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Who reports ROI % based on 10 years instead of annual?

Factor in some property tax, maintenance and compare to TSX during 2008-2018..
 

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I know people who have lost money on Vancouver real estate but very few have. I think you can lose or make money in any market if your timing is right. Most lose because of poor timing or being forced to sell at the wrong window of time.
 

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Just a lot of financial pornography in those graphs. Absolute prices are meaningless, without costs of acquisition/disposition (commissions in capital markets), operating costs (MER in the capital markets), and no relative comparison with capital market indices such as TSX Composite or S&P500.

And if this is a principal residence, there is NO 'realized' gain if one has not re-located out of the region or downsized.
 

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1998 would be a better starting year. Prices were already through the stratosphere 10 years ago, especially when you factor in the lower wages at that time.

I had a 110% gain on my condo between when I bought it in 2003 and sold it in 2016, but it only appreciated about 25% between 2008 and 2016. My timing was off -- I could have had a 230% gain if I'd waited a year.
 

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Who reports ROI % based on 10 years instead of annual?

Factor in some property tax, maintenance and compare to TSX during 2008-2018..
Without property tax, maintenance, interest costs, etc, the annual return ranges from 3-9%. Not stellar, but certainly good given the asset class. The real benefit was the amplification factor of being to leverage 80% LTV or more. Of course, that's really going to hurt to the downside.
 

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I am mortgage free but the cost of owning my home is probably around $1,200.00 a month when you factor in repairs and property taxes. Also some heat and electricity would be included in that $1,200.00 a month. To rent a house where I live the listings are showing around $2,600.00 and up.

So I am probably saving at least $1,200.00 plus a month owning my own house today mortgage free. However once you put in a sizeable mortgage those saving will vanish fast and if prices don't increase it could cost you to own.
 

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When the RE market is moving up, it is tough to beat. One main reason is leverage: Banks will loan you money to buy a home, but they won't loan you money to purchase units in a TSX etf. So if you had rented and put your would be down payment in a TSX etf, I think the RE would win during the time period cited.
EG. 100000 down on a 400,000 property in 2008 VS renting and putting 100,000 in a ETF. If the property doubles in the time period cited, you gross 800,000 minus 100,000 = 700,000, then minus the mortgage outstanding. I know there are expenses, but rent is money too.

TSX ETF during the time cited = about a 23% gain plus some dividends. Gross 100000 + 23% = 123000 + dividends. to keep even, one would have to ditch the ETF, and be a good stock picker.

To me, RE wins during this time period, no matter how one slices and dices the expenses.

this is not to say, now is the time to go all in on RE, as we know RE has very long times - many years - in which it languishes. I fear we are on the verge of such a plateau. Going forward, I'd pick the stock market for the foreseable future.
 

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Just a lot of financial pornography in those graphs. Absolute prices are meaningless, without costs of acquisition/disposition (commissions in capital markets), operating costs (MER in the capital markets), and no relative comparison with capital market indices such as TSX Composite or S&P500.
The graphs don't even show a very impressive gain. Looking across those various kinds of real estate in Vancouver, they're showing about 80% total gain over a decade which is about 6% CAGR ... ignoring maintenance costs and the massive friction of buying/selling.

This actually discourages me from buying RE. We've heard all this talk about amazing Vancouver RE over all these years, and this is the best they have to show for it? 6% CAGR ignoring fees?

That's a pitiful result! My liquid, diversified investment portfolio has returned 6% to 7% CAGR and it does this:
  • after fees
  • with total liquidity
  • diversified, as opposed to 100% concentration in a single thing
The only potential investment advantage I see of RE is that the lack of liquidity can work in your favour. It actually forces you to hold on so you can enjoy the appreciation. And maybe this is why RE works out well for so many.

I think the marketing people who came up with this are trying to trick people who don't understand compound growth.

If the hottest RE market in Canada has only appreciated at 6% CAGR before fees, that is really not impressive.
 

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My old friend sold his house in Richmond for over 2 mill...bought it for $135k. No pension but set for life after moving to Westbank.
 

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Time period does matter a lot and there was a lot of movement over select periods of time, less in other periods. See Historical Greater Vancouver Housing Prices

Individual anecdotes are not relevant to any discussion. Real property is about the most costly type of asset to acquire (legal, land transfer tax, VAT sometimes), maintain (annual property tax, insurance, maintenance and repair and renovate) and sell (legal, commissions) and the like. Imagine if all those costs were imposed on the graph. If capital investors had to remotely incur a fraction of this kind of expense, there would be blood in the streets.
 

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??? If you say so. James asked the newbie.....who made a throwaway post.
Well the newbie is a spammer (now gone, I think) but it just brought my attention to this old thread. Kind of relevant because I'm moving to Vancouver and a friend of mine just bought a condo.

Anecdotes like nathan's Eder's are the kind of amazing stories I usually hear. But what I find funny about the advertising from this real estate company (post #1) is that these broad statistics are much more interesting... and they look a lot worse than the anecdotes!

And eyeballing the data AltaRed attached, let's say for the entire bull market 2002-2019, for attached and apartments it looks like we're talking about 7.5% CAGR.

Looking back all the way to 1984, excluding detached homes, it looks to me like home prices appreciated at around 6% CAGR again... like the original post says.

Just doesn't sound like very impressive performance to me.

Imagine if all those costs were imposed on the graph. If capital investors had to remotely incur a fraction of this kind of expense, there would be blood in the streets.
No kidding. Makes equities, or even a balanced fund, look dreamy in comparison.

Or to put it another way: I actually am getting "Vancouver housing" type of performance myself, but in a liquid portfolio of securities where I don't have to spend tens of thousands of dollars on repairs, lawyers or realtors.
 
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