Don't you mean your landlords lawn?That's interesting and all... but you kids need to get off my lawn! NOW!
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COVID and the housing market
- Thread starter mimico_polak
- Start date
F-n GTA Land Barons in this thread.
blackcamaro
Well-known member
Millennial here. 36 so on the older side.
I have no interest in giving the boomers crap. They’ve been through some stuff. Crazy interest rates in the 80’s, dot com bubble, 07-08 financial crisis. If I remember right a lot of people had a rough time in the mid 90’s in Ontario as well.
Lots of boomers in a not so great spot. No need to blame them as a group.
I have no interest in giving the boomers crap. They’ve been through some stuff. Crazy interest rates in the 80’s, dot com bubble, 07-08 financial crisis. If I remember right a lot of people had a rough time in the mid 90’s in Ontario as well.
Lots of boomers in a not so great spot. No need to blame them as a group.
That is why I had to build the front fence in the reno thread... keeps them kids AND the boomers off my lawn....That's interesting and all... but you kids need to get off my lawn! NOW!
Your momma done raised you right, young man.
Gen X in da house!
Calm down there old man. Work yourself into a stroke!That's interesting and all... but you kids need to get off my lawn! NOW!
Wot you say there, sonny? You "lookin' for a two-stroke"?
Wrong thread! This is the... um... I forgot what thread this was now...
Princess dumb dumb says it will take years to tackle the challenge of the housing market (sounds like a punt to the next government already).
globalnews.ca
"Overall, Askari said the fiscal update doesn’t do much beyond signalling the federal government “wants to tackle” the housing issue."
Challenges fuelling Canada’s hot housing market will take ‘years’ to fix: Freeland - Montreal | Globalnews.ca
Housing prices should normalize 'some' when the pandemic subsides, but the 'acute' challenges behind sky-high housing prices will take time to tackle, the fiscal update said.
globalnews.ca
"Overall, Askari said the fiscal update doesn’t do much beyond signalling the federal government “wants to tackle” the housing issue."
I think you're a couple of dumbs short in her name.Princess dumb dumb says it will take years to tackle the challenge of the housing market (sounds like a punt to the next government already).
Challenges fuelling Canada’s hot housing market will take ‘years’ to fix: Freeland - Montreal | Globalnews.ca
Housing prices should normalize 'some' when the pandemic subsides, but the 'acute' challenges behind sky-high housing prices will take time to tackle, the fiscal update said.
"Overall, Askari said the fiscal update doesn’t do much beyond signalling the federal government “wants to tackle” the housing issue."
"It will take years of strong supply growth"
Duh? The cost is largely the land so how are the Liberals going to grow more? Maybe they're planning to relocate Baffin Island down to Lake Ontario (It won't fit)
Had the Liberals skipped the do nothing election they could have given a couple of thousand GTAers a down payment for a house.
The problem is in the lack of education. I don't mean bad teachers but rather the missing education in reality, that one has to look beyond the glib promises and nice talk to the reality of limited supply and the nature of greed.
Unfortunately for the politicians the course of study would eventually have to include how to get rid of failing MPs, MPPs and municipal paper shufflers.
I only listened to a bit of the garble but recall her making an optimistic comment about recovery being better than expected. Hey, we thought the victim was dead broke but we found a nickel in his back pocket. He'll need it when the tax bills eventually have to be paid.
Mad Mike
Well-known member
The longest possible amortization on any loan, LOC or mortgage is always best with few exceptions.
Longer amortization sets paments lower providing more financial flexibility to use funds for other investments. Rent a dollar from TD on your mortgage, pay them 2% interest, buy a TD share and get a 4% dividend - you will be richer thsn if you paid that dollar back on your mortgage.
Exception. Interest borrowing rates eclipse conservative market returns.
Except it is for the most part it is mutually exclusive.
The people that take the longer mortgage will not have the financial discipline to do anything but lower their monthly payments and the excess is not invested. They run the risk of being underwater with any small market correction, longer the term the higher the risk unless other actions are taken to reduce the risk.
The other main group understands money but will likely be more risk adverse and will take a shorter term or will take a longer term (to keep min payments down and even add a monthly buffer) and will do a combination of pay down extra (shortening the term) and some investment but not to your extent.
Very few will do what you noted, so overall it creates big risk for group one above which will be a significant portion of the population. Look at how many people take 8 year car loans (with interest) because the "need" a new pick-up truck/SUV/whatever!
For first time buyers, I agree, you aren't "safe" until you own a decent percentage of your house. For step-up buyers, most are limited by what they can be approved for, not a 20% down payment so most will have 30+% equity from day one. Much less likely they end up underwater.
Not entirely the same thing but look at what happened in the US in 07/08, many were on their second or third or more home.... we like to think as a group we Canadians are smarter than out neighbours but many are only just as smart as those US buyers. If you have that wad going into the next home and can basement the payments far too many will biggie size it and the down payment will now be minimal. And/Or some will be skimmed for that new vehicle/toys. Interest only mortgages there but just another scheme to reduce monthly costs.
Of course the other problem, reduced monthly payment schemes mean higher prices and therefore bigger down payments are required.
I don’t think we are smarter at all than the US , we are simply more regulated . If we could buy second or seventh houses with $1500. Down and a sub prime mortgage and deduct interest from our income , we would be exactly the same . This is one instance where the stress test on mortgage money makes sense
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Sent from my iPhone using GTAMotorcycle.com
Yep, borrowing to invest can be more lucrative than just investing with your own money. That's leverage.
But 50 years of non-tax deductible interest payments is not the most efficient way of doing this. At least the interest on a margin loan is tax-deductible and the repayment schedule is much more flexible. And tying up your equity in an illiquid asset is not preferable since you are unable to perform any kind of periodic asset re-allocation.
Yeah, yeah, Smith Maneuver, blah blah blah. But that just adds a layer of complexity.
The 50 year mortgage was never aimed at the investor. It was aimed at people who can't afford mortgage payments on the home they want.
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IIRC credit card interest rates in the USA were at one time limited to around 12 or 13 percent. Then we hit the 22% mortgage market in the early 1980's and people were maxing out their cards at the 12 or 13 and loaning the money right back to the banks at 18%. One state eliminated the rule and all the card companies moved there. It was a few years of terror if your mortgage came due in the middle of the panic.
Where in our education curriculum do they teach the investment strategies?
A lot of people still think they always get a deal on something by paying cash.
Mad Mike
Well-known member
The US sub prime was a fiasco. The reason Canada was not impacted is there are lending controls and no unqualified lending here.
My sister bought a $1.0m home in Chicagoland in 04, 100k down and a 1.0m mortgage. She had mortgage payments of $1200/mo for the first 5 year term.
What do you think lending practices like that do to markets?
Mad Mike
Well-known member
The other difference are:
On a mortgage you rent money for an investment, and effectively get to live rent free. Your stock broker wont be sending you $2500 monthly rent cheques if you have $100k equity on deposit.
There is no such thing as living rent free. Housing costs are housing costs, regardless of if you are renting, paying a mortgage or own a house free and clear.
If you choose to live in your investment, you are foregoing rental income - that is your housing cost.
If you live in a house that you own free and clear, there is an opportunity cost of not being able to invest in stocks which historically yields higher than real estate gains. Yes, there is HELOC, but as mentioned before, any equity can be used as collateral for an asset-backed loan for leverage.
Assets are assets, whether they take the form of liquid stocks or illiquid real estate. There is no free lunch to be had here, only a race between different yielding investments.
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