Interest rates to smash property prices.

[eyesthebye]

asset values can drop while debt can remain unchanged

Ah, rebuts the bull, but you only lose if you sell. All you have to do is avoid selling and you're rich.

ah, rebuts the bear, but you only win if you sell, All you have to do (to join our pathetic club) is sell and you're rich.

[Johnny Horton]

yes, sell aand rent....live like a "king for a day".

[jesse1]

All you have to do (to join our pathetic club) is sell and you're rich.

Actually that's true. Someone who bought a few years ago will make a lot of money if they sell (assuming they're not levered to the gills).

Likewise, as I stated, the owner who doesn't have to sell if prices drop isn't out the shortfall: mark to whatever floats your boat until your hand is forced. Life's too short to do otherwise.

[eyesthebye]

All you have to do (to join our pathetic club) is sell and you're rich.

Actually that's true. Someone who bought a few years ago will make a lot of money if they sell (assuming they're not levered to the gills).

misguided approach. I know quite a few people who sold at peak just before the 2008 correction. Their plan was to buy back in at lower prices. Guess what? One is still living with her folks, another can now only afford a townhouse, and a couple more are renting, waiting and losing pace to the market every month. If I ever decided to sell it'll be because I have an accepted offer on another house. Check how many "smart" waiters/renters there are on this site. Wait to buy real estate is the dumbest strategy... better to buy real estate and wait.

[jesse1]

I'm not going to pass judgment on what's better but I think we can agree there's money currently on the table.

[semven]

They need Taipans chart so they dont cry themselves to sleep everynight. Those who sold and waited are still to be commended for at least making a move. Who knows ? They might still be okay.
But you cant win if you talk yourself outta the game forever.

[vancouverowner]

Just thought I'd highlight this chestnut from almost a year ago:

Some of the experienced posters on this board remember what it was like with interest rates of 17%. And that is why they are bearish because even a fraction of those sorts of rates with conservative lending criteria will smash real estate markets across the world, especially Vancouver.

And without doubt Canada will be following us. Canada will suffer the same issues as Australia. Eg commodity based, with significant export income. That means constraints and inflation and BOC forced to raise interest rates. Canada is merely following Australia now.

Anybody that followed this advice wasted thousands borrowing money that wasn't really worth that much to being with.

[eyesthebye]

Just thought I'd highlight this chestnut from almost a year ago:

Some of the experienced posters on this board remember what it was like with interest rates of 17%. And that is why they are bearish because even a fraction of those sorts of rates with conservative lending criteria will smash real estate markets across the world, especially Vancouver.

And without doubt Canada will be following us. Canada will suffer the same issues as Australia. Eg commodity based, with significant export income. That means constraints and inflation and BOC forced to raise interest rates. Canada is merely following Australia now.

Anybody that followed this advice wasted thousands borrowing money that wasn't really worth that much to being with.

I did say that interest rates would be low for a very long time.

[Taipan]

Just thought I'd highlight this chestnut from almost a year ago:

Some of the experienced posters on this board remember what it was like with interest rates of 17%. And that is why they are bearish because even a fraction of those sorts of rates with conservative lending criteria will smash real estate markets across the world, especially Vancouver.
And without doubt Canada will be following us. Canada will suffer the same issues as Australia. Eg commodity based, with significant export income. That means constraints and inflation and BOC forced to raise interest rates. Canada is merely following Australia now.

Anybody that followed this advice wasted thousands borrowing money that wasn't really worth that much to being with.

Thankyou for that.

If you want to be smart, you can then advise readers the changes that have been made to mortgages and amortisation terms.

Cmon post them up and explain what the effect is.

But here is a quick refresher of the tightening rules and the effect it will have on the affordability of people in Vancouver to buy property.



Having recently been in the USA (12 hour flight from Aussie - compared to you jokers), what struck me was the lack of finance by financiers for property.

Even if you can afford to repay the loan, it is very hard to get the money unless you almost dont need it.

Property prices are dead or still falling even with very low interest rates. Same thing happened to real estate in Japan over the last 20 years even with low interest rates.

[semven]

Wasnt one of your Bullshit Stories about owning long term leases?
(Regis participates in this sector too )

Canada property results improve on deals, leasing

Lyle Stafford/National Post
.Comments Email Twitter inShare.0.Reuters Aug 5, 2011 – 11:33 AM ET

By Ka Yan Ng and Amruta Sabnis

TORONTO/BANGALORE — Canada’s biggest office and retail landlords reported strong quarterly results on Friday, boosted by acquisitions and long-term leasing renewals.

Brookfield Office Properties and RioCan Real Estate Investment Trust REI said funds from operations, the most closely watched performance measure for REITs, rose in the three months to the end of June.

Even so, activity for the Canadian companies could slow if a flagging global economy makes it more difficult to raise capital and complete deals. “We’ve had a ton of acquisition activity and capital raising going on over the last two years,” said Karine Macindoe, an analyst at BMO Capital Markets.

“This market environment is probably going to slow some of that down because … share prices are far more volatile and declining.”

Canada’s resilient economy, rising rents and easy borrowing are fueling a buying spree among real estate investment trusts, highlighted last month by the largest office property deal ever by a Canadian REIT.

STEADY EXPANSION

The second quarter revealed few signs of weakness. Brookfield, a major office landlord in Manhattan and other North American cities, reported a 23 percent jump in leasing activity. It leased 1.6 million square feet of space, compared with 1.3 million square feet leased a year earlier.

FFO rose to $166 million, or 30 Canadian cents a unit, from $156 million, or 30 Canadian cents, a year earlier. FFO strips out the effects of depreciation and other factors from the earnings of property companies, giving a more telling quarterly reading. RioCan REIT, Canada’s largest landlord of retail space, also turned in a strong performance.

FFO rose 12 percent to $93-million, or 36 Canadian cents a unit, from $83-million, or 34 Canadian cents, a year earlier. RioCan has steadily expanded its portfolio in Canada, while looking for opportunities for growth in the United States for more than a year. “RioCan’s acquisition platform remains on track to meet our objectives for the year,” Chief Executive Edward Sonshine said in a statement.

[Taipan]

And your point is.........................?

Pray tell me if income is aligned with valuation in commercial industrial, because it is completely out of whack in the residential sector.

Here is another suprise. Developers are across all population centres, but fundamentally the rules are the same.

[vanreal]

And your point is.........................?

Pray tell me if income is aligned with valuation in commercial industrial, because it is completely out of whack in the residential sector.

Here is another suprise. Developers are across all population centres, but fundamentally the rules are the same.

Did you mean surprise?

[vancouverowner]

A few of you will understand the warning of this post. Most of the bulls will dismiss it and ridicule it as unimportant.

Two years later interest rates are lower, Vancouver RE prices are higher and Taipan has finally caved in and paid too much for that chalet he has been coveting.

[unicas]

by Taipan » Mon Sep 20, 2010 3:01 am

In fact falling house prices can cushion inflation in other areas of the economy. In 12 months Australia's interest rates will most likely have risen 2%, from their lows.

There will be howls and there will be screams in this country but i know from experience, they will fall on deaf ears as far as the RBA is concerned.

And without doubt Canada will be following us. Canada will suffer the same issues as Australia. Eg commodity based, with significant export income. That means constraints and inflation and BOC forced to raise interest rates. Canada is merely following Australia now.

Australia is seen to lower interests rate by as much as 100 base point in the coming weeks. Will Canada follow? Or you will have the grace to admit you were just flat wrong. The opposit is happening.

[Taipan]

by Taipan » Mon Sep 20, 2010 3:01 am

In fact falling house prices can cushion inflation in other areas of the economy. In 12 months Australia's interest rates will most likely have risen 2%, from their lows.

Source Reserve Bank Of Australia. Increase from lows? 1.75% I dont know how i can live with myself. I was out just 0.25%, but they did increase 1.75%! There was talk that the last increase in November 2010 could be 0.5%.

3 Nov 2010 +0.25 4.75
5 May 2010 +0.25 4.50
7 Apr 2010 +0.25 4.25
3 Mar 2010 +0.25 4.00
2 Dec 2009 +0.25 3.75
4 Nov 2009 +0.25 3.50
7 Oct 2009 +0.25 3.25
8 Apr 2009 -0.25 3.00

Australia is seen to lower interests rate by as much as 100 base point in the coming weeks. Will Canada follow? Or you will have the grace to admit you were just flat wrong. The opposit is happening.

Ill be surprised if they give back anything at the moment. [addendum 5/6/2012 RBA reduced rates by 0.25%] Now down to 3.5%. 250 basis points higher then canada, but down from 375 basis points higher!]

5 June 2012 -0.25 3.5
2 May 2012 -0.50 3.75
7 Dec 2011 -0.25 4.25
2 Nov 2011 -0.25 4.50
3 Nov 2010 +0.25 4.75

They have given back 1% over the last 6 months. If europe falls apart which is very highly likely they want something in reserve.

Canada on the other hand has nothing. Your at 1%. You barely increased your rates and have nothing to fight the new recession.