3rd times the charm, no new mortgage rules

Jimmy Flaherty has just announced that there will be no new mortgage rules announced as there is already “softening” showing up in real estate markets across Canada:

Flaherty said he’s already intervened to toughen mortgage rules three times in the last few years and there’s no need for further action as conditions in the market are finally moving in the right direction.

Flaherty said he does not believe there were any unintended consequences in the housing market resulting from government intervention in the mortgage business during the financial crisis to keep banks lending money.

Still, he said his government keeps a close eye on the housing market and subsequently stepped in three times with changes to mortgage rules when there were concerns about risk.

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Ahab
Ahab
9 years ago

Flaherty said he’s already intervened to toughen mortgage rules three times in the last few years and there’s no need for further action as conditions in the market are finally moving in the right direction.

And no mention if his prior interventions to:

a) remove the limit to the amount the CMHC would insure

b) increase the maximum insurable mortgage term 3 times from 25 to 30,35 then 40 years (since reduced back to 30 years).

c) provide CMHC backing for HELOCs

Merely unwinding these prior interventions would crash the market.

UnagiDon
UnagiDon
9 years ago

@EXTREMELY BROKE VANCOUVER HOME OWNER: "It’ll be a repeat of Japan only shithole China won’t have quality products to fall back on since they produce only toxic trash."

Although they do contain some toxic components, I don't think I would call my ThinkPad or my iPhone toxic trash.

jesse
9 years ago

@chip: “The problem in the US is that spending as a percentage of GDP has ballooned to about 25% of GDP”

They should take a page from Canada’s play book in the late ’80s, when Canada was facing a potential downgrade due to spiralling deficits, and both increase taxes and cut spending, something conceived and implemented by the then Progressive Conservative government and followed through by their Liberal successors. Result: surplus in less than a decade.

Anonymous
Anonymous
9 years ago

Oops. Post 60 should read

"Originally on market in March for 519k. Now reduced to 479k"

40k reduced in 2 months. No interest.

jesse
9 years ago

I'm loath to post GreaterFool stuff but here's an anecdote based potential effects of the lesser-known and dismissed mid-April removal of government-backed HELOC insurance. So this week I helped a couple with $2 million worth of security get a $350,000 investment loan, and we needed personal lubricant to wiggle the deal through. No more prime – now it’s a full point higher. No more simple loan with interest-only payments. Now it’s an amortized borrowing with principal repayments. And every year these people have to reprove that they qualify… By doing what the US has – shifting risk back on to the lenders from the taxpayers – this change would drop housing values in short order (as it has done in the States), and remove a major reason why living costs are going up and standards of living going down… Has… Read more »

Frank Reader
Frank Reader
9 years ago

@EXTREMELY BROKE VANCOUVER HOME OWNER:

So true, had to buy glass thermometer (made in usa) recently to check kid's temperature since all Chinese digital crap was totally off. Try Chinese gear for divers if you want to commit suicide.

chip
chip
9 years ago

@jesse:

"JMHO but as long as they can raise revenue through higher taxes I don’t think their credit rating is going to be degraded. "

One of the interesting things about the US is that whether taxes rise or fall the share of revenue from taxation remains stuck at 17-18% of GDP. The reason being, I guess, is that higher taxes depress economic activity.

The problem in the US is that spending as a percentage of GDP has ballooned to about 25% of GDP

jesse
9 years ago

@Anonymouse: "The truth is that the MOI in Kelowna has been about double that for a LONG time"

I don't think people in Vancouver understand how catastrophic Kelowna real estate is going to get. There aren't great sales data coming out of the region, proof positive nobody likes a loser.

Anonymous
Anonymous
9 years ago

Anonymouse –

Nice false dichotomy. – Prices have not fallen as low as Vegas so clearly all is well in Kelowna. Solid logic there.

Here's is an example. Aquaintance of mine trying to sell this house

http://www.realtor.ca/propertyDetails.aspx?proper

Originally on market in March for 519k. Now reduced to 499k. Asking price well below assessed. No offers.

There are many other examples. When you look at OMREB stats by neighbourood (which helps correct for product mix) the trend is undeniable.

Patiently Waiting
Patiently Waiting
9 years ago

As I've said before, what is happening is hardcore real estate addicts are moving around within the market. That's up, down and sideways. They all have tonnes of equity to burn through. Some are sensibly downsizing, while others are insanely upsizing. Few are leaving the market altogether.

The bottom of the market is a wasteland, though. New buyers are probably rare now.

This is why we have low-to-moderate sales volume (today is an exception), rapidly rising prices yoy, fairly high listing volume, and (drum roll please) INCREASING DOWNPAYMENTS.

pricedoutfornow
pricedoutfornow
9 years ago

@Anonymouse:

Wait, just wait. Kelowna's in a holding pattern, but I know for a fact there are people there who are on the brink of bankruptcy. It's just beginning…some things don't happen overnight.

Anonymouse
Anonymouse
9 years ago

@Keeping An Eye On The Pimps: "Plainly pathetic when the bulls have to use Kelowna to strengthen their pitch." Oh really? Well, if you think one month with a MOI of 8 in Richmond means the sky is falling in, then go ahead and keep fooling yourself. The truth is that the MOI in Kelowna has been about double that for a LONG time, and you still can't pick up a nice house there for $150-200K, as you could in Vegas or Florida. So maybe there will be people offering "free downpayments" in Vancouver, but using a place not far from here as an example, I can't see it happening for 3-4 years at the earliest. FYI, inventory is lower now than it was this time last year, and the CULT index will be about half of what it was… Read more »

EXTREMELY BROKE VANC
EXTREMELY BROKE VANC
9 years ago

@Extremely rich Van house owner.:

Shithole China will implode and be a shadow of it's former self when the greatest real estate Ponzi scheme in the history of the world blows sky high.

It'll be a repeat of Japan only shithole China won't have quality products to fall back on since they produce only toxic trash. They only produce toxic trash because they're unscrupulous assholes who just want to make lots of money and are incapable of decent business practices. Stealing and cheating is all they know.

After their pretend economy blows up then the formerly wealthy sweatshop owners and property flippers can return to the fields and start crapping in dirt holes again.

It's the circle of life, Chinese style.

Vansanity
Vansanity
9 years ago

Paul B – Those are some strong sales numbers, again.. or still. Are you able to post the current inventory total with your daily posts? It would be appreciated.

Anonymous
Anonymous
9 years ago

@Drachen:

Suck it.

Extremely rich Van h
9 years ago

@EXTREMELY BROKE VANCOUVER HOME OWNER:

Once Great China has establish it force around the world,scum like u will be punished severely by our government.Fuck u white asshole

EXTREMELY BROKE VANC
EXTREMELY BROKE VANC
9 years ago

@Extremely rich Van house owner.:

>>>They should catch a economy flight to “Great China” to witness the booming economy and China’s greatness<<<

Wait a minute, this is the third world totalitarian shithole where most people still squat over a hole in the dirt to take a dump, right?

The one where everyone in government is a corrupt douchebag on the take extorting money from poor people and stealing their land?

The same place where their is no rule of law and powerful people just make it up as they go along.

The country that can't manufacture one single thing that isn't either toxic or a complete piece of junk?

I'll pass on that kind of greatness, fuck you very much.

Drachen
Drachen
9 years ago

Why did Canadian's give these assholes a majority?

Oh right, most people are stupid.

Extremely rich Van h
9 years ago

@EXTREMELY BROKE VANCOUVER HOME OWNER:

"Who ever can't afford grape,is alway complain it is sour,"

loser.

EXTREMELY BROKE VANC
EXTREMELY BROKE VANC
9 years ago

@Anonymouse:

>>>and how long has Kelowna been well into double-digits? 18 months? 2 years?<<

What's your fucking point, cheerleader?

You should stop asking pointless, stupid, irritating questions.

Keeping An Eye On Th
Keeping An Eye On Th
9 years ago

@Anonymouse:

Plainly pathetic when the bulls have to use Kelowna to strengthen their pitch.

http://kelowna.kijiji.ca/c-housing-houses-for-sal

Yes they will pay you to buy.

But not to worry, it's coming to the Vancouver area soon.

Already the specuvestors in the Surrey area are offering Rent to Own and Vendor Financing.

Extremely rich Van h
9 years ago

@real_professional:

What does a white foreign ghost know about China?

They should catch a economy flight to "Great China" to witness the booming economy and China's greatness where a white Canadian name Mr.Tai Shan can tell u the greatest human achievment recorded in human history.A local Vancouver scum,American financed white paper can't reveal honestly about Great China and tell u the truth.

DaMann
DaMann
9 years ago

@paulb.:

Thanks for the numbers Paul. Wow, I'm starting to think it IS different here. These sales are not slowing. Brutal.

Do you have the total inventory numbers?

Jr
Jr
9 years ago

@paulb.: Wow. It's either a great deal of foolish money or a large number of fools with a great deal of money. Or both.

paulb.
paulb.
9 years ago

New Listings 326

Price Changes 131

Sold Listings 223