Enough Trump, China and pantywaist investors. Let’s get back to bricks for a while, where men are men and nobody ever loses money. Err… Wait a minute.
The news Tuesday was that sales last month ‘soared’ in the nation’s biggest real estate market. Say the Realtor® gods®: “With annual growth in sales far outstripping annual growth in new listings, market conditions clearly tightened compared to last year.” So, more buyers chasing scant listings resulted in higher prices.
As market conditions continued to tighten in July, the average selling price increased by 3.2 per cent on a year-over-year basis to $806,755. The MLS® Home Price Index Composite benchmark was up by 4.4 per cent.
Well, that’s definitive. And fake. Let’s have a closer look at what’s going on in a region inhabited by almost one-fifth of the entire Canadian population. Last month the average single-family home in 416 was trading for $1,227,400. That compares with $1,350,700 for the same place a year ago. This is a drop of $123,400, or $10,300 per month. On a yearly basis, the decline is 9.1%.
Now, since everyone on this pathetic blog loves to make year/year comparisons with financial assets, let’s apply the same logic.
A detached 416 house purchased a year ago would cost $1,397,700 with land transfer tax. If the same house were sold today (at the average market price) it would fetch $1,227,400, less 5% sales commission, for a net of $1,166,030. The loss: $231,670, or 17%.
But, I hear the house-humpers cry, Garth’s a moron because (a) there was a benefit from living in the house and (b) nobody buys to sell 12 months later.
So let’s factor in imputed rent of $3,500 a month, or $42,000 for the year. That reduces the loss to only $189,670, of $16,000 a month. Yippee. Of course, to be fair, an investment portfolio – even one that loses capital value in a year – also produces income in the form of dividends, interest and distributions. Apples and apples.
And the argument that houses are not bought/sold annually? Perfectly true. Most people acquire real estate, don’t sweat the value, don’t routinely have it appraised, and really don’t care what it’s worth until they come to sell. But wait. Isn’t that exactly the same with, say, money in an RRSP or a TFSA or a non-registered investment account that won’t be needed until you retire or your kids go to med school?
So why do we apply an entirely different measure to one asset class than another? If residential properties were valued hourly, as ETFs are, we might have a different view of the ‘stability’ of real estate. And, by the way, 416 single-family home prices are back to where they were in the summer of 2016.
So much for “clearly tightened market conditions.”
$ $ $
So what do new homebuyers regret the most? Surveys in both Canada the US have come to the same conclusion. Most people wish, wish, wish they’d had a bigger downpayment.
New American data found almost 70% of recent buyers lamented the paucity of their down. Over half (52%) said mortgage payments were too high and a third believed owning a house was stressful. In Canada, it’s worse. Most new buyers are in condos now, with the average price of a concrete box in the GTA (for example) at a punishing $628,000. In Vancouver it’s $653,000. Government policy (the stress test) has depressed expensive homes and goosed competition for cheap ones – a direct burden on first-time buyers. Meanwhile condo owners are subject to continuous escalation in costs that they cannot control as buildings age and strata fees jump.
The inevitable conclusion: move to Regina and buy an actual house. Average cost: $269,400. That’s 4% less than last year. And it’s not even snowing yet.
$ $ $
Finally, for more evidence of what a housing bubble does to people’s brains, here’s Lillian. Yes, this is an actual letter.
I sold my condo in Brampton for $359 000 purchase price $190 000. I would like to purchase another property for investing but properties are crazy in Brampton. I might have a down payment of about $200 000 but not able to qualify for a mortgage more than an additional $180 000 because my income is $43 000 with part-time job. I am thinking to move to Alberta and buy a property cash. I am 50 years old with no savings but debt free except mortgage. Should I try to buy another house in Brampton?
A woman who rode the property wave, made some serious money, now has liquidity (for the first time, it seems), is steaming towards retirement age and wants to shovel all her money into one thing, while taking on leverage. The question is not Brampton or Alberta , but what this poor creature thinks she’ll live on in twenty years.
Canadians are choking on debt and massively over-invested in a single asset which is still so inflated in most markets that average people cannot afford average homes. And Lillian shows us why it’s happened.
Real estate always goes up. Everybody knows that.
106 comments ↓
Considering putting $10,000 into my new daughters RESP right away to take advantage of the long term growth tax free. Garth, do you like this strategy? I know they won’t pay grant beyond the first $2500 this year. Maybe $5000 now and another $5000 in January? I’d love to hear suggestions.
@Dave Ahem:
Put the $10k in a trust account for your kid. Use the proceeds to contribute $2500 per year to the (self-directed) RESP. Having the separate trust account gives you a place to stash other gifts, earnings etc. from family when you’re not making contributions.
July 2019 stats are now up at https://TorontoRealEstateCharts.com
#1 Considering putting $10,000 into my new daughters RESP right away to take advantage of the long term growth tax free. Garth, do you like this strategy? I know they won’t pay grant beyond the first $2500 this year. Maybe $5000 now and another $5000 in January? I’d love to hear suggestions.
==========
Stick $5,000 in the RESP now – collect $1000 in CESG grant.
Then in 2020 stick another $5,000 in – collect $1000 in CESG grant.
If you stick all of the $10K in now, you will miss out on some grant money. So, stagger it.
Ignore #2 comments – that’s just lame.
Hey Blog Dogs,
Long time lurker, first time poster.
Investment question – If I buy a preferred share CAD ETF on a margin loan, can I write off 100% of the interest on the margin loan per
https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-221-carrying-charges-interest-expenses.html
Which states:
Claim the following carrying charges and interest you paid to earn income from investments:
• most interest you pay on money you borrow for investment purposes, but generally only if you use it to try to earn investment income, including interest and dividends. However, if the only earnings your investment can produce are capital gains, you cannot claim the interest you paid.
As the ETF in question is a preferred share, dividend paying instrument, would this qualify?
Thanks for any feedback on this.
And, Garth – thanks for all you do. You have changed the lives of many people for the better.
I live in North York, anyone watching/involved in the market there knows that anything over a million is still experiencing a slow erosion of valuation. A buyers do not outnumber sellers in that market, thus the price erosion, and there is a decent amount of market options available.
#1 Dave Ahem on 08.06.19 at 4:51 pm
Considering putting $10,000 into my new daughters RESP right away to take advantage of the long term growth tax free. Garth, do you like this strategy? I know they won’t pay grant beyond the first $2500 this year. Maybe $5000 now and another $5000 in January? I’d love to hear suggestions.
———————————–
Overcontributing to an RESP is not a wise move. You don’t get a govt grant for any more than the $2,500/yr/kid. And it’s not tax free: all accumulated income is taxable; albeit at the kids’ rate if they use it, but at your rate if there is surplus.
Much better to put additional in a TFSA or RRSP. If those are maxed, then a non-reg investing account would still be simpler logistically.
For our kids, we contributed the max every year (first 7 years in US 529 plan, next 11 years RESP with gov’t grant). At the end of that time, the total was around $300,000, roughly $150k/kid, or 9% annual return.
Do you really need more than that in an RESP? Remember also that it can stay invested while they’re in school.
My Toronto Housing Charts are up:
http://www.chpc.biz/toronto-housing.html
In July 2019 Toronto housing sales were 32% below their June 2016 high and are heading back down towards the year end lows.
The FOMO crowd must be experiencing fear, but not for missing out.
Haha.Markets tank amid a trade war and USA projected 3 qtrs away from a recession and let’s talk real estate !
Brick and mortar Garth .Everyone wants it .Is what it is
We did macro yesterday. And the day before. And the one before that. – Garth
She could get two places in Spuzzum for her money. Maybe more …
This just sums up my entire reluctance to accept Climate Change: had to share.
“I’ll believe that it’s a crisis when the people who claim it’s a crisis start acting like it’s a crisis.” -Glenn Reynolds
https://nationalpost.com/opinion/rex-murphy-theres-no-hypocrite-like-a-rich-jet-setting-anti-global-warming-one#comments-area
Never less than 25 to 50 percent of your own hard earned dosh in. Makes you think about how much you really want the place.
#1 Dave re: RESP lump sum.
The answer depends in a bunch of variables like how old your kid is, your income tax bracket, and expected rate of return. I compared different strategies to illustrate the principles of what you are asking. I used a 50K lump sum, but they applies to smaller (with smaller differences).
The article is here:
https://www.looniedoctor.ca/2019/04/26/resp-lump-sum-2/
Also, I have made an online customizable calculator on my site that lets you change the inputs.
If you decided to try and maximize the grant, you could do 5K now (to get 1K CESG) and if you wait to Jan 1 you could put in another 2500 to get another 500 CESG. That uses up most of your lump. Easy free money! Also, if you haven’t maxed your TFSA, that would be a good competing opportunity to put some cash into.
Good luck.
-LD
#1 Dave
I should clarify. Getting 1k CESG for 5K now only works if you could have but did not make a contribution last calendar year.
-LD
#5
Yes you can. Keep the leverage reasonable and use Interactive Brokers for the best margin rates.
You are assuming that those investing would live rent free. The Landlords, or should I say with confidence, SLUMlords are jacking up rent prices higher than the rate of inflation on apartments which aren’t covered by rent control.
There are stories of women being forced to live in basements with suspected hidden cameras, and having to pay $1,000 a month to the Landlord who keeps on making advances towards her.
There are bungalows in Scarborough which pack five or six entire families inside the house, creating a huge risk for fires during the winter. And guess what? Those families have to pay $1,000 or even more to rent a makeshift room inside the basement level.
Even if your portfolio increase by 10% every year and amounts from $500,000 to $1,000,000 by the end of the next decade, rent prices in Toronto would be like $5,000 to rent a room inside a basement apartment.
You think that’s hyperbole? Apartments in slum areas of Toronto have jacked up rent prices for a one-bedroom from $1,000 to almost $2,000 because of the Eglinton Metrolinx line construction. It’s a living hell of inflation for those living in Canada.
Most people work (or used to) in Alberta and retire in BC (or used to). Why would anyone retire here (I’ve seen snow every month of the year – central Alberta).
BTW. Have bought and sold 10 houses and have always had at minimum 25% down to avoid stupid CMHC fees. Firat mortgage was for 10.25 % and at the time thought it was a steal of a deal.
‘Lillian’ should max out her TFSA & of course, the money should be invested in a balanced & diversified portfolio, not placed in a HISA or GIC. Also, if she is earning $43,000 working part time I’d say she has possibly achieved that ever elusive work/life balance. So why on earth would she quit, move to Alberta & then have to find work plus sink all her money in purchasing another property? She is 50! The smart move is to invest now & build that nest egg between now & age 65. Old age – its sooner than you think!
RESP – how old is your ‘new’ daughter? new to the world or just new to you?
I ask because RESP contributions automatically back date. If you start contributing when she is 5, you can dump in 12,500 and get the full grants for all 5 years.
Considering putting $10,000 into my new daughters RESP right away to take advantage of the long term growth tax free. Garth, do you like this strategy? I know they won’t pay grant beyond the first $2500 this year. Maybe $5000 now and another $5000 in January? I’d love to hear suggestions.
If you stick all of the $10K in now, you will miss out on some grant money. So, stagger it.
Depends on age.
Overcontributing to an RESP is not a wise move. You don’t get a govt grant for any more than the $2,500/yr/kid.
Depends on the kids age and prior contributions. Blanket statements like this are dangerous.
It doesn’t seem Lillian has a plan – of any kind. firstly She needs to figure out if she is going to AB or not. I presume that would be for better job prospects. Then she needs to get a retirement plan figured out. sounds like she’ll be working til 65 with moderate earnings. My guess is after that, she’ll have little to no room for RE.
I cant recall it being discussed here, but for lower-income singles or retirees, why not a mobile home? It’s really just an expense, with a chance you could get
something back on it later. the Calgary area seems to have liveable choices in the $100k or less range. yes there is pad rent, and I don’t know what the heating cost would be over the winter.
#1 Dave Ahem on 08.06.19 at 4:51 pm
You put in $2K and the feds chip in $500 a year. So unless your investment choices in the resp can beat 40% guaranteed, why would you over contribute versus putting in $2K, get free $500 and putting the remaining $8K in a TFSA to pull out another $2K next year or sink it in your RSP to get most of it back?
Hypocrisy is not the problem.
Defecating our bed is:
http://www.catherineingram.com/facingextinction/
“Facing Extinction” by Catherine Ingram
We talking bricks and mortar?
Hey, I’ll be on topic for once.
Oh no, hang on a minute, I think they are talking about the other mortar.
Shoot…
M45BC
“Charting the World’s Most Powerful Militaries – Which Countries Dominate the Globe?
The defense industry is one of the largest in the world. Nearly every country sets aside a large portion of their federal budget for military expenditures, which can have a major impact on their economies.
It’s breathtaking to see that the United States and China account for nearly half of the world’s military spending! To see the effects of military spending on the world’s economy, let’s take a look at military expenditures around the world.
Global spending on defense hit $1.78 trillion in 2018, up 2.6% on the previous year
At $649B, the U.S. has the highest military spending in the entire world. This is more than double the next highest-spending country (China).
China and the United States account for almost half of the world’s military spending
Yet, India has over twice as many armed forces as the U.S.
China even has twice the number of armed forces as the U.S.
Haiti has the lowest military expenses at just $79,691, and no armed forces
The bottom 5 countries for military personnel combined have less than some U.S. brigades
Using data from The World Bank, which provides data and analysis on a variety of topics for countries around the world, we have compiled the numbers for armed forces personnel and military expenditures for countries across the globe. The graphic doesn’t include countries that haven’t made these available to The World Bank.
The graphic used above illustrates the military expenditures and armed forces personnel for most of the world’s countries. Military expenses are represented by the size of each country’s circle with personnel represented by the color of each circle’s outer ring.
This visualization lets us see total military spending around the world as well as the relationship between military expenses and armed forces personnel.
Countries With Highest Military Spending
1. United States: $649B
2. China: $250B
3. Saudi Arabia: 67.6B
4. India: $66.5B
5. France: $63.8B
Countries With Lowest Military Spending
1. Haiti: $79.7K
2. Cabo Verde: $10.7M
3. The Gambia: $11.5M
4. Liberia: $15.8M
5. Timor-Leste: $20.6M
Largest Armed Forces Personnel
1. India: 3,031,000
2. China: 2,695,000
3. Russia: 1,454,000
4. United States: 1,359,000
5. Pakistan: 936,000
Smallest Armed Forces Personnel
1. Haiti: 0
2. Seychelles: 0
3. The Gambia: 1,000
4. Cabo Verde: 1,000
5. Luxembourg: 2,000
Countries around the world continue to dedicate huge portions of their budgets to military spending. Still, the U.S. maintains the highest military budget in the world. Though President Donald Trump has announced his intentions to decrease military spending in the future, the new U.S. federal budget would increase military spending if approved.
While the U.S. spends nearly double on its military as the next highest country, there are still several countries that spend billions on their militaries. 71 of the 146 countries in this dataset spent over $1 billion on their militaries in 2018. This isn’t limited to countries with small militaries either. Norway’s armed personnel, for example, totals 23,000. Yet, Norway spent over $7 billion on its military last year.
With increased military spending in countries across the world, it’s no wonder that the defense industry continues to thrive. While countries like the U.S. plan to decrease military spending going forward, it’s clear that defense is a top priority for many countries around the world.
By examining the data found in the .visual above, we can have a better understanding of how military spending impacts the global economy.”
6 August 2019
Visualization
https://howmuch.net/articles/the-worlds-military-spending
#14 Loonie Doctor on 08.06.19 at 6:16 pm
#1 Dave
I should clarify. Getting 1k CESG for 5K now only works if you could have but did not make a contribution last calendar year.
-LD
—————————————-
or if there were skipped/missed years in the past that is also forwarded to current years with max contribution of 5k with immediate return of 1k CESG until all of them consumed in the process.
( current year =2.5K + 1-missed year =2.5k )== 5K
What is wrong with my weekly payroll deduction of $200 with a guaranteed 3.0% rate at my credit union? It works for me.
Real estate always goes up. Everybody knows that.
=================================
Especially in awesomely safe EL TORONTO!!!!!
Only 17 SHOOTINGS, ALL WEEKEND!!!
EL TORONTO ROCKS!!!
And the Make Believes have gone OVER 100 DAYS WITHOUT A LOSS!!!
Plus
The Arghh Hoes are on an incredible one game winning streak, their best all season!!
Now do you naysayers understand why that city is so great and its real estate will only go up!!??
EL TORONTO IS THE BEST!!!!!!!!!
I know someone who was trying to sell their townhouse in a yvr suburb because they wanted to move closer to work(both hubs and wife got new jobs). No offers. So they decide to rent it out instead. Their renters turn out to be an couple who is expecting and wanted to upsize from their condo. Which they also can’t sell and which they are going to rent out. Somewhere down the line there will be people who have to sell at the going market price.
The RESP is truly a gift. Please take full advantage. And if you aren’t making 200k family you’ll probably get enough from your child benefit payment to fund the entire thing.
#22 Brian Ripley on 08.06.19 at 7:12 pm
#11 Dogman01
This just sums up my entire reluctance to accept Climate Change: had to share.
“I’ll believe that it’s a crisis when the people who claim it’s a crisis start acting like it’s a crisis.” -Glenn Reynolds
https://nationalpost.com/opinion/rex-murphy-theres-no-hypocrite-like-a-rich-jet-setting-anti-global-warming-one#comments-area
Hypocrisy is not the problem.
Defecating our bed is:
http://www.catherineingram.com/facingextinction/
“Facing Extinction” by Catherine Ingram
————–
Ms. Ingram wrote a well-researched article but she is paranoid. All of her “facts” come from sources that, shall I say, has a vested interest in creating the climate change urgency.
For someone as smart as you, I suggest reading papers that contradict what you believe.
Lillian rent or maybe buy a mobile home. They have a stigma attached to them that is foolish in most cases
There are very nice mobile parks around with very nice parks and such
We own one in florida that we bought during the financial crisis for 10K almost brand new
250/mth pad fee
Been going for 4 months a years since then. All our friends bought too.
We use their management service when we aren’t there. 100 bucks a month
Smart future snowbirds KEEP TEHIR CASH!
The real estate game is done for this cycle
You made money
Keep it
imho
Dave Ahem on 08.06.19 at 4:51 pm
Considering putting $10,000 into my new daughters RESP right away to take advantage of the long term growth tax free. Garth, do you like this strategy? I know they won’t pay grant beyond the first $2500 this year. Maybe $5000 now and another $5000 in January? I’d love to hear suggestions.
—————–
First of all, congrats!!!
This is what I did when our son was born in 2017.
$5K transferred right away.
$3K in 2018
$3K in 2019 and beyond all the way until we reach the $50K limit.
This takes full advantage of CESG and takes into consideration our cashflow.
If you have the cash, just do the full $10K now. Don’t try to time it or try to maximize CESG.
Use TD e-series mutual funds.
Poor woman
Literally & figuratively
Garth,
Can you remind us if average house prices were out of sync with average family earnings back in 2016? And has anything on that front changed today? Just for clarity please.
There are those in USA that are buying an RV to live or retire in living the good life. In Florida and other States one age 60 is exempt for fishing, hunting, or staying in a designated park, but can also obtain a yearly pass for about $25.00 per year. The best deal can be had by staying at a luxury RV resort were all costs are covered for $499.00 USD per month with a small charge for hydro.
These figures are for high end Toronto.
There is no house for sale anywhere within walking distance of me, for over 1.1 million dollars. And it is 2019.
When I bought here, there was no house for sale, anywhere within walking distance, for over $500,000.00
The average price was $350,000.
Now it is $750,000.00
You could buy a crappy semi with a parking spot and some grass in the back for $279,000.00
Now that same crappy semi fetches $650,000.00
You could say that there aren’t any 1.3 million dollar houses in my neighbourhood, and you’d be right.
There never have been.
There will be, though. Probably by this time next year……
The Chief of Police of El Toronto said it best!
“This is not Toronto”
https://toronto.citynews.ca/2019/08/05/this-is-not-toronto-saunders-says-violent-weekend-an-anomaly-for-toronto/
All those 17 shootings were probably not actually even really part of El Toronto!!
That was FAKE NEWS!
They probably happened in Detroit! Or Lunenburg!
But not El Toronto – that place is just too awesome!!
So buy every slanty semi or glass-walled condo there while you still can, before the prices triple again!!!
The SAFEST, HAPPIEST place in CANADA!!!!
Made a massive mistake once.
Went to El Paso for Spring Break.
Visiting the city itself wasn’t an actual mistake, although downtown seemingly was declining not thriving.
The mistake was that I had one of my many ankle surgeries in the New a Year and had not recovered in time.
I was hoping my ankle was going to get better as the trip unfolded but unfortunately it got worse.
I only had a walking stick to get around, when by the end of the trip I probably needed crutches or a wheelchair.
Lots of people came up to me and asked what happened and wished me well in my recovery.
Kind and friendly people.
Now it’s my turn to wish them well in their recovery…
M45BC
Funnily enough the DIRE ClimateChange always is said to occur in areas we never can get to nor see: Arctic, Antartica, Greenland.
Corn and Wheat prices at record decades lows. Supply and demand. Look around you we got it.
https://finviz.com/futures_charts.ashx?t=ZW&p=m1
https://finviz.com/futures_charts.ashx?t=ZC&p=m1
Renting vs Mortgage
Would it make things easier if it was clear that the decision is simply a choice of what to rent? One way, you pay to rent a residence. The other way you pay to rent money from the bank. Either way, you are a renter.
Yes, you are still “throwing money away on rent” even if you dress it up in bourgeois attire by calling it interest!
Once that issue is settled, then maybe it would be easier to determine which rental deal is better, the one for the house/cottage/condo, or the one for the money.
In addition to the cold, hard mathematical calculations of all the costs, demonstrated frequently on this blog, don’t forget to include the pita factor for changing the item you’re renting (unless you’re keeping it forever like a bad tattoo).
#5 Early Investor on 08.06.19 at 5:17 pm
What kind of interest rate can you get on margin?
Questrade is a rather brutal 7% or so which makes it pointless imo.
#29 Blessed Canadian Millenial on 08.06.19 at 8:07 pm
#22 Brian Ripley on 08.06.19 at 7:12 pm
#11 Dogman01
https://nationalpost.com/opinion/rex-murphy-theres-no-hypocrite-like-a-rich-jet-setting-anti-global-warming-one#comments-area
http://www.catherineingram.com/facingextinction/
————–
I went through Ms. Ingram’s article; does not make the case, it reads like a religious emotional awakening. Quoting Leonard Cohen…..
Our leaders have not made the Climate Change case, they are simply using it as an excuse to further a taxation agenda on the masses with no impediment to the elite.
Climate Change appears to be, like Religion, an opiate designed to control the masses.
if serious people actually thought Climate Change was a threat these Billions spent on Military would be mobilized to fight it in a D Day level effort.
#23 Flop… on 08.06.19 at 7:22 pm https://howmuch.net/articles/the-worlds-military-spending
“I’ll believe that it’s a crisis when the people who claim it’s a crisis start acting like it’s a crisis.” -Glenn Reynolds
Right now it looks like a Religion, drawing in people looking for something greater then themselves to cling to.
….and if you believe Ms Ingram, why come to an investing blog as investing assumes a tomorrow not an extinction.
In the Pacific Ocean undisclosed location so my signal is weak.
The panic selling in real estate starts when the jobs turn down. BC will get it even worse than now. It will bottom at some point but I think it is just stabilized right now. Forestry has fallen off a cliff.
2016 prices aren’t low enough.
What could make RE prices go even lower?
Seems there is always a reason for prices to rise, but never a reason for prices to fall.
So my travel agent says don’t even think about a stopover in Hong Kong on your way back this time. Everything is booked up for three months. Meanwhile back in Lower Brainland all the people kinds watching their investment condos sit on the market like a hardened turd in the middle of the trail say a little prayer every night before bed. I won’t be as greedy this time. Really, I promise. Dear God, give me one more chance.
Spoke to two old neighbours this weekend, both of their houses have been up for sale for over a month in Toronto on our old street in midtown. Each is stubbornly holding out for at least $1.2 million for places they bought decades ago. One has refused one offer, the other has refused two offers, all under 1 million. They think the market will come to its senses and give them what they want.
Our Prime Minster flies all over the world and Canada on
his Tax payer paid for Plane He talks about Climate Change then gets on the plane the biggest waste of fuel and pollution & carbon But He is putting a price on Carbon for all Canadians Maybe as a Leader of our Country he should set an example, I GUESS YOU ARE SUPPOSED TO DO AS I SAY NOT AS I DO.
https://www.reuters.com/article/us-china-coal-climate/china-coal-mine-approvals-surge-despite-climate-pledges-idUSKCN1UW0EM
How will Canada’s climate change taxes on oil and gas help the WORLD, not just Canada… when we have China heavily adding capacity to its COAL Power plants. Liberals, please make a comment on this because when you tax Canadians in the name of “saving the planet” and then we see stories like this, it stinks of arbitraryism (doing things that have little or no effect because other people are doing things in a completely different league). Let’s relinquish the oil and gas taxes so we can get our cleaner energy to these markets so they don’t need to use coal. And get Albertans and Canadians on the prairies back to work where they want to be.
Royal Bank of New Zealand cut 50 bps. The BOC will cut at least 25 bps before the end of the year. 50 bps is possible.
That will be unwelcome news. – Garth
#44 fishman on 08.06.19 at 9:43 pm
Yes. Everything is booked up by the american NGO’s and their cohorts and press holed up to record the events of their attempts to destabilize the country. It’s beyond the normal protest of average citizens who have mobilized for the greater good. Clearly something going on. Too much violence. Too much front page coverage. Just like other previous coups. This isn’t your garden variety meeting of mob bosses, circa 1958, Havana, Cuba. It’s more sinister.
Not if you own the S&P500 in USD or equivalent.
$CAD into the 60s. S&P500 > TSX
US tech leadership (+ home builders, cyclicals, financials, high beta)
I am not a gold bug by any means but when I noticed it break out of it’s $1,300 range and now sail past $1,500 it tells me their is trouble ahead for the global economy. A canary in a gold mine so to speak.
#2 Smartalox on 08.06.19 at 5:06 pm
@Dave Ahem:
Put the $10k in a trust account for your kid. Use the proceeds to contribute $2500 per year to the (self-directed) RESP. Having the separate trust account gives you a place to stash other gifts, earnings etc. from family when you’re not making contributions.
—
How much it costs to administer trust account per year?
BANNED
@#45 Dominoes lining up
I have a friend who is going through a divorce. Bought the house for $360 ish in a small town with a 1.5 hr traffic infested commute to the larger city. Only had the house for 3.5 years same with marriage. After sitting on the market since Feb (listed for $495) they get an offer for $440. The house was last renovated when it was built in the 70s, water damage etc. If they took the offer they would walk away breaking even. But they want a bit of profit so they countered higher to $465….the couple is mid 30s and have only known price increases.
They would not qualify to buy their own house at $495…
Recency thinking at play.
…how long can people tread water.
TORONTO appears to be where Vancouver was last year.
Logic needs to be taught in school if nothing else.
Trade War has been going on for a year.
I think the US/West saw that China was growing and has the factory production that can be switched to a war machine if need be….more later…too hard to type on phone.
Speaking of apples to apples are you comparing sfd selling price to all unit selling price (condo , townhouse, sfd)?
DELETED
DELETED
#11 Dogman01
Hey, watch it. Italia and esp. Palermo need the GDP boost. We’ll take anybody’s money. Only thing Italia did wrong here was that Salvini should have let in one of those “Migrant” ships and EV cab transported them to the Hypocrite Soirée for some Selfies and TLC.
PS Rex Murphy (chanteur par extraordinaire de bon mots, like My Liege, but different):
The Greek Temples are mostly near Agrigento and not near Palermo (he sort of, later, gets that correct, i.e., “Valley of the Temples”). Still, his heart was in the right spot (just not geographically). Recall, Italia is a small country (1/3 the land mass of BC) and to us Palermo –> Agrigento may as well be Earth to the far side of the Moon.
One good thing, Katy Perry did not come to the Fashion Capital of the World, Italia, dressed as a chandelier.
Ciao d’Italia*.
*Bring Cash, BC are not the only ones.
BANNED (Again, under the latest name change. Go away forever. – Garth)
My apologies for not endlessly posting folks.
I know Millennial Be-For-Realist was getting worried.
Time to catch you all up.
Monday Natal day celebrations allowed me to enjoy the hospitality of the Maritimes.
After socializing with the Lt Gov of N.S. and the mayor of a small Nova Scotian city ( 100% true I can assure you) during the Natal day celebrations I decided to wing my way back to to prince Edward Island to enjoy some boating, ocean swimming and beach combing.
30c by 4pm yesterday with a light, refreshing breeze to keep the skeeters away.
Alas, the frenzied purchasing of property by off shore “investors” continues on the ‘Million Acre Farm” aka PEI.
It will be interesting to see when this becomes a polarizing election issue forcing the Provincial govt to react as the Dippers in BC did.
One can be assured however that until it does become an election issue, everyone will jump on the cash gravy train as it continues to gobble up prime land all over the province.
Just curious.
Why didn’t Smoking Man win a “Most Deleted” honorable mention for his comment contributions over the last 5 years?
STILL BANNED
SoggyShorts, I thought low interest rates were for consumers to stimulate the economy. What a load of bull. They sure encourage buying houses, condos on the cheap 2.4% 5 year mortgage with loads of debt. You guys don’t get, it they don’t want you to make any money with the bank’s money. They all want you to be in real estate, in debt and illiquid so tomorrow you have to depend on the bank.
In many parts of Alberta today it costs double to rent rather than own. With falling mortgage rates that figure will mean it will cost triple or quadruple to rent rather than own. If she was smart she’d load up on resale apartments and resale townhouses in Alberta. On the resale side a resale house shouldn’t cost 3 or 4 times what a resale townhouse costs. The only problem is not getting them kicked in by the renters and finding renters. The poor retirees are moving to the east coast eventually some of the rich retirees will move to Alberta since like Texas you’re always inside not outside.
After all the surprise rate cuts around the world today one can easily see that the race to bottom for currencies is now in play.
We are at the end of this cycle if growth.
Of this it is clear.
Will there be a better day – absolutely.
But for now protection of capital is now back in Vogue.
The real estate is done
The markets are seeing a slowdown
The bond markets are in deep trouble
The central banks have lost control
The EU is a wasteland after German numbers today
France is self destructing
Canada is going to be a great place after the socialists and globalists are kicked to the curb.
The US is awoke about China
China is scared crapless.
Cash works for now.
Just my two cents.
Maybe you should take the dog for a walk. I just did. He’s happy since I unplugged his router. – Garth
Maybe you should take the dog for a walk. I just did. He’s happy since I unplugged his router. – Garth
Lol I did and came back to chaos…
You gotta love algos. Everybody built these things to take advantage of every nuance and headline on the way up.
But they see what happens on the other side as these things sell at at every Twitter post.
Calm will come. But there is a lot of over leveraged traders out there looking at their reading accounts this morning hitting sell buttons.
When the margin clerks start calling then we will see the final washout.
Not yet though.
This your call for a balanced portfolio rings true again today
Thank you for providing folks with a winning strategy
#46 Hawkeye – Our PM loves to fly on our dime.
https://www.youtube.com/watch?v=xAYs_Nb-NKU
Danes can now get 30 year mortgages at 0.5% interest. 20 years fixed at ZERO interest.
UPPA she goes!
“It’s an uncomfortable thought that there are investors who are willing to lend money for 30 years and get just 0.5 per cent in return,” she said. “It shows how scared investors are of the current situation in the financial markets, and that they expect it to take a very long time before things improve.”
Source: https://www.bnnbloomberg.ca/20-year-mortgages-hit-zero-for-first-time-in-danish-rate-history-1.1298311
Thanks for the comments. To clarify:
– We just had our daughter. She is 7 weeks old today.
– I don’t have any TFSA room.
– I don’t have much RRSP room and have a DBPP too.
– If I put any more than $2500 this year, I will still just get $500. It’s a 20% matching grant per year but my daughter is a newborn so there is no “catching up”.
I’m asking about the strategy of over-contributing now to take advantage of the long term compounded growth. I would do the 10K now, 4K next year then just the $2500 after that to do the maximum 50K in total contributions and get every penny of grant.
I appreciate the comment about all the growth being taxable. That was something I hadn’t considered.
Keep the feedback coming if there’s something I’m missing.
“And, by the way, 416 single-family home prices are back to where they were in the summer of 2016”. – G.T.
Garth, why is this not true for the 905? The prices in some places in the 905 are continuously going up. Perhaps the demographics?
Danish Mortgage rates near zero?
#67 Captain Uppa on 08.07.19 at 9:28 am
Danes can now get 30 year mortgages at 0.5% interest. 20 years fixed at ZERO interest.
********************************
That is very shocking if true. The linked article you posted talks mostly about the bank issuing bonds as well as about mortgage rates.
The bottom of the article indicates:
NOTE: Realkredit Danmark said on Aug. 2 that it would open a 0.5 per cent, 30-year bond, while Nykredit opened new 30-year, 0.5 per cent on Aug. 5
I’d want confirmation on the idea of a 20 year mortgage at zero percent. These are strange days indeed. There is something beyond seriously wrong if home-owners can borrow at 0%. Has to to involve government mortgage guarantees.
Any Danes in our midst that can confirm this and how widespread it is?
Denmark’s central bank rate has been 0.5% since 2015 and 30-yar mortgages have been in the 1% since then. They are currently 0.5% for 30-years and slightly negative (excluding bank fees) for terms of five years or less. With bank fees, they remain around 0.5%. Do not expect that here, as our central bank is not trying to maintain the value of a pegged currency. as in Denmark. – Garth
Trump and Interest Rates
Trump is a life-long debt junkie having borrowed hundreds of millions. He has felt the pain of high interest rates and the personal pain and humiliation of corporate bankruptcies and near personal bankruptcy. The man knows about debt and interest rates.
Now he has signing authority on the giant credit card of the United States of America. And he finds he can have the country borrow at extremely low rates.
With tons of borrowed money he can pursue very things like building that Wall. He could shower the country with money to get votes. The sky could be dark with helicopters dropping money.
AND, AND he finds he can manipulate his interest rates even lower by pressuring the FED and risking growth with trade wars.
Why should he worry about the debt and deficit in this situation?
I am reminded of Buffett’s advice: When it is raining money run outside with a washtub not a thimble.
What could be better for Trump? This is heaven.
Yikes!!!
What Alberta are you living in? Not the same one as me.
=============
#64 Tony on 08.07.19 at 8:53 am
In many parts of Alberta today it costs double to rent rather than own.
#68 Dave Ahem on 08.07.19 at 9:56 am
Thanks for the comments. To clarify:
– We just had our daughter. She is 7 weeks old today.
– I don’t have any TFSA room.
– I don’t have much RRSP room and have a DBPP too.
– If I put any more than $2500 this year, I will still just get $500. It’s a 20% matching grant per year but my daughter is a newborn so there is no “catching up”.
I’m asking about the strategy of over-contributing now to take advantage of the long term compounded growth. I would do the 10K now, 4K next year then just the $2500 after that to do the maximum 50K in total contributions and get every penny of grant.
I appreciate the comment about all the growth being taxable. That was something I hadn’t considered.
Keep the feedback coming if there’s something I’m missing.
—————–
I originally wrote wrong in my earlier post. Put in only $2500 (not $2000) into the RESP, get 20% ($500) free from the government. The $7500 you have left over, leave it in your wife’s bank account to earn 7% avg if you have no room in TFSA or RSP accounts. The taxes paid is less since your wife would be on maternity leave so you are maxing out your benefit. 1st day of the new year, stick in another $2500 for another $500 free. Rinse and repeat for 4 years and watch how much the RESP account grows with the free money and returns on a diversified portfolio.
My son is a couple months past 2 years old and his account has around $9300 in it.
Most new buyers are in condos now, with the average price of a concrete box in the GTA (for example) at a punishing $628,000. In Vancouver it’s $653,000. Government policy (the stress test) has depressed expensive homes and goosed competition for cheap ones – a direct burden on first-time buyers. Meanwhile condo owners are subject to continuous escalation in costs that they cannot control as buildings age and strata fees jump.
…………………………………………………………………
Oh the pain and agony those moisters will feel after they have unloaded their SFH’s for retirement in a concrete box. Most of them are on fixed incomes and will deplete their savings. They will be forced into eating cat food as the strata s increase over their end years on this miserable planet. Meowwww………
Denmark’s central bank rate has been 0.5% since 2015 and 30-yar mortgages have been in the 1% since then. They are currently 0.5% for 30-years and slightly negative (excluding bank fees) for terms of five years or less. With bank fees, they remain around 0.5%. Do not expect that here, as our central bank is not trying to maintain the value of a pegged currency. as in Denmark. – Garth
——————————————————————
They are also perennially in the top two “best countries to live in”.
So move. BTW in Denmark you have time pay a ‘rent tax’ even if you own your home. Plus municipal taxes. And a labour tax. And income tax. Enjoy. – Garth
#68 Dave Ahem on 08.07.19 at 9:56 am
Thanks for the comments. To clarify:
– We just had our daughter. She is 7 weeks old today.
– I don’t have any TFSA room.
– I don’t have much RRSP room and have a DBPP too.
– If I put any more than $2500 this year, I will still just get $500. It’s a 20% matching grant per year but my daughter is a newborn so there is no “catching up”.
I’m asking about the strategy of over-contributing now to take advantage of the long term compounded growth. I would do the 10K now, 4K next year then just the $2500 after that to do the maximum 50K in total contributions and get every penny of grant.
I appreciate the comment about all the growth being taxable. That was something I hadn’t considered.
Keep the feedback coming if there’s something I’m missing.
———————————————-
Just one thing- when distributions are taken, stipulate very clearly that they are first taken from grant monies and accumulated income (capital gains), because this is the only part that is taxed.
After using all of that, everything remaining in the fund will be your own contributions. You can remove all of this tax-free, because it came from after-tax dollars. The accounting is easy, but just make sure to do clearly and officially.
#71 Shawn Allen on 08.07.19 at 10:40 am
Trump and Interest Rates
Trump is a life-long debt junkie having borrowed hundreds of millions. He has felt the pain of high interest rates and the personal pain and humiliation of corporate bankruptcies and near personal bankruptcy. The man knows about debt and interest rates.
Now he has signing authority on the giant credit card of the United States of America. And he finds he can have the country borrow at extremely low rates.
With tons of borrowed money he can pursue very things like building that Wall. He could shower the country with money to get votes. The sky could be dark with helicopters dropping money.
AND, AND he finds he can manipulate his interest rates even lower by pressuring the FED and risking growth with trade wars.
Why should he worry about the debt and deficit in this situation?
I am reminded of Buffett’s advice: When it is raining money run outside with a washtub not a thimble.
What could be better for Trump? This is heaven.
Yikes!!!
…………………………………………………………
Then Trump is in trouble. Firstly you need to have a soul to get in. Secondly I hear Heaven doesn’t accept pathological lying racists and cheating adulterers, but there is room downstairs for his type!
#61 crowdedelevatorfartz on 08.07.19 at 7:00 am
My apologies for not endlessly posting folks.
I know Millennial Be-For-Realist was getting worried.
Time to catch you all up.
Monday Natal day celebrations allowed me to enjoy the hospitality of the Maritimes.
After socializing with the Lt Gov of N.S. and the mayor of a small Nova Scotian city ( 100% true I can assure you) during the Natal day celebrations I decided to wing my way back to to prince Edward Island to enjoy some boating, ocean swimming and beach combing.
30c by 4pm yesterday with a light, refreshing breeze to keep the skeeters away.
Alas, the frenzied purchasing of property by off shore “investors” continues on the ‘Million Acre Farm” aka PEI.
It will be interesting to see when this becomes a polarizing election issue forcing the Provincial govt to react as the Dippers in BC did.
One can be assured however that until it does become an election issue, everyone will jump on the cash gravy train as it continues to gobble up prime land all over the province.
Just curious.
Why didn’t Smoking Man win a “Most Deleted” honorable mention for his comment contributions over the last 5 years?
…………………………………………………………….
That is sort of like “the you came in last but glad you participated” award!
Oh I think my four year old got one of those awards in soccer.
#61 crowdedelevatorfartz on 08.07.19 at 7:00 am
Just curious.
Why didn’t Smoking Man win a “Most Deleted” honorable mention for his comment contributions over the last 5 years?
………………………………………………
Every man is a partaker in the triumph of him who is always true to himself and makes no compromises with customs, schools, or opinions.
‘Walt Whitman’
#68 Dave
The growth being taxable upon withdrawal is not a big deal. Students usually have little to no income. There are also tuition tax credits. They pay little or no tax. Also, if there is unspent accumulated investment income, it is usually possible to shift that into your RRSP if there is room. That is way in the future.
-LD
#81 Captain Uppa on 08.07.19 at 12:07 pm
So move. BTW in Denmark you have time pay a ‘rent tax’ even if you own your home. Plus municipal taxes. And a labour tax. And income tax. Enjoy. – Garth
—————————————————————–
Doesn’t seem to bother them much.
As for me, I’ll stay put for now as I am enjoying the GTA. Plus, we have a pretty ample volume of taxes to pay here as well.
——————————————————————
“It’s no wonder Danes are so happy. They have an obscenely good quality of life. Yes, it’s expensive here. But it’s Denmark – it’s worth it. I don’t mind paying more for a coffee here because I know that it means the person serving me doesn’t a) hate me or b) have a crappy life. Everyone is paid a decent wage, everyone is looked after, and everyone pays their taxes, just as I pay mine. And if we all have marginally less money to buy more stuff that we don’t really need anyway as a result, well I’m starting to think it’s a deal worth making.”
– Helen Russell, The Year of Living Danishly: My Twelve Months Unearthing the Secrets of the World’s Happiest Country
Beijing owns a shitload of bonds in the USA. The Chinese have $1.1 trillion in US Treasuries they own. What happens if Donald doesn’t behave? Could they let the dogs out?
If they flood the market with Treasuries down she goes. Rates go uppa. He better think carefully about his next move. The Chinese are not stupid people and the Chinese culture of dealing with money is over 3000 years old. So I think they have some history in dealing with money.
Renting in a brand new subdivision in the north GTA. This place is like the twighlight zone. The house (2 yrs old) is a cookie cutter 3800 square footer, it’s horribly made with the cheapest finishes done by the builder. So cheap only one window opens per room. Floors already creek and bend all over the place. So close to the neighbours I can hear them fart in their room. In these $900,000 “mansions” less than 50% of them have air conditioning installed and about 1/5th of them are seemingly empty. The occupied ones all have 2 brand new luxury vehicles in the driveway. WTF is going on? I already know the answer, these pieces of junk were all bought by these so called “investors” like the one in your article. All of them hoping to make 20% per year.
another trend: liquidating lives?
RV dwellers who are spending their golden years working in the e-tail
The Amazon CamperForce Amazon’s Nomadic Retiree Army | WIRED
https://www.wired.com/story/meet-camperforce-amazons-nomadic-retiree-army/
Sep 14, 2017 – Inside the grueling, rootless lives of the RV dwellers who are … nest egg in a fund that
The Chinese better think of having enough food to feed their people . Oh wait, it is a Communist government with long history of destroying their own people.
When The Fed contacts Zerohedge…
… according to a research report from BofA’s Marc Cabana which we used extensively in the report, the Fed may be forced to launch Quantitative Easing as soon as Q4 to provide the market with the much needed liquidity, or else suffer the consequences of a major liquidity shortage. To wit, in describing the various steps the Fed can engage in, this is what the BofA strategist said:
Outright QE: after OMO dealer capacity is exhausted the Fed may need to start permanently expanding its balance sheet. The Fed would likely describe this as offsetting “bank reserve demand and growth in other non-reserve liabilities”. Regardless, it would represent the Fed permanently buying USTs outright to maintain control of funding markets well above the ZLB.
Well, it appears that the Fed paid attention, because moments ago we received an email from a Federal Reserve researcher which should make everyone very, very nervous. Specifically, the “rather urgent request” from a Fed staffer (no, not Edward Quince) seeks the full Cabana report whose gist, as noted above, is that the Fed will have to launch QE4 in very short notice to offset the upcoming liquidity drain.
https://www.zerohedge.com/news/2019-08-07/when-you-get-email-fed-it-may-be-time-panic
Whelp, took profits on HGU.TO today. That was fun. Think it still has room to rise before a meaningful correction but you know what they say, don’t get greedy, especially with a 2x levered ETF. Long-term positions in select big-cap and mid-cap miners remain intact, not touching those for years to come. This is the new bull market.
#83 Ace on 08.07.19 at 12:48 pm
Renting in a brand new subdivision in the north GTA. This place is like the twighlight zone. The house (2 yrs old) is a cookie cutter 3800 square footer, it’s horribly made with the cheapest finishes done by the builder. So cheap only one window opens per room. Floors already creek and bend all over the place. So close to the neighbours I can hear them fart in their room. In these $900,000 “mansions” less than 50% of them have air conditioning installed and about 1/5th of them are seemingly empty. The occupied ones all have 2 brand new luxury vehicles in the driveway. WTF is going on? I already know the answer, these pieces of junk were all bought by these so called “investors” like the one in your article. All of them hoping to make 20% per year.
——————————————————————
Personally I am not a fan of those cookie-cutter new subdivisions, but I do know they are really popular – like with real living people and families, not investors.
Why? I have no idea. I guess the allure of the big, new house is too strong. Plus they do boast great new or new’ish schools. Kids from said schools are all live close to each other. It has some perks.
Denmark is not alone having negative interest rate government debt – and others may get there soon. Federal Reserve banks facing a ‘pushing on a string environment. Hard to know how various asset classes would then behave.
https://www.cnbc.com/2019/08/07/bizarro-bonds-negative-yielding-debt-in-the-world-balloons-to-15-trillion.html
@Captain Uppa, post 81:
You’re quite right, Denmark is a civilized country with a lot to offer. However, they pay a lot of taxes to maintain that high quality of life. If anyone proposed such a way of life in Canada or The States, they would never get elected and if they did they would be thrown out at the next election. It would be a world class tax revolt. Economics works like thermodynamics, you don’t get something for nothing.
#82 JB on 08.07.19 at 12:41 pm
Beijing owns a shitload of bonds in the USA. The Chinese have $1.1 trillion in US Treasuries they own. What happens if Donald doesn’t behave? Could they let the dogs out?
If they flood the market with Treasuries down she goes. Rates go uppa. He better think carefully about his next move. The Chinese are not stupid people and the Chinese culture of dealing with money is over 3000 years old. So I think they have some history in dealing with money.
—
Did we no go through this so many times before, they need us bonds so they can print there own money. Noone is selling anything.
https://www.ft.com/content/e4ab221a-77c6-11e9-bbad-7c18c0ea0201
There is a good reason why a chunk of China’s reserves sit in the world’s largest government bond market: it is deep, liquid and pays a positive yield. The two main rivals to Treasuries are Japanese government bonds and German Bunds. Both markets not only lack the depth and variety of Treasuries, they are also negative-yielding through to their respective 10-year benchmarks.
In other news you wont find in MSM due to Trump Derangement Syndrom.
Pakistan and India about to go nukes on each other any moment now.
.
And this is also puts things in perspective considering what happens lately.
https://www.google.com/amp/s/amp.businessinsider.com/china-threat-to-sell-us-treasurys-would-backfire-catastrophically-2019-5
two years ago
mou’s trumps trade mission to china 250b.
https://www.reuters.com/article/us-trump-asia-energy-west-virginia/china-energy-investment-signs-mou-for-83-7-billion-in-west-virginia-projects-idUSKBN1D90S9
Sen. Joe Manchin, D-W.Va., is raising alarm bells about an $83.7 billion investment in his home state pledged by China’s state-owned energy giant.
“When you put that in comparison to the state budget of West Virginia, our state budget only goes over $4 billion a year, so something doesn’t make sense here, and we cannot find out what their intent is,” he says.
The deal was announced in 2017 as part of $250 billion in business agreements reached between the U.S. and China in connection with President Donald Trump’s visit to the country.
Gov. Jim Justice said there would be “shovels in the ground” the following year.
But so far, no such action has materialized. CNBC reported last month that despite the big promises, China Energy Investment Corp. had not yet spent any money in the state.
If it’s for removing resources such as the ethane, propane, butane, and taking a commitment of taking all of our wet gas, which we use as a building block to reinvigorate our petrochemical base, then I would hope for the officials in my state of West Virginia that that is a nonstarter,” he said.
Potential aspects of the Chinese investment have already run into trouble with federal regulators. Local executives and state lawmakers expected China Energy to help build new power plants. That plan was blocked by U.S. officials, who cited national security concerns. A detailed list of investments has never been made public.
West Virginia’s other senator, Sen. Shelley Moore Capito, a Republican, did not immediately provide comment.
ethane export -owned by russian businessman w. virginia
West Virginia Bets Big on Plastics, and on Backing of Trump …
https://www.propublica.org/…/appalachian-storage-and-trading-hub-ethane-west-virgi…
Jul 31, 2019 – Wheeling, West Virginia, lies on a stretch of rural counties along the Ohio River … “The national security threat is not exporting ethane to China,” .
=======
ohio vs Kentucky
centuries of fighting over who owns the ohio river so then who is responsible for the pollution and destruction ?
The Ohio Valley Water Sanitation Commission (ORSANCO) reported the river has 23 million pounds of toxic discharge. Coming in at second and third most polluted rivers are the Mississippi River and the New River. Pollution of waterways is often accredited to the industrialization period during.Nov 24, 2015
Maggie, more like the communists have a history of eating their own people. Documented that in the apex of Mao’s Great Leap Forward & after the People’s Liberation Army had confiscated even the seed grain of the rural peasants, the village women gathered around to come to a consensus as to who’s child went into the pot. Same results for the Russian peasants after Stalin collectivized agriculture.
But hey: we all know that these new young computer literate”Progressives” with correct thought & guidance from their woke university professors will get it right this time!
I hope we get worse then a great depression. My father was right, everyone needs a good famine.
Want to see your real estate holdings go up? You should have bought REITs when they were on sale 6 years ago. My holdings in XRE just keep going up, up, up. Now for the punch line, it also continues to pay a generous yield.
#81 Captain Uppa on 08.07.19 at 12:13 pm
#81 Captain Uppa on 08.07.19 at 12:07 pm
So move. BTW in Denmark you have time pay a ‘rent tax’ even if you own your home. Plus municipal taxes. And a labour tax. And income tax. Enjoy. – Garth
—————————————————————–
Doesn’t seem to bother them much.
As for me, I’ll stay put for now as I am enjoying the GTA. Plus, we have a pretty ample volume of taxes to pay here as well.
——————————————————————
“It’s no wonder Danes are so happy. They have an obscenely good quality of life. Yes, it’s expensive here. But it’s Denmark – it’s worth it. I don’t mind paying more for a coffee here because I know that it means the person serving me doesn’t a) hate me or b) have a crappy life. Everyone is paid a decent wage, everyone is looked after, and everyone pays their taxes, just as I pay mine. And if we all have marginally less money to buy more stuff that we don’t really need anyway as a result, well I’m starting to think it’s a deal worth making.”
– Helen Russell, The Year of Living Danishly: My Twelve Months Unearthing the Secrets of the World’s Happiest Country
——————————————————
Denmark sounds great- the government provides for all people and you don’t need to worry about your next meal, shelter or abject poverty.
And what’s the tradeoff? Well, just pay the government to maintain this. Sure, you won’t have any cash left to build up a portfolio of your own, but who cares: the government is here to take care of you.
What could possibly go wrong with putting your future in the hands of others? This always works out, right?
Denmark versus Zimbabwe, Argentina, Venezuela, Cuba, Bolivia, U.S.S.R., even China soon. Think people think. Look at even the European Union economic basket case.
#96 Doug in London on 08.07.19 at 3:17 pm
Want to see your real estate holdings go up? You should have bought REITs when they were on sale 6 years ago. My holdings in XRE just keep going up, up, up. Now for the punch line, it also continues to pay a generous yield.
——————————————-
Obviously I have to analyze this. Here we are:
Time period August 2013-August 2019
XRE results: 3.7% average return plus 4.40% yield
TSX results: 5.6% average return plus 2.9% yield
…. yawn ….
#64 Tony on 08.07.19 at 8:53 am
In many parts of Alberta today it costs double to rent rather than own.
**************************
LMAO, where?
#75 Captain Uppa on 08.07.19 at 11:28 am
Denmark’s central bank rate has been 0.5% since 2015 and 30-yar mortgages have been in the 1% since then. They are currently 0.5% for 30-years and slightly negative (excluding bank fees) for terms of five years or less. With bank fees, they remain around 0.5%. Do not expect that here, as our central bank is not trying to maintain the value of a pegged currency. as in Denmark. – Garth
——————————————————————
They are also perennially in the top two “best countries to live in”.
So move. BTW in Denmark you have time pay a ‘rent tax’ even if you own your home. Plus municipal taxes. And a labour tax. And income tax. Enjoy. – Garth
……
Well, actually, the people who live there actually do enjoy it immensely. They are ranked the 2nd happiest country in the world, even with those dreaded taxes that Garth finds disgusting but they obviously allow the people to enjoy their country. (Canada ranks 9th)
https://torontosun.com/news/national/canada-ranks-one-of-top-happiest-countries-in-the-world-u-n-report
I saw a while back a comment about a yoga farm on Salt Spring Island – could be my half-sister. She started as an entertainment director on cruise ships and her husband is what I consider a “boiler room consultant”. They have done well providing a wanted service to the wealthy that seem to have an empty life meaning – not to disparage since it is a wealthy lifestyle I could easily adopt.
Dreams, that is what keeps me going. I was looking at GF because their wealth management division has lite up. And yes, I am a DYI investor. I do hold about 60 Cdn stocks and a few American. My top 5 holdings comprise 25% of the total. JE is one of them so their sad story hurts. Best I can guess is that they got the price of energy wrong with their hedging bets. The good news for me is that I got my gold/silver bets right, also my bond EFT’s are doing well. Nonetheless, I took a hit over the last few days and am leaking overall. I think I will survive. I expect VET and JE to cut their dividends and then maybe I will buy in after. The Cdn $ falls with the price of crude. These things do not inspire me. I am building cash for now.
Those silver coins I bought a while back are finally in the money and my gold company shares are being resurrected from the dead. Investing, should, maybe, if… damm, make a decision!
Beautiful picture…
@captian uppa, many of the smaller houses and townhomes in the subdivision I’m in are full of families. But on my street (more expensive and larger sqft) there are 4 houses occupied that are multi family with kids. This is a street with approx 30 + homes. There are a few houses with for sale signs and a few with lockboxes on the doors and no signs up! It is odd, living here has really opened my eyes to how skewed the market is.
@Sail Away, post #101
I’ve done the math and XRE has a combined return of 8.1%, and the TSX has a combined return of 8.5%. That’s quite respectable, and shows what kind of results you can get when you buy stocks and ETFs when they are on sale.