tuesday mass debate - housing prices - vancouver a bubble or just expensive

Posted by: heckler

Actual experience compounding annual growth rates: 3% salary growth vs 7% real estate growth over the past 20 years.  Zero generational wealth.

7% CAGR isn’t unreasonable for other financial assets. This one keeps you warm and dry too!

The real problem is normal salaries don't keep up.

If you want to end up wealthy, use your salary to buy assets, not liabilities (expensive cars being the worst).

What if our only goal is to simply not end up homeless seniors? 

Me and my partner are both pretty dumb and not good at math so our plan is to just try and pay off our mortgage in 5 years by taking advantage of the 20% installment per year allowance. Then once that's done we'll just start dumping as much as possible into an rrsp.

That's a good plan.

Posted by: syncro

Posted by: chupacabra

The other thing to consider is that Vancouver has it's own very wealthy people. According to a new report when it comes to people worth more than 100 million, Vancouver is 41st globally and this is expected to keep growing quickly. Toronto has even more.

Thanks for contributing to being in the top 50.

(looks at bank account with excitement) Ahhh, crap. Still the same.

I have said many times that Vancouver will become the new Monaco; the wealth will come from elsewhere and it will be a town of services and industry/manufacture will go away (mostly, but not all).  The only issue is time.  And how long.  Another thought, and as a rider I understand:  living in Vancouver or North Van to be close to the trails is a privilege, not a right.  If you can't afford it, move.  Prices are never coming down and there is someone, globally, willing to pay more to have what you have.  Get use to it.  I don't like it but that is reality.

Posted by: switch

That's a good plan.

A good plan indeed @FO.  Thats amazing if you can plunk down 20% per year!

I would consider a balanced approach, hammer out the mortgage (ours was 13 years), but not as your only growth asset.  Consider splitting your excess cash to home and RSP and/or TFSA investments.  Diversify, in case housing and/or investments go up/down due to .

Point being - don't put all your eggs in one basket in case it falls & breaks.  But keep your eggs.

my plan was to put half down, go long amortization/ lowest possible payment

so I could ski/ bike paddle with no job and wait for mom (she was 86) to pass, pay off mortgage

that is exactly how it went

^^

Good to see ghoulishness is still a viable financial strategy.

Posted by: Fast-Orange

Posted by: heckler

Actual experience compounding annual growth rates: 3% salary growth vs 7% real estate growth over the past 20 years.  Zero generational wealth.

7% CAGR isn’t unreasonable for other financial assets. This one keeps you warm and dry too!

The real problem is normal salaries don't keep up.

If you want to end up wealthy, use your salary to buy assets, not liabilities (expensive cars being the worst).

What if our only goal is to simply not end up homeless seniors? 

Me and my partner are both pretty dumb and not good at math so our plan is to just try and pay off our mortgage in 5 years by taking advantage of the 20% installment per year allowance. Then once that's done we'll just start dumping as much as possible into an rrsp.

I hate to break it to you FO, but if you are paying off your mortgage in 5 years you are both math geniuses.

Posted by: Couch_Surfer

^^

Good to see ghoulishness is still a viable financial strategy.

she complained about having to pay for drugs while all the other women at the complex got them free, i pointed out the reason was her investments made too much money, so why don't you give it away cuz yer close to 90, to which she replied in a scrooge like voice " you will get my money when i'm dead " and so I waited

instead of waiting til I'm dead my sons have been buying RE & doin reno's, they can really use some easy money right now so i been sending the $$$$$ which they seem to think is pretty cool and hopefully they won't put me in a shitty home

most people don't even live to 86, you never know how long you got 

or if you will get pow

but you can count on death and taxes

Posted by: chupacabra

I hate to break it to you FO, but if you are paying off your mortgage in 5 years you are both math geniuses.

All depends on what his mortgage is, how much income they make and how frugally they live. 

I'm guessing the purchase of the Taco and getting into back road travels might extend that time frame slightly.

Posted by: syncro

All depends on what his mortgage is, how much income they make and how frugally they live. 

That is the math genius part.  Like the brilliant astronaut Forest Gump's mama would often say; "Stupid is as stupid does."

And for how long/ consistant are they doing it, you could use a computer but this is cocktail napkin math,  I always looked at numbers and made a rough guess

Posted by: syncro

Posted by: chupacabra

I hate to break it to you FO, but if you are paying off your mortgage in 5 years you are both math geniuses.

All depends on what his mortgage is, how much income they make and how frugally they live. 

I'm guessing the purchase of the Taco and getting into back road travels might extend that time frame slightly.

Mortgage payments are only around 10% of our monthly income so the taco shouldn't affect things too much. We had amassed a 50% down payment by the time we bought so that helps. 

We're also incredibly dull people. We enjoy home cooked food, netflix and our sofa. For something more exciting we might drive somewhere and go on a hike. So yeah we're frugal and our debt to income ratio is quite light relatively. 

We're pretty fortunate. We work a lot but work is going well for both of us so life is good these days. Turns out all I had to do this whole time was ditch the cigarettes and quit drinking myself into a stupor every night. Everything else has been easily falling into place ever since and I can finally afford the toys I want. 

I'm just lucky my wife put up with the loser version of me for so long. All the motivation came from her end and I've just been along for the ride slowly being uplifted by her presence.

10% of monthly income is really low, a lot of people have put minium DP on houses and now they are screwed

I had a chunk of cash from ridiculous RE speculation/ appreciation so I put it on a 50% down payment, paid cash for a new ranger and went skiing, so it was pretty easy to come up with a mortgage payment putting 50% down