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Friday Free-for-all! New Rules Edition

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308 Comments

Welcome to the summer of 25 year amortizations!

You’ve made it to the end of another weekend and that means it’s time for our regular end of the week news round up and open topic discussion thread.

Lots of ink spilled over the new mortgage regulations released yesterday.

Here are a few links to kick off the chat:

–New rules in effect July 9th
–How rules effect mortgage numbers
–How new rules will sink houses prices
–Final OSFI guidlines released
–Brokers not so happy
–Inventory growth takes a breather
–Be very afraid of the Canadian bubble
–Falling prices, no more home ATMs
–Moody’s downgrades RBC 2 notches
–USA 2006 “I’m not giving it away”

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

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Spot on with this write-up, I truly think this site needs a lot more
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subwoofer deal

Nice blog here! Also your website loads up fast!
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Crikey

@oneangryslav2:
Really, a market dominated by million-dollar homes in Whitehorse? Puleez!

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Crikey

@metrix:
I have only ever said “immigrants”, and stressed that I don’t care where they’re from. It looks like your the racist if you’re assuming I’m referring to “chines” or whatever idiotic other term you want to conjure up.

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Bo Xilai

@s:

North Van (Pemberton Heights) was dead…

Cookie Baking/Baloon inflating was in overdrive though…

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fixie guy

96 jesse Says: “…recent (this year’s) malaise in sales can be plausibly, for the most part though by no means exclusively, attributed to a drop-off in population growth last year.”

It’s hard to argue against the notion fewer buyers mean less demand. 😉
I agree completely on both points, population rate of change impacts housing prices and it’s only one (temporary) component. The latter is why I maintain it’s also one of the components of government policy targeting market stimulus.

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fixie guy

292 mac Says: “@HAM Solo: I have no idea what yer on about.”

White Knighting: associating any discussion of immigration policy with racism. Hence ‘code words’. The bigotry behind that position of course are beyond Solo’s grasp, as is the high probability those accused might just be immigrants or first born offspring.

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G

@mac:

I am with you on the rents cover mortgage cost.

But what if 20-30% loss over the 10 years, and higher interest rates too. They might need to pay more for monthly mortgage.

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s

Just curious if anyone checked out the open houses over the weekend, and wondering if there was a rush to buy in Vancouver before July 9.

Vancouver was toast before the new regulations, I wonder if there were people crazy enough to rush in now.

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VMD

Someone has been busy spam-faxing the following letter to Greater Vancouver households lately (posted in Chinese RE forum):
http://s8.postimage.org/sn9o3b4h1/housing_crash_fax.jpg

methinks the communication medium is a little outdated.. a billboard might work better?

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Anonymous
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VMD

@VMD:
re: polygon’s “MODA” presale in Burnaby that opened Saturday, with some people camping since Monday.
1st day sales:138
total units: 249
ratio: 55%

Additional details:
1. The first 150 units are offered 2% VIP discount. I guess they over-estimated the amount of VIPs…
2. Anecdotal info from a realtor: some buyers who “got” the units are still hesitant and are considering opting out in the opt-out period.

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jesse

@fixie guy: “Likewise the attempt to correlate Vancouver price increases solely to population factors. “ Agreed; my thesis, FWIW, is that recent (this year’s) malaise in sales can be plausibly, for the most part though by no means exclusively, attributed to a drop-off in population growth last year. That does not mean that previous population growth justified high prices, only that a marked slowdown in dwelling formation must lead to slower sales. This was what happened about 14 years ago when population growth fell off a cliff in 1998 and it took several years before sales began to grow again. Net migration fell from about 60K/year in 2007-09 to 33K last year. That means about 10K fewer new dwellings required. A drop in population growth is the catalyst for lower prices — wrought through higher MOI — but doubtful the… Read more »

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mac

@dire straits: What part of Canadians are punch drunk on debt did you not understand. I get it that banks dole out craploads of money. But look! They’re putting more than 20% down. They also take up only a 1/3 of the house. They have relatives upstairs that they can hit up for more should their mortgage get out of hand. I personally wouldn’t make this bet but maybe they want to leave a house to their kids. One that’s divided into 2 or 3 units. Maybe that’ll make them happy when they die. Dunno. I don’t know these people. Having said that, if Tektite wants to try to scare the bejesus out of them, may I suggest he gets them to read Garth’s blog. If that doesn’t work, nothing will. But it sounds like they have lots of equity… Read more »

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Anonymous

@tektite: It sounds like your parents have their minds made up. Basically they are spending your inheritance so it is in your best interest to not have the deal go through. As far as the mortgage goes the banks will finance this based on the 300K down payment. Your best bet to get the deal to fall through would be to have the home inspection come back with problems. Show up to the home inspection yourself and go through the place with the home inspector. Look for things wrong with the house. Make sure the home inspector notes them in the report. Then convince your parents the house has too many problems that will cost a lot of money to fix. It likely does have lots of problems but you have to look for them. If you know a contractor… Read more »

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EquityPorn

Day. A Highway Rest Stop. Dave kicked out the stand on his Harley and leaned back on the seat. His belly glistened with sweat in the mid-day sun from the hard ride down the California coast. This rest area was his kind of place, smelling of redwood and hot oil. The rider to his left stroked his handlebar moustache and grinned as he took in the BC plates on Daves Harley. “You too eh?” the man said pointing to his own BC tags. “yeah” Dave replied “Best place on earth but sometimes you just got to get away.” “I hear you on that one” the other rider said extending his hand. “The names Cam, I’m in sales, what do you do?” Dave unbuckled his helmet “I’m in development.” Cam raised an eyebrow. “development eh, what kind?” Dave reached into his… Read more »

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mac

@HAM Solo: I have no idea what yer on about.

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Anonymous

@Makaya: Funny stuff, welcome to serfdom! Someone should let these guys know economics is about scarce resources, yet the supply of capital is, according to their train of logic seemingly endless. I’ve read of more critical thought in first world war battle tactics at the Somme.

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mac

@Best place on meth: Doesn’t that include the TSX in general?

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mac

@N: Thanks. I really hope with every fibre in my body that you are right and I am wrong.

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Makaya

@Makaya: to which West Side Realtor replied:

Talking to my realtor buddies in the West Side & West Van, the Mainland Chinese & HK’ers are no longer coming here in droves like last year. They are no longer bringing suitcases of cash. They just look around, & decide to go to the states like California since it’s much cheaper, higher quality, & a bigger Asian population. Heck they even have a better hockey and soccer team. lol They all stated that business has dropped 50-60%. It’s usually the locals that are looking around esp East Side. East Side still has it thing going, though slower than last year.

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Makaya

@Anonymous: most ppl believe the market will be down most yes, but not all… Sunday night humour #2. Here is a comment from Larry’s latest post Flaherty’s Folly Kills Rosy Vancouver Home Buying Dreams Well I deal with a real estate agent who sells on the west side of Vancouver and he tells me basically that there is an unlimited amount of money coming in from Mainland China still and the market has just stalled a bit because the Chinese have taken a break for a while, but they’ll be back with even more money very shortly. He also informed me that 95-99% of the people he deals with buy all in cash because it’s a cultural thing. Granted, this is only people he deals with, so maybe there are other Chinese who take mortgages…..I don’t know anything about that.… Read more »

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Anonymous

LOL so much arguments……. I think we should all just quit these arguments and come back a year later and see the data. That saves everyone’s time.

most ppl believe the market will be down (I believe so too).. but before the time and data kick in…. nothing is for sure.. we shall see

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TPFKAA

@sbermunk:

Yes, it is a cracking deal, isn’t it? I looked at comps in the area before renting and they are the same ballpark or a bit more per sq ft. It is easy walking distance to the largest mall that there ever was.

I think that rents are distressed in this market segment, because who the hell is left to rent to when 70% of people are already money renters who take care of collateral boxes for their bankster overlords?

But – and I’m sorry about this – If I am wrong and it really is below market rent, and I reveal the name of the company, and we sit here praising how low they charge per sq ft – I might be facing an unexpectedly huge rental increase in a year’s time, might I not?

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dire straits

chilled: “You’ll have to kill them, in their sleep, with an ax, it’s that simple.”

do it before home inspection

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