so Ka1 and others,
please give me your collective wisdom to my#1870 post.
I am really curious.
And if possible, specific recommendations.
It is easy (and I am guilty of it as well) to say this and everything else is bad. Let's take the next constructive step and suggest what we should do if we believe the bubble is imminent, here, or "coming soon to a theatre near you" and if so, when.
As asked for by you, I am giving my opinion, for what it is worth.
To watch the economy unfold is like standing on the deck of Titanic watching it go under the water. Not too much can be done.
My take, irrespective of various doom and gloom posts and spiritually uplifting posts of Ccondo George, is that the economy will keep on drifting downwards -- slowly and slowly. As a result, R/E prices will keep on going down at the rate of 2/3 % per year with local exceptions. For example, in the 'core' downtown, ignoring a few buildings like Murano, prices will remain firm and will go up slighly, again 2/3% per year. It is simple economics.Considering the current transportation mess, more and more people would want to move in the core downtown --internal migration within the country/GTA, seniors downsizing and a very minor portion of immigrants.
Economy is not going to take the upward march soon irrespective of whatever steps Mr. Carney and Mr. Barnkie take. It will keep on going on a downward march for a few years-- slowly, but surely.
It is the 'Psyche' or perception that has been shaken to the core.
I recall meeting a few survivors of 'Dirty Thirties' who were spendthrifts and very careful about investing in R/E or, for that matter, any other investments. During that period, economy, and the inflation, was going up at slow rate. Things changed in the Trudea era. Deficit financing, in pursuit of 'social justice' was desirable. Caution was out of the window. Unemployment insurance benefits, in the name of 'social justice' were increased sharply. You had to work only around 10 weeks to get benefits for 6 or more months. For younger'Me' generation, 'Dirty Thirties' was just a paragraph in history books. Tomorrow will always be better than today. Spend the most amount of money that you can borrow. Buy real estate -- more than 1 unit --with only 5% or even less down.This attitude has now been shaken badly.
During inflation, prices of every thing goes up. Value of hard cash gone down. During deflation, price of every thing -- with a few exceptions -- will go down. As such, value of cash, relatively speaking, will go up.
My answer is that hold on to cash. Down the road, there will be opportunities to scoop up bargains.
Too many moons ago, when I was still a spring chicken, I had read a book about 1929 crash by late Mr. John Kenneth Galbraith,a Canadian economist at Harvard University and later an advisor to President Kennedy. I would recommend his book a read. If my memory serves me right, it is stated in the book that Joseph Kennedy -- patriarch of Kennedy clan -- had made lots of money in the later years of 1929 crash by buying assets at almost throw away values.