BWAHAHAHAHA !!! That is the best one I have heard yet. Incompetent developer......heh. If the RE market kept shooting to the moon those suites would still be under construction. But at the RE market is tanking......
I can't begin to grasp how you don't understand this. The buildings wouldn't be still under construction because 500/~620 of the units ARE ALREADY SOLD! Problem is, the developer pre-sold them at a price that was considered cheap, even back in 2005. Now, in 2008, after construction and labour costs have at least doubled, they can't afford to finish the project. The project gets shelved and most likely sold to another developer that can re-market the units at a price that reflects todays (still strong) market and construction costs. The "big boys" (Balboa, Concord, Cove, Homburg, Torode, etc) still have projects that are moving forward because they didn't have to sell so many units to qualify for financing... they just have the money to go ahead.
Kds, I have been owning RE since 1989. Looking back, I can honestly say that over the long run it was the right move for every one of my purchases. Back then some of my mortgages were double digits. Looking forward, I see some ups and downs in RE prices (Vancouver) , but you can be sure that if the prices are down enough, I will be buying another one. Have you not played Monopoly when you were young? In any case, best of luck to you and others on this thread in your investments. Try to do the best that you can. That's all I'm doing.
For "some" people, quality of life is what matters, not HOW MUCH they can gain or lose with their residence. I am selling my house in the West Island and have just moved into another, similar house (3,500 sft bungalow on a 18k sft lot) 15 km west of here, but with 100 ft on the Lake St-Louis water front. As a bonus, my taxes went from $7.8k down to $4.3k. The same house on the same lake but on the "Island of Montreal" would cost me $23-24k in taxes! And the whole difference is that it takes me 10 minutes longer to commute to downtown Montreal! Life is great for me ... as a Home Owner! It has nothing to do with investing, IMHO...
We sold our house at the peak in Nov. 2007 in Vancouver based on years of economic analysis and living in the BC market. Our personal predictions (two economists that work in international markets) differ very much from the phoney and il-advised economists at the national real estate boards who slowly are adjusting to the reality of slumping markets. We view Canada 18 months behind the slump in the US, other economies, and other major housing markets like San Franciso, London, Tokyo. We expected prices to fall in the lofty BC market first in recreational properties on the islands; just this week we can confirm 15-20 price declines. We don't plan to buy for at least another year as we expect prices in Vancouver to fall by 10-15%. Our advice; if you want to be an owner, wait, wait, wait. Canada is not a stable market, its crumbling and a steady deflation is now underway. Anyone who predicts otherwise, in our view, has myopia.
Please forgive me if I have misunderstood you, but are you saying that you would sell your house in Vancouver, pay a 3 to 6% commision and other associated transaction costs, invest the proceeds and pay 40% tax on the income earned, pay rent with after-tax dollars and then purchase the same house 18 months later at a 10 to 15% discount? What am I missing?
It could make sense if the house was owned long enough to avoid capital gains tax. Of course, this plan assumes the new rent is the same amount or less than interest and taxes on the old mortgage. The problem with the plan is that you are stuck living in (renting) someone else's house for 18 months. In my career, I have moved around quite a bit and rented houses in a couple of markets. To me, the biggest downside to renting is the house never really feels like "home" when it is owned by another person.
If you have the time, money, and some experience, don't buy someone else's product. Build your own. WAY more $$ to be made.
lol this thread seems to have backfired quite nicely. people who missed the boat and didnt buy before the boom here in calgary all have the same attitude as kds.
Am I in a wrong Forum - " a realestate forum" ? - Anyway, thanks for the "REAL estate information" that I personally don't care or worry about for what I could do if it is "up" or "down". Moreover, when someone make valuable comments; isn't it better to make citation and reference rather than BS to avoid misleading information. my 2 cents. By the way, is the F-car price up or down recently ?
Nothing has backfired turbotrip, as you cannot figure it out......let me help you. What you are seeing is "denial of reality" a substance that is present at the end of all bubbles.........here's a post I made on another RE forum today.........do the math. Better yet.....ask yourself how your neighbours can afford it. LOL !! ------------------------------------------------------------------------------------------------- I pay $1,650 in rent........if I bought I’d pay $3,335 PI…….then taxes of $150…..insurance of $50…..utilities of $200….condo fees of $500….etc….etc…..$4,235 a month. My numbers are based on a $450K mortgage at 7.65% over 25 years with a fixed 10 year rate. Assume I paid $500K and put $50K down. Just the opportunity cost of making the down payment is $20K I would have lost in ten years. Ask yourself how people an afford this ? Seriously. In 10 years my mortgage balance would only have been paid down by $90,977 !!!! Pay myself ? Harumph.....I'd have paid the bank $309K in interest. Read on as how to pay yourself......... Yet, if I saved the monthly difference over those 10 years (which we have been doing for the last 5 years now)…..I’d have $310,250 in the bank not counting interest !!!! Plus my $50K deposit which would have grown to $70K. Real estate…..what a great investment…..LOL !!! It’s the biggest rip off on the planet IMHO. Of course, a banker will never talk to you like this......and a realtor will never tell you the truth.
Scenerio #1: I have $50k and earn enough every month to pay a $450k mortgage which started 10 years ago (1998). I know that in Vancouver, a $500k home in 1998 would have been in a nice part of town, and today in 2008 would be worth no less than $1.5 to 2.0mil. According to an online mortgage calculator, my principal left after 10 years is around $375k. My net worth in 2008 is 1,500,000 - 375,000 = 1,125,000. So I started with $50,000 net worth in 1998 and now in 2008 I'm worth $1,125,000. By the way, this is my principal residence so it's tax free. Scenerio #2: I have $50k and earn enough as above, all other things being equal, $3335 (principal & interest) +$150 (taxes) + $750 (for sundries) = $4235, but decide to rent for ten years. Rent for the first year is $1650 monthly for a $500k house. But in subsequent years rent will increase by 10% each year: $1815, $1997, $2196, $2416, $2657, $2923, $3215, $3537,$3891. These figures are a bit low (I am a landlord). Today a 1.5 to 2.0mil home will rent for $6000 monthly in Vancouver. When you say you are renting at $1650 monthly, I don't think you can rent a 1.5mil+ home. That kind of rent in 2008 gets you a $350-400k home. Anyways, I'm sticking to your $500k home scenerio in 1998. I made $4235 x 12 x 10 = $508,200. I paid rent totalling $315,564. I have my $50,000 initially and $192,636 over 10 years to invest. Assuming I doubled my money in mutual funds for the $50,000. Assuming I turned the $192,636 into $385,272, which means I can double my first year's money in 10 years, doubled my second year's money in 9 years, doubled my third year's money in 8 years, etc. Anyways, I am worth $485,272. By the way, this is an investment, so the tax man will take a big chunk when I sell it to cash.
And I thank you every month when I go down to the bank and pay my mortgage with that money. It is thanks to this sort of scenario that real estate investors get rich. In those 10 years my property has doubled and my mortgage has gone down. Oh, and when you sell the property only half the gain is taxable. If you say you prefer to rent then fine I respect that.
You forgot the squatters....they're a fact of life too. Had some if these characters in one of our apartments in France a while back.
