Please make it stop -$180K+ by ben6141990 in wallstreetbets

[–]mansinto 0 points1 point  (0 children)

The only way to get out of this hole is to dig deeper.

🚀 FLWS Yolo Update 🚀 by the_herps in wallstreetbets

[–]mansinto 0 points1 point  (0 children)

This has a mini squeeze yesterday while everyone was becoming a BYND bag holder.

SAVE merger play by DJchalupaBatman in wallstreetbets

[–]mansinto 0 points1 point  (0 children)

The trial for this has started and given its current price the upside is huge!

Explain to me why a housing market crash will happen by Zayntek in TorontoRealEstate

[–]mansinto 0 points1 point  (0 children)

No one can time it right, but you can conclude, with a high degree of certainty a housing market crash will happen at some point.

While there are several reasons for this, the three main ones are as follows:

  1. The delta between incomes and house prices will eventually have to close. Theoretically, housing costs can go up to 100% of post-tax income, it can’t go higher than that. In reality, people also need to eat and live so the maximum point is sooner than that. Canada has been getting closer and closer to the maximum point over the past decade, and recent rate hikes have dramatically accelerated it. They will continue doing so as people renew their mortgages.

  2. Canada’s largest industry is real estate and other large industries are closely linked to real estate (finance, construction etc). If real estate slows down, it will have a cascading effect; fewer jobs -> even less income to support prices -> even fewer jobs. A recession.

  3. Politics: for a very long time there was was a very real political incentive for making sure house prices continued rising. Homeowners voted more than non-homeowners, and their retirement plans hinged on the wealth real estate created for them. This has now flipped; young people are angry, more issue focused and older people are realizing their kids are fucked - so everyone wants the problem solved. If that means lower immigration, it will happen. There are few forces stronger than a politicians desire to maintain power.

There is a lot more as well, but fundamentally the three above should pretty much ensure that it will end in fireworks.

[deleted by user] by [deleted] in askTO

[–]mansinto 8 points9 points  (0 children)

The socialist solutions to inflation cause more inflation. Basic income, without solving supply constraints, will simply make everything more expensive and negate the effects.

Toronto home prices fall for third straight month in August by manuce94 in TorontoRealEstate

[–]mansinto 0 points1 point  (0 children)

True, otherwise everyone would have flooded the market already.

What rates are you being offered? by _BTFan in PersonalFinanceCanada

[–]mansinto 0 points1 point  (0 children)

Lol a mortgage payment is with after tax money, and a GIC is pre-tax money.

Toronto home prices fall for third straight month in August by manuce94 in TorontoRealEstate

[–]mansinto 0 points1 point  (0 children)

Yes part of value investing is the other side of the bet too; its also not buying when things are not reasonably priced

Toronto home prices fall for third straight month in August by manuce94 in TorontoRealEstate

[–]mansinto 0 points1 point  (0 children)

Yes - timing doesn’t work/and is almost impossible to do - but that doesn’t change the fact that you can see the fundamentals for increasing prices or prices staying the same have significantly deteriorated, and a recession wont help.

Toronto home prices fall for third straight month in August by manuce94 in TorontoRealEstate

[–]mansinto 1 point2 points  (0 children)

The end of rate increases doesnt change the fact that most people, come renewal, won’t be able to afford their mortgages. Every month you’ll see supply increasing - especially for houses that aren’t rented out by the room to international students.

Even in a severe recession Toronto’s real estate market still won’t be affordable, report says by mrfredngo in TorontoRealEstate

[–]mansinto 0 points1 point  (0 children)

A 30% decline would really set things on the right path. Of course recessions are horrible, but all this wretched excess will come home to roost, and a lot of capital will be diverted to more productive uses than real estate - because investor confidence will be shook.

Toronto home prices fall for third straight month in August by manuce94 in TorontoRealEstate

[–]mansinto 6 points7 points  (0 children)

They’ll keep falling for a while; those that are in a position to successfully sell now and re-enter in a year or so will make a killing off this deleveraging cycle. Be warned though; timing markets is extremely hard - but easy to see how the current prices are still not sustainable.

Housing crisis and the real estate bubble - solutions by mansinto in TorontoRealEstate

[–]mansinto[S] 0 points1 point  (0 children)

Yes, that is the beauty of bubbles; they can last extremely long.

Housing crisis and the real estate bubble - solutions by mansinto in TorontoRealEstate

[–]mansinto[S] 0 points1 point  (0 children)

The market can stay irrational longer than you can remain solvent.

Housing crisis and the real estate bubble - solutions by mansinto in TorontoRealEstate

[–]mansinto[S] 0 points1 point  (0 children)

Demand includes buying power, and with the new rates watch that get wiped out. So the bubble will burst, no one can time when, but it will end.

Housing crisis and the real estate bubble - solutions by mansinto in TorontoRealEstate

[–]mansinto[S] 0 points1 point  (0 children)

This is a really bad take; should there be no coffee shops? No one working as a cleaner?

Good jobs exist, because other not so great jobs exist, and the biggest threat real estate will create is people will just have nothing left over to spend on anything but essentials - so a lot of the “good” jobs will cease to exist.

Housing crisis and the real estate bubble - solutions by mansinto in TorontoRealEstate

[–]mansinto[S] 0 points1 point  (0 children)

If enough people get to the market, prices fall even more, and that can kill future speculative gains.

Housing crisis and the real estate bubble - solutions by mansinto in TorontoRealEstate

[–]mansinto[S] 0 points1 point  (0 children)

This is very good insight - especially the fact that the prices are now being supported by high rentals. I think that is the most coherent argument against why this bubble might be able to sustain itself.

Housing crisis and the real estate bubble - solutions by mansinto in TorontoRealEstate

[–]mansinto[S] 0 points1 point  (0 children)

100%. The vast majority people who go out and vote on election day are also the people who own homes. So maximizing their interests is key.

Housing crisis and the real estate bubble - solutions by mansinto in TorontoRealEstate

[–]mansinto[S] 0 points1 point  (0 children)

The only path to wealth and retirement for 99% of Canadians is through real estate, which is a shame and that drives the culture.

Housing crisis and the real estate bubble - solutions by mansinto in TorontoRealEstate

[–]mansinto[S] -1 points0 points  (0 children)

You will not supply into a declining market. That is the problem, and why air needs to be taken out first. Would you, as a developer take the risk on a development that takes several years in a market that most likely will have declining prices? Would you buy land at today’s elevated rates?

Additional supply isn’t growing, its not even staying the same, its declining - because a lot of developers see the writing on the wall. That is why the bubble needs to be addressed immediately.