Flaherty thanks banks for not competing.

It’s not April 1st yet is it?

Because this article in the Globe and Mail reads like some sort of weird parody.

Canada’s Finance Minister has taken his battle against a housing bubble an extraordinary step further, issuing rare praise for the country’s banks for not matching Bank of Montreal’s cut-rate mortgages

What?

Ottawa is growing concerned the banks could end up causing the housing market to overheat, especially after Mr. Flaherty has gone to great lengths to cool the market over the past year.

Could overheat? What brand of rear-view mirror are they using? Maybe if you didn’t use taxpayer money to ensure that they make money from mortgage business but take not risk of loss thanks to the CMHC that would help cool the market a smidge?

Mr. Flaherty and Bank of Canada Governor Mark Carney have waged an all-out war against the massive build-up in consumer debt to record levels. Along with Mr. Flaherty’s restrictions – which reduced the maximum amortization on mortgages last year to 25 years, down from 30 – the central bank went so far as to warn it could raise interest rates to tame the borrowing binge.

All out war?!? This gets better and better! They reduced amorts to 25 years but who jacked them up to 30 in the first place? And warning that rates could go up? Boy, that’s tough!

Battling a housing bubble by undoing the things you did to fuel it is a bit like thinking that getting rid of your slingshot should be enough to un-break all those windows you shot out.

“I encourage responsible lending,” Mr. Flaherty said Friday. “I think that the financial institutions of course are major players in the residential mortgage market and it forms a major part of their asset portfolios and the Government of Canada has a lot to say about it, not only because we’re concerned about the economic fiscal health of the country, but also we have CMHC [the federal mortgage insurer] and many of those mortgages held by the private sector financial institutions are insured with Canada Mortgage and Housing Corp.”

Maybe via the CMHC you’re encouraging too much lending, responsible and not.

And here’s the punchline:

Mr. Flaherty’s praise of BMO’s rivals may be somewhat off target, though, since most of the lending sector is quietly offering the same rates as BMO, mortgage professionals say

Phew. Is that enough stupid for your monday morning?

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Anonymous
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Anonymous

Garth states now 15% correction followed by ‘flatlining’!

Is this guy credible anymore? Yes vote up.

Short'em High
Guest
Short'em High

More like Flaherty thanks non-competing banks for not forcing him to make insured mortgages less than 20 years and more than 25% down, where all taxpayer insured mortgages ought to be in fairness to taxpayers!

jesse
Member
@Lee from previous thread: “Jump forward and assign current mutual fund sentiment to real estate ‘investment’. ‘Why would I buy a condo? They just lose money.’” I don’t think speculation is going anywhere, at least from what I’ve seen stateside. There are bubbles re-inflating, albeit from a much lower base, in cities like San Jose, Phoenix, Palm Springs, etc. Low rates are having an impact. It’s been barely four years since the brunt of the fallout occurred and some people are talking a “rebound” in housing. I think that’s premature, not least because payments must increase faster than inflation if rates rise, and eroding DSRs limit upside. But as it stands, with historically low rates, the “fever” is back. My prediction: the “bottom” in Vancouver will be somewhat of an anticlimax. Busy Realtors will look busy. Payment-oriented buyers will keep… Read more »
VMD
Member
Remember the case I posted last week where a Van West SFH “investor” got into financial trouble and was recruiting a “partner” to chip in to build on a lot he’s holding? Today I present another case: “Richmond 60,000 sq ft Lot, with 28,000 sq ft “standard build-able land, either commercial/residential”, with 60-70 meters of Fraser river waterfront, with capacity for 50+ yachts. Close to YVR/skytrain/casino/#3 road..” “To develop this land likely requires >$20M of cash” Due to “Changes in Investment Plan”, the investor/company wants out and is seeking (through a realtor on Chinese forum) someone to “take over”. The realtor is marketing the lot as “prime location for high end hotel / yacht club”. – looks like some builders/developers are bailing instead of holding… (I’m guessing it’s the new Richmond night market location, SW of River Rock Casino, North… Read more »
Vmdd
Guest
Vmdd
(Removed link to circumvent moderation) Remember the case I posted last week where a Van West SFH “investor” got into financial trouble and was recruiting a “partner” to chip in to build on a lot he’s holding? Today I present another case: “Richmond 60,000 sq ft Lot, with 28,000 sq ft “standard build­able land, either commercial/residential”, with 60­70 meters of Fraser river waterfront, with capacity for 50+ yachts. Close to YVR/skytrain/casino/#3 road..” “To develop this land likely requires >$20M of cash” Due to “Changes in Investment Plan”, the investor/company wants out and is seeking (through a realtor on Chinese forum) someone to “take over”. The realtor is marketing the lot as “prime location for high end hotel / yacht club”. – ­ looks like some builders/developers are bailing instead of holding… (I’m guessing it’s the new Richmond night market location,… Read more »
rp1
Guest
rp1

It’s not going down at all. Everything to the moon in Bubble 3.0.

patriotz
Member

“It takes around three attempts at making money with something before you start to get capitulation and people who will swear off real estate as they have the markets.”

And of course the US stock market hit an all time high last week.

The Canadian market didn’t but the total return is up over 60% from the beginning of 2009.

The crowd always gets it wrong.

patriotz
Member

Brokers seek mortgage break for first-time home buyers

Mortgage brokers are pressing the federal government to make it easier for young people to buy their first homes, just as the spring sales season descends and Ottawa prepares its next budget.

Jim Murphy, the head of the Canadian Association of Accredited Mortgage Professionals, recently met with finance department officials in a bid to convince them that their efforts to cool the housing market have gone too far, especially when it comes to the impact on first-time buyers.

Um, if you want to make it easier for first-time buyers, aren’t lower prices the answer?

Maybe you’re really trying to make it easier for the sellers? So they don’t have to drop their prices? And for you of course.

Ralph Cramdown
Guest
Ralph Cramdown

@Short’em High: “More like Flaherty thanks non-competing banks for not forcing him to make insured mortgages less than 20 years and more than 25% down”

Jimbo has plenty more options than that. He could direct CMHC to tweak minimum credit scores, GDSR and TDSR requirements, or even add a margin of safety to appraisal values. From a bank’s point of view, ‘safe’ is either insured or 20% down and conservatively underwritten. Jimbo effectively controls what gets insured.

Beuller
Guest
Beuller

Worst – finance – minister – ever.

Anonymous
Guest
Anonymous

Post #1 should have read:

Garth Turner is not credible anymore. His latest forecast of 15% correction followed by flatlining is way off the mark. His forecasts of 0% drops in demand neighborhoods is also way off the mark. This guy has forecasted every scenario possible in the last 6 years.

cabrinha98
Guest
cabrinha98

I agree with Jesse, speculation is not going to going anywhere. Florida and Phoenix are perfect examples even thought both places have crashed in 2008.

I wonder whether Canada will escape the fallout from speculators like happened in Toronto during housing bubble in 1989.

crashcow
Member

Quit beating around the bush Flaherty. We want the 20% down requirement back. Now.

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

>There are bubbles re-inflating, albeit from a much lower base, in cities like San Jose, Phoenix, Palm Springs, etc. Low rates are having an impact. It’s been barely four years since the brunt of the fallout occurred and some people are talking a “rebound” in housing.

wow… bear and their silly predictions. they think any kind of capital appreciation is a bubble.

these people missed the biggest bull run in candian real estate. they are missing the bottom in american real estate. and they’ll miss the bottom in canadian real estate.

they spend their lives making silly comments from the peanut gallery scoffing at people who get rich, make money, and live life.

RealityCheck
Guest
RealityCheck

BullBullBull:

You are in the same boat. Otherwise you would not be posting here.

VanRant
Guest
VanRant

Wait, another headline “Home prices to gain ‘measly’ 2% a year over next decade: TD”. Ha.

jesse
Member

” scoffing at people who get rich”

Scoffing is equally meted for those who get foreclosed on.

BTW, Vancouver condos in real terms are over 10% off their peaks. Choose one:
a) They are holding for the long term
b) They get pride of ownership and security of tenure, how can you put a price on that?
c) They are paying their mortgage off so they really haven’t lost any money

rp1
Guest
rp1

More like lose 2% for a decade – if they’re lucky.

Guy Smiley
Member
Guy Smiley

<a href="http://www.ctvnews.ca/business/canadian-house-prices-to-remain-flat-for-10-years-predicts-td-bank-1.1190669&quot;.House Prices to Remain Flat for 10 Years"

Yikes. I’ve never felt quite so anti-TD before. The comments are all rather pro-article so far too.

Guy Smiley
Member
Guy Smiley

Dang, try that link again.

TD Link

Sure wish that preview button were still available…

JR
Guest
JR

I’m not a huge fan of Garth but those of you who have been slamming him the last few days for his apparent reversal on the market drop should take some of that money you’ve been saving for a down payment and invest in some reading comprehension. He said it’s possible some markets in CANADA might not drop much; he talks about more then your private lower mainland myopia. He’s clearly stated Vancouver is toast. I think many view a crash as a 20% or more decrease in a year, but as Observer has shown that the largest drops in the US were only ~10% YoY.

vangrl
Member
vangrl

Garth is a nut-job, his childish replies to anyone that questions his really bad predictions are so embarrassing (for him).

This site is FAR better than Garth’s and I’m noticing that this site gets almost as many posts, at least on the weekends. Garth’s site is my least favourite of all the real estate blogs, I barely read it, he drives me crazy.

And who hires a financial consultant to just buy ETF’s?

vangrl
Member
vangrl

a perfect comment on that Globe and Mail article:)

@Steven
“Why? They already have the HBP, low interest rates and do they still avoid paying the land transfer tax? Do we have to pay their mortgage too? Obvisously this is just the real estate business trying to drum up more transactions.”

HAM
Guest
HAM

vangrl,

Garth is indeed an a hole sometimes. I’ve exposed him several times and of course my post never makes it to the board. I wouldn’t say his site is the worst one out there. His writing is entertaining and his investing strategy is quite good. He makes 7 figures doing what he does. I’ve learned a lot from his site and that’s why I don’t need his services like many of his followers.

vangrl
Member
vangrl

for me,his immature retorts make it the worst site out there… the fact that he really has been wrong for so long now and has the followers that he does is kinda bizarre to me.
How long has he been predicting interest rate to rise? I think it’s going on 3 years now. And his 7 year prediction of collapsing prices has only started to appear in the last 6 months. And I know, they reduced rates in 2008 blah blah blah, fact is, he was still wrong, if he’s so smart he should have seen that coming.

Sorry, not a fan

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