Garth Turner isn't wrong all the time, he 100% called the US housing collapse before it happened and his timing was bang on, he also urged people to load up on equities when the prices tanked... taking that advice I made a nearly 250% return on JPM and SU in just over 24 months. Here also told people to rush over the border and buy US property while the dollar had parity and homes were selling at massively discounted prices. If you were to sell an AZ home today that you bought in 2010, your return would be an easy 50% from the bottom + you would also be able see an additional 25-30% return via the exchange rate. (Not taking taxes into consideration obviously, buying and selling RE in the USA as a foreign investor isn't exactly 100% roses)
Silly Garth though, he made predictions that actually took logic into consideration, he didn't realize Canadians would be happy to live with so much debt.
Quote:
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Canada's household debt-to-disposable income ratio rose to new high of 163.3 per cent in fourth quarter of 2014. Put another way, households held roughly $1.63 of credit market debt for every dollar of disposable income as of the end of last year, StatsCan said
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Obviously as a country people are very divided on the future of Canadian RE, (It's not just Vancouver and TO that have jumped in prices over the years) why anyone would celebrate having to carry a massive mortgage is beyond me. This is your HOME, it should not be viewed as an investment vehicle, unless of course it's part of a balanced portfolio - for the average Canadian with a roughly 80K median household income this is certainly not the case.
Me personally, I've been dumb enough to side with economic fundamentals, while I haven't seen my house jump in value by 200K, I also don't have to be on the other side of the fence when/if the chips fall.
I know in Vancouver everyone is convinced that it's foreign buyers that drive the market, there is simply no data to support this. While I'm sure for the 1 million + homes they are a bit of a factor (I doubt >10%), the real driver of home prices is simply interest rates and the generosity of financial institutions.
As interest rates climb, the average buyer simply cannot afford the same home they could when rates were lower, if you can't see how this will affect the market... well, good luck.