RBC Housing Affordability
- Thread starter nepoez
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QUOTE (nepoez @ Dec 22 2008, 03:10 PM) http://www.rbc.com/economics/market/hi_house.htmlHailing originally from Europe (I came here in 1986 with less than $1000 in my jeans) I always found owning a house in Canada (first ON, then in AB, then in BC) very cheap / affordable for the "average Joe". This has changed in the last few years, to be more like Europe, i.e. more expensive / unaffordable for the average middle income wage earner. That`s why on average you see a lower house ownership % in Europe than in Canada, and a declining % form the mid 60% range to lower 60% range, i.e. more renters .. this is the reason btw why we buy apartment buildings: more renters as a % of population going forward.
If you like to own a nice home in a nice neighborhood, expect to pay good money for it.
Owing an average home in Canada is STILL CHEAP. Drive around Saskatoon, Toronto, Edmonton or Calgary and the "average Joe" has a 3BR house with a yard and 2 cars .. and that same average Joe would rent a 800 to 1200 sq ft apartment in Munich, London, Nice or Barcelona !
We are just entering a period of slight retraction to "more affordable" but expect prices to be high / unaffordable in most major cities due to rising land prices, rising infrastructure services cost, rising levies, rising building standards, rising energy insulation requirements, rising expectations of home owners .. more like Europe !
If you like to own a nice home in a nice neighborhood, expect to pay good money for it.
Owing an average home in Canada is STILL CHEAP. Drive around Saskatoon, Toronto, Edmonton or Calgary and the "average Joe" has a 3BR house with a yard and 2 cars .. and that same average Joe would rent a 800 to 1200 sq ft apartment in Munich, London, Nice or Barcelona !
We are just entering a period of slight retraction to "more affordable" but expect prices to be high / unaffordable in most major cities due to rising land prices, rising infrastructure services cost, rising levies, rising building standards, rising energy insulation requirements, rising expectations of home owners .. more like Europe !
I`m going off topic now. You say you buy apartment buildings, I can`t afford a building. In this case, would you suggest apartment units over single fam with suite, over town houses for a family, etc? or does it not matter what unit type?
QUOTE (thomasbeyer2000 @ Dec 22 2008, 04:35 PM) Hailing originally from Europe (I came here in 1986 with less than $1000 in my jeans) I always found owning a house in Canada (first ON, then in AB, then in BC) very cheap / affordable for the "average Joe". This has changed in the last few years, to be more like Europe, i.e. more expensive / unaffordable for the average middle income wage earner. That`s why on average you see a lower house ownership % in Europe than in Canada, and a declining % form the mid 60% range to lower 60% range, i.e. more renters .. this is the reason btw why we buy apartment buildings: more renters as a % of population going forward.
If you like to own a nice home in a nice neighborhood, expect to pay good money for it.
Owing an average home in Canada is STILL CHEAP. Drive around Saskatoon, Toronto, Edmonton or Calgary and the "average Joe" has a 3BR house with a yard and 2 cars .. and that same average Joe would rent a 800 to 1200 sq ft apartment in Munich, London, Nice or Barcelona !
We are just entering a period of slight retraction to "more affordable" but expect prices to be high / unaffordable in most major cities due to rising land prices, rising infrastructure services cost, rising levies, rising building standards, rising energy insulation requirements, rising expectations of home owners .. more like Europe !
QUOTE (thomasbeyer2000 @ Dec 22 2008, 04:35 PM) Hailing originally from Europe (I came here in 1986 with less than $1000 in my jeans) I always found owning a house in Canada (first ON, then in AB, then in BC) very cheap / affordable for the "average Joe". This has changed in the last few years, to be more like Europe, i.e. more expensive / unaffordable for the average middle income wage earner. That`s why on average you see a lower house ownership % in Europe than in Canada, and a declining % form the mid 60% range to lower 60% range, i.e. more renters .. this is the reason btw why we buy apartment buildings: more renters as a % of population going forward.
If you like to own a nice home in a nice neighborhood, expect to pay good money for it.
Owing an average home in Canada is STILL CHEAP. Drive around Saskatoon, Toronto, Edmonton or Calgary and the "average Joe" has a 3BR house with a yard and 2 cars .. and that same average Joe would rent a 800 to 1200 sq ft apartment in Munich, London, Nice or Barcelona !
We are just entering a period of slight retraction to "more affordable" but expect prices to be high / unaffordable in most major cities due to rising land prices, rising infrastructure services cost, rising levies, rising building standards, rising energy insulation requirements, rising expectations of home owners .. more like Europe !
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QUOTE (nepoez @ Dec 24 2008, 01:28 AM) I`m going off topic now. You say you buy apartment buildings, I can`t afford a building. In this case, would you suggest apartment units over single fam with suite, over town houses for a family, etc? or does it not matter what unit type?I am saying that a few things drive value of real estate: inflation, upgrades, location improvements, increased rents, supply & demand
I cannot influence: inflation, supply & demand
However, I can influence: rent levels, improvements, location where I buy
Thus, in many years real estate will be more expensive than today. To get there you have to have sufficient revenue for many many years to offset expenses like: utilities, mortgage payments, insurance, taxes, R&M, management ..
This is easier / more efficient the more "doors" you have under one roof.
Single family: one door per roof
Duplex: 2 doors per roof
4-plex: 4 doors per roof
47-plex: 47 doors per roof ... etc. ..
Thus, it is easier to hold an asset if it is more efficient to purchase and operate. Can you hold an acreage in Calgary that costs $1M until it is worth $2M .. sure .. but you need a lot of cash for it to buy and likely not enough cash flow while holding !
I started with one condo in 1997 .. as I too had little cash then, no experience and a job to pay the bills .. then I bought one more condo in 1998 .. then one more in 1999 .. then I asked myself "why not buy in bulk" .. like a baker .. he pays less per pound of flour than you and I when we buy at Safeway thus his cost per cake made is lower ! Same in real estate .. so yes, start small .. become an expert .. then repeat and scale it up .. this takes many many years .. se my bio on teh REIN website here .. I bought a 15 suiter in 2000 for $500,000 with $100,000 cash from me and my dad, then a 20 suiter in 2001 and then a 24 suiter in 2002 .. $s from my SW form or re-fi or sale of earlier assets .. then I had no more cash in 2002 as it was all invested so I looked for JV partners and then joined REIN in 2002 to actually learn s.th.
One asset we sell right now is a rental pooled condo for $110-$150K in Camrose, AB .. .. this is how I started .. rental pooled condo .. check it out on our website if you wish .. easy, low risk, arm-chair, rent comes automatically every month .. you determine the cash down: 5% ? 10% ? 30% ? the more cash down the better the cash flow .. so yes to start you have to start SMALL with an INEXPENSIVE asset like a condo, townhouse or small single family home .. most people start small .. not big .. it has to cash-flow so you can hold for many years as real estate wealth takes years to build .. so don`t expect to buy a condo or TH for $120,000 with 10K down and be a millionaire next week .. but if you buy 5 or 6 you WILL BE A MILLIONAIRE in maybe 15 years !!!
I cannot influence: inflation, supply & demand
However, I can influence: rent levels, improvements, location where I buy
Thus, in many years real estate will be more expensive than today. To get there you have to have sufficient revenue for many many years to offset expenses like: utilities, mortgage payments, insurance, taxes, R&M, management ..
This is easier / more efficient the more "doors" you have under one roof.
Single family: one door per roof
Duplex: 2 doors per roof
4-plex: 4 doors per roof
47-plex: 47 doors per roof ... etc. ..
Thus, it is easier to hold an asset if it is more efficient to purchase and operate. Can you hold an acreage in Calgary that costs $1M until it is worth $2M .. sure .. but you need a lot of cash for it to buy and likely not enough cash flow while holding !
I started with one condo in 1997 .. as I too had little cash then, no experience and a job to pay the bills .. then I bought one more condo in 1998 .. then one more in 1999 .. then I asked myself "why not buy in bulk" .. like a baker .. he pays less per pound of flour than you and I when we buy at Safeway thus his cost per cake made is lower ! Same in real estate .. so yes, start small .. become an expert .. then repeat and scale it up .. this takes many many years .. se my bio on teh REIN website here .. I bought a 15 suiter in 2000 for $500,000 with $100,000 cash from me and my dad, then a 20 suiter in 2001 and then a 24 suiter in 2002 .. $s from my SW form or re-fi or sale of earlier assets .. then I had no more cash in 2002 as it was all invested so I looked for JV partners and then joined REIN in 2002 to actually learn s.th.
One asset we sell right now is a rental pooled condo for $110-$150K in Camrose, AB .. .. this is how I started .. rental pooled condo .. check it out on our website if you wish .. easy, low risk, arm-chair, rent comes automatically every month .. you determine the cash down: 5% ? 10% ? 30% ? the more cash down the better the cash flow .. so yes to start you have to start SMALL with an INEXPENSIVE asset like a condo, townhouse or small single family home .. most people start small .. not big .. it has to cash-flow so you can hold for many years as real estate wealth takes years to build .. so don`t expect to buy a condo or TH for $120,000 with 10K down and be a millionaire next week .. but if you buy 5 or 6 you WILL BE A MILLIONAIRE in maybe 15 years !!!
Thanks for the explanation. The buy in bulk idea is now a new seed in my mind for future use, if I do well these next few years.
QUOTE (thomasbeyer2000 @ Dec 24 2008, 03:10 PM) I am saying that a few things drive value of real estate: inflation, upgrades, location improvements, increased rents, supply & demand
I cannot influence: inflation, supply & demand
However, I can influence: rent levels, improvements, location where I buy
Thus, in many years real estate will be more expensive than today. To get there you have to have sufficient revenue for many many years to offset expenses like: utilities, mortgage payments, insurance, taxes, R&M, management ..
This is easier / more efficient the more "doors" you have under one roof.
Single family: one door per roof
Duplex: 2 doors per roof
4-plex: 4 doors per roof
47-plex: 47 doors per roof ... etc. ..
Thus, it is easier to hold an asset if it is more efficient to purchase and operate. Can you hold an acreage in Calgary that costs $1M until it is worth $2M .. sure .. but you need a lot of cash for it to buy and likely not enough cash flow while holding !
I started with one condo in 1997 .. as I too had little cash then, no experience and a job to pay the bills .. then I bought one more condo in 1998 .. then one more in 1999 .. then I asked myself "why not buy in bulk" .. like a baker .. he pays less per pound of flour than you and I when we buy at Safeway thus his cost per cake made is lower ! Same in real estate .. so yes, start small .. become an expert .. then repeat and scale it up .. this takes many many years .. se my bio on teh REIN website here .. I bought a 15 suiter in 2000 for $500,000 with $100,000 cash from me and my dad, then a 20 suiter in 2001 and then a 24 suiter in 2002 .. $s from my SW form or re-fi or sale of earlier assets .. then I had no more cash in 2002 as it was all invested so I looked for JV partners and then joined REIN in 2002 to actually learn s.th.
One asset we sell right now is a rental pooled condo for $110-$150K in Camrose, AB .. .. this is how I started .. rental pooled condo .. check it out on our website if you wish .. easy, low risk, arm-chair, rent comes automatically every month .. you determine the cash down: 5% ? 10% ? 30% ? the more cash down the better the cash flow .. so yes to start you have to start SMALL with an INEXPENSIVE asset like a condo, townhouse or small single family home .. most people start small .. not big .. it has to cash-flow so you can hold for many years as real estate wealth takes years to build .. so don`t expect to buy a condo or TH for $120,000 with 10K down and be a millionaire next week .. but if you buy 5 or 6 you WILL BE A MILLIONAIRE in maybe 15 years !!!
QUOTE (thomasbeyer2000 @ Dec 24 2008, 03:10 PM) I am saying that a few things drive value of real estate: inflation, upgrades, location improvements, increased rents, supply & demand
I cannot influence: inflation, supply & demand
However, I can influence: rent levels, improvements, location where I buy
Thus, in many years real estate will be more expensive than today. To get there you have to have sufficient revenue for many many years to offset expenses like: utilities, mortgage payments, insurance, taxes, R&M, management ..
This is easier / more efficient the more "doors" you have under one roof.
Single family: one door per roof
Duplex: 2 doors per roof
4-plex: 4 doors per roof
47-plex: 47 doors per roof ... etc. ..
Thus, it is easier to hold an asset if it is more efficient to purchase and operate. Can you hold an acreage in Calgary that costs $1M until it is worth $2M .. sure .. but you need a lot of cash for it to buy and likely not enough cash flow while holding !
I started with one condo in 1997 .. as I too had little cash then, no experience and a job to pay the bills .. then I bought one more condo in 1998 .. then one more in 1999 .. then I asked myself "why not buy in bulk" .. like a baker .. he pays less per pound of flour than you and I when we buy at Safeway thus his cost per cake made is lower ! Same in real estate .. so yes, start small .. become an expert .. then repeat and scale it up .. this takes many many years .. se my bio on teh REIN website here .. I bought a 15 suiter in 2000 for $500,000 with $100,000 cash from me and my dad, then a 20 suiter in 2001 and then a 24 suiter in 2002 .. $s from my SW form or re-fi or sale of earlier assets .. then I had no more cash in 2002 as it was all invested so I looked for JV partners and then joined REIN in 2002 to actually learn s.th.
One asset we sell right now is a rental pooled condo for $110-$150K in Camrose, AB .. .. this is how I started .. rental pooled condo .. check it out on our website if you wish .. easy, low risk, arm-chair, rent comes automatically every month .. you determine the cash down: 5% ? 10% ? 30% ? the more cash down the better the cash flow .. so yes to start you have to start SMALL with an INEXPENSIVE asset like a condo, townhouse or small single family home .. most people start small .. not big .. it has to cash-flow so you can hold for many years as real estate wealth takes years to build .. so don`t expect to buy a condo or TH for $120,000 with 10K down and be a millionaire next week .. but if you buy 5 or 6 you WILL BE A MILLIONAIRE in maybe 15 years !!!