CMHC predicts 2010 rebound and building boom
This should be an interesting prediction to watch. The CMHC has put on their happy hats and made this forecast:
“In 2010, a pickup in home sales, a stronger domestic economy with income growth and low mortgage rates will lead to an increase in new home construction. Greater Vancouver tends to lead the other markets and that’s what we’re now seeing. In 2010, it will spread to the rest of the province. This will prompt builders to start more homes to meet a growing need for housing.”
Now remember, these are the guys handing out money to buyers whom banks wouldn’t otherwise lend to without a higher risk premium. They have nearly doubled their mortgage insurance cap over the last two years. When Fanny May and Freddy Mac tried the ‘free loans for everyone program’ down south it didn’t turn out so well, but in Canada we do things differently. Will the CMHC be able to keep pumping enough tax-payer backed credit into the real estate market to make this forecast come true or will the whole house-of-cards come tumbling down in crash part deux?
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December 30th, 2009 at 1:22 pm
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November 6th, 2009 at 6:14 pm
@No Longer Looking: Hi, I know it’s a myth and I constantly tell my wife and friends who are thinking about buying a condo. So that was meant to be tongue in cheek. However many people I know do think that way, especially from mainland China as apparently the condo there (or the equivalent of) don’t actually have as many enforceable rules as here. As my wife puts it, in China if you don’t like how your neighbor lives? Move because it’s your problem!
I find that there is a serious lack of education about condo living and what your obligations are and what happens if things go wrong. It’s really unfortunate.
November 6th, 2009 at 12:57 am
Err, did that math. Worth very little to me.
Worth more was:
[1] not having to worry about potential negative equity
[2] being free to relocate if i wish
[3] Being able to stick my stuff in storage and go travelling for 6 months whenever I feel like it.
etc.
November 5th, 2009 at 9:32 pm
Cashisking, isn’t your wife a realtor? Considering your bearish outlook, it must make for some interesting dinner table conversation. I agree that there are good realtors worth their fees, but they sure are hard to find.
November 5th, 2009 at 7:55 pm
Boombust,
(comment 84)
“Would it be possible for you to post some or all of your letter? Maybe too if it is publicly posted that will help get a reply. Interesting that you haven’t received one yet … it’s been a couple of weeks, right?”
Sorry chum. Didn’t keep it.
November 5th, 2009 at 7:54 pm
…then ask yourself what value you would place on not being able to be evicted for “landlord renovations”, and being able to upgrade the place as you see fit. Then subtract what you think the value is for being able to bail on it with a month’s notice. Then add a premium for not having to read this blog and obsess over housing for the rest of your life.
November 5th, 2009 at 7:36 pm
@logic: Exactly. Everyone should do themselves a favour and complete the following activity. Look up at a typical East Vancouver bungalow on the MLS. Then, go to your favourite mortgage calculator and calculate how much your monthly mortage will be at various interest rates. Then, go onto the Craigslist rentals section and look for houses/apartments/condos that are renting for the various mortgage paymenst you calculatd in the prior step.
Now, for your homework question, ask yourself, “is the quality of shelter that I would get by renting better/worse/about the same as that East Van bungalow.” I think most of us know the answer to that question.
November 5th, 2009 at 7:10 pm
“If the rates goes up in 5 years and I can’t afford it then I will sell and at worst break-even.”
———
If rates go up, people can afford to borrow less. So they will have less to spend on a property. Hence you will get lower offers than they would have made if rates were low. So, do that math on that one.
November 5th, 2009 at 7:06 pm
“Plus it will be newer than the 30 years old rental apartment I’m in right now. A”
———————
Err, with the number of new condos (granite a SS appliances and all) on offer at the moment, odds are your “rented” place will be newer than their “owned” place.
November 5th, 2009 at 5:58 pm
@space889: “Also renting you have to obey other people’s rules but not owning!”
That’s another myth. You’re always answering to someone. Whether its the condo board, the municipality, the taxman etc.
November 5th, 2009 at 5:36 pm
@gvrdpropertyowner:
What I have heard from friends, friends of my wife, etc is basically who cares if the interest rates rise? If I can afford the mortgage payments now then it’s better to own now than renting because you “own” the place and can do what you feel like. Plus it will be newer than the 30 years old rental apartment I’m in right now. Also renting you have to obey other people’s rules but not owning! If the rates goes up in 5 years and I can’t afford it then I will sell and at worst break-even. This is the type of thinking from accountants, engineers, marketing, finance, etc, etc, etc. They figure there will always be someone who can afford to buy it and will buy it so they suffer no loss (ie. house sale proceeds at least equal to outstanding mortgage amount).
My response was ignoring all else, someone who can afford the higher payments probably makes more $$ than you or at least wealthier. So why would a wealthier person not purchase a better place more suited for his wealth/higher income and instead a used condo from you, a poorer person, at a higher price than you bought it at? Given that the cost of owning the place can be viewed as the monthly mortgage payment, strata fee, insurance, tax, etc. Also if a lot of people in your income bracket bought similar places and need to sell, why do you think there are enough higher income people around to buy these places? Since the general rule is that the higher up on the income/wealth ladder, the fewer people there are.
oh well….in the end it’s their choices, no need to be a super spoil sport full of negativism right?
November 5th, 2009 at 5:24 pm
Sorry I thought you would figure it out
Private schools = higher fees for better service … you don’t have to believe it … you don’t have to pay for it … if I don’t feel I’m getting my money’s worth I DON’T have to send them ie pay for it
Do you honestly believe they are equal? WOW
If I owned a property could I sell by myself or are all for sale by owner transactions done between people who don’t have realtors. Furthermore there is a whole section in the Chapters near me that is devoted to selling your house by yourself – fuckin book whores?!? Why are they allowed to charge money if it’s not possible.
November 5th, 2009 at 5:16 pm
Woops, slow down RP , my bad, no censorship of comments today, my machinery must have blinked for a minute. Solly all.
November 5th, 2009 at 5:14 pm
#98 I seem to be getting censored again. My responses to your string are hitting too close to the bone.
But I couldn’t stop posting this from garths comments
Here’s another herd mentality for ya.
Regular healthy people trying to jump the queue lining up for H1N1 vaccines.
How many people die every year from heart disease?
Yet I see no line ups at the gym.