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Old 03-18-2021, 10:52 PM   #282
Rutuu
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Quote:
Originally Posted by bizaro86 View Post
It's amazing how much the trailing returns affect people's perception of what the right course of action is.

Exhibit A: The Vancouver perspective. After years of going straight up, Vancouver RE is now very, very expensive. But that's meant that buying ANYTHING has been the right choice.



Exhibit B: The Calgary perspective. Condos are down over the last 10 year period. But they're so cheap now that it's really, really unlikely (imo!) that they will repeat anything close to that performance over the next 10 years.



Not meant to be a dig at either poster - they're both 100% correct for a certain set of circumstances.

I just think over the next 10 years the right choice might be opposite for the two geographies. Renting a Vancouver condo is so much cheaper than owning at this point that I don't see how the difference ever gets made up. The appreciation required to just break even would be huge.

Whereas owning a Calgary condo is very cheap relative to rent. Even if values stay flat (at current low prices) you're going to make out OK just from mortgage paydown. And with oil prices finally recovering and the Transmountain expansion getting built, I think there's the potential for upside. It doesn't need to be an old style 40% in one year boom, but a couple of 5%+ years in a row on a condo is a pretty nice shortcut on saving for a detached house if that's the end goal.

YMMV, not advice.
A few folks have mentioned the leverage before, but that 5% is a big return even if you're entering at an LVR of 80% (25% ROR on the 1st year).

Also looking at Vancouver prices the land values is similar to what some areas of where I live are at, which makes sense as the populations are similar. The prices for land in the Vancouver area are priced right for condo development. If you want a detached home Burnaby and North Van look reasonable still...on a VERY quick glance.
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