# What the........?



## sags (May 15, 2010)

Look at these unbelievably crazy increases in house prices. Where is the money coming from ?






Madness 2.0 — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate







www.greaterfool.ca


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## sags (May 15, 2010)

House prices, rents, hockey cards, bobble head dolls, tea figurines, comic books, bitcoins.........the world has gone nuts.

I think we are well beyond a "small correction" coming in the future. A total wipeout of asset values is more likely.


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## TomB16 (Jun 8, 2014)

R-E has always worked this way. R-E inflation happens in steps.

R-E buyers are offended by a price that is a bit above established norms but will rush to buy when the market takes a step up because they fear further increases. At least in my city, prices seem to change once per year and that is in early summer.


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## TomB16 (Jun 8, 2014)

sags said:


> I think we are well beyond a "small correction" coming in the future. A total wipeout of asset values is more likely.


A lot of people think this way. This is a great opportunity to make money when the market over-reacts, as it always does.

There has to be a new steady-state of income versus cost of living or society falls apart. So, I don't know where it will end but I know that it will end, at some point, or we will have to call in Sally Struthers.


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## Beaver101 (Nov 14, 2011)

sags said:


> House prices, rents, hockey cards, bobble head dolls, tea figurines, comic books, bitcoins.........the world has gone nuts.
> 
> I think we are well beyond a "small correction" coming in the future. A total wipeout of asset values is more likely.


 ... unlikely a total wipeout as long as there's an interest but that "small correction" is gonna to hurt like hell, like dropping down to earth.


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## sags (May 15, 2010)

In 20 months going up from $850K to $2.1 million ?

Or up in Kelowna $150K in one month ?

If the gains of only the past few years retrace it will be an epic dump.

I remember in Florida, Las Vegas, Arizona when prices dropped 80%.

Home builders simply walked away from homes at all stages of completion and whole subdivisions were empty and condos left unfinished.

A guy used to drive around posting Youtube videos and it was astonishing how many empty homes there were.

I am thinking the same is going to happen here. Don't know when.......but it is coming.


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## TomB16 (Jun 8, 2014)

I think the difference is between Canada and the US is governmental.

There was a time when it was effortless to get a loan in the US. They were pouring gasoline on their R-E fire with zero regard. Remember NINJA mortgages? (No income, no job, no assets)

Canada is not nearly so ridiculous. Our market will undoubtedly correct, from time to time, but I don't see an 80% collapse here. On the other hand, anything is possible. We are so overrun with immigrants, if there is a change in government and immigration and/or guest workers are significantly reduced, there will be a significant impact.


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## sags (May 15, 2010)

I know a couple who emigrated here from the UK. They bought a home and the granny bought a home.

The have been here 15 years and sold their homes and moved to Spain. I calculate they pocketed about $1.5 million after paying off the mortgage.

They also skipped out on $300K in student and other debt. They bought a big two storey villa in Spain with an inground pool.........nice place.

And Canadian taxpayers will pick up the student debt for them, because they purposely went to Spain because the debtors can't collect from them there.

I wonder how many other people are doing this. Thanks Canada !


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## sags (May 15, 2010)

TomB16 said:


> I think the difference is between Canada and the US is governmental.
> 
> There was a time when it was effortless to get a loan in the US. They were pouring gasoline on their R-E fire with zero regard. Remember NINJA mortgages? (No income, no job, no assets)
> 
> Canada is not nearly so ridiculous. Our market will undoubtedly correct, from time to time, but I don't see an 80% collapse here. On the other hand, anything is possible. We are so overrun with immigrants, if there is a change in government and immigration and/or guest workers are significantly reduced, there will be a significant impact.


Canada real estate is a house of cards though.

Parents borrowing huge sums of money from their own overinflated house values to buy a home at overinflated prices for their kids.

When the banks start to tighten up the credit lines and home prices drop to the point they can't remortgage without putting a lot of cash down.........it is going to get ugly.

It could really get ugly for the lenders or CMHC.


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## TomB16 (Jun 8, 2014)

We have had tremendous success in R-E, over the last 30 years.

The way I succeeded was to ignore the legions of people declaring an imminent market crash and simply buying property where there was a business case. If we thought we could rent it and have some cash flow, we bought.

There are people who have been predicting market collapse for 30 years. They have been wrong every year. I'm sure they will get it right, at some point, but ignoring them allowed me to succeed where co-workers and friends told me buying commercial and residential property was going to bankrupt me. I am now retired. I can't think of any of the nay-sayers who are, although that could be by choice for all I know.


"The world does not belong to the pessimist" - W. Buffett.


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## sags (May 15, 2010)

We bought and sold homes for 40 years and I have never seen anything close to this feeding frenzy.

Not just houses either.......everything is crazy priced.

I mean.....cardboard baseball cards bought for less than a penny each are selling for millions of dollars. They aren't even that rare....like a Da Vinci painting is.

NFTs and crypto are a joke. They are worthless and people are paying huge money for them.

Why.....too many people don't have the patience to work, save and invest. They are desperate to get rich quickly to get what they want.

The wealthy feed the poor the illusion of getting rich, while enriching themselves. They pump and dump everything all the time.

Back in the day, few people believed Ed McMahon sold Alpo dog food on the Johnnie Carson show because he cared about what dogs ate.

Today people buy a metaverse property because Snoop Dog owns one..........I mean seriously people believe that hype.

People don't understand how the rich and famous leverage their money and fame to take the money from suckers.

They will learn the hard way.


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## Beaver101 (Nov 14, 2011)

^ The easy-come, easy-go phenomenon ...


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## MrBlackhill (Jun 10, 2020)

sags said:


> Why.....too many people don't have the patience to work, save and invest. They are desperate to get rich quickly to get what they want.


I believe this has been created by a few social issues.

First, gender equality. Aiming for gender equality is good. Women want to work and have a career. But now 70% of households are dual earners, whereas 40 years ago only 30% of households were dual earners. Which means... households have fewer time. And after some time they want to get back that time, so they want to get rich in order to retire early.

Second, social media. The ultimate social manipulation algorithm and time waster. Marketing the dream life. Kids are on social media at least 3h per day, constantly exposed to this marketing, this dream. They are exposed more than ever in history. Obviously, they end up with the desire to achieve that dream life as soon as possible and get those toys. Which requires to get rich. In this era of information and social media, they are also more exposed then ever to the success stories, the lottery winners and their lives, all the opportunities that they've missed creating FOMO when they see that they'd be already rich if they'd been into crypto only 5 years ago, and so on.

Third, people need more money to live. Most people cannot live without a smart phone. No one can live without internet. Stuff is expensive and made so it won't last. Most households cannot even afford to be single earners.

So with households working more, having more expenses, having fewer time for themselves while dreaming more than ever about their dream life, shiny toys and missed opportunities, people end up wanting both more money and more time (retiring early). Basically, more money, and faster.


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## james4beach (Nov 15, 2012)

Look at how well Canadian REITs (see XRE) are holding up in the current environment!

I'm actually amazed that XRE is so strong. Maybe it's true what they say... Canadian real estate can never fall, won't ever decline.


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## scorpion_ca (Nov 3, 2014)

james4beach said:


> Look at how well Canadian REITs (see XRE) are holding up in the current environment!
> 
> I'm actually amazed that XRE is so strong. Maybe it's true what they say... Canadian real estate can never fall, won't ever decline.


I think REIT would drop in the coming months. Interest rates need to go up a little bit more.

If I remember correctly, this happened in Mar, 2020....

1st Emerging markets dropped 
2nd Developed markets dropped ex North American 
3rd North American markets dropped 
4th REITs dropped 

I have sold a couple of hundreds ZRE this morning at close to all time high price.


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## james4beach (Nov 15, 2012)

scorpion_ca said:


> I think REIT would drop in the coming months. Interest rates need to go up a little bit more.
> 
> If I remember correctly, this happened in Mar, 2020....
> 
> ...


Interesting points, thanks for sharing that. It didn't occur to me that REITs might still drop, perhaps as rates go higher.


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## bigmoneytalks (Oct 3, 2014)

scorpion_ca said:


> I think REIT would drop in the coming months. Interest rates need to go up a little bit more.
> 
> If I remember correctly, this happened in Mar, 2020....
> 
> ...


I too sold... actually I got out of the position entirely for the same reason you mentioned.


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## scorpion_ca (Nov 3, 2014)

james4beach said:


> Interesting points, thanks for sharing that. It didn't occur to me that REITs might still drop, perhaps as rates go higher.


The dividend yield of ZRE is only 3.9%. Why would anyone want to take risk when they would be able to get 2.5% to 3.5% from HISA/GIC in the coming months?


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## m3s (Apr 3, 2010)

sags a few months ago you were saying inflation was transitory. Garth Turner has been blogging the exact same prediction for decades

This comes at no surprise to anyone outside of legacy media. When you flood the economy by printing money out of thin air you devalue it. Most people in the legacy sound bite world assume that everything is going up. Everything is going up because you measure value with a unit that is not fixed.

Colleagues are selling their houses in 24-48hrs over list price. They are ecstatic.. and they immediately spend it all on a bigger mortgage and property tax bill. Companies are buying up RE in the US. Everybody including companies need a place to put their cash that is losing value.

There's a few good crypto projects and many bad ones. Even in a bear market I'm earning very high yields for liquidity and even massive gains on little known seed projects. DeFi is another place to shelter from the central bank that punishes diligent savers. DeFi rewards me for my capital unlike legacy finance

It's called the great reset for a reason. You'll own nothing and you'll love it. Inflation is good for GICs as long as you shop at goodwill.


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## james4beach (Nov 15, 2012)

scorpion_ca said:


> The dividend yield of ZRE is only 3.9%. Why would anyone want to take risk when they would be able to get 2.5% to 3.5% from HISA/GIC in the coming months?


You can even get 3.0% today from a Big Five bank GIC.

While that's a good point, I still think it's more valid to look at the "total return" expectation of ZRE which is probably something like 5% to 6% over the long term. Though if someone thinks we're in a real estate bubble, maybe less.

So I think the comparison is more like, 3% for a no-risk instrument vs 5% in REITs.


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## sags (May 15, 2010)

_Inflation is good for GICs as long as you shop at goodwill._

Yup,.....I shop at Goodwill out of choice, where there is no inflation or sales tax.

Remember.......pride goeth before a fall.


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## m3s (Apr 3, 2010)

sags said:


> Remember.......pride goeth before a fall.


Coming from the ol man who cheers whenever he thinks people are losing money. What kind of pride is that?

You think the solution to our problems is more socialism, unions and more government handouts. What kind of pride is that?

Now we can see what government manipulation does to a free market and what a disaster government overreach leads to on another continent

I tried to help you protect yourself from inflation. Instead you ridicule people who succeed. What kind of pride is that?


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## sags (May 15, 2010)

With age comes wisdom. I don't hold your young age and lack of experience against you.


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## TomB16 (Jun 8, 2014)

sags said:


> Remember.......pride goeth before a fall.


Sags, I agree with your position. We haven't been retired for all that long so this inflation surge is hitting us at the worst time.

However, this is the first significant negative macro economic event in the 13 years. In the time since the GFC, markets have varied between very good and "are you kidding me?". Everyone here has been sailing in high wind over calm water for a lot longer than any bull market in the last century. Our portfolios have all made tremendous gains.

At some point, prices and wages will stabilize and we will see what's what. In the mean time, this is hardly unexpected. Spending has been at comedic levels for years. Soon, we will find out if our puffed up portfolios are sufficient to sustain us in the golden years.

Where is Paul Martin when we need him? Someone should check the basement at 24 Sussex to see of Paul is pinned under a beam there. Apparently, that place is a death trap.


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## sags (May 15, 2010)

As Garth Turner noted on his blog......

_People here allege we have runaway price increases for everything, when the official number is 5.1% and the actual, on-the-street hike is a few points higher. It’s worth remembering inflation was 12.5% in 1981, when the Bank of Canada rate was 17.9% (today it’s 0.5%) and mortgages cost 21% (now 3%). We survived. Maybe because there were no blogs letting people emote all over each other.

It’s worth noting an entire generation of house-buyers, for example, have morphed into adults during a period of negative interest rates (below inflation), home loans costing as little as 1%, price stability and relative calm. Poor Millennials. They’re encountering reality. Not coping well. Modest inflation becomes ‘hyperinflation’. Nobody believes the cost of money can rise even by 1%. A market pullback of 10% means stocks are ‘crashing,’ going to zero. Ukraine equals WW3. We’re all doomed._


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## sags (May 15, 2010)

Gas prices are up. Food prices are up. Inflation is up. It is costing consumers more than they are used to paying.

But there are also some silver linings and things to be positive about.

Due to high oil revenues, the Alberta government announced they balanced their budget and the Federal coffers must be gaining a significant windfall as well.

CPP is fully funded, DB pensions are in significant surplus, and investors have been raking in the cash for their retirement accounts.

Employment is high and the economy is booming. Significant capital investment is being made all over Canada, but most notably in Ontario.

The pandemic spending by the government saved the economy from a meltdown and is now paying economic dividends into the future.

All in all.........Canada is doing okay.


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## m3s (Apr 3, 2010)

Can somebody explain to me the mental gymnastics here

*"The government spending is doing the exact reverse, reducing the national debt. It is not inflationary." Nancy Pelosi Mar 11 2022*

Nancy Pelosi who trades millions in mostly hyped tech stocks (AAPL, TSLA, MSFT, RBLX, NVDA, NFLX, PYPL etc)

Why should I trust her talking about 10-20 years from now when she is even older than boomers


__ https://twitter.com/i/web/status/1502449544797192192


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## sags (May 15, 2010)

Government spending in the right places, such as infrastructure or financial support for consumers creates economic benefits as it flows through the economy.

On the other hand, spending to replace bombs has little economic benefit except for those working in the defense industry.

Every time a bomb or missile is exploded it is like burning money.,and the damage it causes is also burning money to replace it.

It all depends on where the government money is being spent.


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## m3s (Apr 3, 2010)

sags said:


> Government spending in the right places, such as infrastructure or financial support for consumers creates economic benefits as it flows through the economy.
> 
> On the other hand, spending to replace bombs has little economic benefit except for those working in the defense industry.


Yesterday Canada's MND announced robust upgrades coming for NORAD. Won't be cheap. Will likely include the F-35 as well

Where is that money going to come from? Will some boomer just Nancy-Pelosi-Jedi-mind-tick us that more government spending will reduce the national debt? Hand wave "It's not inflationary" Hand wave "You'll own nothing" Hand wave "And you love it"

Maybe Klaus Schwab does own half the government representatives in the western world.


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## prisoner24601 (May 27, 2018)

sags said:


> I am thinking the same is going to happen here. Don't know when.......but it is coming.


For sure there will be some pain in Canada's overheated RE markets but it is still very regional as this survey shows. I think the % of median household income to buy/rent shelter is a pretty good indicator of how the typical Canadian family will be impacted. Look at two examples from the survey - Edmonton and Hamilton. Both cities are similar in terms of household median income of $90K and have ownership rates of around 70%. In Edmonton, affordability has improved over the past 20 years so that today it takes about 25% of household income to buy a place and buying is still cheaper than renting. Hamilton today looks like Edmonton did in 2008. Housing affordability in Hamilton has deteriorated over the last 10 years so it now takes almost 50% of income to buy a place and buying is more expensive than renting.

So what will probably happen is that most RE markets will revert to around 30%-40% of income because this is what most people can spend on shelter and still have some left over for savings and other lifestyle expenses.

For those that choose or must live in the least affordable regions they will continue to be "house poor" until they have a liquidity event (for owners) at some point in the future. These are the areas that will see the biggest shocks.

Overall, I think Canada is doing pretty well by most measures. Some long overdue CB tightening will start to take some pressure off asset prices and low unemployment should hopefully drive wages higher.


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## james4beach (Nov 15, 2012)

prisoner24601 said:


> Overall, I think Canada is doing pretty well by most measures. Some long overdue CB tightening will start to take some pressure off asset prices and low unemployment should hopefully drive wages higher.


I think we'll be OK as long as the Bank of Canada normalizes interest rates. My fear is that they are too scared to raise rates to any significant level.


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## Mortgage u/w (Feb 6, 2014)

As long as the government controls rates and remains conservative on lending policies, a fall in RE is unlikely.

If we take a look at the commercial space (multi-residential housing), the appetite for new acquisition and new build continues to soar. There is a continuous demand for housing. 

While some areas have experienced a spike in housing prices, they eventually normalize and tend to plateau for a longer period than areas who experience a more gradual increase in value. The spike simply means there is a higher demand.

Controlling rates simply helps makes it easier to acquire RE and makes sure its doesn't get out of control. The real driver is demand and supply.


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## TomB16 (Jun 8, 2014)

At one time, I disregarded the idea of a broad ranging R-E crash. Assuming the government would work to ensure the stability of R-E was always a safe bet. At least, until the current government came online.

These days, the government prioritizes affordable R-E for immigrants. I very much do not assume the federal government is scared of a crash.

Our cost of living has gotten really high. Canada is competing with Europe for Muslim immigrants, primarily from India, so we have been working to exit the R-E space for the last several years as the future of R-E is no longer as clear as it was.


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## scorpion_ca (Nov 3, 2014)

Mortgage u/w said:


> The real driver is demand and supply.


I notice that those who works in the RE industry, they always tell that it's a supply and demand issue. The house prices in Calgary has increased significantly in the last couple of months and most of the sold houses are sitting empty. A house was sold for $320k in Nov, 2021 and they did a minor repair and now asking $480k and then dropped to $425k this week. WTH?

The housing condition has deteriorated significantly since Liberal won the election in 2015.


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## nathan79 (Feb 21, 2011)

scorpion_ca said:


> I notice that those who works in the RE industry, they always tell that it's a supply and demand issue.


They make money when homes sell, so they have a vested interest in demand being at heightened levels. They will push the supply and demand argument as far as they can in order to create FOMO. They don't even care whether prices are high or low, as long as homes are selling like hot cakes. It's all about crafting a narrative to keep the sales rolling in. The last thing they want is a crash because that means reduced demand, fewer sales, and less money in their pockets.


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## Dora_WalletInvestor (Aug 17, 2020)

sags said:


> We bought and sold homes for 40 years and I have never seen anything close to this feeding frenzy.
> 
> Not just houses either.......everything is crazy priced.
> 
> ...


I agree with many things you say, though I personally think cryptos can be a good way of making money - but one has to be very smart and careful about it. Trading is all about speculation, and if you are good at it, you can ride the waves. The potential for sudden price surges make it possible to make more money if you start with a smaller capital, though of course, whales already dominate the market. 
That said, among both NFT's and fungible cryptos there are a lot of shady and worthless ones, and it is never wise to blindly follow the hype.


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## Mortgage u/w (Feb 6, 2014)

scorpion_ca said:


> I notice that those who works in the RE industry, they always tell that it's a supply and demand issue. The house prices in Calgary has increased significantly in the last couple of months and most of the sold houses are sitting empty. A house was sold for $320k in Nov, 2021 and they did a minor repair and now asking $480k and then dropped to $425k this week. WTH?
> 
> The housing condition has deteriorated significantly since Liberal won the election in 2015.


You can agree or disagree but those of us who work in the RE industry have extensive knowledge and experience in RE. We have followed the market for many years and have a better understanding than those who simply feed off news articles written by uninformed journalists. "Gen Z will be homeless" makes more headlines than "RE is driven by demand and supply".


You can pin it on the Liberals if you want.....but its much more complicated than just finding a culprit. Calgary has experienced a lag in price appreciation. Calgary pricing is heavily influenced by oil.


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## Mortgage u/w (Feb 6, 2014)

nathan79 said:


> They make money when homes sell, so they have a vested interest in demand being at heightened levels. They will push the supply and demand argument as far as they can in order to create FOMO. They don't even care whether prices are high or low, as long as homes are selling like hot cakes. It's all about crafting a narrative to keep the sales rolling in. The last thing they want is a crash because that means reduced demand, fewer sales, and less money in their pockets.


You can apply your argument to any investment out there. I'm sure you think the same of your stock picks.

Its not 'people in RE' that craft narratives to keep sales rolling. Its people that need a place to live that do it for them.


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## nathan79 (Feb 21, 2011)

Mortgage u/w said:


> You can apply your argument to any investment out there. I'm sure you think the same of your stock picks.
> 
> Its not 'people in RE' that craft narratives to keep sales rolling. Its people that need a place to live that do it for them.


Sure, but I rarely talk about my stock investments. I certainly don't tell people the price will never drop, so they should buy now or get priced out (that kind of talk is surprisingly common in RE discussions).

Stocks are meant to be an investment; a home is meant to be somewhere you live, unless it's a rental -- and in that case it should be cash-flowing. It shouldn't be expected to grow faster than inflation over the long term. There shouldn't be talk of being priced out. All that does is create FOMO and poor decision-making.


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## Mortgage u/w (Feb 6, 2014)

nathan79 said:


> Sure, but I rarely talk about my stock investments. I certainly don't tell people the price will never drop, so they should buy now or get priced out (that kind of talk is surprisingly common in RE discussions).
> 
> Stocks are meant to be an investment; a home is meant to be somewhere you live, unless it's a rental -- and in that case it should be cash-flowing. It shouldn't be expected to grow faster than inflation over the long term. There shouldn't be talk of being priced out. All that does is create FOMO and poor decision-making.


No one should say that RE will never drop. Some may interpret it that way due to being hopeful but I sure never said that.

The reality is that RE does go up in value over time. It may seem that the increase is drastic at times which will cause lots of speculation. This could incite rookie investors to get excited by finding ways to capitalize on that. Unfortunately, those are the ones that make the most noise and end up making poor decisions. 

I guess the lesson is to know who you are getting advice from and make sure you always make informed decisions.


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## sags (May 15, 2010)

I remember during the last recession, in some geographical areas of Ontario like Windsor, Ontario home prices collapsed more than other places.

The banks sent out notices to people renewing that they required some capital payment before they would renew the mortgage.

There were some posts on CMF about it at the time. The banks were doing it on a geographical basis, just as they did in the US.

My sister had a mortgage with a US company who had expanded into Canada and then decided to no longer lend in Canada.

They refused to renew the mortgage. Her son had to mortgage the home and rent it back to her, even though he didn't want to.

It was probably the best investment he ever made. She still lives there and pays the mortgage while the home has risen sharply in value.


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## andrewf (Mar 1, 2010)

Mortgage u/w said:


> As long as the government controls rates and remains conservative on lending policies, a fall in RE is unlikely.


Maybe a banking crisis is unlikely but the real estate market can and will correct, eventually.


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## Mortgage u/w (Feb 6, 2014)

andrewf said:


> Maybe a banking crisis is unlikely but the real estate market can and will correct, eventually.


Anything is possible. 
I could see a potential concern in some areas of Canada but I cannot foresee a broad correction, nationwide.

For some reason, market corrections are viewed negatively. It actually favors investors (seasoned investors) and shouldn't affect home owners unless they are over-leveraged. Those who are overleveraged should be concerned with or without a market correction.


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## james4beach (Nov 15, 2012)

All of the big banks now expect a 50 basis point rate hike next week.

Question for the real estate investors on this board: are you selling your properties now?

As mortgage rates skyrocket like this, fewer and fewer people will be able to afford new mortgages. Maybe it's best to start liquidating your property portfolios now, while buyers can still afford them.


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## Mortgage u/w (Feb 6, 2014)

james4beach said:


> All of the big banks now expect a 50 basis point rate hike next week.
> 
> Question for the real estate investors on this board: are you selling your properties now?
> 
> As mortgage rates skyrocket like this, fewer and fewer people will be able to afford new mortgages. Maybe it's best to start liquidating your property portfolios now, while buyers can still afford them.


As an investor, I will not sell and not phased by interest rates rising.

Why suggest liquidating properties? Do you sell your stock portfolio in a bear market? 

Real estate - people always need a place to stay, regardless how the market performs.


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## james4beach (Nov 15, 2012)

Mortgage u/w said:


> Why suggest liquidating properties?


To preserve your high net worth, was what I was thinking.

Also, as interest rates rise significantly, your rental income (net) looks less impressive. You might be able to make more money in GICs than your rental properties.

Why go to all the trouble of renting out to people if you can make more money in risk-free GICs?



Mortgage u/w said:


> Why suggest liquidating properties? Do you sell your stock portfolio in a bear market?


No I don't, but I'm not leveraged. Many real estate investors and speculators are highly leveraged and a sharp decline in RE could actually wipe out their net worths.

Volatility in stocks cannot wipe me out. But if I invested in stocks with as much leverage as RE investors use, that's another story.


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## Mortgage u/w (Feb 6, 2014)

@james4beach

I understand your concern and all valid points. Those who will exit the market are those who have little experience in RE. They are usually highly leveraged, generate no cash-flow (possibly negative), making their asset a poor investment to start off with. They will most likely sell and create a great buying opportunity for a more seasoned and experienced investor.

In reality, when your costs increase (ie: interest rates, etc.) you will want to maintain your cash flow by increasing your revenue (rent increase). In my opinion, this will still out-perform a GIC as you suggested. Maintaining rents in line with the market also increases your property value (maintaining your net worth).

Fortunately, there is a higher number of large property investment companies than there is individual investors.


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## james4beach (Nov 15, 2012)

Mortgage u/w said:


> I understand your concern and all valid points. Those who will exit the market are those who have little experience in RE. They are usually highly leveraged, generate no cash-flow (possibly negative), making their asset a poor investment to start off with. They will most likely sell and create a great buying opportunity for a more seasoned and experienced investor.


Great points.

As with anything else, managing these portfolios is a very long term game, that takes experience and patience. Same thing with stocks and securities.


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