Bull or Bear – put your money where your mouth is.

There’s always a lot of talk about shorting the market on this blog. Well in the UK you really can short the housing market. IG Index, the financial spread betting outfit allows punters to speculate on many different markets, one of which is UK house prices. If this were offered in Vancouver, how many bears would put their money where their mouths are, so to speak?

http://www.igindex.co.uk/spread-betting/house-prices-example.html

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whats in a name
Guest
whats in a name

I am a bear and would put 10% of my worth shorting this market.

patriotz
Member
"Well in the UK you really can short the housing market." Not really. What you can do is make a bet with someone on the future direction of the housing market. Now that's a short position, but it's not the same as short selling, i.e. actually selling the asset and promising to return it later. To make a bet you have to find someone who is willing to bet on the opposite outcome. So if nobody was willing to bet that prices in the UK would be higher next year, you could not make a bet on prices falling. You could only make a bet on prices falling more than a certain amount which is the consensus of the bettors. The other thing is that since it is simply a bet and not a sale, it does not affect the… Read more »
Boombust
Guest
Boombust

Larry reports that as of today, for the three local boards, the total inventory is now 24768. He "…can't remember it being this high."

jesse
Member

The issue is one of timing. To wit bears are right about magnitude of correction but can only eyeball timing. All we can say is that one more year gone puts us one year closer.

But the same can be said about the apocalypse. What's the difference? That's a subject reserved for those who actually bother engaging in critical thought.

registered
Member
registered

4 jesse Says: "The issue is one of timing."

Specifically, timing of federal government policies. Loose money caused this and, given I saw Carney tell the CBC yesterday we're active in the international community counselling other governments to keep it that way, the bet is more one of when Canada breaks.

jesse
Member

@fixie guy: "the bet is more one of when Canada breaks."

Given how arrogant Flaherty and Carney are on the soundness of Canada's banking system and economic stability, it would sure be ironic if Canada was turned up on end with high debt loads and ballooning government balance sheets from underwriting underwater home loans.

bubba
Guest
bubba

Ahh…….quit putting everything into some sort of Stock Market commodity. That's why we are in the mess we are in.

Manna from heaven
Guest
Manna from heaven

Co-worker who makes approx. $70k has just been approved for a $650k mortgage.

Just another example of how our banks are so much more prudent and conservative than their American counterparts.

Devore
Member
Devore

@Manna from heaven: Can he service it? Is it CMHC insured?

Prudent.

trash crash alert
Guest
trash crash alert

short the Canadian bank stocks and credit unions in BC

credit unions may go insolvent in a crash

gordholio
Member
Kind of a difficult question without specifics (which communities, length of time, etc, etc), however… Given that the cost of living in the Greater Vancouver area is as painfully high as it is; given that report after report has been published that prove Canadians as a whole are out of money and that BCers lead the pack; given that three-quarters of familes already own a home; given that mortgage rates have nowhere to go but up; given that "renting" seems to have come out of the closet as the preferred lifestyle choice for many when prices are this ungodly high; given that the MSM – the leading purveyor of mispercetion – is now broadcasting and publishing pieces that 1) Use the bubble word, and 2) Are often more bearish than bullish; given that chopper-rappelling Chinese *aren't* buying everything in sight;… Read more »
chip
Guest
chip

Very nice debt map from The Economist:
http://www.economist.com/content/global_debt_cloc

Canada's per-capita debt is much higher than the US and most of Europe, including Greece.

Manna from heaven
Guest
Manna from heaven

Devore,

She would not be able to service a 650k mortgage but I guess the banks are smarter than her and figure she could.

patriotz
Member

@trash crash alert:

You can't short credit unions. That's why they're called "credit unions".

I agree that BC credit unions are the financial institutions which are likely to take the biggest hit from the coming bust – not so much from residential mortgages but from construction financing and consumer lending. It would be no big deal if a smaller one went under – it happens fairly often – but if a biggie like Vancity or Coast Capital failed it would present a big problem for the provincial government.

patriotz
Member

@gordholio:

"In fact, by selling and now *very* happily renting, I in effect shorted it last year."

No you didn't, any more than someone who sold his stock portfolio. You just took your gains.

patriotz
Member

@Manna from heaven:

"Just another example of how our banks are so much more prudent and conservative than their American counterparts."

They are. What could be more prudent and conservative than making a loan that the government has guaranteed to repay?

jesse
Member

@Manna from heaven: "Co-worker who makes approx. $70k has just been approved for a $650k mortgage."

$650K at 2% is $2400/month or $29K/year. Add in other DSR costs and we're up to about $35K. That's 50% GDSR.

Likely he's either got supplemental income from relatives or other, and/or he's committed to renting out a basement suite or rooms to flatmates/students. I don't see how even a bank is going to qualify someone under the scenario you state.

Troll
Guest
Troll

@jesse:

$650K at 2% is $2400/month or $29K/year.

Don't forget he has to qualify under the 5-year rate, which would bring the number up to $36K/year.

Something smells fishy about this anecdote.

Fed Up
Guest
Fed Up
Alright, I have had it with HAM… I was driving down Oak this morning when I noticed in the rear view mirror a speeding vehicle weaving in and out of traffic. The car was Bentley and he flew past me at 100km. I caught up to him at the lights. Of course, it was a middle aged Chinese man driving the Bentley – surprise, surprise, since we never saw Bentleys on the streets until the recent wave of HAM. I yelled at him slow down and respect the laws, showed him the phone, and told him the police were coming for his speeding. Admittedly, I also yelled that they were coming to deport him. He just kept starring forward pretending not to see me… However, I didn’t tell him that I was planning to phone in his license plate number… Read more »
Anonymouse
Guest
Anonymouse

@Fed Up:

"since we never saw Bentleys on the streets until the recent wave of HAM"

Bob Rennie famously owns one that he managed to collect 204 parking tickets on. He's not Asian as far as I know.

Anonymouse
Guest
Anonymouse

@Manna from heaven:

"Co-worker who makes approx. $70k has just been approved for a $650k mortgage. "

$650K mortgage, or $650K purchase price? There's potentially a big difference.

Bolier
Guest
Bolier

"Bob Rennie famously owns one that he managed to collect 204 parking tickets on. He’s not Asian as far as I know."

He has one, and its well known that its an anomaly. Of course, he bought his at the same time HAM dollars came in and he bought it at least partially from selling to HAM.

Maybe you should check out Rennie's marketing team for the Olympic village. Pretty much all Asian realtors. Maybe Rennie has adopted the "Asian" face approach and needs the Bentley to sell those million dollar Olympic flops to his Asian clientele.

Guy Smiley
Member
Guy Smiley

It's not a perfect way to bet on the collapse, but you could short REIT's i think. Unfortunately i don't know of one that focuses on overpriced vancouver shitboxes – i'd jump in with both feet on that one as soon as the price-fall gained a little traction.

There are some that are city focused like an.un which is primarily montreal and hr.un from toronto though i'm not sure what their residential holdings amount to.

PS – thanks for responses to my q. about buying US property last week.

jesse
Member

@Troll: "Don’t forget he has to qualify under the 5-year rate"

O RLY? Says who? For CMHC-qualified loans I agree. But how about low-ratio loans? You're richer than you think.

kansai92
Guest
kansai92

@Troll:

Basement suite… or multiple basement suites.

Maybe he's going to live in the basement suite and rent out upstairs.

Laneway house?

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