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Thread: Future of Canadian real estate

  1. #21
    Senior Member sags's Avatar
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    Maybe not.

    100 years ago in 1917 :

    Federal spending: $1.95 billion
    Consumer Price Index: 12.8
    Unemployment: 4.6%
    Cost of a first-class stamp: $0.02
    Average wage: $720


    Average cost :

    loaf of bread: $0.09
    house: $6,313
    car: $360


    Inflation would simultaneously make the home more valuable and easier to pay for as the years roll on by.

    Someone planted a tree a long time ago so I can sit in the shade.

  2. #22
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    Quote Originally Posted by Just a Guy View Post
    Then again, the banks are already landlords for most people.
    With the local property taxing authority constituting the landlord for the rest of us.

  3. #23
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    Falling housing prices will continue nationwide, especially in Toronto/Vancouver. Toronto prices only appear to be rising because low-end entry-level activity has disappeared and the mix has moved to the higher end. The peak of the Canadian market was in 2013, including Vancouver/Toronto. Calgary was actually a bit earlier, and Edmonton never even returned back to 2007 prices. Individual identical properties do not sell for more practically anywhere in Canada than they did in 2013.

    Risk premia is rising on mortgages considerably as creditworthiness and prices are stagnating/falling. This is great for the banks, which will pick up even more spread as the BoC drops rates again in response to consumer-demand-led deflation (negative CPI). The 1990s may very well repeat themselves, with the banks putting in 300-500% returns, while housing was, decade over decade, at best, flat.

    Long-term bottom will be somewhere between 1-2X average income. Which means that the current crop of young people are going to be making 20-30 years of payments on their hyper-inflated houses and not accumulate any equity. The combination of falling prices and rising interest rates.
    Last edited by mark0f0; 2017-02-17 at 07:18 PM.

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  5. #24
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    Quote Originally Posted by sags View Post
    Maybe not.

    100 years ago in 1917 :

    Federal spending: $1.95 billion
    Consumer Price Index: 12.8
    Unemployment: 4.6%
    Cost of a first-class stamp: $0.02
    Average wage: $720


    Average cost :

    loaf of bread: $0.09
    house: $6,313
    car: $360


    Inflation would simultaneously make the home more valuable and easier to pay for as the years roll on by.
    In 1917 most people didn't buy houses, they were farmers. I believe you could still get free land if you developed it out west still. The idea of living in cities hadn't really caught on. People still built their own homes.

    You can't really compare the two times.
    I'm not JustAGuy (without spaces), or Donald, or <insert name here>.

  6. #25
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    Quote Originally Posted by borisdavenport View Post
    I need an expert opinion on the stability of Canadian real estate.
    I'm no expert, but let me speak to my location: My neighbour sold her North Oshawa home yesterday. The price set a new record on her street. It went over asking and sold in 7 days with multiple offers. A group of 20 Asian investors from Toronto arrived on a bus. Yes a bus. Her house was one of many they were looking at that day and buying investment properties for people back in China.

    So yes, I believe my location is and will remain stable for at least another year and likely longer.

    NOOB


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