Thank God.

Garth I think if being able to buy a house in Cantada was linked to citizenship alot of people in Cantada would have to leave because they are not paid enough to stay. Then again if they were paid to stay or did leave the economy would likely shut down. Time to knock the hell out of real estate prices by decree. Lets say back to late 1960’s prices which is about where wages are.

Steven

You have no one to blame but yourself.

OR… you can wait a bit until California legalizes pot to survive and does it for you.

Good posts. Thanks for taking the time to comment and provide a fresh viewpoint.

There are other professions that make the kind of money needed to buy in this market. My younger brother in St. Catharines makes $500K+ as a doctor (specialist) and lives in a million dollar home (nearly paid off in 5 years). My sister is a lawyer in Toronto (runs own small firm) and makes over $200K. My other brother is a chiropractor and earns a very good income. All bought a home in the past five years.

Maybe this isn’t the best time to buy, but most life long renters will retire poor. I bought my first house in 2000 and it was wonderful not having a landlord raising the rent every year. Now I have about 200K in equity and can handle a substantial drop in prices.

Good luck to those still renting. If prices drop a lot or stay flat for a long time, I suggest buying if you have 25% down like I did (no CMHC fees). Try to pay it off in 15 years or less.

I agree with everything you said and will miss your input (as sparky as it can sometimes be) simply because it offers a fresh perspective.

But… I do disagree with one of your points and it has to do with your belief that since mortgages are recourse, real estate won’t collapse. If people can’t make their mortgage payments, they’ll still lose their homes and it doesn’t matter how ugly it gets from there, whether its recourse loans in Canada or non-recourse in Alta. Too many mortages are being lent to buyers that can’t afford mortages with any kind of rate hikes.

http://americacanada.blogspot.com/2009/07/we-live-in-borrowed-times.html

http://americacanada.blogspot.com/2009/06/despite-what-you-have-been-told-real.html

Is this all sustainable? No. Any rise in interest rates and everything will fall apart. Going forward we will eventually hit a point where we can’t possibly grow credit any further, even at 0% interest. At this point the economy will be saddled with a massive debt but without new leverage entering it to support it. Without adding new leverage the economy will begin its long overdue deflationary spiral. As it sinks, the burden of the debt will grow and grow. Consumer spending will contract. Deflation will set in. The economy will shrink more, and the cycle will continuously feed itself.

What the magic bottom will be in Canadian real estate is hard to predict but the downward spiral of deflation will begin next year as rates begin to rise and we are likely to see home valuations sink to early 2006 levels as a home valuation marker. The U.S. is experiencing what I believe currently is a bottom and its been recognized only because of near zero fed rates there… if not for low rate policies, real estate would still be in a free fall.

We might not be so lucky here and no… this isn’t what I want.

Oh, yeah,

“PS the greater fool in Chindia theory doesn’t count”

You don’t say anything about supply … only demand.

…Commodities began peaking in 2007, culminating last year with price and buying exhaustion levels…With very few exceptions all have suffered enormous percentage declines…

Yes the world is awash in commodites short term. But long term (more that one year) it is a great investment. Supply is still very low and mines will not open because of costs. Couple this with the sell off of the US dollar and money printing … countries will inventory hard assets.