FFFA! Forecasts! Mortgage! Rules! Carney!

It’s that time of the week again, time for our Friday Free-for-all!  This is when we round up the weeks news and have our open topic discussion thread for the weekend, here are a few recent links to kick off the chat:

IMF: You need tighter mortgage rules
TD: forcasting for the provinces
Teranet HPI scatter plot
Conservative impact from RE market?
Carney gets $400k for housing
Luxury home decline
Sales below 10 year average
Stay out of New West Bob
Home prices fall in most Canadian markets

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

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george
Guest
george
The following link is to a credit market summary data table (as of Sept. 30, 2012) on Statistic Canada’s web site. http://www5.statcan.gc.ca/cansim/pick-choisir?lang=eng&p2=33&id=3780122 The total debt outstanding in Canada was 5.17 Trillion $ (bottom line of the data table). From Jan. 1, 2012 to Sept. 30, 2012 (a period of 274 days) the total debt outstanding increased by 194 Billion $. Over that 274 day period it increased at a rate of 708 Million $ per day. With a total credit market debt of 5.17 Trillion $ and a gdp of 1.75 Trillion $ Canada’s total credit market debt is approximately 2.95 times the size of our gdp. The United States total credit market debt is 3.5 times the size of its gdp, which is not too far off our 2.95 times. The following link from the St. Louis Fed shows… Read more »
george
Guest
george

The following link is to a credit market summary data table (as of Sept. 30, 2012) on Statistic Canada’s web site.

http://www5.statcan.gc.ca/cansim/pick-choisir?lang=eng&p2=33&id=3780122

The total debt outstanding in Canada was 5.17 Trillion $ (bottom line of the data table). From Jan. 1, 2012 to Sept. 30, 2012 (a period of 274 days) the total debt outstanding increased by 194 Billion $. Over that 274 day period it increased at a rate of 708 Million $ per day.

yvr2zrh
Member
I’m a bit jetlagged so I’m up but wanted to post some interesting stats as we go into the weekend. I like to find those hidden trends, facts and issues that are showing market sentiment and activity. As we get to the end of 2012, here are some thoughts. 1.) MOI for December will be the second worst in 15 years. We will likely hit 11. This is a really bad sign as we are typically quite low at the end of the year. 2.) Comparing to 2008, we are deteriorating now. For December, there are even pockets of Vancouver where we may see the December sales lower than December 2008. For November, we compared against November 2008, which is likely Vancouver’s worst month in history. We were up 90% against November 2008 in terms of unit sales but for… Read more »
patriotz
Member

“You will have a lower supply when prices are weak ”

Doesn’t necessarily apply to speculative markets where supply and demand are driven by expectation of future prices as well as current prices.

There is a very large cohort of investors who will lose their chance to get out with a profit, or just break even, if prices fall any further and I expect the smarter ones to get out. It may only be a minority, but that’s all it takes to drive down prices further.

patriotz
Member

” Remember that he will keep his house in Canada and only move there temporarily. ”

Doesn’t really need to keep his house of course. If he sold it that would give a message about his views on the housing market wouldn’t it?

One thing that came to mind is whether Carney would be better off going non-resident for tax purposes. It’s not clear that he would, as the marginal income tax rates in the UK are about the same as Canada/Ontario and he could claim a foreign tax credit if filing in Canada.

george
Guest
george
With a total credit market debt of 5.17 Trillion $ and a gdp of 1.75 Trillion $ Canada’s total credit market debt is approximately 2.95 times the size of our gdp. The United States total credit market debt is 3.5 times the size of its gdp, which is not too far off our 2.95 times. The following link from the St. Louis Fed shows the ratio of the United States total credit market debt to its gdp over the last several decades: http://research.stlouisfed.org/fred2/graph/?g=359 The following link from the St. Louis Fed plots the United States total credit market debt and its gdp over the last several decades on the same graph: http://research.stlouisfed.org/fredgraph.png?g=bIb This huge build up of debt in Canada, the United States and the rest of the developed world has been going on for several decades. The situation with… Read more »
Some Guy
Guest
Some Guy
@5 George: “there are very severe and very painful consquences to having a society which lives way beyond its means for a long period of time.” While I generally agree with you about the huge debt build-up, and the problems we face because of it, I wanted to clarify that while a household can live beyond it’s means (by borrowing from someone else), a society can’t (who would it borrow from – aliens?). The buildup of debt is a result of the financialization of the economy, growing income inequality, concentration of wealth on Wall St., and in London and Frankfurt, and Hong Kong, massive volumes of speculation, wages failing to keep up with productivity growth, etc. More fundamentally, the financialization results from a monetary policy in which governments refuse their duty to provide enough currency for the economy to function… Read more »
Anonymous
Guest
Anonymous

oh, it’s almost Christmas and silly bears are still here debating RE? Dont you have someone you can go and buy presents for? Dont you have parties that you plan to attend? Your prediction is just as good as the Mayan calendar. Have a very Merry one, silly bears. HOHOHO

The wired astrologer
Guest
The wired astrologer

Astrology newscast.

The much anticipated Year of the Water Dragon (2012) has been renamed the year of the Coughing Dragon, due to the economic slowdown in China induced by the Water element balancing the Dragon’s Fire.

The Year of the Water Snake will start on February 10, 2013. A Snake in the House means your family will starve. It also means delusion and deception. Your top priorities should be saving and being thrifty.

If you live in Vancouver, these are clear messages that you should stay away from the housing bubble.

Reference: http://www.springsgreetingcards.com/catalogs/store.asp?pid=256628

bubbly
Member
bubbly

More fundamentally, the financialization results from a monetary policy in which governments refuse their duty to provide enough currency for the economy to function at full strength, so money must be borrowed into existence to make up the gap.

This is just so unbelievably wrong…

patriotz
Member

Anyone else getting an ad from wonga on this website? The loan sharks are circling. As with other ads, I think this site is targeted simply because it deals with RE.

gokou3
Guest
gokou3

“there are very severe and very painful consquences to having a society which lives way beyond its means for a long period of time.”

And that means war, unfortunately.

b5baxter
Member
UBC in Crisis Mode
Guest
UBC in Crisis Mode

yvr2zrh Says:
“That being said – if UBC were to hire a professor to come here on a permanent basis, in order to make them whole on housing, you would likely need to offer a 1.5 million signing bonus, which would be taxed, and from which they would have enough to get into the housing market at the level which they are accustomed to. If this city continues as it is for the next 20 years, we will have no more city.”

The plan to save the university (no good prof wants to come):
http://hap.ubc.ca/reference-documents/blog-2/

Bull! Bull! Bull!
Guest
Bull! Bull! Bull!

yvr2zrh and VMD are the only posters worth reading on this blog.

Some Guy
Guest
Some Guy

@10 bubbly, “This is just so unbelievably wrong…”

Wow, you really convinced me. Great counter-argument…

patriotz
Member

“The plan to save the university (no good prof wants to come):”

These home ownership “assistance” plans were all the rage in the US at the top of the bubble and it’s not hard to figure out how they turned out.

The solution to high prices is lower prices. In the meantime, the university can build housing on campus and rent it out at market rates, no taxable benefit would result.

Many Franks
Guest
Many Franks

Rob McLister reports that Genworth has had its insurance cap lifted from $250B to $300B, probably targeting a small revival of the kind of bulk insurance that has totally dried up this past year due to CMHC nearing its own cap. I doubt it’ll make much of a difference, particularly here in Vancouver, as Genworth has got to be watching things pretty closely.

Anonymous
Guest
Anonymous

Re. #10

“This is just so unbelievably wrong…”

YES!! And if you don’t believe it, here is a dramatization of bubbly’s powerful argument:

http://www.youtube.com/watch?v=NJjZ7Z05f5c

Yalie
Guest
Yalie

Most of the world’s elite universities are located in cities with high property prices – New York, Boston, San Francisco, etc. The problem is that UBC, though highly regarded, is still a second tier school compared to Harvard, Stanford, Columbia, etc. Those universities attract the top end of elite academics who are willing to pay a little more for housing in exchange for a seat at a top school.

Although UBC would like to think it’s one of the world’s elite institutions, its real competition for talent is with second-tier, mostly-public schools like Michigan, UT Austin, Penn State, etc. And most of them are located in smaller cities with much lower house prices.

Anonymous
Guest
Anonymous

Here is a little something for you bears might enjoy. A real estate broker resorts to working as a Las Vegas call girl:

http://tracking.si.com/2012/12/20/suzy-favor-hamilton-las-vegas-escort-olympian/?hpt=hp_t3

gokou3
Guest
gokou3

Re #21: That is certainly a more respected profession 😉

bubbly
Member
bubbly

@Some Guy:
You are confused. I wasn’t presenting an argument. I just said that what you wrote is wrong.
If you said that your car is powered by unicorns, I would also just say that it was wrong. No arguments necessary…

RFM
Guest
RFM
It’s worse than it may appear. I monitor completed condo buildings to see how the final sales numbers worked out. In summer 2011 (yes, 2011) Rize Alliance Properties Ltd completed a 48-unit condo building at 2511 Quebec Street in the South Main/Mt. Pleasant neighborhood. Promotional materials at the time made it appear the development was sold out or close thereto. Throughout 2012, there were always 5-7 units listed for sale on the MLS by the developer, although there are none listed at this time. However, based on very reliable information, it appears the developer actually has 14 units unsold, all 1 bedrooms, from 639-723 square feet, priced at $357,900-$411,900 with strata fees from $262-$297. That’s 29% of the building unsold more than a year after completion. Small projects appear to be having trouble finding buyers; there are dozens of these… Read more »
Devore
Member
Devore

“While I generally agree with you about the huge debt build-up, and the problems we face because of it, I wanted to clarify that while a household can live beyond it’s means (by borrowing from someone else), a society can’t (who would it borrow from – aliens?).”

WE all pay for it. WE become poorer, so WE can keep borrowing. Lower wages, higher taxes, lower standard of living.

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