“Don’t drink the housing market kool-aid. The affordability gauges used by the banks – i.e., people who make money selling mortgages – are too slack. They let people buy more house than they can comfortably afford while meeting their savings obligations. If your mortgage and all your monthly debt payments would exceed 30 per cent of your monthly pretax income, then back off and keep saving. Worried that the price of houses will keep rising and you’ll never be able to afford to buy in? Won’t happen. When people like you are priced out of the market, the market must fall.” …
“Explore your inner renter (Generations X and Y edition). This is already starting to happen in the United States – young adults are postponing home ownership and instead renting for longer. Frankly, there’s a good argument for buying houses in U.S. cities because of rock-bottom prices. But young adults realize that mobility is an asset when looking for a job. Plus, they’re marrying later and often carrying big student loans. Renting makes sense in this context, as long as you’re saving the money you’d otherwise be spending as a homeowner.” …
“Explore your inner renter (Baby Boomer edition).Enough with property taxes and those never-ending maintenance costs, not to mention condo fees. If you’re a retiree selling the house where you raised your family, think about renting your next home instead of buying.”
- Rob Carrick, in ’12 ways to build wealth in 2012′, G&M, 22 Dec 2011
Wow. This is… sudden.
The implications of cohorts following this advice is a housing market crash.
- vreaa
Build wealth AND rent at the same time?
8-O 
Retire to where it’s warm and cheap What? Not in BPOE?
That same author recently wrote some other crazy articles:
Renting is cool
Make 2012 a year of paying down debt
What should your financial goal be for 2012? Get that debt to zero
Rob Garrick is great, he posts interesting open questions on his facebook page.
Also found this article with views from Michael Goldberg, professor and dean emeritus at UBC’s Sauder School of Business about density and urban planning in Vancouver.
http://thetrac.ca/resources/docuploads/2011/11/25/Betting%20the%20House%20Western%20Investor.pdf
”
Statistics from BC Hydro regarding power consumption below the minimum threshold established for occupied
apartments have typically pegged vacant downtown condos at about 8 per cent of the total stock. This year, BC
Hydro numbers pegged the proportion of vacant units city-wide at 2.4 per cent of low-rise units and 3.9 per cent of
highrise apartments. Of course, many foreign-owned apartments might be rented out, so a lack of power
consumption isn’t the best measure of foreign ownership.
But even then, speaking to the Urban Development Institute in May 2011, condo marketer Bob Rennie observed that
for the Lower Mainland as a whole, 2,500 condos are foreign-owned (or approximately 1.2 per cent) based on where
assessment notices are sent. And foreign buyers of single-family homes are equally few, at just 607 (or 0.15 per cent
of the regional total)”
Definitely more noise in the press about a RE downturn.
People do not realize it but a 10 percent downturn from this height easily wipes out 70-100K in equity…and then some,
We have all seen GREED at work, FEAR will be worse.
Hold tight ladies and gentlemen!!
Dinnae sae ye were nae telt.
http://tinyurl.com/ylgf4n
Didn’t this guy get the memo?
“People are getting married later, so there is a need to buy a condo sooner.”
…and they combine their condos into a house when they get married. What could possibly go wrong?
Rob linked to my wall of text/spreadsheet analysis post on his facebook, but not in his G&M articles. Just in case VREAA is interested
Potato -> Thanks for the links; great spreadsheet.
Will headline.