stretched buyers fuel boom

I’m not sure why this article is located on ‘globe sports’ in the hockey section, but this article about mortgage trends in Canada has some shocking statistics based on a recent RE/Max report and some interesting quotes from a few of the big Canadian banks:

Nearly two-thirds of buyers in major centres now favour extended amortization periods of up to 40 years, while putting little or no money down was prevalent in 38 per cent of regional markets surveyed across Canada.

The country’s real estate industry has played down any similarities to the U.S. when it comes to subprime borrowers. But as new segments of the Canadian population enter the market, the findings raise questions about what’s been driving soaring house prices in recent years.

“The reason we think the market has been staying hotter much longer than anyone anticipated was because of these newer amortization mortgages,” said Craig Alexander at Toronto-Dominion Bank.

“Because it really does change the affordability equation,” Mr. Alexander said.

Canada’s housing market has for years defied predictions of a slowdown. From 2002 to 2007, average home prices rose at about 10 per cent a year nationally, Mr. Alexander figures. A willingness to buy now and pay later explains much of the recent heat. Longer amortization mortgages “have had a very profound impact on the Canadian housing market since they were introduced” in 2006, he added.

Buying a house has become increasingly accessible. The flip side, though, is that more home buyers are now susceptible should the housing or labour markets weaken, or if interest rates change direction.

“We’re more vulnerable than we were in the past, and I think that’s just a factor of financial and mortgage innovation,” said Adrienne Warren at Bank of Nova Scotia. “At the same time, it’s a trade-off – more people are getting into home ownership earlier.”

In their report RE/Max attributes the boom to these new mortgage products:

“Innovative financing has become key to home ownership in today’s environment,” yesterday’s report said. “Entry-level purchasers are adjusting their expectations by sacrificing size, location, and even long-term financial freedom to overcome challenges such as rising prices and serious supply issues.”

Policy changes help explain why so many people have been entering the market. Ottawa extended the maximum amortization period to up to 40 years from 25 years in 2006. In the same year, Canada Mortgage and Housing Corp. began providing insurance to lenders for interest-only mortgages.

Mr. Alexander figures that as many as 70 per cent of first-time buyers are opting for longer amortizations. “It’s a double-edged sword. It brings down your monthly payments. But it will actually double the amount of interest you pay over the lifetime of the loan.”

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michael, don't be too harsh on vancouver. it is NOT the best place on earth, but it is one of the best.


not really, I hate people here and really couldn’t care less if they are swayed by my opinion or not. Got it?

Yes Michael, I got it. However, you fail to realize with that statement you are no different than the people you hate.

But judging from your posts, you probably already know that.


Refer to Digi's post about krissh2=Time=Satv=Troll

I tried to post the Digi Post but it didn't work.


Uh… Hockey?

That can be done with in six month then what would you do for the left over period unless you ever become player?and or if you don't really get into nhl?


What do you need to study to become NHL Player?

Uh… Hockey?


STFU Krissh aka Time


Occupation are oppertunity and rates of pay,Occupations are not necessarily based on your education.

What do you need to study to become NHL Player?


More evidence Vancouver is #1

"Planned city office tower on hold

Aquilini Investment Group says there's no market for its proposed 23-storey building"


Downtobidness that's a fantastic business plan, the fundamentals are there and this is the greatest place on earth. Do you think I can raise the rent from $1450 to $3300 if I buy a $460,000, high floor `675 sq ft one bedroom and den? What about raising the rent from $2100 to $4,000 for a 2 bedroom that'd cost $650k? This city is full of rich immigrants who don't mind paying double the rent because everyone needs somewhere to live. If you think so I'll buy ten since it's obvious there's no risk because real estate always goes up, and the olympics, and immigrants! Just look at what's happening in Sochi (2014 Olympics) and looking back at Turin and Salt lake City are now the two most expensive places on earth! It's clear why Coal Harbour is more expensive than… Read more »


“If you buy as a rental investment … you will look for the highest possible amortization time possible in order to maximize the effects of leverage. On the other hand if you buy to live in you will consider the lowest amortization time you can afford.” "Precisely. This means that a 40 year amortization is a good deal for investors, but not for those buying their first home" Yeah! All we need to do now is find cash-flow positive investment properties! There must be tons of them out there in this hot market… Everyone wants to move to Vancouver, so I can charge whatever rent I want. I'm going to get a 40 year amortized mortgage on a studio downtown… it will only cost me $21,700 a year to service the $350,000 loan! Hooray! I'm sure there will be tons… Read more »


"If you buy as a rental investment … you will look for the highest possible amortization time possible in order to maximize the effects of leverage. On the other hand if you buy to live in you will consider the lowest amortization time you can afford."

Precisely. This means that a 40 year amortization is a good deal for investors, but not for those buying their first home.


Hmmmm… "Add comment"… "Preview"…

I can't seem to find the button that says "Michael Randallbard ejector seat".

Michael Randallbard

"If you truly want people to be swayed by your opinion"

not really, I hate people here and really couldn't care less if they are swayed by my opinion or not. Got it?

I am here to trash Vancouver as best I can. I make no bones about this.

I am sick to death of "the best place on Earth" BS here and wish all these hotshot money grubbing business types would FOAD.


Beauty is in the eye of the beholder.

Go out and see the world is my best advice to you.

Thankfully Google Earth makes it possible for those of us who can't.


Michael, I haven't seen it spelled out verbatim yet, so I figured I should at least give it a try.

You come across as a foaming-at-the-mouth lunatic on most of your posts. If you truly want people to be swayed by your opinion, I suggest some investigation into the arts of conversation and persuasion. Start off with the basic stuff first.

Yes, the pool here is nice, but if everyone pisses in it, only those with weak bladders will be left.

Michael Randallbard

The best part of all is it doesn't border with the USA

Michael Randallbard




wake up vancouver "SOCHI IS THE BEST PLACE ON EARTH" and Micheal Randalbards leaving us here see you micheal hope you can easily find the address.


Michael Randallbard

OK enough for now……so when people in Vancouver brag about this BS Olympics we are having here and say this is the "Best Place on earth" tell them that SOCHI IS THE BEST PLACE ON EARTH

and if they don't believe you then



micheal can you find some picture like hot girls standing with tom vu while I can try to read your very first post thanks mike please carry on.


yeah micheal play without limit make sure you don't break your jug at the end leave that for depressed bears.keep on going micheal we are with you we will beat the crash out of this market.

Michael Randallbard

IOC`S EVALUATION COMMISSION SAYS SOCHI HAS NO WEAK POINTS photo EPAThe Evaluation Commission of the International Olympic Committee (IOC) has finished its 4-day visit to the Russian resort city of Sochi, which is one of the three candidates to host the 2014 Winter Olympic Games. The head of the Commission, Tikharu Igaya, says Sochi has no weak points. The city’s unique geographical position and the fact that the Russian authorities, sportsmen and ordinary people support Sochi’s bid to host the Games are the main advantages on its way to the victory. Tikharu Igaya, who was a famous alpine skier himself, said the following: "It is a unique bid since usually the Olympic Games are held in winter countries. And here, in Sochi, we can see palm trees. But at the same time one can rapidly reach the snowy mountains… “I… Read more »

Michael Groupie

per capita there are more assholes in this city than anywhere I know of,…

Absolutely true. That's why I left Vancouver after 33 years. Where I am, people are always surprised when I tell them it's not Shangri-La. Guess the myth persists in the rest of Canada that Vancouver is "the" place to live.


good job micheal keep it up