Mortgage crisis building in Canada

Todays Vancouver Province has an article on the growing risk of a US/UK style mortgage crisis in Canada. We’re building like crazy at a time when the rest of the world is slowing down, are we building our way into an over-supply situation or simply catching up?

Hall noted that housing starts in Canada are “soaring on the strength of the domestic economy and a huge dollop of very well-timed fiscal stimulus,” and that a continuing excess of housing starts over requirements means “Canada’s turn may come soon” for a housing crisis.

The report came in the wake of the Canadian government’s attempt to avoid a housing crisis by no longer insuring mortgages with more than 35-year amortization periods and less than five-per-cent down payments as of Oct. 15.

If fiscal stimulus results in overbuilding and a housing market crash, can it really be considered ‘well-timed’?

Hat tip to ‘bubblicious’ for the story link.

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Our market is headed for a US Style crash.. sales will slow and prices will crash.. you can expect it to go down about 20% a year for the next few yearszz.

Condo Abbotsford

Our market is not headed for a US style crash.. It will slow down (get to a more normal level) a bit .. and You couldn't expect it to grow at 15% per year anywayzz..


If you are worried what "owners" think then tell them you own the place you live in.

It's rude to ask how much one makes or how much something cost. Isn't it crass to ask if someone owns?

I know a fellow who tells less fortunate people he knows (who didn't inherit $$$$$) that he's renting the house he lives in and owns, it makes him feel akward telling people he's rich and he sees no benefit to making others feel bad.



"I’ve never considered myself a second class citizen when I rented in other cities, but here in Vancouver people are ***completely*** defined by whether you rent or own. I’ve never seen anything like it, ever."

That's largely a product of the bubble. It wasn't always that way here. I think it's a part of the denial/fear dialogue that goes on in the heads of owners. They know deep down that the appreciation we've been seeing is abnormal and 'too good to be true' so they bluster and brag and put others down who aren't as 'smart' as they are.

It's very much like how many of the the worst gay bashers and womanisers are worried about their own sexuality, so they externalize their fear of themselves and over compensate.


Interesting Jesse – I remember a time not too long ago… let's say late 90's where our economy in BC was nothing to flaunt. I, like many, moved to Alberta for a couple years for work. Did I like Alberta? Some of it, liked the people alot. Did I want to be back near my family and friends? Yes. So when the opportunity presented itself in 2004 I took it.

The point is, I'm a BC boy, born and raised, this is my home. But at the end of the day the economy dictates where people will live. It's jobs not scenery, polluted oceans and mountains. We'll see how our province looks jobs wise once all these unsustainable construction projects are complete.


"here in Vancouver people are ***completely*** defined by whether you rent or own." Too bad. Renters are saving tons of money. Some cities (especially in Europe) allow signing of multi-year leases. For some reason these are rare in Vancouver. Maybe this is the mother of all bubbles that breaks the back of the city's dependence on real estate for building and flaunting wealth. When I moved here from back east the reclusive nature of people here seemed weird. Everyone had their own thing going on and neighbors weren't that close by default. Block parties used to be common in the east whereas here it's maybe once a year and it's not the norm — the city goes out of its way to encourage block parties as a way of making the city more friendly. There are pockets of good neighborhoods… Read more »


"Are you the same Jesse that went on a tirade over Vancouver bashing?" Maybe? Depends when it was. Bash away, but lots of people LOVE living in Vancouver, have traveled extensively, and still migrate back. Others hate it. Vancouver prices are high and incomes are low on a national scale — i.e. poor affordability. I will not second guess 2.5 million people making a rational decision about where they want to live and at what cost. Vancouver may not be for everyone but lots like it for what it is; on the flipside I know many people who would never live in Vancouver. Those that choose to live here have reasons beyond the usual platitudes of "climate, water and mountains". The city has amenities catering to certain ethnic groups and I'm sure that commands a premium for many. The list… Read more »


NAB will shock Wall Street

US banks have written down $450 billion in bad housing loans. The revelation from NAB means that they will now certainly need to take provisions to $1,000 billion. But write-downs of $1,300 billion and perhaps even more are on the cards.


Jesse, The weather thing now makes me laugh. I've lived in Halifax, Montreal, Ottawa, Toronto and Vancouver now for extended periods. Ottawa and Toronto have terrible weather. However, Halifax has mild winters for the same reason Vancouver does: It's on the water. And there are other problems with living in Vancouver. I've never considered myself a second class citizen when I rented in other cities, but here in Vancouver people are ***completely*** defined by whether you rent or own. I've never seen anything like it, ever. I have a friend who is ending a 5 year relationship. No matter how I try ad convince him renting is a smart idea for him now, he won't even consider it. He won't really explain why but you can tell the subtext…. for him it's like going back to being 'poor'. The oceans… Read more »


Jesse – I appreciate your thoughts on desirability, you seem somewhat objective. Are you the same Jesse that went on a tirade over Vancouver bashing? Just curious. Anyway, would you agree that the whole argument of desirability is a subjective one? I know what your saying and I agree… Vancouver has more appeal than Tuktoyauktuk et al, but the issue has nothing to due with affordability, and everything to do with propoganda, n'est pa? Similar to the stupid argument that I have witnessed being waged on these blogs in the past regarding the "best place on earth". What a tough sell to anyone that lives in the place your boosting as the best…. yawn. Moving on…our Canadian economy just keeps trucking along… BCE cut 2,500 jobs yesterday. Drop in the bucket compared to what our precious forestry is seeing, but… Read more »



You're attempting to debate with a retarded monkey.

This is the time to remember the old adage;

"Never argue with an idiot, they'll only drag you down to their level and beat you with experience."


"I believe incomes in Vancouver are lower compared to Toronto (data)."

They are. That's why I posted the affordability info and not the median cost. Affordability takes wage into consideration.

Vancouver is nearly dead last in the Statscan list of top 25 Canadian cities (by population) for wages.

We're ahead of Abbotsford, Trois-Rivières, Sherbrooke and St John.


"VIA, Past performance is not too bad and the prediction won’t be bad as well-here is little recap for b.c. population growth. April 1st 2008 4,428,356 April 1st 2002 4,105,904" Fine and dandy. I thought we were talking about the city of Vancouver, not the whole province. I doubt the population doubled or will double in Vancouver anytime soon, which was your assertion. Saying population is doubling quickly is as me saying sometime in the future there will be more people in Canada. It's such a vague statement that doesn't show anything. It also depends who is increasing those numbers. Is it immigrants from other countries? Believe it or not most recent immigrants, according to a Statistics Canada report report , perform worse economically than people born in Canada so they probably wouldn't be buying real estate quickly (the wage… Read more »


"Actually rental affordability is much better here than Toronto and we’re pretty close to other major Canadian cities."

Ah yes, data. Thanks. I believe incomes in Vancouver are lower compared to Toronto (data). It's a combination of lower incomes and higher rents (and cost of living) that should be indicative of a city's desirability.


Sorry, should give credit, that was from CMHC via


Actually rental affordability is much better here than Toronto and we're pretty close to other major Canadian cities. "A reading of 100 means that a two-bedroom apartment would eat up 30 per cent of income, using the rule of thumb that a household should spend less than 30 per cent of its income on rent. A lower reading indicates they are spending more than that, and a higher reading indicates less. Toronto, having the least affordable rental market since 2004, is the only city to see an increase in affordability this year but to a reading of just 94 from 91, meaning that rental costs would still exceed the 30-per-cent benchmark. In contrast, Montreal's reading this year, at 130, is down from 133. The readings from the other cities and the change from 2006, were Vancouver unchanged at 101, Calgary… Read more »


DaveD, what you're experiencing is the West Coast ethos of living beyond your means. The majority of Vancouverites are supremely ignorant of good financial sense and think nothing of buying 150$ yoga pants and 5$ coffee drinks while working 30k$/year service industry jobs. In some sense this is not their fault as ones options are limited if you have nothing more than a high school education, like the majority of Vancouverites, but the Campbell government is trying to rectify this problem by turning all community colleges into universities. Shallow materialistic attitudes develop in this vacuum that lead to ostentatious purchases of real estate that would be ill-advised by anyone with a modicum of of financial sense, or at least the ability to calculate compound interest.


Re: nurses. Actually they have like three or four hospitals within a few blocks of each other downtown. Probably would be worth checking.


Obviously anyone who worked with Krissh is going to get out of town as soon as possible. Imagine how annoying that moron would be to work with?

An idiot who knows nothing but thinks he does and has the communication skills of a 5 year old with split personalities.

"Who is this Krissh? I am informer warehouse worker #1"


Do they need nurses Halifax, Nova scotia?


DaveD, no doubt fundamentals are out of whack but even when fundamentals are in whack Vancouver has historically commanded a premium compared to other parts of the country, through a combination of high rents (apples to apples compared to other cities) and low incomes.

Patiently Waiting

I believe Vancouver rents are temporarily higher than normal. Once the construction jobs disappear and oversupply becomes obvious, they will slide somewhat.

Halifax rents are more similar to Victoria, which has a similar size and economy.


Median family income in Vancouver was $54.8K in 2004. You figure an 80% percentile income qualifies as "modest" now?

You need to face reality – fundamentals are totally out of whack.


DaveD and scullboy, high rent on modest salaries is the premium you must pay to have the privelage of living in Vancouver.

Decent year-round weather, mountains, craphole rental


Snow, no mountains, renting a Victorian heritage home

Nothing is free and people in both locales have made their rational choices. Tells me Vancouver offers something other places don't and it's not just hubris.


In Nova Scotia we paid $1100 for a 2000+ sq ft 4 bedroom 2.5 bathroom *brand new* townhome, plus socked away money.

Moved to Vancouver, and even making more than $100K as a family we really couldn't afford to buy anything decent. Rent for crapholes is more than we paid in Halifax.

Lifestyle in Vancouver is terrible right now.