Flaherty to buy more mortgages

Ottawa is going to extend their $125 Billion* mortgage buy-back program because it makes everyone happy.

The banking industry has been pressing the Finance Minister to extend the length of the program because they continue to benefit from it and because there is still the possibility that liquidity pressures could re-emerge.

The move comes amid a global debate among political leaders, central bankers and economists about when to scale back various measures that have been put in place to boost the flow of credit and stimulate economies.

This news has caused the soothsayers at RE/MAX to wriggle with excitement and predict ‘significant growth‘ for Canadian real estate markets in the final quarter of this year. From a press release reprinted as an article in the Globe and Mail:

“While there may still be some challenges down the road, the worst is definitely behind us in the housing industry,” Elton Ash, executive vice-president of the firm’s Western Canada region said in releasing a report on Canadian home sales and prices.

“The bounce-back that began in early spring has made this recession one of the shortest on record for real estate,” the firm said in its report. “Low interest rates, pent-up demand, and improved affordability levels have all played a role in the recovery now under way,” Re/Max said.

*Corrected. Several people pointed out my $125 million error.

32 Comments
newest
oldest most voted
Inline Feedbacks
View all comments
jamessamuel111
9 years ago

• The people are loosing their moral while becoming modern. The society needs to be attentive that moral value.

**********

jamessamuel111

<a>Buy To Let Mortgages

Jim
Jim
11 years ago

There are some great comments on that Remax "article", looks like most people see through the hype, I particularly like this one: Well I, for one, would like to congratulate the Globe and Mail for shedding its boring old clothing of years past, when it used to report objectively asn reasonably the business and economic news as the old grey Toronto Globe and Mail. I personally happen to like the zany, fabric of nutty bright colours that today's Globe and Mail has recently wrapped itself in, becoming, as it has, a cult tabloid spreading the baseless prophesies of selected (allegedly) clairvoyant priests in the real estate business. Headline: HERMAN THE REAL ESTATE DEALING DUDE PREDICTS RED HOT REAL ESTATE REAL SOON! Headline: BOZO THE REAL ESTATE DEALING CLOWN PREDICTS RED HOT REAL ESTATE REAL SOON! Headline: FRANKO THE REAL ESTATE… Read more »

crabman
11 years ago

Why would Flaherty keep this program going now? Because (like Greenspan) he doesn't see a housing bubble.

No housing bubble in Canada: Flaherty

PorkyFlu
PorkyFlu
11 years ago

Offtopic but what is up with BC Ferries officers and shagging in the bridge???? Is there some kind of afrodisiac pumped into the bridge of the ferries? Can't these "highly trained" people keep it in their pants? We've already had two people killed because of shagging in the bridge and we don't need anymore.

myron
myron
11 years ago

Oh dear, another initiative that will earn the taxpayers a profit! Oh, no! What to do!

untitled
untitled
11 years ago

#22, ReadyToPop:

>> Time to take my thoughts to the polling booth.

Is there any difference between the names? Isn't voting a prayer of sorts? When I am fed up with the way BC/Canada is governed, I'll leave. If there are enough people leaving, the government will change laws before you can say "Secessio plebis". Until then they pretend everyone's happy.

NO - LYMPICS
NO - LYMPICS
11 years ago

Quote:

The credit crunch has faded, and Canadian banks have been earning higher profits than expected. As a result, banks have scaled back use of the mortgage program. They've only sold $64-billion worth of mortgages into the program to date, about half the $125-billion the government was prepared to buy.

=====

Correct me if I am wrong, but this is simply an extension of the existing program, is it not? The way I read it,approx. 50 % of the funds available were sold….as the deadline loomed. What does the extension really mean ?

IMHO, the current numbers mean that the program ain't as popular as they thought, so what good is an extension? I think they have used up the pool of greater fools.

Anonymous
Anonymous
11 years ago

"I don’t think anyone can reasonably claim that a future Harper majority versus an Ignatieff majority would look much alike."

Really? I'm no apologist for Harper, but I can't see much of a difference between the policies of the Liberals and the Conservatives. Recall that that Liberal's problem with the recent stimulus spending was that it wasn't *enough*; they support the war in Afghanistan; they supported the lowering of the corporate tax rate; they didn't raise a fuss about the 0/40 mortgages or CMCH insurance (MP G. Turner notwithstanding).

Honestly, I can't think of too many substantive issues where these two parties truly differ.

ReadyToPop
ReadyToPop
11 years ago

@ patriotz

San Francisco/Bay Area up 3.8% May to June – still down 22% over one year.

patriotz
11 years ago

@realpaul:

In Toronto, where average income is $72,800, it’s 5.4 times. In Vancouver, where the average income is $68,900, it’s 10.6 times.

The US real estate bubble imploded when house prices hit five times income.

This is faulty reasoning – comparing the US average to two of the most overpriced cities in Canada. Quite a bit of the US (e.g. Texas) saw no bubble.

In fact the price/income multiples in Vancouver are comparable to SF or LA at peak, and Toronto is probably comparable to a city like Chicago.

How much are SF and LA down from peak today?

ReadyToPop
ReadyToPop
11 years ago

Imagine that…a government that uses our money to try to keep housing UNaffordable and condone wrecklessness. I like that line…"improved affordability levels"…I guess that's a relative term.

Time to take my thoughts to the polling booth.

Notice how many of the photos of these guys like Flaherty in the newspaper are shot looking up at them from below?

patriotz
11 years ago

@About Time: The extension of this program is the equivalent of US bailout programs No it's not. All the mortgages involved are CMHC-insured, so the Crown is taking on no additional risk by buying them. This kind of purchase and securitization has been going on for many years, google Canada Housing Trust to find out more. The only difference today is the magnitude. The true bailouts took place at the time the insurance was issued for each mortgage, on loans greatly exceeding the fundamental value of the property – in BC, Alberta, and Toronto. The rest of the country really isn't overvalued to any great extent and I don't consider CMHC insurance to be an advance bailout if the purchase price makes economic sense. In fact CMHC has made a lot of money in the past on CHT securitization. There's… Read more »

Burn Them All
Burn Them All
11 years ago

19

Zero empathy for the morons. If you have 500k to invest, and you take your advice from a real estate agent instead of a financial planner or financial analyst, then they deserve what they get. These idiots are simply prolonging the time it will take for a lot of us to buy that piece of RE at fair market value. I hope they get really burned, along with the RE agents, so that for 20 years nobody will view RE as the sole path to riches.

Sick of it all
Sick of it all
11 years ago

I can't tell you how badly I'm sick of all this pumping. Poor first time home buyers that don't know any better. ARG!

other ted
other ted
11 years ago

dev/nul the bloc comment was tongue and cheek. and yes only a fool would say ignatieff would be any different than harper. ignatieff is an actuall neo con as oppossed to a neo con wannabe like harper. So i would argue he might even be worse. But i won't waste much time arguing the point as i am not an advocate of either

Brittanny
Brittanny
11 years ago

Prepare for "spin" like never seen before coming from every direction possible as October looms.

EG: Remax – "housing rebound to continue"

IMF – "raises global economic outlook"

"US jobless claims fell last week" (conveniently no % provided – so say .00000001%)

"Business confidence rises" (no source of course)

etc.etc.etc.

realpaul
realpaul
11 years ago

Most expensive real estate and the least able to afford it. The governments supporting a losing trade.

"The average income in this country is $70,500. The average house now costs 4.6 times the average income. In Toronto, where average income is $72,800, it’s 5.4 times. In Vancouver, where the average income is $68,900, it’s 10.6 times.

The US real estate bubble imploded when house prices hit five times income."

Hello bubble.

/dev/null
/dev/null
11 years ago

@other ted: Remember that Harper & Co have been on their best behavior for four years because of the minority government, trying to position themselves for a majority. I know the "scary Harper" rhetoric has been overdone, but do you have to admit that things would be a lot different now (for the worse, IMHO) if he got his coveted majority. I don't think anyone can reasonably claim that a future Harper majority versus an Ignatieff majority would look much alike. Whether we ever have a majority government again is a good question, though, and minorities trend towards populism, partisanship and an appalling lack of progress. And also remember that the Bloc will never be the government so they can avoid all the tough questions about how they would run the country differently. Their left-wing position on social issues sits… Read more »

other ted
other ted
11 years ago

Drachen and Patriotz I agree with what you say except one thing. I see no difference between neo cons and liberals. Two different labels same pile of crap. Don't know who I will vote for next election. If the bloc quebecois was out west they would get my vote. Other than that no one is credible. Only area I put Harper on worse footing than the liberals is in foreign policy. Yesterday having our diplomats storm out of the UN like children was proof. Aparantly we don't debate people we don't agree with anymore.

Ray
Ray
11 years ago

hah, yeah – I was going to say $125m, how is buying 125 Vancouver houses going to make anyone happy?

cashisking
cashisking
11 years ago

2 more points

From my realtor wife

1) Listings are picking up steam

2) Asian buyers who made up a bulk of purchasers have mysteriously dissappeared … coincidence that Chinese central bank changing lending policies

Drachen
Drachen
11 years ago

Actually there was a big study done in the states on fiscal responsibility and economic growth during Republican and Democratic Presidencies and the Democrats won out in every category but one (and that one was super close).

On top of that, some of the most economically successful countries in the world lately have had the highest taxes (Sweden for instance, where the bottom tax bracket is around 50% and it goes up from there)

Repeat after me, Neo-Con, trickle down economic theories simply don't work, they are a smokescreen and an excuse to give handouts to the super-rich who primarily are the ones who finance the conservative political parties.

But enough politics, let's get back to real-estate.

anonymous
anonymous
11 years ago

canada had a deficit crisis during the mulroney years..

under a neo con harper, we are heading towards it again..do we really need to spend billions on new tanks and ships..

who are we kidding.. and get our troops out of afganistan..

who knew the liberals are the actual fiscal conservatives..

harper will pay his way to power with taxpayer money,

ndp will tax you to death,, conservatives will screw us joe blow with their close ties to business..( campbell with hst falls into this camp)

iggy liberals is the only choice left…

patriotz
11 years ago

@Drachen: Ultimately all these boosts for real-estate are not about keeping the economy strong, they’re about keeping the Conservatives in power. Agreed. Right from the time they became government the Cons' policies (GST cut, 0/40 mortgage, mortgage buy-backs) have been aimed not at the long-term fiscal and economic interests of Canada, but at juicing the economy by increasing consumer spending and inflating house prices. And why should anyone be surprised – Harper has long publicly held the US Republicans, who of course did exactly the same things, as his role model. And we will suffer the same consequences. Lets hope Steve and company never get a majority, so the Opposition can pull the plug on them when people see that we are just getting a delayed replay of Bush's policies. And before any rhetorical questions get asked – the previous… Read more »

Brad
Brad
11 years ago

All the responsible people who save, work, pay taxes and don't buy stuff they can't afford were fucked over by the government – AGAIN!