Are young homeowners doomed if house prices drop?

That’s quite a headline on this CBC article.

…the Canadian Centre for Policy Alternatives suggests that one in 10 homeowners under 40 will be underwater on their mortgages — meaning their debts will be greater than their assets  — if real estate prices crash as expected at some point in the near future.

Right now, real estate prices are overvalued by anywhere from 10 to 30 per cent, according to Bank of Canada estimates. Eventually, most analysts say, the market will correct itself and prices will go down, either due to declining incomes, rising interest rates, or a combination of both.

When that happens, homeowners under 40 will be disproportionately affected — not because they stand to lose more actual dollars, but because they are debt-strapped and will see a bigger drop in their net worth, the study argues.

Realtors and economists say not to worry. Read the full article here.

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Oracle
Guest
Oracle

Get ready for rents to go up, up, and up.

Canada to lift visa restriction for Mexicans. If they are denied permanency in USA, then they can come here.

Expect about 40,000 here by summer. No joke.

I would come if i was poor in Mexico. What would i have to lose?

Oracle
Guest
Oracle

And they don’t even have to stay under 6 months….no tax treaty with mexico.

They can stay here, buy or rent houses, but would have to provide own healthcare insurance (but would use facilities), and free education for kids in sanctuary cities.

Wow. Another group wins the lottery courtesy of the RE/Big5/Corporate country called Canada.

Oracle
Guest
Oracle
Oracle
Guest
Oracle

@shutitdown

“Anybody who says traffic is bad in Vancouver has never travelled. Period.”

Its bad and have travelled extensively. Third world you see an opening and can go…no rules…so best drivers can get ahead. Los Angeles is only packed on Freeways. Made it from Universal area to LAX in an hour many days during rush hour. Try to get from Surrey to Vancouver during rush hour!

paulb
Member

New
165
Sold
243

TI:9625

http://www.paulboenisch.com

Whistler or bust?
Guest
Whistler or bust?

$9 mil doesn’t get what it used to…

https://ca.finance.yahoo.com/news/steve-martin-finally-sells-caribbean-getaway-on-181427909.html

They ought see Vancouver!

w
Guest
w

@28

Landlords, only rent with a lease. That way when rents keep skyrocketing you can raise it as much as you want once the lease is up.

Oracle
Guest
Oracle

Wow,

Inventory going towards record lows per capita.

Shout it out
Guest
Shout it out

A sad sign of the times. BC population use of food banks highest ever, and our RE prices are exploding upwards. Tells you people are over indebted just trying to live here and the rewards of society are not being fairly distributed. At least the rich students and housewives can be taxed to help our poor no?

Not that everyone id a victim. Think of Alberta. Explosion of food bank use there too. Until last year, anyone who could tighten a nut could make $120 K a year and even more if they worked hard. Didn’t they save anything? Too many trucks and snow-mobiles are other crap to buy.

Shout it out
Guest
Shout it out

IT’S PROBABLY TIME TO CLOSE THIS SITE DOWN.

We have all been wrong for a very long time. Coming here has just reinforced our mutual delusion that prices will eventually come down.

It wont. rates will not go up. Hot money will keep flowing from Asia. Government will do everything they can to prop RE. the RE lobby IS the money in this province. To get them upset is like upsetting the Mafia. Banks are part of this cartel and they want to keep things pumped up.

people here are now even turning on the impoverished refugees as another cause. they wont make a difference since they are coming with not a cent in their pockets. It is all the other stuff that has and will screw us.

Oracle
Guest
Oracle

Agree.

It should be clear by now who runs gov and all political parties in canada. The aim is to bring in immigrants both temp and perm, and pack them into cities to benefit RE, Corps, and banks.

Trudeau is actually going to make rents go much higher.

Not pumping the bull side but its simply a numbers game.

25,000 Syrians…..

40,000 Mexican ‘tourists’…..

284,000 Immigrants…..

300,000 students and 500,000 IMP/TFW (they haven’t cancelled any program)

Helps the developers.

Shut It Down Already
Guest
Shut It Down Already

@35

Probably?!?

History
Guest
History

impoverished refugees given scads of Goo money for Flow Thru Rent to the housing lobby.

And every mortgage/bank slave says ‘Thank you Justin … thank you’

while the bogus refugees slip into the country, dicks out.

Vanco
Guest
Vanco

@ Shout it out.

I agree this site is not helpful. It serves a place for the bears to find comfort in similar opinion, ignore reality and be pushed out further and further. Different opinions are not tolerated and quickly voted down. Has that really been helpful for anyone who contemplated buying?

@ space
You are right about Assad. Who really thinks the world is a safer place now?

Shut It Down Already
Guest
Shut It Down Already

19, you’ve clearly forgotten where “Freedom Fries” came from.

Piklishi
Guest
Piklishi

This forum has its own importance. I have been been following it for 7 years or more and didn’t stop me from buying a place. It actually helped me to get a better one. And I am still a bear. I wouldn’t mind a crash so I can buy a second one.

Yunak
Guest
Yunak

@35

Of course, there is no other way to transition into Chinese city and territory. It is a long and expensive process when done peacefully. Results are the same as in the wars, winners and defeated, lots of casualties, collateral damages and lost futures. However in this case any attempt to fight back was labeled as racist while powerful, numerous and wealthy invader had generous support from local traitors and collaborationists.

Slagathor
Guest
Slagathor

….That way when rents keep skyrocketing you can raise it as much as you want once the lease is up….

If it’s that simple, why wait? Why not jack the rent up 10 times now and let us know how many tenants are lined up.

w
Guest
w

>If it’s that simple, why wait? Why not jack the rent up 10 times now and let us know how many tenants are lined up.

It is that simple. Increasing rent 10 times before demand appears doesn’t make economic sense for obvious reasons. But that doesn’t diminish my point that landlords should rent with leases because future rent increases will be more than the 2% + inflation that they are legally allowed to increase the rent.

I have no idea why you would think otherwise, other than “jack the rent up 10 times” which is an irrational argument. Is it that as a renter you see the writing on the wall and it scares you?

Oracle
Guest
Oracle

Just posted on a Mexican immigration site…told everyone to come as soon as visa lifted.

Bet at least 40,000 by summer…word is out that Canada accepts refugees easily.

Get the word out. Lets flood this place.

Oracle
Guest
Oracle

and they will likely declare refugee status as soon as they land….free $$$$ for the 2 or so years here!

Yeah baby!

Oracle
Guest
Oracle

Buddy of mine who has been making a mint these last 10 years today suggested i buy a house with 2 suites..he says the suites will each bring in $1000 for a total of $2000 per month.

I said what about taxes. He said no one pays taxes on rent income anyways as no one reports it. and he said politicians would never enforce it since every homeowner does it.

he’s got a point.

patriotz
Member

@47: “I said what about taxes. He said no one pays taxes on rent income anyways as no one reports it”

That should be “as no one makes any”. However your genius friend seems unaware that a net rental loss can be deducted against other income, and that rentals have to be reported even if there is a net loss, and there is a penalty for not reporting regardless.

The irony is that if interest rates go up the landlords will really be losing money big time, but if they then try reporting to deduct the loss they will expose themselves to penalties for not reporting previously.

say whaaaa?
Guest
say whaaaa?

@35

I just check this site for the angst and insanity (of which there is plenty – thanks Victor). I left the lower mainland years ago and it was one of the best decisions I ever made.

RFM
Guest
RFM

Brent crude oil increased to 44.21 USD/BBL on Wednesday November 18, 2015 from 43.92 USD/BBL in the previous trading day.

Brent crude oil averaged 41.77 from 1970 until 2015, reaching an all time high of 145.61 in July of 2008 and a record low of 2.23 in May of 1970.

Source: http://www.tradingeconomics.com/commodity/brent-crude-oil