Comments on: Delusion City

By: Jim

Jim — Sun, 06 Jul 2008 18:10:22 +0000

BUYER BEWARE… a few reasons BCâ€™s BIG bubble is about to burst:
- Olympics venue construction complete as of spring â€™08 (2+ billion of investment completed)
- Housing speculation rampant in BC in the past three years
- Widespread psychology of â€œthings will continue to go up until well after the gamesâ€
- American speculators begin cashing out to cover their losses south of border
- Listings in the lower mainland triple in 2008 as speculators/investors try to sell
- With multi-billions in mortgage defaults at stake, Canadaâ€™s banks release weekly reports pleading Canada is separate from the US (â€˜Canada will withstand US meltdownâ€™, â€˜Canada does not have a subprime crisisâ€™)
- Canadaâ€™s versions of subprime mortgages are 0% down, no income verification with 40 year amortizations (40 year mortgages merely inflated and prolonged the bursting of the bubble)
- Most Canadians are now heading south for recreational and/or winter homes rather than west to BC (with their at par loonies they are presently able to purchase new resort homes for a third of what they would pay in the Okanagan, Lower Mainland or Victoria)
- Forestry and tourism start to feel Americaâ€™s economic pain
- Construction, one of the pillars of BCâ€™s recent boom, dwindles as developers stall projects
- Possibility of NDP regaining power in the upcoming BC election erodes business confidence
- Interest (mortgage) rates begin rising in late â€˜08 eroding affordability
- Housing affordability surpasses 70% of average incomes in many areas of the lower mainland
- Migration patterns intensify as oil-powered Alberta/Saskatchewan entice workers from across Canada with exorbitant salaries and low costs of living/tax environments
- Prices of energy (carbon taxes) strain potential buyers just as banks begin tightening their lending practices
- The ripple effectâ€™s first wave of significant home foreclosures and price declines commence in Vancouver autumn â€™08

By: come back home

come back home — Sun, 15 Jun 2008 03:12:02 +0000

SSS, China even better return. Double your money in 1 monthe. Come, byi, byi, byi in China. Come back home.

By: sss

sss — Wed, 11 Jun 2008 20:12:13 +0000

Heads up! The given rate was 4.25%. Personally, I don’t like to count others money. So I did not ask the details of the deal, but motgage calculator for that numbers shows the right answer.

By: David

David — Wed, 11 Jun 2008 08:37:58 +0000

Arithmetic is only a tough subject if one happens to be in the real estate business.
You presented a scenario of a $315K condo in Richmond with 5% down payment. That would mean a down payment of $15,750. That leaves an outstanding balance of $299, 250. The yearly principal and interest payments at 6.5% would be $24,246.69 for the property holder.The monthy mortgage payment alone would be $2004.45. The interest payments in year one would be $19,240.78. Rents as you said were $1250 per month prior to sale. That equals $15K gross rent. Your friend the landlord will have first of all a negative cash flow of $10 simply by purchasing the property and renting. Factor in taxes of about $3000 and maintenance of $1000. That is a first year cash outflow of nearly $25K.
Net operating income year 1 equals -$10K. Divide that by Fair market value of $315K and multiply by 100.
Your friend got took.