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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space889
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space889

@vangrl – if you don’t have a job then only a negative interest rate would get you to borrow….hence economic cycle matters more.

space889
Guest
space889
BPOM:”I’ve had a look at individual sales from the past month and half the detached sales on the east side are going over asking, some 20% over while the rest go for merely asking. There’s hardly anything left to buy.” So BPOM – if you aren’t a realturd then how did you get individual sales info for an entire month for Van East side? Care to answer that? Or did you have to threaten dozens of actual hard working realtors to get that info? I think BPOM is a realturd and not a successful one that at. Maybe that broken Cantonese you spend thousands of $$ to learn isn’t helping you any? Not even impressing some FOBs like you used to? Is that why you are so pissed against Mandarin speaking people but not those British worshipping ass licking Cantonese… Read more »
@vangrl
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@vangrl

Just like Robert Shiller et al, I don’t think there is much correlation with rates.

For illustration purposes:
‘65-69 — 5yr rates go from 7 to 10.5% , home prices soar
‘72-75 — rates go from 8.5 to 12%, home prices soar
‘78-81 — rates soar from 9 to 18%, home prices soar
‘81-84 — rates plummet from 21 to 12%, prices plummet
‘04-08 — rates go from 5 to 7%, prices soar

space889
Guest
space889

@yunak – I guess when you can’t logically debate anything, you resort to personal attacks.

Funny thing is when I look around high tech high pay industry, the Asians/Eastern Europeans are taking over the work place. The non-Asians/Eastern Europeans are definitely a minority, and most who are still in the industry are managers who started 15 or 20 years ago.

The only boom industry I see for local boys like you are those that require skills in lying, cheating, and bullshiting – woops…I mean err…communication and marketing skills. Like FIRE industry where facts just get in the way.

history
Guest
history

Calgary South West MP @ CMHC save us!
… somehow Flood plus Oil crash = Socialize my RE losses, using toilet scrubber math.

space889
Guest
space889

@vangrl – And yet you ungrateful little brat is still complaining about the source of all this free money coming your way, despite the fact you never work for it. What a hypocrite. If you don’t like the source of the money, don’t take it, refuse it, and convince others to refuse it. If no one sells for foreign blood/corrupt money then you wouldn’t need to complain about all the foreign money influence, would you? But no, you want to complain and be on a moral high horse and take the money at the same time.

southseacompany
Member
southseacompany

MP asks Prime Minister to use CMHC to ‘save’ the Calgary housing market;

“Question Period: IMF Warning on Canada’s Housing Market” youtube video

https://www.youtube.com/watch?v=-vJTA2_gVag&spfreload=10

vangrl
Member
vangrl
thanks #69 & #74 By “tonnes” of money I was only referring to those lucky bastards that bought a long time ago in West Van and Westside, but I understand what you both are saying, certainly they could have bought in many places other than East Van. Listen, I’d be happy, or maybe a better word is ‘less frustrated’, if the gains are entirely because of mortgage rates, at least I’d know that the gains should stop or reverse when rates go up, rather than the constant reinforcement that Vancouver has too much foreign interest to ever go down. It’s hard for me, maybe lt’s because I’ve lived on the Westside most of my life, to not think foreign investment has played a huge part, as I literally see how neighbourhoods have dramatically changed. But maybe what I’m seeing really… Read more »
rip-off
Guest
rip-off

AAPL–Fake Apple Watches go on sale in China, Financial Times reports
Knock-off Apple Watches have gone on sale in China through ecommerce websites such as Alibaba’s Taobao, reports the Financial Times. Most of the fake watches do not have a brand marketing and cost a tenth to a fifth of the cheapest Apple watch revealed by Apple this week. Reference Link :theflyonthewall.comAAPL

The funds will no doubt be converted to Vancouver RE to wash them in due course

patriotz
Member

@53: “Total West Side detached sales last year amounted to 1,765”

Also in many cases the same property accounts for two sales. First sale is the old house, then it’s torn down and a new house is built and sold. Only the first sale results in the former owner with cash in hand looking for a new property.

patriotz
Member

@54:

You’re making a mistake assuming that every household (or most of them) on the West Side who sells their house for a large gain then buys another house farther east. It appears to me they are just as likely to buy a condo in the West Side. There are many such new developments aimed at downsizers. Also many may move to retirement destinations, taking the money out of the market.

If only a fraction of buyers in a market are “deep pockets” it means the marginal buyers, who determine prices, aren’t.

Where are most buyers on the East Side getting the money? Not from selling a West Side house, and not from offshore. They are borrowing it, plus many have the proceeds from selling a condo. And we already have an example of who is buying those condos and how.

southseacompany
Member
southseacompany

On BBC too. In case any Canadian bank governors may have missed;

“‘Extremely foolish’ to cut rates, says Mark Carney”

http://www.bbc.com/news/business-31825746

southseacompany
Member
southseacompany

From across the pond. Name sounds familiar;

“‘Foolish’ to cut interest rates, says Mark Carney”, Financial Times UK

http://www.ft.com/intl/cms/s/0/189240de-c74c-11e4-9e34-00144feab7de.html#axzz3U3jwnrbg

“Mark Carney says it would be “foolish” to cut interest rates or expand quantitative easing in response to falling oil prices”

“The thing that would be extremely foolish would be to try to lean against this oil price fall today,” Mr Carney told the Lords. “The impact of that extra stimulus . . . would happen well after the oil price fall had moved through the economy and we would just add unnecessary volatility,” he added.”

Ouch. That’s got to hurt, eh Poloz?

Marco
Guest
Marco

If CMHC raises it’s maximum over the million mark, like some banking economists would like, watch the gong show to continue. Anyone that can only put 5% down on a house just below a million should not be buying into an environment of possible interest rate hikes. If CMHC lowered their maximum of a million then house prices would fall overnight. If CMHC didn’t exist and the banks were forced to take on all the risk, well you know…

southseacompany
Member
southseacompany
“Why Finance Minister Joe Oliver isn’t intervening in Canada’s housing market”, Financial Post http://business.financialpost.com/2015/03/10/why-finance-minister-joe-oliver-isnt-intervening-in-canadas-housing-market/ “In March of 2013, then Finance Minister Jim Flaherty did something few politicians would dare: scolding Canada’s banks for racing “to the bottom” on mortgage rates at a time when the housing market was already frothing.” “On Tuesday, the IMF issued yet another report urging the federal government to tighten its reins on the financial system and spread more of the mortgage-lending risks among the private sector, citing new concerns over high house prices and huge consumer debt.” “Mr. Oliver, who became finance minister last year, has said little in response to these outside suggestions” “The contrast in styles is unmistakable.” “And, he (Douglas Porter, BMO) noted, that he believes there has also been a similar change in “stance” and “commentary” about housing under the Bank… Read more »
east side buyer's
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east side buyer's

My friends just bought east side sfh 20% down million $ mortgage. They were renting atb $2000 per month. Crappie house crappier location way way over bid. Oh and they are white and Canadian as can be. Nice people but dumb as duck with money and financial matters

Joe Mainlander
Guest
Joe Mainlander
#Vangirl #57 Someone (or a few) selling their home and getting money isn’t much of a ripple. Just because you got more for your home doesn’t mean your going to pay double for your next home, especially if most other folks don’t have any additional money to bid against you. However if EVERYBODY has access to ‘tonnes’ more money due to the laxing of CMHC standards and the lowest interest rates in a century, then that causes a wave not a ripple. The amount of money that EVERYONE can borrow has doubled since 2000. EVERYONE competes against EVERYONE bidding up prices. Then, when prices start rising, because of the ‘expectation of gains’, speculators start jumping in. Thats’ why home prices rocketed in ALL major Canadian cities. I.E. if you gave everyone that wanted to buy a house $500k, then house… Read more »
CanuckDownUnder
Member
CanuckDownUnder
The rationale behind Australia restricting foreigners to purchasing new builds is that it’s supposed to stimulate the supply side of the market. Nice in theory but what’s really happening is that the developers are targeting what’s being demanded in this severely distorted market – units for negatively geared local investors and foreigners. As a result Australia is getting lots of inner-city dogboxes built but absolutely no owner-occupiers want to live in them. How is this supposed to address long-term housing needs? I can just imagine how poorly built these buildings are, sure to be slums in 10-20 years. I’d also like to note that the foreign investment review board has not made one persecution since 2006 so in effect there has been no restriction on foreigners purchasing pre-existing housing. Sure, this $39 million mansion has been in the news recently… Read more »
tedeastside
Member
tedeastside

where’s lurker!!!! did you see that road rage of a guy who in front his mom
got out of his car and punched another driver…..that happened 2 days after i called vancouverites the most angry aggressive drivers in North America…..
lurker got pretty mad,…whats going on in vancouver, those people are the most vicious high tempered people u will ever encounter

LS in Arbutus
Guest
LS in Arbutus

@61 – That’s a good article RE the request to raise rental rates beyond the annual 2.5% allowed. In the rental market there is only so much the market will/can bear thus regardless of the “control” on rents, you’re not going to find people paying crazy rents. You can’t borrow from your HELOC to pay your rent!!! 🙂

Westside Realtor
Guest
Westside Realtor

Cdn RE has entered the Twilight Zone.

It’s laughable. Any sane body realizes this.

Can’t see the stupidity going on much longer.

WS sfh market ain’t hot. Steady, ya…hot, NOT.

It’s local borrowers using teaser rates that are driving up this low inventory mkt.

For now.

I’ll hold my cash and wait for the crash.

WSR

vangrl
Member
vangrl

maybe it was 2007, as I remember a bit of a downturn in 2008.

BUT there was definitely talk of HAM back then, house prices in Richmond went up like crazy!

So if it is indeed just the low rates, then with higher rates we should see the exact opposite right? or wait, is there something else that might come into play?

chinoria
Guest
chinoria

Two headlines on Google FInance:

RBC CEO David McKay bullish on Canadian housing
The Globe and Mail (subscription) – 5 hours ago
Royal Bank of Canada’s chief executive officer delivered an upbeat view of the Canadian housing market to a New York audience, just a day after the International Monetary Fund expressed concerns about it.

Right under it

RBC CEO Dave McKay Earned $7.5M In 2014 … Huffington Post Canada

Wonder if the two are related? Housing crash = may just earn a huge amount of money instead of a hockey star’s salary?

vangrl
Member
vangrl

wasn’t it 2008 that Richmond went just ballistic? or maybe 2009?

VMD
Member
BC landlords denied rent increases March 10, 2015 When B.C.’s housing minister announced last December the allowable rent increase would remain 2.5%, it was much to the disappointment of one organization that was asking for double that. Landlord B.C., which represents more than 3,200 landlords across the province, had been lobbying to raise the rent increase calculation formula from plus 2% to plus 5%, according to recently released Freedom of Information documents. Rent increases are determined by the Canadian Price Index plus 2%, as it’s outlined in the Residential Tenancy Act. David Hutniak, Landlord B.C.’s CEO, said the rental housing industry is unable to revitalize aging rental housing stock resulting from the province’s rent controls, which the group wants eliminated. “What we were suggesting was that formula be changed … because if you look at all the expenses that our… Read more »