Ownership & debt levels soar
Courtesy of todays Vancouver Sun and Statscan – Canadian home ownership levels are at their highest since 1971 but the rush to own has meant soaring debt levels and longer mortgage terms. A growing number of ‘owners’ may never pay off their mortgages, essentially renting the debt in perpetuity.
The report also shows that British Columbians are paying the highest proportion of their income among all Canadians to housing costs, as nearly a third are spending more than 30 per cent of their income to keep a roof over their heads.
More than one-third of the new mortgages being taken out in Canada are now amortized for more than 25 years, a portion labelled by one expert as “phenomenal” for a relatively new mortgage product, and the expectation is that the percentage for B.C.’s homebuyers would be at least that high.
“From the fall of 2006 through the fall of 2007, 37 per cent of all new mortgages in Canada were for amortizations longer than 25 years,” said Jim Murphy, president and chief executive of the Canadian Association of Accredited Mortgage Professionals. “Of all the mortgage products that have been introduced, the ones longer than 25 years are the most popular.
“Thirty-seven per cent is quite high. It is phenomenal for a product that is relatively new.”
Among all outstanding mortgages last year, some nine per cent were pegged with payoff dates stretching more than 25 years all the way to 40 years.
“That number will obviously increase every year,” said Murphy.
…and a little further down:
The dream of burning the mortgage appears to be a more elusive one for Canadian owners, with the percentage of mortgage-free owners declining between 2001 and 2006, bucking an expectation that aging baby boomers would be paying off their mortgages by now.
“The share of owner households with mortgages has not been at such a high level in Canada since 1981,” the report said.
Huh. I guess a bunch of people must have paid off their mortgages right after 1981? Or perhaps it was the foreclosures.
.. and in an unrelated example of how silly some of these loans have gotten, how about giving an 85 year old man a 4.8 million dollar mortgage on a 5 million dollar home?
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Drachen Says:
June 5th, 2008 at 8:40 am
““That number will obviously increase every year,” said Murphy.”
Which is another way of saying, “Real Estate prices will obviously keep going up forever.”
These guys are like the Bush White House for staying on message, you’ve gotta give them credit for that much. If they thought green skies would sell real estate they’d be telling everyone the sky is green (and judging from recent experience most people around here would believe them!).
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dont boy me; call me bubba Says:
June 5th, 2008 at 8:56 am
With all that debt everyone is sure hoping that “equity” continues to increase, and we all know that isn’t going to happen. Here’s a sneak preview into Vancouver RE’s future, courtesy the latest topic on Calculated Risk:
“Fed: Household Real Estate Assets Declined $431 Billion in Q1″
Now that’s merely Q1. It works out to $1400 for every man, woman and child in the U.S.
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patriotz Says:
June 5th, 2008 at 10:27 am
Huh. I guess a bunch of people must have paid off their mortgages right after 1981?
That’s 25 years after 1956, so I think indeed a lot of mortgages would have been paid off around that time. The 50’s were the biggest period of homebuilding in Canadian (and US) history before the current bubble.
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JUn Says:
June 5th, 2008 at 10:32 am
hahhaah thinking the drop is going to drop again… you guys…
hahahahaha… keep thinking when it’s gonna happen
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Drachen Says:
June 5th, 2008 at 10:53 am
Jun
Call me cruel and unusual but it’s people like you who I hope get burned down to the waterline when the market crashes. Tell me, when you have to declare bankruptcy will you stick it out here or run away to whatever country you come from? (I’m guessing China)
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pricedoutfornow Says:
June 5th, 2008 at 11:09 am
Debt is always bad news. Sure, you can manage that huge mortgage payment when interest rates are low and gas prices aren’t skyrocketing. However, I think we should expect interest rates to go up next year, especially with inflation. This spells trouble for those with mortgages, lines of credit etc. The other thing is, people feel less incentive to keep making that mortgage payment when the house value is declining. As my mother used to say “This will all end in tears”
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Cheif Says:
June 5th, 2008 at 11:15 am
PTO-”for release immidiately”
“Oh right I forgot, Vancouver, through an odd quirk of geography happens to be the only place on earth where the economy and the real estate do not depend on even our closest neighbours.”-Drachen.
Drachen,Exactly.
” the consumers who are most aware and the small minority who are most concerned about US events, attitudes to local housing markets are not negatively affected”.
Most British Columbians have very good reasons to be positive about our personal circumstances, and our communities This give us confidence about the housing market outlook and our economy for the decades to come.
please note.“the truth can’t be overturned with hundreds of lies”
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Drachen Says:
June 5th, 2008 at 11:33 am
“the truth can’t be overturned with hundreds of lies”
Especially when the liar can’t spell, has terrible grammar, doesn’t properly understand half the words he uses, can’t keep his lies straight and is incapable of building even the most flimsy of arguments based on those lies.
Yeah, does that pretty much sum you up Cheif?
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Cheif Says:
June 5th, 2008 at 11:48 am
Cheif?
My name is cheif not chief from the lions gate bridge bon après-midi every one,buy a home today and relax you brain muscles,Au Revoir.
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finklebean Says:
June 5th, 2008 at 11:55 am
Cheif, I’m sure this misspelling is a subtle form of satire most of us are incapable of grasping. It isn’t possible that you don’t understand how spellcheck works, is it? A word of advice, if anyone should offer you Kool-Aid, don’t drink it. Unless, of course, you already have. In which case, never mind.
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finklebean Says:
June 5th, 2008 at 11:57 am
Well, I tried. A lost cause if ever there was one.
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Drachen Says:
June 5th, 2008 at 12:07 pm
“Cheif?
My name is cheif not chief”
Did you just correct me when I was already correct? I think this is an excellent demonstration of your powers of deduction and clearly illustrates why you can’t be trusted as a valid source on any issue even one so simple as comparing two five letter words to see that the letters match.
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Tony Danza Says:
June 5th, 2008 at 12:11 pm
buy a home today and relax you brain muscles
If I were in debt a half mill on an unfinished 2 bed condo in the DTES I’d be all over these blogs with my crazy unintelligible rants too. What else are you going to do?
I can hardly wait for the sob stories to hit the CBC in a few months time, it’s gonna be great!
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Anonymous Says:
June 5th, 2008 at 12:23 pm
“Economically and demographically diverse cities such as Vancouver and Toronto continue to fare well, even though both have seen their housing markets skyrocket”-r.e.source
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Ken Simpson Says:
June 5th, 2008 at 1:04 pm
It’s popcorn time, folks.
When the Vancouver Sun prints, “House Prices Drop in Vancouver,” I’m gonna throw a party.
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blueskies Says:
June 5th, 2008 at 1:42 pm
I think this is an excellent demonstration of your powers of deduction and clearly illustrates why you can’t be trusted as a valid source on any issue even one so simple as comparing two five letter words to see that the letters match.
good one drachen!
like getting caught with your pants down when they are on backwards…. no amount of explaining will suffice
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beatstreet Says:
June 5th, 2008 at 1:58 pm
Right now, it seems to me that buying a four year condo on Seymour Street at $700 psf with a forty year mortgage is little more than buying an expensive call option on the chance to profit from future spectacular real estate price gains. Of course, one difference is that true call options limit downside risk.
More importantly, most calls favour the seller as the majority of calls finish out of the money.
From that perspective, Vancouver still very much is a sellers market.
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Drachen Says:
June 5th, 2008 at 2:56 pm
“like getting caught with your pants down when they are on backwards…. no amount of explaining will suffice”
I wouldn’t say that too often, people might think you’re speaking from experience…
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-A- Says:
June 5th, 2008 at 3:07 pm
The official stats don’t reveal the real tragedy. Many of the recent home debtors, with the help of their creative mortgage brokers, have overstated their actual taxable income probably by a wide margin.
Note I said taxable income. Many have undeclared income, and others may have a couple of foreign students boarding in the second bedroom .These poor RE hype victims might just squeak by, but that won’t prevent the bottom from falling out the market.
It’s a tragedy, wife and husband, working for just above minimum wage, and a part time evening and weekend work, getting paid minimum wage under the table just to keep paying for a depreciating leaky condo for 4o years.
SATV: Are you one of those “creative” mortgage brokers or Re hype victim?
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slade Says:
June 5th, 2008 at 3:38 pm
I still wonder what response the developers with new projects coming online in the next while will have. Just received info on V6A, starting at $550( most over $600) per square foot and 999 Seymour at $800+, both begin sales this weekend. Noticed several plans at the Beasley are sold out, so there still must be some bulls left out there. With the mainstream press now reporting a slowdown on sales, a huge increase in listings, no one can claim to be unaware of a downturn. Any one with a theory as to who’s buying and why?
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Ulsterman Says:
June 5th, 2008 at 3:48 pm
Looks like the UK market is starting to freefall.
“House prices are falling at a faster rate than during the recession of the early 1990s, according to data released by Halifax today.
Britain’s biggest mortgage lender said prices fell by 2.4% in May, wiping almost £5,000 off the value of the average house.
The decline follows a 1.3% drop in April and a shock 2.5% drop in March – the biggest monthly decline since 1992 – and means prices have fallen by around 6.5% in the past three months.”
http://www.guardian.co.uk/busi.....ouseprices
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Drachen Says:
June 5th, 2008 at 3:56 pm
People like SATV/Thumbsup/Krrish/Cheif are buying.
Ignorant immigrants for the most part. Which is not to say that all immigrants are ignorant it’s just that being ESL and insulated by your culture on top of living in a place where the rules are unfamiliar to you just makes you far more likely to be gullible.
Welcome to Canada!
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Ultraman Says:
June 5th, 2008 at 3:57 pm
Very curious as well on how the new projects will be selling.
I think it’s safe to say that Beasley has sold enough units so it will be built but I’m not so sure about 999 Seymour and the new Richard’s Living project that is about to go on sale.
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bd Says:
June 5th, 2008 at 3:59 pm
I was just at Satv/Cheif/Krissh open house, he already reduced the price $50,000 and no one wants it!
He must feel really dumb now, which is probably why he’s inventing new names.
Hey Satv, if 70% of the population owns then what does that say about the future demand? How will this impact renters for decades to come?
Satv you are the only one who thinks that you’re wearing clothes!
Did you ever read the emperors new clothes or was it too complicated for you?
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Anonymous Says:
June 5th, 2008 at 4:36 pm
… I think this is an excellent demonstration of your powers of deduction…
Not that such a collection of astute observers and deducers should stoop below their station to actually look something up, but “cheif” is in fact a word, and he is in fact making a joke.
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finklebean Says:
June 5th, 2008 at 5:09 pm
cheif
109 up, 60 down
a mug or fool, a weak person. used primarily in west and northwest london
I’ll be darned. You won’t find it in the Oxford English dictionary but I imagine this online definition is what our boy had in mind. As I said earlier, too subtle for me.
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blueskies Says:
June 5th, 2008 at 5:22 pm
satv has a sense of humor?!?
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-A- Says:
June 5th, 2008 at 5:57 pm
krissh krassh /rob a/satv, kingii, is no recent immigrant.
He is a local realtor, and I give you 1 guess.
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stagnate Says:
June 5th, 2008 at 6:03 pm
slade:
find my prior posts in the archives. the information you are looking for is there.
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My Computer Says:
June 5th, 2008 at 6:52 pm
-A- I don’t mean to offend or reveal any secrets, because I like the comments you post and find you very entertaining, but its rare to see someone so obsessed with another person as you are with Rob. I’m beginning to suspect that you are Rob and this is your way of promoting yourself, attempting to generate notoriety or increased name recognition.
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Anonymous Says:
June 5th, 2008 at 6:58 pm
Beatstreet, I suspect most people buying right now don’t know what a call option is.. learning tricky financial terms is not a prerequisite to getting a mortgage.
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Drachen Says:
June 5th, 2008 at 7:14 pm
Finklebean
Don’t forget the 3rd definition, “Misspelling of the word Chief – mistake typically made by idiots who read at the 3rd grade level” (I actually didn’t make that up)
Anonymous 4:36
I didn’t say anything about his spelling, if you review my full post and his I’m sure you can figure it out.
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Informer2 Says:
June 5th, 2008 at 7:28 pm
Ho HA -
People are buying to live here in Vancouver it doesn’t matter who they are
Albertans,Americans,Euoropeans,Brit*ish*er and or Internationals.
Ho Ha-BDK,
Krrish2 has sold one of his unit to powered rest of his properties as planed -not to sell them unless trade is required.
He was giving final touch to his unit while buyers jumped over to grab that before it was officially listed in mls.
While subject removal dates are fourth coming still lots of buyers are eagerly viewing it to stand next in line.
He is looking forward to take possession on three future projects and his brother with other family member will take care of SFH.
he is going to reside in one of the future project- now his Sonika don’t have to throw quarters on him,he said.
“If 70% of the population owns then what does that say about the future demand?”
1.Vancouver Population will be double by 2031.
2.Unemployement rates countinue to fall in decades to come because of strong economy and increasing population jobs are countinue to grow.
3.People with good paying jobs don’t mind buying anything unless they are wisemens,people who believe in family system buying a house is a better investment for them,invetments in other sector is a secondry concern.
“Growing numbers of jobs and real estates are best friends to grow strong economy”-He Said
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-A- Says:
June 5th, 2008 at 8:25 pm
Informer2, as a regular and frequent poster I want to welcome you to this forum. It’s nice to see new posters.
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exx Says:
June 5th, 2008 at 8:31 pm
This Richmond realtor has a lot of good links to recent news articles on his blog. Judging by his comments, he’s not full of it. He even links to PaulB’s blog in his May 25th post.
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Big Crash Says:
June 5th, 2008 at 10:52 pm
“Drachen Says:
Jun
Call me cruel and unusual but it’s people like you who I hope get burned down to the waterline when the market crashes. Tell me, when you have to declare bankruptcy will you stick it out here or run away to whatever country you come from? (I’m guessing China)”
Wrong, Jun is from the Phillippines and he might take off to Manila or Winnipeg when the market crashes…
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scullboy Says:
June 6th, 2008 at 6:11 am
Gosh Informer2, you must have been lurking for quite a while. I made that joke about throwing krrish quarters months ago.
Oh and I’m impressed…. you seem to know the intimate details of krrish’s RE dealings! Did you get those while giving his mom a Guatamalan Hot Pocket? If you did, next time ask for the Gorilla Mask…. it’s her specialty!
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Tony Danza Says:
June 6th, 2008 at 8:06 am
I thought Jaimie Bacon er… I mean Krrrish was in jail?
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Informer3 Says:
June 6th, 2008 at 5:50 pm
My source tells me Krissh has tried to sell his Mums studio for more than he paid but cannot, this is why he is now posting under several different screen names.
You have to understand that Krissh lives in an adult daycare and his intelligence is on par with a cat.
This is why he never answers questions and has no common sense and it is not because he’s actually an idiot pretending to be stupider than he is.
Krissh has never and will never own anything himself, he’s not legally allowed because he’s too stupid.
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Informer3 Says:
June 6th, 2008 at 6:06 pm
Wrong, Jun is from the Phillippines and he might take off to Manila or Winnipeg when the market crashes
Uhhh-since when did janitors earning $10/hr start buying property and why would anyone care what they thought about prices?
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browntown Says:
June 6th, 2008 at 7:31 pm
hey, dracken and other kkk fuckslaps! yeah immigrants keep economy going and real estate market strong so you can keep renting! ha ha ha, yeah
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browntown Says:
June 6th, 2008 at 8:03 pm
yeah maybe ndp will come back turkey, you can get hospital cleaning job back! real estate might come back for turkey slop! yeah!
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Greymatter in the brain actually bdk) Says:
June 6th, 2008 at 8:24 pm
Krissh are you calling yourself browntown now because you have shit in your brain and you know it? Or are you just so crazy that you like to post about yourself in the third person?
Why is real estate going to turkey slop? Do you have any basis for any of your posts or is it just a gut feeling?
Right you can’t understand questions which is why you never answer them.
Do you read the links on the Friday Free For All? Do you understand them? Oh right you don’t read them you just post a bunch of unintelligible ramblings about how you think prices will go up and since your life is a self fulfilling prophecy it will happen.
Way to go, keep living with your Mum and pretending you know more than a ten year old, if you’re lucky you might even get to kiss a girl one day.
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browntown Says:
June 6th, 2008 at 11:57 pm
hey nutslap! i’ve never known about this krissh, everyone like to talk krissh, usually turkey sloppers! maybe he was here when house was cheap! yeahh, read the friday news, no more cheap house for you rap star! bdk in the club!
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krissh Says:
June 7th, 2008 at 1:13 am
it is clear bdk is wisemans no more turkey slop!
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scullboy Says:
June 7th, 2008 at 11:27 pm
What the hell is turkey slop?
I have to say I raised turkeys back when I was growing up in Nova Scotia. They are really smart animals, and I suspect they’re cleaner than our buddy krrish. For sure they are cleaner than his mom, but we all know she’s a dirty, dirty girl.
Yeah my post has nothing to do with real estate but what the hell….
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B Says:
June 13th, 2008 at 3:49 pm
Those with a vested interest in RE always come here to gas themselves up by directing baseless, condescending insults to veteran posters of this board labelling them as: “chicken-littles” or “poor renters”.
To those with vested interests, congratulations on your new-found fortunes over the past few years. Regrettably, it doesn’t seem to have helped enhance your personal happiness as some of you continue to gravitate here to seek satisfaction through mud-slinging, name-calling, and rhetoric.
Not suprisingly, no factual information is ever provided. Again, to those with a vested interest in RE, perhaps veteran posters of this board will take you more seriously if conclusive evidence is provided to support your claims of bullet-proof Vancity RE, instead of flagrant demonstrations of your own insecurity.