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Discussion Starter #1
I went to Garth Turner's speech last night and he's a lot less controversial in person, he's a good speaker and makes some valid points. The most valid one being that it's not a great idea to have all your financial eggs in one asset class ie. your personal residence. People should also have financial assets.


http://landlordrescue.ca/garth-turner-houseaggedon/

I'm not sure why people consider this so controversial
 

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This guy is hilarious.
He provides pure entertainment value and nothing else.
His record as an MP is equally hilarious, esp. his party-hopping.
He is always one step behind in economic advice.
Like the Nortel thing (telling people to use their HELOCs to buy Nortel stock just before the started to fall apart).
He was also telling people to sell bonds early last year, when it was perhaps the best time to buy them.
I sometimes read his blog when bored for pure shock & entertainment value.
 

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I would say its in Garth's commercial interests to stir things up... but I'll say this: I agree with him that those Canadians who bought "too much house" while interest rates were at emergency lows are going to be in a bad place when they come to renew their mortgages.
 

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Discussion Starter #6
Actually the blog was a lot more controversial than his speech, there were 0 sales, he didn't even bring copies of his book to sell. Right or wrong, he just seems genuinely concerned.

I've seen a lot of folly out there myself.

One time I rented a place because the owners were leaving for Australia. It was 6000 square feet of house, 7 bedrooms, one office, two living rooms, two laundries, 2 car garage, dining room, family room and 5 bathrooms. A couple lived there, most of the rooms had no furniture, and they kept the place in the winter at about 50 degrees. The elderly lady comes to meet me wearing three sweaters, she's freezing to death.

I rented it for about $2500 per month and it still didn't cover their expenses, that's ok it's an investment, they told me. I had to call them before every showing so they could turn up the heat. It was too expensive to heat. Every time I left that place I was grateful for my small hovel, not impressive but warm.
 

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Why don't they just extend amortization to 100 years at a fair interest rate, allow no equity withdrawals, do not allow the home to be used as security for any other lending, and cap the future selling price at a 1% increase each year.

Sounds like a plan to me.
 

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Why didn't they install wood stoves in a few of the rooms, that woulda kept the house warm for cheap.


Because you need to run the venting for each woodstove, and then find enough wood to keep them going.

I got a price on a woodstove last year. The woodstove was going to run about 2 grand, the venting was another 3k to run it up along the outside of the house.

So for 5 thousand dollars, I can try to find cheap/free wood, split and season it.

No thanks.

Bought a gas fireplace instead. 3k installed and uses about 100 dollars worth of Natural Gas a year.
 

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I would say you would have more to worry about then just the value of your house if jobs and everything else goes in the toilet. I would think you would need to be in cash and mid to short term bonds as the deflation wave goes through.

I live in the Vancouver area and housing is to expensive for sure, but if anyone would have listen to Garth and his house price falling comments over the last 10 or so years they would be in trouble. Even if prices fell in Vancouver those people who left 10 years ago would still probably not be able to afford to buy in Vancouver.
 

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Well now Vancouver is even more unaffordable, so much so I don't even know what my house is worth. I give it a sale price today of between 1.2 million to 1.7 million as the only house in my area I can find is selling for 1.7 million. And by the way I am talking about Richmond BC not Vancouver which is much higher. If Toronto is seeing the same thing then Garth is more wrong then ever as my last post o this thread was 2010 which seems hard to believe.
 

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Well now Vancouver is even more unaffordable, so much so I don't even know what my house is worth. I give it a sale price today of between 1.2 million to 1.7 million as the only house in my area I can find is selling for 1.7 million. And by the way I am talking about Richmond BC not Vancouver which is much higher. If Toronto is seeing the same thing then Garth is more wrong then ever as my last post o this thread was 2010 which seems hard to believe.
1.4 million is the going rate for a detached 2000 square feet house with 5000 square feet lot. A newly built monster house has to hae $700 000 material and contractor cost added on to it by the developer. Financing and all the overhead with realstors and we are stepping into 2.5mil territory for a new house.

Now, with the recent rush of chinese money outflow, we might be seeing that money slushing around in the summer. That, along with the potential for interest rate to go to zero (even garth is preaching this....) and we have a perfect storm in 2016.
 

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My wife's cousin lives in West Vancouver.

We have never visited, by the brother in law has and says it is pretty nice there.

An interesting home and story to it.

If it wasn't for our son and grandson, we would be heading out there for the rest of our retirement. It looks pretty nice around that area.

I can see why wealthy Chinese are buying it up. What is a couple million here or there to them.

https://westvancouver.ca/sites/default/files/bylaws/4785 Heritage Designation Bylaw No. 4785, 2014 (for 6003 Eagleridge Drive).pdf
 

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Causalien correct me if I am wrong but from what I know of Asian buyers is it is better to have an older though maintained house to sell then a newer lived in house. My house is older and my lot is larger then 5000 sq. feet so I am maintaining it so it can be sold to live in with no problem or to take it down. I would think the same may apply to the Toronto area as well since many here are from there. And like here they can't really make any more detached houses because of the lack of land to sell.
 

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Your house is worth whatever someone will pay for it. No more no less. You won't know its worth until you try to sell it and get an offer.
 

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In regards to garths myth busted statement about Canada not having a US style crash due to Canada having "stricter lending standards". It's all about a borrowers abiltiy to pay back the loan. A 0 down 40 year mortgage has no bearing on that. In the US they were lending to people with sub 500 credit scores, of course they weren't gonna pay the loans back. Try getting mortgage in Canada with scores like that, no chance.
 

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When has Canada ever had a real estate crash? Seriously, tell me. The home ownership and mortgage system is completely different here in Canada. All the pundits have been talking about a real estate crash since 2007 when the US dropped 40% to 50% in some areas. Canada dropped about 10% and recovered a month later.

I am not talking about Toronto, Vancouver, Calgary, or one of those northern mining towns where the town's one industry shut down. You could mark those areas on the map in red, step back 10 feet and you couldn't see them. By the way Calgary is one of those one industry towns and so is Fort MacMurray. Their RE values will take a beating as long as the oil industry is in trouble. That is not the same thing as a nation wide RE crash.
 

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Calgary real estate may not 'crash' per sae but there have been a number of times when it has dropped. 2008/2009.

And now.

So, we are in the Calgary market. We sold 2 1/2 years ago. We were going to downsize and buy again but we got turned off with the bidding over list issue. We decided that we did not want to buy when everyone else was buying.

So this morning we saw a listing for $689. At time of build, 2 1/2-3 years ago it was selling for $800 plus any builder add ons like a finished basement. In Dec. 2014 we viewed a home that had been reduced from $629K to $609K. One year later it was empty and listed for $549K. The one beside, almost identical, was listed at the same time for $525K. A home we viewed six months ago was $669. Went down to $639 two months ago. Today it was re-listed for $599K.

We are going away for a few months. The pundits agree that there will be another drop in prices between now and spring. Two reasons. Separation packages and EI is running out for many. Sellers are adjusting to the new market price realities. One real estate franchise closed on 31/12. Six offices in the Calgary area, 160 plus realtors. They announced it mid Dec. and closed up shop two weeks later. Not because business is good.

Not sure what is going down in the sub $500K market. The condo market is dropping quickly. An article in the Calgary Herald a few days ago mentioned an interview with a local mortgage broker. He cited a property that that he was familiar with. It was appraised three years ago at 2.5. It was recently appraised at 1.5


Some people may not view this as a housing bust but my guess is that the owner/sellers of these properties may have a different perspective.
 

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Discussion Starter #20
Housing busts cannot happen in Canada, so the rest of Canada is going to give Calgary to the United States. Also too much cowboy at the Calgary Stampede.
 
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