“So,” they gushed, “here’s the plan.” He’s in construction. She’s an actress. Well, part-time. But with full-time je-ne-sais-quoi. Avec much lipstick. He wants to invest. She wants babies and a big house. She’s winning. “We’ll keep our condo and rent it out for our retirement nestegg.” Sure? I asked. “Why yes.” Batting eyelashes. “Real estate always goes up.” They’re about thirty, with enough cash between them to buy an Acura.
We did the numbers. They figure their condo’s worth $300,000 (bought for two hundred five years ago), on which they owe $150,000 and hope to rent it for $1,500. “We think this is a smart way to go,” she said. “We may have to borrow more for the house (about 95%), but we’ll have the investment income from the rent.”
Actually not. Condo fees are $350 a month, so are taxes. Insurance is a hundred bucks. That equals $800 a month. The mortgage costs $750. So the net monthly income is fifty bucks short, negative $600 a year. And meanwhile, there are 17,000 condos for rent in Toronto – which probably means the amount the kids actually are able to charge for 700 feet of engineered flooring in suburbia is more like $1,250.
So much for the plan. So much for the easy money allure of condos. They’re well on the way to to becoming the financial sinkhole of Generation Screwed.
In fact buying or even owning the average condo these days in the GTA, Calgary or Vancouver defines risk. Most are mass-produced, nondescript boxes in repetitive towers which will look as sexy in 15 years as Kirstie Alley does now. Occupancy costs suck, and once capital values start to erode everywhere, there will absolutely no reason to own any but the most unique and well located.
The golden age of the condo is over. Finished. And it lasted nary two decades.
In fact, even during the height of those years, when values were romping, owning a rental condo for income and appreciation, could not compete with a lowly REIT. Days ago I shared some research with you showing that investing in an apartment real estate investment trust like Boardwalk beat the pants off owning a condo in Toronto or Calgary over the last five years. Now the same researchers have added to the evidence showing either of two main commercial REITs also gave superior returns over the last decade – the hottest years for boxes in the sky.
Now before I go further, let’s make something clear: REITs do not buy houses. Apartment trusts acquire residential rental complexes and commercial trusts buy office buildings, malls and industrial properties. The idea is that REITs collect rents and pass cash flow on to investors in the form of regular distributions. Their units can increase or diminish in value, depending on investor sentiment. Lately these things have grown, on average, about 20% a year as well as paying investors to own them. And a housing correction will not impact them negatively.
You can hold REITs in you RRSP, your TFSA or any investment account. They give you direct exposure to income-producing real estate, but without the hassle of buying or owning it. No closing costs or land transfer taxes. No mortgage renewals. No looking for tenants. No pulling iguanas out of toilets. No repairs. No insurance or condo or strata fees. No property taxes. Nobody trashing your appliances. No leverage. No stoned tenants with grow ops in the guest bedroom. No bed bugs. No realtors.
The Macquarie Capital Markets report compared the return you’d get owning a condo in godless Toronto or tedious Calgary for a decade, collecting market rent (no vacancies) and monetizing all of the appreciated value of the unit. It assumed 40% equity, and factored in the transaction costs of any real estate play – closing costs and selling fees. The REITs compared to this were RioCan, the above-mentioned Boardwalk, and CREIT.
So, what were the results? First this comment about the markets, which should send a small shiver through every quivering, condo-lusting breast:
“During the height of the previous cycle, Calgary housing prices were rising at an unsustainable pace. For example, from 2001 to 2006 average condo prices increase by a total of 35%, then jumped by more than 50% from 2006 to 2007. Subsequently, prices have declined by approximately 12%, which equates to a 30% decline in equity value, assuming a 2007 purchase price and a 60% LTV (mortgage).
“Toronto, on the other hand has experienced stable growth, albeit at a much slower pace. Notably even in a low interest rate environment rental income as a percentage of total return has declined to 0.5% to 2% from mid to high single digits in the past. This means investors have to rely on capital appreciation in order to generate a return.”
Exactly. It’s impossible to buy a condo today in these cities, or Vancouver, and rent it out for a positive return on your investment. You might as well leap into the orange guy’s shorts or bury your cash in a can in the backyard. In fact, a can would be a far superior investment vehicle – given the fact condos are on the cusp of significant deflation.
Anyway, the envelope, please…
Over ten years, the Toronto condo returned 239%. The Calgary condo gave off 274%. The REITs paid 348% – with no wet reptiles.
Oh yeah, and this period of time included the steep financial crisis of 2008-9, as well as generationally low mortgage rates and the planet’s greatest outbreak of house horniness. In short, if there ever was a time when physical real estate would outperform a financial derivative, this was it. And it didn’t.
Condo investors are sunk. Lipstick and all.
154 comments ↓
first
Yeah, but anyone who owns a piece of Boardwalk goes straight to the seventh circle of hell. Your pet can join you for $249.
This should bode well for overstretched real estate junkies. Lets see, higher monthly payments and a soon to be depreciating asset equals one really bad investment.
“Interest rate hikes are coming – and soon”
http://www.theglobeandmail.com/report-on-business/economy/economy-lab/stephen-gordon/interest-rate-hikes-are-coming-and-soon/article1985036/
.
Your house IS NOT an investment! That’s just a catch phrase used by the real estate industry to convince people to overpay because if you call it an “investment’, it gives the false impression that it will only go higher and higher in value.
If I had a dollar for every time I saw a young soon to be deep in mortgage debt couple interviewed by US TV at their Bubble peak say, “Its’ allot more than we had intended to pay but it will keep going up in value so we don’t mind overpaying”.
“A House is NOT an investment”
http://www.bankruptcy-canada.ca/trustees-talk/bankruptcy-canada/20090713/why-a-house-is-not-an-investment.html
.
Garth – 2 pts for using the word ‘nondescript’. It describes much of the mass produced garbage of the recent years.
Mr Turner:
Mr. Carney dodged the interest rate increase, most proably due to the election. In your opinion, will he raise rates durring the second half of this year taking into account the strong dollar? Secondly, I have heard some economist suggest a full 1% increase on the prime by the end of 2011……your view please?
Thanks
Yes, and yes. — Garth
funny stuff
Garth, I agree with most if not all of what you say, but comparing REITs over the last decade to investing in a condo is misleading because of leverage. Yes, the leverage does come with risk, there is no question about that. But as far as I know it’s not easy to use leverage to buy REITs. To illustrate, if Person A used $30,000 10 years ago as a down-payment on a then-$300,000 investment condo and Person B had put $30,000 in REITs, I know which person I’d want to be now, ‘eh’?
Yes, the REIT owner. That is exactly what the study showed. — Garth
BOOM GOES THE DYNAMITE!
Am starting to get my head around REITs with your blog. I understand that apartment based REITS could yield good income since living space is a necessity, but wouldn’t commercial-property-based REITs be subject to economic downturns? ie businesses failing=vacancies in malls=weaker returns?
Enjoying your education, satire and all .
They’re on the verge of being fleeced, kind of like Canadian’s voting for the CONS only to be screwed. All the while having sunshine blown up their butts.
Condos still solid value in Vancouver. Lineups around the block folks. No chance of The Americans 40% haircut based on nothing but pure jealousy.
Garth, where can you get someone like a financial advisor to get expose to REITS, ETF, etc?
Thanks for that excellent post, Garth.
I said it before, and I’ll say it again (since it’s on topic). I never liked condos as an investment. They are concrete boxes in the sky not directly attached to land (where the real value lies); supply can be increased very easily (unlike land); and condo fees are rising very fast (in Toronto at least).
As for positive cash flows. It is getting harder, if not impossible, to find a rental property in the smallish range (say 6 to 15 units) that will not generate a negative cash flow with a standard 75% LTV (even with these low interest rates). Why? Price appreciation, which has really only accelerated over the last couple of years or so, based on what I have seen.
I talked to my agent today. I was looking at a property that in order to get a neutral cash flow (I’m not greedy), I would have to pay no more than a million. The owner is asking 1.225 million, but would come down to no more than 1.15 on the best terms. Cap rates below 5%. How long can this continue?
Update on the condo market in the GTA…….
Sales have stalled as countless condos sit empty without any renters or buyers. Flippers now face the hard choice of either selling at a loss or renting for cash flow negative. The worst part is thousands of more condo’s with thousands of more flippers are going to hit the market this year. Buddy in the biz said owners of condo’s in the GTA are going to take a bath.
The “Harper Government” changed the income flow through on Income Trusts. Although Harper promised in writing not to touch Income Trusts. They could do the same tax status change on REITS too, could they not? What would that do to the “wonder investment”?
REITs were exempted from trust changes, for good reason. — Garth
17ooo new units coming online in the GTA is that correct, and how is this not going to end in anything but tears for a whole lot of people. Dollar at 1.04 and then some, I have my pulse on industry and I can tell you their’s no one humming along on production for any product. Car sales declining,inflationary pressures for all commodities. If the SHTF there’s going to be a lot of collateral damage.
Two years ago when my sister bought acreage closer to lake Simcoe than Ontario with her husband working in the west end of TO, gas was only .90 a liter. Now 1.30 and climbing that Hemi and the two 3/4 ton work vans and the subsidized gas cards for the two kids is hurting big time. But hey they have the estate with the acreage, WTF were you thinking.
My sister is having the worst luck trying to sell her condo. She had two offers and then in the last min they both got cold feet. On top of that more units are hitting the market in her building and at lower prices. Sis is getting worried the bottom is going to fall out and distory her gains. The Toronto market is looking very weak.
This is an interesting piece. I wonder why the hell anybody would buy a condo?
I rented in a 30 year old building with rampant corruption. A repair of two stories of underground parking went $600,000 over budget and the work was never really completed.
An absolute smear assault was launched on the few owners brave enough to stand up to the board and sue them. The most vocal sold and moved. Most of the owners were immigrants, and were passive about the whole thing. The manager was moved and nary a board member lost their seat.
I think I still have copies of the various letter passed under my door with owners, the board, would-be-board members and management all slandering each other, over a whole range of issues.
The whole place was a grade A cluster (you know what.)
What a disaster to live in.
Question Garth. You said that ” the golden age of condo ownership was over”. Now, I never plan to own one, but I have considered renting one in my golden years. Don’t you think that will become the norm with many seniors wanting a low maintenance roof?
On a global level I find Mr. Turner’s observations both acute and entertaining. Thank you Mr. Turner.
Preserving and growing money is not for the faint of heart. The last time I looked at a study on the rate of capital formation (MIT, 1972) it indicated that less than two percent of the money sloshing around in the market actually ended up being turned into capital goods, like steel, railway cars or tractors. What is the rate of capital formation today?
On a more amusing note: A former chief justice of the US Supreme Court once observed that “taxes are the price we pay for civilization.” I grant you, we do not seem to be getting good value for money, but accepting that, it would appear the Scandinavian countries, and just about everybody else is doing much better than Canada these days.
http://www.straightgoods.ca/2011/ViewArticle.cfm?Ref=294
First !!!!
…everyone else cheated:
BTW is that Ignatieff in the photo, upper “left” hand corner
Oh yeah.
….forgot to mention Bloc’s Gilles Duceppe bottom left hand corner of photo … closer to the bull
Dark Sad Monster Bunny on 04.14.11 at 9:41 pm
————–
From:
http://www.fin.gov.on.ca/en/publications/1996/cpp_.html
Pay-As-You-Go (“Pay-Go”) Funding: A means of financing a pension plan whereby current contributions pay for benefits-in-pay (plus administration costs)
==============
In an ideal world, I would prefer fully funded but there are so many moving parts when you are investing for 40 years that I’m not sure it can be done successfully at the government level… too many players.
Governments just can’t stop themsleves from raiding the cookie jar so maybe it’s better to keep it empty.
Could it be that all those condos will turn into the slums of tomorrow? Some people think so …..
Condo vacancy rates in Toronto now sit at 5%…and in my latest journey to Bathurst & Lakeshore I could count 11 skycranes in the immediate area.
Even with 25% down, investors are not making money, I don’t know one condo owner with property I manage who is breaking even on the rent if you include vacancy property management, property taxes and a little spit and polish between tenants. It’s just better than paying real estate fees and mortgage breaking fees.
The difference between commercial real estate and condos is that one is investment grade and the other isn’t.
But Garth Garth Garth I hope that you stop telling people what a great deal REITs are because they too are significantly overvalued.
Low interest rates = higher building valuations
The reits make money on the spread between the cost of the money they borrow and the cap rate of the investment they buy, and commercial mortgages are not friendly beasts…so if what you say is true and interest rates go up…building valuations go down, acceptable cap rates go up and the shit hits the fan.
And REITs are bloated with cash right now because people crave yield. They have to invest and because prices are so high and inventory is so low, they’re paying market price at 5% cap rates with a cost of borrowing of 4% or so. A profit margin of 1%. Nice thing to bank retirement $$$ on. Refinancing along the way to keep those fat distributions going.
Not too big to fail…
Garth,
Why do you think that the housing correction will not impact REITs negatively? Their share price is tied to their overall valuation. Will the value of their real estate not diminish along with the other?
There is no correlation between residential real estate values and income-producing apartment and commercial properties. — Garth
“And a housing correction will not impact them negatively.”
Won’t impact payouts, or won’t impact the value of the underlying properties?
I’ll bet both, and more. A housing correction followed by a long-term scraping-along-the-bottom new normal in property prices will be coupled with even more rentals being thrown onto the market.
Higher vacancy rates. More deadbeat tenants. Higher maintenance costs.
REITs thrive only on cash flow. Look at what’s going to be coming at commercial REITs in the U.S.: higher vacancy rates, lower cash flows, margin compression for the tenants.
Not to mention the REIT market is a little crowded these days…very popular with oldsters, mutual fundees and the fixed-income dependent. “Low-risk”, the experts say; ergo, very enticing to Canucks.
It’s likely time to give up grubbing for cash flow and concentrate investing efforts on retaining the value of one’s capital…capital gains held as far away as possible from the tax net will probably outperform cash flow strategies going forward.
But that wouldn’t be Canadian Values(TM), would it?
Timidity…
There is absolutely a place in a diversified portfolio for REIT exposure. You are universally negative, and tedious. — Garth
Question re REITS
Still dependent of the renter market(ie customers) and vacancy rates…No?
What if condo owe-ners start to get desperate offering free orange shorts and allow alligators for pets to prospective tenants.
If the condo market collapses, the default mechanism may be they get rented.
In addition, REITS would most likely be older buildings depreciated to almost lot(land) value would they not ? Wosk family in Vancouver were selling 8 hi rise towers recently they stated were 95% rented, the newest was built in early 1980’s
Commercial ? That market is dying ….is it not….. we have friends whose companies encourage them working from home.
“Condos still solid value in Vancouver.”
Yeah? Oh well, I guess I’ll just have to “invest” in the Coquitlam area, then.
He he…
“In fact buying or even owning the average condo these days in the GTA, Calgary or Vancouver defines risk. Most are mass-produced, nondescript boxes in repetitive towers which will look as sexy in 15 years as Kirstie Alley does now.”
I was thinking the exact thing this afternoon (except the Kirstie Alley part) while taking a cab past the forest of towers known as CityPlace. It seems like only yesterday it was a vast, contaminated rail yard. The location is meh, and given the number of towers all built at the same time I can see it ending up like St James Town in twenty years:
“St. James Town was originally designed to house young ‘swinging single’ middle class residents, but the apartments lacked appeal and the area quickly became much poorer. Four buildings were built by the province as public housing. Today, the towers are mostly home to newly arrived immigrant families.”
http://en.wikipedia.org/wiki/St._James_Town
I bought a condo downtown about 13 years ago as my principal residence, sold it about 10 years ago due to a change in lifestyle. If the poor schlep who I bought it from 13 years ago never sold it, she would still, even with the astronomical runup in prices in the last decade, not have broke even just in terms of inflation-adjusted dollars. And that doesn’t even account for the equity that was locked in and not growing or earning anything. She took a 40% hit just in nominal dollars when she sold 7 years after she bought it. Knowing what happened to her and thousands of others in the last condo boom should be a lesson to those who didn’t live through it – but it seems like many don’t learn from the past and are doomed to repeat it.
“Could it be that all those condos will turn into the slums of tomorrow? Some people think so ….”
…er, yeah..
@ #19 xindai shan
The whole place was a grade A cluster (you know what.)
What a disaster to live in.
********************************************
And THAT is why I will NEVER buy a condo.
Corruption in the Condo Committee, a new problem to deal with. Unbelievable.
Wow I can just imagine the state of the place now.
Update for “ground zero”: Cityplace Toronto
http://cityplace-ghetto.com
Kijiji lists 106 condo rental ads with Cityplace in the name. I imagine craigslist is the same.
But some ads belong to realtors(r) like this guy offering a few dozens units in one ad!
http://toronto.kijiji.ca/c-housing-apartments-for-rent-1-bedroom-CITYPLACE-CONDOS-FOR-RENT-W0QQAdIdZ274095946
realtor(r) states: THESE UNITS WILL NOT LAST LONG!
To which I reply: THIS WILL NOT END WELL!
@ #22 Hoof Hearted
“…First !!!!
…everyone else cheated:”
Hilarious!
After yesterdays blog ( with so few “first”ers) I was kinda hoping we had reached the end of the ridiculous ,”I got here first” road.
Apparently not
Sigh……
@ # 6 Mr Lee
You have some excellent comments. keep it up.
“In fact buying or even owning the average condo these days in the GTA, Calgary or Vancouver defines risk. Most are mass-produced, nondescript boxes in repetitive towers which will look as sexy in 15 years as Kirstie Alley does now.”
Couldn’t agree with you more Garth. Many condo owners in Vancouver pay almost half my rent just in fees-taxes, condo fees insurance, etc. Most of the condos in Vancouver are terribly built and over half the people I know that have bought condos have had leaks in their building. Buying a condo here is like stepping into a minefield. Further more, not only are they generic and characterless with shoddy construction and cheap materials, but they are tiny boxes, with many only being from 500-800 sqr feet! My question is, what is the alternative in Vancouver? You have to either do something illegal to buy a house, even on the east side, or move out to Surrey.
Moody’s cuts China’s property outlook
HONG KONG (MarketWatch) — Moody’s Investors Service on Thursday lowered its view on China’s property sector, warning that a slowdown is underway with credit conditions forecast to tighten over the next 18 months.
http://www.marketwatch.com/story/moodys-cuts-chinas-property-outlook-2011-04-14?reflink=MW_news_stmp
However, closing costs, land transfer taxes, mortgage renewals, looking for tenants, pulling iguanas out of toilets, repairs, insurance or condo or strata fees, property taxes, somebody trashing your appliances, leverage, stoned tenants with grow ops in the guest bedroom, bed bugs and realtors are still part of real estate. Being twice removed just keeps your hands clean. In th end, it is still real estate and a downturn in the economy like people losing their homes and others trying to hold on rather than selling for an impossible loss will remove spendable income from all sectors. Malls will go bankrupt and office towers and commercial propertes will close when companies go out of business. While this may be a second wave, I would suggest it will be inevitable. The fast exit (quick liquidity) may be a saving grace, but like anything, if it starts to drop, only the GFs will be in the market to buy so keep those figures for the last 10 years to convince them and watch your bobber for when to cut bait.
Generation S…
Hey, that could catch on.
Definition:
Generation S are those people born between any previous year and present day, who buy real estate with little to no money down, during a recession, at the top of a bubble, during historically low interest rates which have no where to go but up, and still think they’re #winning. lol
Big Al (New): Two years ago when my sister bought acreage closer to lake Simcoe than Ontario with her husband working in the west end of TO, gas was only .90 a liter. Now 1.30
my nephew lives in Innisfil, works at the Honda plant. I’m thinking that the whole Highway 400 crowd is feeling it.
Sure, put away a small amount in REITs…even though it goes against your general argument re: real estate being due for a drop.
I may be negative & tedious, but I ‘m very POSITIVE that we’ll see inflation in commodities and essentials and lacklustre performance from financial assets – income-generating stuff, like REITs, term deposits, GICs, RRSPs, general stocks, general stock mutual funds, dividend-collecting stocks, commercial & residential property and cash.
That’s a valid point. With inflation raging and rates rising, don’t you think that discussing the return OF your capital rather than the return ON your capital is something to consider? Why the obsession with chasing yield in cash?
Sh*t will be hitting the fan shortly.
China’s central bank drains 83 billion yuan from money market
“Liquidity will be too excessive in the money market and exert new pressure on asset bubbles and price increases, if the central bank takes no action,” warned Lian Ping, a chief economist for the Bank of Communications. “Therefore, it is necessary for the PBOC to continue to resort to tools such as RRR.”
http://news.xinhuanet.com/english2010/china/2011-04/15/c_13829526.htm
The ONE experience we had owning a condo has made it clear, we wouldn’t wish it anyone.
Every condo has a ‘nutbar’ – and the stress in the place we owned was literally causing my health to decline.
We sold at the right time, and now happily rent both here on Maui and in La La Land.
Today’s post shows how warped people’s perceptions are, when it comes to “investing” in property.
Aloha.
@ #34 S.B.
When a realwhore® tells you “this unit won’t last long”, there’s a reason for that.
It actually means “this unit was poorly constructed.”
That’s why it won’t last long. lol
What I have noticed…or not ? is WHO ( HOO?) is buying these condos(in BC at least)
I see ads, some pre-sale offices, mock ups, but no crowds.
More convinced that they are sold off shore….to people that never set foot in them or the country.
The builders of new product must rely on this market, and are going to get screwed when these ghost buyers dry up and or bail on their deposits.
I think we have seen lots of evidence that the line-ups are often staged
How easy is it to sue someone 5,000 miles away in the communist country? We can’t even extradite the crooks that land HERE.
Garth, stop giving away best tips for free to all
Step-mom just paid 280 large for a leaky condo at 10th and Alma that has been undergoing renovations for 3 or 4 years now. The elevator doesn’t work and most owners live in other countries and don’t seem to care too much either way. Tomorrows job is attaching a metal flashing to her balcony ceiling to stop the Vancouver torrential rains from flooding her living space. It seems that many of these ” Condo Rot ” buildings were designed with California weather conditions in mind rather than the wet coast downpour. I still think mom is an RE genius anyhow.
24 Moneta – thank you for the link. Have saved for future reading.
Yes the CPP is pay-as-you-go or put another way, a ponzi
scheme reliant on future contributions paying our benefits, as our contributions are in part paying for those drawing benefits now. Wasnt somebody in the NDP
calling for doubling the benefits? Being self-employed I
already contribute about 8% up to the max allowed.
Now some of this is going to the reserve fund, currently $100B+ more or less, supposedly to see us boomers thru when the ratio of working to retired drops to about 3:1. Now with 17M contributors, that is only about $6K per person. Not much at all.
Garth, how many TFSAs can a person have? Some guy in the last blog post bragged about having two of them to his name.
As many as you want. But the contribution limit does not change. — Garth
You can fire a cannon down the hallways of most condos in Canmore and not hit a living thing. One bankrupt development is about to be bulldozed. Others are ghost towns. Prices on new-to-be-built units have dropped $130-150 k. (and are still two to three times higher than what they’re worth).
#12 BPOE…
I always hope, despite all evidence to the contrary, that you are the ironic creation of a being who wishes to caricature the parochial morons I meet every day.
Those who truly believe Vancouver is special and different than every other place on Earth.
Hope springs eternal…
17,000 still doesn’t seem like such a big number, if there were 6,000 sales in February alone in TO. They won’t all come onto the market the same month. That’s not including the rentals. … sorry, Duh, I don’t get how that number is going to be such a negative
Hi Garth…so when ‘joe investor’ has to reduce the rent on his ‘investment and the entire rental market softens ( ie Florida) what happens with these reits? I would think they have to remain competitive with rents??? The share price declines or dividend is less??
Many Thanks
The other thing to consider for all the wanna-be landlords is that most of the people who formerly made good tenants… bought property. With home ownership at an all-time high percentage, who do you suppose is left over to rent from you?
After living and working tax free for 10 years in SE Asia and retirement glistening in the near distance, I SO don’t want to repatriate to Canada. Your blog has reinforced that buying property now is insane. The cost of living there is unfathomable.
Meantime, I’ll be sipping cosmopolitans poolside at the villa in Phuket and living in paradise on less than 1k a month. Peace.
Certainly those REITs looked like a good place to be, but now they’re all at or near their record highs. Doesn’t really seem like the best time to jump in… no?
–
“He wants to invest.” — An intelligent male, one of the last of a dying breed. A rare specimen indeed!
“And it lasted nary two decades.” — Slightly longer than a six-pack, which would last for two minutes or so.
*
Three min. clip Headline says a lot. Japan is sinking. Ghost Town Short clip of Fukushima. Reactor #4 Someone screwed up. ‘Quake resistance Doesn’t seem to be very good.
Link in. Next up — NMF. Globalists in Japan “No Good Crisis Goes to Waste.” If the landmass sinks, however . . .
China FX reserves shoot past US$3 trillion. Nice bank account.
Libya The UK, like the US, prefers war over looking after their own.
Civil Servants Not overly civil, as taxpayers must foot the bill.
Link in. The WH has ordered 16 banks to reimburse people whose homes they illegally foreclosed.
Video Link. The Codex Alimentarius Conspiracy.
Link in. Curious if only for the date.
Gold Going up?
Greece and Portugal Great places to visit.
8:17 clip with Peter Bernstein.
Twelve Triggers TPTB use to mess us up.
Plates shifting? Are Europe and Africa about to switch? Constant change and upheaval is guaranteed here!
Arachnaphobia Indiana Jones — where are you?!
Ms Turner
what do you think about the US dollar.
Do you think that our dollar topping the green it affects our currency??
Share your opinion about!
Garth, you mention that a housing bust would not affect REITs but I’m not convinced. Increasing housing prices have forced up rents as well (at least in delusional Vancouver). Any bust in housing could force rent prices lower. Also, any increase in the risk free rate of return – which we all believe is going up – could also have a negative impact on REITs as they are in many ways valued like a dividend paying stock or preferred with a strong correlation to interest rates. Like anything else – it seems timing is critical and the REITs I’ve seen are trading at multiples that look way too rosy (especially for the readers on this blog who aren’t buying the false sunshine up the rear that’s being pumped in most circles.
Anyone I know with an investment condo either bought on impulse or had other motivations and ROI wasn’t even an after thought. All of em financed.
Its a frightening number speculators who bought new personal residence while choosing to hold onto old as an investment. Double whammy, lose the personal residence first then the spec properties. Domino effect of multiple properties hitting the market for each deadbeat debtor won’t be something market to absorb. Thats the danger of specuvestors – they don’t just own one property and if they are upside down on one it means they lose the others by default.
#17 Big Al (New)
Dollar at 1.04 and then some, I have my pulse on industry and I can tell you that there is no one humming along on production for any product. Car sales declining, inflationary pressures for all commodities. If the SHTF there’s going to be a lot of collateral damage.
———————————————————
Relax. The shit will not hit the fan just yet.
That is already yesterdays news. Forget the commodity boom until fall. We are in retrenchment mode now.
Prices will decline as May comes on like a lion and there is a dawning awareness that no QE3 will never materialize.
Sell in May and go away…???
Well yes in fact but for different reasons this time around. You should take probably take profits on coal, oil, potash, copper, gold and especially silver sometime soon.
Goldman was not just blowing smoke about unwinding long positions in oil and Canadian resource stocks. So get that straight. The US dollar in turn will stage a rally in anticipation of a commodity sell-off, news of efforts to introduce US austerity measures and instability in European credit markets.
The extremely overvalued Euro should finally take a long overdue nap and the Loonie will drop back near par for the summer as commodity pressures relax over heightened concerns over inflation in Asia, reductions in buying and Central planning measures to control those outcomes.
Inflation brought on by QE’s is about to reverse as the QE’s end. You should now be more concerned with Dollar denominated trades that stage a comeback and reverse opportunities based on past inflation expectations that are not likely to materialize for the coming months.
Everything has changed. The signals are pointing to lower equity values, lower oil prices and the froth being blown off of the precious metals markets and most commodities excluding grains until fall.
[The preceding represents my personal opinions only and should not be construed as investment advice. Consult your own broker or financial advisor for individual investment planning. ]
I would like to talk about the 3 year scam plan being foisted upon mainly our most precious resource, our youth; you know, the ones who we are going to depend on to lead us out of the next recession. No, we are, instead of protecting them, going to allow telecommunication companies to enslave them in these contracts, therebye discouraging them in future to make innovative decisions because of the enslavement nature of our present contract law. These telecommunication companies have the resources to see into the future and they see free wireless in coffee shops. I believe many shops were headed in that direction so they were offered incentive deals to back off and are now willing to participate in the enslavement (you may have heard recent commercials). All I can say is if you own such a shop you would be crazy to take such a deal. I know 5 Timmy’s in Buffalo that offer free wireless and they are doing phenominal, yet up here in Canada they are backng off. Sooner or later free wireless will dominate and you will be sorry to have sided with them.
Tim…#37
“Most of the condos in Vancouver are terribly built and over half the people I know that have bought condos have had leaks in their building. Buying a condo here is like stepping into a minefield. Further more, not only are they generic and characterless with shoddy construction and cheap materials, but they are tiny boxes, with many only being from 500-800 sqr feet! My question is, what is the alternative in Vancouver? You have to either do something illegal to buy a house, even on the east side, or move out to Surrey”
Are you paying attention ? Rent instead ! Invest the rest (REITS have treated me well…:)
You have to be smart with real estate the same way you have to be smart with other investments. Lets say you break even on a monthly basis with the investment condo (very possible, there are deals in any market).
Id much rather have 274% growth on a $150,000 dollar condo than the 348% on the $15,000 or whatever you’re investing in reits.
But hey, keeping harping about how bad real estate is if it gets you to sleep at night.
Nothing to see here but the wet dreams of real estate bears.
Have fun living in your REIT and selling it with no capital gains tax.
Silly.
I am sorry I deviated from topic, but it has been on my mind for some time and I read your piece after, and not before submitting. So, what can I offer about Reits? Only that they represent places where people actually want to live, as opposed to condos which will accomodate the less fortunate of baby boomers where they can live their final days in comfort.
There will come a time when RIET’s could play a major role in an investment portfolio, but now is not it. Find a trend, a secular bull market, be right and sit tight. Real estate isn’t it in any form at this point. But there is a secular bull market in its 10th year for those willing to think for themselves . A market that will protect ones assets from what the future has in store.
2 points:
Condos: Condo is just another word for apartment rental. Condo fees are rent you can’t control as much as you can control apartment rent. Same box, same building, same 4 concrete highrise walls. Landlords turn into condo developers, they are “smart” they now have their tenents by the balls as they have to live there (they bought it) and have to pay their condo (rent) fees, all while giving them a large payment of cash to “own” the box.
Orange guy shorts: Garth said yesterday people shouldn’t keep their cash in 1.5% accounts. I thought about this and conclude, while it isn’t the BEST investment it is hugely better than owning money. I’d rather make 1.5% than pay a 3% VAR mortgage.
So should REITS be held in TFSA or RRSPs? Or either one?
REITS don’t give you dividend, generally a large chunk of the distribution is return of capital and interest income. Doesn’t make too much sense to hold it outside a tax shelter.
There is no correlation between residential real estate values and income-producing apartment and commercial properties. — Garth
Well – except for places like Toronto where the tens of thousands of new condos ARE the competition for these apartments.
The growing over-supply of condos will eventually push vacancies up and rents down, since a high percentage of these condos are rented – especially in developments like CityPlace that contain a very high percentage of rented units.
Hi Garth, I keep hearing an ad from the RE people telling homebuyers to make sure they sign a BRA..should we sign this or is it a gimmick ? Does it really help homebuyers?
JO
Yes, I did a post on this some months ago. There is no advantage to buyers, only the agents. In fact, signing one could create a serious financial liability for a buyer. — Garth
39 P F Murphy on 04.14.11 at 11:39 pm
——
I agree.
I rented an apartment from Metropolitan Structures in the mid-90s when vacancy rates were over 10% and they were throwing in multiple free months. Boardwalk owns them.
Nun’s Island is expensive but what makes it different from Westmount, Outremont and TMR is that the population there is much more transient and nouveau-riche than in the other 3 where old money tends to reside.
Maybe we’ll never see high vacancy rates ever again. Maybe it’s different there, everyone will want to live there. Maybe all the poor from the burbs will force all the rich foreclosed to move there.
What I know is that in the US the foreclosure rate is the highest in the jumbo loan segment and I’m sure Nun’s Island is full of these.
IMO, the money has been made, these REITS are now short term flips until and the next step is to hook the greater fools.
Canadians will buy properties and pay them off simply as a goal in itself
=========
Yes. The 80+. And even then, they’re starting to reverse mortgage.
Garth, I recognize that REITs are a far superior investment vehicle than rental properties. But your repeated praise of them glosses over a critical aspect of investment: asset allocation.
A balanced investment portfolio should be spread across a number of non-correlated sectors, such as foreign and emerging markets, small cap, large cap, commodities, precious metals, and, yes, real estate.
But most of us are already over-allocated in the real estate category (namely, our homes). If I already have a $300,000 real estate asset, and only $200,000 in all my other categories, then the LAST thing I should be doing is sinking more money into real estate.
It’d be nice to see you address this issue.
First, nowhere did I ‘praise’ REITs. I only contrasted them to a direct real estate investment. Second, I have written endlessly about diversification, and a typical REIT weighting would be less than 5%. Please read my words literally. It’s how I write them. — Garth
While REITS have performed very well in the past few years, I’m not convinced the good times for these products will continue at the same rate. With more vacant houses and condo flippers condos available for rent, I’m not sure boardwalk and other apt REITS can get full occupancy at the rent prices they want. Commercial REITS will also face downward pressure as consumers dry up in an inflationary environment. Just my 2 cents worth.
Study the properties and fundamentals of these apartment REIT companies. You will see this comment is just conjecture. — Garth
“The golden age of the condo is over. Finished.” – Garth
Quite true I think.
Not only this is true for financial, economic and demographic reasons, but a large condo market such as the one we have does not make much sense anyways.
Consider that for most a condo is (in real life) merely a temporary solution, young couples (such as your example) will soon want to move and/or upgrade to a detached home when they have kids (or they will split up…) and older folks will live there only as long as their health permits. If you consider that, the fact that most will want to own their condo for a rather short period of time makes this “investment” all the more risky and potentially very troublesome.
The reality is that the condo market does not fulfil a true need in our society, what we really need is a healthy market for good quality rental apartments.
We will get there because the market always eventually brings everybody back to reality.
The Rolling Stone got it right: “You can’t always get what you want, But … you might find you’ll get what you need”
It’s only a matter of time, but for a multitude of reasons, economic and otherwise, the condo market is doomed.
About gas prices, I’d guess diesel is the way to go in terms of wringing out an extra 30%+ of gas miliage.
Diesels are so clean and quiet these days. And offered in a surprising array of models:
BWM 3-series and SUVs, Audi SUV, Jeep Liberty, and the venerable VW Golf/Jettas and maybe Passat, and others I cannot recall.
Hybrid is a joke, when you mash the throttle you want real Horsepower to follow. There’s no replacement for displacement as the saying goes!
In fact a pure electric car is even better as electric motors develop almost full torque from a standing start. No waiting for it to spool up.
A great electric car was crushed, literally, by GM and Big Oil years ago: http://www.ev1.org
The GM Volt is an embarassement, a step backwards, even university engineering students could invent better results.
Respoding to #12 –
BPOE, Vancouver is done. Caput. Finished. Over. I live in Kits, and I personally believe we will have at LEAST a 40% trip on our prices. Inventory is definitely sitting longer and prices HAVE been slowly and quietly coming down. My wife and I agree 110% with The American. Frankly, every time you disagree with him, you only show the rest of the blog just how right he is. You have no respect here and you’ve been caught in several lies and mistruths. So, if you disagree with someone, it only means that person is right. Nobody wants to be on the side of a loser, much like yourself.
Okay Garth: I’m getting confused. Yesterday I realized my daughter’s RESP has been sitting idly since Sept as CASH in the acct. (It used to be a GIC, and somehow I didn’t realize it had matured~Yikes~). Anyway, I phoned the [email protected] and asked about putting this into a TFSA and he said I could NOT do that. She’s 5. I have a while to go but I thought I read somewhere here that a RESP COULD be in the TFSA shelter. It certainly isn’t a lot of dough but I would like to see it get maximum value. Was he wrong or did I misunderstand and have to keep stuffing the orange guys shorts?
Thanks for all your attempts to edumacate us fiscally illiterate. Appreciate your humor and the pic’s are stellar too!!
You need to be 18 to register a TFSA. But nice try, — Garth
Its a good thing its different here. No need to consider that US REITS shed about 2/3 of their market value between 2007 and 2009. :-)
So did the Dow. As one asset class in a diversified portfolio, REITs have a useful role to play. But if you’re scared, stay home. — Garth
Hi #77 S.B., Have you seen this car and bus yet?
The GM volt battiery technology was the best at the time, but not quit good enough for all temperature range in north america. But now there are better battery materials with much better properties. Here are just two examples in use today, see below.
All electric car
http://www.teslamotors.com/
Altairnano Batteries Make Proterra A Magic Bus
http://www.wired.com/autopia/2009/11/altairnano-proterra/
Here is an electric hybrid bus that is made near Oakville in Mississauga Ontario Canada.
http://www.orionbus.com/
No question they have a useful role to play here Garth. Just saying that they are unlikely to perform all that well in the next little while. Still decent investments though.
Look everyone! Vancouver is such an awesome place that it has its own Twitter page and Facebook page and other people blogging about us! Amazing, eh?!?! This city really is something, folks. Why, just check out what others who live here or have visited here have to say about it! It’s so neato awesome that we have a f*ckin’ Facebook page! I mean, what city has that, right? Well, off to ass-roger another potential stupid buyer this morning. Talk with you all soon!
http://twitter.com/VancouverSuckshttp://amplicate.com/hate/vancouver
http://www.facebook.com/group.php?gid=2243416689
http://www.youtube.com/watch?v=FmjP1vxLxtg
http://www.sfbayguardian.com/politics/2007/10/23/why-vancouver-sucks
http://blog.vancf.net/2007/11/03/why-vancouver-sucks/
http://www.topix.com/forum/ca/british-columbia/TOD1PJ6BKH1G4GPQ4
http://www.youtube.com/watch?v=Dy7GAi7ns2I
http://www.topix.net/forum/ca/vancouver-bc/TOD1PJ6BKH1G4GPQ4/p44
Here’s our Twitter Page in Vancouver!
http://twitter.com/VancouverSucks
Brad in Van
Good work following The American, renting in Kits some dingy 3 story walk up. Meanwhile you could of bought in Kits a few years ago and made a small fortune. The American makes up facts like 40% based on nothing. Typical American bitter that Vancouver is better than the US. Higher interest rates will not stop offshore money. If all offshore money dried up tommorow due to improbable high interest rates the end game would be the same. 2 million dollar dunbar house down 40% to 1.2 million due to high interest rates = the same carrying charges.You missed the most recent boom now your bitter as your friends all got rich. Stressful and sad situation. Unrecoverable
Hey Garth,
As per my Notice of Assessment, I have TFSA Contribution Room for 2011 of $10,000. I’ve been contributing $5000 in each of the last 3 years…..
What gives? The governments control on these things seems laxidaisical and amateurish at best. Can it simply be chalked up to a new offering and their still working out the kinks? (I know the gov’t works slow… but come on… its been 3 years)
Is it my responsibility to tell these bozos of my contributions? or do I turn a blind eye and keep contributing until they advise me otherwise?
I was under the assumption that my financial institution should be remitting these contributions to the proper authorities?
Do you think sheepishly, the gov’t is trying to entice me to overcontirubte so they can penalize me at 1%/month to re-coup some of the losses they took from those savy investors that were stashing millions ?
What do you think I should do with this carrot they seem to be dangling?
Anybody else have a similar issue?
Greetings: # 79 [S.B.]
The trucking/military/agriculture sectors are the biggest consumers of diesel and you can rest assured the cost per liter will surpass that of gasoline. While we as consumers can modify our consumption a fair bit, these parts of the economy don’t have as much flexibility. I will stay with my small pick-up rather than contemplate the cost of switching to a diesel. ROI just isn’t there.
BPOE ….I’m in the elevator waiting…… And that smell….isnt fear. :)
#56 Ralph Cramdown
I have no problems finding good tenants. The key to being as you put it “a wannabe landlord” is to not be a desperate landlord.
I don’t know the details that Garth knows of this couple, but I wagering a guess that they would REQUIRE a renter every month of the year and would be in serious trouble if they didn’t have one. This leads to desperation and renting to someone you shouldn’t.
The key is to have the renter need you more than the other way around, so you can take your time with your decision. If you can’t withstand at least 4-6 months of not having a renter, you should probably not be in the game.
#66 Karl Hungus,
The study was based on a condo with 40% equity … so only leveraged 2.5 times. The rate of return listed INCLUDES the leverage. Sure you could say what if I only had 5% equity and was therefore leveraged at 20 times. Ya, your return would be a LOT better … but so too will be the pain if there’s a loss. Just like I could go take out a loan and invest it all at the black jack table for 100% return … or 100% loss.
If you want leverage I’m sure you could borrow your brains out and dump it into a balanced portfolio too. Leverage just increases the risk as well as the return.
The biggest difference between a REIT and a condo is that if I want to sell my REIT investment I can do it in 30 seconds and it will cost me $10. If I want to sell a condo it might take 6 months and $20,000.
On the subject of crappy condo construction. Nothing new here and I’m feeling my age. About 20 years ago, just out of school and looking to shack up with the hubby, we looked around for a small house or condo. We looked at some lease holds in False Creek. We weren’t sure what they were, but learned that you never owned the land, just leased. Yikes – you never really owned it? Anyway, I was quite surprised that prices were still so high for leased condos. I wanted to clarify my understanding with the real estate agent and when I asked whether it was true that after lease period ended, you didn’t own anything, she light heartedly replied that the buildings probably wouldn’t even last for the lease period. We created a wind tunnel running out of the unit. It still makes me laugh.
“…the majority of B.C. residents planning to buy a home in the next two years value the price and location of the property (94 per cent and 91 per cent respectively) over resale value (66 per cent).”
http://www.vancouversun.com/Home+buyers+value+price+location+over+resale+value+survey/4621842/story.html#ixzz1JbXKwfGN
Here’s my favourite part:
“The report also revealed that intuition plays a key role, with 67 per cent claiming a “good feeling” towards the home is an important factor in the decision-making process.”
LOL :-D :-D !!!
REITs bin good to me. But you have to find something better than the XRE ETF. Managed funds would seem to be a better bet.
Somewhat concerned with all the For Lease signs and empty Malls dotting the landscape. They will eventually have an impact. Unless the green shoots get some miracle grow fertilizer soon.
Statistic of the day:
“the average Canadian house price rose to an all-time high of $366,000 last month (March), but if Vancouver were excluded the average national price would be 11 per cent lower at $327,000.”
http://www.680news.com/business/article/212910–national-home-sales-steady-in-march-first-quarter-near-long-term-averages-crea
Did I hear a “pop” somewhere?
#50 Dark Sad Monster Bunny
Just another in a long list of ill-conceived schemes.
Sure, it would be nice to double CPP payouts. It would be nice to pay our veterans more. It would be nice to give more funding to this and that program. Everyone’s deserving of more money. Especially if that someone is me.
But, you always, always have to ask one simple question:
Where is the money going to come from for all this wonderful new spending?
We’re already running a deficit, and have for nearly every single fiscal year. I don’t buy the “balanced budget” BS that’s based on accounting gimmicks, delayed spending, and unsustainable offloading of costs with no compensation.
So you have three valid options:
1. Put it on our credit card, run higher deficit.
2. Raise taxes, and don’t give me that “we’ll tax the rich and corporations” BS, that only works on the terminally naive.
3. Take money from other programs, list them by name.
One of these options should be attached to any new spending proposal, in crystal clear black and white, and account for the entire cost of the spending, not just the teaser first year.
Condos –All the financial responsibilities and obligations of home ownership and all the disadvantages of renting.
No value, no land, just a poorly built building steadily deteriorating. No thanks.
What percentage is required for civilization? We’re way above 50% in taxes and hidden fees right now.
>Hybrid is a joke, when you mash the throttle you want real Horsepower to follow. There’s no replacement for displacement as the saying goes!
What you really want is torque if you want responsiveness. My hybrid puts out just shy of 300 lb-ft of torque and it does it at zero rpm. I can’t stand driving a standard car with the torque lag it has. Hybrids give you acceleration instantly. Not second and a half later.
BTW, If I mash the pedal the ABS engages because the wheels can’t possible grip that well.
Mr. Plow: (funny name) If you can’t withstand at least 4-6 months of not having a renter, you should probably not be in the game.
absolutely true, also talk to my sister-in-law who has been a landlord for 20 years. A long time ago I was a naive landlord. No more.
Garth, really enjoy your blog and have become a big fan but I’m with several here in that I fail to see how REITs are going to continue to make reasonable returns. Succinctly, in an environment where property values are going to go down and interest rates are going to go up, how is this going to work to the advantage of a REIT?
Are the house horny over leveraged 20’s crowd going to flock to rental accommodation after having been foreclosed on? I’m also somewhat skeptical that commercial realestate is going to continue to thrive in this type of environment, i.e.: without HELOC piggy banks to draw upon consumer spending is going to plummet.
Your insights would be appreciated.
It’s interesting how so many people misunderstand these vehicles. An apartment REIT owns properties which are already fully matured and leased. Why should a real estate correction throw people out of their units or change a business model? This is simply not rational thought. — Garth
G-Man….you’re couple is only down $600 p/a ‘now’. So what happens when rates are up …even slightly….or they ‘shudder’ get any type of ‘special assesment’ from the condo board/mgmt for any kind of upkeep or repair on the building? Too many of these people don’t plan for the inevitable and I think it’s appropriate that you are using deer as visual metaphors…. as in ‘deer in the headlights’.
I had lunch with a banker yesterday…..he wanted to know how to invest his mothers retirement egg. So much for going to the chartered banks for advice. These twenty and thirty year olds don’t even have the vocabulary….never mind the skills or experiance to think for themselves. Anyhow………I did mention that stats indicate that 80% plus of the FTB’s are less than 1% away from being undewater……..he turned a bit green…..this is no secret. I asked him what the bank thought would happen when this segment of the market was removed from the field……? They haven’t thought this out at all. It won’t take more than a vagrant breath of homeless air to topple this shaky scam aka ’emergency rate regime’.
But ……………….the world is getting back to normal…..Tokyo Disneyland is open for business !! Glow in the dark sushi anyone?
#101 45north
Thank you sir, or Ma’am.
I admit I have learned this stuff from some poor decisions of others that are close to me. Luckily they were inexpensive mistakes for them, but I learned a great deal from them without having to endure them.
#88 Ron Burgundy
Just me, but I wouldn’t be trying to pull a fast one over CRA. If they have made a mistake and you knowingly over contribute you could be on the hook for that mistake.
Why not phone them and just ask what is up with your notice. See if you can contribute more or if they made a mistake, or if you are reading it wrong.
Stay Classy.
#79/SB:
University students could? Can, do, and did.
http://www.thefreelibrary.com/30+UNIVERSITIES+TO+COMPETE+IN+FORD+HYBRID+ELECTRIC+VEHICLE+CHALLENGE-a011944615
Check out the release date.
It’s practically a farce how far things _haven’t_ come in the nearly two decades since I was an undergrad. What we did for a hundred grand is still mind-blowing.
Everyone else’s mileage may vary.
6% yield
http://finance.yahoo.com/q?s=CSH-UN.TO
http://www.stockchase.com/Company-sl–slq-ID-slv-Chartwell–Seniors–housing.php
Responding to #87: See BPOE, that’s your problem. You assume WAY too much. I OWN OUTRIGHT my home in Kits. No rent, and its a nice home.
As for following The American, I don’t. But, I do agree with his posts 90% of the time. And, I’ve lived in both Seattle and Vancouver. No comparison whatsoever. Seattle trumps Van in every way imaginable. That’s why you continually have to bring up that argument time and time again. If anyone is feeling inferior here, it is clearly you.
Like I said, you have ABSOLUTELY ZERO CREDIBILITY. So, remember this… Anytime you say ANYTHING, the readers here will clearly know you’re wrong, lying, or falsifying data. Its a very simple formula. So, when you say Vancouver is going up, we clearly know it must be on its way down. After all, everything you’ve ever said has been PROVEN to be a lie. Loser.
Story on condo line-ups in Burnaby
http://therunagatesclub.blogspot.com/2011/04/chancellor-tower-metrotown-madness.html
They are suggesting bylaws to stop this…I agree.
Is the City in cahoots by catering to the crowd?
I can see line-ups for one overnite thing……like Boxing day…any longer call it loitering . Buy buy bubble
#93 mousey
Re leaseholds….
They have existed for a while, but what pisses me off is how instituions like UBC and SFU have pimped their endowment lands.
My understanding is they cannot sell them, they are in trust, so they effectively Joint Ventured with developers and earned revenue. The question is what di they do with the revenue? WTF is a University doing in the RE business? Why are tuition fees so high? Are these universities turning into private corporations , paying profs top dollar , private research facilities.
It sems very public sector entity is on a rapacious fullscale double dipping mission.
They should never be allowed to engage in residential RE
At #12: BPOE, what exactly would I be jealous of? Worse weather in Vancouver? Vancouver being a vastly smaller city in the middle of a rain forrest? Vancouver having an absolutely lousy economy and no industry given its relative population? A tremendous collection of racially-divided ghettos throughout the region near Vancouver? A freakish lack of infrastructure to support growth in Vancouver? Outdated architecture and buildings in Vancouver, even if they’re brand new? Worse shopping in Vancouver? A tremendous real estate bubble that will pop in Vancouver and cause financial ruin on its citizens?
Nahhhhhhhhhh, I can assure you I’m not jealous in the least. I’m angry with friends and family there that have been delusional for the past several years. Now they’re all, each and every one of them, coming around to realizing there is a serious problem with which to recon. “People” like you are perhaps the largest of the Vancouver challenge as you continue to spew lies and deceit, once again finding a greater fool. I’m trying to combat ignorance such as your’s.
Seattle’s growth continues to happen, and it is continuing to outpace that of Vancouver, even with the “mass influx” of Chinese people into Vancouver as you would want everyone to continue to believe. This speaks volumes with where I choose to be and will continue to happily stay.
And me too. I would love it if they doubled the CPP just before I turn 65 (a long way from now), that way I won’t have to contribute to it; I can just enjoy receiving the doubled benefits.
Oh but wait, I think someone has already thought about doing this. Unfortunately it seems that’s the next scam the retiring boomers are going to pull on us. Double their benefits, and send everyone else the bill.
Interestingly the latest CREA news release does not provide any actual numbers for the sales activity apart from “With national sales in each of the first three months of 2011 running close to their five- or ten-year monthly averages” – http://creanews.ca/
The same report for March 2010 – http://www.crea.ca/public/news_stats/pdfs/media_mar10.pdf is more telling:
“A total of 43,621 homes traded hands through Boards’ MLS® Systems on a seasonally adjusted basis in March
2010.” or “Unadjusted national sales activity numbered 49,256 units in March”
Anyone can shed some light on the actual sale activity for March – after all we had at least two weeks with RE market on steroids.
#99 Calgary Rocks
#181 Kaganovich on 04.14.11 at 4:42 pm
#178 Calgary Rocks (except when it doesn’t)
Perhaps, but to me your analogy is mistaken. I forget who it was that quipped ‘taxes are the price of civilization’…and after some reflection, I would tend to agree despite the odd reservation.
What percentage is required for civilization? We’re way above 50% in taxes and hidden fees right now.
Good question, but I don’t think we are tackling the issue from the same perspective, since my tax burden is much less than yours. Anyhow, I guess the question depends on two things. First, a definition of civilization and secondly, whether it is right to focus on achieving it as defined. Here:
http://michael-hudson.com/2011/01/why-america-had-a-90-income-tax/
If you aren’t persuaded, you may at least find it interesting as he explores concepts such as unearned income.
Here is some provocative talk about taxation by Stiglitz:
http://jessescrossroadscafe.blogspot.com/2011/04/stiglitz-of-1-by-1-and-for-1.html
#69 TheBigLebowski on 04.15.11 at 3:23 am
There will come a time when RIET’s could play a major role in an investment portfolio, but now is not it. Find a trend, a secular bull market, be right and sit tight. Real estate isn’t it in any form at this point. But there is a secular bull market in its 10th year for those willing to think for themselves . A market that will protect ones assets from what the future has in store.
__________________________________________
Excellent advice Mr. Partridge. Excellent advice!!
Following such advice would have cost you lost, predictable and low-risk returns over the last several years. Fear speaks loudly, but irrationally. — Garth
#80 Brad in Van
“BPOE, Vancouver is done. Caput. Finished. Over. I live in Kits, and I personally believe we will have at LEAST a 40% trip on our prices. Inventory is definitely sitting longer and prices HAVE been slowly and quietly coming down. My wife and I agree 110% with The American. Frankly, every time you disagree with him, you only show the rest of the blog just how right he is. You have no respect here and you’ve been caught in several lies and mistruths. So, if you disagree with someone, it only means that person is right. Nobody wants to be on the side of a loser, much like yourself.”
————————————————-
Agree, I live in Kits as well, and condo inventory today is at a 4 month high, lots of condos listed for months now, and I’ve seen about 5 price decreases in the last week alone for the ones that have been listed for awhile.
The tide might be changing even on the west side, Unfortunately I can’t same about Single family houses….yet
@ #102 realist:
I don’t know about a “pop,” but I do recognize when someone cherry-picks and distorts statistical information.
The CREA report clearly indicates that excluding Vancouver, national home prices year over year in Canada are up 4.8%.
Yes – I realized this when I re-read the article… first time through, I thought it said that prices were DOWN 11% when you exclude Vancouver.
Unfortunately, there is no “delete” or “edit” button on these posts.
Interesting article on speculators and defaults in Dubai.
Developers can play hard ball in Dubai with the deadbeat speculators. Look at the collection options being used. Of course in Canada the developers would receive big fines if they tried the last three options. I love it a name and shame campaign.
Options available to developers
In strata title buildings with a high percentage of service fee defaulters and significant cash deficits, developers are resorting to one of the following options:
Continuing to fund the operating costs to retain the project’s brand value
Temporarily withholding utility services
Restricting tenants from using non-essential amenities
Unleashing a name-and-shame campaign
The last option typically involves the developer putting up the names of service fee defaulters on a noticeboard in the building lobby. “I understand Emaar has attempted this in some cases. But it is a very hostile act and not recommended. Some owners have some genuine complaints, and to act in this way is confrontational,” says Kent O’Brien, CEO, Strata Global, a strata consultancy firm.
http://gulfnews.com/business/property/service-charges-are-a-cat-and-mouse-game-1.790412
best thing to come out of this election so far. Steve it’s time to leave.
http://thetyee.ca/Mediacheck/2011/04/14/ViralElectionVids/
#110 Hoof Hearted
They don’t need any new laws to stop this. Are there not already perfectly good laws against blocking a sidewalk, loitering, etc? There are so many laws, no one can keep track as is.
Ahhhhhh! Garth and Change!!!
http://bit.ly/eQeX1a
#115 Kaganovich
In the first minutes he talks about the income tax being brought in to tax “unearned income” of the top 1%. In “unearned income” he counts rent. Excuse me, but how is rent “unearned income”? Rent is payment for housing, which is a service provided by a landlord to a tenant. It brings the industrial base to bear (construction, renovation) and is absolutely earned. This is in stark contrast to money earned through “financial innovation”.
Every once in awhile, a posters says they hear a ‘pop’. There must be something wrong with their ears as real estate prices continue to ratchet higher year after year.
Talk to your doctor. They might be able to help!
yesssss BPOE, down on your knees, Now breathe Deeeeeeeeeeeep, Enjoy the fragrance of Richmond Elevator elevators.
You know you like it……
Observations On The Chinese Real Estate Sector Following The Biggest Price Decline In 5 Years
Submitted by Tyler Durden on 04/15/2011 12:04 -0400
Two days ago we indicated that something quite material could be happening in the Chinese real estate market. Quoting from Market News, we reported that “Prices of new homes in China’s capital plunged 26.7% month-on-month in March, the Beijing News reported Tuesday, citing data from the city’s Housing and Urban-Rural Development Commission.” And while many dismissed these news as merely a property specific ASP rotation, what followed was a downgrade of the Chinese property sector by Moody’s citing an expectation of “credit conditions to worsen in next 12-18 months for developers” at which point we decided to dig in deeper. It appears not all is as good as the apologists would like to claim. Because while the average selling price in Beijing plunged by 34%, and that in Hangzhou by 26%, the drop was very substantial and rather pervasive pretty much everywhere else as well. From Citi’s Oscar Choi: “ASP- down 7% MoM in March, biggest monthly drop in the past five years. In January and February, ASP in most key cities still maintained an upward trend. But entering March, ASP achieved in 18 key cities dropped by 7% MoM, and Beijing’s and Hangzhou’s ASP achieved were down 34% MoM, Hangzhou down 26% MoM.”
Continued at:
http://www.zerohedge.com/article/observations-chinese-real-estate-sector-following-biggest-price-decline-5-years
Could the Asians bolt as easily from BC?
realpaul: stats indicate that 80% plus of the FTB’s are 1% away from being underwater……..he turned a bit green…..this is no secret. I asked him what the bank thought would happen when this segment of the market was removed from the field……? They haven’t thought this out at all.
and here I am thinking that the banks have got this all figured out or maybe top management is going to let their employees figure it out at the same time as their customers
Mr. Plow: Thank you sir, or Ma’am.
Sir
“REITs do not buy houses. Apartment trusts acquire residential rental complexes and commercial trusts buy office buildings, malls and industrial properties. The idea is that REITs collect rents and pass cash flow on to investors in the form of regular distributions. Their units can increase or diminish in value, depending on investor sentiment. Lately these things have grown, on average, about 20% a year as well as paying investors to own them. And a housing correction will not impact them negatively.”
Ummm… isn’t it plausible that rents would actually decrease if housing/commercial values decreased? I’m no expert, but I think that declining rental revenue streams would impact a REIT negatively…
http://www.discountlandlord.co.uk/news/index.php/economic-situation/landlords-warned-as-rents-fall-for-first-time-in-year/
http://www.time.com/time/business/article/0,8599,1873081,00.html
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a2CB8KFfL3tw
REITs have buildings full of people on leases. — Garth
#80 Brad in Vancouver
#117 Moloko
you may not realize how far the condo market has dropped on the west side of Van. in the last little while.
i made a little trip to see my “local realtor” to see how this west side condo market was really doing (i did the same thing before Xmas and posted the results of the 20 condos i researched in the Westend of Van–lots sitting since last spring –many with price reductions)
i had 10 properties checked and guess what???
-#207-3731 w 6th–list oct10 -378.8k–now345k
-#308-3839 w 4th–list may10 -499.7k–now 459.7k
-#319-3875 w 4th–list oct10-364.9k–now354.9k
#402-4387 W 10th–listaug10-1.588M-now-1.509M
#103-4463 w 10th–list oct10-659k–now 599k
#403-3611 w 18th-list feb10 -788k–now 768k
#207-3638 w 9th-list mar10-369k–now 339.8k
#302-4375 w 10th–bought oct08-444k–listed 499.9
the other two were recent listings
-there are not that many condos for sale in the point grey area and i have a strong feeling you’ll find the same price reductions in all areas with many listed for months and no takers
the one that did surprise me was the last one -bought in oct08-where is that huge price increase we’ve all heard about–not so “scary” when you see the real numbers, is it?
try it–pick 10 to15 mls# in your area –take them into your local realtor–tell him/her you’re interested and want some background on your numbers(they’ll smell an easy commission and will bend over backwards for you)
–tell them that you’ve just recently sold your house and your rental condo–watch their eyes light up–they’ll be sending you listings til the cows come home………
Following such advice would have cost you lost, predictable and low-risk returns over the last several years. Fear speaks loudly, but irrationally. — Garth
_____________________________________
why don’t you comapre the returns in gold, vs your investments over the last few years, and see which has done better. physical gold has returned 18% pa COMPOUNDED over the last 6 years to me. with NO DOWN YEARS, not even in 2008/9. can you say your investments have done the same?
i am neither afriad, nor irrational. the Big L is 100% correct. find what is a in a BULL MARKET, and HOLD IT.
i’m sure the reference to Mr. Partridge eluded you.
My diversified portfolio contains both, of course. — Garth
While I agree that RE in Vancouver is in a bubble, why does “the American” so vehemently denigrate Vancouver as a place to live? There’s just too much hostility there.
Just accept that different places appeal to different folks. I’m sure there are people in New York City that would guffaw at the provincial nature of Seattle.
Full disclosure: I live in neither Van, Sea nor NYC.
#121 Devore
I know…..that’s a whole other story.
Lots of informed citizens say ENFORCE THE EXISTING BYLAWS…
Why is Burnaby staff accomodating this line -up?
Politicians are useless…bored Staff simply draft new bylaws to ad to the other ones that already collect dust.
186 Timing is Everything
fraud as a deflator
.. link regarding BMO bank fraud. iIlike what the bmo spokesperson said,”… conducts appropriate due diligence for each mortgage transaction,” “We take all necessary measures to protect our assets.”
========================
NEW YORK — Top executives at Washington Mutual actively boosted sales of high-risk, toxic mortgages in the two years prior to the bank’s collapse in 2008, according to emails published in a wide-ranging Senate report that contradicts previous public testimony about the meltdown.
The voluminous, 639-page report on the financial crisis from the Senate Permanent Subcommittee on Investigations singles out Washington Mutual for its decision to champion its subprime lending business, even as executives privately acknowledged that a housing bubble was about to burst.
@#97 Devore
Federal governments don’t have credit cards. They print the money they need to spend (don’t be naive and think they spend your tax money; they spend first, take in tax later).
When the government sector is in deficit, the non-government sector is in surplus. It is an accounting identity.
A monopoly issuer of currency has no constraint on their spending, apart from self-imposed constraints.
Here’s the rub: if there is work needed to be done, its usually better that the private sector do it. But if the private sector doesn’t/can’t (as in a recession) the government sector must step in and do the work.
Otherwise the work does not get done, which leads to high unemployment.
Look around you at society. Can you honestly tell me there is no useful work that can be done that isn’t being done?
AND no one goes to JAIL? Isn’ this organized
racketeering ?
By late 2006, the FDIC discovered that Washington Mutual was not complying with the new standards, but the Office of Thrift Supervision blocked any further FDIC review, refusing to give access to loan files.
Using the delay to its advantage, the bank continued to issue billions of dollars of high-risk loans. A 2007 e-mail from Ron Cathcart, the bank’s chief enterprise risk officer, implied that the delay was strategic: new requirements for income verification would cut the volume of new adjustable-rate mortgages by a third.
Have you noticed that Gail Vaz-Oxlade now has a brand new version of her popular show “Till Debt do Us Part” out on TV as of last week or so……
It is entitled “Til Debt Do Us Part…..THE HOME EDITION”………and guess what kind of people it profiles…….YEP, you guessed it, and it wasn’t even that hard now, was it ?
It’s the 20-30 something home debtor crowd of greater fools who are stuck up to their you know whats in you know where…….
#136 Keith in Calgary…
Thanks for that. I would like to catch a couple of those episodes to see what kind of message she and show sends.
#125 CrowdedElevatorFartz
Dude, very creepy…
#124 Drewbie on 04.15.11 at 3:55 pm
Every once in awhile, a posters says they hear a ‘pop’. There must be something wrong with their ears as real estate prices continue to ratchet higher year after year.
Talk to your doctor. They might be able to help!
______________________________________________
Drewbie –place a bag of microwaveable popcorn in your microwave and each “pop” you hear is another property being listed for less than the owner paid 2 to 3 years ago–when that one’s done –repeat the procedure for next weeks listings–this market is going down–down–down
— take off those blinders and do a little research–you’re sounding like a fool
Garth, can you translate this?
http://www.theglobeandmail.com/report-on-business/economy/housing/vancouver-boom-cited-for-home-price-surge/article1986776/
Latest March figures in this area.
Average price down 2% year over year.
Sales down about 20% year over year.
Cottage country sales have ground to a halt.
All of this is due to a late spring which has yet to arrive (I’m sure).
If the trend continues in April, we can blame the federal election.
Then May is here and… oh boy, RE better be moving then or we are all in big trouble.
I no longer think that slow melt will occur; I expect a big drop when it hits this Summer.
If people can bring themselves to get their head around the US debt ceiling debate this Summer, they will fully understand how bad things are for those in debt…and the RE lightbulb just might come on.
#123 Devore
#115 Kaganovich
http://michael-hudson.com/2011/01/why-america-had-a-90-income-tax/
If you aren’t persuaded, you may at least find it interesting as he explores concepts such as unearned income.
In the first minutes he talks about the income tax being brought in to tax “unearned income” of the top 1%. In “unearned income” he counts rent. Excuse me, but how is rent “unearned income”? Rent is payment for housing, which is a service provided by a landlord to a tenant. It brings the industrial base to bear (construction, renovation) and is absolutely earned. This is in stark contrast to money earned through “financial innovation”.
I think what he is trying to get at is separating the necessary and justified costs of the rent from gouging and unjustified costs in rent…for whatever services. Keynes writes candidly about the issue in the concluding notes of his general theory. Did you watch the whole video where at the end Hudson addresses rentier/financialized economies being ‘free-lunch’ economies? There used to be a commenter by the name of ‘jr.’ who posted frequently on this site, and (s)he would always write about the neccessity of an underlying economic engine being the crux of any productive economy. I was always inclined to agree. But what I am getting at is that Hudson is speaking about the tendency of the FIRE sector to stifle productive, industrious economic enterprise. Lining the countryside with houses and then charging eachother rent must be underpinned by something other than easy access to debt qua economic engine, that is, unless our goal is to return to feudalism II.
REITs may have people on leases, but all leases tend to expire. What happens when these leases expire in the midst of a RE crash? There will be many cheaper rental options available putting a downward pressure on lease rates. This happened to my employer’s own office space – we secured several floors at cheap rates for several years during the recession. Please explain how REITs are not affected by this.
Wait and see. In the meantime, I’m enjoying my REIT returns. — Garth
#134 Robert Dudek
Governments don’t “print” money, central banks do. By “credit card” I meant bonds/treasuries. Governments get money by borrowing, or from taxes/service fees. If governments just printed money to cover deficits, every country would be Zimbabwe decades ago.
Due to employment, labour and wage laws, there is TONS of work that could (and should) be getting done, but is not.
#142 Kaganovich
I understand the economic concept of rent, rent seeking, and the rentier class. Hudson seems to be on the extreme saying services/service economy is basically unproductive, and generates no real wealth, and should not be profitable, which I have an issue with. There are many services that are necessary, essential even (such as rental housing) that do not “produce” anything, but someone must supply them. In order to supply them, they must charge a fee, at a profit, to earn a living, and to finance capital improvements. Who would provide them otherwise, the state?
Holding productive assets always comes at a cost. Nothing is free. Productive assets almost always depreciate, be it a house, machinery, factory, etc. Owners of those would not be owners for very long, if they could not make a profit renting them out to producers. Whether those profits are outrageous is a matter for the market and supply/demand to decide.
You could make a case for land, because as a general rule land does not depreciate, absent external factors, such as changing political or regulatory regimes. But even land is taxed as well, so it is not a risk-free venture.
I agree that the FIRE sector, high finance and everything associated with it is largely unproductive, and sucking wealth out of society. The entire derivatives and shadow banking system is out of hand, and placing the world economy at risk. Anyone arbitraging between central banks and governments (ie primary dealers in US) is the very definition of a rent-seeker. But the line has to be drawn somewhere. Without owners of assets, you would very quickly have no assets, unless you’re thinking, what, communism?
Responding to #131 –
Robert Dudek I don’t take away at all that Vancouver is a bad place to live. When I read The American’s comments they are in response to the needling and bullshit that BPOE directs toward The American, always calling Seattle a “rain barrell” or “back water” or calling The American “jealous” of Vancouver. Should he sit there and take it from a piece of crap like BPOE? I read The American’s comments and I have to admit that I agree with him, mostly. Have you ever noticed how he doesn’t bring it up until provoked by BPOE. He’s made a forecast of price declines in Vancouver in excess of 40%, which is probably accurate. BPOE doesn’t like it, and then he has to start trashing other cities like Seattle.
109 Brad – On the subject of credibility. Firstly BPOE never had any so why blog-yell at the village idiot?
Secondly, and more importantly, I’ll review what you
have told us and why you are now lacking credibility. You have stated before how much you dislike Van. I asked
before why don’t you just leave? (Never got an answer).
You say Seattle is much better, so why not try there?
Now you claim you own free and clear in Kits, and you
are sure prices will fall – and you dont like it here anyway. So sell and GTFO with $1M+.
You sound as FOS as BPOE.
Devore – you’re on a roll today.
Please dont misunderstand that I somhow approve of doubling the CPP. I remember that CAW economist approving of it. Here’s a guy working for a powerful union now calling on the govt to support his workers after they have already bailed out the industry. CAW workers need look no further than their union leadership for the culprits.
C-Rocks – I dont see the CPP as a “boomer thing” either. Boomers are just starting to draw benefits after paying in
for as long as 45 years. Problem is, most of that has already gone out as benefits to our parents generation.
I would prefer a “fully funded” CPP but I think Moneta has a point in saying that would be too complicated for
the govt to run!
#145 Devore
Thanks for the thoughtful response. I am not saying that housing isn’t useful, since it undeniably is crucial in our climate for the labour pool to be able reproduce itself everyday. All I am claiming is that the rent/profit should be kept in check. Yes, the primary dealers are getting a free lunch after they ate everyone else’s (and they still won’t even come close to covering over the derivative black holes they created). Fairly counter-productive. I don’t really know what the answers would be, but they maybe lurk around the attempts to control or regulate profits or rates of return to reasonable levels while still trying to make credit available to the entrepreneurial minded folks. Like Keynes points out, if demand isn’t crushed (by a housing bubble bursting, for instance), then even entrepreneurs of ‘average skill and average good fortune’ will have a chance of succeeding and investment won’t seem so risky. Windfall profits however, should be seen as detrimental and signs of systemic flaws. I guess I am not enough of a believer in the existence of free markets (especially after confronting Ha Joon Chang’s work) to actually condone deregulation. In fact, regulation should be seen as a way to keep markets free from private monopoly/oligarchical control, but for that to happen, the citizens of a country would have to not only conceive, but force, the state to be their apparatus for expression. Few of us have developed ourselves to the degree required for another stab at instituting the communist idea, myself included. As Keynes pointed out during the Depression, (You will get a kick out of this!)
For my own part, I believe that there is social and psychological justification for significant inequalities of incomes and wealth, but not for such large disparities as exist to-day. There are valuable human activities which require the motive of money-making and the environment of private wealth-ownership for their full fruition. Moreover, dangerous human proclivities can be canalised into comparatively harmless channels by the existence of opportunities for money-making and private wealth, which, if they cannot be satisfied in this way, may find their outlet in cruelty, the reckless pursuit of personal power and authority, and other forms of self-aggrandisement. It is better that a man should tyrannise over his bank balance than over his fellow-citizens; and whilst the former is sometimes denounced as being but a means to the latter, sometimes at least it is an alternative. But it is not necessary for the stimulation of these activities and the satisfaction of these proclivities that the game should be played for such high stakes as at present. Much lower stakes will serve the purpose equally well, as soon as the players are accustomed to them. The task of transmuting human nature must not be confused with the task of managing it. Though in the ideal commonwealth men may have been taught or inspired or bred to take no interest in the stakes, it may still be wise and prudent statesmanship to allow the game to be played, subject to rules and limitations, so long as the average man, or even a significant section of the community, is in fact strongly addicted to the money-making passion.
Now, Keynes writes like the elitist don that he was, but the gist of it remains accurate. I have little doubt that the high concentration of sociopaths and psychopaths in the FIRE sector would be tyrannizing in a much more harmful way if it weren’t for that sector opening the doors to their personalities, but that doesn’t mean that they should not be regulated and policed simply because of their vocation.
Responding to #147:
Dark Sad Monster Bunny, maybe I should clear up a few things here. I never stated I hate Vancouver. I find it to be a pleasant place, but not without its problems. We live here because we are Canadians – not Americans. That presents a substantial difficulty in a long-term stance in Seattle. We had lived in the U.S. in a few cities prior to moving to Vancouver. I work in the tech industry and Seattle filled that well for us. I like Vancouver, but I get tired of Vancouverites stating and believing it is the “best place on Earth.” It really isn’t and all it would take is for people to get out more to understand that. I support other’s comments on here when I read that sustainability of prices and affordability in our city has gone overboard. There is no justification for it. As I said before, if I could, I would move back to Seattle, but I cannot for a time being due to contractual obligations with my previous employer. I would have to wait another 18 months before that can happen. At that point I will certainly do my best to make it happen. Unfortunately, we too were dumb enough to purchase this home of which we now believe is actually losing value each day, making it more problematic for a move back should we sell. We’re considering other options such as renting our home out, but we’ve had horrible experiences with that in the past doing that in our neighbourhood. Like i said Vancouver is nice but it isn’t THAT nice of a place to warrant the ridiculous naivity and superiority complexes people here have about the place. It is called delusion.
150 Brad – thank you for your response. BUT please read this cut and pasted:
Brad in Van on 04.02.11 at 3:01 am
At #198: Nomad, Vancouver is a shithole. Really, it is a shithole of unmentionable proportions. Give me NYC,Chicago, Barcelona, or Rome any day of the week over this rain-pissed mud flat of a town. Culture here S U C K S, arts scene here S U C K S, night life here S U C K S, shopping S U C K S, and the educational system REALLY is not that great, and the traffic is pathetic.
End of cut and paste.
Now you say it’s “a pleasent place”?
So Garth suggests to sell damn condo, passing troubles onto someone else. This is a zero sum solution, as the overall number of troubled owners remains the same – nothing has changed in this scenario. Garth is a typical politician – give something to some, while taking that out from others. Garth, can you resolve the problem, but not redistributing it.
Joke, right? I sure hope so. — Garth
#152 Sss
In your world is everyone running through a meadow, hand in hand, while singing and laughing with the sun beating down from a bright blue sky?
Responding to #151:
Dark Sad Monster Bunny, I cannot stress this enough – I did not write that post. It is far too easy to post as someone else in this blog. It is someone else who is vastly exaggerating my core feelings, probably trying to get me into some sort of trouble. I stand by my response to you at #150.
154 Brad – understood and thank you.
#74 Moneta on 04.15.11 at 8:10 am
Nun’s Island is expensive but what makes it different from Westmount, Outremont and TMR is that the population there is much more transient and nouveau-riche than in the other 3 where old money tends to reside.
……………..
Agree re Westmount, etc. I and my 2 sisters lived on Nun’s Island back in the early 70’s until we were forced out by a fire in the apt. above us. Luckily we had insurance, but turned out not nearly enough. Most on our end of the building had none. We loved the area back then, except for the darn shad flies. Took me 7 mins to drive to work in Westmount (Sherbrooke St.) a block above the Elizis Nihon Plaza. I gather that Nun’s Island has dramatically changed since then. Next time we visit Mtl. (maybe Xmas) I must remember to visit NI.
Have been in a few of those ‘old money’ homes in Westmount. Back then I worked for ‘private’ FA’s to a rich family who worked in the same office. Gal I shared an office with spent most of her time taking care of all their insurance policies on their homes – works of art, etc. FA’s and their client family were great to work for. We plebes had it good. But, the 2 FA’s I worked for hightailed it out of the country due to insider trading. Tried googling them a few years ago but found no trace. Probably changed their names. I did continue working for the family until I moved to another prov.