Bet they do! After all, how can you afford the gas for your supercar, when it costs so much to keep a garage over its head?

CharlesInCharge, is that you?? :pokerface:

Maybe, just maybe, people can't have everything. If you have high insurance or childcare costs don't take out a lease on a brand new vehicle, don't max out their RESP's (what the hell kind of post-secondary are you planning for them here at $5k/year?) don't have one parent completely quit working just to raise the kids. Of course it'll be hard to make your mortgage when you reduce your income and max out all possible expenses.

Yes it's a bummer when you can't have everything you want but that's part of life, people better get used to that.

WTF, the house in the article i was comparing to is the EXACT same thing, $15K 1960's money to $1M today's money.

i was comparing apples to apples

right, and i said it was a vast over simplification, but the returns from S&P500 far outweigh the real estate. less so when you take those factors into consideration.

also consider that in 1961 you'd have had to have saved a larger % down payment (no >100% mortgages then), so that could have been invested, and the rest would have been invested over time.

this, of course is on the assumption that rent was < than ownership cost then, which may or may not have been true.

the thing is, people are stupid, they don't understand simple time value of money or economics - they will read the line about $15K house going to $1M and think its the best thing ever. i'm just showing a glaringly easy alternative.

it's not a perfect comparison as there are those considerations, but it's just there to show the other side of a multi faceted consideration.

but to your point, you mentioned borrowing rates, which are usually closely tied with inflation, so let's say borrowing rate = inflation, given S&P500 has historically gained real return of 6%, you're still way better off (over the long run), you have real spending power of +6% each and every year (less the spread on the debt, which will be <6%)

Before committing ones working life to purchasing real-estate, its best to first invest in a crystal ball so you'd know when the next crash is going to happen.

Ive yet to read a reason as to why real estate prices doubled in a span of 5-7 years a decade ago... the system will always keep people in a hamsters wheel... foreign investors or not.

Article talking about been house poor in Canada which a lot of Vancouverites can relate to;

did you miss the global financial crisis of 2008 and the resulting quantitative easing (pouring of cheap and easy money into the system).

where do you think that money went - into building up companies, like it was intended? no, of course not, it went partially to that and the rest has gone to hard and financial assets, real estate, art, equities, bonds - safer havens

CiC - i thought you were just crazy, turns out you're also an idiot.

Vancouver housing prices doubled before 2008.

You're like the biggest mainstream regurgitator that replies to my posts... and you've always been wrong or backwards because your so gullible in what the news and probably your peon friends tell you.

Now run to your news sites and tell me why prices doubled from the year 2000+

Learn a thing or two? Sorry buddy but I have had first hand experience how people do business in China. In their world no know cares how you get rich as long as you get rich no one gives a shit how you got there. There are no rules in running business in China is who you know that counts.

i will remind you of the dotcom bubble which burst in 2001.

do you know what happened after this event? money started becoming VERY easy and much cheaper to get in the US. This had an effect on the cost of borrowing in Canada, whilst not quite as easy as the US (the difference can be seen, partially, by the US crash in 2008 vs. no material crash in Canada, though that is in part due to the emergency rates brought in in Canada), Canadian real estate started going up.

The cost of debt and the prices of properties are inversely related.

if i was a mainstream regurgitator, as you put it, i'd be saying it's because Vancouver is special, it's different here, CHINESE MONEY!!!!

instead, i'm intelligent and well read, hence why i state the factual economic basis for the change in prices. Now, admittedly, some of the China money, it's special here, etc. will have a small, limited, local, certain portion of the market effect, but by and large it is fundamentals that drive pricing long term, not a conspiracy theory, not aliens, not anything else.

ironically, you tell me to run to news sources - i don't need to quote news sources, what i state is known fact. yet, you always provide links to cracker jack sites as back up to your crazy assertions.

having said all this - you are partially correct, the system is keeping the masses down, the rich have disproportionately gained from the financial crisis, this is beyond debate. my solution - become one of the 1% (or 5% will do, to be honest) by virtue of hard work, smart investing, and intelligent spending, not by screwing others over. or you could juts complain about it and say it's some crazy Illuminati thing.

and, it's "you're gullible", i don't have a gullible.

So because lots of citizens got scammed in the United States... losing mucho money! you say...
this spurred the Canadian banksters to also start lend out so much money that in a span of 5-7 years it caused an unstable doubling in the cost of housing?

but, but, its not an Illuminati thing... and its not like they collapsed wtc7 containing the Enron and WorldCom investigation files... no (that was due to Bin Ladin's fluke luck taking down a building not struck by a plane but got pulverized at free-fall speed due to debris raining down from the other collapsed freefall buildings)

Canada is not under the control of international shadow banking Illuminati's because that would be a crazy assertion.
So why did the Canadian bankers just start lending out money like crazy? For what reason?

You are so well read and intelligent like you claim, lettuce all patiently await for you to wake up in the morning and share your great wisdom.
:megusta:

this is becoming the next real estate thread with a billion pages of poor people whining, and rich people justifying.

canadian central bank rates tend to follow those of the US, this is done for two reasons, 1) usually there will not be a desire or need to manipulate relative rates for purposes of changing the FX rate, and 2) the US is the largest trader with Canada - Canada's economy, to some (large) degree, echoes that of the US

the above will have an effect on variable mortgages, based on the BoC rate.

fixed 5 year mortgages are priced based on bond yields - these tend to reflect growth expectations in the market, with other factors also considered. When bond yields move in the US, they tend to move in Canada, this is because Canada and US have a constant relative risk profiles, so if bond yields rise in the US, they will tend to rise lockstep in Canada, as otherwise an investor would just take their investment money to the US and buy US bonds rather than Canadian, and vice versa

the above is simplified, CiC, on account of your small brain, but on account of a very stable relationship between the US and Canada in relative bond yields, overnight rates, economies, etc. (in the long run), take it as gospel that whatever the US will have a significant effect on what happens in Canada. Perhaps not 1:1, perhaps the FX rate will fluctuate, perhaps there is a slight, temporary, whatever, shift in relative risk, performance, etc. (commodity cycle since 2008, for one) - but long term, know this will survive as long as Canada is so reliant on the US economy, something that may never change due to the geographical, social, and political alignment of the two nations.

CiC - you mad, don't be, the Illuminati will save you (whatever that means)

So when Canadian labourers are trying to save up for a house, specially those that dont want a life mortgage and to pay $100,000+ interest to the banks... they have to prey to the bond yield gods in the United States (the same country that schemed on a governmental level, defrauding over a trillion of American citizens monies in the housing crisis) for those gods not double the housing rates in Canada... call me stupid but sounds like there's a shadow ruling elite pulling the strings for booms and depressions.

I have video of George Bush promoting Enron before the burst, and Im sure most have seen him at the 911 site condemning terrorist when he was in fact one of them...
http://www.revscene.net/forums/69670...-shelters.html

So in conclusion you want me to believe x + y + variable - shift in relative risk x performance = everythings going to be alright?
I got your variable bond yields BoC rate right here.
*grabs crouch.

what?! FailFish

i explained the economic support for the link between US and Canadian borrowing rates, the timeline from 2000 to today re: house prices being driven (in my opinion) by cheap debt - and somehow this is a conspiracy theory?

there's no conspiracy, those in power will do what is best for them. you can only hope that trickles down to you, the average citizen - if not, you voice your displeasure by voting them out.

you think the US has some conspiracy against canadian workers? no, it's just that the US has the biggest economy which happens to be the main driver of the Cdn economy. if somehow the Canadian cost of debt was related to the egyptian cost of debt, i'd be with you on this one, but for now, you're on your own little cracker island.

Im investing my future in Iran, a free country unlike Canada... but who knows maybe you or your children will be in the hot middle eastern trenches one day trying to get a piece of Iran for your ZioAmerican over lords. Thus the role of a cog that will wake up one day, be drafted into a world war, and think how did this happen.

FailFish

this explains it all.

TLDR; Canada isn't safe, don't trust the government, bubble will burst, but invest in Iran

If their mortgage takes 43% (considered the top end of acceptable), how the hell are groceries and housing bills taking up the rest? It sounds like these people are spending money on other things and then wondering why they're broke.

The returns do outweigh real estate assuming the real estate was being purchased strictly as an investment with cash and you let it sit empty for some reason. If you start to factor in borrowing any of that money or renting out/living in the property during ownership it becomes vastly more complicated but I somewhat doubt sticking the value of a house into an investment for 54 years still comes out on top.

Well besides the fact that it is a legal grey area to invest in Iran right now.. Iran is starved for cash. You can get some crazy returns (with some crazy risks).

However I know a few hedge funds (closest one I know is in the Bay area) already getting their prospectus ready whenever the embargo is lifted in the next few months.

Again little guys will get trampled.

Actually most med grads I know usually buy their first place a few years out of university.. and in Vancouver. A lot I know buy around the Womens and Childrens (Fraser, Oak, King Ed area).. Doctors are the sector bankers roll out the red carpet for. 1/2 mill credit line during med school days? done... Free everything service.. done.. they want you to get you in debt.

Lawyers same thing, but since it is not as controlled and have shortages they are not as conveted, but they like prefer closer to downtown for obvious reasons.

Because of income splitting a lot of people "who use their brains", one spouse will stay at home and they can afford to and the tax benefits work that way. Once your combined income is about 150k you should listen to a good financial and more importantly tax advisor. You shouldn't use brute force at this stage because the payoff is a lot less.

As long as you are on the straight and narrow in those professions.. ie no affairs / divorces / drugs.. the banks will back you even if you have crazy debts because you are not going anywhere.

The government gives you $500 if you contribute $2500 to an RESP per child so it makes sense to max out your contributions because there aren't many programs that allow you to get free money. $5000 was based on the average of two kids per family. $2500 X 18 years is $45,000 which may not necessarily be a lot of money considering the cost of any post-secondary program today, let alone in 19 years. I'm sure a lot of people here have had crippling student loan debt and probably wished that their parents could have given them a head start (we're talking about education - not cars, or house down payments).

Even if you buy a used minivan or wagon (like a mid-200s Suburu) to shuttle your kids to doctor's appointments, swimming lessons, etc., you're still paying 1000-2000 per year to keep that car on the road in maintenance and unexpected repairs (like an automatic transmission rebuild, or head gasket). Of course, you could wrench yourself, but then you would need a second car (as a runner to get dealer-only parts if you break something along the way) and ample space, tools, and most importantly, time.

I guess my point is that it's not hard to see where the money goes, even when families make prudent decisions.

Not to mention, a lot of financial institutions match your contribution if you open an account with them (at least for the first few years).. since they know it is a gov source it is a stable source, they want your business.

But it is fair on the new car lease and living within your means.