|
The rent we have in YVR gives a rough idea how overpriced our RE really is.
The simple equilibrium I always use is that rent=mortgage payment with 20% down @25yrs.
And even that is a stretch because the LL is still cashflow negative. Common investor wisdom would demand to be at least cashflow neutral.
The rent is a sign of the market's ability to pay for shelter. For far too long we have relied on RE increase to compensate ownership that we forgot about economic fundamentals.
Now that the market is in freefall (at least for the high-end sector), I'd say to any one wanting to invest in RE to tread cautiously until we get near to market fundamentals.
__________________
Nothing for now
|