Uh-oh Canada: Record debt threatens stability

Canadian debt is now almost triple the size of the national economy. How did we get here? A decade long housing boom!

While Canada boasts the lowest government debt load among Group-of-Seven countries, household debt is the highest of its peers, the Basel, Switzerland-based BIS said last month in its quarterly report. In September, Statistics Canada reported household liabilities rose to 100.5 percent of GDP, exceeding the size of its economy for the first time.

Canada was the only developed country showing early signs of stress in its domestic banking system amid “unusually high” credit growth relative to GDP, the BIS said.

“This debt overhang represents one thing and one thing only: a pervasive constraint on Canada’s economic growth potential,” David Rosenberg, chief economist and strategist at Gluskin Sheff & Associates Inc. said by phone from Toronto. “When you get to levels on total debt that makes even the Italians blush, you know you’re in a straitjacket.”

Read the full article over at Bloomberg.

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southseacompany
Member
southseacompany

“CMHC issues ‘red’ warning for Canada’s housing market”, Global News
http://globalnews.ca/news/3026944/cmhc-issues-red-warning-for-canadas-housing-market/

“The Canada Mortgage and Housing Corporation (CMHC) issued a “red” warning Wednesday saying there is strong evidence that many Canadian housing markets are overvalued.”

“The CMHC warned in its quarterly Housing Market Assessment that red-hot real estate prices have spread beyond Vancouver and Toronto, which have seen skyrocketing housing prices.”

southseacompany
Member
southseacompany

“How Canada fuelled a housing bubble, then tried to fix it”, Globe & Mail

http://www.theglobeandmail.com/report-on-business/top-business-stories/how-canada-fuelled-a-housing-bubble-then-tried-to-fix-it/article32531116/

“Crisis-era interest rates may have helped drive certain Canadian housing markets to the boiling point, but governments played their role, too.”

“Now, they’re scrambling to undo it.”

southseacompany
Member
southseacompany

I had a strange dream that Vancouver home sales were collapsing… and that VCI was hacked by some guy in Bangladesh.

Dreams can be so unreal.

Confucius
Guest
Confucius

It was Oracle’so cousin.

Dave
Member

Hacked!

Bag it and tag it
Member
Bag it and tag it

It was Hyper Mega/s only play

Boombust
Guest
Boombust

Phew! I’m glad VCI is back on-line. I was getting worried!

Funkeymonkey
Member
Funkeymonkey

Hyperbull I take back what I said. Many north Vancouver homes for rent ( whole house) under 2500 I saw one 1900. Also I saw a house for rent in everyone’s favourite nabourhood killarny! 2200

history
Guest
history
Kim
Guest
Kim

SHOCKING

Vancouver does not make worlds top 30 cities list. Wonder why the MSM is not all over this. Is it because it doesn’t fit their real estate narrative? Just as usual dumb Canadians are getting taken advantage of. People don’t want to come here. They just want to launder their money.

http://www.usatoday.com/story/news/nation-now/2016/10/25/pwc-survey-people-think-these-30-cities-best-world/92717052/

HAMster
Guest
HAMster

Homeowners cashing out of hot housing markets (or trying to in the case of YVR).
http://globalnews.ca/news/3022969/homeowners-cashing-out-of-hot-housing-markets/

Bag it and tag it
Member
Bag it and tag it

“When you compare it to the peak of the madness in April, we’re off — for certain products — by about 20 per cent.” said Vancouver Realtor, Kevin Garbutt.

What say you Hyper Mega Bull? A member of the pumper team just turned on you…

Whistler or Bust?
Guest
Whistler or Bust?

I wonder if Garrett was calling it “peak of the madness” back in April?

Or was he just saying this is the new normal, lack of land, immigrants, etc?

Boombust
Guest
Boombust

Or, “It’s different this time” and/or “Everyone wants to live here”. Sort of like Michael Campbell/Levy, don’t you think?

Hyper-mega-Bull
Member
Hyper-mega-Bull

how many different accounts do you have?

Billybonger
Guest
Billybonger

WHEN will listings surge?

Why, when it’s too late of course.

Months.

Unless your an Oracle believer.

Boombust
Guest
Boombust

With a market THIS slow and with “softening prices” at this current inventory level, just think what it will be like when Joe Sixpack gets the memo and inventory levels explode.

Bag it and tag it
Member
Bag it and tag it

I think the panic selling will start with the boomers with huge equity that they’re counting on for retirement…which is detached of course. The younger generations will likely hang on until they’re under water which means most won’t be able to sell without declaring bankruptcy…

Newcomer
Member
Newcomer

We can clearly see this is happening already. It may result in some resentment.

paulb
Member

New
197
Price Change
77
Sold
152
TI:9926

http://www.paulboenisch.com

Ray
Member
Ray
Detached homes in Vancouver, West Van, North Van, Burnaby, Richmond and New West for the first 21 days of October 2016 vs April 1-21, 2016 (peak) vs October 1-21, 2015: Oct 1-21, 2016: Total Sales 150 Apr 1-21, 2016: Total Sales 758 Oct 1-21, 2015: Total Sales 537 – year over year, that is a decline of 72%. Oct 1-21, 2016: Average Sold Price $2.05m Apr 1-21, 2016: Average Sold Price $2.31m Oct 1-21, 2015: Average Sold Price $2.07m Oct 1-21, 2016: Median Sold Price $1.65m Apr 1-21, 2016: Median Sold Price $1.85m Oct 1-21, 2015: Median Sold Price $1.64m Oct 1-21, 2016: Number sold “over asking” 16 of 150; or 11% Apr 1-21, 2016: Number sold “over asking” 462 of 758; or 61% Oct 1-21, 2015: Number sold “over asking” 197 of 537; or 37% – in other words,… Read more »
No Money Down
Member
No Money Down

Actually, adjusted for 16 business days as of Oct 21 out of a total of 21 business days, this gives adjusted October sales of 197 (21/16 * 150) and MOI = 17.2 (3,381/197).

Same conclusion: the Detached market is cooked.

Boombust
Guest
Boombust

So, Hyper-mega-bull…what say YOU?

Hyper-mega-Bull
Member
Hyper-mega-Bull

this is getting tiresome. this has been discussed to death.

here’s a hint: 2015 was a record year.

i leave the rest for you to figure out as an exercise in logical thinking.

No Money Down
Member
No Money Down

According to the REBGV, sales of Detached in October 2015 were 36% above the 10-year average. True, those were good times.

However….October 2016 is on track to be 62% below the 10-year average Detached sales. Nothing to see here Hyper-mega.

No Money Down
Member
No Money Down

Don’t follow your cryptic logic.

Hyper-mega-Bear
Guest
Hyper-mega-Bear

Were you using logic when prices and sales were off the charts in the Spring and you were saying it’s only going to get crazier? You and your cute little spaceship blasting off and taunting us? I thought you were just a jerk before, but now you’re completely delusional and sad. You’re not accepting the facts and your taunting is just funny now. Things have changed buddy.

Best place on meth
Guest
Best place on meth

Don’t ask him anything, the bursting bubble has made him very bitchy these days.

Boombust
Guest
Boombust

Local realtor, Jasper Wright is reporting a 72% YoY sales decline for Metro Van SFH for October 1-21…seems to square with Garth’s murmurs in today’s Greater Fool of the “carnage” we can expect to see for this month…

Hyper-mega-Bull
Member
Hyper-mega-Bull

we are a safe place for rich foreigners to stash money and family. a new tax to evade won’t change that.

B.C. licence quirk catches Saudi students

Judicial justice calls on province to fix problem which repeatedly lands foreign students in court

http://www.cbc.ca/news/canada/british-columbia/license-saudi-students-court-1.3742967

Madashell
Guest
Madashell

This could be interesting….
China’s tax authorities to begin financial data collection on foreign residents from January.
Days of underpaying taxes to end soon as China takes part in worldwide scheme on swapping information on foreign residents’ financial assets.
http://www.scmp.com/business/article/2040014/chinas-tax-authorities-begin-financial-data-collection-foreigners-residents?utm_content=buffer6e897&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer
Like the part about swapping information.

Madashell
Guest
Madashell

While China hands the information to other countries, it will also get information on Chinese nationals’ overseas accounts.
The information about their overseas financial assets, including bank deposits, securities, investment-oriented insurance products, or financial assets held through trusts or special facilities, will be handed to the government.
“For Chinese individuals, the move will enable the government to have necessary information to levy taxes on their overseas assets,” said Ye Weiwen, the national financial services tax leader at Deloitte in Hong Kong.

ostritch
Member
ostritch

The ones who have gotten out already are obviously the smart ones. Can see them playing our government like a violin.

Hyper-mega-Bull
Member
Hyper-mega-Bull

as we enter winter i’m looking forward to bears talking about how owners will be “forced to sell”. those comments are always fun to read.

Slava
Guest
Slava

You just got smoked funky monkey. But keep trying.

Slava
Guest
Slava

smoked by funky monkey that is…

Funkeymonkey
Member
Funkeymonkey

Owners wont be forced to sell they will be forced to own! A co-worker owns a house in sask that he says he cant sell. Of course he can sell he just doesn’t want to lose his shirt.

southseacompany
Member
southseacompany

National Bank Special Report:
“Report: Imminent Pullback for Vancouver and Toronto Home Prices, October 21,2016”

Full Report:

https://www.nbc.ca/content/dam/bnc/en/rates-and-analysis/economic-analysis/special-report-21oct2016.pdf

Hyper-mega-Bull
Member
Hyper-mega-Bull

>The index has not so far shown a decline of prices.

contradicts all the chicken little’s on here.

Whistler or Bust?
Guest
Whistler or Bust?

I predict you change your handle by 2017.

Dave
Member

Member when Gordon Campbell froze assessment values in 2009 because of confusing values? What’s the over/under on history repeating?

patriotz
Member

“The (Teranet) index has not so far shown a decline of prices.”

The Teranet index is based on closings (not sales) and uses a 3 month moving average. Given the sales bump in October to beat the new Federal rules I wouldn’t expect to see anything significant from them until next January.

Hyper-mega-Bull
Member
Hyper-mega-Bull

Remember when bears made snarky comments about how landlords were subsidizing their rent and how they pretended that owning sucked and renting was amazing?

Funkeymonkey
Member
Funkeymonkey

Still happening almost every rental on craigslist are being subsidized by landlord. Many north shore houses (whole house) for rent 3K. A few months ago I was looking in west van 3500 was a price where many houses were priced from. Wages are tied to rent!
I think I heard it here, we talk about high rents in Vancouver we don’t talk about the lack of good paying jobs here.

Combat roach
Guest
Combat roach

They still do, thanks for the reminder.

HAMster
Guest
HAMster

Australian housing expert says Vancouver, Sydney, facing similar issues.
http://www.cbc.ca/news/canada/british-columbia/vancouver-sydney-unaffordable-1.3819898?cmp=rss

It’s because of the locust Chinese. Why don’t they just admit it?

patriotz
Member

Oz and Canada have inflated prices for the same reason – government policies that encourage people to park their wealth in RE. For example, Oz has asset-test qualifications for social benefits. Sound good? Problem is principal residence is exempt, no limit on market value.

Combat roach
Guest
Combat roach

Right, locust decided to launder and stash on the west side and picked the closest cities. Wonder why fucks didn’t go to Rusia, that would be closer to the motherland but perhaps Russians would not so politely tolerate their shit.

patriotz
Member

The Russians will politely tolerate anything as long as the right “incentive” is paid. Right now the Chinese are pillaging Siberia’s resources and may outnumber the Russians before long.

http://abcnews.go.com/International/story?id=82969&page=1

Combat roach
Guest
Combat roach

Either locations locust’s objective remains the same because they operate on all levels, take advantage of everything possible.

“Alexander Shaikin, in charge of controlling the Russian-Chinese border, said on June 29 that 1.5 million people from China have illegally entered the Russian Far East over the past 18 months.”

Best place on meth
Guest
Best place on meth

Why don’t they shoot the illegals on sight?

Russians don’t give a shit about political correctness or the “rights” of illegal aliens.

Just me
Guest
Just me

Yet another expert confirming that it not lack of supply but disproportionate demand growth that is driving price growth.

http://www.cbc.ca/news/canada/british-columbia/vancouver-sydney-unaffordable-1.3819898

The BC liberals are really out to lunch on this problem. They are trying to scam us all into believing that itmis all about reducing red tape.
Clark, DeJong and the others have got to go.

No Money Down
Member
No Money Down

“Research shows that with big housing booms, demand for housing actually grows. It’s a complex situation. It’s not something that can be fixed with basic school economics. With a boom in demand, more people want to enter the market for FEAR OF MISSING OUT.”

And speculator greed.

Combat roach
Guest
Combat roach

Right, list of their achievements is too long…

“Firing of Vancouver trustees part of broader effort by Premier Christy Clark to silence dissent”

http://www.straight.com/news/813781/firing-vancouver-trustees-part-broader-effort-premier-christy-clark-silence-dissent

HAMster
Guest
HAMster

Christy is taking lessons from Harper.

Just me
Guest
Just me

While unpalatable, I can understand their motives. There are some serious problems with open border policies. I wishTrudeau and McCallum paid more attention: millionaires benefit from open migration much more than average joes. The same is quite true in Vancouver snd Canada.
Telling people that they are racists justmakes things worse. Worries about immigration are not about race. They are about jobs and the cist if leaving. The businness of importing people to support economic growth has to be called a sham.

http://www.bloomberg.com/news/articles/2016-10-24/britons-happy-to-sacrifice-trade-for-fewer-foreigners-poll-says

HAMster
Guest
HAMster

There is no reason for “skilled people” to immigrate to Canada, the land of high taxes and over-priced housing. The only immigrants we will attract are the low-hanging fruit who want our free social services.

Best place on meth
Guest
Best place on meth

“Migration levels have frequently been touted as one of the key reasons behind the June 23 referendum result and the government has pledged to get numbers below 100,000. ”

And our drunken immigration minister wants to increase immigration to 400,000 – in a country half the size of Britain.

What a traitor.

Bag it and tag it
Member
Bag it and tag it
Then again last week there was that panel that released their list of recommendations to help stimulate the Canadian economy, and one recommendation was to increase immigration to 450K over a 5 year period with their concern being not enough skilled workers to fill the vacancies left by retired boomers and not enough workers to pay cover the costs associated with an aging population. I think this is all a big scam orchestrated by special interests (Real Estate Cartel, Corporations, etc) to ensure there is continued demand for their products, cheap labour, etc.. I think the boomer voting block also wants to ensure there will be people to buy their overpriced homes and ensure they have a comfortable retirement (ie. lots of healthcare funding and no pressure on their bloated pensions). The powers realize there is no appetite for this… Read more »
JayTor
Guest
JayTor
southseacompany
Member
southseacompany

“Fed’s Task Next Week: Signal December Rate Rise”, Wall Street Journal

http://www.wsj.com/articles/feds-task-next-week-signal-december-rate-rise-1477351253

“Federal Reserve officials, wary of raising short-term interest rates amid the uncertainty surrounding the U.S. presidential election, are likely to stand pat at their November policy meeting and remain focused on lifting them in December.”

“Traders in futures markets already place a 74% probability on a Fed rate increase by then, according to CME Group.”

Ultimate danger for bears coming.
Guest
Ultimate danger for bears coming.

After much analysis of comments here, it seems the bears on this blog are doomed for the simple fact that they can’t pinpoint the root cause of this bubble. Its has been pointed out by the likes of Chilled, Oracle, AlR and a few others but they are met with angry retorts.

With the changes afoot in the marketplace, prices may drop 20%. However, that still leaves homes out of reach of locals without a substantial down payment. MEANWHILE, rents will continue to go up by about 15-20% a year for desirable rentals.

Not acknowledging the root cause will promptly price you out of the lower mainland rental market.

Newcomer
Member
Newcomer

Yes, Oracle, we know. Tell you what, come back next year when the rents are 15-20% higher than they are now and crow about it.

Combat roach
Guest
Combat roach

What’s your point, it’s been said like 900 times. What that has to do with the crashing market? Who cares, one thing at the time.

Hyper-mega-Bear
Guest
Hyper-mega-Bear

The market is crashing hard. Ironically, the parents that bought houses for each of their kids are going to have to sell a kid to survive this bust.

CanNeverThinkOfAGoodName
Member
CanNeverThinkOfAGoodName

What happened/is happening at the town hall? Sorry I missed it.