk management.

# ? Mar 24, 2014 16:46

Lexicon: Jul 29, 2003; I had a beer with Stephen Harper once and now I like him.

Cultural Imperial posted:

I honestly don't give a poo poo what people spend their money on. It's the fact that they're afforded the debt to buy poo poo that hacks me the gently caress off.

Exactly. And the fact that they will likely come to the rest of the country, cap in hand, when it all goes pear shaped, and expect me and others to cough up.

# ? Mar 24, 2014 16:48

PT6A: Jan 5, 2006; Public school teachers are callous dictators who won't lift a finger to stop children from peeing in my plane

Lexicon posted:

Way to miss the point. I could spend thirty-seven dollars on a muffin - I have the money available to do so. But there's no loving way that I would, because that's bananas.

$400 jeans are the same.

Agreed, but where does that line of thought end? What is the maximum amount one is allowed to spend on unnecessary luxuries before being crazy, as a percentage of discretionary income? Frankly, I think as long as these purchases aren't being financed on credit and the purchaser has a reasonable savings rate, I believe that should be 100%. I could be pissed off and jealous of the guy who has two Range Rovers so he can keep one at his vacation home, but since I know he can easily afford it, it's none of my goddamn business.

# ? Mar 24, 2014 16:51

beepo: Oct 8, 2000; Forum Veteran

$400 jeans are a bit of an exaggeration, but I see lots of places selling $150-$250 jeans. It's not just places like Holt Renfrew, pretty much anything above mall brands are going to be in that price range.

# ? Mar 24, 2014 16:55

ocrumsprug: Sep 23, 2010; by LITERALLY AN ADMIN

PT6A posted:

Agreed, but where does that line of thought end? What is the maximum amount one is allowed to spend on unnecessary luxuries before being crazy, as a percentage of discretionary income? Frankly, I think as long as these purchases aren't being financed on credit and the purchaser has a reasonable savings rate, I believe that should be 100%. I could be pissed off and jealous of the guy who has two Range Rovers so he can keep one at his vacation home, but since I know he can easily afford it, it's none of my goddamn business.

Yeah, but this particular topic was kicked off by a mention of how HELOCs are 14% of Canada's GDP now. It is all fueled by credit.

# ? Mar 24, 2014 17:01

namaste friends: Sep 18, 2004; by Smythe

It's more interesting to me why Canadians have to buy $400 jeans or luxury cars. From my perspective, it's absolutely crazy what kinds of cars you see people drive in Vancouver. There isn't anything close to this level of ostentation in Seattle.

# ? Mar 24, 2014 17:03

PT6A: Jan 5, 2006; Public school teachers are callous dictators who won't lift a finger to stop children from peeing in my plane

ocrumsprug posted:

Yeah, but this particular topic was kicked off by a mention of how HELOCs are 14% of Canada's GDP now. It is all fueled by credit.

Is it, though? Of the people I know who are working full-time, salaried jobs, I'd say only one of them has consumer debt problems (caused by stupidity and possibly a gambling problem). Consumer debt is a major problem, I agree, but luxury purchases needn't necessarily be made on credit.

# ? Mar 24, 2014 17:05

Baronjutter: Dec 31, 2007; "Tiny Trains"

My parents have been living off a large line of credit tied to their house for a very long time, at least since I was a teen (like 15 years ago)

Also I'm pretty sure my mom has bought some 300-400 jeans but you see they're normally $500 and they were on sale so this was in fact a very good deal. The moment my dad retired he bought a fairly high-end Merc sedan with the sports package. Boomers have odd senses of finances and value, my folks were a single-income couple with my dad a bus driver.

The problem is, for every boomer who had a high income and stashed a lot away for retirement and treated them selves to $400 jeans for their luxury retirement car, there's 10 more who know that wealthly boomer and now think they deserve the same or some sense of "keeping up with the jones's" mentality. For instance my parents bought a house well beyond their means so our neighbours were always doctors and lawyers yet my bus-driver income parents would constantly try to keep up. Some of their friends were straight up rich, so once again they'd compare what they have with their "peers".

Baronjutter fucked around with this message at 17:10 on Mar 24, 2014

# ? Mar 24, 2014 17:06

Franks Happy Place: Mar 15, 2011; It is by weed alone I set my mind in motion. It is by the dank of Sapho that thoughts acquire speed, the lips acquire stains, stains become a warning. It is by weed alone I set my mind in motion.

PT6A posted:

Is it, though? Of the people I know who are working full-time, salaried jobs, I'd say only one of them has consumer debt problems (caused by stupidity and possibly a gambling problem). Consumer debt is a major problem, I agree, but luxury purchases needn't necessarily be made on credit.

You live in Calgary, one of the least sustainable economies in Canada. Try thinking harder.

# ? Mar 24, 2014 17:08

Lexicon: Jul 29, 2003; I had a beer with Stephen Harper once and now I like him.

PT6A posted:

Agreed, but where does that line of thought end? What is the maximum amount one is allowed to spend on unnecessary luxuries before being crazy, as a percentage of discretionary income? Frankly, I think as long as these purchases aren't being financed on credit and the purchaser has a reasonable savings rate, I believe that should be 100%. I could be pissed off and jealous of the guy who has two Range Rovers so he can keep one at his vacation home, but since I know he can easily afford it, it's none of my goddamn business.

Dude, I'm as market-oriented and liberal as they come. People can allocate their cash in whatever way they want, so far as I'm concerned. The line of thought you reference ends exactly where any reasonable reader of this conversation would conclude: as soon as there's a threat to the financial system (and thus economy and society) due to people pigging out on debt on the back of an inflated housing bubble.

# ? Mar 24, 2014 17:15

Lexicon: Jul 29, 2003; I had a beer with Stephen Harper once and now I like him.

Cultural Imperial posted:

It's more interesting to me why Canadians have to buy $400 jeans or luxury cars. From my perspective, it's absolutely crazy what kinds of cars you see people drive in Vancouver. There isn't anything close to this level of ostentation in Seattle.

I used to live in Silicon Valley. Out for beers one night, a colleague of mine remarked "Look around the room. See the guys in the flashy suits, sharp haircuts and prominent jewelry? They are all realtors, car rental agents, and all have very low income and net worth. By contrast, the quiet, unassuming dudes with jeans and plain T-shirts are the ones pulling in well over-six figures, and in many cases have seven-figure net worths"

I know there are many exceptions on either side, but this has always stuck with me. I think a lot of this phenomenon exists in Canada, but especially in Vancouver.

# ? Mar 24, 2014 17:23

namaste friends: Sep 18, 2004; by Smythe

http://www.biv.com/article/20140324/BIV0111/140329980/vancouver-8217-s-housing-market-strongly-dependent-on-chinese

quote:

By Emma Crawford Hampel
Mon Mar 24, 2014 8:49am PST
An increase in growth in China�s gross domestic product (GDP) would have a positive impact on the housing market in Vancouver, argues a Conference Board of Canada report released March 24.

The influence of China�s economic state on the city�s housing market should not be underestimated; the report argues that the Chinese economy is one of the biggest drivers behind housing sales activity in the area. It �rivals� not only the city�s population growth but also the employment environment and mortgage interest rates in terms of what determines the state of the market.

�The chief implication is that observers need to pay attention to China�s economic health when assessing the outlook for Vancouver�s housing market,� the report said.

�This analysis suggests that Vancouver�s housing markets would perhaps welcome a pickup in Chinese GDP growth more than a rise in local employment and about the same as lower Canadian interest rates.

�If the Chinese economy is indeed improving, this could help rekindle both new and resale demand in the Lower Mainland.�

The report argues that when looking back over the past couple decades, periods of high and low sales in Vancouver home sales can be correlated to similar trends in China�s economy. For example:

in the 1990s, China�s GDP growth was �tepid� with annual growth rates ranging from 3.8% to 7.8%, after annual expansion of 12% per year in the 1980s. Correspondingly, Vancouver�s housing market was also relatively sluggish, despite the fact that the local economy was healthy, with increasing employment of 2.3% annually and an annual population growth of 2.5%; and
in the 2000s, Chinese GDP grew by over 8% annually � and Vancouver�s housing market also took a dramatic swing upward.
Today, the pattern is repeating, the report said. Vancouver�s employment growth was 2.1% per year on average between 2010 and 2012, and population grew by 1.6%. Those factors, combined with low mortgage rates, would lead to the expectation of a more active housing market.

However, over the same period, China�s GDP growth slowed down to 12-year lows � and Vancouver home resale volumes fell 23% in 2012, while the average home sale price dropped 6.4%.

ecrawford@biv.com

lol

# ? Mar 24, 2014 17:31

namaste friends: Sep 18, 2004; by Smythe

what is this 'poo poo news mondays'

# ? Mar 24, 2014 17:31

FrozenVent: May 1, 2009; The Boeing 737-200QC is the undisputed workhorse of the skies.

Cultural Imperial posted:

http://www.biv.com/article/20140324/BIV0111/140329980/vancouver-8217-s-housing-market-strongly-dependent-on-chinese

lol

Well, this confirms my opinion of the Conference Board and think tanks in general.

Are there still really people in 2014 who still expect China to grow indefinitely?

# ? Mar 24, 2014 17:33

Franks Happy Place: Mar 15, 2011; It is by weed alone I set my mind in motion. It is by the dank of Sapho that thoughts acquire speed, the lips acquire stains, stains become a warning. It is by weed alone I set my mind in motion.

What I like about that article is that the premise is wrong, the analysis is wrong, and the conclusion is wrong, in three separate and amusing ways.

I really hope the government sticks it to the banks and their shareholders as much as possible post-crash, because this level of toxic disinformation didn't just come out of nowhere.

# ? Mar 24, 2014 17:38

ocrumsprug: Sep 23, 2010; by LITERALLY AN ADMIN

FrozenVent posted:

Well, this confirms my opinion of the Conference Board and think tanks in general.

Are there still really people in 2014 who still expect China to grow indefinitely?

What I think is really telling about that article is that the state of the Chinese economy is basically the measure by which Vancouver is now measured. The local Vancouver market is so distorted (at least in some peoples minds) by China, that conditions here no longer matter to the market.

That report isn't even being produced by a real estate board. The economics of Vancouver being driven solely by real estate, and sustained by offshore inflow is now being parroted by Canadian economic think tanks. Worse, they don't even seem to think it is anything but a good thing.

e: �This analysis suggests that Vancouver�s housing markets would perhaps welcome a pickup in Chinese GDP growth more than a rise in local employment and about the same as lower Canadian interest rates."

Case in point, who needs local employment if China's GDP is still chugging along? What a poo poo analysis.

ocrumsprug fucked around with this message at 17:50 on Mar 24, 2014

# ? Mar 24, 2014 17:46

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# ? May 18, 2024 09:08

namaste friends: Sep 18, 2004; by Smythe

FrozenVent posted:

Well, this confirms my opinion of the Conference Board and think tanks in general.

Are there still really people in 2014 who still expect China to grow indefinitely?

cf. the china economy thread. Short answer is yes.

# ? Mar 24, 2014 17:47

The Something Awful Forums > Discussion > Debate & Discussion > Canada Housing/Debt: Trust me, I'm a landlord.

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