Natalie Obiko Pearson of Bloomberg comes up with an explanation of housing costs that’s as good as any I’ve seen:
In the spring of 2012, Dustan Woodhouse, then a 40-year-old Vancouver mortgage broker, broke the cardinal rule of saving for retirement: he liquidated his retirement fund, took the tax hit and plowed the rest into the local real estate market.
“People told me I was crazy,” says Woodhouse, 45, whose plan is to buy and have paid off 10 such investments by his late sixties. “But that’s our pension — that’s what that property is.”
…
Woodhouse’s decision to flout traditional investment strategies has so far proved to be a winner. With the roughly C$60,000 ($47,000) he had in hand, he took out a mortgage and bought a wood-shingled townhouse near a coastal inlet east of Vancouver for C$240,000. Five years later, he figures his house has risen about 60 percent in value if sales of nearby properties are anything to go by. In the meantime, he’s accrued a nest egg of roughly C$24,000 from rental income, even after accounting for expenses, mortgage payments and taxes.
…
The price of a typical detached home in Vancouver rose 69 percent in the five years through July, compared with a return of 51 percent for the S&P/TSX Composite Index, the country’s benchmark equity index, and 7.6 percent for Canadian government bonds. Some 41 percent of baby boomers said home equity made up more than 60 percent of their household wealth, according to a survey by Manuflife Bank published in May. For 21 percent, it made up more than 80 percent.
HIMIPref™ Preferred Indices These values reflect the December 2008 revision of the HIMIPref™ Indices Values are provisional and are finalized monthly |
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Index | Mean Current Yield (at bid) |
Median YTW |
Median Average Trading Value |
Median Mod Dur (YTW) |
Issues | Day’s Perf. | Index Value |
Ratchet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 1.1976 % | 2,361.5 |
FixedFloater | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 1.1976 % | 4,333.2 |
Floater | 3.67 % | 3.70 % | 115,797 | 17.99 | 3 | 1.1976 % | 2,497.3 |
OpRet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.1574 % | 3,088.6 |
SplitShare | 4.72 % | 3.89 % | 53,690 | 1.32 | 5 | 0.1574 % | 3,688.5 |
Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.1574 % | 2,877.9 |
Perpetual-Premium | 5.40 % | 4.84 % | 55,641 | 6.06 | 17 | -0.0650 % | 2,781.1 |
Perpetual-Discount | 5.31 % | 5.34 % | 60,821 | 14.87 | 20 | 0.0256 % | 2,928.3 |
FixedReset | 4.37 % | 4.42 % | 144,887 | 6.33 | 98 | 0.1589 % | 2,391.6 |
Deemed-Retractible | 5.10 % | 5.41 % | 101,235 | 6.08 | 31 | 0.0807 % | 2,875.6 |
FloatingReset | 2.63 % | 3.13 % | 41,034 | 4.17 | 9 | 0.1534 % | 2,619.7 |
Performance Highlights | |||
Issue | Index | Change | Notes |
BAM.PF.D | Perpetual-Discount | -1.24 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2047-08-31 Maturity Price : 22.02 Evaluated at bid price : 22.39 Bid-YTW : 5.55 % |
BAM.PF.B | FixedReset | 1.12 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2047-08-31 Maturity Price : 22.30 Evaluated at bid price : 22.67 Bid-YTW : 4.64 % |
CM.PR.O | FixedReset | 1.19 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2047-08-31 Maturity Price : 21.64 Evaluated at bid price : 22.07 Bid-YTW : 4.38 % |
PWF.PR.Z | Perpetual-Discount | 1.22 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2047-08-31 Maturity Price : 24.41 Evaluated at bid price : 24.80 Bid-YTW : 5.30 % |
MFC.PR.C | Deemed-Retractible | 1.26 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 21.72 Bid-YTW : 6.78 % |
MFC.PR.M | FixedReset | 1.34 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 21.86 Bid-YTW : 6.01 % |
BAM.PR.B | Floater | 1.36 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2047-08-31 Maturity Price : 14.11 Evaluated at bid price : 14.11 Bid-YTW : 3.70 % |
SLF.PR.H | FixedReset | 1.40 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 20.99 Bid-YTW : 5.89 % |
BAM.PR.C | Floater | 1.44 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2047-08-31 Maturity Price : 14.09 Evaluated at bid price : 14.09 Bid-YTW : 3.70 % |
SLF.PR.J | FloatingReset | 1.51 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 16.85 Bid-YTW : 7.99 % |
Volume Highlights | |||
Issue | Index | Shares Traded |
Notes |
IFC.PR.E | Deemed-Retractible | 181,000 | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.78 Bid-YTW : 5.62 % |
CM.PR.R | FixedReset | 145,965 | YTW SCENARIO Maturity Type : Call Maturity Date : 2022-07-31 Maturity Price : 25.00 Evaluated at bid price : 25.14 Bid-YTW : 4.55 % |
RY.PR.B | Deemed-Retractible | 110,442 | YTW SCENARIO Maturity Type : Call Maturity Date : 2017-09-30 Maturity Price : 25.00 Evaluated at bid price : 25.08 Bid-YTW : 1.90 % |
RY.PR.R | FixedReset | 81,190 | YTW SCENARIO Maturity Type : Call Maturity Date : 2021-08-24 Maturity Price : 25.00 Evaluated at bid price : 26.80 Bid-YTW : 3.60 % |
TD.PF.C | FixedReset | 52,400 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2047-08-31 Maturity Price : 21.42 Evaluated at bid price : 21.76 Bid-YTW : 4.36 % |
TRP.PR.J | FixedReset | 42,875 | YTW SCENARIO Maturity Type : Call Maturity Date : 2021-05-31 Maturity Price : 25.00 Evaluated at bid price : 26.61 Bid-YTW : 3.67 % |
There were 14 other index-included issues trading in excess of 10,000 shares. |
Wide Spread Highlights | ||
Issue | Index | Quote Data and Yield Notes |
GWO.PR.S | Deemed-Retractible | Quote: 24.70 – 25.25 Spot Rate : 0.5500 Average : 0.3933 YTW SCENARIO |
BAM.PF.D | Perpetual-Discount | Quote: 22.39 – 22.78 Spot Rate : 0.3900 Average : 0.2682 YTW SCENARIO |
BMO.PR.B | FixedReset | Quote: 26.13 – 26.40 Spot Rate : 0.2700 Average : 0.1559 YTW SCENARIO |
BNS.PR.D | FloatingReset | Quote: 22.24 – 22.49 Spot Rate : 0.2500 Average : 0.1378 YTW SCENARIO |
TRP.PR.A | FixedReset | Quote: 19.26 – 19.56 Spot Rate : 0.3000 Average : 0.1962 YTW SCENARIO |
RY.PR.O | Perpetual-Premium | Quote: 25.20 – 25.47 Spot Rate : 0.2700 Average : 0.1729 YTW SCENARIO |