Author Topic: Garth Turner - Real Estate in Canada  (Read 488748 times)

Liberty

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Re: Garth Turner - Real Estate in Canada
« Reply #430 on: April 09, 2015, 11:16:56 AM »
http://business.financialpost.com/personal-finance/canadians-embrace-idea-of-paying-rent-and-condo-fees-with-their-credit-cards

I hope these people actually pay off their credit cards.

Unless I'm misreading that, it sounds like people are paying 2.75% extra for the privilege of paying with their credit cards:

Quote
The credit card fee is 2.75 per cent of the transaction to the consumer, making the lure of gaining points on your card a less attractive option.

“Somebody has to pay for the cost of acceptance [of the credit card],” says Postrehovsky. “We are giving the consumer the option to pay [through a credit card].”

Crazy. Guessing people desperate or illiterate enough to do that are probably not always paying it every month...
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Phoenix01

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Re: Garth Turner - Real Estate in Canada
« Reply #431 on: April 09, 2015, 11:20:01 AM »
http://business.financialpost.com/personal-finance/canadians-embrace-idea-of-paying-rent-and-condo-fees-with-their-credit-cards

I hope these people actually pay off their credit cards.

WOW!!!  It looks like millennials have completely missed the point that cash as a store of value.  As long as the cashflow covers the expenses, all is good.  There are going to be a lot of people living in their parent's basements for a long time.

50centdollars

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50centdollars

Liberty

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Re: Garth Turner - Real Estate in Canada
« Reply #433 on: April 09, 2015, 11:28:44 AM »
http://business.financialpost.com/personal-finance/canadians-embrace-idea-of-paying-rent-and-condo-fees-with-their-credit-cards

I hope these people actually pay off their credit cards.

WOW!!!  It looks like millennials have completely missed the point that cash as a store of value.  As long as the cashflow covers the expenses, all is good.  There are going to be a lot of people living in their parent's basements for a long time.

It's human nature. I don't think people have ever liked this whole concept of "you can only buy what you can afford with the money that you have saved" concept. If credit had been as available as it is now in the 60s or whatever, the boomers would've gorged on it to buy muscle cars with no seatbelts, turntables, and bell bottom pants or whatever. Most people have no idea how to manage money and don't think very far ahead, which is sad.
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Liberty

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Liberty

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Phoenix01

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Re: Garth Turner - Real Estate in Canada
« Reply #437 on: April 09, 2015, 04:21:28 PM »
Nothing wrong here..

http://m.theglobeandmail.com/globe-investor/personal-finance/mortgages/good-things-come-in-small-packages-for-millennial-buyers/article23671953?service=mobile
Developer Jon Stovell of Reliance Properties specializes in delivering housing to those young people who are eager to purchase real estate, and also willing to live small. He believes that the millennial market has a lot of untapped potential, but he says cities such as Vancouver aren’t keeping up, with their outmoded regulations.

They must be outmoded since THIS TIME IS DIFFERENT!

Uccmal

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Re: Garth Turner - Real Estate in Canada
« Reply #438 on: April 09, 2015, 04:29:30 PM »
Hi Al,

The Central Banks have created a major global stretching for yield that has affected everything (Sovereign debt, Corporate Bonds, Junk Bonds, Real Estate, Stocks, ...).  When the elastic snaps back (don't know when & don't know how) it has the potential to be colossal.

Do you have plan for this possible long tail event?  What if RE is down 50% and stock are down even more and the Cdn $ is crushed?  Will you be OK?  Will you be able to take advantage of the amazing bargains that will be offered up?  Do you have some sort of insurance policy against this scenario?

Well, I am not convinced.  As you know, We, whom were on this board, went through one of these a few years back and came out stronger.  Do you have a plan Phoenix? 

I for one have been buying dividend payers in an assortment of industries.  It is interesting to note that in 2008/2009 the majority of companies did not cut their dividends - they didn't raise them, but they didn't cut either.  The major income hits were among US financials.  At the same time I have been exiting most of my leveraged bets (Leaps), slowly. 

I cant speak to CDn. Real Estate.  It is certainly frothy but has never dropped by 50% - see above evidence. 

I try to get my head around the scenario you propose.  With central bank ammunition used up, the outcome is nothing short of worldwide disaster.  Nothing will be safe, certainly not cash.  This time around no one will be buying stocks because we would be in a deflationary spiral. I guess that is why the fed. is unwilling to shrink its balance sheet or raise interest rates in any hurry.  I also think the Fed. and worldwide governents want to inflate their way out of debt. 

Like Y2k, there is enough people worrying about it to make it a non-event.  This wasn't the case in 2007, when no one seemed worried about anything.  I had SPY puts by summer 2008, that I sold out way, way too early.  I am not seeing that as necessary right now. 


GARP tending toward value

Phoenix01

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Re: Garth Turner - Real Estate in Canada
« Reply #439 on: April 09, 2015, 04:45:06 PM »
Good article with Ben Tal on vacancy rates in TO

http://landlordrescue.ca/the-truth-about-current-vacancy-rates/

As for your concern, about a sell off,  I think that there is a very real possibility. I have been disseminating a cap rate spread sheet for the use of small investors for years and it does include such things as maintenance and vacancy. What you find when evaluating real estate in Toronto is that it makes no financial sense at all unless capital appreciation is relied upon to make the investment.