He said “It is different now, as property always goes up in Vancouver, unlike the overinflated expectations of .com”.

‘BC is even better than ten best place on earth’ at greaterfool.ca on 12 Feb 2011 at 4:07 am“I have just had a really strong argument with a friend. He took out a HELOC to do a granite-n-steel refurb. Plus the mandatory Porsche panakake (panamera) for the drive. He had to have a new one as well with an immediate depreciation attached.
I reminded him how he borrowed money against his stock options in the .com days and how he wound up with a loss that took him 5 years to repay. He said “it is different now, as property always goes up in Vancouver, unlike the overinflated expectations of .com”.
Then he criticized me for renting (a very nice, just renovated 2500 sqf townhouse in Shaugnessy where the owner gave me a 3 year lease) and having an ’09 Jeep (bought in cash) Libby.
When we looked under the covers and I explained I have $500k in a diversified portfolio (made me $56k in netreturns last year) and my expenses are only rent allowing me to max out my and my wife’s TFSA, RRESP and save for the kid’s education. This still leaves me about 50% of my disposable income (of my base salary, commissions always go to non reg savings) to enjoy my debt free life.
I think a year from now, I’ll buy his pancake-American porkie for cents to the dollar. He needs his commissions to make ends meet. If he loses his job, he’s in fire sale land.
If I lost mine, at my current burn rate I could survive quite well for just under 10 years.
I live KNOWING my family is safe, he lives HOPING everything stays as it is…
I do have a property, it is in Rome, Italy, where I will retire, I bought it second hand, only about 400 years old…”

3 responses to “He said “It is different now, as property always goes up in Vancouver, unlike the overinflated expectations of .com”.

  1. “Property Always Goes Up…”

    Once upon a time Seattle indigenes thought so, too… However, as Bobbie Zimmerman famously once said, ‘Things Have Changed’…

    [NYT] – Housing Crash Is Hitting Cities Once Thought to Be Stable

    “SEATTLE — Few believed the housing market here would ever collapse. Now they wonder if it will ever stop slumping. …In the last year, home prices in Seattle had a bigger decline than in Las Vegas. Minneapolis dropped more than Miami, and Atlanta fared worse than Phoenix. ”

    http://tinyurl.com/5sf73n7

    • Their wording is a bit misleading:
      “In the last year, home prices in Seattle had a bigger decline than in Las Vegas”
      Well yes, that sounds dramatic, but that’s because Las Vegas has already dropped like a rock and doesn’t have much farther to fall. Look at their graphics giving the 3-year drops: Las Vegas down by 50%, Seattle down by only 25%.

      • Prices at Seattle downtown and waterfront are still holding up. Yes, that statement easily fools those not familiar with Seattle real estate market.

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