How to prepare for a housing bust

Garry Marr writes about the situation in Alberta over in the Financial Post. The drop in oil prices has hit their economy first and hardest with sales down by 30-40% over a year ago and growing listings.

So how do you prepare for a surprise economic hit like that?

Simple. Save up to cover for job loss, keep your debts and bills manageable and  don’t get into a situation where you have to sell when everyone else is selling.

Unfortunately Canadians aren’t doing so well on the debt front:

Debt reached an all-time high in the fourth quarter, relative to income. Statistics Canada says the debt to disposable household income ratio is 163.3%, much of it attributable to housing costs.

Read the full article here.

Sort by:   newest | oldest | most voted
Westside Realtor
Guest
Westside Realtor

How to prepare?

Simple. Rent, save (as much as possible), invest where you see value.

When the worm turns, use this cash to strike a fair deal.

That’s my plan.

WSR

Randy Randerson
Guest
Randy Randerson

Seems like the idea to save for rainy days is a no-brainer. The stories of grasshopper and ant should be sufficient education.

Or that cowboys are just bad at listening.

oneangryslav2
Guest
oneangryslav2

Horny housebuyer: “But the debt disappears with the equity during a downturn, right?”

Me: “You’re half-right.

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

albertans can just walk away from their properties.

space889
Guest
space889

@Westside Realtor – Cuz when you can’t pay the rent, you can always file complaint to the Landlord Tenant Board and drag out the eviction process for months while living rent free, right?

All is fair as long as you are renting and it suits your purpose?

vangrl
Member
vangrl
Westside Realtor
Guest
Westside Realtor

Space,

Go chew on some elephant turd.

you missed the point completely.

No surprise.

WSR

southseacompany
Member
southseacompany

Vikram Mansharamani’s Wle E. Coyote comment makes Global News;

“Canada’s housing market hits Wile E. Coyote moment: Yale lecturer”

http://globalnews.ca/news/1900283/canadas-housing-market-hits-wile-e-coyote-moment-yale-lecturer/

“Mansharamani, who teaches a seminar on bubbles at the U.S. Ivy League school, has in recent days joined a slew of international observers, which includes the IMF and Deutsche Bank, in expressing concerns that Canada’s housing market is approaching a potentially sharp correction.”

“Mansharamani said Canadians have embarked on a decade-long credit binge that’s helped puff up home values, a trend that’s made the country one of “the most vulnerable large economies in the world.””

Oracle
Guest
Oracle

WSR:

If you go buy a house, what you going to invest with?

Buy a house if you can afford the monthly. Keep the principal out of the house as gov is giving free money at 2%. Invest the principal.

Strange you said you’d put your ‘cash in when they drop ‘. No. Buy with leverage with little down if possible.

bullwhip29
Guest
bullwhip29
You can’t prepare for something that is already unfolding in front of our eyes. It is way too late for that. Anyone with a half a clue should have taken what occurred in 2008-09 as a major wake up call and gotten their finances in order instead of making the situation so much worse. Unfortunately, the MSM among others labelled the events of those yrs as the worst financial collapse since the Great Depression, which imho was a complete farce. Not only were some really stupid policies implemented and all kinds of funny money completely wasted (and/or stolen), the public learned very well what the definition of moral hazard was and continued on like nothing ever happened. Poloz and co are acutely aware of the ridiculous predicament most Cdns are now in (not just those from Alta and bubblicious prov’s… Read more »
Bull! Bull! Bull!
Guest
Bull! Bull! Bull!

late in 2012 you said that a “stealth housing crash” had been going on for “some time”. yet here we are in 2015 and prices keep going up.

bullwhip29 Says:
December 3rd, 2012 at 8:16 am
Whatever you do, don’t listen to those annoying bears that think a serious meltdown in prices is coming, that a stealth housing crash has already been underway for some time and that much of the HAM fueling the housing boom here has literally gone up in smoke.

http://vancouvercondo.info/2012/12/government-meddling-hurts-first-time-buyers.html#comment-186132

bullwhip29
Guest
bullwhip29

@ #11
you obviously didnt understand what i said or deliberately took some of my comments out of context. thx kindly for going to all that trouble to repost link to original post.

Best place on meth
Member
Best place on meth

There are really only two ways to prepare for a housing bust.

1. Duck & cover

2. Stop, drop & roll

Both are equally effective.

Yunak
Guest
Yunak

“Toronto is 10 years behind Vancouver in terms of the difference in the housing market.”

It’s an utmost contentment to be part of such advanced city when it comes to housing and RE market…

http://www.cbc.ca/news/business/price-gap-between-new-houses-and-condos-hits-300k-in-toronto-1.3007732

vangrl
Member
vangrl

Now there’s a chart!

https://ca.finance.yahoo.com/echarts?s=TCN.TO#symbol=TCN.TO;range=5y

Sweetest easiest way to have played the U.S housing market from Canada.

Canadian company trading on TSX, pays 100% eligible dividends but does business in the states.

One of my fave holdings!

vangrl
Member
vangrl

I have a sneaky suspicion that Van’s Condo market is going to start going down very soon….

patriotz
Member

@4: “albertans can just walk away from their properties.”

CMHC insured mortgages are recourse regardless of provincial legislation.

But what ultimately matters anywhere is whether the borrow can make the payments.

Loon
Guest
Loon

How to prepare for a housing bust:

Get ducks in a row. Shoot ducks. Shoot self.

paulb
Member

New Listings 285
Price Changes 57
Sold Listings 231
TI:13423

http://www.paulboenisch.com

history
Guest
history

Laurentian Bank:

“Canadian consumers are highly leveraged and thus cannot continue supporting the growth of the economy like they have done over the past decade unless jobs are added at the same pace as they are in the U.S. The housing sector is also fully valued”

http://www.zerohedge.com/news/2015-03-24/canadian-housing-bubble-has-begun-burst

history
Guest
history

http://www.cbc.ca/news/business/the-astounding-rise-of-china-s-currency-don-pittis-1.3005562?cmp=rss

‘As of this week, the renminbi is being traded in a major way in Canada as well, after Finance Minister Joe Oliver opened North America’s first Chinese currency trading hub Monday night in Toronto.’

YLTNboomerang
Member

Anyone know how to post a screen cap from the financial post front page where this article referenced in the headline has the word “when” replaced with “if”?

I’m guessing they didn’t change it in the existing article as the would Be too easy to call out but changing on the front page assuages the 70% who own…and pay for the post.

Randy Randerson
Guest
Randy Randerson

Who here thinks Poloz will drop rate again this year, since our economy is going down the crapper than a piece of turd. I for one think he’ll drop another quarter of a point to appease his Master Harper to keep this RE bubble going.

vangrl
Member
vangrl

http://www.theglobeandmail.com/report-on-business/economy/housing/the-real-estate-beat/developer-pays-big-premium-in-hunt-for-vancouver-land/article23604767/

wow, those co-op owners scored!

Also, what was the government thinking with their 20 mil bid to CP? that one block on 6th between Cypress and Burrard is probably worth more than that.

RFM
Guest
RFM

“Five years ago, I wrote an article for Reuters titled “Goldilocks and the Three Fuels.” In it, I discussed what I call the Goldilocks price zone for oil, natural gas and coal, a zone in which prices are “just right” — high enough to reward producers but low enough to entice consumers. Ever since the start of the fossil- fuel era, such a zone has existed. Sometimes price boundaries were transgressed on the upside, sometimes on the downside, but it was always possible to revert to the zone.

But now, the Goldilocks zone for oil has ceased to exist. This will have staggering consequences throughout the economy for the foreseeable future.”

Read the full article at Reuters:

http://blogs.reuters.com/great-debate/2015/03/24/goldilocks-zone-for-oil-prices-is-gone-for-good/

wpDiscuz