The ‘good banks’ myth
Observer pointed out this blog article over at the Vancouver Sun, which does an excellent job of rounding up some of the issues we’ve gone over about the CMHC and the Canadian Banking system:
Not only has the Harper government felt it necessary to prop up Canadian banks it was this same government which created financial system risk in the first place. In 2007 the Harper government allowed US competition into Canada which prompted the CMHC to dramatically change its rules in order to compete: it dropped the down payment requirement to zero per cent and extended the amortization period to 40 years. In August 2008 Flaherty moderated those rules in response to the US mortgage meltdown. CMHC then “securitized” an increasing number of its loans into bond-like investments (if you have a typical Canadian mutual fund, you’ve got some.)
At the end of 2007 there were $138 billion in securitized pools outstanding and guaranteed by CMHC –17.8 per cent of all outstanding mortgages. By June 30, 2009, that figure was $290 billion and by the end of 2010 it was $500 billion.
Read the full article, it’s full of interesting facts and figures.
May 25th, 2010 at 5:06 am
@rubberduckie:
That's because the owner already owns the land, which otherwise would not be generating income. It's land costs which are primarily responsible for inflated RE costs. You also don't have the condo-industrial complex taking their piece of the action.
I say bring on the laneway houses. The more of a glut of rentals this city has the better it is for the bears.
May 25th, 2010 at 1:18 am
Thanks for the cost quotes, pals!
If a laneway house costs 125k to 160k to build, and could be rented out for $1250 to $1600 a month, that does seem like a better investment than any single condo unit in town. I'll not be surprised if I see them popping up all over the hood like a wave of post-halloween-makeup acne.
The downside is you lose your yard, but the upside is you have somewhere to park your car, right?
I'd love to have one (along with my dream house), but for my own use as a home office or guest cottage.
May 25th, 2010 at 12:08 am
@crashcow: Carnage is continuing in Europe! It's going to be a wild ride today!
May 25th, 2010 at 12:07 am
@specuskeptic: Has Harper paid you $75,000 recently?
May 24th, 2010 at 11:37 pm
the carnage continues in asian markets…
http://finance.yahoo.com/intlindices?e=asia
US futures down as well…
http://www.bloomberg.com/markets/stocks/futures.h…
May 24th, 2010 at 11:26 pm
Owning versus renting: some US graphs, as of today.
http://runningofthebulls.typepad.com/toros_runnin…
Still Cheaper to Rent
At least in some cities.
May 24th, 2010 at 11:08 pm
@Happy Renting:
Insurance underwritten by the Canadian tax payer is wrong in my books.
There seems to be nothing 'free' about the CHMC.
May 24th, 2010 at 10:48 pm
@Chilled:
"Here I was asked for money as I paid my fare. Isn’t this illegal? "
So is smoking pot but since when did legality ever stop the self-centered Vancouverites from doing whatever they please?