The area / location of the real estate property matters.
The OP is located in Alberta. My feeling is that in Calgary and Vancouver, the property prices are absolutely overpriced and looks like that it is likely to go for a crash. People who might have bought is as an investment only might suffer greatly.
However in the GTA , I donot think that we have reached a point whereby a real estate crash is immenent but the prices are way up as when compared to when i came in 2002. We are also running out of land in the GTA and people are also not gobbling up new subdivision developments now as they did in 2002/03.
I also agree with posters who say that buying a house for living at any time is a good investment provided you have a stable job. I know of a couple who had good jobs in Hamiltion and they bought a luxourious house in Burlington. The husband lost his highly paid job in a month and though he got a very good job , he got it in Scarborough. He now commuted 2 hours each way daily. His wife also got layed off and did not even bother looking for a new job as she knew that she canot afford to commute to even the downtown with 2 small children. Luckily , the company that layed her off called her back in 6 months.
TK A
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I am a Gents and not a Ladies.
Quote:
Originally posted by Simmi
Economist who are predicting that in next 20 years the housing prices will be doubled, where do you think this people are getting their data from for such predictions.
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Mumbai Maazi Ladki ...
Quote:
Originally posted by shankaracharya
If you've had seen my earlier threads I do not have a habit of responding to stuff written in response to my posting as I strongly believe in the concept of everybody is entitled to their opinion.
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Mumbai Maazi Ladki ...
I know couple of people here in Calgary and Vancouver whose are mortgage free by flipping few condos last 3-4 yrs. Now they are out in that business. Someone has to pay price to get label of bigger fool.
I can see in Canada same market as I was in US in 2005. Seller/realtor/banks are not agreeing that market is going to crash but that happened. If people by home for living then price can not go high like this. Investors who buy 8-9 condos in one building (all condos sold in 3 hrs in few building in Calgary/Vancouver) are major culprit to make price sky rocketing.
New definition of house: it's no more emotional living whole life place. It's just investment like other we do. When you get good deal get it or sale it.
This is not the right time to buy anyone for at least few months. if you are in hurry wait for foreclosure property soon. Soon house price will be less than mortgage that happened in Atlanta, Miami, CA, NV, AZ.
We are different than US as we export 80% to US. 80% people here are employed by US companies. We have major investment from US companies all over Canada.
Quote:
Originally posted by Big Vee
But if the answer to the question is no and that you are buying a home for you and the family, then anytime is a good time to buy. Let us face it, you have to live somewhere, right? Why pay the landlord when if you could, pay yourself. The value of your property can go up or go down, what difference does it make to you? The answer to that is actually None whatsoever . So is it a good time to buy - YES.
BV
Oh yes I agree. Sometime renting is better option than owning. Here are some thoughts in todays market. They are only true when market is on top of the bubble like we have right now.
Renting is just throwing money away.
FALSE, renting is now much cheaper per month than owning. If you don't rent, you either:
Have a mortgage, in which case you are throwing away money on interest, tax, insurance, maintenance.
Own outright, in which case you are throwing away the extra income you could get by converting your house to cash, investing in bonds, and renting a similar place to live for much less money. This extra income could be 50% to 200% beyond rent costs, and for many is enough to retire right now.
A rental house provides good income.
FALSE. Rental houses provide very poor income in the most bubble areas and certainly cannot cover mortgage payments.
OK, owning is a loss in monthly cash flow, but appreciation will make up for it.
FALSE. Appreciation is negative. Prices are going down, which just adds insult to the monthly injury of crushing mortgage payments.
As soon as prices drop a little, the number of buyers on the sidelines willing to jump back in increases.
FALSE. There are very few buyers left, and those who do want to buy will be limited by increasing difficulty of borrowing now that many subprime lenders have gone bankrupt.
House prices don't fall to zero like stock prices, so it's safer to invest in real estate.
FALSE. It's true that house prices do not fall to zero, but your equity in a house can easily fall to zero, and then way past zero into the red. Even a fall of only 4% completely wipes out everyone who has only 10% equity in their house because realtors will take 6%. This means that house price crashes are actually worse than stock crashes. Most people have most of their money in their house, and that money is highly leveraged.
We know it will be a soft landing, since it says so in the papers.
FALSE. Prices could fall off a cliff. No one knows exactly what will happen, but the risk of a sudden crash in prices is severe. As Yale professor Robert Shiller has pointed out, this housing bubble is the biggest bubble in history, ever. Predictions of a "soft landing" are just more manipulation of buyer emotions, to get them to buy even while prices are falling.
Most newspaper articles on housing are not news at all. They are advertisements that are disguised to look like news. They quote heavily from people like realtors, whose income depends on separating you from your money. Their purpose is not to inform, but rather to get you to buy. When you see an statistic that says everything is fine, look at the source. Is it from someone who needs you to believe in the housing market so that they can take your money?
The bubble prices were driven by supply and demand.
FALSE. Prices were driven by low interest rates and risky loans. Supply is up, and the average family income fell 2.3% from 2001 to 2004, so prices are violating the most basic assumptions about supply and demand.
As a renter, you have no opportunity to build equity.
FALSE. Equity is just money. Renters are actually in a better position to build equity through investing in anything but housing. Renters can get rich much faster than owners, just by investing in reasonably conservative stocks or index funds. The stock market is much better than the housing market in the long run.
Owers are losing every month by paying much more for interest than they would pay for rent. The tax deduction does not come close to making owing competitive with renting.
Owers are losing principal in a leveraged way as prices decline. A 14% decline completely wipes out all the equity of "owners" who actually own only 20% of their house. Remember that the agents will take 6%.
Owers must pay taxes simply to own a house. That is not true of stocks, bonds, or any other asset that can build equity. Only houses are such a guaranteed drain on cash.
Owers must insure a house, but not most other investments.
Owers must pay to repair a house, but not a stock or a bond.
If you rent you are a buyer. You are just buying it for someone else.
FALSE. It may be true that rent covers mortgage payments in some places like Northen Manitoba, but not in any of the markets that have shot up in the last few years. Rents are much less than mortgages in most places now. No landlord buys with the intention to rent out in Calgary because that's not profitable. The owner is generously subsidizing the renter, a wonderful thing for renters during this crash.
I was lucky that my realtor told me to increase my bid by $50,000. Otherwise I would have lost, because my realtor knew about a secret bid $40,000 above mine.
FALSE. Your agent gets paid nothing if you don't buy the house, and he gets more if you waste more money by bidding too high. Those are two big motives to invent false bids.
Thanks Rahul for keeping more Renters in the market. Without renters i would not able to retire
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