Why a soft landing would be bad for the economy.

Ben Rabidoux has an article in the Globe and Mail about ‘soft landing’  in the real estate market.

Check out the full article here.

His points mostly come down to this question:

If the housing economy decreases,  what will happen to all those jobs provided by building,  selling and furnishing homes?

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My crystal ball works no better than anyone else’s; I have no idea where house prices will be in the future. But I am deeply concerned with the clear imbalances that this current boom has created. And that raises an important question: If we are indeed headed for a soft landing, and if the economy and labour market is negatively affected by a soft landing in housing as I believe the data suggest, will it remain a soft landing?

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Groundhog
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Groundhog

I’m guess we’re going to start Chinese New Year with a bang. 500 listings!

Saw more new listings this weekend in my area then I’ve ever seen before. Haven’t seen any sold stickers go up yet.

Anonymous
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Anonymous

10 year mortgage rate at 3.69% !!!!!! –> Scotiabank

Pay off 35% of your principal in 10 years. Remaining debt is 65% of original. Inflation at 2% a year means the dollar will devalue 20% in that time. Real value of debt is 50% of original amount.

Example:

Buy a $500,000 house. $100,000 down and $400,000 mortgage.

Value of mortgage after 10 years = $200,000 in real dollars.

Bears are so screwed!!

Anonymous
Guest
Anonymous

WOW. 3.69% for 10 years? Seriously considering buying now.

Democrass
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Democrass

Can you post a link for that Scotia 10-year mortage?

10 year mortgage rate at 3.69% !!!!!! –> Scotiabank

Anonymous
Guest
Anonymous

……Example:

Buy a $500,000 house. $100,000 down and $400,000 mortgage…….

Not sure I want to commute from Merritt.

Anonymous
Guest
Anonymous
Why did we start a new thread? I think that story about condo marketers posing as prospective buyers in the media is tremendously important. This speaks to so many issues right now–deception in the real estate market, the degradation of journalistic standards, the operatives of how real estate prices in Vancouver became so inflated, the issue of HAM and how true it is that HAM have inflated our prices or whether that was just a marketing gimmick. The perception (rightly or wrongly) that housing is unaffordable to local people due to HAM investors is causing a great deal of racial animosity in our society. It is undermining Trudeau’s vision of a multicultural society where different races live in harmony. So if it is true that condo marketers and the local media have been deliberately deceiving the public into thinking that… Read more »
Lifetime Renter
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Lifetime Renter

Mr. Rabidoux’s article is a must read. The same factors that power a housing bubble will, on the downside,deepen the crash. There is every chance that hundreds of thousands will be out of work or forced to work part time. Meanwhile the federal government will automatically provide billions to the financial institutions responsible for bankrolling the bubble because of CHMC loan guarantees. This will shoot a big hole in the federal government’s budget. This and a significant drop in government revenue at all levels will lead to austerity that will further deepen the crisis. And it should be noted that the federal government has weakened employment insurance and added humiliating restrictions such that, when it will be most needed, many will find it more difficult to get.

Anonymous
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Anonymous

Mr. Rabidoux’s report has a huge flaw.

Housing starts are NOT net new housing starts. What about all those houses demolished for new homes? When the housing starts data minuses those houses lost to demolition, then I’ll believe the data.

Only then can you analyze NET new housing and household formation.

care to comment Ben?

HFHC
Guest
HFHC

I agreed with post # 6. We should be placing all of our efforts into making the “condo marketers story” into the mainstream media. I’m not the best with words but I was hoping if there is anyone out there that wouldn’t mind putting together a letter to one of the regulatory bodies out there regarding this. I would love for all of us to then send that letter and get the ball rolling on exposing these people. Truth be told, anyone who doesn’t visit this site wont ever know about this.

Very Early results so far for ALL lower mainland

New Listings 63
Back On Market Listings 0
Price Changes 22
Sold Listings 7

Many Franks
Guest
Active Member
Many Franks

In case you’re not following Whispers from the Edge of the Rainforest — apparently the CBC is sniffing around this MAC Marketing story and there’s some follow-up over there. (To be clear, I think this would be totally marvelous to expose. I was just concerned about the smell of blood making people lose perspective.)

900kCrackHouse
Guest
900kCrackHouse

Ben kicks ass!!!!

emmi
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emmi

Maybe I missed something but was 3.69% supposed to be a joke?
http://www.zillow.com/mortgage-rates/

US 30 year fixed is advertised lower than that. Of course that rate will only be if you have an 850 score.

Simon
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Simon

“Don’t kid yourself. These people do live work here…”

Patsan
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Patsan

Anon #8

“Housing starts reflect the number of homes, apartment buildings or townhouses on which construction began in a given month.” Taking into consideration the recent trend that a bigger new home with multiple basement suites and frequently a laneway house replaces every demolished house thus contributing to gentrification and adding new dwellings to the overall RE stock, can you comment on a true NET new housing?

Harry Wang
Guest
Harry Wang

amanda lee’s facebook http://imgur.com/ax6kMDA

specialfx3000
Member
specialfx3000

Local business owners not excited about the new paid-day-off Family Day:
http://www.news1130.com/2013/02/10/family-day-a-holiday-for-most-but-an-inconvenience-for-many/

At least money was spend and the economy benefited; whoops, wrong economy:
http://www.news1130.com/2013/02/12/many-british-columbians-headed-south-for-family-day/

Anonymous
Guest
Anonymous
http://www.scotiabank.com/ca/en/0,,216,00.html Special offer 3.69% for 10 year. Word is there is downward pressure on rates. Bank of Canada is in the business of QE#1 for Canada. Insiders say expect 3.49% 10 year from major banks and 3.29% 10 years from brokers by mid summer. Word is that Flaherty is working with the banks to make sure that 10 year terms become the new norm for term length (as opposed to 5 years). Only sticking point is banks want something in return… chatter is that they want to be compensated by the government if a customer wants to break a mortgage. Otherwise the penalty is too great for a customer to pay. And you thought CMHC was a cash cow for the banks?! Wait until this become standard practice. Banks getting compensated for mortgage breaking penalties from your TAX Dollars in… Read more »
4444 4444 4444 4444
Guest
4444 4444 4444 4444

Sorry bulls, no soft landing.

Curse in motion set on the 4th day of 4th month.
Will last 44 months.

Not back to this price level for 44 years.

But if you want to call it a soft landing, I won’t argue.

Done with my once proud country
Guest
Done with my once proud country
pecial offer 3.69% for 10 year. Word is there is downward pressure on rates. Bank of Canada is in the business of QE#1 for Canada. Insiders say expect 3.49% 10 year from major banks and 3.29% 10 years from brokers by mid summer. Word is that Flaherty is working with the banks to make sure that 10 year terms become the new norm for term length (as opposed to 5 years). Only sticking point is banks want something in return… chatter is that they want to be compensated by the government if a customer wants to break a mortgage. Otherwise the penalty is too great for a customer to pay. And you thought CMHC was a cash cow for the banks?! Wait until this become standard practice. Banks getting compensated for mortgage breaking penalties from your TAX Dollars in exchange… Read more »
Anonymous
Guest
Anonymous

@Done with my once proud country

Take me with you! I need to get out of this country but I am trapped here.

VMD
Member

Re: the Lee sisters.
This advertising tactic is so old-school, people on local Chinese forums are bombarded with similar realtor-written advertorials all the time on Chinese media. An easy example would be all the articles written by “Realtor, PhD” Liu Yi. This Lee sister CTV piece was already translated to Chinese yesterday. Already getting recognized by many commenters as “BS” and “realtor written junk news”. Even the Chinese don’t believe in HAM coming this year; but I guess the Chinese population was not CTV’s target audience…

asalvari1
Guest
asalvari1

@Done with my once proud country

..” Comparing Vancouver’s decline to that of San Diego or LA is moot if this policy is implemented.”

Oh Really? Would you please tell me what kind of rates and duration they got then?

asalvari1
Guest
asalvari1

… cont..
for crying out loud, they used to give them free money if they bought, and yet it did not stop the collapse..

Ooohh, HOLD ON now, we are doing the same !

vanpire
Guest
vanpire

RE: SPECIAL offer
The 10 year term is nothing new. It’s been there for a while now. Last time I checked, 3.7% was available from brokers all last year.
What’s the big news?

Moivng to the States
Guest
Moivng to the States
Filed a complaint to CBSC and got this reply: The Canadian Broadcast Standards Council (CBSC) has received your correspondence concerning the news. Internet content does not come within the purview of the CBSC’s mandate. Since the Codes that the CBSC administers apply only to content broadcast on traditional radio or television, even if it is found on a broadcaster’s website we are unable to formally pursue the complaint. However, if you have seen or heard this content on traditional radio or television, we can deal with your complaint if you send us the date and time of broadcast. We will nevertheless send a copy of this message to CTV Vancouver (CIVT-TV) so that they are aware of your concerns. If in the future you should have any further concerns regarding content that you saw or heard on private Canadian television… Read more »
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