OECD: Canada RE way overpriced

There’s another article about the OECD report of overpriced real estate over at the CBC.

The Organization for Economic Co-operation and Development looked at real estate prices in developed countries and looked at price-to-rent and price-to-income ratios:

The report found that based on rents, Canadian real estate is overvalued by as much as 60 per cent and in terms of prices to incomes, real estate is still as much as 30 per cent overvalued.

“There is no denying we’re overshooting, vis-a-vis rent, vis-a-vis income, vis-a-vis demographics. So the OECD is not adding anything here to the debate,” Benjamin Tal, CIBC deputy chief economist, told CBC News. “That’s old news.The interesting question is not that we’re overshooting, it’s what will be the corrective mechanism, namely what kind of mechanism will we see bring it back to normal.”

Read the full article here.

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someone
Guest
someone

This is hilarious! MAC Marketing Solutions has come out with a Vancouver real estate-themed crossword puzzle. You can submit a completed crossword puzzle along with your name, phone number, and email address by midnight of June 13th for a chance to win a $50 Home Depot gift card.

Here is a little sample of the puzzle: The clue for 2 Down is “Popular Countertop Material”. The answer must be Granite.

http://www.macmarketingsolutions.com/blog/post/mac-real-estate-crossword-puzzle-contest

Village Whisperer
Member
Village Whisperer

Gee, and my first thought was that the 7 letter answer must be “suckers”

Beuller
Guest
Beuller

17 across, 4 letter word for employees posing as potential buyers?

Rates Rates Rates
Guest
Rates Rates Rates

rates aren’t going to go up rapidly. the government and central bankers, especially in canada, now have full control of the economy and they won’t let bonds shoot up in a way that disrupts the economy. and that means easing rates up slowly, giving people enough time to adjust to higher rates.

this means no crash, but a decade of declining prices. as we all know that no bubble has ended in a soft landing, this means that there was never a bubble.

happy monday.

emmi
Guest
emmi

Rates, Aren’t rates a market?

And, they are “shooting up” right now.
http://www.bankofcanada.ca/rates/interest-rates/canadian-bonds/

Probably because the U.S. is making noise about killing QE and then tweaking our rates up. Once the U.S. does that the market for Canadian bonds is going to get very weak indeed.

Anonymous
Guest
Anonymous

“this means no crash, but a decade of declining prices. as we all know that no bubble has ended in a soft landing, this means that there was never a bubble.”

If prices decline for a decade, who cares if you call it the bubble or a soft landing? It is a disaster.

N
Guest
N

“the government and central bankers, especially in canada, now have full control of the economy”

Whew!

chump change
Guest
chump change

it is certainly a Conspiracy, under the auspices of glaringly obvious Political Economy. More to come, Guinea pigs … One trick pony commodity country, Canada, is building us something very important, and will be revealed in due time.

Anonymous
Guest
Anonymous

@ Bueller (comment #3) “17 across, 4 letter word for employees posing as potential buyers?”

KRIS?

southseacompany
Member
southseacompany

From today’s Province. Also in National Post:

“The secret plan to break up the CMHC”
http://www.theprovince.com/business/secret+plan+break+CMHC/8503251/story.html#ixzz2VpVy8dxI

“In 1979, Mr. (Larry) Smith (professor emeritus at the University of Toronto’s economics department), was appointed deputy chairman of a federal task force set up to “study the potential for privatization” of the activities of the CMHC.”

“It makes for an interesting read three decades later as the country gets set to contend with a potentially severe correction in house prices.”

“Much of the discussion about what’s wrong with the housing market focuses on the CMHC.”

Son of Ponzi
Guest
Son of Ponzi

CMHC Canada’s Fannie Mae.
Will have to be bailed out by Taxpayers.

Son of Ponzi
Guest
Son of Ponzi

Is there a Mandarin version of the crossword puzzle?

Rates Rates Rates
Guest
Rates Rates Rates

>Rates, Aren’t rates a market?

over the past 5 years it should be clear that governments have the ability to control markets and create the outcome they desire.

housing is a market, or at least it should be, but the government has shown that they have perfect control over it.

if we get into a situation where people are having problems paying off debts or defaulting, this will give the government even more ability to print money. because if money is being removed from the economy in the form of interest payments and defaults, printing will have no net effect and inflation will be at targeted levels.

this means that if things get bad the government will simply step in and create an equilibrium, or easy the price down over the long term.

Rates Rates Rates
Guest
Rates Rates Rates

if you people think bonds prices are going to collapse and rates are going to spike up, that’s fine. we should find out very soon if you are right (how long? one month? two months?).

but if your prediction doesn’t come true, it might be time to take a step back and realise that maybe your analysis is based on wishful thinking rather than critical thinking.

Son of Ponzi
Guest
Son of Ponzi

Triple Rates,
So you believe in “Money ain’t for nothing, And the chicks for free”.
All the government controls is an artificial economy, devoid of fundamentals.

Beuller
Guest
Beuller

7 down, you should never _____ anything anyone from the real estate industry says on TV, 5 letters, starts with “T”

jesse
Member

39 down clue: “Not variable”
Suggested cryptic clue: “Sisters’ marketing campaign”
hahahaha

Beuller
Guest
Beuller

6 across, people commonly refer to real estate agents as ______ bags, 6 letters, starts with “D”

Rates Rates Rates
Guest
Rates Rates Rates

@Son of Ponzi

obviously there is no free lunch. but that fact doesn’t contradict anything i’ve said. maybe you should be more specific with what the issue is so i can respond. song lyrics with double negatives do little to advance the discussion.

Guy Smiley
Member
Guy Smiley

@ Bueller #3

Something about it doesn’t look right but F-R-O-D seems to fit.

JSON
Guest
JSON

SHILL has 5 letters. 😀

Anonymous
Guest
Anonymous

“rates aren’t going to go up rapidly. the government and central bankers, especially in canada, now have full control of the economy and they won’t let bonds shoot up in a way that disrupts the economy. and that means easing rates up slowly, giving people enough time to adjust to higher rates.

this means no crash, but a decade of declining prices. as we all know that no bubble has ended in a soft landing, this means that there was never a bubble.”

please keep this to yourself. people in this blog cannot accept this! tell them the sky is falling, and they will worship you like god.

Rent$385
Guest
Rent$385

This small house is for rent on Craigslist $950
on msl: $579,000

http://www.realtor.ca/propertyDetails.aspx?propertyId=13238719&PidKey=647046551

http://vancouver.en.craigslist.ca/bnc/apa/3861494069.html

Price to rent: >50.

But what really makes me laugh is the craigslist description:
“The house is for sale but landlord is in no rush to sell and won’t accept the crazy low prices some builders are asking. The house has been on the market for 3 months and there has only been 1 offer (very unreasonable). It could take 6 months or a year to sell based on the current market.”

Really? Have you looked at your Price to Rent?

Son of Ponzi
Guest
Son of Ponzi

Triple Rates # 19.
Maybe this analogy will help.
The government’s approach to engineering a soft landing is like an alcoholic who keeps on drinking with the hope of waking up some day and being sober and dry.
Years of artificially low interest rates and QE created record debt levels.
As the old car repair commercial went ” You can pay now, or you can pay me later”.
With later meaning that it will be much more expensive.

Rates Rates Rates
Guest
Rates Rates Rates
>Years of artificially low interest rates and QE created record debt levels. no, they’ve had the opposite effect. QE is the american policy, so let’s look at the debt stats for that country. federal debt to gdp ratio: http://en.wikipedia.org/wiki/File:FederalDebt1940to2012.jpg Fed Says U.S. Household Debt Declined to 2006 Level http://www.bloomberg.com/news/2013-05-14/fed-says-u-s-household-debt-declined-to-2006-level.html the reason the US central bank can print so much money without creating inflation is because money is being removed from the economy to pay off debt. thus the money printing simply maintains the equilibrium. canada is not the same as the USA. there was no crisis and no QE in canada. houshold debts are too high here, the government and BOC know this. they are taking measures to ease that down. so far it’s working. increasing personal debt after the economic crisis also worked, and it saved the canadian economy… Read more »
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