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Discussion Starter #421 (Edited)
This is great, thanks for the explanation! I might throw $15k or so into gold for now. "closed end fund" was certainly what came to mind when you were describing MNT... I might go with IAU.

I can totally see the appeal of holding some physical (we wants the precious!) but the stress of it being stolen would probably get to me, haha.
 

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Discussion Starter #423
May Update

Equity
: $805,000 (+10,000 m/m, +122,000 y/y)

This market rally is incredible. I've been trimming stocks on the way up because it feels so unsustainable, but I'm sure the market can defy expectations for much longer - in other words I know I'm probably wrong to trim, but oh well.

The Toronto real estate market is showing more cracks. Rents have started falling quite sharply for larger units, and Airbnbs appear to be flooding the rental market now. With mortgage deferrals coming due in a few months it'll be interesting to see how much of the banks' mortgage books are in default. I suspect it will be significant. Basically this is the perfect storm for Toronto RE:

  • Demand: DOWN (unemployment up, incomes lower, less inbound immigration, fewer inbound foreign students)
  • Supply: UP (new condos being completed and coming online, Airbnbs being sold or put on as rentals)
Plus with rents going down, that makes condos EVEN MORE cash-flow negative than before.

I think the bank of Canada or the government will step in to bail out homeowners, so I expect the real damage here will be to the Canadian dollar. I don't normally have a view on currencies but it looks bad for Canada.
 

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Plus with rents going down, that makes condos EVEN MORE cash-flow negative than before.

I think the bank of Canada or the government will step in to bail out homeowners, so I expect the real damage here will be to the Canadian dollar. I don't normally have a view on currencies but it looks bad for Canada.
Real estate is a huge part of the Canadian economy, especially if you look at the broader effects into the financial and insurance sectors. We are a country that is mainly involved in flipping properties, renovating kitchens and bathrooms, taking out loans, and then riding the wealth effect of the increased asset prices. And it's all fuelled by credit.

I also find this RE obsession in Canada, with all the renos and pretentiousness, to be very American and tacky. Like we're stuck in 2006 (before the American RE collapse). Personally I would like to see a total wipe-out and deleveraging in real estate, especially among the highly leveraged property investors and temporary owners.

What these "property investors" have done to the RE markets in cities is horrendous, including destroying Toronto's skyline and previously beautiful neighbourhoods, making housing unaffordable everywhere in Canada.
 

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I think there will be few principal residences lost, but the chances of defaults on rentals Is much greater. I think landlords who have made some capital gains will be quick to exit the market and the snowball will begin. immigrants drove real estate in the large cities.......and I too think immigration will slow down while covid is around.
 

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Discussion Starter #426
Real estate is a huge part of the Canadian economy, especially if you look at the broader effects into the financial and insurance sectors. We are a country that is mainly involved in flipping properties, renovating kitchens and bathrooms, taking out loans, and then riding the wealth effect of the increased asset prices. And it's all fuelled by credit.

I also find this RE obsession in Canada, with all the renos and pretentiousness, to be very American and tacky. Like we're stuck in 2006 (before the American RE collapse). Personally I would like to see a total wipe-out and deleveraging in real estate, especially among the highly leveraged property investors and temporary owners.

What these "property investors" have done to the RE markets in cities is horrendous, including destroying Toronto's skyline and previously beautiful neighbourhoods, making housing unaffordable everywhere in Canada.
I agree with all this, which is why they can't let it fail and will let the CAD go to hell while defending it - print and spend, forgive loans, etc. I still think we'll get a nice dip but anything more than that will be economic armageddon for Canada. Realtor fees alone are 2% of GDP. https://www.cbc.ca/news/business/real-estate-fees-home-sales-1.4226630

I think there will be few principal residences lost, but the chances of defaults on rentals Is much greater. I think landlords who have made some capital gains will be quick to exit the market and the snowball will begin. immigrants drove real estate in the large cities.......and I too think immigration will slow down while covid is around.
Exactly. If I'd made a bunch of money in condos I'd sell right now before there's a rush to the exits.
 

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This is unbelievable, I had no idea!
The industry is ripe for change. Real estate commissions made “some” sense when homes were 150,000 or 200,000. 4 and 5% commissions on $million+ homes is ridiculous. Think of all the homes sold in days (or hours) after being listed.

the amount of fees I‘ve paid over the years could send a bunch of kids to university,
 

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That is absurd realtor fees is 2% of GDP. Guess we are moving more and more towards being a service economy.
I've always avoided real estate due to not understanding the ridiculous pricing not that the stock market has been much better but least can diversify. Depending where you live in Canada house prices have only depreciated over the last 10 years.
 

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Discussion Starter #431
That is absurd realtor fees is 2% of GDP. Guess we are moving more and more towards being a service economy.
I've always avoided real estate due to not understanding the ridiculous pricing not that the stock market has been much better but least can diversify. Depending where you live in Canada house prices have only depreciated over the last 10 years.
To me, a good service economy is businesses like Google, Netflix, and Nintendo generating revenue from the innovative creative things they do. Not just layering fees on people who flip assets.

Yeah I don't understand pricing in housing. Stocks make more sense, but in some cases it's hard to understand - many companies today are priced on revenues not profits (because they don't have any), but unlike the tech bubble I think this technique is here to stay for certain types of companies. At the end of the day when interest rates are zero, it's hard to properly price things.
 

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To me, a good service economy is businesses like Google, Netflix, and Nintendo generating revenue from the innovative creative things they do. Not just layering fees on people who flip assets.

Yeah I don't understand pricing in housing. Stocks make more sense, but in some cases it's hard to understand - many companies today are priced on revenues not profits (because they don't have any), but unlike the tech bubble I think this technique is here to stay for certain types of companies. At the end of the day when interest rates are zero, it's hard to properly price things.
Definitely, providing an actual value to the end consumer.
Wonder what the end result would be charging 5% to consumers to buy and sell stocks.
With all the fees to buy and sell homes you need a decent return just break-even. Apart from Vancouver/Toronto you are basically hoping the land value appreciates greater over the depreciation of the home.
 
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