Tag Archives: finance

Houses: the greatest investment delusion known to man

Houses: the greatest investment delusion known to man

The worst aspect of all this is that although particular individuals become better off as a result, people overall do not. The housing market is the greatest source of investment delusion known to man. As I said a few years ago, people are encouraged to believe in “money for nothing”. As house prices go up, they are led to believe that as a society we are richer and yet if no new assets are produced, clearly we are no richer at all.

Race to Rhodes Ave

Race to Rhodes Ave

An article on the insanity of Toronto’s real estate market. One of the couples who are profiled are 28- and 29-year old teachers. They put in a losing bid of nearly $650k on a home, and shortly afterwards bought a townhouse for probably the same amount. How can a couple of teachers possibly have or make enough money for that expensive a property?

I’ve stepped out of the real estate market after having lost a few bidding wars last year, but I’m still following what houses are selling for, and this year seems so much more frenzied than even a year ago. Prices in the areas my wife and I were looking have increased by around 10%. Nothing in Toronto’s real estate market makes any sense right now.

The ‘wealthy poor’ replace the middle class

The ‘wealthy poor’ replace the middle class

A new paper by economists Greg Kaplan and Justin Weidner of Princeton University, and Giovanni Violante of New York University, finds that about 70 million Americans may live in families they describe as “wealthy hand-to-mouth” households. These are families that own assets such as homes, cars, retirement plans and even boats, yet still spend virtually every dollar of their regular income because it’s necessary to pay all the bills they’ve racked up.