# Vancouver Condo market going up up up...



## tavogl (Oct 1, 2014)

Vancouver and it's surrounding areas are going up and up month by month, selling in a week and getting bidding wars. 

A condo I saw 4 months ago sold for 430k and today is up for sale for 600k.

I personally went to a open house for a condo listed at 400k, the average sqft sold in the area/building for similar units sold for $407 per sqft, owners listed it at $428 per sqft and unit got sold in 4 days for $455 per sqft. While in the open house the realtor told mine the owner wouldnt take anything else than $455 per sqft. Markets are insane, people are crazy paying this prices, it-s not even close to the city, almost 1.5 hous away from Vancouver and still people overpaying. This madness has to stop.

Sorry for the rant, it's just very frustrating.


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## Mike-RetireEarly (Feb 28, 2016)

It's still a crazy market in Vancouver. Price per square foot in Vancouver is easily $1000 for an older condo and around $1500 for a new condo. Then you get the insane prices, take a look at this penthouse thats $3365 per square foot: https://www.realtor.ca/Residential/...-HOMER-MEWS-Vancouver-British-Columbia-V6Z3E8


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## TomB19 (Sep 24, 2015)

I thought the real estate market was going to crash this year? For sure, this time. No... they really mean it.

I was being facecious.

I remember in 1979 when a neighbor moved away and told us their house sold for $40K. My parents freaked out. They were horrified. They said they were fortunate to buy when they did because they could never have afforded another house.

When I was a teenager, someone took me under their wing and showed me a bit about investing. I come from a poor family so the whole thing was a revelation to me. About 2 seconds after being shown the effects of inflation, I realized I would rather have a hard asset than cash.

That knowledge has served me well, all these years. We've always put our savings into down payments with the agreement that, "This will be our last house... no, really...".

A good friend of mine talks frequently about buying a rental house. He has been talking about it for as long as I've known him and that is over 20 years. He's waiting for prices to "correct" back to the level he bought his first house at. This man is 58 years old.

Real estate divides people into two categories: People who follow the market and see the gains and people who are living in the past.


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## none (Jan 15, 2013)

That's an overly simplistic way to look at it. The Canadian RE market is very much like the NASDAQ was in the late 90's WAAAAY over valued -- BUT -- it managed to inflate well beyond any rational person's dreams before popping. Timing tops is near impossible. One can only make the best decisions that one has with the information at the time. In hindsight was NOT buying a house 3 years ago the correct decision? Yes, based on the information then it was and therefore I have no real regrets (and converting my RRSP to all USD and putting it into the s&P500 instead was a pretty great move).


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## tavogl (Oct 1, 2014)

I am just putting my cash in Tfsa and tangerine HISA at 2.4% while waiting to buy a condo... should i start investing my money and forget about a condo anytime soon? should i just jump into the market with this crazy prices? all my friends bought at insane prices and their properties have gone up up and up... it seemed crazy when they bought but its making more sene now... difficult decision.


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## TomB19 (Sep 24, 2015)

none said:


> The Canadian RE market is very much like the NASDAQ was in the late 90's WAAAAY over valued -- BUT -- it managed to inflate well beyond any rational person's dreams before popping.


Is it?

... because the market continues to go up and has done so forever. That puts you in the camp that is incorrect and yet your camp continues to throw down statements like this, even though you have been proven wrong every year for my rather long lifetime.

I'm not saying the market isn't pumped up. I'm not saying the market can't go down or even have a major correction. It most certainly can.

The idea I wish to convey is that people such as yourself and the endless YouTube posters who record their visions of real estate doom are doing a disservice to new home buyers by endlessly explaining about impending bubble. It's clear you don't understand the market.

In 1994, when I was looking at my first rental property, the market was about to crash so I held off. In 1995, it was definitely, for sure, we aren't making it up this time, going to crash so I held off. When I finally purchased in 1996, a friend who owned a couple of rental houses told me I would lose my shirt because it isn't possible to make money at these prices. Between then and now, my market has not corrected. It has had a few flat years and a few explosive years but mostly it's been surprisingly stable.

tavogl, It could be a great idea to wait or it could be an expensive mistake. My advice to you is this: Look at it like people trying to figure out what is going to happen in the stock market in the short term. They might buy and the market goes up, proving they are smart. They might buy and the market goes down, proving they are unlucky. The reality is, very few people know what is going to happen on the short term. Certainly, you and I do not know. What you can know is that 20 years from now, your condo will be worth significantly more than it is today regardless of any market corrections or booms.

I'm not suggesting that you stop trying to time the market. I attempt to time the market.

I'm just saying that you're the one who has to put your money on the table and throw the dice. It's a crap shoot. The most important thing is that you are able to live with whatever decision you make.


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## none (Jan 15, 2013)

That's a very Canadian centric view. I lived in the states during their massive market correction. A LOT of people were financially destroyed. Same here in Toronto in the late 80's.

Time will tell. I'm happy enough living effectively rent free b/c of the money my investments spin off. It's kind of like I own a house \.

You're a victim of recent history. For example, in the late 80's early 90's being invested in the stock market was WWAAAAAY more profitable than owning a house. Now cue the conflicting 'house is not an investment but a home' rhetoric...


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## TomB19 (Sep 24, 2015)

Obviously, it's legit for someone to present a point of view that the market is at unsustainable heights. My question to you is this: how many years in a row have you been presenting this theory?

When I arrived in Toronto in 1991, the R-E market was on fire. Your "destroyed" market of the late 1980s was a minor correction that re-gained the losses and more in a couple of years, from my point of view.

If every year since 1980, I were to declare the stock market as being in a bubble position, I would have been correct three times. I could declare myself a market expert. ... but I would not be.


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## Nelley (Aug 14, 2016)

TomB19 said:


> I thought the real estate market was going to crash this year? For sure, this time. No... they really mean it.
> 
> I was being facecious.
> 
> ...


I know your friend-his name is Garth Turner.


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## tavogl (Oct 1, 2014)

[/QUOTE]
tavogl, It could be a great idea to wait or it could be an expensive mistake. My advice to you is this: Look at it like people trying to figure out what is going to happen in the stock market in the short term. They might buy and the market goes up, proving they are smart. They might buy and the market goes down, proving they are unlucky. The reality is, very few people know what is going to happen on the short term. Certainly, you and I do not know. What you can know is that 20 years from now, your condo will be worth significantly more than it is today regardless of any market corrections or booms.

I'm not suggesting that you stop trying to time the market. I attempt to time the market.

I'm just saying that you're the one who has to put your money on the table and throw the dice. It's a crap shoot. The most important thing is that you are able to live with whatever decision you make.[/QUOTE]

Thanks for your reply Tomb,

I see what you are saying, the problem I see is that we would not keep the condo for 20+ years, I can tell you that for sure, 400k which is what we can currently afford doesnt get u much around here. It would be fine if we have one child but it would be too tight for the second. We would have to sell and get something bigger for sure.

I feel we are throwing away our "rent money", even it's only 1100 a month. Our mortgage including all costs would be around 2k a month, almost double, but one day it would be ours. I dont really care how much value it gains over the years, just keep up wih inflation and serve the porpuse it should, be a home. 

Maybe all my friends have been right this whole time, get in huge debt and hope for the best


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## TomB16 (Jun 8, 2014)

It sounds like you see the fulcrum of the decision.

Just be sure you subtract the principal portion of the payment from the cost of owning your own condo, when comparing to rent. Paying back principle gains equity, which is exactly like money in the bank from a net worth perspective.


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## sags (May 15, 2010)

The CREA and BCREA have a different point of view. 

They say Vancouver home prices peaked in Jan 2016 have fallen since. Further declines are predicted.

The number of sales has plummeted over the same time period.

http://globalnews.ca/news/3258122/vancouvers-real-estate-market-will-keep-falling-bcrea/


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## tavogl (Oct 1, 2014)

Sags, sales and plummeted but also did the number of listings. The condo market is heating up.. https://sec.theglobeandmail.com/rea...17-below-average/article34183531/?service=amp


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## TomB16 (Jun 8, 2014)

I followed the R-E crisis in California through the 2008-2009 pretty closely and there may be some value in the lessons learned from that market event.

We've wanted to retire to an ocean view condo for over 10 years. I thought about picking one up and renting it until we are ready so we've viewed a few and I occasionally browse listings in Vancouver, San Francisco, and SoCal.

Back to SoCal... What I find interesting is that, during the height of the crisis, they were literally bull-dozing entire neighbourhoods of brand new homes in the Inland Empire. Banks didn't want to carry the liabilities and pay the taxes so they knocked them down. That's how low their value was estimated, during the worst of it.

... but properties on the coast hardly changed. I had a fantasy that we could find an ocean front place for $1M but nothing even came close. Prices hardly budged.

As best I can tell, the crash was almost exclusively in non-prime properties. The closer to the ocean, the less affected by the crash to the point that ocean front was unaffected.

... so if you're trying to time the market in inner Burnaby, that is likely to be a different game than timing a condo with a nice view of English Bay.


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## indexxx (Oct 31, 2011)

Yup- it's crazy out here. I bought two years ago in Port Moody for 220K; another condo in the same development is on the market right now for 375K. I have 125sqft more square footage but they have a den, although my layout is nicer. Comparable view. If I hadn't jumped when I had the chance, I'd be renting for the rest of my life.

Average rent for a one bedroom in Vancouver is now $1900; for a two bedroom it's $3200. People subdivide their living rooms to make extra bedrooms and rent out to strangers to be able to afford anything- you'll get three people sharing a one bedroom downtown, it's just a ridiculous rat race.


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## tavogl (Oct 1, 2014)

Looking to sell indexxx? lol


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## mark0f0 (Oct 1, 2016)

TomB16 said:


> It sounds like you see the fulcrum of the decision.
> 
> Just be sure you subtract the principal portion of the payment from the cost of owning your own condo, when comparing to rent. Paying back principle gains equity, which is exactly like money in the bank from a net worth perspective.


But make sure you tack on extra for maintenance over and above the condo fee. Condo fees only cover operating expenses for the building and a relatively small reserve fund which is almost never enough to cover building maintenance. Additionally, condos require interior maintenance (ie: carpets, etc.) or else they will be hopelessly outdated -- another expense which needs to be accounted for in addition to condo fees. 

1-2% of the condo unit's present market value is a good starting point for such.


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## My Own Advisor (Sep 24, 2012)

@indexxx,
"Average rent for a one bedroom in Vancouver is now $1900; for a two bedroom it's $3200."

I can't imagine that. $3200??


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## nathan79 (Feb 21, 2011)

I sold my condo outside of Vancouver last year for more than double what I paid for it in 2003. Everyone said I did well and sold at the right time. Now it's back on the market for 140K more than what I sold it for. I'm not sure what they're smoking because similar units are listed for about 100K less. I think some sellers are putting up these absurd prices and just crossing their fingers and hoping that the mania continues.


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## tavogl (Oct 1, 2014)

nathan79 said:


> I sold my condo outside of Vancouver last year for more than double what I paid for it in 2003. Everyone said I did well and sold at the right time. Now it's back on the market for 140K more than what I sold it for. I'm not sure what they're smoking because similar units are listed for about 100K less. I think some sellers are putting up these absurd prices and just crossing their fingers and hoping that the mania continues.


Similar stuff is happening around here, Coquitlam, Port Coquitlam and Port Moody. Condos were selling for 370k 5 months ago 2br 2 wasrhooms 900 sqft. now they are going for 425k MINIMUM, even they list it for 400k they fully expect more than listing.


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## indexxx (Oct 31, 2011)

My Own Advisor said:


> @indexxx,
> "Average rent for a one bedroom in Vancouver is now $1900; for a two bedroom it's $3200."
> 
> I can't imagine that. $3200??


I can't find the exact article that quoted that figure (saw it a couple of weeks ago) but here are some others:
http://blog.padmapper.com/2017/04/13/april-2017-canadian-rent-report/
https://www.rentjungle.com/average-rent-in-vancouver-bc-rent-trends/
http://www.vancourier.com/news/vancouver-still-has-the-highest-average-rent-in-canada-1.11983914


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## indexxx (Oct 31, 2011)

tavogl said:


> Looking to sell indexxx? lol



Sure! $400k sound fair?


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## tavogl (Oct 1, 2014)

indexxx said:


> Sure! $400k sound fair?


Well, if it's less than 10 years old, 2br 2washroom and about 850sqft that's the price they are going for lol.


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## Flash (Nov 25, 2014)

Mike-RetireEarly said:


> It's still a crazy market in Vancouver. Price per square foot in Vancouver is easily $1000 for an older condo and around $1500 for a new condo. Then you get the insane prices, take a look at this penthouse thats $3365 per square foot: https://www.realtor.ca/Residential/...-HOMER-MEWS-Vancouver-British-Columbia-V6Z3E8


Holicrap, that strata fee is significantly more than my mortgage.


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## My Own Advisor (Sep 24, 2012)

"This is particularly true for two-bedroom apartments. The average Vancouver rent for this home type remained unchanged in March at $3,130 — the highest in the country. In second place was Toronto at $2,160, making the average two-bedroom rent 45 per cent higher in Vancouver than in Canada’s largest city. - See more at: http://www.vancourier.com/news/vancouver-still-has-the-highest-average-rent-in-canada-1.11983914#sthash.VDZolLiT.dpuf"

Geez.

I would be sooooo happy to sell my place in Vancouver right now and move somewhere else. Heck, go to Kelowna. 

Vancouver, great city, I get it, but man o' man there are other nice places to live that don't sacrifice your financial future.

Living where I do, in Ottawa, a nice home, that's is certainly not worth what it would be in Vancouver only 20-min. from the downtown...I can't imagine this place worth $2 M+ like it would be in that city. I would sell and be done with work for good and then do things on my own terms.


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## new dog (Jun 21, 2016)

If we get a bit of a recession here and in the US it could start a decent correction as we know. It is what they can do about this recession as in QE and zero interest rates that could really send real estate prices soaring.


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## indexxx (Oct 31, 2011)

new dog said:


> If we get a bit of a recession here and in the US it could start a decent correction as we know. It is what they can do about this recession as in QE and zero interest rates that could really send real estate prices soaring.


I've never thought Vancouver would really be negatively affected. There is too much demand and too much big foreign money on the west coast for the RE market to really be hit.


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## new dog (Jun 21, 2016)

We do have an election tonight in BC and the NDP know how to run us into the ground. If they win they could do damage down the road to the real estate market, with their spend, chase away business and tax policies.


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## new dog (Jun 21, 2016)

So far the Liberals are leading in BC which is good for BC real estate. If this continues then other forces will have to come in to turn the market down.


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## indexxx (Oct 31, 2011)

NDP now in the lead at 9:15


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## new dog (Jun 21, 2016)

This will go down in Canadian history, we now have a Liberal minority in BC with the Green party holding the hammer. The Greens were vocal about affordable housing and rising real estate costs so we will have to see what effect this will have on BC real estate.

http://www.metronews.ca/news/vancou...-estate-speculation-aggressive-tax-hikes.html


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## KaoruChiwa (May 21, 2017)

new dog said:


> This will go down in Canadian history, we now have a Liberal minority in BC with the Green party holding the hammer. The Greens were vocal about affordable housing and rising real estate costs so we will have to see what effect this will have on BC real estate.
> 
> http://www.metronews.ca/news/vancou...-estate-speculation-aggressive-tax-hikes.html


hard to say.. holding your breath for the recount!


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## indexxx (Oct 31, 2011)

Just bumping this thread to mention that average rents in Vancouver for a one bedroom is now well over $2,000. Crazy.

https://www.rentjungle.com/average-rent-in-vancouver-bc-rent-trends/
https://www.rentboard.ca/rentals/rental_rates.aspx?locid=1040


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## fatcat (Nov 11, 2009)

in victoria, businesses are actually closing because they can't get workers and often they can't get workers because the workers can't get housing

they can't house the workers that are needed to build more housing


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## tavogl (Oct 1, 2014)

Not only condo rents are going up but commercial! a friend of mine rents a 200sqft space for his shawarma/donair fast food restaurant, he pays 8k a month! it's a great location but 8k a month for 200sqft!! you can barely move inside! No wonder all restaurants are more expensive here in Vancouver than anywhere else in Canada, rent prices are insane compared to the rest of Canada.


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## milhouse (Nov 16, 2016)

Pretty anecdotal but during our walks around downtown Vancouver and False Creek we're constantly seeing help wanted signs in the windows of restaurants. 
It sure seems there are jobs to be had. But whether they pay a wage to support living in Vancouver and whether people can hack working in the restaurant industry is another matter.


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## fatcat (Nov 11, 2009)

help wanted signs carpet victoria but nobody can find anything to rent let alone afford it on a typical low skilled job wages


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## indexxx (Oct 31, 2011)

I was in the restaurant industry for a long time out here, the last several years as a GM. Finding staff is the hardest challenge. If you're a cook, you can work as much as you want; almost nobody can hire anyone for less than $16-18/hr plus tips and meals. I know of a situation where someone was opening a new restaurant- he stuck his head into a kitchen at another restaurant and said he'd give two dollars an hour more plus a $500 bonus for anyone who left to come work for him. Just poached more than half the staff.

Renting is so bad here that people will subdivide a one bedroom apartment into three makeshift sleeping areas just to stay afloat. You have to go way out to the suburbs to find a crappy basement suite in someone's house for less than $1000. If I hadn't bought in Port Moody a few years ago, I wouldn't be here either.


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## Lost in Space 2 (Jun 28, 2016)

> help wanted signs carpet victoria but nobody can find anything to rent let alone afford it on a typical low skilled job wages


Was article about killer commmutes in SanFranscio, one lady well paid civil servant had to move (article doesn't explain why she didn't buy) due to the high rent. She now has to get up at 2am and leave the house at 3am to get to work.



> ... because the market continues to go up and has done so forever. That puts you in the camp that is incorrect and yet your camp continues to throw down statements like this, even though you have been proven wrong every year for my rather long lifetime.
> In 1994, when I was looking at my first rental property, the market was about to crash so I held off
> What you can know is that 20 years from now, your condo will be worth significantly more than it is today regardless of any market corrections or booms.


That is exactly what Rob Dix (UK housing author) says. No matter what happens in the short term, in 25 years your house will be worth much more. I’m writing a book on investing in German real estate and it’s the same situation here, especially in Berlin. It’s gone from cheap and chic to extensive and chic. A very strange experience for Germans
I’m actually devoting a chapter to this very subject. For Canadians I’m reminded of one couple who bought at the peak of the last bubble (late 80s) and suffered through years of negative equity. They got featured on greaterfool as they sold their place for 2 million plus and the buyer walked.

The point here is as TomB19 said, waiting for a crash is a fools game. The problem is, as I talk about, the property cycle moves in very very long cycles. 18-25 years. Generally speaking I tell people to bite the bullet and buy. You’ll be broke till wages and inflation work their magic. Only issue I can see is I’m not sure I’d buy a condo, not just the fees but the lack of a reserve means you could get stuck with a massive special assessment. Buying a house is always better


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## indexxx (Oct 31, 2011)

Lost in Space 2 said:


> Was article about killer commmutes in SanFranscio, one lady well paid civil servant had to move (article doesn't explain why she didn't buy) due to the high rent. She now has to get up at 2am and leave the house at 3am to get to work.
> 
> 
> 
> ...


Totally agree on the investment value of real estate. Can you beat it in the stock market? Sure, it's possible. Will the stock market be in a massive tailspin for a few years when you want to retire and need those funds? Nobody knows but of course it could happen. Pretty sure any condo or house in areas like Vancouver will be recession proof; particularly after 20 years of equity growth in the property at even half the current rate you'll be very far ahead.


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## nathan79 (Feb 21, 2011)

Vancouver most unaffordable housing market in North America

http://theprovince.com/news/local-n...rica/wcm/97ceca5c-a318-4056-bb0c-c54e30aa73fc



> A median multiple of 5.1, which means a home costs about five times the average annual household income, or more is considered “severely unaffordable.”





> Vancouver’s median family income is $63,944, and the median home sale price is just over $1.1 million. That produces a median multiple of about 17.3.


On a side note, the NDP campaigned on addressing housing affordability, but now that they're in power it seems they don't want to upset the apple cart. No surprise there since no party wants to be responsible for wiping out people's equity.


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## fatcat (Nov 11, 2009)

nathan79 said:


> Vancouver most unaffordable housing market in North America
> 
> http://theprovince.com/news/local-n...rica/wcm/97ceca5c-a318-4056-bb0c-c54e30aa73fc
> 
> ...


100,000 affordable housing units in 10 years is what they said ... sure


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## nathan79 (Feb 21, 2011)

fatcat said:


> 100,000 affordable housing units in 10 years is what they said ... sure


Even if that were possible, it would still be far less than needed. Metro Vancouver's regional growth strategy is projecting a 40% increase in population (an additional 1 million people) by 2041. That's 400,000 after 10 years, so the 100,000 units would accomodate only 25% of that growth.


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## Pluto (Sep 12, 2013)

^
presumably each housing unit would accomodate more than one person, so 100,000 units could do it. 

In the meantime, GVA RE is showing some weakness as apparently some detached properties selling below asking and below last years assessment. tighter lending rules coming in January, and probably interest rate increases are headwinds. Eventually there will be a recession. All that seems to add up to a multi year consolodation with no new high prices for some time. 
Even so, the Vancouver area has been an extremely resiliant area for RE prices. All is not lost, except maybe those who bought at the top with tons of unmanageable leverage.


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## Pluto (Sep 12, 2013)

So I did a little experiment for fun. 
1. In 1992 the average detached house in Van was about 325000. 
2. In 1992 10,000 invested in RY with dividends invested comes to $368,117. A 36.8 fold increase. 
3. 36.8 x's 325000 = 11.9 million, so clearly conservative stocks can beat house prices. 
4. But usually first time buyers don't have the cash, but only a downpayment. So say 20% downpayment on 325000 = 65,000 Suppose they decided to rent and invest the 65000, what would the result be? 65000 x's 36.8 = 2.39 million. Gee. That's more than the average detached in 2016 @ about 1.8 million. Minus cap gains on the stocks and maybe its about even. 

It seems to be possible to gain on house prices by investing downpayment money in conservative stocks.


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## tdiddy (Jan 7, 2015)

Pluto said:


> So I did a little experiment for fun.
> 1. In 1992 the average detached house in Van was about 325000.
> 2. In 1992 10,000 invested in RY with dividends invested comes to $368,117. A 36.8 fold increase.
> 3. 36.8 x's 325000 = 11.9 million, so clearly conservative stocks can beat house prices.
> ...


Umm may want to check that math. Are you saying RY yielded about 30% total return per year over 25 years??


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## nobleea (Oct 11, 2013)

Not 30%. It's about 15%, which sounds correct to me.


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## tdiddy (Jan 7, 2015)

sorry tried to edit but site is lagging for me

My mistake, apologies, it is about 14.8% total return which does seem correct. Astonishing how well bank stocks did long-term.


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## james4beach (Nov 15, 2012)

tdiddy said:


> My mistake, apologies, it is about 14.8% total return which does seem correct. Astonishing how well bank stocks did long-term.


In Canada, yes the bank stocks did well (we also haven't had a real estate bear market). But in countries that had weak real estate, bank stocks did poorly.

RBS (Royal Bank of Scotland) -17% annual return over 10 years
Citigroup -5% annual return over 15 years
countless examples, maybe more useful:
*Morningstar Global Banks benchmark is 0.03% annual return over 15 years*

The Canadian banks are very much a global outlier. We just simply haven't had a real estate slow down.

My position is that you have to be bullish on real estate to be bullish on Canadian bank stocks. If our real estate had a significant slow down in the 2007-2009 time frame, IMO these banks would have collapsed just as their American & European peers did.


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