Real Estate

Vancouver housing bubble?

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Deal Fanatic
May 1, 2012
9259 posts
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Markham
Mark77 wrote: Toronto RE took a decade to recover from and return to the 1989-1990 highs. That's a lot more than just a 'couple years'. In the meantime, the stock market tripled and interest rates fell substantially.

Someone who took their 25% housing down-payment in 1990, and, invested it in stocks (ie: the TSE index, TIPs, the predecessor to XIU), a decade later, basically had almost enough to buy the house outright. While the mortgaged homeowner basically made a decade worth of payments and only had the paid-in equity to show for it.

edit: similar deal in Vancouver, slightly different timeframes.
Thats all you got? Why don't you pull up some facts about your claims of steady housing price reductions. We're all still waiting on that one. Last I checked, those who bought in the 70s are filthy rich today... if they held on.

edit: also the fact that in hindsight everyone sounds smarter.. we're looking at an overall picture... not a blip in timeline that you keep quoting.

edit #2: I think I am being sucked back into Mark77's well of opinionated gravity. It's a realm of no facts and pure conjecture.
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Jul 16, 2003
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Toronto
Im surprised to see that so many people still try to reason with Chris. He lives in an obscure world with imaginary rules that he bends as needed. The more people he can get to argue with him, the better he feels. You have better chances arguing with a door knob.
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Jun 9, 2003
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techcrium wrote: So your networth is up 35% YoY investing mostly in XIU?

XIU is up a max of 10% YoY.

If we go back 4 years, XIU is down from its high of high of $20.xx

Unless we are talking about magical money or something...
Probably leverage, not magical money.
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Feb 15, 2008
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Calgary
licenced wrote: Meanwhile, the person who invested in stocks had to pay rent in addition to the taxes on the 300%.
That's right, but interest had to be paid on the 75% of the money borrowed. At double-digit rates of interest for a good chunk of the 1990s. And maintenance expenditure had to be undertaken as well. Its pretty hard to deny, when looking at the numbers, that the stock owners did dramatically better than the leveraged home owners. I suggest we don't waste a lot of time arguing whether they did 200% better, 201% better, 300%, 305% better, etc.
Math check - 25% down on a $250,000 is $62,500, $187,500 when tripled.
Add in dividends as well, which roughly means a quadrupling. Of course, a house provides dividend (ie: the ability to live in it), but the leveraged houseowner had to pay a mortgage to rent the money to own it. While the renter/investor had to pay rent similar to that of a mortgage and still got to live in it.
Even if you don't account for taxes on the gain and rent how does one "basically have enough to buy the house outright" when a decade later the difference in average price (GTA) between 1990 and 1999 was $27,000?
Re-invested dividends effectively made the total return of the stock market roughly a quadruple. And almost any amount of foreign diversification improved such over the base case return of the TSE when translated back into Canadian dollars.
TodayHello wrote: ...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
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Feb 15, 2008
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Anikiri wrote: Thats all you got? Why don't you pull up some facts about your claims of steady housing price reductions. We're all still waiting on that one. Last I checked, those who bought in the 70s are filthy rich today... if they held on.
Same with people who bought stocks or bonds or practically any asset other than gold at the peak, in the 70s. Your point?

edit #2: I think I am being sucked back into Mark77's well of opinionated gravity. It's a realm of no facts and pure conjecture.
Actually its a realm of all facts, no conjecture.
TodayHello wrote: ...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
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Feb 15, 2008
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laptop-tech wrote: He lives in an obscure world with imaginary rules that he bends as needed. The more people he can get to argue with him, the better he feels. You have better chances arguing with a door knob.
Sounds a lot like various participants in this thread who make claims such as Toronto RE only went down for a couple years (it took a full decade to recover). Or those who can't accept the fact that CMHC insurance is for loans that are considered so crappy and so poor in credit quality that banks won't accept them without it.

Luckily the facts disprove pretty much everything they claim. Just as the facts are now showing that RE prices are going down in most of Canada as credit availability and expansion tightens.
TodayHello wrote: ...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
Deal Fanatic
May 1, 2012
9259 posts
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Markham
Mark77 wrote: Sounds a lot like various participants in this thread who make claims such as Toronto RE only went down for a couple years (it took a full decade to recover). Or those who can't accept the fact that CMHC insurance is for loans that are considered so crappy and so poor in credit quality that banks won't accept them without it.

Luckily the facts disprove pretty much everything they claim. Just as the facts are now showing that RE prices are going down in most of Canada as credit availability and expansion tightens.
I am going on a limb here, but the last person I would want to have financial advice from is a chronically unemployed. I mean... would you take insurance advice from a homeless guy?
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Feb 15, 2008
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Anikiri wrote: I am going on a limb here,
Yes you are on a limb. Get back on the tree. BTW, discussing RE pricing is not rendering 'financial advice'. Certainly there are some logical consequences flowing from a realization that houses are severely over-valued, but that's, as always, left to the reader to make the decision making process. If someone asks me if its rational to hold a house, at a long term peak in valuations, that has no earnings when you calculate the numbers as you would under GAAP for a stock -- I think its pretty obvious what the 'advice' might be.
TodayHello wrote: ...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
Deal Fanatic
Jul 3, 2011
5733 posts
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Thornhill
Mark77 wrote: That's right, but interest had to be paid on the 75% of the money borrowed....


Add in dividends as well, which roughly means a quadrupling...
Oh so now you’re obfuscating just so you can muddy the water that somehow your 300% which is still considerably less than the 1999 value to buy the 1990 house equates to “basically have enough to buy the house outright?”

What the owner paid in mortgage interest has zero relevance to the investor who didn’t buy previously but who 10 years later “basically have enough to buy the house outright”

Okay so let’s quadruple then since par for the course, your rebuttal is to always move the goal post.

$62,500 X 4 = $250,000

You needed $223,000 to buy that house, is the tax on your gain of $187,500 only 8.56%

Would you like to try for quintuple?

You math here is almost as bad as claiming a 35% yoy increase in your net worth when you’ve consistently said that XIU is 30% of your portfolio which, if techrium is correct in that it gained only 10% means your remaining 70% gained 47.5%.

It would be appreciated if you just present honest arguments rather than dance all over the place.
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May 17, 2013
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licenced wrote: Oh so now you’re obfuscating just so you can muddy the water that somehow your 300% which is still considerably less than the 1999 value to buy the 1990 house equates to “basically have enough to buy the house outright?”

What the owner paid in mortgage interest has zero relevance to the investor who didn’t buy previously but who 10 years later “basically have enough to buy the house outright”

Okay so let’s quadruple then since par for the course, your rebuttal is to always move the goal post.

$62,500 X 4 = $250,000

You needed $223,000 to buy that house, is the tax on your gain of $187,500 only 8.56%

Would you like to try for quintuple?

You math here is almost as bad as claiming a 35% yoy increase in your net worth when you’ve consistently said that XIU is 30% of your portfolio which, if techrium is correct in that it gained only 10% means your remaining 70% gained 47.5%.

It would be appreciated if you just present honest arguments rather than dance all over the place.
Great points.
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May 1, 2012
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Markham
licenced wrote: Oh so now you’re obfuscating just so you can muddy the water that somehow your 300% which is still considerably less than the 1999 value to buy the 1990 house equates to “basically have enough to buy the house outright?”

What the owner paid in mortgage interest has zero relevance to the investor who didn’t buy previously but who 10 years later “basically have enough to buy the house outright”

Okay so let’s quadruple then since par for the course, your rebuttal is to always move the goal post.

$62,500 X 4 = $250,000

You needed $223,000 to buy that house, is the tax on your gain of $187,500 only 8.56%

Would you like to try for quintuple?

You math here is almost as bad as claiming a 35% yoy increase in your net worth when you’ve consistently said that XIU is 30% of your portfolio which, if techrium is correct in that it gained only 10% means your remaining 70% gained 47.5%.

It would be appreciated if you just present honest arguments rather than dance all over the place.
I've said it before, and I'll say it again. His portfolio is as real as a talking rainbow coloured unicorn.
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Feb 15, 2008
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licenced wrote: Okay so let’s quadruple then since par for the course, your rebuttal is to always move the goal post.
Hardly, but certainly if you could see that there is a world beyond RE, you'd understand that dividends are part of the return on stocks.
$62,500 X 4 = $250,000
You needed $223,000 to buy that house, is the tax on your gain of $187,500 only 8.56%
Would you like to try for quintuple?
Are you the kind of person who demands every calculation of everything be done to 5 decimal points? I made my point, houses were stagnant for a decade. The stock market moved forward quite dramatically. The stock market and the housing market in Canada display a pattern of cyclicality with respect to each other.

So what are you arguing? That cyclicality has been repealed? That stocks will perpetually suck while housing is going straight to the moon? I'm not even sure half the time what you're saying because all I hear is criticism, most of which is not based in fact, of what I say.


It would be appreciated if you just present honest arguments rather than dance all over the place.

There's nothing dishonest about the facts that I state. You may have problems understanding them, which you are certainly free to ask questions about if relevant, but to go on at length because, heaven forbid, maybe there's only enough money in a hypothetical investment account to buy 95% of a house instead of 100%, after only investing 25% a decade earlier... I just don't understand such a response to a more general and broad statement of the circumstances at the time.
TodayHello wrote: ...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
Jr. Member
Oct 17, 2007
130 posts
26 upvotes
Let's not forget the past...

Famous Quotes From The Great Depression:
"There will be no interruption of our permanent prosperity." - Myron E. Forbes, President, Pierce Arrow Motor Car Co., January 12, 1928
"Stock prices have reached what looks like a permanently high plateau. I do not feel there will be soon if ever a 50 or 60 point break from present levels, such as (bears) have predicted. I expect to see the stock market a good deal higher within a few months." - Irving Fisher, Ph.D. in economics, Oct. 17, 1929
"This crash is not going to have much effect on business." - Arthur Reynolds, Chairman of Continental Illinois Bank of Chicago, October 24, 1929
"This is the time to buy stocks. This is the time to recall the words of the late J. P. Morgan... that any man who is bearish on America will go broke. Within a few days there is likely to be a bear panic rather than a bull panic. Many of the low prices as a result of this hysterical selling are not likely to be reached again in many years." - R. W. McNeel, market analyst, as quoted in the New York Herald Tribune, October 30, 1929

CoS
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Feb 15, 2013
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cstca wrote: Let's not forget the past...

Famous Quotes From The Great Depression:
"There will be no interruption of our permanent prosperity." - Myron E. Forbes, President, Pierce Arrow Motor Car Co., January 12, 1928
"Stock prices have reached what looks like a permanently high plateau. I do not feel there will be soon if ever a 50 or 60 point break from present levels, such as (bears) have predicted. I expect to see the stock market a good deal higher within a few months." - Irving Fisher, Ph.D. in economics, Oct. 17, 1929
"This crash is not going to have much effect on business." - Arthur Reynolds, Chairman of Continental Illinois Bank of Chicago, October 24, 1929
"This is the time to buy stocks. This is the time to recall the words of the late J. P. Morgan... that any man who is bearish on America will go broke. Within a few days there is likely to be a bear panic rather than a bull panic. Many of the low prices as a result of this hysterical selling are not likely to be reached again in many years." - R. W. McNeel, market analyst, as quoted in the New York Herald Tribune, October 30, 1929

CoS
Let's not forget the present...

"Prices are still going up" - The market

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