IMF issues fresh warning on Canada housing market

Apparently it’s not just the Bank of Canada that thinks Canadian RE buyers are suckers. The IMF is issuing yet another warning of potential problems in the Canadian Real Estate Market.

The International Monetary Fund is raising red flags about Canada’s housing market, warning that moves by Ottawa in recent years to tighten mortgage lending standards and boost oversight of the country’s financial system haven’t gone far enough.

Household debt levels remain well above those in other Western countries, the organization said in a commentary posted to its website Monday. Home prices have jumped 60 per cent in the past 15 years and remain overvalued from 7 per cent to 20 per cent, in line for a “soft landing” over the next few years, the IMF said.

At the same time, it reiterated its call for Canada to collect more data on its housing market and to centralize oversight of the financial sector. As it stands, regulation remains fractured among the Department of Finance, the Office of the Superintendent of Financial Institutions, the Canada Mortgage and Housing Corporation and provincial governments all playing separate roles in regulating the housing the market.

Read the full article in the Globe and Mail.

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southseacompany
Member
southseacompany

“Housing starts fall sharply in February to lowest levels since 2009”, BNN with video.

http://www.bnn.ca/News/2015/3/9/Housing-starts-fall-sharply-in-February.aspx

“Canadian housing starts fell much more sharply than expected in February, a move that may have been aggravated by severe winter weather, data showed on Monday.”

“A report from the Canadian Mortgage and Housing Corp. showed the seasonally adjusted annualized rate of housing starts fell to 156,276 units last month from a downwardly revised 187,025 in January. That fell short of the 180,000 economists had expected.”

realist
Member
realist

Re-posting from previous thread. And why bring up corrupt banks on an RE forum? Follow the money…

@ 60 & 61 history:
“Starting to get the feeling HSBC fraud story is taken from a Grisham novel.”

ROFL. Better than any novel! Nothing new here, started with the John Company, well before (and helping precipitate) the First Opium War.

http://www.zerohedge.com/news/2015-02-16/hsbc-bank-secret-origins-laundering-worlds-drug-money

The recent shenanigans (2013 onwards) well covered in Private Eye and some of those British MSM recently found wanting, such as the Guardian:

“The US department of justice said HSBC had moved $881m for two drug cartels in Mexico and Colombia and accepted $15bn in unexplained “bulk cash”, across the bank’s counters in Mexico, Russia and other countries. In some branches the boxes of cash being deposited were so big the tellers’ windows had to be enlarged.”

http://www.guardian.co.uk/business/2012/dec/14/hsbc-money-laundering-fine-management

See also Matt Taibbi:

http://www.rollingstone.com/politics/news/gangster-bankers-too-big-to-jail-20130214

88
Guest
88

IMF warnings seem to have come early or late this year.

Nov 28, 2013 IMF says Canada should end CMHC insurance – Vancouver Condo Info
Oct 10, 2012 IMF pessimistic on Canadian outlook – Vancouver Condo Info
Oct 6, 2011 IMF thinks you have too much debt – Vancouver Condo Info

southseacompany
Member
southseacompany

“Barbara Yaffe: With lack of affordability, Vancouver fast losing its livability” Vancouver sun

http://www.vancouversun.com/business/Barbara+Yaffe+With+lack+affordability+Vancouver+fast+losing+livability/10874990/story.html

Pay site but if you scroll down carefully you can read the article behind the pay window.

“It should be remembered that politicians know, for every person that wants more financially accessible housing, there’s someone else who already owns and wants prices to stay high.”

patriotz
Member

@3:

Wow, she finally says something that makes sense. Except for every person who wants lower prices, there are many who want prices to stay high. 70% of households are owners, and not every renter aspires to buy.

patriotz
Member

In Calgary, condo sector bearing the brunt of the real estate downturn

Calgary’s condo market has taken a major hit as a result of diminished consumer confidence, say the analysts closely watching its vital signs.

Condos are often hit hardest in a downturn because it’s a market fuelled by investors. Because of the strong rental market, a condo investment in Calgary is *was?) an attractive choice. But investors will unload those condos if tenants lose their jobs and move away, or if they simply get nervous about prices falling. The owner of a single-family house, on the other hand, is more likely to ride out the storm.

Correct. Condos will take the hit first because their market is more investor-driver. But this will hit the SFH market next, because many SFH buyers are trading up from condos.

StupidityCheck
Guest
StupidityCheck

@3: Notice the Chinese characters on that sold sign? Strange, considering they are such a small fraction of buyers.

Judging from the comments, it seems the peasants might be grabbing for the pitchforks soon.

southseacompany
Member
southseacompany

“Real Estate Watch: IMF sounds fresh alarm over Canadian housing market”, BNN

http://www.bnn.ca/News/2015/3/10/Real-Estate-Watch-IMF-sounds-fresh-alarm-over-Canadian-housing-market.aspx

This one with a video.

patriotz
Member

@3:

The 32-year-old medical resident wrote recently to Mayor Gregor Robertson, conveying concern about the city’s property market.

Yet another person who doesn’t understand that it’s federal and provincial policies that are responsible for high prices. Plus:

Penner, from Chilliwack, and wife Leanne, a school teacher, live in a 730-square-foot Kitsilano condo purchased — with parental help — in 2009 for $440,000.

Yet another person who thinks he is a victim and doesn’t understand that he is part of the problem. Paying high prices for entry level properties supports high prices across the whole market. The person who sold that condo for $440K was able to buy a more expensive property, and so on.

So typical and so sad. As Prentice put it, look in the mirror if you want to see who’s responsible.

southseacompany
Member
southseacompany

“Markets tumble, greenback strengthens on rate hike concerns”, CTV News

http://www.ctvnews.ca/business/markets-tumble-greenback-strengthens-on-rate-hike-concerns-1.2272056

” North American markets racked up sharp losses Tuesday morning amid growing concern that the U.S. Federal Reserve could move sooner than thought on hiking interest rates.”

southseacompany
Member
southseacompany

Meanwhile in crazy land;
“Spring comes early to hot housing markets in Toronto, Vancouver, realtors say”, Financial Post

http://business.financialpost.com/2015/03/10/spring-comes-early-to-hot-housing-markets-in-toronto-vancouver-realtors-say/

“Rock-bottom interest rates, a scarcity of supply and growing demand from millennials and wealthy immigrants have fuelled a strong start to the spring real estate season in Toronto and Vancouver.”

vangrl
Member
vangrl

Patriotz,

Do you believe that Mainland Chinese money has had an influence on Vancouver house prices over the last 10 years?

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

hey thinks it only has an impact on the “high end”.

now what is “high end”? with the typical house on the east side, richmond, burnaby, north van all over a million one has to wonder.

patriotz
Member

@11:

Of course there’s an influence. Every buyer is responsible for the selling price of that property. Are some buyers Mainland Chinese? Yes.

Beyond that, you have ask whether anyone else can be held responsible for a price you chose to pay, when you didn’t have to buy in the first place. That’s not an objective question.

vangrl
Member
vangrl

just curious, I wasn’t sure where you stood with that.

LS in Arbutus
Guest
LS in Arbutus

I was on the very pretty stretch of Broadway, west of Alma and there is a brand new house being constructed. I was driving, so I didn’t get clear sight of the marketing sign, but it appeared to be 100% in Chinese. So… one can’t deny that the builder knows his main buyer reads Chinese.

Whether these people are residents or not, if they are reading Chinese, their wealth was not made locally.

I think that most of the movement up in prices in Canada *is* due to a credit bubble, but to absolutely deny that there has been little foreign money, particularly on the west side, would not be true.

BTW, China’s in a serious credit bubble as well. Could be VERY interesting.

Just Jack
Guest
Just Jack
The very act of the government interfering in the housing industry by encouraging more construction of smaller condos for affordable housing has the affect of stimulating the economy and making housing more expensive. Smaller units drive out families and encourage investors buying vacation rentals and speculators leaving the suite vacant as a hedge against currency fluctuations and for wealth preservation. The money would be better spent on older condominiums. A co-operative condo complex can get financing for ongoing repairs. Alter the strata property act to allow strata councils to have the same access to financing and we won’t need financial reserve studies that increase the monthly costs. This would also alleviate the fear of massive personal debt if the strata complex requires major upgrading. These unknowns make the older condos less desirable than buying new. Let’s start working for the… Read more »
Son of Ponzi
Guest
Son of Ponzi

#16
good comment.
Problem is, HAM only buys new.

Mortgageslave
Member
Mortgageslave
@space889 “I guess she didn’t get the memo about how awesome renting is. Everything is awesome when you are renting and part of the bear team! Everything is awesome when you are renting and part of the bear team! Everyone sing it!” Just going through some weekend comments and had to laugh at space (once again). It’s so obvious that he’s a struggling realtor, being so angry at people for their choice to rent a home!! how dare they?! What a pathetic loser, LMAO – AT YOU SPACE889!!! PATHETIC! @StupidityCheck “Judging from the comments, it seems the peasants might be grabbing for the pitchforks soon.” Another “Classy” realtor calling non-homeowners “peasants”? Last time I checked I have more $$ than all my homeowning peers. You guys are all pathetic. if you only had a clue. On another note, would you… Read more »
kabloona
Member
kabloona

@16 – How does producing more of something drive the unit price up?

BTW, I’m not interested in paying for the deferred maintenance on old condos, either…directly or indirectly.

Taxpayers in BC have already subsidized the renovation of leaky condos once….those buildings are *private property*, not a public liability.

Just my $0.02….

hoax
Guest
hoax

IMF report.

IMF doesn’t understand the Economics of Corrupt Money. It works differently than the clear money.

Say, during Asian Finance crisis, Honger moves money back to HK to save the businesses they have in HK.

Corrupt money from China works in the opposite direction. Money is leaving as the problem goes bigger.

If anyone knows a graduate student, here is a thesis.

Obvious
Guest
Obvious
vangrl
Member
vangrl

http://www.vancouversun.com/life/Video+Biggest+residential+real+estate+sale+million+Point+Grey/10875379/story.html

“comes at a time when Vancouver market is just hopping with Chinese money”

every day, article after article….

vangrl
Member
vangrl
Yunak
Guest
Yunak

@21,2,3

So unfortunate and bizarre that such small and relatively distant piece of the Planet Earth ends up with gargantuan shitload of Chinese sediment. A natural disaster run by few interest parties, such irony…

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