Author Topic: Garth Turner - Real Estate in Canada  (Read 548319 times)

gary17

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Re: Garth Turner - Real Estate in Canada
« Reply #1940 on: September 16, 2020, 04:50:46 PM »
the most beautiful thing is TAX FREE for principal residence !


beerbaron

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Re: Garth Turner - Real Estate in Canada
« Reply #1941 on: September 16, 2020, 04:55:31 PM »
So with the federal govenrment borrowing like crazy and the housing market exploding...

How levered are househould and goverments together?
Do we have historical data to compare?

BeerBaron

Cigarbutt

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Re: Garth Turner - Real Estate in Canada
« Reply #1942 on: September 16, 2020, 05:50:04 PM »
Quote from: beerbaron[img
http://link=topic=6314.msg431126#msg431126 date=1600300531]
So with the federal govenrment borrowing like crazy and the housing market exploding...
How levered are househould and goverments together?
Do we have historical data to compare?
BeerBaron
[/img]
This is not what you asked but it's an interesting graph. Do you remember the 1990s when credit agencies got agitated over federal debt? You may want to adjust for real GDP growth x 4.4 (1969 to end 2019).
The following contains what you are looking for. For the first link, CDN's household debt to GDP reached about 106% at the time of this writing. For the second link, see page 12 for provinces and the federal net debt to GDP. i think you're from Quebec? i don't want to get into politics but there was a lot of noise about "austerity" for a few years and the new government does have some more breathing room as a result although IMO marginal debt addition even at super low rates may eventually become an issue.
https://betterdwelling.com/canadian-household-debt-has-grown-over-49-faster-than-gdp-since-2005/
http://www.rbc.com/economics/economic-reports/pdf/canadian-fiscal/prov_fiscal.pdf

SharperDingaan

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Re: Garth Turner - Real Estate in Canada
« Reply #1943 on: September 16, 2020, 05:56:37 PM »
The great thing about a mortgage is that you just need to pay the interest. If you have remaining borrow capacity, you don't even need to do that. Your banker simply increases your mortgage, credits your chequing account, and you just pay it back to him/her as last months interest. With a little help from the BoC  ;) no defaults as long as the price of the average residence keeps going up.

Same thing applies to rent, the lender just needs to receive the interest, the landlord just needs to receive interest and operating cost. A little regulatory grace  ;) a refi to reduce the interest rate, and everything can stay open - at 25-50% less rent. More people back at work, and spending again.

The home owner also benefits from inflation  ;) 'cause the real asset inflates, and the monetary liability deflates - increasing your equity. Compare the major fiat currencies to gold - and we can see that inflation both exists, and is sizeable. The incremental $'s just don't spread evenly over the same fixed supply. Hence the 31% price rises in PEI, and 5% in Alberta.

Point? It's going to be a very long time before real estate blows up in Canada.

SD
« Last Edit: September 18, 2020, 10:24:54 AM by SharperDingaan »

cwericb

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Re: Garth Turner - Real Estate in Canada
« Reply #1944 on: September 16, 2020, 05:57:30 PM »
Yes! Alfred E. Neuman for President in 2020 !
Politicians and diapers must be changed often, and for the same reason. - Mark Twain