Fuck Yu. A house is not an investment. This is a marketing line from real estate agencies. A house is a place to have and raise children and this is being blocked by foreign capital under the guise of investment.

Chinese are not buying as an investment. This is a marketing line from Chinese real estate agencies with local footprints making money hand over fist. They are buying to move low-cost subsidized capital out of the country before Xi takes it back or they see losses at home. Or worse, Xi has stated in his last communist party address his desire to take over the rest of the world, so sweeping up houses and stripping foreign nationals of the ability to bear and raise children in their own country seems like a good start.

Based on the numbers in this article we can see that “a few money launders” could easily surpass the entire Canadian market supply of new residential housing. There needs to be a social or military response to this influx of capital since our governments aren’t even talking about it .

agreed. it could be 40 cents to dollar as well the way it is heading if you factor in Nafta impacts etc

I don’t like where this is going, I dont mean to insult the homeless or less fortunate. I’m sure for those without a home it is difficult to collect anything. No mailing address. Lower income folks not being able to afford a place in the city while speculators and money launderers rack it in big is a massive issue. Especially considering their actions and gains today are going to hurt those lower income folks very hard when this all comes collapsing down.

I just dont think it is fair to compare a landlord to someone collecting welfare. And while landlords are usually not the most popular, in normal times it serves a very good function to society.

Thanks Xelan! Apparently you either have to pretend that you know it all or you are considered meek on this website. I am not an expert on real estate and economy has never been my favourite subject. Considering I have only been in Canada for 2.5 years I dont understand the background on the real estate year and what has happened in the past. But I am trying to observe and avoid a big mistake. Its been so topsy turvy since I have moved here that I thought it was natural to be confused but according to Blue that isn’t an option.

Well, I did say “street people”, twice in fact. I can see mixing that up with, say, “purple beets”, but “welfare bum?”
Anyway, about the rent cheques … You could try putting them in the donation cups, but it seems like these guys run a mostly cash-only business.
But hang on a sec … it’s the welfare bums who fill out forms in return for cheques, not the street people street people.

Mic drop. thanks Grizz.

Mav, I have a couple minutes: a) your entry was submissive and an attempt at placating by b)referencing a couple of the more active posters and asking for help cuz you know we’re so smart (not even close) then c)note some believable/semi-truths about how the market is perceiving the correction (people know it is happening but prices just aren’t coming down + no one wants to sell unless they get 2016/2017 money) which then leads to d)a dilemma which the masses will face, take the 2% discount or wait (if you have silently been watching you know we’re 6-12 months away for a trough so it is laughable you would suggest ‘door number fail!’) and then finish with d)I’d like 5% higher vs 30% lower which is subversive and suggesting the market has normalized and there will be moderate (though still high) growth of 5% YoY…in brampton, where housing is getting fucking crushed and I think will see a big dive…dude you can blather on all you like but there are so many things off about your post that I’m not giving you the benefit of the doubt. Maybe I misread the intent of your post. Whatever, you’re collateral damage. See you tomorrow.

If you put the question this way nothing is wrong with buying 3 condos and renting them out.
What wrong is:
– Thinking that your property will go up in value forever (check US historical home prices chart)
– Thinking that if property price will go down it will always recover. ( check Japan’s historical home prices chart)
– Make business decisions based on past property price growth performance
– Use or count on existing equity without planning for potential house price declines
– Perform business planning with potential interest rate increase in mind.
I believe those points will be more than enough. How many landlords you think comply with all those? I have many friends with investment properties but none of those actually perform proper risk planning.

Everyone is buying a condo -> rent it out -> use rental income to buy new condo -> etc. rinse and repeat. As a result they have 4-5 condos with 70-80 LTV, close to zero cash flow but they extremely happy that their equity is growing extremely well.

By 2020 we should expect mortgage rates in 5% range which means my friends have to renew their 4-5 mortgages at higher rate and their interest payments will raise 30-40%. Rent will only grow 4-5% because of fundamentals and rent control. So cash flow will accidently become negative. Now they have only 2 choices – either selling some of those properties or tapping into their virtual equity. And if the house prices will decline equity will evaporate pretty quickly and now they have much more liabilities than income. They have to sell properties at that point or it’s a game over.

And even if we(taxpayers) won’t have to bail out the banks we are forced to wait until that scenario plays out and all inexperienced landlords/investors who doesn’t do proper risk assessment and planning are wiped out from the market and release their properties. It takes years, even decades and it’s very sad.

I can buy a house now, but I realize that I overpay now and when interest rate rises I overpay again because I pay higher interest on my overpayed house on mortgage renewal. This is a double loose scenario.

Sorry I didn’t realize we were talking about “street people street people” I thought we were talking about as you put it “welfare bums”. Assumed to be a “welfare bum” you were someone on welfare.

Question though, if “street people street people” don’t bother to fill out the forms or collect on welfare, how would we get a rent cheque into their hands