a SFH with a “mortgage helper” suite

would have to be considered “subprime"

I wish people would stop using the term "subprime" in reference to Canada, period. My aversion to this is based on two reasons:

1. It gives people the impression that the root cause of the US bust was not excessive prices (and by extension that excessive prices alone will not result in a bust in Canada), and that the prices would have been sustainable if lending practices had been different. The US bust would have happened even if every single homeowner had paid cash. The prices were simply not sustainable.

2. There is an organized campaign in the US to blame the bust on supposed government mandated lending to minorities, and "subprime" is used as a code phrase for this.

Using the term "subprime" for Canadian mortgages (other than those actually called "subprime" by lenders such as Xceed), or for US mortgages in any other sense than that used by the US mortgage industry lends credibility to these fallacies IMHO.

It's all about the prices.

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22-year-old, independent gangster arrested on drug, gun charges

http://www.vancouversun.com/news/year+independent…

It's good to see young people going into business for themselves. Kids, you don't all need to be a corporate gangster and go to Wall St. Think of the flexible work hours and lifestyle available to a mercenary for hire. You'll have more time to spend with the family so they'll visit you in prison. And won't you feel less guilty not knowing who your victims are?

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take an average of starts in Vancouver metro for the past 5 years. Then take the total number of net immigrants over the same period. Put the two together. What do you get?

Incidentally, in the same period RE prices exploded. Cannot (repeat: cannot!) be sustained.

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http://abbotsford.en.craigslist.ca/apa/1562349649…

Looks pretty nice for $1400/mo. Rented by developer. What's the asking price? Why it's $539,500.

http://www.idke.vancouver.com/realestatedisplay?r…

And property taxes? About $3500 per year probably.

http://investbc.gov.bc.ca/CommunityProfiles/Pages…

Now I am no financial genius, but does this even cover the cost of funding? What did this lot cost? How much did it cost to build? Maybe someone can fill in an educated guess. Here it is on a map.

http://maps.google.com/maps?f=q&source=s_q&am…

And who in their right mind would ever "invest" in this? The yield is at best 2%. What about taxes on the sale? HST? Even slightly higher interest rates?

Even if some idiot buys this, the bubble is popping this spring. There is just no way these numbers work or can work without riches falling from the sky. Somebody out there has a balance sheet. It's game over.

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I believe that most individuals in the property management industry would describe the market as soft at best.

But you don't have to take my word for it; just do a little empirical research, and walk around and look at all the "for rent" signs… go talk to the building managers: ask them if they think there will be upward pressure on rents this year?

Actually , the whole year (2009) was, for the most part, soft for the rental market: Two reasons mainly, first time home buyers and the unemployed.

I'm not sure where most of the bulls thought the first time buyers were coming from, but it was renters leaving their $1000 a month suites to purchase equivalent properties for $350,000…we'll have to wait and see if works out for them.

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Buying real estate

in the best city on earth

makes Rennie happy.

Distilling wisdom

in the form of Haiku

is a waste of time.

g'night everyone

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would have to be considered "subprime"

if this route is the only way the buyer

can qualify….. made in Canada eh?

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Critical Thinking

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