Comments on: Is Canadian Real Estate Overvalued? http://www.canadiancapitalist.com/is-canadian-real-estate-overvalued/ Helping you invest and prosper Sun, 12 Feb 2012 00:54:40 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: mike at second opinions http://www.canadiancapitalist.com/is-canadian-real-estate-overvalued/#comment-158383 mike at second opinions Wed, 01 Oct 2008 00:08:20 +0000 http://www.canadiancapitalist.com/?p=1324#comment-158383 At the end of the day, real estate is always priced locally at the supply and demand intersection. You cant equate it to an average income or rent because the amounts vary drastically by moving a few blocks in most cities, by being close to a subway, by being close to a beach. The best way to determine if prices are dropping is to track listings and home sales....again, you come back to the intersection of supply and demand. At the end of the day, real estate is always priced locally at the supply and demand intersection. You cant equate it to an average income or rent because the amounts vary drastically by moving a few blocks in most cities, by being close to a subway, by being close to a beach.
The best way to determine if prices are dropping is to track listings and home sales….again, you come back to the intersection of supply and demand.

]]> By: Ben http://www.canadiancapitalist.com/is-canadian-real-estate-overvalued/#comment-158306 Ben Tue, 30 Sep 2008 12:16:54 +0000 http://www.canadiancapitalist.com/?p=1324#comment-158306 Pam: the MPAC document showing assessed value is the last place one would want to look to gauge home value. One would prefer to see the house next door sell for an exorbitant sum, rather than pay higher taxes based on the MPAC value. Pam: the MPAC document showing assessed value is the last place one would want to look to gauge home value. One would prefer to see the house next door sell for an exorbitant sum, rather than pay higher taxes based on the MPAC value.

]]> By: CanadianInvestor http://www.canadiancapitalist.com/is-canadian-real-estate-overvalued/#comment-158273 CanadianInvestor Tue, 30 Sep 2008 07:29:06 +0000 http://www.canadiancapitalist.com/?p=1324#comment-158273 Pam, the 2.7% is the number in the UBC study CC has reviewed. Pam, the 2.7% is the number in the UBC study CC has reviewed.

]]> By: mjw2000 http://www.canadiancapitalist.com/is-canadian-real-estate-overvalued/#comment-158256 mjw2000 Tue, 30 Sep 2008 05:55:26 +0000 http://www.canadiancapitalist.com/?p=1324#comment-158256 I agree Anon...so here are the numbers in Vancouver... Average Family Income: $60,000 Average House Price: $800,000 After tax monthly income at $60,000 = $3500.00 30yr monthly cost of $720k mortgage @ 6% = $4,200.00 I pay $1060 a month in rent in Downtown Vancouver for an apartment near the beach, this includes utilities and cable television.....for me to buy a condo would cost me at least double in mortgage payments, taxes and condo fees....I think RE is a great investment at the right price....but I don't want to live to pay for my mortgage.... I agree Anon…so here are the numbers in Vancouver…

Average Family Income: $60,000

Average House Price: $800,000

After tax monthly income at $60,000 = $3500.00

30yr monthly cost of $720k mortgage @ 6% = $4,200.00

I pay $1060 a month in rent in Downtown Vancouver for an apartment near the beach, this includes utilities and cable television…..for me to buy a condo would cost me at least double in mortgage payments, taxes and condo fees….I think RE is a great investment at the right price….but I don’t want to live to pay for my mortgage….

]]> By: Pam http://www.canadiancapitalist.com/is-canadian-real-estate-overvalued/#comment-158218 Pam Tue, 30 Sep 2008 02:47:21 +0000 http://www.canadiancapitalist.com/?p=1324#comment-158218 Hi CC, great post. CanadianInvestor, the 5.4% rate is what the Ottawa Real Estate Board is citing on their website. I'm not sure where the 2.7% is from. My fiance and I just bought a house in Ottawa this spring. We are eagerly awaiting our property tax assessment and hoping it has an assessed value on it of more than we paid :P Other than that, we're not too worried about declining house values as we plan to stay here for 30+ years and aggressively pay down the mortgage by the time we're 40. Hi CC, great post. CanadianInvestor, the 5.4% rate is what the Ottawa Real Estate Board is citing on their website. I’m not sure where the 2.7% is from.

My fiance and I just bought a house in Ottawa this spring. We are eagerly awaiting our property tax assessment and hoping it has an assessed value on it of more than we paid :P Other than that, we’re not too worried about declining house values as we plan to stay here for 30+ years and aggressively pay down the mortgage by the time we’re 40.

]]> By: CanadianInvestor http://www.canadiancapitalist.com/is-canadian-real-estate-overvalued/#comment-158176 CanadianInvestor Mon, 29 Sep 2008 22:28:52 +0000 http://www.canadiancapitalist.com/?p=1324#comment-158176 Hi CC, thanks for the mention. I also found it interesting that the UBC website has another paper (comparing renting vs buying as a form of wealth accumulation) by the same author where the Ottawa annual house price appreciation is 5.43%instead of the 2.7% expected rate in the controversial paper. So which is it guys? As it happens a 5.4% rate of appreciation would neatly balance their equation and Ottawa would be in balance. Hi CC, thanks for the mention. I also found it interesting that the UBC website has another paper (comparing renting vs buying as a form of wealth accumulation) by the same author where the Ottawa annual house price appreciation is 5.43%instead of the 2.7% expected rate in the controversial paper. So which is it guys? As it happens a 5.4% rate of appreciation would neatly balance their equation and Ottawa would be in balance.

]]> By: Anon in Montreal http://www.canadiancapitalist.com/is-canadian-real-estate-overvalued/#comment-158174 Anon in Montreal Mon, 29 Sep 2008 21:31:55 +0000 http://www.canadiancapitalist.com/?p=1324#comment-158174 I find this "what could you get for renting your house?" business quite strange. An average house is worth what a family with an average salary can afford. To me, that's the best way of knowing if my house's current price is near it's long term value. I find this “what could you get for renting your house?” business quite strange.

An average house is worth what a family with an average salary can afford. To me, that’s the best way of knowing if my house’s current price is near it’s long term value.

]]> By: Thicken My Wallet http://www.canadiancapitalist.com/is-canadian-real-estate-overvalued/#comment-158173 Thicken My Wallet Mon, 29 Sep 2008 21:19:06 +0000 http://www.canadiancapitalist.com/?p=1324#comment-158173 Oops, I meant Alberta is borrower friendly. Oops, I meant Alberta is borrower friendly.

]]> By: condohype http://www.canadiancapitalist.com/is-canadian-real-estate-overvalued/#comment-158170 condohype Mon, 29 Sep 2008 20:28:09 +0000 http://www.canadiancapitalist.com/?p=1324#comment-158170 I'm in Vancouver and can tell you a 10% decline, even on top of the current declines (the market's been heading downward since the spring) will not bring our real estate even close to fair value. All over the city there are small condos "worth" upwards of $400,000 that rent for maybe $1,400/month. The numbers don't make sense. I’m in Vancouver and can tell you a 10% decline, even on top of the current declines (the market’s been heading downward since the spring) will not bring our real estate even close to fair value. All over the city there are small condos “worth” upwards of $400,000 that rent for maybe $1,400/month. The numbers don’t make sense.

]]> By: Thicken My Wallet http://www.canadiancapitalist.com/is-canadian-real-estate-overvalued/#comment-158163 Thicken My Wallet Mon, 29 Sep 2008 18:46:28 +0000 http://www.canadiancapitalist.com/?p=1324#comment-158163 CC: I can't speak for Alberta, only Ontario, but Alberta is known as a creditor friendly jurisdiction so I would not be surprised. Thanks. CC: I can’t speak for Alberta, only Ontario, but Alberta is known as a creditor friendly jurisdiction so I would not be surprised. Thanks.

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