RealityCheck, with no sense of irony says, “nothing earth shattering to happen anytime soon. Too many new foreigners buying. 100,000′s of Immigrants will pour into this city over the next 3-5 years.”

So…. the LM gets ALL of Canada’s immigrants? I did a quick “reality check” of my own over at Wikipedia. Your immigration numbers are wrong – very wrong. (“Since 2001, immigration has ranged between 221,352 and 262,236”)

For your hyperbole above to be true, most of the immigrants need to settle in the Couv. Simply doesn’t happen.

It’s OK though, those who fear a crash need to bend reality to come to the conclusions they like.

VMD, as I mentioned on twitter, changing amortizations are different from rising real rates. Changing amortization should have very little effect on the NPV calculations because it only affects repayment. Rising real rates OTOH is a different beast: they in effect tax borrowers and should elicit a stronger reaction.

The talk when amortizations were clawed back was on the “effective” rise in rates of 1% or whatever, but while that increases payments it also increases savings so nothing is really lost. Rising rates is bona fide “throwing your money away”. I think in general borrowers know the difference.

Time for some reflection: Back in June, RBC raised its 5Y Special Fixed Rate from 3.09% to 3.19% on June 10, then 3.39% on June 24 (now at 3.89%). With Fixed Rate on the upswing since early/mid June, the 90-day low-rate holds are starting to expire right about now. The 120-day low-rate holds may still have a month left before they expire. Worth noting that banks also do “rate sales”, with a lower rate quote requiring a faster closing (<60 days). Now for my little spiel: The rising rates have been forcing potential home-buyers who were sitting on the fence to make a major financial decision within 90-120 days. 3-4 months is enough time for any fence-sitter with a buying-bias to capitulate. This has occurred, resulting in an unseasonably "hot" July, August, and early September. Contrast this year's 3-4 month… Read more »

G&M on a roll today
Mortgage fears drive up Canadian home sales

If rising rates don’t cool housing, Flaherty may have to

Scotiabank’s Rick Waugh is doing a nice bit of comedy aimed directly at Jim Flaherty.

Bank of Canada should hike rates if worried about housing: Scotiabank

“I do not think there is a bubble, but if you’re really concerned, and you’re a policy maker, you know what the right thing to do is? Raise interest rates.”

Reminds me of Robert Webb in this sketch.

My god, it’s so beautiful.

/wipes away tears

Now, every morning is like Christmas.

http://www.greaterfool.ca/wp-content/uploads/2013/09/BONDS.png?8f4c78

*sniff*

The US non-farm payroll tomorrow 5:30am is The stat to watch.
If it’s a good beat, then chance of Sep-taper will be much higher (and bond yield will soar further)

The Canadian Unemployement Rate and Ivey PMI tomorrow will be interesting to watch too. All major stats that can impact CAD/USD exchange rate..

Bpom, the 5y bond rate leads mortgage rates. Going off the “average” rate the differential goes to zero in May 2014 and is negative for the rest of 2013 at current interest rates.

+100 to inventory.

+73 yesterday.

New Listings 280
Price Changes 98
Sold Listings 118
TI:16912

http://www.paulboenisch.com

Speaking of car payments, when did they start doing 84 month terms and show the payments as bi-weekly?

Also, will this trend eventually go to a 40 year car loan and the payment amount shown as daily?

@Saver: I have a friend who recently went from a not-too-old sedan to a brand new crossover. The motivation was trying to avoid a $2-3k repair bill on his old car in favour of trade-in credit from the dealership (surprise, the same shop that gave him the $2-3k repair estimate).

He’ll be paying more than double the ticket price of the vehicle when all is said and done, in addition to getting ripped off on the trade-in.

And he’s over the moon with his new car. Addictive behavior indeed. This guy is no dummy, but after hearing this story, you’d be forgiven for arguing otherwise.

(This guy’s in his 30s, otherwise I’d say we had the same buddy.)

Congratulations Vancouver. According to Bloomberg News/National Post you are now one of the two largest cities in Canada. Not sure what happened to Montreal but whatever.

It’s bad enough that these “news” outlets simply rehash RE propaganda as news, they can’t even get basic facts right. And they want you to pay for this garbage?

“Home sales in Canada’s two largest cities continued their surge in August from a year earlier.”

http://business.financialpost.com/2013/09/05/canadas-two-largest-real-estate-markets-are-surging/

Am I just afraid of change or is the new MLS site horrible?

Here is a chart of the 5 year renewal gap from 1956 to 2013.

There was a small blip positive in 2008, but the gap hasn’t been above 2 since 1990.

Basically, pretty much no one under 50 knows the stress of waiting to hear from your bank how much your 5-year mortgage payment is going to go *up*.

Anyone here remember that stress? If we see renewal gaps turn positive in 2014, a new generation will learn that burn. And it does burn.

Let’s not get too excited about the surge in listings in early September–it is at totally normal September surge levels. Here is 2012: date sell list ratio 04-Sep 88 364 24.2% 05-Sep 69 327 21.1% 06-Sep 80 290 27.6% 07-Sep 54 295 18.3% Here is 2011: 06-Sep 103 356 28.9% 07-Sep 106 316 33.5% 08-Sep 103 277 37.2% 09-Sep 106 253 41.9% Here is 2010: 30-Aug 102 191 53.4% 31-Aug 129 150 86.0% 01-Sep 94 189 49.7% 02-Sep 106 190 55.8% 03-Sep 103 210 49.0% So far, 2013 looks like 2011 or 2012 for listings. If we get a 400 listings day, or sustained 300+ then we have something. Otherwise, same old September. I think the rate-hold thing is the best explanatory factor for the last few months. If current yield trends sustain, then that 5-yr renewal gap turning positive… Read more »

For those of us wondering how changing credit conditions and the collective attitude towards debt affects behavior, look to an example that’s slightly less near and dear to our hearts than Vancouver real estate: auto loans. Auto dealers report record August sales: It was a hot summer at Canada’s car dealers as many automakers reported record sales for August, the second month that sales have reached new monthly highs. Canadian sales in August were up 6.5 per cent from last year, with car sales increasing by 7.2 per cent and light truck sales up 5.9 per cent, according to data compiled by DesRosiers Automotive Consultants and released Wednesday. Automakers have sold 1.2 million units in Canada so far this year, up from 1.16 million at the same point last year. “The gains were broad-based, with seven manufacturers reporting double-digit increases,… Read more »