Comments on: ING CEO warns of Canadian Housing Bubble

By: Nicole

Nicole — Fri, 20 Nov 2009 21:25:19 +0000

I have a contract on condo unit and found this great company that is fighting to get my deposit back. They are at http://www.contractrefunds.com….hope it can help doesn’t hurt to try

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By: crabman

crabman — Tue, 17 Nov 2009 17:24:24 +0000

@Anonymous: I love their Harbour Green example: "This unit would cost $22k/month to own, but you can rent for the bargain price of $6k."

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By: Boombust

Boombust — Tue, 17 Nov 2009 16:13:03 +0000

“24 X Anonymous Says:

November 16th, 2009 at 10:15 pm

http://www.youtube.com/watch?v=dFplvCb2iJo”

As Lisa Taylor points out, re: the current high inventories, “It’s supply and demand” that is bringing rental prices down.

So, was it stupidity and demand that drove people to buy in the first place?

Methinks so.

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By: Wreckonomics

Wreckonomics — Tue, 17 Nov 2009 14:49:37 +0000

@Anonymous: Great link! You should put a little comment about what the content is when you link to youtube videos though. Can you believe there are condos out there with $22,000 monthly carrying costs that can't even find a tenant to rent for $6,000?!? Does anyone seriously doubt this is a housing bubble in Vancouver?

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By: badnewbear

badnewbear — Tue, 17 Nov 2009 09:19:48 +0000

‘ Olympic ticket monopoly freezes out the fans ‘
http://seattletimes.nwsource.c.....ets15.html

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By: badnewbear

badnewbear — Tue, 17 Nov 2009 09:18:56 +0000

@James: After all Vancouver is the home of the ' Greatest fools on earth '

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By: logic

logic — Tue, 17 Nov 2009 07:52:51 +0000

"if we assume that all the marijuana consumed in North America, along with a chunk of Asia and Europe is all grown in Vancouver basements" =========== lol, as if. anyway, back to our regularly scheduled trolls,who i assume will be along soon after midnight when they finsh their shifts at McD's. Supraboy?

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By: Declan

Declan — Tue, 17 Nov 2009 07:21:19 +0000

"Sorry, but I call BS on that stat. Maybe quite a few, but 1 in 4? " Well 200,000 houses, at $150,000/year, is only $30 billion, or $7,500 for every man, woman and child in B.C. Rough estimates suggest annual U.S. spending on Marijuana at $20 billion, with Canada around $2 billion, so if we assume that all the marijuana consumed in North America, along with a chunk of Asia and Europe is all grown in Vancouver basements, then Casanova's figures are perfectly plausible. Although, if that *were* true, house prices here would make more sense!

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By: rp

rp — Tue, 17 Nov 2009 07:03:00 +0000

#24 @Anonymous: Priceless. "We're looking for $5500 per month before we entertain you with our snobby accents."

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By: logic

logic — Tue, 17 Nov 2009 06:20:46 +0000

"one in 4 houses approx has a grow up in their basement" ------------------------ Sorry, but I call BS on that stat. Maybe quite a few, but 1 in 4?

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By: Supraboy

Supraboy — Tue, 17 Nov 2009 06:17:18 +0000

@chumpdawg: I'll bet you ten cents since I'm poor like everyone else in Vancouver.

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By: domus

domus — Tue, 17 Nov 2009 05:52:49 +0000

@flip_this: I understand your doubts, and I think they come from the disappointment of seeing an absurd situation persist. But the word has NOT changed, and, yes, rates will go up when inflation hits. Even the most powerful government in the world cannot contain market forces for too long. They wish they could, but they can't.....they can only delay the unavoidable, and in the process they make the final outcome even worse. This RE market is bound to crash and burn. At some point it will. You can make the choices you want with your money, but you have been informed.

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By: Anonymous

Anonymous — Tue, 17 Nov 2009 05:38:10 +0000

@James. Great posts to keep her honest. 10% of 4 billion Asians make up 60% of 700 millions who want to emigrate to other countries.

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By: “They were beginning to get freaked out by the prospect of losing their jobs while trying to pay their mortgages.” « Vancouver Real Estate Anecdote Archive

Tue, 17 Nov 2009 05:19:27 +0000

[...] 16 November 2009 · Leave a Comment This from logic at vancouvercondo.info 16 Nov 2009 3:53 pm - [...]

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By: Anonymous

Anonymous — Tue, 17 Nov 2009 05:15:37 +0000

http://www.youtube.com/watch?v=dFplvCb2iJo

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By: casanova

casanova — Tue, 17 Nov 2009 05:14:54 +0000

Dont compare Miami to Vancouver regarding drugs trade. In the US is a highly risky business to grow marijuana in your basement wheras in Vancouver one in 4 houses approx has a grow up in their basement (15 to 20k CAD cash flow every 6 weeks) because BC has a drug friendly goverment and police. House prices will be sticky here for some time to come, maybe if California legalises the marijuana then RE here will take a hughe hit. But dont hold your breath. Lots of cash around here.

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By: flip_this

flip_this — Tue, 17 Nov 2009 05:09:36 +0000

@domus: I hope your assumption that the mortgage rates will rise with the inflation will materialize. That's how it normally works... However, given how huge, in terms of average income to price, this housing bubble really is, there is a possibility that the the government will at some point freeze the interest rates on the existing mortgages by a decree, in order to stop massive foreclosures. They are already subsidizing the mortgage payments in a very significant way, so the next logical step would be to do it more openly, accompanied by the usual propaganda: affordability, protecting the families, stimulating the economy, saving jobs etc. So, in my opinion, a lot depends on what the government will do.

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By: Ricardo

Ricardo — Tue, 17 Nov 2009 03:00:25 +0000

@Supraboy: So are you going to take Chumpdawgs bet? What will be the wager? I'm interested to see how this turns out.

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By: Boombust

Boombust — Tue, 17 Nov 2009 01:28:18 +0000

I know someone who bought a house at the peak in 1981 in PRINCE GEORGE. He and his wife realized the value of the house was plummeting only a year later, so they stopped making payments on it. They were taken to court, and the judge ordered them to pay 15 cents on the dollar on what was owing.(they ended up paying only $1500.000) They had a bad credit rating for 7 years...and then they bought again. Just letting you know...

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By: DaMann

DaMann — Tue, 17 Nov 2009 00:37:19 +0000

@taylor192: Recourse or not, lose your job and are on the hook for a $500k mortgage with piss all as a downpayment, people will walk. Same goes for someone who leveraged all with a 5% ( or zero down) downpayment on a 40 year mortgage and the place crashes in price, they will walk. Especailly all the 20 somethings who are mortgaged to the hilt. Their credit will be back in 7 years time so no big deal rightÉ

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By: logic

logic — Mon, 16 Nov 2009 22:53:45 +0000

Also, and OT: was sitting in the Starbucks on cnr of Denman and Davie this morning doing a bit of work and listening to a group of 4 trademen (construction) on the table behind me talking about all the layoffs in the places they work, and stating that they were beginning to get "freaked out" by the prospect of losing their jobs while trying to pay their mortgages. They were most worried about the fact that it's not just the new hires being let go, but also people with "seniority". Felt sorry for them, as they genuinely sounded worried, and seemed like nice enough guys.

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By: logic

logic — Mon, 16 Nov 2009 22:49:19 +0000

taylor192 Says:
November 16th, 2009 at 2:35 pm

@patriotized

2 words: recourse mortgages.
————–

Actually, this is not quite so simple. It differs on a state-by-state basis. Many US states DO have recourse mortgages on 2nd mortgages, HELOCs, refinancings, etc.

http://globaleconomicanalysis......risis.html

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By: rp

rp — Mon, 16 Nov 2009 22:40:42 +0000

#9 @Selma Body: Not a fair comparison. The computer industry has been in a state of continuous rapid deflation for over 30 years. Performance doubles every 18 months, or equivalently, the price of processing capacity is cut in half. The price of storage is cut in half every two years, bandwidth every five years, etc. Deflation isn’t bad when it’s caused by innovation, and the entire industry runs on continuous breakthroughs. It’s actually quite amazing, and if we could replicate the success in other industries we’d be living in a technological utopia. Of course, deflation caused by a giant economic toilet flush is something else entirely

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By: taylor192

taylor192 — Mon, 16 Nov 2009 21:35:00 +0000

@patriotized

2 words: recourse mortgages.

The US has non-recourse mortgages, so when the sky started falling many people just handed the keys back to the bank and walked away.

Canada has recourse mortgages, so when the sky started falling many people tried to sell (active listings doubled) cause they cannot give the keys back to the bank and walk away.

The silver lining of the US is you could walk away from your debt and start over.
The silver lining of Canada is many will try to keep paying their mortgage and RE prices won’t crash as hard. Yet the economy will as people have less disposable income.

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By: patriotzed

patriotzed — Mon, 16 Nov 2009 20:27:06 +0000

@other ted:

Any thoughts as to why the Canadian government was successful in reflating the real estate bubble while our US counterparts were not?

Because one out of 8 dwellings in the US is vacant. When you have that much excess supply, you cannot move prices even with record low interest rates. The households are simply not there to move into the dwellings. Also since the bust started earlier than in Canada more people who might buy have gotten the message that it's a risky proposition. In other words, bubble denial in the US is pretty much dead. Due to a generally later start to the bubble and generally tighter development controls, Canada had not gotten to such a point before the financial bust, thus lower interest rates were enough to move demand up to meet supply. But this cannot last. If prices exceed normal multiples of incomes and rents, supply will inevitably outrun demand.

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