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

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namaste friends: Sep 18, 2004; by Smythe

http://www.theglobeandmail.com/report-on-business/economy/housing/bmo-expects-strong-housing-report-despite-low-sales/article18598680/

quote:

The Canadian Real Estate Association will be releasing April�s housing data on Thursday, and the report is expected to show that prices are strong even though sales have been lacklustre.

�Price gains remain firm in much of the country, with average prices expected to be up about 6 per cent year-over-year, steady from the prior month,� Bank of Montreal economist Benjamin Reitzes wrote in a research note.

�The quality-adjusted MLS house price index, a better representation of market conditions, looks to accelerate to 5.4 per cent year-over-year, a 29-month high,� he added. (The MLS home price index, released by CREA, adjusts for changes in the types and locations of dwellings that are selling in an attempt to create a more accurate measure of underlying prices than the average price, which could be swayed if, for example, an expensive neighbourhood suddenly became more popular.)

CREA, which represents real estate agents, gathers MLS information each month from local real estate boards across the country and then discloses the national numbers. Some of the local boards have already disclosed April�s numbers. The average selling price in Edmonton was up 4.5 per cent from a year ago, to $365,045; Toronto�s average selling price rose 10.1 per cent to $577,898; Ottawa�s average price ticked up 0.8 per cent to $374,015; Regina�s remained relatively flat, at $317,176.

�Prices continue to rise despite cooling activity, reflecting relatively tight supply in major markets,� Mr. Reitzes wrote. He, like many economists, questions whether the price momentum can be sustained. �Pricing tends to lag sales, so we could see prices come under mild pressure toward the middle of the year,� he wrote.

He predicts that the number of existing homes that sold via the Multiple Listing Service in April will be about 2 per cent higher than a year earlier. If he�s right, that would leave sales a little bit higher than they were in March, and would make April the third month in a row of sales gains after five consecutive monthly declines.

Toronto�s volume of sales for April was up 1.8 per cent from a year earlier, Regina�s and Vancouver�s were each up about 16 per cent, and Montreal and Ottawa�s each fell by about 9 per cent.

# ? May 12, 2014 18:09

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# ? May 26, 2024 19:28

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

Yeah, consider that most BBB corporates need to pay more than 4% for 30-year debt, if they can even get it. Not even close to the same thing.

# ? May 12, 2014 20:25

namaste friends: Sep 18, 2004; by Smythe

http://www.imf.org/external/pubs/cat/longres.aspx?sk=41551.0

quote:

Canada�s housing boom is the single most important domestic risk to financial stability.
House prices, residential mortgage credit, and consumer credit (including Home Equity Lines
of Credit) all grew rapidly in the 2000s. House prices doubled and ratios of house prices to
income and house prices to rent increased sharply (IMF, 2014a). Mortgage credit expanded
by almost 9 percent per year on average between 2000 and 2008. Household debt as a share
of disposable income rose from about 110 percent in 2000 to 165 percent in 2013. Mortgages
and consumer loans secured by real estate (mostly HELOCs) are estimated to account for 80
percent of household debt and to represent the single largest exposure for Canadian banks
(about 35 percent of their assets).

The Canadian authorities have exceptional power to affect housing finance through the key
role of government-backed mortgage insurance. Specifically, the combination of the
requirement that most lenders have insurance for high loan-to-value (LTV) mortgage loans
and the central role of the government in providing such insurance gives the government
great power to influence housing finance. In other words, the rules governing mortgage
insurance are important macroprudential tools. The authorities can also influence credit and
house price growth through microprudential measures, such as prudential guidelines on
mortgage lending, and structural measures, such as the oversight of the government-owned
Canadian Mortgage and Housing Corporation (CMHC).

The main aim of this paper is to assess the effectiveness of the macroprudential policy
measures taken to address the housing boom. A cursory look at mortgage credit and house
price developments suggests that the measures were effective: mortgage credit growth
slowed sharply after the first measures were taken in 2008 (Figure 1); similarly, house price
growth, while more volatile, has also been clearly lower since 2008 (Figure 2). However,
much of the slowdown can be attributed to the impact of the global financial crisis on
Canada; indeed, house prices rebounded strongly in 2009, in line with the economy�s fast
recovery from the recession. This paper will argue that the moderation in house prices and
mortgage credit since 2010 has been due in part to policy measures.

The paper is organized as follows. After a brief description of housing finance in Canada
(Section II), we provide empirical evidence on the impact of the macroprudential measures,
controlling for other variables that affect house prices and mortgage credit (Section III). We
then turn to what more could be done, if necessary, based on international experience
(Section IV). Finally, we suggest some medium-term reforms to housing finance (Section V),
before offering some concluding remarks (Section VI).

wadin' through dis'

e: for all of you wondering how to short the housing market, you want to read this

e2:

quote:

Longer-term fixed rates were phased out in the 1960s after lenders
experienced difficulties with volatile interest rates and maturity mismatches.

so in other words, it was hard to make money in mortgage finance so we moved the goal posts

e3:

quote:

The government�s role in mortgage insurance in Canada is large compared to most other
countries. Even though mortgage insurance is available in many countries, it is used
extensively in only some: Australia, Canada, France, Hong Kong SAR, the Netherlands, and
the United States (Joint Forum, 2013).

lol

e4:

quote:

Mortgage insurance rules were relaxed in the mid-2000s, making insured mortgages more
affordable, which supported a boom in mortgage credit. Measures included a broadening of
the eligible sources of funds for the minimum down payment; increasing the maximum LTV
ratio that triggers mandatory insurance to 80 percent, and increasing the maximum LTV ratio
for any new government backed insured loans to 100 percent; increasing the maximum
amortization period from 25 to 40 years; and providing insurance on interest-only mortgages
and on mortgages to the self-employed (Table 1). Together with lower interest rates, these
measures boosted mortgage credit and housing prices. In turn, higher house prices were one
of the factors that led to a sharp expansion of home equity credit lines.

This right here is all you need to understand why Canada has a housing bubble.

e5:

quote:

While the household debt to income ratio continued to increase in 2013, it would
have likely been even higher if the authorities did not take action. We run a simple
counterfactual exercise, and calculate the fitted regression values of mortgage growth
rates both with the measures and without them. Assuming all else stays the same,
without the measures the average monthly growth (y/y) of mortgage credit would
have been 1 percentage point higher than actually observed since April 2010. The
household debt-to-income (DTI) ratio would have been closer to 170 percent as of the
third quarter of 2013, instead of the actual 165 percent.

namaste friends fucked around with this message at 01:05 on May 13, 2014

# ? May 13, 2014 00:46

etalian: Mar 20, 2006

FrozenVent posted:

You can't really compare 5 years fixed to 30 years fixed, though. I'd take 4% fixed 30 over 2.99% fixed 5 any day of the week.

On a side note long ultra-low fixed rates only exist in the USA since the government backs them, public underwriting of private debt ftw.

# ? May 13, 2014 01:44

namaste friends: Sep 18, 2004; by Smythe

etalian posted:

On a side note long ultra-low fixed rates only exist in the USA since the government backs them, public underwriting of private debt ftw.

no kidding. I didn't know that.

# ? May 13, 2014 01:48

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

etalian posted:

On a side note long ultra-low fixed rates only exist in the USA since the government backs them, public underwriting of private debt ftw.

It's essentially the same as CMHC, except worse.

# ? May 13, 2014 02:20

etalian: Mar 20, 2006

It's why other countries tend have much shorter loan terms or even floating rate type mortgages.

It's more along the the lines of a indirect backing:
http://www.investopedia.com/articles/pf/07/mortgage_rate.asp

The whole practice of cheap long term fixed rate home loans was started by the US FHA:
https://en.wikipedia.org/wiki/Fixed-rate_mortgage

# ? May 13, 2014 02:34

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

might as well sell it with children

# ? May 13, 2014 06:19

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.

Investors Group unveils 3-year mortgage at 1.99% (not a typo)

# ? May 13, 2014 18:57

Baronjutter: Dec 31, 2007; "Tiny Trains"

What's the catch? It goes up to like 10% after those first years?

\/ are buyers so stupid they don't understand the rate will absolutely go up, and are the brokers and bankers so dishonest they don't make that clear? I.. I guess that's a rhetorical question

Baronjutter fucked around with this message at 19:25 on May 13, 2014

# ? May 13, 2014 19:15

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

After that term you have to get another one; if the interest rates have gone up since then, you have to finance at the new rates then. It's just like any other mortgage.

What's funny is that a lot of people are going to buy houses assuming they'll keep that same rate over the life of the mortgage, and it's pretty much guaranteed to at least double before then.

# ? May 13, 2014 19:21

Saltin: Aug 20, 2003; Don't touch

FrozenVent posted:

After that term you have to get another one; if the interest rates have gone up since then, you have to finance at the new rates then. It's just like any other mortgage.

What's funny is that a lot of people are going to buy houses assuming they'll keep that same rate over the life of the mortgage, and it's pretty much guaranteed to at least double before then.

Even double 1.99 is historically very low. Only our parents know what real interest rates look like, for now.

# ? May 13, 2014 19:31

Soviet Space Dog: May 7, 2009; Unicum Space Dog
May 6, 2009

NOBODY WILL REALIZE MY POSTS ARE SHIT NOW THAT MY NAME IS PURPLE

It's a variable rate mortgage so if the prime rate goes up it also goes up. There's also other fees, and it is impossible to get out of short of selling the property.

quote:

If applicable, you may be responsible for legal and administrative fees or prepayment charges. Not available for renewals or internal refinances. These promotions are closed terms that are not eligible to be paid out, refinanced, early renewed or extended prior to maturity of the term (except upon the bonafide sale of the subject property).

If the prime rate goes up by more than 0.60% you will have a higher rate than their fixed rate mortgage with the same terms.

# ? May 13, 2014 23:21

Professor Shark: May 22, 2012

tagesschau posted:

Investors Group unveils 3-year mortgage at 1.99% (not a typo)

Those comments are awesome- one guy is off his meds raging about Canada being controlled by our Capitalist Overlords (only in crazy talk) and something about Isreal, and another guy is blowing off the idea of a bubble as "the sky is falling!".

# ? May 14, 2014 00:02

on the left: Nov 2, 2013; I Am A Gigantic Piece Of Shit

Literally poo from a diseased human butt

FrozenVent posted:

After that term you have to get another one; if the interest rates have gone up since then, you have to finance at the new rates then. It's just like any other mortgage.

What's funny is that a lot of people are going to buy houses assuming they'll keep that same rate over the life of the mortgage, and it's pretty much guaranteed to at least double before then.

Why is it guaranteed to double? I don't think any central bank plans on ending the free money party anytime soon.

# ? May 14, 2014 01:16

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

on the left posted:

Why is it guaranteed to double? I don't think any central bank plans on ending the free money party anytime soon.

In June 1994, the prime mortgage rate was 8%. You wanna laugh, look at 1981. What's the average length of a mortgage these days?

It's not GUARANTEED to double, but rates can't go any lower than they are now.

# ? May 14, 2014 01:59

Guest2553: Aug 3, 2012

on the left posted:

Why is it guaranteed to double? I don't think any central bank plans on ending the free money party anytime soon.

Soon has to extend til 2039 or else these people will be straight up dicked.

# ? May 14, 2014 02:01

on the left: Nov 2, 2013; I Am A Gigantic Piece Of Shit

Literally poo from a diseased human butt

Guest2553 posted:

Soon has to extend til 2039 or else these people will be straight up dicked.

When I did my asset securitization class, the average life of a mortgage in the US is something like 11 years, and I am pretty sure that excludes refinancing.

Of course, in the US a house is going to be a much smaller multiple of income and the mortgages were fully documented with 20% down, so maybe not a useful number for blowout markets like Vancouver/Toronto.

# ? May 14, 2014 02:22

Guest2553: Aug 3, 2012

Holy gently caress

http://news.nationalpost.com/2014/05/13/vancouver-house-that-sold-for-3-million-in-one-day-now-faces-bulldozer-because-it-is-too-small/

tl;dr: A perfectly livable house sells for 3+ million in vancouver within a day of listing. New owners intend to knock it down to build a bigger house. It's alluded to that rich Chinese are to blame.

# ? May 14, 2014 04:12

on the left: Nov 2, 2013; I Am A Gigantic Piece Of Shit

Literally poo from a diseased human butt

Guest2553 posted:

Holy gently caress

http://news.nationalpost.com/2014/05/13/vancouver-house-that-sold-for-3-million-in-one-day-now-faces-bulldozer-because-it-is-too-small/

tl;dr: A perfectly livable house sells for 3+ million in vancouver within a day of listing. New owners intend to knock it down to build a bigger house. It's alluded to that rich Chinese are to blame.

When paying $3mm for a 1/5 acre lot, you aren't paying for the awesome construction quality, you are paying for the land. Demolishing the house and building a bigger one is a drop in the bucket compared to the price of the land.

# ? May 14, 2014 04:22

ductonius: Apr 9, 2007; I heard there's a cream for that...

Guest2553 posted:

Holy gently caress

http://news.nationalpost.com/2014/05/13/vancouver-house-that-sold-for-3-million-in-one-day-now-faces-bulldozer-because-it-is-too-small/

tl;dr: A perfectly livable house sells for 3+ million in vancouver within a day of listing. New owners intend to knock it down to build a bigger house.

If you look on google maps, it's the smallest house in the neighborhood and it's a block from the UBC endowment lands. It's not surprising it's being torn down.

Guest2553 posted:

It's alluded to that rich Chinese are to blame.

No, it pretty much says straight up that rich Chinese are to blame.

# ? May 14, 2014 04:31

namaste friends: Sep 18, 2004; by Smythe

hey come on it's not like they're building a huge empty city

in ki-ti-mat-zhou

# ? May 14, 2014 04:38

on the left: Nov 2, 2013; I Am A Gigantic Piece Of Shit

Literally poo from a diseased human butt

What's the big problem with Chinese people coming to live in Canada? Isn't Canada supposed to be an open, multicultural society comprised of immigrants?

# ? May 14, 2014 04:40

namaste friends: Sep 18, 2004; by Smythe

on the left posted:

What's the big problem with Chinese people coming to live in Canada? Isn't Canada supposed to be an open, multicultural society comprised of immigrants?

There's nothing wrong with chinese people coming to live in Canada. It's the the worthless investment class immigrants I have a problem with. The number of immigrants we allow into Canada is a zero sum game so arguably, we're letting some shitheel money laundering nouveaux riche coolie ahead of people who might be more qualified, better educated and more interested in building a life in Canada, who will also pay more income tax over a long period of time since he/she isn't just using Canada as a parachute for when the politburo starts chopping heads.

# ? May 14, 2014 04:44

computer parts: Nov 18, 2010; PLEASE CLAP

The real reason is that they're a convenient scapegoat when the market crashes even though there isn't a significant amount of them.

# ? May 14, 2014 04:46

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

If you think that one's crazy, we were just looking at rentals and went through a place that was listed way below market. We couldn't figure out why until we noticed it was a short-term lease. We asked the owner why the short term and they said it was because they were waiting for a construction permit. The house had an impeccable view of the city, was no more than 25 years old, and was beautifully built. I couldn't help but think it would be a terrible shame because the house as built fit really well into the contours of the surrounding developments, while the new owner's description from what I could understand was of some horrid urban castle that would look like a terrible eyesore. Even their real estate agent, who was around for the showing, was quietly showing disgust that the place was getting torn down. I got the sense that she didn't know in advance that they were buying it as a teardown.

I'm the last person to say someone shouldn't do what they want with their own money and/or property, but boy was I ever depressed after leaving that house.

E:

Cultural Imperial posted:

There's nothing wrong with chinese people coming to live in Canada. It's the the worthless investment class immigrants I have a problem with. The number of immigrants we allow into Canada is a zero sum game so arguably, we're letting some shitheel money laundering nouveaux riche coolie ahead of people who might be more qualified, better educated and more interested in building a life in Canada, who will also pay more income tax over a long period of time since he/she isn't just using Canada as a parachute for when the politburo starts chopping heads.

Mostly I agree with this, but using the term coolie is horribly bigoted in many countries and is also incorrect even in a historical sense when describing wealthy immigrants. Find a better way to describe what you're talking about.

Kalenn Istarion fucked around with this message at 04:51 on May 14, 2014

# ? May 14, 2014 04:46

namaste friends: Sep 18, 2004; by Smythe

http://m.theglobeandmail.com/report...b+Article+Links

quote:

Canada’s realtors told Prime Minister Stephen Harper that the country’s housing market is essentially balanced, as they kicked off a lobbying effort in Ottawa that saw them make appointments with more than 160 MPs.

About 300 realtors descended on the nation’s capital in recent days for a political action campaign that the Canadian Real Estate Association has carried out annually for almost 30 years.

CREA represents more than 100,000 agents in Canada. It had the 300-odd realtors who participated this year fan out and give politicians their take on the housing market, as well as press for changes to the Home Buyers’ Plan.

The meeting with Mr. Harper was late last week, CREA president Beth Crosbie tells me (she said realtors also spent time with NDP leader Thomas Mulcair, Liberal leader Justin Trudeau, and more than ten cabinet ministers).

The message that the realtors wanted the prime minister to hear was “that the market is quite balanced,” Ms. Crosbie says. “When we’re giving out statistics, they’re often weighted in terms of some of the bigger areas, like Vancouver or Toronto, but markets are very much local and while there are some areas perhaps that aren’t balanced, overall it’s very much a balance.”

SPONSORED CONTENT A new vision for building homes in the North

Many prominent members of the real estate industry have accused the Conservatives (namely former Finance Minister Jim Flaherty) of going too far in their efforts to cool the housing market. The government has made a number of changes to the rules governing the mortgage insurance market in an effort to stem the growth of consumer debt levels, house prices, and the exposure of taxpayers to the housing market. Notably, Mr. Flaherty imposed new rules in July 2012 that caused a steep decline in home sales. Economists have generally applauded Mr. Flaherty’s rule changes, which came amid fears that a housing bubble could form.

While the meeting with Mr. Harper was at the tail end of last week, the realtors’ “political action committee days” didn’t officially kick off until this past Sunday. Ms. Crosbie says a bursary helps pay for the realtors to go to Ottawa, where they receive some training before meeting with an MP. “The idea is that the realtor lives in the district of the MP, so that the MPs are speaking to their own constituents and understanding how the market is working in their area and the importance of the issues,” she says.

Each year CREA picks two or three issues that it wants to discuss with the politicians. For the last couple of years one of the main ones has been the Home Buyers’ Plan (which Ms. Crosbie says she did not discuss with Mr. Harper directly).

The Home Buyers’ Plan has been around since 1992 (CREA was one of the organizations that first advocated for its creation) and allows first-time homebuyers to withdraw money from an RRSP to buy a home. The limit was $20,000 until 2009, when it was bumped up to $25,000. The amount that’s withdrawn generally needs to be paid back into the RRSP within 15 years to maintain the tax advantage.

The realtors’ main request is that the plan be indexed to inflation, which essentially means bumped up again.

“Already we see that the value is diminishing steadily,” Ms. Crosbie says. “So the ask, or the suggested solution to the government, would be that we index it. And the idea is that in 2016 they would bump it up by $2,500 and then again in 2020.”

But the Home Buyers’ Plan is controversial, and there have been calls for it to be scrapped altogether.

For their part, the realtors argue that it “helps consumers save on mortgage insurance fees and allows them to build home equity sooner.”

CREA is also asking that the Home Buyers’ Plan be made available to people who are relocating for a job, divorcing, or are going to have an elderly family member live with them.

To make their case, the realtors have been pointing to the number of jobs and economic spin offs that stem from home sales.

The government has been walking a tightrope in recent years between ensuring that the housing market continues to fuel economic growth, and preventing it from overheating to the degree that it could cause a major downturn in the future.

# ? May 14, 2014 14:26

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

Appointments with 160 MPs sounds like a lot, but you have to remember that there's realtors in pretty much every ridding; most of those are probably realtors (And possibly someone from their association, although owing to the volume I doubt they were at every meeting) meeting with their MP. Shake hands, take picture, spend ten minutes shooting the poo poo, hand over the leaflet the association printed, move on.

They're still scum, but as far as lobbying efforts go this one is pretty transparent.

# ? May 14, 2014 14:32

namaste friends: Sep 18, 2004; by Smythe

This new home buyer plan is awful and needs to be abolished.

# ? May 14, 2014 16:35

Bleu: Jul 19, 2006

Hey, you know a great way to build equity? Take your savings. Okay, you got them? Now spend them.

No need to thank me. I'm a REALTOR�.

# ? May 14, 2014 16:42

mik: Oct 16, 2003; oh

I used the HBP when I bought my house, not because I needed the cash, but so I could transfer cash from one RRSP account to another institution without paying any fees. gently caress the man!

# ? May 14, 2014 17:22

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

Bleu posted:

Hey, you know a great way to build equity? Take your savings. Okay, you got them? Now spend them.

No need to thank me. I'm a REALTOR�.

It's stupid to treat houses as an investment in this market, but really the point of any investment is to take your savings and turn them into something that will increase in value over time. Pointing out that you have to spend your savings in order to invest in something isn't a really stunning argument.

# ? May 14, 2014 18:25

Baronjutter: Dec 31, 2007; "Tiny Trains"

Yeah that's making money off finance in a nutshell. Take your savings, now spend them on investments. The question is: is this a good investment or not.

# ? May 14, 2014 18:39

ocrumsprug: Sep 23, 2010; by LITERALLY AN ADMIN

Point One: Housing isn't an investment
Point Two: You have to buy investments
Point Three: Don't make fun of someone telling you to invest in a house with your savings

Is that a reasonable distillation of your post PT6A?

# ? May 14, 2014 18:46

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:

Point One: Housing isn't an investment
Point Two: You have to buy investments
Point Three: Don't make fun of someone telling you to invest in a house with your savings

Is that a reasonable distillation of your post PT6A?

In essence, yes, but part 1 is a bit wrong. Housing is a type of investment, it's just not a very good one at this point The problem is that the REALTOR is trying to convince you to make a bad investment at this point, not that he's trying to get you to part with your savings in order to make an investment. The post I quoted was just phrased in a very awkward way.

# ? May 14, 2014 18:52

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

PT6A posted:

In essence, yes, but part 1 is a bit wrong. Housing is a type of investment, it's just not a very good one at this point The problem is that the REALTOR is trying to convince you to make a bad investment at this point, not that he's trying to get you to part with your savings in order to make an investment. The post I quoted was just phrased in a very awkward way.

I never thought I'd say this but I agree with PT6A. Real estate can be an investment, it's just that the vast majority of our compatriots are going at it in an absolutely stupid way. (Rental condos, what the gently caress) And the market's not good for a long term outlook right now.

# ? May 14, 2014 18:54

Baronjutter: Dec 31, 2007; "Tiny Trains"

Everyone I personally know who's rich got rich investing in the real estate game, but they did this like 20-50 years ago (and mostly got lucky selling it all off during bubbles rather than slowly building equity or earning money off rent). Some of them continue to play the same game and are now losing out and getting mad and shaking their fist at "the government" for not "supporting market growth" while others have wisely gotten their investments the gently caress out of real estate and invest in other poo poo now.

A lot of people know people who got rich back in the day investing in real estate and don't understand that things change, we have this ingrained cultural belief that real estate is the best and safest way to get rich.

# ? May 14, 2014 18:59

namaste friends: Sep 18, 2004; by Smythe

Furthermore, if you were really interested in investing in real estate, I think one would find REITs to be more attractive than getting saddled with a house or condo that currently generates negative income.

# ? May 14, 2014 19:10

LemonDrizzle: Mar 28, 2012; neoliberal shithead

Cultural Imperial posted:

Furthermore, if you were really interested in investing in real estate, I think one would find REITs to be more attractive than getting saddled with a house or condo that currently generates negative income.

House prices always go up at like inflation * 10 so even if your mortgage + maintenance costs are way above the rental income, you're winning.

Not that you could be expected to understand such matters of high finance, pitiful rentailure.

# ? May 14, 2014 19:21

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# ? May 26, 2024 19:28

Baronjutter: Dec 31, 2007; "Tiny Trains"

LemonDrizzle posted:

House prices always go up at like inflation * 10 so even if your mortgage + maintenance costs are way above the rental income, you're winning.

Not that you could be expected to understand such matters of high finance, pitiful rentailure.

One might say that's absolutely economically unsustainable, and I agree! So buy now before you're priced out. Buy now before that million dollar knock-down is a billion dollar knock down by the time you retire. Although hopefully the government will step in to make sure we all have easy access to billion dollar mortgages otherwise we'd have a government that didn't value home ownership, and besides, if that billion dollar home doesn't go up in value a lot of hard working canadians trying to get rich quick will be sunk!

# ? May 14, 2014 19:37

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