http://canadabubble.com/
Nice to read.

Quote:

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Originally posted by san-hugo
Since 2007 you are living in condo counting 80k you saved , but your home owner is richer today by 1600 * 50 months = ~80k.

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http://www.greaterfool.ca/2011/10/23/the-sure-thing-7/#comments

“It takes a long time for most people to save 5% or more, by that time prices have gone up about 10%. A $200,000 house today will likely cost $220,000 the following year and the interest rate may not be as low as today’s rate.” In fact, this guy states on his site, without qualification, “prices go up about 10% yearly.” That means your $400,000 condo is soon worth $440,000, so losing $5,000 a year in cash flow is no big deal. In fact, in just 10 years your unit will have a value of $1,037,496! Why wouldn’t everyone do this? And unlike acquiring, say, an iPad, you don’t need cash.
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Wow..Garth made it so easy to make understand whom do not want to understand.

Rahul,

Pls mention USD (or CAD) wherever applicable, you are trying to misguide the forum by imposing US housing (when sold) calculations on Canadian housing. Moreover people who buy homes , they buy to live in it instead of counting on pennies earned and lost every year.
If you do'nt sell your house you do'nt lose. Trick is to buy as early as possible when township is being built or buy during recession.

By renting instead of owning, you lose good quality life for you and your family despite you can afford it (there cannot be any argument against it ) and losing a chance of building an asset.

Did you try these calculations using a house of same price instead of a condo? This would have been much profitable than a loss...and more freedom than living in condo..My purchase price exactly matches with the following price in 2007 and the house is worth $500K ok being conservative..$450K not a penny less...go figure.

Quote:

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Originally posted by rahul_singh23

http://canadabubble.com/
Nice to read.

Again I would like say that I am not against owning house but numbers should make sense. I owned in USA and sold in 2005 before moving Canada, now back to US. Lot of people cannot get out from city even they have good job offer in another state/province just because of negative equity.
Negative equity, higher interest rates in future, no saving and living paycheck to paycheck would going to kill RE market. Govt. stimulus is over.

My rental condo was selling for 360K in 2007 but it’s selling 310K these days.
360K for 25 yrs at 3%.
$1700/month+$100 tax+$350
condo fee =$ 2150/month
Total payment in 4 yrs:$103,00

After 4 yrs:
Principal balance: 320K
Total paid: 82K


It seems I paid around 40K principal in 4 yrs.
Total – Principal : 10300-40,000 =$63,200 (no return)
Total rent in 4 yrs( 1500/month average):$72,000

Now I want to sell same condo in 310K + realtor commission+ miscellaneous cost
Total loss: 63,200+50K (price difference)+ realtor commission+ closing cost at the time I bought = It call comes around 125K+??

Difference after renting: 125K-72k = 53K loss
Wait, we did not add up mortgage penalties which can go from 10K to 20K. This place really needs some work now.

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How much I need price appreciation to get our without loss in 4 yrs ?

Price should jump around 15-20% just to get our without loss. It's easy to say our neighborhood price increase this x%age but calculation brings different results.

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http://whispersfromtheedgeoftherainforest.blogspot.com/2011/11/what-we-cannot-seem-to-see.html

We ARE in a credit inflated bubble, a bubble that is part of a world wide phenomena. And that bubble is unsustainable. As the Economist concludes, the worldwide housing bust is only half over and the full impact is yet to begin in many countries.

Canada is one of those countries. We are, as the Economist notes, "more overvalued than America was at it's peak."

Unfortunatly most of us cannot seem to see that.

Jesse Kline on housing. Or: How I stopped worrying and learned to love the bubble

http://fullcomment.nationalpost.com/2011/11/21/jesse-kline-on-housing-or-how-i-stopped-worrying-and-learned-to-love-the-bubble/

If the Canadian housing market were to collapse, Canadian taxpayers would be hit hard. The federal government is fully liable for any losses incurred by the CMHC, which currently backs somewhere in the order of $600-billion worth of mortgages. It has been bailed-out by the government twice in the past.
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http://www.oakbaynews.com/news/134346523.html
Construction industry hits deep slump

http://www.greaterfool.ca/2011/12/12/big-dog/#comments

Simple. He’ll be raising interest rates in 2012, and he’s letting you know why. The official reason will be because inflation has exceeded BoC targets (and it’s done so for the last 11 months), but the real reason is to stop people from being idiots.