Banking on Real Estate in Canada, but is it sustainable?
Real estate has been a traditional way to bank your cash privately as a rising long term asset protection. Many investors also see this as an income producing asset with rents returning better than what the banks can provide.
Banking on Real Estate
In the second quarter of 2009 Canada’s real estate activity and prices has risen significantly especially in the larger urban centers like the Greater Toronto Area (GTA). Canada and most of the rest of the world is in a deep recession But sales of real estate has been much higher than expected. In fact, the surging activity has Ottawa and the Bank of Canada talking about putting on the brakes, but a mild one at that.
First-time buyers attracted by historically-low interest rates sent the number of sales much higher than expected in several markets. But is it any wonder when the faith in the equities market has taken such a beating, those with some cash to spare will also turn to real estate as a wealth preserver?
In some markets, prices returned to pre-recession highs. The Canadian Real Estate Association says stronger sales in higher-priced markets have skewed the average price higher.
They revised its sales outlook twice during the year to reflect the stronger activity. It suggests the number of sales and average prices will continue to rise in 2010.
Reasons for Real Estate Price Rise
Even cautious investors have decided to take the plunge and buy real estate. The most important reasons appear to be based on the larger urban areas like the GTA.
* Large steady population increases creates a steady rise in demand for real estate.
* Commuting wastes time and resources, so many are now buying closer to work. That creates more local area demand for larger population centres.
* Interest rates are historically low for mortgages.
* Large first time real estate buyer pool. (Mum, Dad and grandparents may also be shelling out financial support for first time buyers).
* Large net immigration (from other countries or even from other parts of the country) into large population centres like the Greater Vancouver Area and Greater Toronto Area.
* Even with the retiring baby boomer population, their more active lifestyle and longer life span may simply create a different kind of housing demand.
CIT has secured a $3 billion credit from its bondholders.
Wall street responded well to the news. The news seemed to indicate CIT might dodge the bullet and avoid bankruptcy. CIT may not be the top of the heap in terms of size but it plays a vital lending role to the small and medium business loans industry. Loans to over 1 million businesses says plenty.
CIT has also announced this was the first step in its recapitalization plan, and offering a tender for its senior notes due August 17.
It must be noted that CIT is just beginning its expected very long road to financial health. The Bondholders in this deal are expected to come out very well from this deal. Prior to this, there were many worried reports that CIT would not survive. Watch this video below.
There’s much ado about offshore banks and banking secrecy lately. But why go far, far away when you have your very own assets protection system so well set up in a state called Delaware.
Primarily affecting USA residents and companies residing within the USA, many have already heard about using the Delaware Corporation as an asset protection base. Why? Simply because, whether it be banking secrecy or corporate secrecy, the USA has neatly used to side-step the G20 “end of banking secrecy agenda” – state incorporation secrecy was not on the agenda and treated as an internal matter.
I found this on You Tube some time ago but is interesting enough. No I’m not promoting IncNow, but they do have great information about why you could and should protect your assets and consider a Delaware Incorporation. Enjoy the videos.
Why you should Incorporate in Delaware or Form a Delaware LLC:
The internal operations of Delaware Corporations and LLCs are governed by Delaware law. The US Chamber of Commerce has rated Delaware’s litigation system #1 of all 50 states in the past five years in every category (Judges’ Competence, Judges’ Impartiality, Overall Treatment of Tort and Contract Litigation, etc.)
Additionally, recent amendments to the Delaware LLC Act now make it the state-of-the art jurisdiction for LLCs. Delaware’s Charging Order Remedy is exclusive and very narrow, to starve out a creditor. Creditors are no longer entitled to other legal and equitable rights to attach assets. Assignees are also bound by the Operating Agreement even if they did not sign it.
Choosing Between a Delaware LLC and a Delaware CorporationThe “Limited Liability” of Both Entities
The owners of a sole proprietorship or general partners of a partnership are not protected from the judgments against and liabilities of the business or from the acts of their business partners.
The stockholders of Corporations and members owning units in Limited Liability Companies (LLCs), on the other hand, benefit from “limited liability.” In other words, their liability is limited to their investment in the stock of the Corporation or in the units of the LLC.
More than 50,000 Americans use asset protection from the Swiss Banks tells something of the nature of this business. It is perfectly legal. But some politicians rail against this Swiss Secrecy
Despite websites with some apparent experts claiming to tell everyone who reads it that it is illegal and run for the hills or an American bank in this case, there are many more websites around the world saying otherwise, and they proudly display the effectivenes of such a strategy as an asset protection strategy. That offshore banking is illegal is really a made in America and some wealthier nations’ claim, but which are really surrounded with controversial bullying of very small nations. Money laundering has actually been used as the reason for offshore banking and found to be largely misleading.
Sometimes, it seems attempts by politicians can go too far to the point of insulting our international allies and insisting they toe the American line. In short, hand your country to us because we demand so – or else. There’s always something ominous behind it. But there are times the agressor may have egg on his face. Sovereign Countries like Switzerland are not just going to let their way of life go to hell in a hand basket.
Tell, me what you think about your lot if you could have total privacy? Remember, how many are really illegally doing so?
Wall street responded well to the news. The news seemed to indicate CIT might dodge the bullet and avoid bankruptcy. CIT may not be the top of the heap in terms of size but it plays a vital lending role to the small and medium business loans industry. Loans to over 1 million businesses says plenty.
There’s much ado about offshore banks and banking secrecy lately. But why go far, far away when you have your very own assets protection system so well set up in a state called Delaware.
More than 50,000 Americans use asset protection from the Swiss Banks tells something of the nature of this business. It is perfectly legal. But some politicians rail against this Swiss Secrecy
