Canadian housing market and downside for banks

“Amateur landlords are rampant in the Toronto condo market…50-60% of condos under construction are being sold not for owner-occupied but for “investment purposes”…this could hurt the Canadian banks but also the bank investors” [shareholders].Here is a direct video link.

Sure one could buy or hold Canadian banks here for the 3-4% dividend income….so long as one doesn’t mind holding through capital implosion in the process. Remember a cyclical gain of 100% is completely extinguished in a price decline of 50%, and the downcycles typically move at lightening speed compared with the multiyear price recoveries.

Chart source: Cory Venable, CMT, Venable Park Investment Counsel Inc.

This entry was posted in Main Page. Bookmark the permalink.