Scotia & RBC housing reports
Donald sent in a couple of bank reports on the Canadian housing market that were just published. Yesterday saw the release of Scotia Capitals report “Is There a Canadian Housing Bubble?‘, while this morning RBC released their Housing Trends and Affordability report. The Scotia report is remarkable for putting the question right out there in the title, but their conclusion seems to be “yes, maybe there is a Canadian housing bubble, but thanks to mortgage innovation, it probably wont bust for another year or so”.
There is no question that Canada is perhaps curiously off-cycle compared to other countries by way of pursuing mortgage innovation while other countries have curtailed such activities. Stronger bank capitalization, more prudent regulatory and managerial oversight, a century’s worth of sounder policies relative to countries like the US in carving out a structurally sounder banking market, work since the mid-1990s to craft a relatively much sounder fiscal environment, and among the more pro-active central banks have all set decent backdrop within with such innovation can occur. Thus far, most of the innovation has been classically Canadian in a conservative sense, but there’s no objectively doubting that the market is changing.
Canadian innovation really only began, however, after the current federal government liberalized the mortgage insurance market in the Spring of 2006. Material innovation has only been characteristic of the Canadian market for 2-3 years, but it is already having a significant impact.
And their note on how amortization terms are changing:
In terms of amortization periods, it was 25 or bust until three years ago when 30, 35, and 40 year amortizations became available. Now, after just three years, 18% of outstandings are over 25 yrs. 10% are 35-40 years. As a share of new mortgage originations, 47% of mortgages originated for new purchases in the past year have had amortizations longer than 25 years, and over 60% of that share has been in 35 and 40 year mortgages. One can no longer get an insured 40 year mortgage in Canada, but uninsured 40 year amortizations are still available.
Remember, this is for all of Canada, we’ve heard anecdotal evidence from banks that greater than 50% of new buyers in Vancouver are opting for longer amortization.
The Royal Bank report remarks less on market forces and steers clear of any ‘bubble’ predictions. They do note that their ‘affordability’ trends are declining again, particularly in Toronto and Vancouver.
This near-frenzied tone to the market is occurring despite still historically poor, and now deteriorating, levels of affordability. In the third quarter, RBC’s affordability measures for Vancouver worsened for the first time since early 2008, rising between 1.7 and 4.3 percentage points. These increases were, in fact, the biggest among major cities in Canada. Even though the affordability measures fell substantially during 2008 and early 2009, they remain well above long-term averages.
I’m not sure to make of all the cautionary notes coming from banks about housing lately – From INGs CEO warning about a Canadian housing bubble to these recent reports. It would appear that this attention to the issue should avert some of the ‘nobody saw this coming’ comments that we saw out of US banks and lenders when their market crashed. One thing is for sure, as long as the CMHC is picking up the risk there’s no way these banks are going to stop handing out big home loans.
RSS 2.0 comments feed. Both comments and pings are currently closed.
November 25th, 2009 at 9:05 am
FIRST!!!!!
November 25th, 2009 at 9:13 am
“Canadian innovation really only began, however, after the current federal government liberalized the mortgage insurance market in the Spring of 2006. Material innovation has only been characteristic of the Canadian market for 2-3 years, but it is already having a significant impact.”
This is a joke! The conservatives have liberalized the mortgage market? Are they kidding? The last 3 years have seen the biggest nationalization ever of the mortgage market, with the majority of new mortgage originations being guaranteed by taxpayer money. There is absolutely NO private skin in the game!
Without government guarantees this market would be in the doldrums. These reports are a joke!
November 25th, 2009 at 9:14 am
It looks like everything is set up for a big rate hike if needed (for instance, a 1% first step), with the BOC, and all the banks, able to say that they very clearly warned everybody.
November 25th, 2009 at 9:23 am
@domus:
Good catch.
They’re fudging things with use of the word ‘liberalized’.
The effect on the borrowers has been superficially ‘liberalizing’. Like a fawn allowed to frolic in a meadow with a barely visible nylon noose around its neck.
But the effect on the market itself has NOT been liberalizing (risk costing has been perverted).
Great example of ‘smoke-and-mirrors’ language.
November 25th, 2009 at 9:33 am
As an aside…I received a letter yesterday from RBC regarding my line of credit. They are increasing the rate by 1% starting Jan. 5 due to “market conditions”. Interesting.
November 25th, 2009 at 9:51 am
I think GDP growth was essentially achieved by paying people to dig their own financial graves before the correction happens. Poetic justice at work for sure.
November 25th, 2009 at 9:57 am
I received the same letter from RBC and am a little choked about that. The agreement oh so long ago was prime + 1% – as in, you get 1% because you are a great person for this type of rate. The Prime aspect is the variable that may go up and down through the course of time.
Now – they come in and say, well based on our craptacular practices, we need to change the agreed upon +1 % due to market conditions – isn’t that what the prime part is???
So, not only will prime go up at some point, but also the specific to customer rate.
And when the economy gets going again – will they lower that back to 1%?
November 25th, 2009 at 9:57 am
interesting how we are headed for summer 2010 like a train rumbling toward a washed out bridge.
rate hikes coming, stimulus ending, Olympic party over. it’s like a perfect storm.
Surely it can’t all get dropped at once.. that would be dumb.. no ?
November 25th, 2009 at 10:12 am
I do not understand how we can have had a sales surge and increased costs since spring, plus layoffs and clawbacks in the BC workforce, and only NOW be suffering a worsening of affordability.
What market indicators are these banks looking at?
Sheesh.
November 25th, 2009 at 10:16 am
Does anyone have a link to the Scotia Report?
I read an article that interviewed Derek Holt. He cites interest rates but makes no mention of the role of the CMHC.
I think at some point the CMHC will have to be reined in. My money is on them being forced to reintroduce a price ceiling.
November 25th, 2009 at 10:39 am
There is a lot of money chasing the illusion of opportunity for profit. Unfortunately, the structure of our economy is such that there is very little incentive to innovate and produce value but a lot of incentive to speculate, especially in the housing market but also almost every asset class. So eventually the money will be chasing something which doesn’t actually exist because no one has the incentive to actually do the work. When future expectation of profit doesn’t pan out, there will be a massive coordinated deflation in asset prices. This is also a somewhat global phenomenon but some countries are a little better at encouraging the right incentives than others.
The housing market is in a quite a bind at the moment with prices approaching the glass ceiling of stimulus and with very little ammunition left. Although it is sometimes vexing that to see the government encouraging people to buy who shouldn’t be buying, it is also these very same people who will cause the market to undershoot in the coming correction. You can’t have one without the other. It simply means people who are looking to buy at the bottom will be showered with money from those buying at the peak.
Even with financially robust investors in the market, it is really the weakest and vulnerable chain in the link, namely the overstretched FTB who hold the key to liquidity in the market.
It may not look like it now, but the CMHC is also slowly digging its own grave unless it makes some changes soon.
November 25th, 2009 at 11:01 am
My favorite part of the RBC survey is the affordability graphs for canadian metro markets.
Vancouver’s is the only one where the y-axis goes from 0-90%.
November 25th, 2009 at 11:19 am
@Nero:
Not going to happen as long as we have a “Conservative” minority government. It would be an admission that they had been fueling a housing bubble to try to juice the economy and gain themselves a majority. It would also induce a bust that the party in power would be blamed for.
Look for limits to be introduced after a bust, either sooner by the Liberals if they get back in (they can blame the “Conservatives” for loose lending) or later by the “Conservatives” after the bust is no longer an issue.
November 25th, 2009 at 11:34 am
Classic CYA comments from the banks. They know it’s going to end badly, and they want to have their ducks in a row when the media is suddenly outraged that the CMHC is receiving massive government bailouts. “But we warned you!!”
November 25th, 2009 at 11:41 am
In case anyone missed it in the other thread:
USA housing returning to fundamentals
http://www.calculatedriskblog......-rent.html
There is no escaping it. The link to the “fundamental value” paper reinforces what has been repeated ad nauseum. Patience, bears. Momentum = delusion. The last of the greater fools are being fleeced, to the benefit of nobody except the already-rich and the politicians.
http://www.frbsf.org/publicati.....04-27.html
November 25th, 2009 at 1:54 pm
http://www.google.ca/search?hl.....=f&oq=
another article on a potential housing bubble…
November 25th, 2009 at 2:05 pm
“One thing is for sure, as long as the CMHC is picking up the risk there’s no way these banks are going to stop handing out big home loans.”
Pre-WWII, they blamed it on the financiers.
Post-WWII, memories diminished with each passing generation.
The late-20th-Century and the 21st-Century financiers taught them how to and continue to push them to screw the taxpayers.
November 25th, 2009 at 2:30 pm
@observer: “The housing market is in a quite a bind at the moment with prices approaching the glass ceiling of stimulus and with very little ammunition left”.
The sad part is that there is plenty of ammunition left. In fact, central bank has an unlimited supply of ammunition. They can almost instantaneously print as much ammunition as they want. The fiat money are basically numbers written on a paper, or stored electronically. The numbers are free, and there is truly an unlimited supply of numbers, supply of the housing on the other hand, even with all the overbuilding, is finite.
November 25th, 2009 at 4:32 pm
The CMHC and the central banks will run out of ammo…it can’t go on forever.
IMHO, we would ALL be far better off if the savings rate was say 4% and the prime rate approx. 7 % VERSUS the near zero savings rate and the current prime rate. The spread is approx the same, but the current system is to reward only the banks, punish the prudent savers , and lead to inflated and unsustainable housing prices. Think about it.
This was a well choreographed plan , but they have no exit strategy. Regardless, the end is near.
November 25th, 2009 at 4:59 pm
Re the 24 year old pharmacist buying a $500,000 condo.(in last post).
As someone mentioned , he may have gotten help from family etc etc. However, he was probably cherry picked for the article to give a skewed demographic and lure in more suckers.
Garth’s post mention huge pre-sale line-ups at a TO project, but then suspicions that the developer staged the start of the line-up.
BTW thanks for the Len Barrie Bear Mountain update…..that thing smelled from the start and the stink is getting worse. I can forsee a lot of pissed of investors aka well- known NHL stars.
November 25th, 2009 at 5:06 pm
Hey Strataman.
I heard from a reliable source(tradesmen working on the site) about a major problem in a project in Vancouver. The green roof is leaking and they have to strip it all back.
Also, apparently the workers used elevators that had not passed inspection. Further to this, the elevators are missing key components in the shaft construction , the SHTF and now they have to spend millions to bring this all up to code.
You heard about this one ?
November 25th, 2009 at 5:39 pm
@Starving Artist:
Further to what I had said earlier, there will be no CMHC bailouts either as long as the Cons hold a minority. That would be the perfect issue for the Opposition to force an election on the issue of financial incompetence.
By bailout I mean a grant of taxpayer’s money from the Crown. If CMHC runs out of money it will just borrow more on the open market – it has a Crown guarantee and the market will be happy to oblige.
At some point the situation would have to be resolved either by a Crown grant or the raising of mortgage insurance premiums (the latter being the correct solution). But not before the next election – no way are the Cons going to admit that they allowed (or directed) CMHC to get out of control. This government does not like to admit making even small mistakes, and this is a whopper.
November 25th, 2009 at 6:10 pm
“SELLERS WHERE ARE YOU?”-. Scotia,Rbc,TD,Bmo,Cibc.
This article from SCOTIA (Richer Than You Think) and the one from RBC are worried about the pace of listings that goes down down down,These big five banks are in search of more buyers and that can only happen if sellers get scare from the year old techniques BUT who is going to convince these big five dumbheads that VANCOUVER REAL ESTATE NEVER GOES DOWN Even, If rebgv ever fakely state it down then assessment value will never support this bubblicious notion to bait the sellers to flood the market.
SO,keep on bringing more garbage through paid media those producers will be defeated again and again.
HAPPY BIG 5 BANKSGIVING DAY (AWAY).
(bye bye Scotia,Rbc,TD,BMO,CIBC.)add ING at THE END
November 25th, 2009 at 6:15 pm
I love it when you can’t even tell whether someone is a bull or a bear because his post is so incoherent.
I’m not even sure if it’s some form of parody.
November 25th, 2009 at 6:27 pm
# 22 patriotz:
As Iggy seems to be even more useless than Dion, the minority Cons have little to fear re an election not of their choosing.
However, I am not sure any Federal party wants an election nor really wants to hold power in this economic climate.
Re bailouts,…..I think the Ponzi scheme fuelled by the CMHC will have far more drastic consequences than the US bailout, as we are directly subsidizing a gov’t agency (with full knowledge this will likely fail via the examples set in the US and elswhere)as opposed to the US bailouts of private banks after the RE collapse.
I am not even sure most Canadians are even aware of the CMHC and its current role, , but when they finally see their own Gov’t has jumped in bed with the banksters and made housing LESS affordable (in direct contrast to the CMHC’s original purpose)…there may be riots in the streets when our own RE system collapses.
November 25th, 2009 at 6:28 pm
No matter how cheap money is, eventually the state of the economy will dictate the RE market. The higher rates in the past few years didn’t keep the bubble from forming because there was enough economic momentum. The lower rates now have prolonged it somewhat.
The question is…where it goes from here.
November 25th, 2009 at 7:02 pm
That’s right. Vancouver real estate never go down. Unlike supra and his lady boy buddies.
Do you really think that was coconut milk supra was gargling in bangkok? Oh no. He and his friends were just getting in practice for the rich Asian and Europeans who are sweeping into Vancouver and snapping up condos at fire sale prices!
Isn’t that right Supra?
November 25th, 2009 at 7:09 pm
@flip_this: After a certain point, the bond market would start to dump our government bonds and push yields up. If the printing continues with no regard to consequences, then hyperinflation and currency crisis would set in. So you see, the government isn’t entirely omnipotent.
November 25th, 2009 at 7:17 pm
Public protest may be sinking in to the fascist leaning members of Van Shitty Council and the Olympic assholes. It has been announced that protest and protest zones, pens, areaa cannot be subjected to harrassment and arrest. I think this has been an embarrassment to democratic minded people around the world.
I think the fascist scare tactics and the show of kill force security has scared people off from around the worlds who do not think they would be safe against the planned force that the police have announced.
It has resulted in locals rebuking the olympics with non particapation and is obvious by the huge number of tickets that can not be sold.
Serves the pricks right. i thought I lived in a democratic country and didn’t appreciate the Vision Party trying to subvert my rights of Canadian citizenship.
Unfortunatley its going to end in a huge fiscal hangover that the rest of us will suffer with foe decades and long after the Olympic bamboozle has left town.
November 25th, 2009 at 7:47 pm
Looking outside at the 25th straight day of pouring rain reminds me of why this is the best place on earth, why our real estate deserves to be priced higher than that of London, Paris & New York, why the multitudes of visitors coming here this February will likely snap up 2 (if not 3) properties immediately upon disembarking at YVR and seeing the breathtaking breathtakingness of their magical surroundings, and why 10X household income is a premium well worth paying for a handyman special on Knight Street.
Only a bitter, angry bear would think otherwise.
November 25th, 2009 at 8:13 pm
I can’t wait for the Olympics! (to be over)
El Niño isn’t promising any favour for the outdoor snow venues. I’m liking the early dump of snow that’s given me a chance for a bit of skiing so far. But I can pick and choose when I’ll get out on the snow and when I’ll just avoid the rain. Not so with the 2010 event schedule. Weather like today’s dreary rain is gonna be so photogenic; everything in shades of dismal grey. Announcers, spectators, athletes, and crew all gloomily peering out from under dripping hoods of their shivering gore-tex jackets. Let the world see just how much colder Vancouver rain feels at +2 deg C than a crisp Torino sunny day at -5 deg C. Kinda puts a smile on my face just thinking about it.
Of course, perhaps the media will be instructed to show stock footage of a ski race, or even a high quality Computer Generated video, instead…
November 25th, 2009 at 8:59 pm
@Best place on meth:
Oh stop exaggerating will you! It’s only been 23 days, not 25! Huge difference.
November 25th, 2009 at 9:20 pm
@Scullboy is Sofia from Chillko:Hey Scullboy Rich asians aren’t just sweeping Van R.E. They are sweeping Potash from Saskatchewan,Rimm from Ontario,Canadian Natural Resource and Suncor Energy from Alberta.Macdonald and Gap is strong as Rich asians.Walmart,Loblaw,and Metro Quebec is strong because rich asians sweep everything from the stores.AirCanada has installed in flight internet for Rich Asians.However, You can wait till R.E.GETS DOUBLE IN VALUE, atleast you will get your job back from your dummy boss but so far” BREAK IS IMPERATIVE” “BOSS” Rich Asians and Black Friday is going to be a Blockbuster(Huge Hit).
November 25th, 2009 at 10:23 pm
@scullboy:
I thought this moron left town, what’s he still doing here? Hey Wannabe, you’re right, Rich asians are sweeping up POT, CNR, SU and so forth. Even I’ve got shares of POT, so does my relatives and my Chinese friends.
Idiot Scullboy is in Halifax getting ready to become the next Sidney Crosby, perhaps he can make it into the NHL and buy a piece of property here after he lines up in a Penguins uniform.
Every restaurant that I’ve been going to in Vancouver the past year has been jammed packed. The money cycles around the Chinese and will never get filtered to Scullboy because he’s a white trash sitting in front of his computer jacking off on porns instead of working hard finding a real job. Asians work hard and will continue to shift money amongst themselves, once scullboy realizes it, he’ll want to join the party, then he’ll understand what it’s like to work hard and get rich.
November 25th, 2009 at 11:16 pm
Maybe the international media will show up for the Olympics and run some “human interest” stories, like how 50 year old crack shacks in East Vancouver are selling for as much as Manhattan penthouses and Hawaiian beachfront estates. Look it up. The British and the Americans could use a good laugh, and we are even more %$*!’d than they are now.
November 25th, 2009 at 11:53 pm
Hello Dear VancouverCondoInfo-ites!
I wanted to share with you something amazing! I have just finished watching a show called “Property Virgins”. First time I see this programme, which is sponsored by re-max Toronto (2009).
As the “Virgin” titles implies, it was a porn movie about a rich sadistic Madame in Toronto who captures a young couple of virgins. She uses her charms to seduce them into wanting to buy an anal-dildo for a price of around 400,000CAD. Somewhat nervous about purchasing such an expensive item, they shop around, looking at a few dildos. Since they could not afford a brand new dildo, they opted for a used one.
The first dildo they saw was too expensive for them. The second one was to small. The third dildo was perfect. However, they soon found out that more couples were willing to pay for the same dildo.
So the Madame came by in her Jaguar and told them to offer as much money as they could(‘nt), blindly. “Just pay and shut up”, she said with a convincing smile, “Otherwise you will be just kicking yourself in the rectum!”.
They offered three hundred and ninety thousand Canadian dollars(!!), and soon discovered that they lost the dildo war to a greater-er fool.
Then, in an amazing thinn-ening of the plot, the greater-er fool who won-won the dildo war soon discovered the dildo is leaky!!! Intestinal fluids can actually flow through the anal dildo’s thin walls and get into the battery compartment!
Great, said our virgins, we are in!
And they paid only 387K for an old leaky anal dildo, living happily ever after. Today they proudly walk around town with the old dildo up their rectums, showing friends and family that they are NOT virgins anymore, hurray!
Too bad here in Vancouver/Richmond you cannot lose your anal virginity for a mere 400K, because I definitely would like to try that, walking around very stiffly for 35 years! Sounds great! Yes!
Regards
arit
November 26th, 2009 at 12:17 am
Oh Supra, of course I’m in Halifax but honestly, who could resist your delicate, girl like titters, those fluttering beaded lashes, that rosewater scented porcelain skin? Truly, you are the lady boy to end all lady boys. All that time in Bangkok was very well spent.
You must know different Asians then I do. Sure I’ve met some who were clever but quite honestly an awful lot of ‘em were just….bone….dumb. That’s not rasict, Petal. They’re exactly like any other group.
You are a great example. I’m sure every fat German tourist who got a poke are your, um…. pie did agree you work hard for the money (like the song says) but the opinions you’ve spewed here like so much German sex tourist coconut milk have shown the world there are some really dumb Asians out there.
I’m indeed in Halifax. I’m stunned by the difference. There are no mountains here, that’s for sure. Vancouver is definately prettier then Halifax. If they were movie stars, Vancouver would be Botoxed and siliconed to within an inch of her life, and Halifax would certainly have a Lauren Bacall – esque character to her face.
Still, Halifax has a fantastic restaurant scene for a town its size. There seem to be great Thai, Vietnamese, Persian, Scandanavian, Chinese and Japanese, Mexican, Colombian, greek and Italian restaurants here. You can get GREAT haddoc, clams and lobster for $12.99 in the restaurants. I’ve seen Innes and Gunn (my favorite premium beer) in three establishments and the liquor stores, which makes it more popular here then in BC. You can also get Glen Breton Rare, the only single malt distilled in North America.
It’s been overcast here, but the “rain” it more like a heavy mist then the clothes soaking downpour in BC. It also feels much warmer here then when I left Van, but that’s entirely subjective.
Within 48 hours I found a fantastic house for rent! It’s a cute little (and I mean little) salt-box type house. It would be perfect for 2 people at max. Everything has been renovated, the windows are brand new (important in Nova Scotia), the kitchen (lile all NS houses) is HUGE, and I mean HUGE. It’s also an eat-in kitchen which is fairly rare in Van. There’s a great laundry room, a nice little deck with a pleasant view and a back yard that’s nicely gardened. It’s in a little West End type neighborhood (older with lots of mature trees), but instead of highrises it’s all VERY cute little houses on nice little lots. No Burnaby or Richmond monster houses, which is a refreshing change.
The monthly rent on the place?
$975, including heat (VERY important in NS!), not water and electricity.
Oh and the people are work are awesome. Thery’re an HR nightmare (lots of inappropriate humour). There are 2 other guys who just moved from Van and there’s one from Toronto. I’ve been here 2 days and already a couple of people in other companies have casually mentioned I should come and talk to them about work, so at least in IT there seems to be no shortage.
I can’t say life here’s for everyone and there are certainly advantages to Van, but I for the right people, there are good jobs and an affordable lifestyle here.
Supra you might want to stay in Richmond. I’m not sure what the local manly men would make of a delicate, rosewater scented, porcelain skinned lady boy such as yourself.
November 26th, 2009 at 12:27 am
Congrats Scullboy!
I did my grad studies in Halifax despite fully funded offers from BC schools. Maybe it was the Dean flying out to meet me, or the fact that I would not by the BC bullshit about best place on earth.
I have lived and studied across Canada, and by far, Maritimers are the nicest around. They will invite you to their homes, make strangers feel welcome, and will converse with anyone without judging them or misinterpreting their actions.
You will have a great time, and get accustomed to the weather in no time!
Besides, you do feel like you are in Canada and not some other country when you live in the Maritimes. Perhaps its its the absence of self segregated communities that lack any desire to assimilate and learn the values and language of the country. Perhaps it is the sense of history and pride attached to provinces settled well in advance of BC. Either way, its a great place
Maritimers are the best!
November 26th, 2009 at 12:33 am
‘ Yes mom Ill be in bed my 9pm tonight ‘
oh no did i just type that?
November 26th, 2009 at 12:34 am
Hey you people again
Here is a GREAT website
http://www.basicallymoney.com/
It uses the revolutionary stackexchange platform to create a site which truly answers “all” financial questions. I attend two totally unrelated knowledge sites which use the same platform (stackoverflow.com and startups.com) and the way the knowledge flows there is unrivaled. Give it a try. It is built in such way that the more you participate the more you enjoy it. Share your knowledge.
Regards
arit
November 26th, 2009 at 12:34 am
I wish I was smart
November 26th, 2009 at 12:36 am
Hey arit
I like dildos!
November 26th, 2009 at 12:42 am
And I forgot: Congrats Drachen on your debut on the greater fool!
To the person imposing as Supraboy: Give it a break. You are only confusing everybody. Please just chose a nickname and stick with it.
Supraboy presents his case usually in a good fashion, he doesn’t curse and doesn’t insult people. He has his opinions about stuff and says it politely. If he thinks Chinese are hard working and Canadians are lazy, it is his right to think so. He is not constantly cursing his agressors, and does not descend to the childish name calling scullboy uses.
If you disagree with Supraboy, like I do, just counter his arguments in a civil way. Don’t confuse us.
Regards
Ari
November 26th, 2009 at 1:01 am
@observer: I agree: the government and BoC are not omnipotent. The question than what is the breaking point in terms of currency value vs money printing? It looks like, at the present, the environment is very conducive for the money printing: our biggest trading partner USA is trying very hard to devalue their currency and the Canadian dollar is supported by strong commodity prices.
So, it looks like for quite a while they can keep inflating the money supply using the housing market as a conduit.
November 26th, 2009 at 1:48 am
@arit: Post of the year! Well, on the bright side, although having had a dildo up your rectum means you’ve been screwed, at least there’s no chance of getting pregnant.
Also, they do “own” a dildo now, unlike the rest of us who have to rent them.
November 26th, 2009 at 5:12 am
Arit:
I respectfully disagree. IT’s SupraLadyBoy’s right to post as he likes, but he certainly does descend to name calling, almost constantly. Using a term like “white trash” or accusing me of watching porn at both pretty good examples of ad hominem attacks. Calling Canadians lazy is also name calling, and in my opinion is racist. You yourself accused him of spitting in the well.
There’s no point at all in being civil with Supra since he’s not very civil in return. Recall how he showed up here and promptly tried to provoke people with childish name calling. There’s no point in countering anything he says with a rational argument since he has never and will never construct one himself.
That leaves just one option, which is to see just how creatively you can insult him, then watch him howl in outrage because someone used his own childish pranks against him.
I also think it’s telling that he chooses to separate out “Canadians” and “Chinese” because clearly in his mind the two groups are separate. I suspect for him “Canadians” is code for “Caucasians”, but whether or not that’s correct it’s certainly disrespectful of all the people of various races who built this country into what it is.
Whatever, it’s cool. I’m a big boy. The guy is clearly trolling, so it’s fun to provoke him; he’s too stupid to realize that someone chose to turn the tables and deliberately provoke him instead.
November 26th, 2009 at 8:53 am
@observer post #11:
Great post regarding misallocation of resources in bubbles.
“No one has the incentive to actually do the work”.
Right on.
November 26th, 2009 at 9:26 am
Scullboy, I found a new blog for you…
http://www.blogcatalog.com/blo.....eal-estate
November 26th, 2009 at 10:28 am
Here is a true story – my cousin is in his late 20′s and he decided he wanted to buy a house (BC interior). He had little money of his own so he went the CMHC route and put 5% down and had the CMHC fees included in his mortgage so he effectively has no equity at all in the house on day 1. Mortgage is in the 300K range.
Prior to closing on the house, he loses his job. He does the right thing and tells the bank (TD, I think) about his change in circumstances. The bank, already knowing the mortgage is 100% guaranteed by CMHC, says “no problme” and allows the sale to go through.
I am sure this won’t end badly at all…..
November 26th, 2009 at 10:39 am
Rogers cuts 900 jobs
Bombardier lays off 715
Canadian consumer confidence drops
“Buy now or PAY A MUCH LOWER PRICE IN THE NEAR FUTURE”
November 26th, 2009 at 11:27 am
Scullboy,
OK, I understand what you are saying. I still don’t think the cursing helps anything here, but you are free to do as you wish.
Keep us updated about Halifax, if things don’t improve here we might all end up there.
Regards
arit
November 26th, 2009 at 11:31 am
With all this bickering, I don’t quite see the point of this blog. Close it down before it becomes a flame war central? Where did all the good commentators go?
November 26th, 2009 at 12:05 pm
@Oh La La: I don’t want the blog to be closed down. I don’t know if there’s much more from an analytical standpoint that I (or most) could learn right now, so that type of commentary is no longer of crucial importance.
It’s posts like #49 that keep me reading this blog. I’d love to see some enterprising young journalist take this up as a story, interviewing the people at TD, and folks and the CMHC and the Canadian government.
November 26th, 2009 at 12:11 pm
@Oh La La: Shut the F up, just don’t visit the blog, ok.
November 26th, 2009 at 1:15 pm
So you think we can have a sustainable economy based on RE, hot money, and tourism? Well maybe not…
Dubai strives to ease default fears
But it’s different here. It rains a lot.
November 26th, 2009 at 2:32 pm
Hey, my letter’s featured on Garth’s blog today.
I wonder if that means he agrees with my CMHC/MBS generated/enhanced bubble theory?
November 26th, 2009 at 2:35 pm
55 – Yup, the tide has just gone out on Dubai, and left them naked. We’ll find out over the next year or so how many others have sold their swimwear and are praying the tide doesn’t go out…
November 26th, 2009 at 3:30 pm
@patriotz:
And we don’t have any of that smelly black gunk just lying around in pools everywhere (not in BC anyhow).
Speaking of which, apparently energy derived from Alberta’s oil sands causes more pollution than an equal amount of energy derived from any other source on the planet.
November 26th, 2009 at 5:20 pm
49 X CMHC or bust
That is truly scary, and one wonder how much of this has gone on.
November 26th, 2009 at 5:24 pm
# 56 Drachen:
Congrats on being picked up by Garth (and good info!):
The 1980′s will go down as an era that seeded a lot of future economic turmoil.
November 26th, 2009 at 5:45 pm
58 X Drachen Says:
November 26th, 2009 at 3:30 pm
@patriotz:
And we don’t have any of that smelly black gunk just lying around in pools everywhere (not in BC anyhow).
——————
Neither does Dubai (well, not much at least, compared with the other gulf states), which is their problem.
November 26th, 2009 at 5:56 pm
What do you say when people tell you that you might as well buy now, since everything is relative..
Upcoming higher interest rates may mean lower prices, but your over all monthly mortgage payment will work out the same..
November 26th, 2009 at 6:00 pm
arit I have seen property virgins a few times. I saw that episode yesterday and was disgusted with the fools. HOw the show usually goes is the gapped tooth realtor eggs on the clients. She almost always gets the virgins to go over bid. I saw one time over 100k over. Then she congratulates them on having there property cherry popped. And then there is my favourite when the homeowner is entertaining mulitple offers. The young idiots bid over asking. And then the realto/host comes back and tells them the owner wants them to do better. No counteroffer nothing. And of course not knowing if they were the best bid or not already the young victims go even higher. If it were me I would say make my next offer lower. And if not your fired. This shouldn’t even be legal and this fool on tv gets away with it everytime. I believe once the bubble bursts these loonie realtors on tv will have people with pitch forks coming after them.
November 26th, 2009 at 6:11 pm
I just realized the taxes are damn high in NS. Hope I didn’t make the wrong decision coming here. Food prices are also sky high. Someone lied to me about how good this place is, now I want to go back to Vancouver.
November 26th, 2009 at 6:20 pm
other ted,
Thanks for the explanation. I agree with you, pitchforks are indeed needed!
But…..
Aren’t you embarrased to admit publicly watching that show a few times? LOL
Or maybe you are watching it for anthropological research?
Regards
arit
November 26th, 2009 at 6:21 pm
“Dubai struggled to ease fears of debt default Thursday…”
Interesting how all this info was revealed on the day the US stock markets were closed due to Thanksgiving.
I’ll be watching the reaction tomorrow on the New York Exchange after Wall St. has been able to take a deep breath and count to 10.
November 26th, 2009 at 6:34 pm
“Where did all the good commentators go?”
Seriously. Still appreciate the posts but the comments have become moronic.
November 26th, 2009 at 7:32 pm
@Drachen:
Who cares if he agrees with you or not? Do you really need the validation of a fearmonger?
Again, I thought you didn’t believe in graphs. Strange that you are now trying to predict the future off one.
November 26th, 2009 at 9:31 pm
i’ve seen that show too. to be fair, the realtor does sometimes tell the victims to lower their expectations. my favorite episode was when she told the buyers replacing the countertops would add $30,000 to the value of the home. i guess that explains all the granite countertops.
November 26th, 2009 at 10:04 pm
CANADA RANKED BEST PLACE FOR EXPATS
“expats in Canada have the best quality of life and found it among the easiest places in the world to integrate with the local population,Dubai stinks”.-HSBC BANK INTERNATIONAL.
November 26th, 2009 at 10:06 pm
Garth’s only a fearmonger if a housing correction is fearful. In my books, it’s the bulls, the “buy now or be priced out” people, and the “the cost of home ownership will take 60% of your take home pay, suck it up” people, who are really dealing in fear. All those developers hyping condos into overnight lineups: that’s fear.
November 26th, 2009 at 10:17 pm
Smart Gastown Living is best building in Gastown Vancouver.
November 26th, 2009 at 10:17 pm
TV TOWER2 IS THE BEST PLACE ON EARTH.
November 27th, 2009 at 4:15 am
I’ve heard it said imitation is the sincerest form of flattery, therefore I’d like to take a moment to thank the poster who tried to post as me.
I think a few well chosen obscentites can shock people, which is why I post the way I do. Your average Vancouver bull is probably the most smug and complacent creature on the planet. Why not try to shock them?
We all made the points we wanted to make years ago. What’s the point of trying to change the mind of a guy like supraladyboy? Absent additional debate the only reason for posting is the shock value. Bulls like supra aren’t smart enough to engage in rational discourse anyway. They are only really good for target practice.
So far Halifax has been awesome. The restaurant scene is amazingly diverse. There aren’t any huge companies locating head offices here but the city benefits from a phenomenon I had not heard of before: nearshoring.
A lot of companies do not want to farm out jobs to places like china or India. It’s too hard to keep an eye on the quality of the work and the time difference is prohibitive. They can often realize significant cost savings while keeping quality high by sending work to a closer location.
It’s my understanding that the Maritimes have benefitted considerably from this. Several relatives are working in call centers at well paying jobs for large banks and insurance companies. The company I work for has 500 employees and handles IT infrastructure for a surprising variety of national and international companies.
While it’s true that taxes here are higher overall prices seem to be quite a bit lower. Some things like bananas are a little mote expensive but others are surprisingly cheap and if you substitute local products for imported ones then things get very cheap indeed. Local artisinal cheeses are way cheaper the say Salt Spring Island cheeses. Same for lamb and haddock (which substiutes brilliantly for halibut). Atlantic salmon isn’t as good as pacific but apparently pacific salmons about to go the way of the cod anyway.
Lobster is 5 bucks a pound and my friends were very amused at my reaction.
a friend of mine has a Kenyan husband and 2 kids. Her husband is still trying to get his career started but they were able to buy a small home not far from the place I hope to rent. They paid in the 300k range. Bear in mind this isn’t a semi detatched or a condo. It’s a sfh on a small lot.
So yeah taxes are a little higher here. Big fucking deal. Overall prices are so much lower that you still end up living a much better lifestyle.
Oh yeah and you don’t have to pay bc a monthly fee for health services, which also saves money.
Best of all, because it’s smaller it’s way easier to network which makes it a lot easier to find work. I’ve already had 2 companies offer me jobs if I decide to leave my current one.
Life here isn’t for everyone. The pace is a lot slower. Supra would absolutely hate it. There aren’t a lot of flashy cars on the streets and ostentious displays of wealth are mocked and scorned, and Maritimers have a keen ability to identify and mock the absurd. There’s a reason that “united breaks guitars” guy was so successful. Google it if you are unfamiliar. Mary Walsh just got big press for punking Sarah palin too, and let’s not forget Rick mercer punking George Bush. We are very good at getting under the skin of self important jackasses. That’s probably why I love tormenting supra so much. He’s just so irresistable.
anyway that’s life here. If any of you have questions just ask
November 27th, 2009 at 9:17 am
“If any of you have questions just ask” Scullboy
Nope.
November 28th, 2009 at 5:29 pm
I can’t help but just laugh my guts out about what is happening in this town (Vancouver), province (British Columbia) and country (Canada). To me, this pipedream looks very much like the 2002-2005 hay days of the California housing boom. I have personally experienced this and can probably write a book about it. I think the title of it would be called “Collusion”. It is merely how all bubbles are created. Collusion, on the part of the government by a way of low interest rates, a drive to increase homeownership at all costs in order to extract political dividends including becoming a subprime lender of last resort (e.g. CMHC in Canada’s case), mortgage and real estate broker and borrower fraud, unwarranted government subsidies to certain segments of the economy, i.e. the construction, real estate and financial intermediation sectors , to name a few.
Location exclusivity being touted as miraculous reason for why prices are not where they should really be. Complete detachment from reality when it comes to economic and financial fundaments (e.g. price / rent ratios, price to earnings, population income potential, economic diversification etc). To add fuel to the fire which is destined to inevitably engulf all colluded parties involved, purported “chronic housing shortages”,” multi-decade demand outstripping supply” continuously trumpeted analyses and trends,
“land-use restrictions” or “ lack of buildable land” justifications for why housing prices are so high, “net growth in foreign and inter-state (province) migration”, “the presence of a diversified economy “, and so the list went on, were all symptoms of the bubble mania which took hold in California in the early part of the decade. This was all good until there were no more greater fools left to bid up the inflated housing prices, and so the party abruptly stopped. People realized that they were not buying homes. In fact, they were renting them for the price of the mortgage. Those aforementioned fallacies, and many more others, are some of the principal reasons why the bubble burst in the States and why it will follow suit in Canada. British Columbia is no California, heck, Canada’s GDP is less than that of post-bubble California, with the country’s economy NOT as well diversified as one would expect, BUT heavily dependent on a few industries (e.g. oil and gas, energy, forestry and other derivative commodity industries, heavy machinery, construction etc.). Noteworthy is that Vancouver MSA’s per capita income is half of what per capita incomes are in the San Francisco Bay Area, certain portions of Los Angeles and San Diego areas, where prices have plummeted more than 50% from their peak.
It’s only a matter of time until the bubble bursts. The deflation in the U.S. started when the Federal Reserve began increasing interest rates. This could, however, start sooner than that. One should pay a close attention on consumer psychology when it relates to perceived expectations in the future. Often, this is how contagions, financial panics, great depressions are started. The longer the imbalances persist in the greater economy when it comes to housing, the more painful and protracted the adjustment is going to be when it comes. The Canadian government can keep the last fool from wanting to dump his inflated housing mortgage on the market for as long it provides backstop guarantee. However, financial markets are going to severely punish the Canadian government shortly by dumping its dollar, lowering its perceived credit worthiness (thus increasing implicitly and explicitly borrowing costs in the economy). A scenario just like this is currently unfolding in the U.S. Anyone wanna buy BC, Ontario provincial government bond at 9%? You start printing enough money until the federal currency is eventually debased and has little incremental value left.
After having met recently with “respectable mortgage brokers” who have been in the business for over 25+ years, I am now firmly convinced that this market is going to have a crash landing like one never experienced before. Pre-sales “pink paper” flipping (as what was called in the U.S.) where respective condo owners would trade condos like call options by purchasing condos without any intention of taking possession of the unit(s) and thus procuring further the housing bubble, funky appraisals based on comparable sales only with little to no historical economic fundamentals in place, liar loans (i.e. stated income (NIQ loans), stated assets) etc. are all hallmarks of the impeding and most definitely inevitable collapse of housing prices in Canada.
November 29th, 2009 at 11:19 am
You guys are hilarious, and once in a while even brilliant. Maybe you trash each other, but at least Google loves you. Every time i search on BC realestate up comes something from this blog..