Thanks for that eieio, interesting read.I tend to focus on...

Thanks for that eieio, interesting read.

I tend to focus on fundamental things and there are interesting differences to Australia.

For example, the author said "The monthly mortgage payments should be - at minimum - 15% less than comparable rents for similar units in the rental market"

That is upside-down from here in Aus where mortgage payments are higher than a comparable rental. This is one of the incentives to rent rather than buy in Australia, it tends to be a bit cheaper. In Kelowna it seems they are used to mortgage payments being less than renting a comparable property.

I wonder if Canada has the same tax laws as the USA where Americans get a tax deduction for interest payments on their primary place of residence but not on investment properties (this could be why rents are higher).

The author also said "we already have 25 months worth of inventory sitting on the market". Yes that is a problem if you have so much supply sitting there vacant. This is a contributing factor in the USA with vacancy rates over 10%.

I think cities like Kelowna are particularly exposed when they have a small number of industries to provide work. All it takes is for one to falter and then you see people going elsewhere for work.

This is why big cities tend to show lower risk to the investor. When there are innumerable industries providing alternative employment for the populace, a large city actually attracts more people in times of hardship, they come looking for work.

Sure, big cities like Melbourne and Sydney don't have the startling rises you see in the boom towns but they don't have the startling dives either.

I personally think if we see the unemployment which some people are forecasting then one of the first property sectors to suffer will be the discretionary housing sector, eg holiday houses, beach shacks etc.

I will be watching closely a lovely beach area I know well and see what happens over the next couple of years.