Real Estate Talks

asset values can drop while debt can remain unchanged

Ah, rebuts the bull, but you only lose if you sell. All you have to do is avoid selling and you're rich.

All you have to do (to join our pathetic club) is sell and you're rich.

All you have to do (to join our pathetic club) is sell and you're rich.

Actually that's true. Someone who bought a few years ago will make a lot of money if they sell (assuming they're not levered to the gills).

Some of the experienced posters on this board remember what it was like with interest rates of 17%. And that is why they are bearish because even a fraction of those sorts of rates with conservative lending criteria will smash real estate markets across the world, especially Vancouver.

And without doubt Canada will be following us. Canada will suffer the same issues as Australia. Eg commodity based, with significant export income. That means constraints and inflation and BOC forced to raise interest rates. Canada is merely following Australia now.

Just thought I'd highlight this chestnut from almost a year ago:

Some of the experienced posters on this board remember what it was like with interest rates of 17%. And that is why they are bearish because even a fraction of those sorts of rates with conservative lending criteria will smash real estate markets across the world, especially Vancouver.

And without doubt Canada will be following us. Canada will suffer the same issues as Australia. Eg commodity based, with significant export income. That means constraints and inflation and BOC forced to raise interest rates. Canada is merely following Australia now.

Anybody that followed this advice wasted thousands borrowing money that wasn't really worth that much to being with.

Canada property results improve on deals, leasing

Lyle Stafford/National Post
.Comments Email Twitter inShare.0.Reuters Aug 5, 2011 – 11:33 AM ET

By Ka Yan Ng and Amruta Sabnis

TORONTO/BANGALORE — Canada’s biggest office and retail landlords reported strong quarterly results on Friday, boosted by acquisitions and long-term leasing renewals.

Brookfield Office Properties and RioCan Real Estate Investment Trust REI said funds from operations, the most closely watched performance measure for REITs, rose in the three months to the end of June.

Even so, activity for the Canadian companies could slow if a flagging global economy makes it more difficult to raise capital and complete deals. “We’ve had a ton of acquisition activity and capital raising going on over the last two years,” said Karine Macindoe, an analyst at BMO Capital Markets.

“This market environment is probably going to slow some of that down because … share prices are far more volatile and declining.”

Canada’s resilient economy, rising rents and easy borrowing are fueling a buying spree among real estate investment trusts, highlighted last month by the largest office property deal ever by a Canadian REIT.

STEADY EXPANSION

The second quarter revealed few signs of weakness. Brookfield, a major office landlord in Manhattan and other North American cities, reported a 23 percent jump in leasing activity. It leased 1.6 million square feet of space, compared with 1.3 million square feet leased a year earlier.

FFO rose to $166 million, or 30 Canadian cents a unit, from $156 million, or 30 Canadian cents, a year earlier. FFO strips out the effects of depreciation and other factors from the earnings of property companies, giving a more telling quarterly reading. RioCan REIT, Canada’s largest landlord of retail space, also turned in a strong performance.

FFO rose 12 percent to $93-million, or 36 Canadian cents a unit, from $83-million, or 34 Canadian cents, a year earlier. RioCan has steadily expanded its portfolio in Canada, while looking for opportunities for growth in the United States for more than a year. “RioCan’s acquisition platform remains on track to meet our objectives for the year,” Chief Executive Edward Sonshine said in a statement.

And your point is.........................?

Pray tell me if income is aligned with valuation in commercial industrial, because it is completely out of whack in the residential sector.

Here is another suprise. Developers are across all population centres, but fundamentally the rules are the same.

A few of you will understand the warning of this post. Most of the bulls will dismiss it and ridicule it as unimportant.

by Taipan » Mon Sep 20, 2010 3:01 am

In fact falling house prices can cushion inflation in other areas of the economy. In 12 months Australia's interest rates will most likely have risen 2%, from their lows.

There will be howls and there will be screams in this country but i know from experience, they will fall on deaf ears as far as the RBA is concerned.

And without doubt Canada will be following us. Canada will suffer the same issues as Australia. Eg commodity based, with significant export income. That means constraints and inflation and BOC forced to raise interest rates. Canada is merely following Australia now.