The Central Bank That Cried Wolf.

There once was a central banker who was bored as he sat on the hillside watching the village sheep. To amuse himself he took a great breath and sang out that some property prices were “probably overvalued“.

The Canadians came running out of their homes to try to pay down their debt and get their finances in order. But when they arrived at the top of the hill, they found record low interest rates and rising property prices along with stagnating incomes. The central banker laughed at the sight of their angry faces.

“Don’t cry ‘high debt loads” said the Canadians, “when there’s no interest rate increases!” They went grumbling back down the hill and signed up for some more mortgages.

The banker was replaced with another, but he played the same naughty game, singing out “The elevated level of household debt and stretched valuations in some segments of the housing market remain an important downside risk to the Canadian economy”

By this time though the Canadians were wise to these pranks and they wisely held their place in the line up for the latest greatest condo pre-sales opportunity.  The banker retired with a gigantic pension and everyone lived happily ever after.

MORAL: Load up on more consumer debt, invest in hot real estate. What could possibly go wrong?

 

Sort by:   newest | oldest | most voted
www.shopwahl.de
Guest
www.shopwahl.de

Commonly I can’t read content upon weblogs, nevertheless i need to declare that the following write-up extremely pushed my family you need to do thus! Ones composing preference has become surprised everyone. Many thanks, pleasant post.

bestplaceonearth
Guest
bestplaceonearth

Canada, Australia and the UK all have bears in common.

Aggregator
Guest
Aggregator

@CanuckDownUnder “What a uniquely Australian phenomenon”

It’s no phenomenon. Just think what Canada, Australia and the UK have in common and you’ll get it.

VMD
Member

@81 I don’t know what the purchase price was back in 08 (if it was sold then), but this was the listing back in 2008, the year it was built.

http://www.okanagancollection.com/Properties.php/Details/5

It was called “San Marc Tuscany Villa” and was “previously owned as a second residence“.

If the original owner paid anything close to the original asking price of $5.9M back in 2008 for this vacation home, he’s short $2.4M, a lambo, and “$450k worth of furniture & art.”

Harvey
Guest
Harvey

45% drop, but that is still expensive for our resident bears.
but thanks for posting.

Barb Rennie
Guest
Barb Rennie

1532 VINEYARD DR WEST KELOWNA

How much did the seller pay for the property? And when was it purchased?

VMD
Member

From one of my contacts:
This luxurious Kelowna mansion was auctioned off today (see Auction Site Here)

1532 VINEYARD DR WEST KELOWNA
Built: 2008
Listing Price (2008): $5,900,000
Listing Price (2013): $4,350,000 (May/13)
Assessed Value (2013):$3,780,000
Auction Date: Oct 24, 2013
Winning Bid: $3,500,000
Winning bidder got “house, a free Lamborghini, $250k of furniture, and $200k of beautiful art as part of the deal!”

bestplaceonearth
Guest
bestplaceonearth

come on bears, you can buy a surrey two bd condo at $140k. the reason you cant afford anything in this town or in the burb is that you keep sitting on your fat arses all day whinning, and hoping someone is gonna give you a royal suite in coal habour.

CanuckDownUnder
Member
CanuckDownUnder

@jjss:

What a uniquely Australian phenomenon, the vomit-inducing property auction. If you think real estate agents are greasy you can imagine what the property auctioneers are like.

I’m having a hard time following the logic of the winning bidders – “Sydney prices are just nuts at the moment so I know we’re never going to lose money here.”

Fugly
Guest
Fugly

Who’s seen the Sixth and Willow townhouse on West 6th lately? I swear it is the ugliest piece of work i have ever seen, the rusted iron slats should be illegal, you swear its a prison in the making, these toilets start at 989,000, woooo me thinks the few suckers who have bought are now suicidal . Unfnbelievable
!!

jjss
Member
jjss

Here is a link to a short news story about the currently heating Australian market.

http://www.bbc.co.uk/news/business-24646941

After I watched it, I found this story from July.

http://www.bbc.co.uk/news/business-23337955

Snake
Guest
Snake
jesse
Member

“is the crash being postponed yet another year”

(Don’t tell anyone, but the market has already partly corrected. The debate should be when it stops correcting.)

Harvey
Guest
Harvey

144

is this hot or not for this time of the year? what armchair economists have to say?

paulb
Member

New Listings 201
Price Changes 101
Sold Listings 144
TI:16604

http://www.paulboenisch.com

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

how have sales been lately? is the crash being postponed yet another year?

Poloz
Guest
Poloz

Housing prices are going to stay stable at worst going forward. They will rise 10+% at best.

I know this detaches them from the so called ‘fundamentals’ but this is totally a new era. Low rates for a long time and 50,000 people coming here per year for decades.

I’m just hoping for a small sudden shock to the system so I can get in before it all starts taking off again.

Worst decision I ever made was listening to ‘bear’ websites. They will continue to be wrong. What trend is going to stop home prices from increasing?? None.

patriotz
Member

“beggars and the homeless”

tell me a city of 2 mil in north america that does not have those?

The difference is that elsewhere in Canada (I won’t speak for the US) they are confined to downtown and the crappy areas adjacent to it – not everywhere from UBC to Abbotsford.

Many Franks
Member
Active Member
jesse
Member

“Don’t bet money with the doomers
Fixed.

Some anonymous guy prognosticates about future currency movements. Best of luck to you.

Mortgage Borker
Guest
Mortgage Borker

” His bet against the loonie is already starting to look good.”

if you put money with them you are going to loose. As long oil is around $100 expect parity with US$. Don’t bet money with the doomers.

jesse
Member

“The Financial planner course is on par “

I think it’s more that the finance industry does not self-select for intelligence. No offence to anyone here — I’m sure there are a lot of smart finance people — but intelligence doesn’t seem to be a meaningful arbiter, in other words the type of work doesn’t require you to be smart.

I expect being money-grubbing and greedy will be assets (if you love money, and indeed who doesn’t, why not do a job you love?) but I might be wrong on that one and I’m sure there are exceptions.

Best place on meth
Member
Best place on meth

Speaking of that US hedge fund betting against our real estate by shorting the banks and the loonie, the Q&A with the manager of the fund is fascinating.

http://www.theglobeandmail.com/globe-investor/investor-community/qa-with-vijai-mohan-the-man-whos-shorting-canadas-banks/article11731134/

Mr. Mohan has clearly done his homework. His bet against the loonie is already starting to look good.

Melba
Guest
Melba

…Some people here will be the first ones to tell you that managing other people’s money doesn’t require being bright as a prerequisite….

Isn’t that the truth! The Financial planner course is on par with the Realturd course.

jesse
Member

“They haven’t paid off, yet”

Gamblers gonna gamble. Some people here will be the first ones to tell you that managing other people’s money doesn’t require being bright as a prerequisite.