It’s Probably Nothing

22 Replies to “It’s Probably Nothing”

1. Wow. Looks like Mann made global warming!

2. Canada’s land development industry is utterly destroyed by insane government regulations.
   All of that giant price rise the graph shows is driven by bureaucracy. All of it. Every penny. And so called conservative governments did nothing but make it worse.
   That’s why I no longer support them and won’t give them a vote or a penny.
   Let it burn.

3. The supposed engine of Canada, Winntario, is generating +60% of her GDP from housing. If that doesn’t scare even the most novice of citizen then watch out. At some point a correction will happen and the fallout for Canada will be extreme. Real economics will reassert itself. I do not invest in Canada anymore. Labelled as a tax cheat after decades of employing many people I have moved south.
   How long will it take to sink in that $1 of Canadian GDP does not come close to equaling $1 of USA GDP. Canada is a price taker and the USA is value added.

4. An interesting chart but its insufficient. What about price/rent ratio? Price as % of income, etc? I still think altogether the numbers would not look good for Canada.

5. Sold my house 1 year ago as I could see this happening. My financial advisor encouraged us to do this as he could see the bubble building. It is scary that even with a large money amount I received at the sale I could not buy back into my old neighbourhood. Bought my first house in 1974 for $22,000 in central Toronto.

6. Hey! This is how Socialists create “affordable housing” … simply crash the economy, and with it … everyone’s assets!!

7. And behold,the 40 cent dollar was born.

8. And the shocking part is that this graph is largely driven by Toronto and Vancouver. House prices in Calgary and Edmonton are not dramatically higher today than they were in 2010.

9. and again McStupid stumbles into the conversation with NO knowledge of that which it quacks about
   FYI McStupid, I was a landlord for much of my life, and quit financing “rentals” when renting rules became statutory in stead of contractual
   You really need to learn to listen rather than honk off like an idiot

10. SECOND THAT. Canada got the uni-party disease just as bad as anywhere else. We got the deep state cancer just as bad as anywhere else. We got corruption in office; possibly worse than anywhere else.
    Why do you think it is a sacrament of the bureaucracy, that there be no death penalty? Our public masters don’t want to be killed by their servants. Same reason disarming citizens is so important. If no one but police or army needs guns, well, there is nothing standing in the way of a boot stamping on a human face, forever is there.

11. Simply put: the re election of Justin as PM will be determined by where the real estate market is in Ontario.

12. This is why, I stopped giving to charity. I read the studies, about how conservatives did charity, and no one else did. And it made me realize; I was not helping, I was enabling. Do the people who create the need for food banks actually support food banks? Do the people who want unreliable power get in their cars to help when the power goes out?
    I remember seeing a story on here, about how Notely’s unreliable power policies were crippling the food banks in Alberts; did that stop Notely? Give he pause in any way? Any policy changes whatsoever? No. When people vote for Venezuela, you have to get out of the way and let them have it; GOOD AND HARD.
    I also started looking into the ties between planned parenthood and every charity on the planet. And I came to the conclusion there was only one tree, and it was poisoned. I will not support infanticide. Red Cross, United Way, Salvation Army, Boy Scouts, Girl Scouts, Heart and Stroke; there is no one without ties to PP. So, no more charitable donations. To anything.

13. Diefenbaker’s charter cemented property rights in Canada; Trudeau ash canned that charter, put one in that specifically excluded private property rights.
    If you do not have the right to not serve whomever you please in your own restaurant, why would you think you have any say in how or who you rent to. When Trudeau said “the state has no place in the bedrooms of the nation”, it was a complete and total lie. Not only did Trudeau engineer a permanent spot for the state in the bedrooms of the nation; he wanted a spot in the garages (electric cars), kitchens, bathrooms, attics, back yards, basements, parlors, bathrooms, …
    And no one, in any of the years since then, has done enything to change that.

14. I see a chart for a highly successful quality and tax free investment (in Canada of course).
    Let’s see. Entered housing market in 1991. It took until around 2003 to see any appreciation after inflation. Now I’m being rewarded. My home is worth for times what it cost it 25 years ago. That means on average it doubled every 12.5 years, or 8% per year, or about 5% real, maybe 4% after maintenance and taxes. This is in Victoria, probably the fastest growing market today, which btw cratered badly in the 80s high casualty economy.
    Meanwhile we paid the mortgage year after year, maintained the place, roof, septic, electrical, renos, deck, yard, etc, and paid the taxes.
    How is this a bad thing? Just because housing prices are “too high” for some. Hint: It’s always been hard to get into the housing market. Try it now with 11 – 20% mortgage rates as my generation saw. Do it how we did it, with family help. Don’t go for a palace with the first purchase.
    Make sure you can carry the place, be conservative in outlook. Go forth and prosper instead of worrying about or waiting for the next crash.
    And ….. seek value in all markets. As the chart shows, it is available to patient investors.

15. This is a really good point, as the Ontario housing market goes so does Trudeaus fortunes
    One major difference between the US bubble and Canadas is that in the US mortgage interest is deductible. That distorts the market and some idiots even think something that is deductible is free.
    Also if you treat your house as a liability and not an asset that should appreciate, you will do just fine.

16. Housing is a great way to increase net worth, but that’s pretty much it. The value is by far the most non-liquid asset anyone owns. HELOC rules have tightened. Property taxes go up with value. Now you sell and then what?
    Of course this different for rental properties.

17. Rental properties are subject to the same economic realities as primary residences. As for selling and buying, the same rules apply to investment assets of quality and value, even in that sky high market. Is real estate was as easy to sell as stocks, imho the realty market would be in a world of hurt.
    But it isn’t, people see value rather than just market value. For instance, people know if your house drops in value due to short term market forces, your plumbing doesn’t suddenly fail, or the furnace doesn’t break down.
    Successful investors understand this, that for every seller there must be a willing buyer. Success depends on which side of that equation you are on.
    Selling can often mean inability to get back into the market. Just ask the people who sold over the last three years because the real estate market was “too high.” Now it’s too high for them to get back in, so they’re stuck in rentals if they don’t have other real estate.

18. I didn’t buy my house as an investment. I bought it because I needed somewhere to live. The only thing an increase in the value of my house does for me is increase my property taxes. Selling it doesn’t increase my net worth unless I don’t need another place to live after I sell the place I’m in. It might be a great investment if I have more than one, but I don’t look at my principal residence as an investment.

19. A rose is still a rose.
    Yes, it’s a lifestyle decision rather than an actual investment, where you are looking for income. Agreed; but with a handsome tax free return to boot.
    And yes, Virginia that is tax free income. It’s a key to financial security, owning your home.
    It gives you equity that you can leverage off for rental income for instance.
    It has actual value, even if you just enjoy it and/or pass it on (or milk it if you wish, again tax free).
    It gives you the chance for a place with no mortgage or rent payment. At the very least. It is also a great estate planning tool.
    My father in law sold his place before his passing and everything came, despite the usual drop of the ball bank move, without delay or probate.
    But, there are lots of other things that are attractive investments for those who wish to check and/or prefer to earn passive income.
    Opportunity abounds, especially with rising interest rates and perhaps cooling stock markets.

20. As a further comment, to reflect on the “sell in the market when its high”. Then it goes higher and it continues.
    So, just another tale of market timing gone bad. Had this talk with one of the kids the other day, and related it to them this way, when they said homes were too expensive.
    Home ownership is always expensive, but often, the best choice to the alternatives. You buy a home, you know what your monthly payment is, Sure when you re-up the mortgage, that amount can vary, but usually by a reasonable amount, depending.
    Sell your house in a market like this, and, well, in Victoria area, you can face a house rental cost of $2500/mo quite easily. Whats the good of selling out and eating up your equity by paying huge rents, instead of your nice fixed, lower payment? I know of 2 couples whose relationships and families busted apart, doing just that, trying to time the market. Its a fools game.
    If/when the market pops, and who knows when that will be, those feeling the most pain will be those overleveraged, and the last ones in the market. The rest of us will just ride the tide. For that reason, even PM Shiny Socks understands that being the PM when interest rates rise quickly is a very bad thing. I doubt he will let that happen, and, as was said previously, welcome to the 40 cent dollar.
    Our governments are doing everything they can to destroy all resource industries, leaving just the housing industry as the only Canadian industry that is thriving. They will do almost anything to preserve it, cuz city dwellers = city voters = Liberals

21. I bought a home in Airdrie in 2005 and still owned a home in Calgary. We, my wife and I, decided not to rent because many renters were wrecking the homes they rented in a horrifying manner and there appeared at the time to be no reasonable recourse.
    After all, you can’t get blood from a stone and renters are often the dregs of society without a pot to piss in.
    We paid extra in insurance to protect an unoccupied home and counted ourselves blessed to be able to do so.
    It was a bargain compared to the cost we might have had to pay for repair vs the money we would have gotten in rent plus the inability to sell it during the repair period.
    I don’t know if there is, but there should be an internet site for landlords to go to where bad renters are listed and landlords should be allowed to refuse such people the right the government gives them to rent homes or at least the renters should have to insure the homes themselves and pay for the repairs until the insurance companies raise the insurance premiums beyond these bad renter’s ability to pay.

22. I invest in real estate by buying shares in REITS. I used to own several that had strip malls and shopping plazas. I never bought Amazon stock, but I looked at the trend in retail and sold them all. I now own two REITs, one owns rental apartments and has done very well for me tripling my capital and similar raises in monthly income and, with an eye one the future I bought shares in another one that owns nursing homes. That being said I also owned shares in two REITs that took a beating when the oil price collapsed. One owned hotels in Fort Mac and the other owned Calgary office space. I sold both of those at a loss.