US Recession may affect Canada
I’m submitting the title of this post for the understatement of the year award. The United States of America is the worlds largest economy and Canada’s largest trading partner. With recent US job data not looking so hot, problems in the credit market and a housing slump that has left vacant eyesore properties in the hands of banks, 2008 is not looking like a really great year for the US economy.
Bank of Canada governer David Dodge commented earlier today on the potential fallout for the Canadian economy:
“The downside risks to Canada from slower U.S. growth in the first half of 2008 are probably greater than we estimated in October,†he told reporters on the sidelines of a meeting of the Bank for International Settlements in Basel, Switzerland.
The big question is how bad those downside risks turn out to be. If the US enters a recession (or is already in one) will Canada be able to avoid the same fate? What sectors of the economy are likely to thrive, where will we hurt and what happens to our super-hot housing market? It’s shaping up to be an interesting year.
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January 7th, 2008 at 11:57 am
January 7th, 2008 at 12:41 pm
January 7th, 2008 at 12:45 pm
Paulson: No simple Solution to Housing Crisis
http://tinyurl.com/2jqft8
I thought the last couple of lines of this one were classic:
Paulson called the current housing correction inevitable after what occurred during the five-year boom in which sales and prices climbed to record levels.
“After years of unsustainable price appreciation and lax lending practices, a housing correction is inevitable and necessary,” Paulson said.
January 7th, 2008 at 2:01 pm
As for what is going to get hurt, in BC, I’ve got to say it’s the forestry industry that is going to go belly-up. Civil service, public works, law and medicine will probably be fine. Civil law, in particular, should be good, as people and companies have more need for assistance with the law when they are under financial stress.
January 7th, 2008 at 3:36 pm
VANCOUVER IS GOING TO BREACH THE LAW OF FUNDMENTALS FOR EVER. SOON, THE BENCHMARK PRICE OF HOMES WILL BE 750 TRILLION DOLLARS!!!!!!!!!!!!
PEOPLE WILL BE PRICED OUT FOREVER
January 7th, 2008 at 3:41 pm
January 7th, 2008 at 4:37 pm
I can’t wait to hear that Paulson statement come from Muir, too bad it will be after lots of people have flushed their financial future down the drain.
January 7th, 2008 at 4:43 pm
REBGV Post new stat, incicate all Canadians want to leave affordable city to live in Vancouver! Smile for sunny day! Beep Beep! All other city target for terrorism and natural disaster. Everyone know Olympics never have terrorism. No natural disaster in BC (not counting earthquake and avalanche)! Buy high, sell higher! Age is one thing you can’t get back, so buy now or be priced out forever! Plane will land safely with everyone onboard RICH RICH RICH FOREVER.
I thought I’d give SatV’s Thumbs a rest and write his response for him.
I think at this point it must have dawned on every single soul in the West Coast that the real estate boom has ended. You aren’t going to see 15% increases yearly any more. And seriously once you are down to an appreciate 4-5% / years, do the prices at this justify the “investment”?
January 7th, 2008 at 5:12 pm
CO2 levels may affect global warming as well.
Cheers,
Spark
January 7th, 2008 at 5:14 pm
January 7th, 2008 at 5:29 pm
Get the popcorn indeed, and maybe a harness and some Gravol. This has all the makings of an IMAX spectacular.
Don’t forget the ammo and beans either.
January 7th, 2008 at 5:56 pm
January 2, 2008
Today, the Space and Science Research Center, (SSRC) in Orlando, Florida announces that it has confirmed the recent web announcement of NASA solar physicists that there are substantial changes occurring in the sun’s surface. The SSRC has further researched these changes and has concluded they will bring about the next climate change to one of a long lasting cold era.
http://www.nowpublic.com/weath.....ate-change
January 7th, 2008 at 8:30 pm
Grab some popcorn, the shows just getting started.
Sure why not?bears can not afford bubble gums so just for peace of mind popcorn are ok but 50-100 cents expensive than last year.
Dodge
is a respectable person might have some sort of idea how to pull investor from stocks and put them into real world of housing sector.He did not point out any city or name of market like gold,housing,jobs,and or tsx .
Lets see if Canada at 7.1% has a vulnerability more than Zimbabwe’s 322.111,China’s 161% hong kong’s 39% and Ireland’s 26.1% Answer is NO!…
http://www.cbc.ca/news/interac.....k-markets/
btw..
Cadbury,
thanks to represent me in my absence love will find it’s way soner or later.
Comment by HEY
2008-01-07 15:36:49
was absolutely fabolous I liked that Fantastic!.
Finally combat between Dodge and Grant.
Dodge said”US Recession may affect Canada”
Grant said….”Increases of 10to20 percent for single family homes and condominiums are very common in Vancouver.â€
Jason Grant is a Vancouver Area Assessor.
January 7th, 2008 at 9:00 pm
January 7th, 2008 at 10:06 pm
You really are hilarious. Bubble gums…
January 8th, 2008 at 12:27 am
January 8th, 2008 at 1:33 am
January 8th, 2008 at 8:39 am
It’s all a matter of perspective. Since most of us are disappointed that we cannot currently enter the market due to the absolutely terrible outlook and the current affordability levels we’re looking forward to the crash. If we OWNED and we were talking as we are you could say we’re full of doom and gloom but a crash will mostly hurt owners, we renters who would like to buy will jump in when the time is right and snap up your house when it is on the auction block.
January 8th, 2008 at 8:42 am
Stop spending your money on crack and maybe you could buy another property. Bulls are only paper rich, but bears are the ones with liquid money in their accounts. Plus the extra $2K a month in spending a month. It’s steak and lobster for the bears. Bulls, save you money. You’ll need it for your next mortgage payment. No steak and lobster for you.
January 8th, 2008 at 9:18 am
Buy my house for 10 Million more what it was worth two month before.
Remember that unit at Ri##-Car### for 18 million yet to be built.
Ritz-Carlton penthouse carries $28 million price tag that’s atleast $10 million more that the record$18 million paid by an unnamed U.S.Bussiness man.
link would be available sooner every where..
January 8th, 2008 at 9:34 am
January 8th, 2008 at 9:41 am
Um, the forest industry has already gone belly-up. One of the big honchos has already said it’s as bad as 1982.
How will tourism and mining do once the US housing slump turns into a general recession?
Now just why do you think public sector spending (except for the Olympics, of course) will keep going when the private sector goes into the tank? Who is Gordo’s role model? What did he do in a similar situation?
January 8th, 2008 at 9:44 am
Yet-to-be built downtown condo smashes lofty price barrier
Downtown Vancouver’s luxury condo market has shattered the $20-million price barrier, with a yet-to-be-built penthouse at 1133 West
http://www.canada.com/vancouve.....mp;k=78356
January 8th, 2008 at 9:44 am
I don’t know about the others but I’m not depressed at all. My super hot college boy bf just moved in. My living expenses just dropped to 450 bucks per month, and I live west of Denman, a block from the beach and a block from the park.
I now have tons of money to invest. I also have tond of money to live the “Vancouver lifestyle” so bloved by condo marketers.
Actually, there’s an irony. I actually have the money to do stuff like go skiing or take trips, or to enjoy fabulous meals. People who bought in have barely enough money to scrape by on no name mac and cheese (KD? Dare to dream about those permium labels!) and are apparently raising children in closets (I hope that CBC couple named their kid R. Kelley)
In a recession I can just shift my strategy and perhaps cautiously spend my savings.
A well thought out financial strategy that’s affordabe and based on sound financial reasoning will keep you off the anti-anxiety meds, let me tell you.
January 8th, 2008 at 9:50 am
In case you’ve never heard about Seattle, it’s the place with:
- similar weather and lifestyle to Vancouver
- higher incomes
- house prices 2/3 Vancouver (and falling)
- world-class employers
- no state income tax
- mortgage income deductibility
January 8th, 2008 at 9:50 am
He’s actually on his back, legs in the air, getting viciously tag teammed by Cameron Muir and Rennie. His computer has voice recogntion software and picks up random words. As he flails about in extacy, his hands hit random combinations of letters which auto-correct into slightly less random words.
When either Rennie or Muir finish up, they tag the other guy, clean up a bit, then hit “post” and VOILA! Instant SatV post!
It certainly would explain a lot. Just make sure Rennie and Muir have double bagged it, Sat… .those two have screwed a lot of people…..
January 8th, 2008 at 10:12 am
I could really use some sunshine and even if US prices keep dropping the value difference between sun markets there and rain markets here is huge right now when you consider the exchange rate.
January 8th, 2008 at 10:58 am
January 8th, 2008 at 11:05 am
….kidding aside, you make a good arguement
January 8th, 2008 at 11:23 am
January 8th, 2008 at 11:29 am
The public sector is slow to react. It has budgets well in advance. I don’t think it is immune. It’s just that, in the next one or two years, other, more market-responsive sectors are going to feel it more.
January 8th, 2008 at 11:42 am
January 8th, 2008 at 12:19 pm
“I think I have figured out why Sat’s posts make no sense.”
1) There’s no real need to be vulgar, we get it, you’re gay…
2) Occam’s razor, when faced with several different hypotheses which could account for observed phenomenon the simplest possible explanation is the most likely to be true. ie. He’s just stupid, illiterate, wilfully ignorant but, unaware of his shortcomings he truly seems to believe that he has something useful to add to the conversation.
January 8th, 2008 at 12:46 pm
1) Well that wasn’t so much about ME being gay. Admittedly it was vulgar but *shrug* what can I say it’s a slow day and I get bored. Plus apparently I am a little twisted.
2) We’re probably all geeky enough to know what Occam’s razor is. I don’t know why, I just don’t find that explanation satisfying. I really think there’s something more at work there but darned if I know what it is.
January 8th, 2008 at 12:57 pm
despite a downturn in the US market Vancouver is as robust a market as ever, in fact prices have NEVER been higher than they are now. Complaining about that is like wishing you could still use a payphone for dime. Its simple. Stop throwing your money away, get into anything you can afford NOW and watch your asset grow.
January 8th, 2008 at 2:30 pm
“prices have NEVER been higher than they are now.”
So essentially your wealth building method can be paraphrased as “Buy at a record high, hope prices go up!”
Call me strange but that doesn’t seem like a very good plan.
We all know you’re an agent Dosh, I really don’t think you’ll find any greatest fools here aside from those who just come here to deride our opinions (and they’re already leveraged to the hilt). Don’t waste your time.
January 8th, 2008 at 2:54 pm
January 8th, 2008 at 3:12 pm
Gosh I wish I’d thought of that! Dosh man, what can I say. The world’s collapsing into a recession, prices are plummeting everywhere else, the non construction industry in BC is in the crapper…. but it’s never been a better time to buy?
Dude it scares me to think about your client list.
January 8th, 2008 at 3:46 pm
According to the realtors, modest growth is expected.
In related news, an unbiased professional representative of the Franklin Mint projects excellent returns on Star Wars Collector’s Plates next year. “Now is a great time to buy!”, he weighed in gravely.
January 8th, 2008 at 4:25 pm
January 8th, 2008 at 4:35 pm
From the Big Picture:
August 2005:
“All of the doom and gloom forecasts of a housing debacle are not only irresponsible, but also downright wrong.†–David Lereah, National Association of Realtors
April 3, 2006:
NAR: “We can expect a historically strong housing market moving forward, earmarked by generally balanced conditions across the country and fairly stable levels of home sales with some month-to-month fluctuations.â€
June 27, 2006:
NAR: “Right now we are on course for a soft-landing in housing.â€
October 25, 2006:
NAR: “The worst is behind us, as far as a market correction – this is likely the trough for sales. When consumers recognize that home sales are stabilizing, we’ll see the buyers who’ve been on the sidelines get back into the market.â€
December 4, 2006:
NAR: “It’s important to focus on where the housing market is now – it appears to be stabilizing, and comparisons with an unsustainable boom mask the fact that home sales remain historically high – they’ll stay that way through 2007.â€
February 15, 2007:
NAR: “At least the bottom a ppears to have already occurred. It looks like figures will be improving.â€
June 6, 2007:
NAR: “Home sales will probably fluctuate in a narrow range in the short run, but gradually trend upward with improving activity by the end of the year.â€
August 8, 2007:
“Existing-home sales should be relatively stable over the next few months, holding in a modest range, with some pent-up demand growing from buyers who’ve been on the sidelines.â€
October 10, 2007:
NAR: “The speculative excesses have been removed from the market and home sales are returning to fundamentally healthy levels…â€
November 15, 2007:
NAR: “It is possible for even higher home sales activity than we’re forecasting if buyers regain their confidence.â€
December 10, 2007:
“Although there could be some minor slippage in the first quarter, existing-home sales should hold in a narrow range before trending up,â€
January 8th, 2008 at 4:45 pm
Time to start collecting Canadian quotes now, I suspect.
January 8th, 2008 at 5:59 pm
January 8th, 2008 at 6:34 pm
“… in fact prices have NEVER been higher than they are now. ……get into anything you can afford NOW and watch your asset grow”
….Oh, that’s it!….I thought: “buy low, sell high” was a lttle tired….Do you give investment seminars?
January 8th, 2008 at 7:34 pm
January 8th, 2008 at 8:09 pm
I was trying to think of the best comeback for this remark from a large number of choices, but I think I’ll just let it speak for itself.
January 8th, 2008 at 8:15 pm
MacDonald Dettwiler and Associates Ltd., the company behind the iconic Canadarm, is selling its space and satellite business to a U.S. buyer, betting its future on the far more terrestrial but profitable world of real estate data.
Actually the lead-in is not quite correct, that Canadarm was developed by Spar Aerospace and later sold to MDA.
One more step toward the real estate economy.
January 8th, 2008 at 8:38 pm
January 8th, 2008 at 8:51 pm
posted: http://efinancedirectory.com/a.....World.html
25 Most Unaffordable Housing Markets
Important Note: This list uses a median income multiplier to determine relative affordability. Please read accompanying article below for explanation.
Nation Market Median Multiple
US LA-Orange Co, CA 11.4
US San Diego, CA 10.5
US Honolulu, HI 10.3
US S Francisco, CA 10.1
US Ventura Co, CA 9.4
US Stockton, CA 8.6
Australia Sydney 8.5
US San Jose, CA 8.4
UK London (GLA) 8.3
UK Bournemouth-Dorset 8.2
Australia Perth 8.0
US Riverside-S Bernardino, CA 7.9
Canada Vancouver 7.7
US Miami-W Palm Beach, FL 7.6
US Modesto, CA 7.6
UK Cardiff 7.5
UK Bristol 7.3
US Fresno, CA 7.2
US New York, NY 7.2
Australia Hobart 7.0
New Zealand Auckland 6.9
UK London Exurbs 6.9
Australia Melbourne 6.6
US Sacramento, CA 6.6
US Sarasota, FL 6.6
Source: Demographia International Housing Affordability Survey
How Markets Were Ranked
The 3rd annual Demographia International Housing Affordability Survey employed what is known as the ‘Median House Price to Median Household Income Multiple’ to rank 159 major markets in the United States, the United Kingdom, Australia, Canada, Ireland and New Zealand.
The housing affordability rankings are as follows:
Rating Median Multiple
Severely Unaffordable 5.1 and over
Seriously Unaffordable 4.1 to 5.0
Moderately Unaffordable 3.1 to 4.0
Affordable 3.0 or less
Every market out of the top 25 markets shown above was deemed ’severely unaffordable’. Of the 25, 14 of them are located right here in the U.S.–10 of them are in California.
Only 42 of the 159 markets surveyed were considered affordable based on median home prices and median incomes. Seven of the markets were in Canada, and 35 of them were in the United States. Regina, Fort Wayne, and Youngstown were deemed the most affordable.
The Housing Affordability Crisis
According to the survey, the problems with housing affordability originated within the past ten years. Prior to the 1990’s median multiples above 4.0 (in the ’seriously unaffordable’ range) were extremely rare.
What does this prove?
Basically, what we already know. There is a dangerous disconnect between home prices and median incomes. When the artificial bubble pops, prices will drop, and then the real crisis will begin:
January 8th, 2008 at 8:57 pm
3 since WWII I think:
late 70’s - real but not nominal due to high inflation.
early 80’s - the Big One.
late 90’s - about 20% nominal, 30% real.
After a big rise post-WWII (which happened all over N. America for obvious reasons) I think price growth was pretty steady until the inflationary era threw things out of whack in the 70’s.
Pre-WWII there was the Great Depression of course (in which the city picked up Champlain Hights due to tax defaults) and I think there were some bubble/busts pre-WWI too.
January 8th, 2008 at 9:38 pm
Canada will slow — rather than stall — escaping a recession this time, much as it missed the 2001 U.S. recession.
‘recessions’ — to say that the backdrop is ‘recession-like’ is akin to an obstetrician telling a woman that she is ’sort of pregnant,’”
“You either are or you are not.”
http://www.cbc.ca/money/story/.....ssion.html
January 8th, 2008 at 10:32 pm
He also said the risks to Canada from slower U.S. growth in the first six months of this year “are probably greater than we had estimated.”
Greater then we had estimated, slightly greater then we had estimated, oh well the usual see Benny Lava note, we are already doing the same thing! Thanks krrish1 as you pointed out you really can’t trust what they say, crap October was TWO months ago! Just goes to show the comments from experts are self serving and meaningless!
On the other hand I have to commend you for changing from what many believed you to be; (in ignorant denial), I can now see you also recognize the total hypocrisy in these statements! Your comprehension of english is improving!
January 8th, 2008 at 11:55 pm
All time high tonight again.
Better get some folks its going to $1,600.00
Those who listened to me a year ago are VERY happy.
January 9th, 2008 at 7:15 am
http://tinyurl.com/yw9n5t
“The sharp decline in December housing starts suggests that a more significant downturn in housing activity may be in the cards for 2008,†said Ted Carmichael, chief economist at J.P. Morgan Securities Canada.
January 9th, 2008 at 11:15 am
2008-01-08 20:51:41
Good info. However, Vancouver in real terms is rated much higher in the scale. What really matters is after tax income to housing prices.
We have two consumption tax. We have a much higher tax rate. And our mortgage interest is NOT tax deductible. Taking that into consideration, Vancouver should be much higher. I would say top 5 in unaffordability in the world. Most of the cities listed above Vancouver have lower tax rates.
January 9th, 2008 at 11:36 am
Great song.
*g*
January 9th, 2008 at 11:40 am
January 9th, 2008 at 11:47 am
January 25th, 2008 at 3:52 pm
but the average person makes more money there in whatever field……you should see Edmonton, the wages in this province are very low and the price of housing and renting are going up and up….there is probably more homeless in edmonton than any other canadian city.
This country is becoming utterly rediculious, I hope that we run out of oil so the gas and oil companies have to change there ways to help this planet and global warming, I can’t wait for the day when we have no oil left, I will just laugh….people will have to ride there bikes and take the subway to work.
The world is rediculious and the world needs an overhaul.