Garth Turner - Real Estate in Canada

[alertmeipp]

A person who has lived in Canada can use a similar no income verification program if they are self employed. BC has the highest rate of self employment in Canada.

This post has some stuff about how some lenders like Vancity are offering all kinds of crazy products (ie. they give you half of your downpayment at 0.01% interest, etc):

http://www.greaterfool.ca/2015/06/14/the-money-changers/

Also: http://business.financialpost.com/personal-finance/mortgages-real-estate/a-third-of-canadians-would-struggle-if-mortgage-rate-grew-by-only-1-survey-finds

"A third of Canadians would struggle if mortgage rate grew by only 1%, survey finds"

I am debating whether I should get in.. (Toronto) I guess not?!!?

[Liberty]

A person who has lived in Canada can use a similar no income verification program if they are self employed. BC has the highest rate of self employment in Canada.

This post has some stuff about how some lenders like Vancity are offering all kinds of crazy products (ie. they give you half of your downpayment at 0.01% interest, etc):

http://www.greaterfool.ca/2015/06/14/the-money-changers/

Also: http://business.financialpost.com/personal-finance/mortgages-real-estate/a-third-of-canadians-would-struggle-if-mortgage-rate-grew-by-only-1-survey-finds

"A third of Canadians would struggle if mortgage rate grew by only 1%, survey finds"

I am debating whether I should get in.. (Toronto) I guess not?!!?

It's your decision, it's your money, same as with stocks. But if you're asking me what I would do, especially in Toronto, I would rent (I'm currently renting, and I live somewhere a lot less expensive than Toronto). If you are really itching for a nice place, then rent a luxury condo or house, it'll still cost you a lot less than buying. Put aside the difference for a bigger downpayment down the road and wait for this real estate mania to be over. You never get a good deal when you are buying something that everybody else is buying, especially when they think it'll keep going up fast and can't fall.

[50centdollars]

http://www.vancouversun.com/business/real-estate/Flipping+Vancouver+homes+proves+profitable/11145524/story.html#ixzz3dRA3YYGc

[Otsog]

Having a bitch of a time selling my condo in Victoria, anyone want it?

Anyone know what cap rates usually are in multi-family residentials?

[gary17]

downtown vancouver, for a newer 550K condo , 2 bdrm + 2 bathroom + 1 parking  - rent should be $2000/month.
you then need to account for about $400/month of strata fee + insurance + property tax....      ($2000)

[Otsog]

Wow that is low.

I'm calculating roughly 3% in Victoria. I don't have any insurance though. Also had maintenance, vacancy and management fees.

[50centdollars]

http://news.nationalpost.com/full-comment/bruce-yaccato-youd-have-to-be-crazy-to-buy-real-estate

[alertmeipp]

I am renting in Toronto suburb, $2000 per month, it will cost me about $750,000 to buy the place.
Rent is pretty reasonable. But the catch is the same house can be have to 630k last year.

So, yes up close to 20% in a year!   

[enoch01]

I am renting in Toronto suburb, $2000 per month, it will cost me about $750,000 to buy the place.
Rent is pretty reasonable. But the catch is the same house can be have to 630k last year.

So, yes up close to 20% in a year!   

Good for you on relatively cheap rent though.  Prices sound like they are firmly in greater fool territory.

I'm astonished at how low some of these quoted rental yields are.  Your hypothetical landlord's situation were he to buy it today:

$2k * 12 / $750k = 3.2%.

By contrast, I own a rental at an 11% yield in the U.S.  Nothing special, I bet there's millions of them in the U.S. available at similar prices.

[alertmeipp]

I am renting in Toronto suburb, $2000 per month, it will cost me about $750,000 to buy the place.
Rent is pretty reasonable. But the catch is the same house can be have to 630k last year.

So, yes up close to 20% in a year!   

Good for you on relatively cheap rent though.  Prices sound like they are firmly in greater fool territory.

I'm astonished at how low some of these quoted rental yields are.  Your hypothetical landlord's situation were he to buy it today:

$2k * 12 / $750k = 3.2%.

By contrast, I own a rental at an 11% yield in the U.S.  Nothing special, I bet there's millions of them in the U.S. available at similar prices.

Yes, and we have not talked about taxes on rental income, property taxes and maintenance expenses.

If one assumes house price will JUST appreciate the same pace as inflation, it makes no sense to buy now. But somehow in Canada, there is a thinking that detached houses will be in shortage, so buy now or never!