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October 20th, 2009 at 11:54 am
Apparently the media jumped on erroneous news of the Conde Naste mentioning Vancouver as a ‘travellers pick’. It wasn’t Vancouver at all that was mentioned in the article, No, it was Vancouver Island under the category of ‘Islands of North America’. Just more bullshit propaganda from the local media that got sucked up by a desperate public.
http://news.yahoo.com/s/ap_tra.....ers_choice
“My neighbours have put their place up for sale in a flurry of panic that the market is going to crash.” « Vancouver Real Estate Anecdote Archive Says:
October 20th, 2009 at 11:24 am
[...] from Hovering at vancouvercondo.info on Oct 20th, 2009 at 10:08 am [...]
October 20th, 2009 at 11:22 am
I can’t wait for the correction, if only so we can stop hearing about “why it’s different here”, like this notion that somehow rich foreign investors are responsible for inflating the bubble for all areas including 1 bedroom apartments in Abbotsford.
It seems to me we are in a classic bubble where lax lending standards and extrodinarily cheap money makes a gamble on future price appreciation too hard to resist for many. It works until it doesn’t. We’ve seen it play out in country after country, and had a front row seat watching the US implode.
As someone mentioned in the last thread, Bulls need to consider that their vision of the future results in an impoverished middle class, a huge transfer of wealth to the banking and real estate industry and virtually no hope that future generations will be able to purchase their own homes. Likewise, Bears wishing for 70% drops to realize some personal gains may also be sorry when the whole economy comes crashing down and the taxpayer and society as a whole will be picking up the pieces.
Here’s hoping for a ‘gentle’ correction back to sanity…..
October 20th, 2009 at 11:09 am
True. Vancouver specials were designed essentially as an up-down duplex and they have been around for 40 years. I guess they felt that it was an immediate solution for finding more affordable housing.
You are right about the states, generally one kitchen in houses. I have lived in CA and CT and interviewed extensively through the midwest as well (and on “second trips” the companies send you on a get to know the area trip with a realtor or relocation specialist).
In SF, you could rent parts of living rooms at one point. If any of their markets are/were like YVR, its SFO. Thats another reason why I believe a crash/correction will happen here.
Hopefully, it will be an orderly correction. A crash will prompt the government to step in and bailout, and we all know what that does for housing prices.
October 20th, 2009 at 10:57 am
@SD92129: Vancouver has gone to hell with mortgage helpers, but other cities have them too. I owned a house with an upstairs suite in Halifax. When I lived in St. John’s NF, houses often had suites. Toronto has lots of suites, so does Calgary and Edmonton. Down in the US they have suites. But the Americans appear more likely to rent bedroom-by-bedroom, creating rooming houses in effect.
Toronto gets more immigration than Vancouver IIRC, and hasn’t had the same bubble.
Immigrants and mortgage helpers were common in Vancouver seven years ago, before the bubble.
Increasing supply is hurting rents in Vancouver, but that is just another example of weak fundamentals that will sink this market. We build condos everywhere, even in noisy industrial areas:
http://www.cbc.ca/canada/briti.....fight.html
The “correction” (read crash) will happen, but we have all given up in predicting when. At some point, the stats and anecdotes will get very ugly. At first, everyone will be too cautious to say “this is it” (because we’ve been burnt before). Only after the market plummets, will we know it happened and only in hindsight will we know the trigger. The root cause we all know, but the trigger is the mystery for now.
October 20th, 2009 at 10:37 am
a TD’s recent increase on my co-workers variable (to prime +1%) has halved his +ve cashflow. He is re-evaluating his investment. he is 1% from being cashflow neutral, renter is leaving at the end of the month, he is considering sell, re-rent, hold out for 5 months or so to cash in on the olympics and para-olympics (dont flame me, not my words, I quietly laughed when I heard that also). Along those lines, did anyone make cool coin on the World Police-Fire games held in the summer?
October 20th, 2009 at 10:08 am
my neighbours have put their place up for sale in a flurry of panic that the market is going to crash. my landlord (who bought last year at peak) is also desperately trying to sell the place out from under me (so to speak).
Strange days
October 20th, 2009 at 9:54 am
I am not saying that there are not arguements for and against lower prices (or higher prices). I believe rents are low here because there is a decent supply of rental units (and soon will be more). Fundamentals based on potential income stream are out of whack. My point is about SFH housing, which because of mortgage helpers, allows people to pay more for a house than one should. Laneway and units within apartments should have a similar effect.
But as we all know, prices are crazy. The western US seaboard has LA, OC, SD, SF, Portland and Seattle to immigrate to and immigration is generally tougher than in Canada. Vancouver (and if you want to count Victoria) is the only gateway for Canada. Furthermore, immigrant consumption choices may put housing near the top of the list so they will sink whatever they can into a home quickly regardless price as they may have come from somewhere arguably “bubblier” than Vancouver so they are used to rampant inflation in housing.
I believe we are in for a correction. Raising property taxes (especially for non-owner occupied) as well as a weaker loonie (which may happen all by itself) should go a long way in flushing foreign investments out of the YVR housing bubble.
October 20th, 2009 at 9:34 am
@patriotzed: I was just comparing the total amount of mortgages directly owned by CMHC to Fannie and Freddie.
If you include loan guarantees, CMHC’s exposure is much greater as well.
From the CMHC 2008 annual report (page 97):
2009 Plan:
Assets: $345B
Insurance-in-force: $440B
Securitization Guarantees in force: $372B
Total: $1.157 trillion!
October 20th, 2009 at 9:29 am
@logic:logic Says:
October 19th, 2009 at 7:52 pm
rentah Says:
—-
They are ahead of the game in that they get an (almost) one way bet on RE prices.
————
Ah. I see. I thought the game was being happy and ejoying one’s life – not spending all one’s time stressing about the value (or not) of one’s house. My bad.
_____________________
logic, PLEASE don’t misunderstand me here.
I’m also renting (with very similar % metrics as you).
I’m prudent, I’m a bear, I’m expecting a Vancouver RE price collapse of over 50%.
However, note that this is not a board where we are discussing ‘the game’ of ‘quality of life’… heck, if it were, we’d have guru’s checking in asking why we don’t cast off all possessions and go and help the poor in Burundi. This is an RE board and we are discussing the matter of housing prices in Vancouver and thus ‘the game’ here is indeed the price of housing.
As long as there is a moral hazard situation, with people having the option of one way bets, some people will take that option. Sure, you or I wouldn’t enjoy life much knowing we’d taken that bet, but some people, out of denial or ignorance, will take it as long as the option exists. And that screws things up for the rest of us in that it perverts the market.
When the resolution comes, let’s hope it is swift and decisive.
October 20th, 2009 at 8:24 am
@crabman:
You also forgot to add Fannie/Freddie’s loan guarantees to their assets (assets are loans purchased by them). Total comes to about $5.5 trillion.
FHA makes guarantees only and does not buy loans.
So total USG exposure is about $6 trillion which on a proportional basis is higher than in Canada.
October 20th, 2009 at 8:17 am
You should also add the loans guaranteed by FHA, which until the USG takeover of Fannie/Freddie was the true counterpart to CMHC.
http://online.wsj.com/article/.....85297.html
But wait… is trouble brewing?
Can’t happen here?…
October 20th, 2009 at 6:26 am
Total assets at Fannie and Freddie add up to $1.67 trillion. This would be equivalent to CMHC assets of $167B when you adjust for population or GDP, since the US is roughly 10X bigger than Canada.
So, the US GSE’s are backing $167B and CMHC is on pace to own $345B by year’s end, with a cap of $600B. Nice.
October 20th, 2009 at 4:10 am
@SD92129:
OK, so (drumroll)…
Why aren’t rents any higher than in Calgary, Toronto, or Ottawa?
October 20th, 2009 at 2:17 am
so these high rises popping up everywhere are unlike LA, OC, riverside, and SD
———
All of which should make our RE cheaper than theirs, rather than more expensive – as there are fewer constraints on supply. Want to keep torpedoing you own argument?
October 20th, 2009 at 1:29 am
In SFH in LA, there are very few mortgage helpers. Have you actually been there and taken a close look? People here can afford to pay much more for a house if they have these suites they can rent out. Most places have a 4 storey building limit (and that is for commercial) most residential are limited to 3 stories. so these high rises popping up everywhere are unlike LA, OC, riverside, and SD.
October 20th, 2009 at 1:28 am
No Longer #32 “We are going where the Americans went already and have retreated from. We are creating our own subprime disaster.”
Precisely, with teaser rates and essentially interest-only 35-yr mortgages. A lot of people are going to be in trouble for a long time, and the looming demographic debacle of deadbeat boomer retirees trying to cash out at once is only going to worsen the disaster. The next 10 years won’t look anything like the previous decade.
#33 rp: “You’re retiring later than you think” LMAO. Hilarious. And true.
October 20th, 2009 at 12:56 am
#14: @Ulsterman: Funny thing is though, i don’t really feel like i’m geting rich from renting either.
Me either, but the prudent can’t compete with leveraged debt. “You’re richer than you think” is part of the psychological pull. Those commercials should really say “you owe as much as you remember borrowing” followed by a giant gulp and some dude’s hair falling out as he realizes he’ll be an indebted senior citizen. “You’re retiring later than you think” would be another good one. Seriously, this country has gone house nuts and everybody is in on the party.
The most valuable thing to own later is often what the masses are shunning now and can’t easily get back. Right now that is being debt-free. All these huge mortgages with insanely long durations. How long will it take to get out of this mess? Another generation has been largely sucked in. Of course you’re free to take advantage of this phenomenon and try and get rich, but you risk losing your shirt.
In the end, I think it boils down to your philosophy of life. If you want to make money then you should play all the games. You have to be happy with your choices either way. Personally I just want to avoid being screwed big-time. Our society has a way of doing that to large groups of people at once. I’ve seen it, and the damage is roughly proportional to peoples’ greed and the size of the games that were played. This one looks like an all-time record on both fronts, so I’m sitting on the sidelines.
I’m not particularly happy about it. I would have liked to own a home, mostly for the yard. But this is the rawest of raw deals. People can’t seriously be signing their lives away for a shoebox with strata fees, can they? If the crash doesn’t come in time then I don’t give a crap. I’ll find something that works for me. I have so far, and I don’t have any money problems or any real risk of them, and I’m doing other stuff I enjoy. That’s enough. I really shouldn’t dare complain. It’s the nature of greed to want what you don’t have only to ignore or neglect what you do.
October 20th, 2009 at 12:42 am
I should add that the easy lending criteria that is apparently going on amplifies the effect of those super low rates. We are going where the Americans went already and have retreated from. We are creating our own subprime disaster.
October 20th, 2009 at 12:37 am
but they dont have the urban density it SFH that we have.
=========
bullshit.
and they also have twice the population. that worked out well for them, didnt it.
October 20th, 2009 at 12:36 am
There is only one reason — ONE — for why the bubble didn’t continue its burst. Super low interest rates like we’ve never seen before. Before that, this market was collapsing.
There is only one reasonable, short-term bull argument: that the governments and CMHC will continue to pull more schemes from their bag of tricks. The mind boggles at what’s next.
The fact that the market went bad so quickly in 2008 proves all local bullshit arguments are just that.
October 20th, 2009 at 12:27 am
besides, they dont have the lax immigration policies in the US as they have here. So people with a 6 figure investment sum can immigrate just buy investing.
October 20th, 2009 at 12:25 am
but they dont have the urban density it SFH that we have. Have you lived in LA? SF I can agree with, but their $/SQFT beats YVR unless you are more than an hour from downtown, which in YVR would put you in Maple Ridge
October 20th, 2009 at 12:20 am
@SD92129: Bullshit. They said the same things in LA, San Francisco and Seattle. Now look at them.
October 19th, 2009 at 11:57 pm
People, this is a gateway city. There is an influx of cash and people are willing to double up (or triple up in the case of laneway housing). It is just like any high density metropolitan area where housing takes up a larger percentage of household income. get used to it.
October 19th, 2009 at 11:19 pm
No Longer Looking Says:
October 19th, 2009 at 9:28 pm
@logic: Welcome to Vancouver
=========
Nah, not my Vancouver. It only is if you buy into the race. I’m here for my career but retirement is definitely somewhere warmer. Afterall, skiing when I get to 60 ish probably loses it’s appeal.
October 19th, 2009 at 11:17 pm
@Ulsterman:
Worried about what exactly?
You are paying the market rent for your accommodation, which is exactly what it’s worth. Meanwhile – as you have detailed in your post – “owners” are paying more than twice this. The only way they can make up this loss is by selling to a greater fool, and these fools will eventually run out. No matter what.
One more thing – the longer that prices stay high, the more people will buy at an inflated price, and the more people that buy at an inflated price, the fewer people that will be able to buy later at a reasonable price.
So just grab some popcorn, sit back, and wait. Worked just fine south of the border and will work fine here.
October 19th, 2009 at 11:13 pm
@FORREST:
#21, F
Thats a good one LMAO, right on the money DUDE !!!!!!
October 19th, 2009 at 10:50 pm
Ulsterman:
If you make double the average income and cant afford an average house without killing yourself for a mortgage then something is wrong. This cant carry on forever. Housing is a supply and demand market and has rampent speculation just like most other markets.
And just out of curiosity, why do you want to own so badly if you dont think you can afford it? It really isnt a decision, just sit back and try not to say “I told you so” when the whole ponzie scheme falls apart.
October 19th, 2009 at 10:14 pm
C CONSERVATIVE
M MANAGED
H HOUSING
C COLLAPSE
THAT’S ALL I GOT TO SAY ABOUT THAT
October 19th, 2009 at 9:40 pm
Found on Craigslist:
NOTE TO LANDLORDS (Lower Mainland)
If you have to keep posting your ad week after week take a hint. It is too expensive or a dive! And get real on prices seriously! If you reduced your rent and the suite wasn’t vacant for a few months you would make more money…this is not rocket science. Oh and a basement suite shouldn’t cost as much as a condo mortgage!
http://vancouver.en.craigslist.....04384.html
October 19th, 2009 at 9:36 pm
@ReadyToPop: The article talks about how remortgagers will need to buckle down and pay debts to qualify. No doubt many are going to quickly learn the bitter reality of being a debt slave. Eating out and other luxuries will soon be a pleasant memory.
October 19th, 2009 at 9:28 pm
@logic: Welcome to Vancouver
October 19th, 2009 at 8:51 pm
Britain: How’s this for getting tougher…
Homeowners ‘will struggle to remortgage’ under FSA rules
Under proposals published yesterday by the regulator, banks and building societies will have to assess all mortgage applicants on the basis of their “free disposable income”, after tax, debt repayments, utility bills and other outgoings including “alcohol and tobacco”, “clothing and footwear” and the cost of eating out.
October 19th, 2009 at 7:52 pm
rentah Says:
October 19th, 2009 at 7:00 pm
@logic: How are they ahead of the game here?
—-
They are ahead of the game in that they get an (almost) one way bet on RE prices.
————
Ah. I see. I thought the game was being happy and ejoying one’s life – not spending all one’s time stressing about the value (or not) of one’s house. My bad.
“I’m watching the market irrationally move further and further beyond my means.” « Vancouver Real Estate Anecdote Archive Says:
October 19th, 2009 at 7:37 pm
[...] 19 October 2009 · Leave a Comment Market wisdom is that the bull market is over when the very last of the bears that are destined to capitulate do so (and buy). VREAA personally knows of two long term bears who have recently bought. The Vancouver RE message boards are rife with bears expressing their exhaustion and demoralization. Perhaps we are somewhwhere near a top. This bear lament from Ulsterman at vancouvercondo.info on October 19th, 2009 at 7:06 pm – [...]
October 19th, 2009 at 7:06 pm
Crash said, “The CMHC debacle will, at some point, end up being a scandal of epic proportions.” True enough. However i am concerned that, as Keynes said, “The market can remain irrational longer than you can remain solvent.”
All the rational arguments in the world won’t help the fact that the irrational bulls have become quite wealthy while i’ve sat back and read bear blogs. I think the market is insane and makes no sense. When i see family income @ 60k i wonder who is buying all the houses around me. Mine’s double that and i feel like everything is out of my league. Meanwhile, i’m watching the market irrationally move further and further beyond my means.
Funny thing is though, i don’t really feel like i’m geting rich from renting either. The house i rent (Burnaby) costs 2400/month to rent and i figure it would cost 4200/month inc. taxes to buy (at the CCS 5 year rate of 3.85 – which i’m certain will rise soon). However, i don’t automatically save 1800/month because to be honest i couldn’t afford to pay 4200/month in the first place without eating Kraft dinner throughout my “good years”. Could i pay 4200? Right now yes – just. But what happens when another kid comes along? Mortgage rates rise? 4200 on one income is a frighteningly LARGE payment. Very little margin for error.
I’m just worried that this market will keep on chuggin’ or drop a measly 10-15% again and i’ll still be waaaaaay out of the market.
October 19th, 2009 at 7:00 pm
@logic: How are they ahead of the game here?
—-
They are ahead of the game in that they get an (almost) one way bet on RE prices.
If prices soar and interest rates remain low, they profit (perhaps handsomely), if prices plunge and/or rates soar, they walk away.
Classic moral hazard.
October 19th, 2009 at 6:34 pm
“Five years down the road, if interest rates are high and property values have dropped, they may be willing to file for bankruptcy. In the meantime, they had a nice house.”
——–
I live in a nice house now (which I rent for about 40% of what it would costs to service a 95% mortgage), and have no chance of bankruptcy. How are they ahead of the game here?
October 19th, 2009 at 5:34 pm
It was just a week ago that the government was saying that inflation was negative because of declining energy prices. Someone should point out that gas prices are certainly not going down. Where do they get their information?
http://news.yahoo.com/s/nm/200.....9saW5lcHI-
If saving 5% is a hardship then how about a doubling up of a mortgage payment as interest rates rise. What is tougher?
1) Not having bought a house you couldn’t afford and renting in a place that you can.
2) Having to declare bankruptcy to extricate yourself from a mortgage that you were told was affordable because you didn’t understand the bankster and the real whore were lying about interest rtaes staying at zero forever and ever , OMG, forever.
October 19th, 2009 at 5:13 pm
Increasing the cap will not prevent the inevitability of a crash. No amount of loose lending in the U.S. was able to prevent the spectacle that we are now witnessing south of the border.
October 19th, 2009 at 3:12 pm
The CMHC is a Crown Corporation. It operates by the directives of the Federal Government. What a majority of people don’t seem to understand is that the new ’600′ billion dollar figure is ‘The Stimulus’ program that was announced and agreed to by a majority of Canadians and their representatives in Ottawa.
The Liberals, NDP and the Unions ( and the citizens it goes without saying) have been hoodwinked by the announcement of stimulus spending and they interpreted the funding announcement to mean that ‘shovel ready projects’ across the land would get funding. They are howling in parliament and in the media that those projects have been stalled. None of these projects were ever intended to be funded.
The fact is that the stimulus funding has not gone to the usual Liberal and Unionists public-trough dwellers or parasites and instead has been used to fund this real estate bubblezilla to the tune of $600 Billion plus. Its quite simple, the Conservatives have no intention of funding infrastructure projects in Liberal, NDP or Unionist ridings anywhere in Canada, there isn’t ANY political mileage in that.
But……. new home buyers beholden on the government for a ‘miracle interest policy and free money for all’, now that constiuency has legs. This is just politics as usual in Canada, no one should be surprised, the Liberals funded Ontario and Quebec campaigns on the backs of the taxpayer for generations. The media has eaten this stuff for breakfast and regurgitates the fallacy that ‘its a good thing’ every day ad nauseum and in turn the brain dead public laps it up.
It is currently reported that 100% of all purchases are CMHC funded with less than 5% down ( those magic HELOCS to the rescue). In the US the figure is 75% of the mortgages are funded by agency ( F&F Mac) buying of mortgage securities. Interestingly the mandate for federal funding expires ( in the US) at the end of October. Can the Canadian Conservative Party hoodwink the public ( with help from the media of course) into funding an additional $600 Billion?
There is currently zero buying of Mortgage backed securities in the debt market. 100% of the market is being absorbed by you the taxpayer. How are you going to pay for this? Higher taxes, of course.
Barrons ( the investors Bible) magazine issued a front page directly warning the US Fed to stop the intervention and raise rates ….Now, before the debt bubble explodes. Is it likely Canada will follow? Remember , this is all going to happen before November 1st in the US. The effect will send the $CDN to the moon as the .62% yield in the US moves away from the .40% yield in Canada forcing the BOC to act in such a way that has the optics of being a situation it cannot control. Get your popcorn ready.
October 19th, 2009 at 1:52 pm
@Crash:
It will bring down the government when the Real Estate market collapses… Which is why they’re so desperate to keep things going.
October 19th, 2009 at 1:44 pm
Of course, this news story is really an ad for TD “Green” mortgages. Keep up the social pressure, and throw in a little political correctness.
Yes, the present is like no time previously. Never before has it been so easy to borrow so much to buy so little.
Why can’t the older generations let the youth be young for a little while? You know, go to school, travel, have fun etc. No, we have to indoctrinate them into the debt cult.
There’s no time like the present to be buying your first home… The latest survey on home-ownership from TD finds Canadians between 18 and 34 feel more ready to get into the market than their parents or grandparents did.
In some cases, it’s because they’re buying older homes or getting help from their families. The research also suggests new homebuyers have more options when it comes to financing including green mortgages, for those who want to lessen their environmental footprint.
http://www.news1130.com/news/l.....15203_7948
October 19th, 2009 at 1:17 pm
The CMHC debacle will, at some point, end up being a scandal of epic proportions. CMHC are running out of control with no accountability. It will eventually bring down the government.
October 19th, 2009 at 1:13 pm
Without the Real Estate boom there is no economy to speak of.
They will prop it for as long as possible. And when no longer possible they will prop it some more with some novel scheme nobody thought was possible. This is already happening in England.
When this empire falls, there will be nothing left. The only thing that can overshadow the devastation of the aftermath is another world war. And as you all know, the biggest fortunes are made in times of war…
You make your own conclusions.
October 19th, 2009 at 12:54 pm
A pox on the CHMC.
they are encouraging recklessness. If you cant afford something, then WAIT AND SAVE A Bigger down-payment. Sheeeshh – what’s worng with that??
another bone from Harper to his banker and developer friends.
Some nameless, faceless beaurocrat in now building our very own Fannie Mae and Freddie Mac.
October 19th, 2009 at 12:30 pm
@gasman:
I never noticed the adds, let the Pope make a little money on the side as it is a lot of work to manage the site – not to long ago he was going to shut it down the way of VHB.
Speaking of ends, when the market started to slide at the end of ’08, the banter back and forth on this and other sites all but died as all the bears felt their views had been proven, the market was falling and there was no point going on about how they were right… So the bright side of this last little rally is we get to complain yet again about the bubble not bursting – enjoy the banter as this site and others will get quite dull once the market finally capitulates.
October 19th, 2009 at 12:21 pm
This is right on the money and will hopefully start coming out more in the media so our politicians can understand the issue – currently they seem to have no clue. The CMHC is an unregulated entity that is setting us up – the Canadian tax payers – for a disaster of epic proportions. Classic case of Moral Hazard. Banks will write mortgages all day long as they are insured / backstopped by the CMHC. I also believe that it being insured by the CMHC allows them to not include the mortgage as part of their regulatory capital requirement calculations. Therefore if you are a bank and you make a spread on each mortgage you write with no recourse back to you – I would write them all day long and that is what they are doing. Unfortunately the CMHC is a bit of a blackhole and does not publish much data. Note – the FHA – which is the US’s equivalent to the CMHC – now has 20% defaults on the mortgages it wrote in 2006 and 2007. A $600B cap? – in 2005/2006 the CMHC had just over $100B in mortgages on its books…it then tripled to well over $300MM this year and it is currently levered 35:1 from what I can calculate. If it goes to $600B – that will be a 6x increase in value of their mortgage book since 2005/2006 and put them close to being one of, if not the largest bank in Canada by assets.
Most new mortgages written in Canada are well under 25% down (closer to 10% down or less) and therefore fully backstopped and insured by the CMHC. From what I can gather the majority of new mortgages are also variable (2% lower rate than a five year fixed which would be close to double the rate) and most at 30 or 35 year amorts – people will be lucky to pay them off before they die. The banks have no risk at all on these mortgages and they also don’t count as part of their capital requirements as they are backstopped by the CMHC. They will continue to write as many as they can – its free money with no risk – until rates start to rise – which we are already starting to see on the 5 years – and the defaults start and the CMHC is forced to stop lending to people who are not ever close to being able to afford what they are trying to buy.
Scary. This is the US all over again. Our tax dollars are going to pay for this when it blows up. And we don’t have any politicians that really seem to see it coming – wouldn’t expect them to as most of them don’t’ have any proper economic or financial training and likely can’t even balance their own cheque books. In the original article this was published in – CIBC’s economist also stated that the above was the reason the Canadian Banks didn’t need bailouts. They likely won’t – it’s all on the government tab.
Until this activity ends and people stop getting mortgages that are 6-8x+ their gross income with 5% down and 35 year amortizations – housing prices will continue to rise, you will get 20 offers on houses for sale as we are seeing now and the bubble will continue to grow.
The funny part is that I saw a comment from a government source saying they may have to increase interest rates to slow the housing bubble. Why penalize an entire economy when all you have to do is stop the CMHC in its tracks and make it so that everyone with a heart beat can’t get a highly levered mortgage.
Unfortunately – and like the US – this won’t happen until its too late as the politicians have no will to act to reign in the CMHC and / or don’t understand what is happening – same thing that Greenspan mentioned happened to him when he spoke in Vancouver the last time he was here.
October 19th, 2009 at 12:14 pm
The heavyhanded censorship and editing of comments on this site make it hard to have an adult discussion. Mind you the stream of real estate related advetising does give the intent of the site away as fluff anyway.