Canadian economy at risk from mounting mortgage debt

Is anyone else getting tired of all the warnings?

Be careful how much debt you take on, be careful how much house you buy, make sure to save for retirement.

Well here’s another one: Stephen Harper has been told the entire countries economy is at risk due to record debt levels and the high cost of housing.

Municipalities are asking for the government to address high housing costs, but not everyone agrees.

… Finn Poschmann, vice-president of research at the think-tank C.D. Howe Institute, said Ottawa has “little jurisdiction and almost no practical capacity to deliver housing.”

“Past attempts to do so, through CMHC for example, have produced financial disasters for the people who participated and put CMHC in grave financial situation.” he said.

“We wouldn’t want to see that again, nor the federal mortgage agency deeply underwater and as similar U.S. agencies have been, through the course of much more recent financial disasters.”

Of course our current situation is that the CMHC has been pouring money into Mortgage Backed Securities to encourage buying, they recently had to cap this program because they couldn’t keep up with the growth.

It is likely that the government could reduce the cost of housing by simply pouring even less money into MBS.

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Village Whisperer
Member
Village Whisperer

Ham Solo: where do you get the foreclosure data for BC? Is it available on line?

village_whisperer@live.ca

Thanks

oneangryslav2
Guest
oneangryslav2

Anybody who has ever taken an introductory class in economics knows that any type of consumer subsidy will simply shift the demand curve to the right, causing an unambiguous increase in price for that good/service. In fact, anything (like the expansion of credit) that acts to mimic an increase in income will have the same effect.

The solution to lower housing prices, as all of us here know, is to remove government subsidies from the housing industry. The feds know this, but refuse to do so. Hmmmm, I wonder why? The answer, of course, is not even rocket science!

crabman
Guest
crabman

Funniest line from that article:

“support the federal government’s commitment to jobs, growth, and Canadians’ financial security.”

The Federal Government doesn’t give one f@$k about Canadians’ financial security. They just give lip service to it so they have cover when the s&!t hits the fan.

Look how long they’ve been “warning” us without taking action:
http://www2.macleans.ca/wp-content/uploads/2012/04/Bank-of-Canada-Quotes-Chart.png

Randy Randerson
Guest
Randy Randerson

Politicians are best at kicking the proverbial can down the road. The Harper government is just hoping that the economy doesn’t tank while they’re in power. The best thing to do is to take away CMHC, but that’s just plain political suicide.

tasmanian devil
Guest
tasmanian devil

So can we assume that our politicians serve banksters elite or are we so brainwashed by the media to even recognize this?

Unplugged
Guest
Unplugged

Same old story of panic stricken marketers, brokers, bank loan officers and the like sucking in ignorant Canadian buyers and investors on promises of INCREDIBLE returns and SAFE HAVENS for assets that is Real Estate in Canada. See here how they operate:
goo.gl/0EafKr

paulb
Member

New Listings 199
Price Changes 91
Sold Listings 67
TI:16762

http://www.paulboenisch.com

chin
Guest
chin

thanks Paul, I knew something was up due to high amount of troll traffic

jesse
Member

One gauge I use is going on twitter and measuring how cocky some of the usual suspects’ tweets are. Don Campbell is my bellweather but there are others. Generally the level of mocking recently has increased, mostly geared towards the unnamed “bears”, but will be folks like “gentle” Ben Rabidoux, David Madani, et al.

It’s not just twitter, bank economists are starting to sound more and more brazen.

This is unscientific but when people who have a vested interest in things remaining the same start euphorically blowing their trumpets, I’ll take the other side. I don’t know better, but they should.

Faust
Guest
Faust

this breaking news
i guess this will show patriotz and BPOM how useful idiots they are
shame shame shame

Aggressive and insidious’: More details of Canada spying techniques to follow, Greenwald promises
http://rt.com/news/nsa-scandal-canada-greenwald-911/

Naked Official #9000
Guest
Naked Official #9000

@loyal cadre Faust

please report to your CO at the Shenzen Propaganda Office PLA Batallion #8888 and wu mao will be deposited in your account for your efforts.

keep it up!

bubba
Guest
bubba

from the FP link:

“the short supply of rental units is driving up rental costs and making it hard to house workers in regions experiencing strong economic activity.”

there was a time when housing prices didn’t rise faster than wages, this allowed quite a bit of rental properties to be built. But, as it turned out, the rental properties were turned into condo’s so that occupants could capture the price growth during the asset inflation years (which are drawing to a close). The solution to the supply problem is to revert the condo’s to rental units. Mass foreclosures should do the trick, it might be painful initially, but this idea will put more rental units on the market at affordable rates.

Xyz
Guest
Xyz

I’m starting to question my own sanity here…

Basement suite, 4 bdr, 3.5 bathroom, busy street, $2000 a month.

http://vancouver.en.craigslist.ca/bnc/apa/4093629781.html

Please tell me this is rediculous.. Not just the price, but squeezing all those bathrooms in a basement suite?

Would anyone here pay this to live in serfs quarters?

jesse
Member

“this idea will put more rental units on the market at affordable rates”

I want a crash as much as the next guy but this isn’t realistic. Even the most insane bubble cities in the US barely budged on the rental side during their crashes.

gokou3
Guest
gokou3

Re xyz#13:

The owner is probably aiming to set it up like a dormitory and have each room occupied by 4 students. It would be such a phenomenal deal for the 16 students (4×4 rooms) to split the $2k rental bill.

Just saying. Not saying this is a smart idea by any means.

Nguyen
Guest
Nguyen

Federal reserve nominates Yellen. Low mortgage rates for a long time and asset inflation. Who’s looking dumb now?

Nguyen
Guest
Nguyen

My 2 BDRM suite is rented for $1100 plus 1/3 utilities. So $2000 for a 5 BDRM sounds about right. I’m going to increase mine by $75 on Jan 1st.

former owner
Guest
former owner

might want to check with residential tenancy branch .. They might say your increase is not allowable:

http://www.rto.gov.bc.ca/content/news/default.apex

approved increases for 2014 are 2.2% ….

Xyz
Guest
Xyz

It’s a 4 bedroom. In the basement, not 5..

1100 for underground 2 bdr, kinda makes my skin crawl… If you currently have tenants, the rent increase may motivate them to start looking around… Just sayin 🙂

Xyz
Guest
Xyz

Ps. I viewed it today out of curiosity. You could not fit 4 students in each room if they were all standing up in 3 of the bedrooms. The bathrooms were quite fancy, and you shared a laundry room that is basically in your suite.

chin
Guest
chin

good luck with that nguyen because tenants are in high demand not enough of them. rents and house prices are getting lower so watch out for falling prices moron

Best place on meth
Member
Best place on meth

@gokou3

“The owner is probably aiming to set it up like a dormitory and have each room occupied by 4 students”

You’re half right. It’s definately set up for students but only 1 per room.

$500 a month is very reasonable for a student at BCIT which is only 5 minutes away.

Xyz
Guest
Xyz

I don’t know a lot of students that stick around long term and purchase renters insurance, but that seems to be thier target market.

Former Home Owner - Free since 2010
Guest
Former Home Owner - Free since 2010

@Nguyen – You may want to check out the residential tenancy boards website … Your rent increase is not allowable for 2014:

“For a conventional residential tenancy rent increase that takes effect in 2014, the allowable increase is 2.2 per cent. ”

Plus you remember to give the tenants written notice to get the rent increase in effect by Jan 1. Hope you already did that since you have to give three months notice:

A landlord must give a tenant 3 whole months notice, in writing, of a “rent increase. ”

To help you out, here’s a link to the site:

http://www.rto.gov.bc.ca/content/news/default.aspx

Good luck with the $24.20/month increase!

Best place on meth
Member
Best place on meth

@Nguyen

“Who’s looking dumb now?”

Looks like it’s you since you didn’t know it’s the President who nominates the Fed Chairman, and that your maximum allowable rent increase is only $24.

0 for 2.

canada man
Guest
canada man

@gokou3 yeah I’m sure the neighbors won’t mind,everything in this city is geared to making the most money you can .Hopefully theres a garage that can house 4 to 6 more students,this is the way to creating a great city.

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