6072 replies to this topic

[Mike K.]

$337.3 million.

[Ismo07]

$337.3 million.

 

Gave you the link, just do the math on each spending amount...

[Citified.ca]

 

Experts said Victoria's housing market would take a beating, but not even soaring listings have dampened prices

https://victoria.cit...ampened-prices/

[Ismo07]

^^ A lot going on in that photo..

[Mike K.]

I love the dog just crossing the street on his own (allegedly).

[Ismo07]

I love the dog just crossing the street on his own (allegedly).

 

Yeah that's Bruce..  Downtown dog... Part of the $337M budget..  His collar triggers the walk lights..

Edited by Ismo07, 04 June 2024 - 09:15 AM.

[Mike K.]

For that price it better trigger the walk lights.

[Szeven]

More going on in that photo or in that headline?

[Mike K.]

20 minutes to go!!

[Mike K.]

Rate cut from 5% to 4.75%.

[IPH]

Rate cut from 5% to 4.75%.

TD, Scotia and Vancity all dropped their prime rate by the same 0.25% to 6.95% this morning so looks like the major banks will match the BOC cut.  Will be interesting to see if this spurs some of the pent up demand to re-enter the housing market or if people will wait for further reductions.

[dasmo]

They will wait. Just try this stress test with our house prices and incomes with other reasonable inputs. You will fail unless your household income is well above average.... https://wowa.ca/calc...ors/stress-test

[Mike K.]

End-users are buying, but it’s the investors that are gone. What’s going to move the market is when returns on real-estate are greater than parking an investment down payment into a GIC.

You’re going to be negative if you’ve got $500k to invest into an $800k 2BR rental, with a $300k mortgage (not including closing costs, PTT, GST). To cover all costs you’ll need to bring in $3,000/month. It’s not easy to cover much above that, and then you have to deal with potential vacancy and maintenance, management, non-payment, that will put you immediately into the red, and everybody’s favourite, taxes.

That aside, the condo market is flat, and may remain flat while losing value via inflation for at least the near term.

Meanwhile, that $500k you didn’t use as down payment is making upwards of a $30k return right now if you’ve got 6%, with zero fuss. Over 10 years, you’ll have a compounded return of $240,000 even if savings average 4%, let alone today’s rates of up to 6%, or higher if you locked in a little while ago. At 5% your return is $314,000.

It’s not even a question where to put money.

[Tony]

What about the higher tax rate on interest income does it not reduce the return?

[IPH]

Yes, but for end users there is a lot of pent up demand.  If you need a place to live, parking your money in a GIC and paying a landlord $2500 month your net is zero.  Rates are likely to drop 1.5 to 2% over the next year or so and then prices will start climbing again.  Buying now at a better price, with a short fixed or variable term until rates drop may end up being the better option in the long run.

[Mike K.]

That is true, and I was referring to investors only.

[Mike K.]

What about the higher tax rate on interest income does it not reduce the return?

 

It depends how you invest it, whether it's a personal investment, a corporate investment, and your income aside from the GIC return. You can split it into a TFSA, so $95k max as of this year, earning tax-free, and into an RRSP, then the rest un-registered.

[Tony]

For individual investors I would assume that they have already maxed out their TFSA.. I can not talk to the effects of interest income on corporate investment returns.

[Mike K.]

Right, but you’d be drawing the money from there, to make the $500k real-estate down payment.

We’re not worrying over where to put new money, but on where to spend it (or not, best to leave it where it is).

[Citified.ca]

A Q&A on the lending environment from the commercial perspective, but it has some nuggets of information that will be applicable to residential mortgages and lending options.

 

 

Q&A with Impact Commercial's Alan Haigh on interest rates, lending opportunities and what's in-store for borrowers and lenders

https://victoria.cit...rowers-lenders/