Friday Free-for-all!

It’s the end of the week! That means it’s time for our regular end of the week news roundup and open topic discussion thread. Here are a few recent links to kick off the chat:

Metro Vancouver house sales down 8 percent YOY
Condo sales are cooling off
Unhappy OV owners dig in for long fight with city
Moneysense: How to buy a condo
A higher density Cambie Corridor
Building code questioned after Richmond condo fire
Credit unions in BC want to give you money
Home Capital ramps up uninsured lending
Weak week for the TSX
Oil price ends it’s run
Profit taking window in bond sector?
The Silver Bull is Selling
Blockbuster Canada Busted

So what are you seeing out there? Post your news links, thoughts and anecdotes here and have an excellent weekend!

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@rosy: …In the U.S. you can right off your mortgage interest expense so it’s in everyone’s best interest to have as much rolled into your mortgage as possible – including wealthy people. Comparing it to Canada is apples to oranges ….

So, I guess when interest rates are really low, it's less of a factor since there's less to deduct?


@fixie guy: …The news today was talking about record rain …..

Don't you just love the way the Vancouverites dwell on the notion of setting a rainfall records, as it it’s something new? If I had a nickel for every time there was a rainfall record set in Vancouver I'd have enough money to buy a condo somewhere else.

Here’s a tip for those of you not originally from Vancouver: a new rainfall record was set yesterday, another one will be set today, another one tomorrow and another the day after that, etc. etc. Feeling cold and wet this spring – it’s normal, this is Vancouver – get used to it!



40% with no mortgages, but instead are HELOC’d up to their arses.

Any loan secured against RE is a mortgage by definition. A HELOC is just a mortgage loan without an amortization schedule.

If you're wondering where the 40% lives, do remember Canada is not Vancouver. Many, many, mortgage free properties in the East Coast, Quebec, small towns, etc. As others have pointed out, the US had about the same number and look how that turned out. Having everyone own their home free and clear in Codpiece, Newfoundland does not do anyone in Toronto or Vancouver any good. Nor does the guy next door owning his house free and clear do Joe Homedebtor any good.

Watt Watt?

Bought a presale in 2008? Take your loss now.


My house has been paid for for 8 years now.
I don't have a HELOC or any other debt for that matter.
I don't think my situation is typical in the loser mainland though.
Saying that, I don't think every baby boomer loaded their selves up with debt just cause their home was mortgage free.
I'd be more concerned about the 5/40 crowd.
Most of them have never seen a crash. I have.


[swirlyman]: Eric Sprott simply re-invested some of the proceeds of PSLV into a combination of silver bullion and silver mining shares, because he felt the premium on PSLV shares had gotten too high.

Modded down for telling the truth? The Sprott interview on this matter is here:

“Well Eric in response to your question, any proceeds that we’ve received from selling PSLV have immediately gone back into silver or other silver equities. And I can tell you we have the highest position in physical ownership that we’ve ever had, and we have not lost one ounce of our encouragement for the outlook for the silver price.”


Exactly what I mean Rosy. So if 40% of Canadian own their homes and there is no benefit for Canadians to roll everything in to a mortgage for tax benefits, do they have separate personal debt that would put them over the edge. So it would be nice to get the following stats:

"Of the 40% of the Canadians that own a home, how much personal debt do they have? And would this personal debt force them to sell their house when interest rates go up."


In the U.S. you can right off your mortgage interest expense so it's in everyone's best interest to have as much rolled into your mortgage as possible – including wealthy people. Comparing it to Canada is apples to oranges


@fixie guy: Asset-based lending will end in tears. Or at least Carney told us so.


I am wondering. Even if 40% of Canadians own their own home without a mortgage, are alot of them using their home equity as an ATM? Sort of like what the US was doing when the real estate market went belly up. So personal line of credit and credit card bills may not show up as a lien against their house. So the 40% ownership rate may just be part of the story. If we dig in to the bigger picture, these so called wealthy owners may be in as much debt as another owner who can only afford a 5% down payment. After all, interest rates have been so low, that it's probably worthwhile to borrow for a nice home reno, vacation, or a big suv.



Australia: “I don’t think we’ll ever have a boom and bust cycle in this country again.” Hat tip Automatic Earth.

Maybe not in housing, for a while, but there most certainly will be booms and busts. They're inevitable when interest rates and money supply are artificially set.


4o% have no mortgage. I wonder how many of them have reached into their piggy banks(overvalued RE) and gave jr the downpayment on their house. It is numerous as I know a few. Ignorance is bliss and if you are a believer you do so blindly. There is no question that this will end very badly.


Eric Sprott simply re-invested some of the proceeds of PSLV into a combination of silver bullion and silver mining shares, because he felt the premium on PSLV shares had gotten too high.


@jesse: I have no doubt we are going into a period of financial hardship for many households in Canada. Just from the people I know, several of them are "living on the edge"-the credit is starting to run dry. Even some who seem to be in relatively stable positions have high mortgages and will be struggling once rates go up. It is inevitable and the numbers tell the story. Even if rates stay low, we are already seeing housing sales drop by huge percentages outside of Vancouver. I think this tells us the party is over, and prices are soon to follow. Sure, some people may be able to keep paying their mortgages, but if any life event occurs (a marriage, a divorce, a new child) there will be hardship. And if they can't sell for more than they paid,… Read more »


@rp1: From the article: "There was a surge in demand of those markets, and perhaps we had prices moving ahead of incomes in those markets." This is the explanation provided by Westpac chief executive Gail Kelly and chief financial officer Phil Coffey, who said that mortgages tend to slip into default about three years into the loan cycle. Both explained Westpac had sold a large number of mortgages between 2007-09. Notice how they correctly realise that prices and incomes cannot become detached forever. But notice the other observation, by two seasoned industry experts: defaults will tend to occur about 3 years after mortgage origination. The surge in mortgage originations in Canada occurred in 2009 due to CMHC's "lend to anything that fogs a mirror" directive. Square this with Ben Rabidoux's analysis on mortgage arrears in Canada. Expect to see more… Read more »

fixie guy

@55 Jack Says:"“And with 40% of Canadian homeowners owning their home outright with no mortgage…"

The quick and dirty number I found for the US is 38% in 1999. How did that work out for them? The Deloitte Center for Financial Services (surprise) must understand that using personal wealth metric in a bubble is self-referential and illogical, but that hasn't stopped the financial services sector from doing it it over and over again.


Australia: "I don't think we'll ever have a boom and bust cycle in this country again." Hat tip Automatic Earth.



40% with no mortgages, but instead are HELOC'd up to their arses.


@Jack: I think that excludes line of credit. They were saying the same thing in US before the crash and it turns out that a lot of those no mortgage owners still owe a lot of debt.


40% with no mortgage! Wow! They didn't mention flipping iPAD2 in a Lexus SUV is better than a 9-5 regular job. Hint: Lexus SUV smashed in to Lansdown Mall last Thursday.


Millionaire nation: Canada tops G7 rich list

"And with 40% of Canadian homeowners owning their home outright with no mortgage, it is no surprise that there is substantial wealth locked into property, he added."

Wow, 40% have no mortgage……wonder how much debt the other 60%

must be carrying

Ravishing Rick

@ keeping an eye on the pimps

Im not married…. You must have got that woman confused with some realtor trying to make a sale!

Don't worry i wont bed your wife, lately i've been into hot 20 something asian daughters of HAM … While their parents are on their real estate tourist heli-tours… Im teaching the daughters the value of hard work, and knee pads.

hit the music!

Keeping An Eye On Th

Ravishing Rick:

Stop spending time with other people’s wives. Yours is really starting to bug me.

She wants it too often from me, the other night when you were off tying helium balloons and serving donuts at the open house, she almost sucked one of my kidneys through my urethra, and that was after a 2 hour pounding.

The poor woman is starved. Quit blogging, make some real sales calls, and start performing your conjugal duties. PLEASE

Ravishing Rick


Cut the music!

Listen up, i guess you were asleep when the financial crisis broke… Interest rates were cut to stimulate the economy as a result of the financial crisis. Before the crisis interest rate hikes were already under way. So if you think another ten sigma event is going to take interest rates lower… Good for you, keep waiting. Meanwhile ill be pleasing your old lady.

As for the bond market, you sweat hog, look at the spread on real return bonds and governments… Inflation is already priced in at pre crisis levels, and yes, oil was higher then and so was economic growth.

Last time i checked core inflation surprised to the upside… Yes, Core, that bastardized measure. Speaking of core, guess what ill be doing to your old lady.

Hit the music!


Heard on BNN this morning, Aarper sending Gordo to UN as our Ambassador to pump BPOE.