tag:blogger.com,1999:blog-7123542260692860177.post8946208514543562154..comments2023-12-02T00:38:46.467-08:00Comments on House Hunt Victoria: TD Economics doesn't think much of VictoriaHouseHuntVictoriahttp://www.blogger.com/profile/07456914359088891317noreply@blogger.comBlogger112125tag:blogger.com,1999:blog-7123542260692860177.post-19333557715256669452009-04-14T06:35:00.000-07:002009-04-14T06:35:00.000-07:00Actually Ryan has something there. I saw a calcul...Actually Ryan has something there. I saw a calculation a while back that demonstrated that approximately the first $20,000 per year of savings in RRSPs or other direct income that a person has in retirement is reflected as a direct reduction to government subsidies.<br /><br />Think about medicare, OAS, GAIN, various other social programs, and yes CPP in the future (highly likely to be income tested when we get there.) <br /><br />Subsidies in publically funded old age homes are income based as well. Just wait until they rearrange the medical services that is already partially income tested.<br /><br />RRSPs look worse and worse as a retirement plan and I believe the new tax-free savings account will be considered at 100% of all withdrawals as the government programs move towards means testing rather than income. If you have the money we will take it.<br /><br />People with incomes that can be manipulated in retirement will fair much better. BTW, Victoria is loaded with people that have pensions when they retire.<br /><br />Is everyone aware that when we die all of our RRSPs (RIFs) and all other property are deemed sold and considered for income tax in that final year (assuming it does not roll to a spouse, which it will then come into her/his income in her final year.) <br /><br />If you still have $300,000 in RIFs when you turn 75 and you pass away, your estate will pay tax on $300,000 at the highest tax rates in your final T1 plus the deemed sale of all property, plus whatever other income you would ordinarily have. RRSPs suck as a retirement savings plan.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-50591517917378148122009-04-13T21:18:00.000-07:002009-04-13T21:18:00.000-07:00"$50,000 in RRSPs is not equivilent to one year's ..."$50,000 in RRSPs is not equivilent to one year's wages, even if $50,000 was the average or the actual wage earned by the person in question. When you retire, you get CPP and a lot of people in that generation will have a company pension as well, and you should have your house paid off. More importantly, you no longer have to save for retirement."<br /><br /><br /><br /><br />No longer have to save for retirement ? yee haa ! not bloody likely Ryan. CPP pays diddly squat and who says there will be anything left in 10-15 years when a major proportion of the population is sucking it dry ? <br /><br />And not all or most have a pension plan. Not everyone works for the government or a corporation and many small business people only have RRSP's to rely on. <br /><br />As far as a house paid off,yes you should if you think a house is a necessity in your life. Some people don't own or will always rent because of divorce and hardships in their middle years that doesn't let them back into the markets. It's not so cut and dry as you make it out to be.vgnoreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-19612419080230099192009-04-13T18:10:00.000-07:002009-04-13T18:10:00.000-07:00"more often that not they are countering off-side ...<I>"more often that not they are countering off-side Bear-spin suggestions that all home owners / landlords are losing money and destined for poverty."</I>A bit of a stretch don't you think? I can't see where anyone has said "all homeowners/landlords are losing money." It's just the ones who've bought in the last 12 months who are clearly losing money.hhvnoreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-66418983523293328912009-04-13T17:11:00.000-07:002009-04-13T17:11:00.000-07:00"Just over 40% will have RRSPs with more than $50,..."<I>Just over 40% will have RRSPs with more than $50,000 – enough to live less than a year.</I>"<br /><br />This is why I stopped reading Garth's blog--he's the Michael Moore of housing bubble blogging. I agree with his larger point but it annoys the hell out of me the way he distorts facts to support his thesis.<br /><br />$50,000 in RRSPs is not equivilent to one year's wages, even if $50,000 was the average or the actual wage earned by the person in question. When you retire, you get CPP and a lot of people in that generation will have a company pension as well, and you should have your house paid off. More importantly, you no longer have to save for retirement.<br /><br />That $50,000 is not going to be used up in the first year, and implying that it will be is disingenuous. Yes, a lot of Baby Boomers will be screwed. Especially the ones who not only have nothing saved but actually up-sized their home during the bubble and will retire with a mortgage to pay off. The people with money in RRSPs may run out of money eventually, depending on how well they manage to adapt their lifestyle to their means. But implying that everyone, even the people with money saved, are going to be broke in ONE YEAR (!!!) is insulting.Ryanhttps://www.blogger.com/profile/10104704096049638272noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-14135876826673563972009-04-13T17:10:00.000-07:002009-04-13T17:10:00.000-07:00This comment has been removed by the author.Ryanhttps://www.blogger.com/profile/10104704096049638272noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-81726177535406499642009-04-13T17:00:00.000-07:002009-04-13T17:00:00.000-07:00"Seems there's been a rash of buyers/landlords/own..."Seems there's been a rash of buyers/landlords/owners lurking here recently pining their negativity on us who are comfortable with our decision to wait this nonsense out. Bitter buyer's they are becoming."<br /><br />I don't think so. The recent rash aside, most comments appear to be an attempt to balance the commentaries; more often that not they are countering off-side Bear-spin suggestions that all home owners / landlords are losing money and destined for poverty. This just isn't the case.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-55679724719465297852009-04-13T16:48:00.000-07:002009-04-13T16:48:00.000-07:00It's not timing the market based on nothing. I ju...It's not timing the market based on nothing. I just think RE will go back to its long term trends for price/rents, price compared to what ppl in the city make etc. Once it does I would buy something again.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-66476212526222865982009-04-13T15:51:00.000-07:002009-04-13T15:51:00.000-07:00"Sounds like a lot of market timing to me. We coul...<I>"Sounds like a lot of market timing to me. We could be on the cusp of another 20 bull run in real estate. You sure you want to sit on the sidelines? I'm just saying."</I><BR/><BR/>Anon, sounds like a lot of wishful thinking to me. RE is very easy to time. Anyone who says it isn't doesn't have the slightest respect for your ability to think independently. Anyone can review widely available public real estate statistics for Victoria and see for themselves. <BR/><BR/>Prices go up (slowly) with increased demand and decreased supply. Prices go down (slowly) with decreased demand and increased supply. <BR/><BR/>Where are we right now? Demand is at a decade-long low while supply is near the peak of a decade long high, with more coming online everyday. Prices are flat, MOM, and down YOY, with all analysts, including those paid for by REALTORS, calling for further price reductions of no less than 10% YOY. <BR/><BR/>Remember that in a margin account, you can win or lose big time based on debt. When prices are going up, you look like a hero, when prices are going down you look like a zero. <BR/><BR/>If I have the opportunity to save my family $50K in purchase price plus an additional $50K in interest over the term of the mortgage, I'll take it. But I think I'll save double that by waiting a year. I already saved $50K + $50K by waiting out last year. I'm willing to "risk" by waiting for an additional $100K savings this time next year.hhvnoreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-4127341576136338382009-04-13T15:28:00.000-07:002009-04-13T15:28:00.000-07:00Sounds like a lot of market timing to me. We could...Sounds like a lot of market timing to me. We could be on the cusp of another 20 bull run in real estate. You sure you want to sit on the sidelines? I'm just saying.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-17361028342090645282009-04-13T15:06:00.000-07:002009-04-13T15:06:00.000-07:00I would agree - it's not a to buy or not to buy de...I would agree - it's not a to buy or not to buy decision. It's a does buying make sense right now? sort of decision. This depends on your income as well the prevailing market prices, the available downpayment, the available mortgage rates and the market price of available rentals. If it makes sense, great go to it. If it doesn't make sense, then other strategies are likely to be better.Just Janicehttps://www.blogger.com/profile/06002680972898096266noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-39064476774548599682009-04-13T15:03:00.000-07:002009-04-13T15:03:00.000-07:00"The thing to keep in mind for sure is that no mat..."The thing to keep in mind for sure is that no matter what real estate will always be a long term investment where as renting is a short term transient mistake."<BR/>Was it a transient mistake for the guy who took out a 1 year lease instead of buying last April? Over the long term the savings will be huge. Real Estate isn't like stocks, its not that easy to dollar cost average. Timing matters, big timeAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-3122241750613779322009-04-13T14:47:00.000-07:002009-04-13T14:47:00.000-07:00When you buy is the most important decision, far m...When you buy is the most important decision, far more important than the one "to buy." <BR/><BR/>Seems there's been a rash of buyers/landlords/owners lurking here recently pining their negativity on us who are comfortable with our decision to wait this nonsense out. Bitter buyer's they are becoming.hhvnoreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-86207232666419107132009-04-13T14:22:00.000-07:002009-04-13T14:22:00.000-07:00For sure it's always better to be on fixed income ...For sure it's always better to be on fixed income and deal with rising rents. This is unquestionably the best retirement strategy. In this way, your lifestyle continues to decline as rents rise. This is why it's best to be a FoRenter.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-49490242347591523582009-04-13T14:09:00.000-07:002009-04-13T14:09:00.000-07:00What kind of sauce would you like with those pre-1...What kind of sauce would you like with those pre-1950's glass door knobs?<BR/><BR/>May I suggest a 90's Burgandy with your helping of shag carpet.<BR/><BR/>Mmmmmm. Your always better off financially with a home. Ask the older residents in Oak Bay, who are living on CPP.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-81104745686954001152009-04-13T13:41:00.000-07:002009-04-13T13:41:00.000-07:00The thing to keep in mind for sure is that no matt...The thing to keep in mind for sure is that no matter what real estate will always be a long term investment where as renting is a short term transient mistake. It has been proven over and over again that if you own you will be far better off financially over the long term than renters.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-19220137720006767962009-04-13T13:22:00.000-07:002009-04-13T13:22:00.000-07:00April 9th, financialsense.com's analysis on a ...April 9th, <A HREF="http://www.financialsense.com/editorials/phillips/2009/0409.html" REL="nofollow">financialsense.com</A>'s analysis on a new world reserve currency. In short, China & Russia pushing for a new world reserve currency. The IMF's been propped up by a fresh new 1 Trillion (USD) in bail out funds, and still they favour gold, though it's likely premature to suggest gold be part of a new world currency reserve basket.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-41672634677580092612009-04-13T11:14:00.000-07:002009-04-13T11:14:00.000-07:00Garth had some interesting stats today...Let’s win...Garth had some interesting stats today...<BR/><BR/><I>Let’s wind the tape forward ten years. That would place nine million Baby Boomers around Allan’s age. Unless something drastic changes, we know this: Personal savings rates will be close to zero. Half of all the Boomers will have absolutely no retirement savings. Just over 40% will have RRSPs with more than $50,000 – enough to live less than a year. Seven out of ten will have no corporate or workplace pension. And more than eighty per cent of all their net worth will be in real estate. That they can’t unload.<BR/></I><BR/><A HREF="http://www.greaterfool.ca/2009/04/12/its-like-over-dude/" REL="nofollow">Greater Fool Website</A>Rogerhttps://www.blogger.com/profile/08266466833259484873noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-34948353172666904662009-04-13T10:49:00.000-07:002009-04-13T10:49:00.000-07:00New world order eh?Here's Bush Sr.,and Bush Jr. on...New world order eh?Here's <A HREF="http://www.youtube.com/watch?v=Rc7i0wCFf8g" REL="nofollow">Bush Sr.</A>,and <A HREF="http://www.youtube.com/watch?v=OMsmo42A2_o" REL="nofollow">Bush Jr.</A> on a New World Order, and then... Kissinger, Walter Cronkite, Bill Clinton, Obama & Gordon Brown ... on a "<A HREF="http://www.youtube.com/watch?v=3xFleGrsl1Y" REL="nofollow">New World Order</A>"...<BR/><BR/>Lastly and recently, <A HREF="http://www.youtube.com/watch?v=lkKbE9qCzQo&feature=related" REL="nofollow">Glenn Beck</A> - "China & France want New World Order"<BR/><BR/>[insert twilight zone music here]....It's coming!<BR/><BR/>PS. Hey even <A HREF="http://www.youtube.com/watch?v=LLSfhfZP4us&feature=related" REL="nofollow">CNBC </A>is in on it! LOLAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-78552529323218664192009-04-13T09:45:00.000-07:002009-04-13T09:45:00.000-07:00Roger,Re: Harry Dent - Cyclical type predictions a...Roger,<BR/>Re: Harry Dent - Cyclical type predictions are worth looking at, as they tend to be based on MACRO-Technical Analysis, but obviously need to take present situations and other forms of analysis into account. Recessions/Depressions are not identical, but they do rhyme.<BR/><BR/>The analysts I follow echo some similar things to Harry. DOW to fall to at least 5,000 if not worse, (US) Real Estate will fall much further and we're on the verge of a currency crisis. If you are US citizen, recommend holding 30% of your networth in gold (not necessarily all physical). But in Oil they would disagree. What drove Oil down from the $147 peak was the deflationary turn in the markets due to lower demand (and the fact that Oil was in an unjustifiable bubble).<BR/><BR/>If Harry sees things getting worse, seeing oil going up at the same time is contradictory, at least until inflation hits. Yes the peak oil theory is real, but only when demand is constant or growing.<BR/><BR/>There will come a time though in the not too distant future, when some "New World Order" (and I'm just quoting various Presidents here, and not subscribing to tin-foil hat theories)... will come and the Reserve currency is altered from the USD to something else (not necessarily gold - likely a handbasket of currencies, in small part backed by gold).<BR/><BR/>When that is announced or even prior, we'll have a currency crisis. At that point in time and/or when inflation starts rearing its ugly head back up, comodities will peak. That's when Oil and others will shine. But that may also be short lived as getting out of a depression doesn't happen overnight, not even by just changing currencies.<BR/><BR/>As for real estate, it's not a buy for quite a while. So in general I would agree about his real estate theory, but would re-analyze every 6 months, and not depend on historical macro-technical analysis Cyclical trends to make my purchasing decisions.<BR/><BR/>Mr.4AMMr.4AMnoreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-66670372753414778762009-04-13T09:42:00.000-07:002009-04-13T09:42:00.000-07:00The one thing we do not have is pent up demand. W...The one thing we do not have is pent up demand. With home ownership at an all time historical high in Victoria, and sale volumes trending down since 2007 in spite of lower interest rates and longer amortization periods.<BR/><BR/>Quite the contrary, we have an over supply of housing, most noticably in condominiums and less so in detached homes. This glut of housing will continue to increase as the attention to and confidence in real estate dwindles.<BR/><BR/><BR/>When the talk at the office water cooler turns against real estate - then the big fall is soon to happen.Johnny-Dollarhttps://www.blogger.com/profile/12950799399842707067noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-16968505147936584932009-04-13T09:30:00.000-07:002009-04-13T09:30:00.000-07:00I think the last 5 year boom was the result of pen...I think the last 5 year boom was the result of pent up demand that has been released somewhat. There is still a very large population of people who want to own real estate but cannot because of a lack of supply. With construction cutting back the demand will simply continue to "pent up" until the credit markets recover. Once that happens I expect house prices to double in Victoria by 2015. We'll probably have generational mortgages by then.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-68275444674600287602009-04-13T08:47:00.000-07:002009-04-13T08:47:00.000-07:00I don't know on the school thing. Historically, I...I don't know on the school thing. Historically, I think when jobs dried up, yes people went to school. However that was when they were doing it on their own dime by taking out student loans. <BR/><BR/>Now, with the expectation of the bank of mom and dad to finance the kids university, I think there's a real possibility that mom and dad might tell jr. to get a job for a bit then go to University as they can't afford it when their retirement plans have already had to be deferred. I think we'll also see quite a drop off in private school enrollments. I also think bank of mom and dad, might not be as willing to invest in RE for the duration of jr's degree, and will encourage jr. to rent (decreasing demand in the first time condo market) and come back home for the summers. <BR/><BR/>In terms of general impact on RE, I think people will want to push forward their plans to downsize or convert to rentals to limit their exposure to the RE market and reign in expenses. I think young first timers might stay out of the market a bit longer (after this initial round of silliness is done), I think those in the sell up market are likely to put off decisions to upgrade their homes. Those historical retirees (a much more significant and less transient component to the Victoria RE market) might decide to stay closer to their own children as they simply can't afford the degree of seperation that they used to. In general, I could see the factors that will shrink RE demand far outweighing those factors that would boost RE demand in Victoria over the next 3 to 8 years.Just Janicehttps://www.blogger.com/profile/06002680972898096266noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-79666880287822614772009-04-13T07:03:00.000-07:002009-04-13T07:03:00.000-07:00How can Uvic, Royal Roads, Camosun and the multitu...How can Uvic, Royal Roads, Camosun and the multitude of little schools have NO effect on the Re market? Of course they do: purchases by parents (may be small but definitely happens,)rentals, jobs, small business, spinoffs etc etc. <BR/><BR/>Don't expect this to dry up ant time soon. And I agree, when jobs are scarce more people go to school.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-25437717142150381042009-04-13T01:54:00.000-07:002009-04-13T01:54:00.000-07:00Anon 8:12I thought I was bearish... Do you really ...Anon 8:12<BR/><BR/>I thought I was bearish... <BR/><BR/>Do you really believe that in two years time the student population of Uvic will be 25% its current rate because people will be having trouble getting enough to eat. Are you preparing your bunker with survivalist gear?<BR/><BR/>That said, I agree that having a university in Victoria will have NO impact on the local RE market.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-42918624614912619892009-04-12T22:42:00.000-07:002009-04-12T22:42:00.000-07:00Looks like bears aren't the only ones that saw tha...Looks like bears aren't the only ones that saw that the boom would end. Here is an article on a developer, Concert Properties, that is successfully weathering the downturn. <BR/><BR/><A HREF="http://www.joconl.com/article/id33286?search_term=concert" REL="nofollow">Bucking industry trends pays off for Concert Properties</A><BR/><BR/><I>Concert president, David Podmore said recently that by June, his company will have about $800 million in cash.<BR/><BR/>He recalled a panel hosted by the Urban Development Institute that he took part in two years ago, where his view was diametrically opposed to other panelists.<BR/><BR/>Many expected little change in the residential market for the next several years, but Podmore expected it to collapse more quickly and Concert began withdrawing.<BR/><BR/>The company finished ongoing projects, but didn’t launch new ones. <BR/><BR/>“We just felt at the time the market was overheated and people were starting to do quite silly things. The market could not continue to deal with the increase in sales value and the increase in construction pricing.”</I>Rogerhttps://www.blogger.com/profile/08266466833259484873noreply@blogger.com