Budget, Canada, CMHC, debt, economy, predictions, prices

How resilient is CMHC to a US style housing crash?

October 19, 2017 VCI Admin

Kabloona points out this article asking yet again how this country would fare in a US style housing market crash, but particularly how the CMHC would fare:

Canada Mortgage and Housing Corp., which protects financial institutions in the case of consumer default and is 100 per cent backed by Ottawa, said in a release Wednesday that it looked at anti-globalization, earthquakes, a steep oil price fall and a U.S.-style housing correction to see how its insurance portfolio would hold up. It did not look at a combination of any of those scenarios.
The verdict is a U.S.-style correction would be its worst scenario for its insurance program with a cumulative loss of $217 million from 2017 to 2022 which would come on top of a need for the Crown corporation to suspend its dividends to Ottawa. CMHC paid Ottawa a special dividend of $4 billion in June because of excess capital and issued a $240 million dividend in August.

Read the full article here.

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Dude Chilling

Click to flag and open «Comment Reporting» form. You can choose reporting category and send message to website administrator. Admins may or may not choose to remove the comment or block the author. And please don't worry, your report will be anonymous.

Viral smartphone game lets ordinary Chinese ‘clap’ for Xi

http://www.news1130.com/2017/10/20/viral-smartphone-game-lets-ordinary-chinese-clap-for-xi/

Those wacky Mainlanders really know how to have fun!

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Dude Chilling

The main media has now picked up this story…

https://globalnews.ca/news/3815089/luxury-car-owners-steal-richmond-farmers-pumpkins/?utm_source=Article&utm_medium=MostPopular&utm_campaign=2014

“People are coming in overnight and stealing pumpkins,” Wood said. “PEOPLE ???”
As far as Wood knows, besides the value of the cars, there hasn’t been much that unites the thieves. “He didn’t identify any cultural issues,” Wood said.

Se, there is the problem right there. NO ONE is willing to call a spade a spade and call out the CHINESE as the culprits. We all KNOW but are too scared to say anything because it would be “racist”. Meanwhile hardworking Canadian citizens like this farmer (who is an immigrant himself) get walked all over. It is a disgusting situation that must stop.

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Shut It Down Already

What’s your interpretation of “nothing unites them except the value of the cars”?

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bullwhip29

very doubtful this story is aired on this evening’s news cast. this said, i applaud the richmond news for finally stepping up to the plate and talking about some of these issues that many are afraid to go anywhere near. their most recent edition was pretty much cover to cover complaints/rants about all that is wrong in richmond.

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Just me

While the explosion of sycophancy over China’s president may seem almost comical, his reign will have ramifications far beyond the country’s borders.

https://www.theguardian.com/world/2017/oct/20/xi-jinping-china-president-leninist-quest-authority-control-carries-dangers

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Just me

Hopefully this won’t happen. But definitely a worry.

http://business.financialpost.com/real-estate/mortgage-industry-sees-amortization-loophole-in-osfis-new-stress-test-rules

Mortgage industry sees amortization loophole in OSFI’s new stress test rules.
Qualifying for a mortgage under new rules coming in the new year might not be as hard as you think, sources say.

Member

Burnabonian

Stupid. There will always be legitimate and illegitimate ways to work around the letter or spirit of a financial or tax regulation. Regardless, as the article states the “loophole” borrowers are self-identifying as higher risk and will pay higher rates. Thus qualifying for less than they would have otherwise anyway. I would guess that another loophole is to borrow a bunch of money from Mom and Dad / company / cousins / buddies, qualify, then mine it back out via your HELOC and give it back. Again, though, it will mainly be fringe and high-risk borrowers doing this because it’s sketchy AF as the kids say. The desired effect of the stress test is clear and is not largely reduced by the existence of these fringey scammers: Reduce the amount of capital available to speculators. The tide is going out… Read more »

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Oracle

Nothing is going to change with OSFI changes. Locals care about the monthly payment amount and foreign money does not care about banks.

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Oracle

OSFI could have just set a limit on any mortgages to a max of 25 years.

But nope. Loophole. To make locals pay more interest and pad bank profits.

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Bear Vancouverite

I’ve been given multiple first hand accounts of examples where foreign money DOES care about banks and reported those here. What sources of yours who are either foreign money or work for foreign money where you observe they do not care.

In one case that I’m aware of, a foreign buyer with millions of dollars of cash available was attempting to get mortgages from bank after bank before being frustrated and using all cash. From his own mouth, he admitted that had he gotten mortgages he would have bought 4 houses, and instead he had to settle for 1.

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bullwhip29

More UBC trees get axed to make way for market housing
http://www.cbc.ca/news/canada/british-columbia/more-ubc-trees-get-axed-to-make-way-for-market-housing-1.4361298

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Just me

If only this big tree cutdown served the purpose of housing young and productive workers of UBC. History shows that those units will be bought and often left vacant by offshore “investors”, also known as millionaire migrants from mainland China,

They bring cash. But in a few years we will all grow to regret the choices our society is making.

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YVR

“But in a few years we will all grow to regret the choices our society is making.”

It is going to take you a few more years?

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Lost...but not leased

Unless mistaken…all the UBC land is LEASEHOLD….often 99year leases….the least desirable RE to get into. Effectively, you are renting the land and buying a depreciating asset…not good.

Member

AngloMan

Does anyone know who ran Vancouverpricedrop?

https://vancouverpricedrop.wordpress.com

I wonder if they will start posting again early next year?

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Combat roach

And yet our governments keep piling the shit up here as much as it gets…

” “Please remember, at your back stands a strong motherland.”

This red-blooded nationalism has been channeled skillfully by President and ruling Communist Party leader Xi Jinping as he seeks to strengthen the party’s role in Chinese life and shepherd the country’s rise to prominence at a time when the United States and others in the West are seen to be in retreat.

Xi’s muscular foreign policy could become even more assertive following this month’s congress of the ruling Communist Party, where delegates will agree to support his policies and endorse his second five-year term as party secretary general, observers say.”

http://nationalpost.com/pmn/news-pmn/make-china-great-again-xi-leads-china-into-muscular-new-era

Member

Best place on meth

CRA is expanding their hunt for pre-sale condo flippers who didn’t declare profits on their tax returns.

https://beta.theglobeandmail.com/news/british-columbia/cra-investigation-seeks-information-to-identify-bc-condo-flippers/article36596875/?ref=http://www.theglobeandmail.com&

There is a lot of money to be recovered and CRA has been given more resources to go after it.

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YVR

And all these years the CRA have focused on going after undeclared tips. Imagine how much tax someone can evade on tips in a year compared to flipping a condo. A waitress may make $5000 in tips and would be at a low tax rate of maybe 20%. The CRA could net $1000 at most. Not enough to pay for the audit. On a flipped condo they are often $100K to $200K each as the lift.

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Just me

Eby. Horgan. Where are you guys?

From the G&M article:

The B.C. and federal governments could work together to improve reporting requirements for presale assignments, said Ron Usher, a lawyer and one of the members of a 2016 panel struck to review real estate regulation in B.C.

“We’ve not had a system in place … that requires reporting of the acquisition and disposition of real estate, or interests in land-like contracts that get assigned,” Mr. Usher said.

“That’s what missing from the system.”

Authorities could address that gap by making it mandatory to report the acquisition and sale of land, including assignments, Mr. Usher said.

Member

Bear Vancouverite

The market appears quite resilient still in the sub $2M range.

2-2816 W 41st (townhouse) listed at $1.4M for 1454 sq ft or around $961/sqft just sold, not sure at what price.
402 E 30th Ave (Detached) listed at $1.995M just sold

Both were listed just a week or so ago.

I’ve heard some $2.5M+ homes have been sitting for half a year, and the owners are getting worried, but when asked to lower prices balked.

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Just me

Zolo suggests the market is picking up again, over the past few weeks.
I wonder how many of these buyers are anticipating purchases to avoid new OSFI regulations.
I had a conversation with an expert today. She said the drop in credit available to buyers would e at least 20% and more likely around 30%. It depends on individual cases, and also on whether the bank is willing to make exceptions.

All I know is that in January there will be significantly less money doing the rounds.

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Shut It Down Already

I thought Chinese currency limits reset in January and we should expect a massive surge? And foreign money drives this market rather than availability of credit?

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Combat roach

In occasional absence of foreign money to drive RE market, usual savvy folks drive pumpkins market in adequate way. All is well as long as something is driven, right?

http://www.richmond-news.com/news/bandits-in-luxury-cars-stealing-pumpkins-in-richmond-1.23069403

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Just me

If it easn’t a signal of our tragic situation, it would be funny.

Why don’t people protest about the silly greed of these Chinese millionaires?

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Shut It Down Already

Do you ever proofread your posts?

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Just me

I would if I cared about you. Sadly, I don’t.

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Oracle

Stop it. You are dealing with average IQ’s! don’t bring in multiple factors and numbers into outcomes.

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Just me

True. January is reset time. But the Chinese will not be able to leverage it as last year. Ask your family.

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Combat roach

“Zolo suggests…”

Perhaps those savvy Canada Goose Jackets smugglers (flippers) from Holt Renfrew are at it while being here because of jackets?

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YVR

“Zolo suggests the market is picking up again, over the past few weeks.”

No kidding. The NDP is has all but come and said the party is on and they do not plan on doing anything that could slow down the rise in housing. The only people who haven’t figured that out is the naive NDP followers. Expect NDP counter measures to offset the OSFI changes. The only hope is the NDP is so incompetent they will screw it up and housing will collapse anyway.

Member

Best place on meth

“The NDP is has all but come and said the party is on”

You’re starting to lie like Whoracle.

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Oracle

OK Einstein. Don’t throw a tantrum. We’ll agree with you if you don’t; the NDP is going to do something about housing (6 mos after election LMAO).

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Whistler or bust

Brought to you by Local #457

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YVR

How would you characterize what the NDP have done since getting elected? Give me your rating out of 10 on housing.

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Oracle

Thats my take. had my friend put in an offer on his 4th property. I was like what about the OSFI rules and the NDP. He just smiled. Im sure about the NDP not doing anything but OSFI i don’t know.

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Oracle

Some more facts:

USA has a gov that is going to cut immigration by 50%.

New Zealand now has a government that is going to cut immigration by 40%.

Britain has brevet and is going to cut immigration by 40%.

NOW ASIANS only have 2 choice…Canada and Australia. Expect a flood of people to show up here. Trudeau INCREASING IMMIGRATION!!!!

Get involved and wrestle control away from uncontrollable immigration. End result of this is an increase in racism due to local morons not knowing how to channel their frustrations.

Let the down voting begin.

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Dude Chilling

You are tedious.

Member

paulb

New
154
Price Change
73
Sold
116
TI:9834

http://www.clivestevepaul.com

Member

Raincity

Walked thru Holt Renfrew. Having a Canada Goose Jacket sale. Swarmed by Asians buying 2 to 3 at a time!! They go back to the homeland and resell for double! ( Told to me in confidence by a saleslady) LOL!

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Lost...but not leased

I think I will go there dressed up like a CRA official

…..see how many run for the diaper department

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Combat roach

Certainly not Japanese, Indians and Malasyans, right?

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Lost...but not leased

Today’s lesson in world history……

NYC banksters set up Russian Revolution in early 1900’s ( if want more info GOOGLE ” In the Shadow of Hermes ” by Juri Lina ******** HIGHLY RECOMMENDED ***** The revolutionaries were trained in the New Jersey area …

The aim was to set up a base (RUSSIA) in East Eurasia to ultimately take out Western Europe. and establish a Bankster run “Communist state.

Why?..because Russia under the Czar was becoming a threat, given many reforms were coming forward to…DRUMM ROLLL……….build a strong middle class….which Banksters detest. Or..if the Czar had stopped the revolutionaries..a whole different world history.

If you do the homework, you will understand the roots of where we are headed…….if not ….keep er head up yer ass.

Member

kabloona

I wish @FakeCMHC would start tweeting again….

😉

https://twitter.com/FakeCMHC

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bullwhip29

Steveston Boardwalk debate moves to compensation
http://www.richmond-news.com/news/steveston-boardwalk-debate-moves-to-compensation-1.23067334

>>> sounds like a done deal to me. this will conclude over the holidays (when no one is paying attention) and the residents, tenants and future hotel guests in the area can look forward to some new odors, sounds and fashions come spring/summer 2018

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Lost...but not leased

Steveston?
Who gives a Fiddlers F*ck…really….

Steveston is really an @ss pimple on the rest of Richmond…full of whiners and bitchers…Sounds like the West side of Vancouver and the legends in their own mind “entitlement ” crowd.

The sad thing is….Richmond Council knows these Steveston types can get organized and target Councillors at election time.

Regardless……Steveston should do Richmond a favor and separate from Richmond so they will STFU and wipe each others bums .

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Dude Chilling

Other articles from that link include Chinese in $100,000 luxury cars stealing $10 pumpkins out of farmers fields and Chinese unabashedly coming to Richmond to give birth so their kid is a Canadian citizen. Yeesh what a gong show Richmond has become.

Member

Best place on meth

Yeah, the pumpkin stealing locusts in high end vehicles played dumb when caught and confronted.

What a broken record we keep having to listen to as our country is raped by vermin.

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Combat roach

They recently came over and thought pumpkins are public goodies same as their predecessors stilling cabbage and tomatoes from community gardens. Nice people but sometimes confused due to language and cultural barriers.

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Dude Chilling

Vancouver tech startup, Istuary, ordered to pay millions in unpaid wages

https://globalnews.ca/news/3813180/vancouver-tech-startup-istuary-ordered-to-pay-millions-in-unpaid-wages/

A Vancouver company accused of not paying its employees for months is also accused of using investors’ money to buy multi-million dollar homes in Metro Vancouver.
Remember this story about Istuary from September: They just said they have money and they’re using it to buy another company and they have problems transferring some money from China to Canada and because of that payroll was delayed. Well it sounds like the owners were out buying houses in Coquitlam instead of paying their employees.

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Combat roach

Norwegian business in Vancouver as usual. Like the part “ordered to pay millions” while meanwhile fucking lowlifes Ethan Sun and his wife, Yulan Hu must be laughing their asses off at the prospect of doing anything as such.

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Combat roach

Judging by the report the assholes have mainly screwed their homies. Must be some traditional awkward custom to keep the shit within the “family” or they couldn’t hire anybody else but homies due to management only could interview candidates in Mandarin.

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bullwhip29

so what happens if/when they do pay up? is that the end of the story? will anyone look into what this sham company is really up to and if it is actually a legit business (versus nothing but a fraudulent document mill). will any of the principals be prosecuted (assuming they can be found)? or will they simply be allowed to quietly and discretely wind up operations, shift some money and other assets around, wipe their hands clean and perhaps even setup shop all over again?

hello?
eby?
bueller?
anyone?

Member

Best place on meth

What’s this, more chinese fraud in Canada?

I am shocked.

Guest

Lost...but not leased

Doing a little research on CMHC via Wiki… Its assets (as of 2015 ) total approx. $250 Billion Seems its mandate is to get involved with affordable housing from Day One…,1946..to deal with housing needs for returning veterans from WW 2. It started out with $25 Million in capital and $5 million in reserves In 1940’s, it worked with provinces to create social and rental housing with a 75%/25% split. In 1954 it allowed chartered banks to enter the mortgage market…requiring down payments of 25% In 1960’s it developed the first c-op housing, and multi unit apartments outpaced single family homes. In 1980’s it withdrew from funding public housing projects.(recall MURBS came around this time) etc etc. ========================================== Seems that given the above…the CMHC has shifted it focus from providing affordable housing to basically keep the Big Banks viable ..acting… Read more »

Member

Burnabonian

Oh they know.

Who would know better how insane Canada’s market has gotten than the people insuring the insane fringes of it.

But short of a whistleblower, what six-figure hairy-assed civil servant is going to raise the alarm?

All of them are happy to draw their salaries and pensions while they cheerfully walk Canada to the gates of Hell.

If anything, CMHC staff will know where the best discounts can be had after the coming carnage.

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bullwhip29

At June 30, 2017, CMHC’s total insurance-in-force was $496 billion, below CMHC’s legislated insurance-in-force limit of $600 billion
https://www.cmhc-schl.gc.ca/en/corp/nero/nere/2017/2017-08-29-1200.cfm

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Burnabonian

These sons of bitches have guaranteed our banks a taxpayer-funded bailout (because that’s what it would be) of 1/3 of the country’s GDP.

Yeesh,

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Dyugle

Total insurance-in-force was $496 billion and total guarantees-in-force was an additional $456 billion. Total is 952 billion in loans underwritten. These numbers are from pages 11 and page 15 of the second quarter report.

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Burnabonian

$217MM losses in all of Canada? Perhaps they meant “B”, not “MM”. CMHC stands to lose $217MM in *Kerrisdale*. As for how resilient CMHC is, the answer is “infinitely”. CMHC has the sum total resources of every taxpayer in Canada at their disposal. Full stop. The crown of a first world country with a GDP of 1.5T will not be defaulting on any insurance that it has issued to its’ banks against its’ residential housing. Full stop. The real question is how resilient Canadian society is in the face of a prolonged and utterly devastating downturn. Remember that this is not the USA. We are not an economic powerhouse that can unwind an all-out depression in a few years. We are a sprawling and relatively poor country that is heavily dependent on sectors that are either in the toilet or… Read more »

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Combat roach

“We are a sprawling and relatively poor country that is heavily dependent on sectors that are either in the toilet or gone forever — oil/mining/manufacturing/forest products/farming.”

Right, but our governments have the ingenious solution. A tremendous amount of land to sell to the highest bidder and infinite but mostly useless and detrimental immigration afflux/accumulation.

Member

Burnabonian

And even that is falling down.

Capital controls being the ruthless bitch that they are.

Leaving the local population to ejaculate borrowed money all over each other (while screaming “foreigners are doing it”!) until they have buried themselves under one of the worst debt crises in the developed world.

Member

Best place on meth

“Leaving the local population to ejaculate borrowed money all over each other”

Is there a video of this somewhere?

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stagnate

the cmhc report is comparable to the upcoming ndp report on uber. optics only. 4 billion dollar dividend?! helicopter Ben would be proud

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bullwhip29

a $200M loss as a worst case…this is beyond laughable

for arguments sake, let suppose 1% of loans turn sour. this would still equate to losses in the billions

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Dude Chilling

Yes they must have left off a zero or two.

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bullwhip29

and were the likes of bernanke and the various bank ceo’s all wrong about the subprime crisis? or were they blatantly lying about it?

we are witnessing the very same thing all over again imho..

an appearance by jesse livermore’s ghost is imminent

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bullwhip29

something like 14% ALL mortgages in the USA were either delinquent or in foreclosure as of mid 2009

so basically CMHCs spokespeople somehow think (or more likely want us to believe) a US style financial crisis CAN’T happen in canada and/or should the impossible actually unfold, that a material price drop would not occur

who knows, maybe they are right and financial armageddon in canada would naturally lead to a run on safe haven assets like $2000/sqft shoeboxes, illegal hotels built on farmland and $9M bungalows primed for demolition

Guest

Shut It Down Already

A third option is that your math is way off. That one gets my vote.

Member

Burnabonian

Also, contrary to popular belief mortgage defaults are not a good test of the financial health of a population.

This is because people will default on all other bills and literally defer eating before they risk their mortgage.

This is especially prevalent in Canada, where we hold housing to be holy and where we are too ashamed to speak openly about our financial problems.

Plenty of people present to Bankruptcy trustees without having been late on a single mortgage payment in their lives.

Low default rates mean the same as “no visible sores”. It’s not the same as not having herpes.

Member

Doomcouver

Yeah that is ridiculous. CMHC has over $500 billion worth of mortgages on their books. If 1% of loans go bad they’ll lose over $5 billion. The most they have in reserves appears to be what they call “Total Equity In Canada” on their annual reports, and at most it’s at around $20 billion. Who knows what they count as “equity” though. Basically if 4% or more of their loans go bad, they’re insolvent even by their own metrics. Either the banks, or the taxpayer is going to get screwed in that scenario. With the amount of house-lust in Canada i’m going to bet that taxpayers are going to get royally screwed. In a major correction, I feel at least 10% of the mortgages will default, so the CMHC could be in for a bumpy ride.

Member

Hyper-mega-Bull

how do i get my trusted member badge?

my predictions and analysis of vancouver real estate and social changes to the region have been exceptionally accurate for years. i think i deserve it.

Member

Hyper-mega-Bull

i’ve been talking about the sinofication of vancouver and how vancouver is becoming part of the sinosphere when many people still thought HAM was a myth.

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Combat roach

Apparently, you deserve badge so is Oracle for some of his predictions of exaggerated insanity becoming very present reality. Given the current social and economic situation, as well as future perspective, we are total FUBAR. The key question is how do we get on the path of recovery? How do we clean up the malign shit and reestablish conditions to move forward as a cured society? Thoughts…

Member

Hyper-mega-Bull

learn mandarin.

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Combat roach

It is easier to leave then, why waste the time? Try harder!

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Oracle

Thx. I may come across as rough but My predictions so far have been dead on.

Member

Bag it and tag it

Oh, so you’re not going to give your ‘sources’ and credit?

Member

Bag it and tag it

stop spewing shit would be a good start

Vancouver Condo Info

How resilient is CMHC to a US style housing crash?

Bubble? What Bubble?