In UK, first-time buyers offered GBP 70K deposits by local councils
First-time buyers are being offered deposits of up to £70,000 by their local council to help them on the property ladder, with taxpayers footing the bill if house prices fall.
Source: Telegraph.co.uk
March 23rd, 2011 at 12:20 am 1
Meanwhile in Australia internet searches for "no deposit loans" are way up. But no luck:
'RateCity, a financial comparison website, said that at present there is only one loan product out of the 2000 it monitors that covers 98 per cent of a home purchase – Teachers Credit Union My First Home Loan.
Otherwise, it says there are 95 per cent loans, that make up 59 per cent of all home loans that it monitors.'
I love the subtle rent v. own comparison – the rent on the average Sydney home is predicted to rise by $33.60 but the weekly repayment on a mortgage is only expected to go up $23.47 a week. If you're only borrowing $300,000 for a house in Sydney you're putting down around 60%, not 5%. I don't think this applies to the typical renter.
And this is of course the gem:
'‘‘Times are tough financially for both tenants and mortgage holders, but at least the latter group has an asset to show for that money spent,’’ Ms Sheppard said.'
We can just ignore the fact that the mortgage holder is paying way more to own than rent, and is sitting on a property that has been depreciating.
http://smh.domain.com.au/real-estate-news/forget-…
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March 23rd, 2011 at 12:43 am 2
http://www.sector-group.com/About-us.htm
What a joke.
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March 23rd, 2011 at 1:24 am 3
More government meddling in real estate.
This should be illegal.
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March 23rd, 2011 at 1:38 am 4
grim news from the states,
New Home Sales Fall to Record Low in February
http://www.calculatedriskblog.com/2011/03/new-hom…
Why there is such time delay with Canada regarding the house collapse? I don't understand.
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March 23rd, 2011 at 1:43 am 5
4 tetra Says: "Why there is such time delay with Canada regarding the house collapse?"
Harper.
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March 23rd, 2011 at 1:45 am 6
@Best place on meth: Falling prices are de facto illegal. That's why they are doing this. Nobody cares about productivity and saving anymore…
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March 23rd, 2011 at 1:57 am 7
Looks like the spring rate hike is out the window:
http://www.cbc.ca/news/canada/story/2011/03/23/el…
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March 23rd, 2011 at 2:01 am 8
@tetra: @tetra: "Why there is such time delay with Canada regarding the house collapse?"
After listening to former finance ministers on CBC's The Current this morning it's pretty obvious: there is no public discourse over the impending problems with overpriced housing. Until it is generally recognized as a problem, politicians will not act on it as a broader theme to their campaigns.
If you want governments to care, suggest a way to shape the message such that the electorate can understand and agree with it. I would be pleased to hear any suggestions.
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March 23rd, 2011 at 2:11 am 9
I was born there and lived there off and on over the years but the UK is a complete mess. They have 11 trillion pounds in debt and unfunded liabilities, a fifth of the population lives on some form of the dole and in most of the country the govt generates more than half of the GDP, yet in their wisdom the nobs at the local councils want to take a flyer on the housing market with yet more taxpayer-funded debt.
What can go wrong?
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March 23rd, 2011 at 2:15 am 10
@jesse: "Until it is generally recognized as a problem, politicians will not act on it as a broader theme to their campaigns."
I am not convinced that the government is the reason for the time delay. Politicians did not act in the US or Ireland in order to rein their housing. It fell on it's own weight.
I am mostly leaning on Shiler intreprataion that high resource prices prevented house collapse. But still I don't understand how is that possible.
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March 23rd, 2011 at 2:24 am 11
It appears we'll be going to the polls soon. This is a great time to check out the Wikipedia page for your riding and get a feel for the competitive landscape.
Email the MPs for the 2 top parties that compete for the seat, and let them know the issues that are important to YOU.
Some of the ridings will be quite close, so if we all make some noise, maybe the CMHC issues will get some attention.
“Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has” -Margaret Mead
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March 23rd, 2011 at 2:26 am 12
that's sick.
Capitalism only works with periodic depressions.
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March 23rd, 2011 at 2:28 am 13
@tetra: "high resource prices prevented house collapse"
For provinces like Ontario with a significant manufacturing base that seems rather odd: their housing market took off like everyone else's in 2009, even with high unemployment.
I think to understand the lag you have to go back further to mid last decade. The US peaked in 2005 while Canada's housing market was still inflating. The first place I'd look is to compare the timing in changes in lending practices between the two countries.
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March 23rd, 2011 at 2:31 am 14
@jesse:
"Until it is generally recognized as a problem, politicians will not act on it as a broader theme to their campaigns."
From a campaigning perspective, it's not a problem when such a high proportion of voters are also home owners.
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March 23rd, 2011 at 2:53 am 15
@tetra:
In case you didn't notice, housing also fell on its own weight in Alberta in Summer 2007 and in BC and Toronto in Spring 2008.
What was different in Canada from the US or Ireland is that the busts in those countries were too far advanced to be reversed by super low interest rates and government-ordered looser lending in late 2008 as happened in Canada. That's all.
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March 23rd, 2011 at 2:56 am 16
@Anonymouse:
"From a campaigning perspective, it’s not a problem when such a high proportion of voters are also home owners."
Yes, according to homeowners and politicians, who really cares if your house is overpriced? Great! We can all be rich rich rich! So what if our children go into massive debt to buy some crummy house? Which politician would really want to bring on the wrath of homeowners/voters by suggesting that house prices are too high?
I wrote my MP and told him a nice story of a guy I know who has a $900k mortgage, thanks to the CMHC and the government of Canada. I pointed out that this guy has to rent out 80% of the property to make the mortgage payments, and still managed to qualify for a loan, despite the fact that he's never made more than $50k per year in his entire working life. Problem? Nahh….Of course, if this same guy had approached a bank for a business loan in the same amount he'd be shown the door so fast. But because it's a HOUSE he bought, the bank welcomes him with open arms, since who cares if he defaults? CMHC will take care of it. No problem!
Of course no politician wants to admit that this could be a problem. But I'm sure they all see the writing on the wall.
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March 23rd, 2011 at 3:00 am 17
@chip:
Those of course are only the official numbers for those on the dole.
In reality the whole banking and RE industries in the UK are on the dole as they can continue their present operations only through the explicit backing of the UK and local governments, the topic of this thread being just the latest example.
The difference is that those on the official dole are treated with scorn while those on the unofficial dole are treated like royalty.
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March 23rd, 2011 at 3:22 am 18
@patriotz + @chip: Bloomberg: Banks Bring Jobs to London as Finance Pays Most Tax in U.K.
I wanted to find the Private Eye article showing how the "most tax in UK" shtick is a "load of bollocks" but meh.
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March 23rd, 2011 at 3:35 am 19
@The Leak: Where do you see the "capitalism"?
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March 23rd, 2011 at 3:35 am 20
@Anonymouse: "it’s not a problem when such a high proportion of voters are also home owners"
The reason I brought this up is because of the discussion I just heard on the radio surrounding budgets in fiscal crises. The issue Canada was facing in the early '90s was that its finances were in trouble and interest rates were high, making debt payments onerous. The country had to decide to implement "austerity" measures or risk ratings downgrades. The groundwork for austerity was laid by the Tories in the form of the GST. (Former Liberal finance minister John Manley acknowledged this multiple times in the discussion.) The GST was implemented at a time when the public discourse surrounding higher taxes was deeply unpopular due to an ongoing economic slowdown. Only after things started to recover slightly was the public mood geared towards "getting the fiscal house in order" and the 1995 federal budget slashed spending significantly to a relatively popular reception.
I think the parallels between that period and now are worth considering. The moves the government is making into reducing lending is a good start (which is merely U-turning on policies they implemented), but they are tippy-toe steps. The sense of impending danger from oversubscribed housing is not seen as a problem the same way overspending was seen 20 years ago because housing debt and future valuations are hidden off the books. That may prove to be a significant mistake.
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March 23rd, 2011 at 4:58 am 21
@pricedoutfornow:
"Of course no politician wants to admit that this could be a problem. But I’m sure they all see the writing on the wall."
I'm not disagreeing with you, just saying it'd be very tough to persuade home-owning voters that they need to see lower house prices. Turkeys voting for Christmas, and all that….
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March 23rd, 2011 at 5:22 am 22
The banks and government want you to be in debt. A person without debt is dangerous – too independent.
The government also wants high prices ==> high revenues from property taxes!
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March 23rd, 2011 at 5:29 am 23
@tetra: ….grim news from the states,
New Home Sales Fall to Record Low in February
….
Isn't it obvious what's happening? The US price drops are due to all those American folks selling their homes so that they can buy homes in Vancouver where the price never drops. Thank God for free markets! (cash is free right?)
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March 23rd, 2011 at 5:34 am 24
How much longer can this madness go on?
"The CMHC is a driving force in the housing market. But critics warn its policies could fuel a U.S.-style meltdown."
"CMHC’s balance sheet looks strikingly similar to both Fannie and Freddie"
“CMHC has distorted the housing market by making homes, especially ones that are on the pricier end of the spectrum, more affordable and encouraged a lot of people to get in over their heads.”
http://www2.macleans.ca/2011/03/23/a-mortgage-mon…
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March 23rd, 2011 at 5:38 am 25
patriotz Says: "What was different in Canada from the US or Ireland is that the busts in those countries were too far advanced to be reversed by super low interest rates and government-ordered looser lending in late 2008 as happened in Canada. That’s all."
That is too simplistic thinking. Super low rates were available in US and Ireland and other countries for the most part of the decade.
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March 23rd, 2011 at 5:38 am 26
@VanRant: Wow. Some might think Macleans is reading bear blogs!
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March 23rd, 2011 at 6:26 am 27
@26 jesse: Or Shiller.
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March 23rd, 2011 at 7:01 am 28
@tetra:
Are you claiming that interest rates in the US and EU were essentially flat over the last decade? Please.
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March 23rd, 2011 at 7:18 am 29
US real estate vs. Stocks
"…the S&P 500 has actually stomped the real estate market, from Boston to Detroit to Dallas. From the start of 1980 to the end of 2004, home sale prices increased 247%. A pretty sweet deal, it would seem. Over the same period, however, the S&P 500 shot up more than 1,000%." Old Forbes Asia article: http://www.forbes.com/2005/05/27/cx_sc_0527home.h…
If you extended that analysis period to today, the US real-estate market is even worse in a bind and the S&P 500 is above 2004 levels. Thus, stocks gave real-estate in the US a sustained thumping over the last 30ish years- this makes sense based off of fundamentals! And, not to mention in the last 30 years we have been in an environment of decreasing interest rates.
How is the Canadian outperformance possible? Especially if interest rates are likely to go on a sustained bull-run.
It isn't
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March 23rd, 2011 at 7:40 am 30
Devore Says:
March 23rd, 2011 at 11:35 am
@The Leak: Where do you see the “capitalism”?
That, my furry friend, is a statement about the overall state of our economy. We want continued growth and governments will do whatever they can to keep it going, but economies aren't infinite. History speaks for itself.
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March 23rd, 2011 at 8:02 am 31
@patriotz:
"Are you claiming that interest rates in the US and EU were essentially flat over the last decade?"
No, he's claiming they were low – not flat.
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March 23rd, 2011 at 8:35 am 32
I had not been to Chipman's site for many years. I lost interest after he started to change positions every week, much like Yatter Matters. Par for the course when you are a salesman I suppose.
So I popped on over to the site because someone referenced the stat packages there and found this:
"My name is Rob Chipman and I’m a realtor, pilot and all around super hero based in Vancouver, BC. I really enjoy flying, playing guitar and hockey, real estate and the Chilcotin. My company is Coronet Realty Ltd., located at 3582 East Hastings Street, Vancouver, BC, V5K 2A7. I have a C-150L that I own with two other pilots, based out of Pitt Meadows. "
Is this an internet dating ad??? Really – superhero, guitar player, pilot??
This is why I can never ever take ANY realtor seriously.
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March 23rd, 2011 at 8:50 am 33
@DQ
I don't see it. Maybe he frequents this site and just updated his blog?
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March 23rd, 2011 at 8:56 am 34
ourLemon Says:
March 23rd, 2011 at 4:50 pm
@DQ
I don’t see it. Maybe he frequents this site and just updated his blog?
&&&&&&&
http://www.robchipman.net/
Look below, in italics, the "report generator" – the white and yellow stats box. You will see it.
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March 23rd, 2011 at 9:04 am 35
@DQ gotcha. I was looking in the wrong section (About).
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March 23rd, 2011 at 9:41 am 36
Dailies – List | Sold
Vancouver East & West*
New Listings – 71
Back On Market Listings -2
Price Changes -29
Sold Listings – 58
Vancouver All Areas*
New Listings – 235
Back On Market Listings – 4
Price Changes – 95
Sold Listings – 155
*Attached & Detached – Date: 03/23/2011 Time:17:38 Pacific YatterMatters.com:Courtesy REBGV. Data believed to be accurate but is not guaranteed.
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March 23rd, 2011 at 9:46 am 37
500 heads roll at Shaw, 90 in Vancouver
http://www.cbc.ca/news/canada/british-columbia/st…
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March 23rd, 2011 at 9:57 am 38
Forget the £70,000
Year to date, silver has gained over 20 percent!!!
Say folks, a thought occurred to me. Why play the bankster's game of impoverish the middle class? Why depend on 1% interest per year to help with your down payments? Did you know that silver is now up 800% since 2000? How's your down payment account doing. Still believe in this system? Still believe that runaway inflation isn't going to destroy the value of your paper money? Listen….banks have other services which can help you too make 800% by just leaving your money there. It's called a safety deposit box. There you can store your gold and silver for when you need it and you can be assured that you will not have lost anything to inflation. So simple its scary. So stay away from fancy schemes by banksters. The bank is your enemy if you follow their advice.
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March 23rd, 2011 at 10:04 am 39
OFF TOPIC, BUT NOT NOT UNUSUAL FOR THIS SITE
+++++++++++++++
It's that time again!!! Time to refuse the census.
Got my first call today asking questions I just won't answer. Someone claiming to be from Stats Can. I haven't done the census in almost 15yrs and have been threatened a few times but no actions taken.
Statistics Canada, as many of us will agree manipulates numbers that cause indexed pensions, union contracts and many other forms of compensation to be kept artificially low. What is Stats Can current manipulation of the inflation rate doing to interest rates?
Grow a set and REFUSE the census and TELL THEM WHY. Tell the idiot at your door to get off your property or you will call the police. Do it!!
Rant over. (for now)
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March 23rd, 2011 at 10:18 am 40
tetra,
I am with you. I am starting to think it is not going to happen. However, we are going ahead with our reno and decided not to sell so it probably will.
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March 23rd, 2011 at 10:21 am 41
@chilled:
"Grow a set and REFUSE the census and TELL THEM WHY"
Anybody who freely gives away personal information to strangers who call claiming to be from wherever deserves everything they get.
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March 23rd, 2011 at 10:22 am 42
@chilled:
I threw my 2006 census in the garbage when I found out it was contracted out to Lockheed-Martin, an American manufacturer of weapons of mass murder.
If Harpo can't hire a peaceful Canadian company to do a Canadian census then the fucker gets nothing from me.
Nice numbers tonight, yesterday was the high point of the year.
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March 23rd, 2011 at 10:24 am 43
I saw the first March 18th sale on my auto-update email today (1 bed condo in Coal Harbour, sold a little over list), so I guess we should expect the stats to start reflecting the effect of that day soon.
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March 23rd, 2011 at 11:21 am 44
China's Property Bubble: "Modern Equivalent of Building Pyramids" http://bit.ly/hZdAXr
Watch the video too.
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March 23rd, 2011 at 1:48 pm 45
@Best place on meth:
"I threw my 2006 census in the garbage when I found out it was contracted out to Lockheed-Martin, an American manufacturer of weapons of mass murder.
If Harpo can’t hire a peaceful Canadian company to do a Canadian census then the fucker gets nothing from me."
Actually, the decision was made by the Liberal govt in 2004. Harper became PM in 2006.
And Lockheed has also been instrumental in developing GPS, the International Space Station, Hubble telescope, telecoms satellites and recent missions to Mars, so you better get cracking if you want to wean yourself off this odious company.
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March 23rd, 2011 at 2:33 pm 46
Greenhorn over at RET claims Richmond sales have slowed significantly due to perceived earthquake risks. Sales being pushed to Burnaby.
Someone should tell them about the nuclear power plant being built in Burnaby. And no I'm not lying.
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March 23rd, 2011 at 2:36 pm 47
My buddy works for a company that specializes in a particular component of building material used in all construction. They've been busy recently he was working 6 days a week. Well, that industry can be feast or famine and he's being laid off as of April 3. He's been with the company 15 years.
In my opinion companies like his are the equivolent to canaries in the mine shaft and it shows that a slow down is coming. I think a lot of construction jobs are going to start getting lost. The fortunate ones will be able to get onto ongoing projects and the rest will ride some EI and maybe look at moving away eventually if nothing turns up over the next 12 months.
In my employment I deal with a lot of developers, contractors and the like, a lot. Many of the ones you all know by name. Recently, I've noticed a shift of their focus on redeeming lines of credit and payments that are outstanding… I can sense that for some of them the purse strings are starting to tighten. Again, this is another sign for me that construction is going to start winding down.
But, what do I know? I thought real estate in Vancouver would go down like in 2008 only worse and here I am.
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March 23rd, 2011 at 3:00 pm 48
@jesse: "Someone should tell them about the nuclear power plant being built in Burnaby. And no I’m not lying."
Link?
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March 23rd, 2011 at 3:21 pm 49
@bubbly: Http://www.generalfusion.com
Fusion reactors. About as rational a fear as "flooding" out of Richmond a week after an earthquake the other side of the globe. Someone should tell Mingpao.
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March 23rd, 2011 at 3:33 pm 50
@jesse: Interesting company…
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March 23rd, 2011 at 10:48 pm 51
one of my friend who rents in Richmond was so thankful that she lost in a multiple bid for a house a week before the Japan earthquake. She plans to look for a house elsewhere except Richmond and Delta.
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March 24th, 2011 at 1:38 pm 52
[...] at vancouvercondo.info March 23rd, 2011 at 10:56 am- “I wrote my MP and told him a nice story of a guy I know who has a $900k mortgage, thanks to [...]
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March 25th, 2011 at 5:36 am 53
[...] LY at vancouvercondo.info 24 Mar 2011 at 6:48 am – “One of my friend who rents in Richmond was so thankful that she lost in a multiple bid for a house a week before the Japan earthquake. She plans to look for a house elsewhere, [anywhere] except Richmond and Delta.” [...]
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March 27th, 2011 at 4:40 am 54
[...] at vancouvercondo.info March 23rd, 2011 at 10:36 pm- “My buddy works for a company that specializes in a particular component of building [...]
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