Should we buy a house .... In view of the current volatile situation....
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Thanks to all of you for replying to my post..... It is most helpful when taking such a huge step and making a big decision.....
Don't you think those were the days when your leveraging was almost zero. You bought only when you had the capital. And once you bought a place you pretty much were going to stay there for the rest of your life - in most cases.
Quote:
Originally posted by peacock1
Hi,
Our elders always used to advise, it is
When buying house, or precious metals, they are never expensive.
You shall never go wrong, in the long run you shall end up winner
You always have to do your math, before taking any major decisions, however in the hindsight you also tend to get this questions , you are asking.
Location: Amidst a glow in the sky.
Posted on: 07-08-11 09:42:13
Quote:
Originally posted by ashedfc
It all boils down to the stability of your source of income, only you can answer that question..
For the macro-economic view - massive worldwide inflation is coming. Its already there in emerging markets, as we all can relate to India where there is general price increase, salary increase, loss of value of Rupee, & a corresponding increase in corruption which is directly related to the level of inflation..................... this is expected to come in the western world.
The only difference here is the wage pressure, employees do not have the negotiating power to demand wage increase. So a lot of jobs will be lost, or will be available at reduced pay in the coming future years.
In any inflation: you have to look back at history as to what has done well. And real estate has performed well in most of the cases. This time should be no different. However, the only difference is, this time interest rates are at rock bottom, & the western society is over-leveraged (borrowed to the maximum capacity). So those who can sustain the cost of interest through the entire inflationary phase will be the winner; whereas those who will not be able to pay interest & either will have to force sell or sell at market condition will be loser..
Having said that: There's going to be massive amount of wealth transfer from the ignorant people (who wait till the last moment) to the informed people (who plan ahead & make their moves before the crowd rushes in)
So you know yourself, better than anyone else. You need to do some serious budgeting, calculation, & reach your own conclusion..
My take: A place to live is not an investment (one shouldn't look it that way; its the problem that everybody counts on the principal residence as an investment; no doubt its a kind of wealth, but in my opinion its merely place to live). So if you can digest the cost of carrying the house (mortgage +utilities +tax +expected/ unexpected repairs - if any), than you should be fine. But for an investment/ second home/ rental property - the golden buying time of buying low & selling high is probably over. That doesn't mean one can't buy high & sell higher, but the risks has gotten magnified now.
Great analysis! thanks for being part of this forum!
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Quote:
Originally posted by G13
Quote:
Originally posted by ashedfc
It all boils down to the stability of your source of income, only you can answer that question..
For the macro-economic view - massive worldwide inflation is coming. Its already there in emerging markets, as we all can relate to India where there is general price increase, salary increase, loss of value of Rupee, & a corresponding increase in corruption which is directly related to the level of inflation..................... this is expected to come in the western world.
The only difference here is the wage pressure, employees do not have the negotiating power to demand wage increase. So a lot of jobs will be lost, or will be available at reduced pay in the coming future years.
In any inflation: you have to look back at history as to what has done well. And real estate has performed well in most of the cases. This time should be no different. However, the only difference is, this time interest rates are at rock bottom, & the western society is over-leveraged (borrowed to the maximum capacity). So those who can sustain the cost of interest through the entire inflationary phase will be the winner; whereas those who will not be able to pay interest & either will have to force sell or sell at market condition will be loser..
Having said that: There's going to be massive amount of wealth transfer from the ignorant people (who wait till the last moment) to the informed people (who plan ahead & make their moves before the crowd rushes in)
So you know yourself, better than anyone else. You need to do some serious budgeting, calculation, & reach your own conclusion..
My take: A place to live is not an investment (one shouldn't look it that way; its the problem that everybody counts on the principal residence as an investment; no doubt its a kind of wealth, but in my opinion its merely place to live). So if you can digest the cost of carrying the house (mortgage +utilities +tax +expected/ unexpected repairs - if any), than you should be fine. But for an investment/ second home/ rental property - the golden buying time of buying low & selling high is probably over. That doesn't mean one can't buy high & sell higher, but the risks has gotten magnified now.
Great analysis! thanks for being part of this forum!
I agree good analysis and thoughts...Would like to press 'like' button on this !!
Quote:
Originally posted by ashedfc
Having said that: There's going to be massive amount of wealth transfer from the ignorant people (who wait till the last moment) to the informed people (who plan ahead & make their moves before the crowd rushes in)
Good analysis...just one question how relevant is above statement? Who are the so called informed people and where do they get information from? Can you brief please?
A place to live is what you wish it to be - its both a place to live in as well as an asset and being an asset it can be a wise or not so wise decision to buy a house .
But as some one said , if you are renting , buying a house cannot be wrong .... Under any case GTA does not have steep changes in value over a couple of years .
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Fido.
GTA has seen steep changes in values on the west side
Renting is better from peace of mind point of view..
Buying is recommended for people who need more room, because a equivalent sized rental will run u the same amount u pay for mortgage..
I can tell from my experience 3 years back i bought a house, housing market crashed in 2 months and i can tell u i had spent 6 months stressing out about the house..
Finally i got used to it..
Now my house price has probably gone up 10 to 15 % from my purchase price.. just about enough to cover broker charges.
I think we are on the cusp of the next crash.. for first time home buyer better to wait and watch next 6 months for lower housing prices.
If recession hits u will get a 10% reduction in housing prices.. If not, i dont think the housing prices will appreciate so u should be able to get similar houses at similar prices as today.
