You needn’t go beyond the title and the first paragraph for an accurate description of the current state of the Canadian housing market. Another “victory” for zero percent interest rates.
“My net worth has obviously gone up a lot, just based on what’s happened this year, because the market’s gone berserk,” said McDonald, a former arborist who started acquiring single-family homes in the small city of Barrie, Ontario, in 2015, and now says he has a net worth “in the millions.”
Reading the article I was struck by the similarities between the 1920’s in the US and the current housing market in Canada. Investors getting overextended betting on a irrational belief that it will only go up. When interest rates start to rise then they will be dumping a large volume of properties causing a crash.
This could have a triggering effect on global markets. It’s a race to see if inflation in the US, undependable power grids in the US and EU, a housing collapse in China, interruptions in global commerce due to the pandemic or some other combination of events triggers a market reset that is severe.
Depression here we come!
“You might not be interested in economics, but economics might be interested in you.”
(stole it)
Everything is bonkers, even if not true. Female Weightlifter Suffers Tragic Testicle Injury Just Weeks Before Tokyo Olympics
https://www.youtube.com/post/UgwIRiit8zEHHhUX4Ft4AaABCQ
The 3/8 OSB sheets were sitting on the shelf in Lowe’s on the weekend behind an $86 per sheet price tag. They must be sitting on some high priced inventory. Think they were around $18 per sheet when we built our garage two years ago.
Life Follows Art dept.
Just One of Those Things – Bryan Ferry
https://www.youtube.com/watch?v=y-YZKzDBknI
The guy in Barrie owns over 100 houses? And he started as an arborist? Trimming trees pays that well?
Easy, cheap credit. Five percent down! Two-percent mortgage! What could possibly go wrong?
He has his name on over 100 mortgages, should be the headline.
When the tide goes out, you will find out that some people were swimming naked.
I’d be more than a trifle nervous, were I his accountant. He’s carrying enough leverage there to move a mountain. When his cash-flow gets impeded, he’s likely got no way to keep up.
That said, if he’s at all smart, he’s got a sole-prop holding company going on as the mortgagee. When he does have to pay the piper, his company folds, but his personal assets will be fine.
Lots of people have no idea what upside down means. If rent income is 200 more than mortgage, they think the more houses owned, the better. But a few 6 month vacancies, a few unexpected repairs etc, and you have to start feeding the beast. Never mind interest rate risk.