Vancouver Real Estate Cracking . . . .

[errolanderson]

http://www.businessinsider.com/regulation-changes-in-china-could-crash-vancouvers-real-estate-market-2017-2?utm_content=buffer61a87&utm_medium=social&utm_so urce=linkedin.com&utm_campaign=buffer

[errolanderson]

http://www.businessinsider.com/charlene-chu-on-china-outflows-outlook-2017-2017-1?utm_content=bufferaa88b&utm_medium=social&utm_so urce=linkedin.com&utm_campaign=buffer

With China's war on currency leaving their country, this is now just back-of-the-napkin math of the brewing fallout of luxury real estate markets across North America. The money tide appears going back out to sea.

[SASKFARMER3]

Also some billionaire out of hong kong was picked up by a group of guys and took a trip to china. Surveillance had him seen crossing border. He is missing for one or two weeks was the news.

Mother china is flexing its muscles and they are big.

[farmaholic]

And just how long before that lack of Chinese capital inflow into Sask's artificially high land prices becomes the chink in it's armour? Young "farmers" who want to buy land to make a living on can't afford the high prices because people parking money have driven it up past the point of it not being able to financially sustain itself.

[bucket]

When the Chinese guy that has invested locally here decides to sell ..... I think it's over.


I am surprised he's stuck it out this long. ... bought at 40 to 50 thousand a quarter and could get three times that now.....renters are paying him well but that may end too.

[newguy]

And just how long before that lack of Chinese capital inflow into Sask's artificially high land prices becomes the chink in it's armour? Young "farmers" who want to buy land to make a living on can't afford the high prices because people parking money have driven it up past the point of it not being able to financially sustain itself.

only time land was ever affordable was when very few farmers had any money to buy.Bought land that the banker told me if I got it free it would not pencil out.I see lots of young farmers using profits from rented land to buy farmland.they jut can not expect to buy a whole farm in one year and pay for it the next year.

[farmaholic]

A $300K quarter with 25% down at 5% interest is about $75/ac(based on 150 acres) interest only.

Borrow $225K @ 5% over 15 years
Two semi annual payments totaling $21,500 = about $145/ac over 150 acres

Total interest: $97,500

Total Loan paid: $322,500
Plus Down Payment: $75,000
Total cost to buy $300K quarter: $397,500


And you better be young, because if this thing corrects like it did in the mid eighties..... You may not have enough time for the price to recover what you "invested" in it if you want out or have no one else to pass the "asset" on to! If it needs to be "subsidized" with paid-for land, how good of an investment is it?

Everyone looks at things a little different and their view depends on individual circumstances. Plug what ever numbers you want into your loan calculator.



I guess the guys farming the land have been relegated to tenant farmers, the very thing our forefathers left Europe for to come to Canada, the opportunity to own what they farm.

[farming101]

I think your example will mean refinancing somewhere along the way.
Even if parents step up with the down payment it's tight
Decent returns, living cheap and working like a dog might do it

[farmaholic]

101, Is this not the reality of the current situation? The economics of it have left the room.

I am open to any criticism of the example I gave, that's why I told people to plug numbers into their own loan calculator.

I hate to see my unrealized land equity erode like anyone else but as I said before, what's the difference if its never sold.... unless I want to borrow against it.

[errolanderson]

China's economy has been unravelling, trade tensions heightening with Trump and it is communism.

Wonder why soybean prices have been dropping of late?

[Farmfleury]

I think a more realistic loan would be for 25 years now, and at a interest rate of about 3 or 4%.
That math will bring the yearly payment down to a more reasonable amount and be better than renting.

[farmaholic]

$300K quarter with 25% down.....

$225K @ 3.5% over 25 years:

Two semi annual payments equaling about $13,600

Total interest paid over 25 years ASSUMING interest would stay at 3.5%: $114,500

Total paid for loan $339,500 plus $75,000 down: $414,500 total cost

Twenty five years is a loooooong time. 3.5% interest over twenty five years is likely wishful thinking.

What's the longest term you can lock in? ....at what rate? I would bet the farm it ain't three point five percent!