Should bank CEOs be worried about housing market?

Who should worry most about an overheated housing market?

Overstretched owners with big debt? Renters who want to buy? Government?

What about Bank CEOs?

TD CEO Ed Clark says that bank CEOs ‘should be worried’ about the Canadian housing market.

While he isn’t worried about a full-blown bust, Mr. Clark believes chief executives simply can’t ignore warning signs in the market – particularly the sudden run up in prices for real estate of all stripes. “If you run a bank, you should be worried about it,” he told the audience at a bank conference in Toronto.

Now if banks start to worry about insured mortgages, maybe the taxpayers insuring them should be worrying a bit too.

Of course other bank CEOs have said that there is no problem and lending has been prudent and restrained.

That article ends up with possibly the weirdest last paragraph of the year so far:

Mr. Clark’s comments Tuesday weren’t the first he’s made on the topic, but this time he went into more detail on how his bank is changing its behaviour.

“We’re saying ‘no’ lots of times” to potential real estate borrowers,” he said, some of whom are big, lucrative clients. Mr. Clark wouldn’t name names, but he noted that in one instance, Tim Hockey, the bank’s head of Canadian retail and commercial banking, was “virtually in tears” for having to turn the client down.

The austerity! it hurts!

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ILoveCharts
Guest
ILoveCharts

Yes and no.
There will be some carnage.
On the other hand, when the entire country is enslaved by debt, the banks are raking in enough (and will be raking in enough for a decade or two,) to deal with some carnage.

It feels good that I don’t pay any interest to the bank. No mortgage. No car loan. No credit card debt.

ILoveCharts
Guest
ILoveCharts

And to add the obvious: The people who should really be worried are the taxpayers. CMHC is where the bulk of the carnage will occur.

UBC in crisis
Guest
UBC in crisis

No, tax payers on the hook, thanks to CMHC.

jesse
Member

making loan officers cry? Sounds like winning to me

paulb
Member

New Listings 248
Price Changes 47
Sold Listings 55
TI:12360

http://www.paulboenisch.com

Best place on meth
Member
Best place on meth

Are sales still “hot”?

2.79% 5 yr. NEVER AGAIN
Guest
2.79% 5 yr. NEVER AGAIN

Happy 12,360 party!

VMD
Member

Tax cheats beware: Tories launch snitch hotline
The lines are now open to snitch on tax cheats.
The federal Conservatives launched the hotline Wednesday, saying they’ll also reward informants who provide information that leads to a big bust.
Informants who provide information on major international tax evasion of more than $100,000 could get between five to 15 per cent of the money that’s recovered, excluding interest and penalties, said Revenue Minister Kerry-Lynne Findlay.
“This will be a critical tool for recovering taxes that would otherwise be lost to tax cheats,” she said. Informants won’t get anything if they’ve been convicted for being part of the tax-dodge scheme, she added. The Tories plan to spend $30 million over five years to improve efforts to fight tax evasion both in Canada and abroad, Findlay said.

Son of Ponzi
Guest
Son of Ponzi

Right now we’re looking at MOI of 13.
Poor sellers.

DaMann
Member
DaMann

As Bearish as I am, come on guys, pretty standard seasonal numbers…Let’s not get carried away

tedeastside
Member
tedeastside

percentage of vancouver homeowners that report rental suite income…
probably around 1%

Bailing in BC
Member

I’ve never understood why people don’t report their suite rental income. The vast majority would have a loss after expenses. If you get caught not declaring it they disallow any expenses and you really get dinged. Bloody stupid if you ask me.

Renter
Guest
Renter

Percentage of Vancity homeowers who could afford to carry mortgage without renters 1%

Renter
Guest
Renter

Not to mention the homeowers who live in the basement suites while their tenants rent the main floor of their own house, I personally know a few…. Silly Willy

Snake
Guest
Snake

FULL TIME LICENSED AGENT NEEDED ASAP! TOO MANY BUYERS TOO HANDLE!*

http://vancouver.en.craigslist.ca/van/rej/4288120031.html

mac
Member
mac

Notice how there’s no blog called the Restrained Banker. LOL.

So not even Romeo Jordan is going to divulge his secret number for retiring in Vancouver sans condo? What about Dave? Has Dave bought yet?

gordholio
Member

Retire in Vancouver? Why would anyone want to do that? Ridiculous cost of living, seven months of rain, dreadful traffic…

Interesting. I’m watching the Canucks get destroyed and really loving it. The team was pretty darned good…three years ago. Management and others with vested interest have waxed poetic about them ever since, while in fact they’ve grown steadily worse the whole time. Now it’s finally becoming evident to everyone.

It reminds me of something. Hmm…what could it be…

VMD
Member

Australia just posted terrible employment numbers.

The Australian Bureau of Statistics has just released the December employment report, which was a terrible number no matter which way you cut it.

Employment in Australia fell by 22,600. But the huge fall in full-time unemployment of 31,600 is the big shock for markets, and puts a big question mark on the recovery at the moment.

But it is the contracting participation rate (think people in the workforce or actively looking for jobs) which is really holding the unemployment rate below 6%.

AUDUSD down 3% in 3 days. Sounds familiar?

crashtard
Guest
crashtard

we are crashing right now, as we speak, and the mainstream is totally unaware! this is insane!

tedeastside
Member
tedeastside

Proud vancouverites should buy a billboard in Coconut Grove Florida that says ….world class vancouver!! Dont you wish you retired here

Funkeymonkey
Member
Funkeymonkey

Before I sold I always reported my rental income. I wonder how many people with lane way houses do that?

patriotz
Member

@8: ” The Tories plan to spend $30 million over five years to improve efforts to fight tax evasion both in Canada and abroad ”

$6/million a year might hire about 50 people, assuming it’s all spent on staff. Yawn.

In other news, the Tories spent $2.5 million of taxpayers’ money advertising the non-existent Canada Job Grant program.

Barney
Guest
Barney

@gordholio
where would you retire in north america?

Many Franks
Member
“On the other hand, once I put this blanket over my head, driving isn’t so terrifying after all.” Household Debt May Not Be as Crushing as Some Data Suggest: There’s no doubt Canadians are carrying a significant amount of debt. But exactly how crushing that burden is depends on how you crunch your numbers. It’s uncertain how crushing things are. That’s reassuring. [T]he total debt service ratio of Canadian household debt is at a record low after falling to 7.2% recently from 7.4% a year ago. The debt service ratio represents the amount of disposable income needed to cover interest payments and other obligations stemming from household borrowing. That’s important, he argues, because “the driving force behind defaults and delinquencies is the ability to service the debt,” not the amount owed. So what? We already know delinquencies are currently low.… Read more »
Barney
Guest
Barney

“T]he total debt service ratio of Canadian household debt is at a record low after falling to 7.2% recently from 7.4% a year ago.The debt service ratio represents the amount of disposable income needed to cover interest payments and other obligations stemming from household borrowing”

so just pay interest and forget about principal. The principal, you can pass to the next generation. wow. we are doing good.

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