We love debt even more than Americans

Canadian consumer debt.  It’s not just growing, it’s growing faster.

Transunion has released their latest quarterly analysis and it shows Canadian household debt loads increasing 400% percent faster than inflation.

Statistics Canada pegs Canadian household market debt at an astounding 163% of disposable income.

For comparisons sake, the US housing bubble saw household debt peak in 2007 at 128% of disposable income.  By 2011 the US rate was down to 112%.

The good news? Credit card debt is actually down year over year and delinquencies across all types of debt remain low.

Transunion puts the average household non-mortgage debt at $26,768.  Do you owe more or less than that?

Higgins said the increase stands in stark contrast to encouraging signs from relatively stagnant debt growth in the prior three quarters.

He also points out that in the past five years, debt loads have increased 400 per cent more than the rate of inflation — with inflation as measured by the Consumer Price Index up nine per cent and consumer debt jumping more than 37 per cent.

“Debt’s outpacing us and continues to outpace us, so at some point in time there’s going to be a reconciliation,” Higgins said.

“Hopefully it’s not drastic and hopefully it doesn’t hit everybody, but there’s going to be a correction somehow along the way.”

Read the full article over at the CBC.

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mac
Member
mac

Jesse,

Disturbing what you posted over at RE about Pettis’ view on HAM and real estate. Esp. as China decelerates they put their foot on the pedal when it comes to acquiring foreign RE with nervous money. God. Will it never end?

Devore
Member
Devore

@Domocrass:

The lesson is to just listen to the big banks and the MSM. If you don’t, I fear hat you will be in danger of missing the bottom.

Right, the MSM, economists and banks which called 4 market bottoms in as many years in the US? Or are our experts better than the US experts?

http://www.youtube.com/watch?v=Cdiz0k0Rudw

Hah, just that kinda day today.

patriotz
Member

Seven years after he said that the US had no housing bubble, Bernanke still doesn’t get it:

Ben Bernanke has said that the overly stringent lending requirements of banks are hurting the US housing recovery.

In a speech, he said the housing market showed signs of recovery but was “far from being out of the woods”.

The Federal Reserve chairman said “the pendulum has swung too far” from the easy lending days of the housing boom.

While mortgage interest rates have fallen to record lows, he said many borrowers, especially minorities and low earners, could not get a loan.

Garbage. If lending requirements were too strict, price/rent and real price would be below historical norms. They’re not – they are about what they were in the late 1990’s, which was higher than the average during the post WWII years.

http://www.bbc.co.uk/news/business-20351761

Makaya
Member
Makaya

Market sentiment… Here is a comment posted by a realtor on facebook:

Those of us who lived and worked in real estate in the early ’80s are saying, “Not again, please God!” We’re still recovering from that!

jesse
Member

@gokou3: “during the boom times, properties rarely transacted at prices below assessed values”

Assessed values are based on sales at or around July 1st of the previous year. In other words they are a snapshot of the market between 6 and 17 months ago. In a rising market assessed will always be higher than sales price. In a falling market…

Vulture Fun
Guest
Vulture Fun

Remember when we’d get excited about sub-100 days? I wonder if sub-50 will be the new normal a few months from now. Schadenfreude, bitchez.

patriotz
Member

@Vote Down The Facts:
“There are far better metrics to use when determining value. ”

It’s not a metric of value at all. It’s a metric of market direction.

Vote Down The Facts
Guest
Vote Down The Facts

@gokou3: “If you think a comparison of listing price vs assessed price has no value, it’s up to you”

That’s exactly what I think. There are far better metrics to use when determining value. Price:rent being one example. Why, as a potential buyer, should I care what some computer algorithm thinks a property is worth?

There’s an incentive for a seller keeping their assessed value as low as possible – the property will sell for its fair market value anyway, whilst attracting lower property taxes. I can’t imagine many people petitioning city hall to have their assessed value increased so that they can pay higher property taxes, but they’ll certainly do the opposite.

s
Guest
s

Two Metro Vancouver realtors are taking a group of about 30 potential homebuyers out for a night on the town that includes drinks, appetizers and a limo ride. Along the way, the group will visit The Pint pub, as well as five funky homes that are for sale in Vancouver.

Read more: http://www.vancouversun.com/Realtors+break+drinks+limo+crawling+real+estate+market/7556108/story.html#ixzz2CLQs6Hyz

Crikey
Guest
Crikey

@specialfx3000:
“My used boxers were for sale at $100. No interest.”

What you have right there is a marketing problem.

If you make sure to wear panties from now on, you will have a market for them from – you guessed it – the HAM. I have seen the vending machines myself, overseas — the used merchandise sells at about $40 a pop.

gokou3
Guest
gokou3

@Vote Down The Facts: Debated with you on this before, not gonna do it again. If you think a comparison of listing price vs assessed price has no value, it’s up to you. All I know is during the boom times, properties rarely transacted at prices below assessed values.

gokou3
Guest
gokou3

@paulb: So the average of yesterday and today’s sales numbers doesn’t look so good eh?

Makaya
Member
Makaya

5211 Cypress St. – asking $3.698M. Sold for $3.150M. Purchased in March 2012 for $3.225M.

Sales way down, price down. Do you need any more proof that the market is tanking?

Vote Down The Facts
Guest
Vote Down The Facts

@gokou3: ‘Another “priced below assessment” gem’

Assessed values don’t really mean anything in terms of what a house is worth. They’re just a way of setting relative property tax levels. In the UK, for example, they’re set based on 1991 prices. In Ontario, they were last set in 2008. The fact that BC updates theirs annually doesn’t really imply they have a clue what your property would sell for.

To say something is “priced under assessed value!!!!1111!!!” is just a marketing strategy.

Domocrass
Guest
Domocrass

@reasonfirst:

T@reasonfirst:
“But they were saying things were great right up to the top”

Things were great right up to the top. Then the top happened. And now the decline. The statemetns by the big banks and the general MSM “collective view” turn with the market and headed down with the market.

The lesson is to just listen to the big banks and the MSM. If you don’t, I fear hat you will be in danger of missing the bottom.

paulb
Member

New Listings 128
Price Changes 92
Sold Listings 57
TI:17466

http://www.paulboenisch.com

I will likely be late with the Friday numbers as I will be in Victoria for the next few days competing in a Crossfit event. I will get them out at some point this weekend!

Naked Official saves face, fucks off
Guest
Naked Official saves face, fucks off

@Anonymous:

“Eath Van ith the new Thaughnessy!”

I lol’d!

gokou3
Guest
gokou3

Another “priced below assessment” gem, a 2BR condo in highgate mall burnaby:

http://mlslink.mlxchange.com/DotNet/Pub/EmailView.aspx?r=298110432&s=BRC&t=BRC

specialfx3000
Member
specialfx3000

@Guy Smiley:

“Hey! Are those boxers still available?”

Since listing them on M1ng Bao and acquiring the services of Renn1e Marketing, the phone’s been ringing off the hook. There’s now a bidding war but I’m not yet done.

Planning to hang them on a yellow helicopter for a White Rock fly-over.

Supply is limited but I’ll put you on the VIP list. What’s your bid?

Makaya
Member
Makaya
@Unsettled Worker: Here is what’s going to happen. Conclusion from the article I wrote on Canadian RE published today. If the experience of the real estate collapses in other developed economies is any indication, the burst of the bubble will come at a huge social and economic cost for Canada. According to a Bloomberg report, construction jobs amounted to more than 7.4% of all employment in Canada in April of this year. In the U.S. at the peak of its housing bubble, construction jobs never exceeded 6 per cent of all employment (currently standing at 4.2%) . The FIRE industries (Finance, Insurance and Real Estate) alone currently account for 20% of the Canadian GDP. Those industries will be decimated by the real estate collapse and high unemployment is to be expected, depressing the consumer driven Canadian economy. Tax collection will… Read more »
Sheesh
Guest
Sheesh

I was wondering what happened to that West Side place that was featured in CBC’s the National (the realtor’s name was Phillip Chan). Just looked it up and it’s not on MLS anymore. The MLS number was V969843.

Can anyone look this up to see if it sold? If so, what was the sales price?

reasonfirst
Guest
reasonfirst

@Domocrass:

But they were saying things were great right up to the top.

jesse
Member

@Vote Down The Facts: “I don’t want to spend the best years of my life living so far below my means that it makes me miserable”

I then stared in awe as my neighbour stopped working at 45. (Hint: he bought low.)

Domocrass
Guest
Domocrass

@Bull! Bull! Bull!:

Bull Bull Bull has a valid point, which is that with all of the contrarian opinions voiced here over the past 6 years or so, the MSM and the big banks had it right on the way up, they called the top and they are right on the way down. If we did what they told us to do, we would have made tons of money buying low and selling high.

Anonymous
Guest
Anonymous

@Anonymous: Did Rosie also factor in our taxes as per US? Pretty much evens out the benefit of free medical.