Topic: Canadian Housing & Bitcoin - page 2. (Read 4251 times)

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...?

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.

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

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

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

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.

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

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

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.

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.

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.

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

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!!!!!

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

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.

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

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

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.  

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

Edit: Oops, did I just Godwin this thread?