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Almost all of my friends are 100% or 99% invested in real estate.....

Almost every chart I look at implies Canadian housing is in a MASSIVE MASSIVE bubble.. our ecom is real estate..

When it fails I am wondering if others think BTC and PMs will lift off.

Canada and Australia are the perfect examples of massive housing bubbles.
This crap is so expensive right now.

What is the yield your friends are getting now btw?

If they are getting high rental yield, it really doesn't matter if the housing market correct up to 50%.

Yup, if you treat real estate market as somehow isolated from the rest of the economy.
Even if prices correct 25% it will be a huge blow to the economy. And the rental yield won't help as it will plunge as well. Y'know crisis, unemployment...

Gains of about 5-10% a year.. however they all still own.. sooo....

They view their own house as an investment tool :S..  "Who cares it will be worth 100% more in 20 years so I'll use my house to retire"

Will you now...

I have a bad feeling if the prices dip more than 10% all of the forigen buyers will sell to stop their losses...  the amount of houses not owned by Canadians is not known thx to Criminal Harper.

Mortgage-free since 1995.

Just say no.

I am mortgage free but I also do not own a house..

http://i664.photobucket.com/albums/vv10/JimboToronto/HeilHarper2.jpg (http://s664.photobucket.com/user/JimboToronto/media/HeilHarper2.jpg.html)

Edit: Oops, did I just Godwin this thread?

That's why I think that the investment use of real estate should be tightly regulated to avoid such disbalances.

My good friend paid 400k for a cookie cutter disposable condo in the vancouver lower mainland area. As long as interest rates never rise ever he should be fine.  ::)

I might post this picture on facebook it's so epic LOL

Yesterday's speech from Antonopulous to canadian senate is really amazing and deep. Senators, suprisingly, seem to understand much more than most trolls here.

https://www.youtube.com/watch?v=xUNGFZDO8mM

Australia has a multi tiered system to support house prices unlike anything else in the world asfaik

eg at least in canada housing wentt down or was level or just 4% the last few years. Sydney went 12~15% again last year.

One of the most ubranised counties in the world. There is nothing outside the 5 major cities.

>Negative gearing, tax breaks on your income if you own an investment property and it makes a loss.
>100% tax free when sell on profit if you lived in the house
>0% land tax if you live in the house.
>social security underwrites the entire lower end of the market, eg tax supported.
>No public housing for people to move to
>people who are in the country moveing to cities.
>popular with overseas immigrants and investors, and they have only really heard of Sydney.
>banks won't loan to you if you buy in many rural areas.
>Politicians have substantial property interests
>Banks are forced by gov to make a deal if too many people go to the wall. Last time this happened was in the 80's when interest rates went to 13~16%. Gov stated banks would not forclose but let people of until they could pay.
>crap transport do you cannot live out of the central near cbd areas, beyond 15km its impossible.
>finally limited land supply in Sydney, makes Sydney even worse.

To give you and idea of how urbanized Australia is

population of western Australia 2,517,200 (4th)
population of Perth, the capital city, `1,972,358

No other country I know of has any where near this mix of prop property.

It shows to in the GFC Australian prices hardly fell (1%), were stable or went up. Whereas UK, and US fell alot


Thus its much safer to have a large home loan than not, as it put you in the important class of people to the gov and you get all the tax breaks.

Hopfully. But Canadian Housing is only based on Canada, while bitcoin is global.

I have a large amount invested in a canadian private mortgage company. It has proven to be a really good value. I get returns of around 7 to 10% annually, which is pretty good, but during the last recession it returned 10-14% which is amazing for a traditional investment product. right now my dividends pay my rent and bills, so I am not complaining, but a crash in the market will earn me rent, bills, and a healthy flow of disposable income as well.

The logic seems to be when economy suffers BTC rises, but I dont really think that is guranteed. It is BTC afterall. It will defy expectations. I really hope that a crumbling economy will pump up the BTC value, though, for obvious reasons (I'm a hodler)

I've been sitting here all year cursing the improving economy, waiting, hoping for the big collapse. Bring it on!!!!!

Always a safe play to buy into 2nd most unaffordable market in the world.


http://i.cbc.ca/1.2505618.1390339722!/fileImage/httpImage/image.jpg_gen/derivatives/original_620/most-least-affordable-markets.jpg

From investor perspective, rental yield going down alone is not the primary factor of concern.

Let's say you buy a rental property, and get 6% yield a year. After 5 years, you already getting back 30% of the capital.

A 30% price correction will only set you back to square one and you are still getting return back every year in the form of rental. 10 more years and you will most likely be ahead of the game in term of profitability.

As someone in the US who just went through the housing bubble 5 years ago here is what happened.

The interest rate was so low that when calculating how much you can afford for a house per month you were more willing to pay more for a house because the monthly bill would not be as much. Also all of the housing prices were rising so you figured that if you paid a little bit more you could get your dream house and sell it down the road for double making a buttload, more than you could working. All of the prices were going way up, people were buying several homes figuring that if they could have a few houses they could rent them out and get the income while also being able to sell at a huge profit. As they bought one home and the value went up they would finance from the equity in that home as the price went up...this created more demand and higher prices. The prices went up the most in cities where new construction was not possible, in cities that could expand the rate did not climb as much because new home companies were popping up houses to try to meet demand.

Then the bubble popped. Triggered by the AIG, bank crash.

The people that were in the process of acquiring new properties were usually stretched very thin money wise because they were putting everything they had into the next house. That next house would not sell/rent so they would be stuck on a property that was losing them money. They would try to dump that house but nobody would buy. Housing prices started dropping quickly. People who were renting started seeing these cheap houses that they could not afford previously and started breaking their leases and bought cheaper houses. People who were into real estate would have a bunch of empty homes with no income, they would end up being mortgaged up to their eyeballs and needed to drop their homes so they would sell on a short sale. There were an increasing amount of foreclosures on the market making people who were buying homes look for extremely cheap deals (I was talking to a guy in my town that bought a nice house on the Gulf or Mexico for $60,000).

For me personally, I bought a house in San Antonio as the bubble was building for $130k but the prices weren't as high in San Antonio because there was room to expand housing and new homes were going up all over. Then the bubble hit, I moved to Florida because of my job and rented a house there. I tried to sell my house but could not find a buyer so I put it up for rent and was fortunate to get a renter to cover the mortgage. After a few months in Florida seeing the housing prices dropping I found a great house on the Gulf for $290k, it had been appraised for $600k two years before. So we broke our lease (had to pay a few thousand to get out of the lease) and bought the house. I was finally able to sell my house in San Antonio for $118k, fortunate to be down only $12k compared to other people. The guy that sold me the Florida house had houses all over the place, he went bankrupt and ended up getting a divorce and moving in with his grandmother. He had a million dollar home with several other nice homes as well, none of them sold, one the bank just tore down and turned into an empty lot, another still sits there an empty shell because he could not finish the interior. He had a really nice yacht, everything...it all came tumbling down. Shortly after I bought for $290k the zillow price eventually wound down to about $170 at its lowest point. Not it is back up to around $230k. I will likely sell in a few years, hopefully close to what I paid for it.

It's might be a good investment until it isn't. So it wipes out all of your rental earnings of the past 5 years.

When you see the prices being that high I don't think it's wise to invest any more. In fact, I'd be divesting instead. Because when it pops I might not be able to sell fast.

but i still have somewhere I can live, versus say bad share investment.

Are you talking about houses or Hashlet Primes from your sig? Better sell that account before the bubble pops! ;)

How much life are you expecting?  By the time you have enough funds for multiple investment rental properties, you are minimum mid-30s or older.


Unless you are buying mobile homes and renting them out to hicks, but as the other guy said you only need one tenant to turn that house into a meth lab or to rip everything out and leave it a condemned structure.  You might say it would NEVER happen to YOU but it happens to people.

Yep, but if we talk about proper money management it's a weak excuse. Sadly, no good asset is able to provide a good yield right now because of low interest rates environment.

Yeah, lol. But my account is not an investment anyway, so nvm :D

Sydney houses have returned 60% over the last 3 years, tax free if you live in it. That's pretty good return.

Quite a few suburbs have done 30~50% in the last year alone

Soon people will move their money out of all other forms of investments.... That will be the precursor to a big crash.

Yes the canadian housing is severely overpriced and its a huge bubble.

What will cause the bubble to burst? and burst badly?

When the interest rates start to rise again which is due to happen sometime in 2015 when the Fed starts to increase interest rates.

Canadians have a huge debt to income ratio and even a small increase in interest rates will hurt most home owners who are underwater on their mortgage.

I have a feeling they will never raise the rate again until the CAD is dead.. they cannot with out sinking the ecom..  A very slow 10-50 year death of the fractional banking system...?

Reminds me of the lost decade of Japan.

No the OZ GOV forces banks to not call in loans, as they did in the 80's. Thus is can never crash. Pretty simple really how does it help the gov to have 30%~50% of people kicked out of their homes.

Pro tip it doesn't.

So negative interest rates and stupid retarded policies to keep the housing market going?

Well everyone has been saying that for a while about the Canadian Housing Market
Remembers when Carney before he took his trip to Britain to be a Central Banker was like STOP Spending damn it we will raise the interest rate
Then the government was like ah were doomed its a bubble.
Others argue that people want to rent to own so its not a bubble but well we will see.

So...Canada, Australia and China are having huge housing bubbles...

what will happen when they pop? Will it be a domino affect?

Will they pop or will everything inflate to justify their cost?

Or will they think up some new scheme to keep it going?  (I am banking on this, most people are full blown retarded and will believe anything they are told.)

Well Contagion in all likelihood
Honestly not sure economists love this 2% inflation so I'm banking on them trying to put a TON of Money in again called QE to keep the economy floating until the next collapse.
(While I hold tangible goods or Bitcoin since whatever ones survives the **** fest will still convert to money at a more favorable exchange rate ^^)

They have been calling for a Canadian housing collapse for a long long time. I drive around Vancouver all day and I can assure you there is no slow down on construction. As long as rich Chinese are concerned about the safety of their wealth within China they are going to look to Canada, AUS, California housing as a safe haven. They are even buying up farm land in Saskatchewan because it gives a decent return and keeps their $$$ away from possible confiscation.

Construction only employs like 7% of the workforce and these jobs aren't even particularly well paid to begin with.  Apprentices are making under $20 and ticketed tradesmen under $35 a hour.  Then the work is very seasonal so there is no such thing as 365 days of pay.  Benefits and pensions?  What are these strange alien things you speak of?

I find most ticketed tradesmen I know don't even work in construction or even utilize their skillsets.  You might have a carpentry or an electrician ticket but if you work at the warehouse or docks and forklift shit all day at some union job then you're technically an over-educated warehouse / dock worker.

Problem is these apartments and condo can't even get 5% yield before maintenance cost and other wear down cost.

Hummz seems I should of bought and sold LOL.

Current opinions?

You must live on the west coast,this real estate market is going to blow and people are going to be committing suicide left and right.
I know guys that have never worked a day in their lives that just flip houses and have made decent coin but they also overextend themselves and reinvest due to the Asian influence on our prices.
When the bubble does burst it will effect me more in a work related sense as the new construction permits will flow to a trickle.
Jobs will be put on hold as companies that also speculated go under. Its going to be nasty if the day comes because a lot of people have taken out loans against their current value of the house or they are paying max just to get into the market. If the value goes up or down to fast people can catch heat.

I do not see people flooding to bitcoin when that happens though. More likely it will be to late for a bunch of people.
You watch t.v and the news will parade real estate agents through telling you now is the time to buy,have they ever not said that!

Every housing market has its own different characteristics. The death of the UK's bubble has been predicted for several years and seems to shrug it off completely. Massive immigration is definitely a factor there and pathetic amounts of house building. I really wonder what it'll take to tip it over the edge into a crash.

This is true but the Vancouver(Canada) market is different because it is being used as a place to get money out of China. It may be happening all around the world but Vancouver has less room and is proximity wise closer to China. It has gotten so bad that I receive mail in Chinese asking me to sell my house on a weekly basis. There are empty houses from foreign investors that are turning into tear downs in the most expensive areas.
UK is different due to the different areas you take in for investing.
The bubble has been pushed back due to the Asian investors here and that is the reason it has not surfaced,think the U.K is dealing with different dynamics.
Like more broader collective of foreign investors.

What is it about Canada that attracts the Chinese so much?

We have very loose laws about foreign investment and our current Provincial government is turning a blind eye. Think a lot of people in China where worried about
a crack down and wanted to get their money out lately as well. We have mountains that limit how far you can develop the area and the downtown core is pretty close to a island and also very limited in space.
Also its proximity to China. Its become like owning a gucci purse,they all know about Vancouver and its status to own here.

I know Australia cracked down recently but our government is scared to do so,due to how many people are profiting off this crazy push upwards.

It's an english speaking country, and is/was very easy to immigrate to. A lot of people have family who are now canadian citizens.

How fast and far do you think the TO area will fall if at all?

It seems this game could go on for decades :S..

Yeah, i want to know, too!

What's the connection between Canada and China?

It is a particular connection because China and Canada begin both with the "C". This is an important thing. Another important thing which connect Canada with China is that both has at least an "a" within. It is not important the overall amount of "a" in both names but that it is at least one of those in every each of these. Then are even not important thing like Canada is a very good place to live because is one of the most qualitative places in the world regarding the quality of life make there and Chinese people are to smart and want always the best for themselves. So send money there before send themselves and theirs family. But has no importance to be told or write.

I made finally a post for which I am proud to be the author of it.  :o