Personal Finance

So many real estate bears on CBC.CA...

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Penalty Box
Apr 16, 2012
3565 posts
688 upvotes
Greely

So many real estate bears on CBC.CA...

http://www.cbc.ca/news/business/canada- ... -1.2835066

Those quotes, no joke are one right after the other. So....real estate bear, can you find me the equivalent of a real estate bull? 10 quotes side by side?

Here are the comments in the comments section:
30 years ago, my house cost me 6 times my annual salary. To buy my house today, it would cost my son 15.5 times his salary. We work in the same field. So much for social progress in Canada.
She will crash in about two years. Not crazily like it did in the States, but we will see a noticeable difference. If you want to sell and downsize, I would do it sooner rather than later to avoid losing a ton of cash. Even after it falls, I really hope the boomers don't expect our generation to buy your big fancy houses...it's just not in the cards for us.
..thanks to foreign investment, money laundering etc.
I'm happy that my house is priced nowhere close to the "average" - when the bubble bursts, and that's inevitable, the value of my home will not drop as much as those in TO, VCR, etc. How can anyone afford to buy a single-family dwelling in Toronto I'll never know.
Disgusting. Prices are being overinflated. Out of control foreign investment is pricing Canadians out of owning their own homes. Our politicians are not selling our goods, they are selling us out.
I have an idea.
Take out a mortgage
equal to the value of your house
and live it up.
When the bubble bursts
you have the cash
Bubble, racket or both? Boom-bust scam at work.
In some cities owning a house is a distant dream for young Canadian families.
73 replies
Deal Guru
May 1, 2012
10538 posts
11427 upvotes
Toronto
While there are certainly those who simply view the market as frothy and bubbly, by far the majority of haters (bears) are priced out and angry.

Unfortunately, buying a house isn't a right; it's a privilege.


Meanwhile: Best October since 2009 for Real Estate
http://www.theglobeandmail.com/report-o ... e21610189/
Sr. Member
Feb 11, 2010
502 posts
262 upvotes
Anikiri wrote: by far the majority of haters (bears) are priced out and angry.
You base this on what, exactly?

I tend to think you simply like making these antagonistic statements when the opportunity presents itself. OP rolls out another useless bait thread and you're on it like a fat kid on a smartie with a comment like this. Two peas in pod.
Penalty Box
Apr 16, 2012
3565 posts
688 upvotes
Greely
Anikiri wrote: While there are certainly those who simply view the market as frothy and bubbly, by far the majority of haters (bears) are priced out and angry.

Unfortunately, buying a house isn't a right; it's a privilege.


Meanwhile: Best October since 2009 for Real Estate
http://www.theglobeandmail.com/report-o ... e21610189/

Pretty interesting you have that link because in the quotes:
Welcome to the globalization of Canada...Unfettered foreign investment from Asian markets coupled with over 500,000 TFWs and 300,000 immigrants annually has made Canada the wild west of globalization...Canadians displaced as foreigners move in...Enjoy...
Economists are just guessers. They really have no clue what is going to happen like the crash of '08. They just HOPE there's a soft landing and by stating such they HOPE people will believe them.
Penalty Box
Apr 16, 2012
3565 posts
688 upvotes
Greely
Jor wrote: You base this on what, exactly?

I tend to think you simply like making these antagonistic statements when the opportunity presents itself. OP rolls out another useless bait thread and you're on it like a fat kid on a smartie with a comment like this. Two peas in pod.

Well do you have anything to argue with the facts I presented? Are the quotes not correctly quoted? Is the website a fake CBC website? Is the website run by mortgage agents?
Deal Guru
May 1, 2012
10538 posts
11427 upvotes
Toronto
Jor wrote: You base this on what, exactly?

I tend to think you simply like making these antagonistic statements when the opportunity presents itself. OP rolls out another useless bait thread and you're on it like a fat kid on a smartie with a comment like this. Two peas in pod.
What is a more credible scenario?

Scenario A:
Most couples make 100k+ and have a 20% downpayment for a 550k+ house. But chooses not to buy because they feel the market is over-ripe.

Scenario B:
Most couples do not make 100k+ and do not have 20% downpayment for a 550k+ house. They are angry they cannot buy a house and start making bearish predictions.


Here is Statscan reporting median incomes in Canada based on Provinces/Territories:
Source: http://www.statcan.gc.ca/tables-tableau ... 8a-eng.htm

Here is Statscan reporting on average expenditures in Canada based on Provinces/Territories:
Source: http://www.statcan.gc.ca/tables-tableau ... 0a-eng.htm

According to the Globe and Mail:
Average Age of First Time homeowner: 29
Average Downpayment: 48k
Average House price: 300k
Source: http://www.theglobeandmail.com/globe-in ... e10931739/


I conclude that most couples cannot afford to buy a house @ 550k+ and have a 20% downpayment. Let's be generous and say that only 6/10 RE bears are priced out angry, while 4/10 are just weary/cautious renters.
Deal Fanatic
User avatar
Sep 23, 2009
7084 posts
5213 upvotes
I am Confused by the OP.

Is he proud to be a real estate bull and found bearish thoughts and wants real estate bears to find bullish remarks?

It's a pretty interesting challenge, but it seems that more and more people are jumping on the bear wagon.

Or maybe they are just bitterly priced out of the market. As the prices go higher, more people get priced out and the more people that start to believe it will all crash. Or rather they need it to.
Sr. Member
Feb 11, 2010
502 posts
262 upvotes
techcrium wrote: Well do you have anything to argue with the facts I presented? Are the quotes not correctly quoted? Is the website a fake CBC website? Is the website run by mortgage agents?
I don't dispute your "facts". But what is your point other than to bait others into this "discussion" yet again? One merely needs to look at the threads you've started to see this pattern.
Deal Guru
May 1, 2012
10538 posts
11427 upvotes
Toronto
Jor wrote: I don't dispute your "facts". But what is your point other than to bait others into this "discussion" yet again? One merely needs to look at the threads you've started to see this pattern.
He reeled you in, didn't he? Like a fat kit on a smartie...

Fan fact: Smarties aren't chocolates in the USA.
Deal Addict
Jan 15, 2009
1081 posts
456 upvotes
Just north.
YAY! 7% annual gain in average RE price. If this continues to infinity, we'd be all rich!
Sr. Member
Feb 11, 2010
502 posts
262 upvotes
Anikiri wrote: Scenario B:
Most couples do not make 100k+ and do not have 20% downpayment for a 550k+ house. They are angry they cannot buy a house and start making bearish predictions.
While I appreciate the time you took to explain your position and the reasons for it, I think the issue is with your assumptions in Scenario B. Why does "priced out" automatically mean "angry"? And how is someone without 20% down labelled as "priced out" when most buyers aren't putting anything near 20% down to begin with?
Sr. Member
Feb 11, 2010
502 posts
262 upvotes
Anikiri wrote: He reeled you in, didn't he? Like a fat kit on a smartie...

Fan fact: Smarties aren't chocolates in the USA.
Pointing out the bait =/= taking the bait.
Deal Guru
May 1, 2012
10538 posts
11427 upvotes
Toronto
Jor wrote: Pointing out the bait =/= taking the bait.
I disagree with this. He probably intended to bait people like you.

As for your previous post, I cannot legitimately argue with you with this regard because there are no studies to fortify either of our arguments. However, I think you are pretty ignorant if you think people (in general) aren't envious of those who have more ability, more possibility, and more purchasing power. Heck, I want a Ferrari and I totally deserve one. But I don't have one and I hate everyone who has one.
Deal Guru
May 1, 2012
10538 posts
11427 upvotes
Toronto
renoldman wrote: I am Confused by the OP.

Is he proud to be a real estate bull and found bearish thoughts and wants real estate bears to find bullish remarks?

It's a pretty interesting challenge, but it seems that more and more people are jumping on the bear wagon.

Or maybe they are just bitterly priced out of the market. As the prices go higher, more people get priced out and the more people that start to believe it will all crash. Or rather they need it to.
Thank you. Finally some sense.
Sr. Member
Feb 11, 2010
502 posts
262 upvotes
Anikiri wrote: However, I think you are pretty ignorant if you think people (in general) aren't envious of those who have more ability, more possibility, and more purchasing power. Heck, I want a Ferrari and I totally deserve one. But I don't have one and I hate everyone who has one.
I think you're overstating the envy effect. Sure there are those that think this way but it is a personality trait, seen as a weakness by many, that doesn't belong to the majority of people. How many think this way? I don't know but I'd be shocked if were in any way typical or average. Am I ignorant to believe that? I don't think so, amongst my peers it isn't typical at least.
Deal Guru
May 1, 2012
10538 posts
11427 upvotes
Toronto
Jor wrote: I think you're overstating the envy effect. Sure there are those that think this way but it is a personality trait, seen as a weakness by many, that doesn't belong to the majority of people. How many think this way? I don't know but I'd be shocked if were in any way typical or average. Am I ignorant to believe that? I don't think so, amongst my peers it isn't typical at least.
Neither of us are social psychologists, but I have access to the NCBI-NLM database (as per my profession being not a real estate agent). Envy/Jealousy/Narcissism are ingrained traits for everybody. These are behaviours that solicit personal interactions among people. The degree of which these traits are shown vary according to the person to behold. However, when external stimuli such power, wealth, prestige, and vanity come into play; more and more of such behaviour will surface. There is more than this one study, but I think one is enough to read. I personally find psychology really boring.


Source: http://warhol.wiwi.hu-berlin.de/~hkrasn ... asnova.pdf

In short, yes people feel inadequate if they cannot do something that many others can do. Such as purchasing a house. They become... to a lesser extend jealous, and to a larger extend narcissistic.
Member
Oct 5, 2009
469 posts
40 upvotes
Calgary
Anikiri wrote: According to the Globe and Mail:
Average Age of First Time homeowner: 29
Average Downpayment: 48k
Average House price: 300k
this is bullcrap, average downpayment for first time homebuyers is 7%... Nowhere near $48k on a $300k house.

that's completly ridiculous to think the average DP for first time buyers is over 15%
Deal Addict
Jul 23, 2014
1298 posts
503 upvotes
Toronto, ON
Anikiri wrote: What is a more credible scenario?

Scenario A:
Most couples make 100k+ and have a 20% downpayment for a 550k+ house. But chooses not to buy because they feel the market is over-ripe.

Scenario B:
Most couples do not make 100k+ and do not have 20% downpayment for a 550k+ house. They are angry they cannot buy a house and start making bearish predictions.


Here is Statscan reporting median incomes in Canada based on Provinces/Territories:
Source: http://www.statcan.gc.ca/tables-tableau ... 8a-eng.htm

Here is Statscan reporting on average expenditures in Canada based on Provinces/Territories:
Source: http://www.statcan.gc.ca/tables-tableau ... 0a-eng.htm

According to the Globe and Mail:
Average Age of First Time homeowner: 29
Average Downpayment: 48k
Average House price: 300k
Source: http://www.theglobeandmail.com/globe-in ... e10931739/


I conclude that most couples cannot afford to buy a house @ 550k+ and have a 20% downpayment. Let's be generous and say that only 6/10 RE bears are priced out angry, while 4/10 are just weary/cautious renters.
I am confused by why "young families" think they deserve to live in nice house in an expensive city? Toronto is becoming world class and it's natural that the housing in the city will be expensive (limited houses and lots of demand). "Young families" still have the option to live in the city, either in a condo or rentals, if they MUST own a house, then you can buy one outside of the GTA. Just because "young families" could buy a house 10-20-30 years ago because they were more affordable, shouldn't mean they can now (times change). More people are wanting to live in the city and only those with money will be able to afford it (also doesn't help that most older families that currently own their house are not selling anytime soon).

Do "young families" complain about not being able to buy a house in other world class cities such as New York? Tokyo? London?
Deal Addict
Jun 20, 2011
2095 posts
1083 upvotes
VANCOUVER
RFD6482, It's the age of entitlement. Instant gratification. It has escaped some people that it's not as simple as saying you want it and getting it.
Member
Sep 18, 2012
405 posts
365 upvotes
BRAMPTON
Anikiri wrote: I conclude that most couples cannot afford to buy a house @ 550k+ and have a 20% downpayment. Let's be generous and say that only 6/10 RE bears are priced out angry, while 4/10 are just weary/cautious renters.
I love how you always assume all bears are renters or people that are just angry.

I'm a real estate bear. I'm not a renter, I'm not angry, I own my own home (80% payed off) and have a household income significantly above the national average. When I look at Canadian RE from a rational viewpoint, I see no reason for people to take the bull stance on the market.

- Price-to-rent and price-to-income fundamentals in Canada are way out of wack when you compare to historic norms and other developed nations.
- Canadian household debt to income rations are sky high
- Young couples starting families with average household income are priced out of the market.
- In time baby boomers may start cashing out of their larger homes and buy smaller ones (this may work to stabilize the price of smaller homes but work against larger ones that have seen the most appreciation).
- When the U.S stops QE, there will be more downward pressure on the dollar. Canadian interest rates will rise eventually.
- Growth in RE prices has far exceeded actual economic growth.

When you take the above into consideration I see no reason to be a real estate bull because their are too many factors going against it long term. At best I could see it tracking inflation....and thats only if the Canadian gov't continues to allow foreign money to flood the market. At worst, you could see a significant correction. Either way, I dont see it as a good investment if you buy in at current levels....the risk/reward just doesnt make any sense.

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