Archive for the ‘Canada’ Category

Friday Free-for-all!

Friday, May 15th, 2015

It’s that time of the week again…

Friday Free-for-all time!

This is our standard end of the week news round up and open topic discussion thread for the weekend, here are a few recent links to kick off the chat:

-How about more taxes?
-Not all owners oppose lower prices
-Equity Protection
-What a realtor says
-The premier wedge issue?
-Lessons learned in the 80s?
-Harper warns of high debt

So what are you seeing out there? Post your news links, thoughts and anecdotes here and have an excellent weekend!

 

Canadians deep in debt and getting deeper

Monday, May 11th, 2015

The Globe and Mail nicely sums up the current Canadian obsession with taking on household debt. This infographic has all the pretty charts related to the current situation in which current debt totals a record $1.8 trillion. Just over a trillion of that is Mortgage debt, with the other big growth seen in lines of credit and car loans.

One Trillion is a big number and it can be hard to visualize.  Here’s one way to put it into perspective:

If you spent $1-million every day, it would take you 2,740 years to spend $1-trillion.

Albertans carry the largest debt to income ratio followed by BC. It seems the nation loves debt, but the west loves it best.

Read the full article here.

Should you walk away from your Alberta mortgage?

Monday, May 4th, 2015

southseacompany pointed out this article in the Financial Post:

You can walk away from your mortgage (if you live in Alberta) but should you?

“Francis, a 34-year-old welder from the mining town of Grande Cache, Alberta, says he wishes he could get out of the townhouse he bought four years ago.”

“He bought the home for $175,000 with a five per cent downpayment but still owes $150,000 on his mortgage. He says the market for his home has collapsed in his town and a realtor just told him the best price he could expect is $75,000.”

“Since the loan is “under water,” his bank would be left with a shortfall that CMHC would have to cover. The Crown corporation would likely sue him for any losses it has to cover, so if he has any assets, CMHC will go after him.”

“Handing over the keys to the house and walking away from your mortgage, called “jingle mail,” was a defining act of the American housing crisis and helped send the market south of the border into a deeper tailspin.”

Interesting theory, but as we actually saw in the US states with recourse loans (i.e. Nevada, Florida) saw just as much of a collapse as non-recourse states.

Angry tweets won’t bring prices down.

Wednesday, April 29th, 2015

Well! They could have told us this earlier and saved us a lot of time… Turns out desperate tweets won’t solve our housing cost problems.

Sociologist Nathan Lauster calls the current clash the “intergenerational drama of urban house ownership as a life goal.”

“It produces this sensation for a lot of people like you’re trying to make a home on quicksand,” says Lauster, who is part of UBC’s urban studies department.

“So you’re trying to do everything that you think is right, everything that your parents have done, and it’s still not going to be enough.”

But home ownership hasn’t always been the ultimate goal for a family. In Germany, for instance, renting is the norm.

And in Vancouver, in recent years, it seems people don’t just want a home, they want a perfect home, tearing down old stock to build new mansions, ripping rather than renovating.

“There are a lot of different ways to live. But a lot of policy and a lot of our intergenerational culture has encouraged only one way, and that’s the single family house,” says Lauster.

‘Dr. Zen’ in the comments section of that article has one possible fix:

Solution… leave Vancouver. You will not regret it.

Read the full article here.

 

Hey Vancouver! Why so unhappy?

Monday, April 27th, 2015

Imagine this:

There’s a city in Canada that has a temperate climate – it’s not frozen half the year. It’s widely acknowledged as a beautiful place with access to nature and people are willing to pay some of the highest prices in the world just to buy a bit of real estate there.

And yet the citizens are some of the most unhappy in the country?

What gives you bunch of ungrateful louts?

According to Statistics Canada the entire province of BC is filled with a bunch of unhappy people. Not a single city in BC even cracks the top ten happiest places in Canada.

And our fair city of Vancouver? Well 33rd place isn’t really that bad is it?

Stop crying and move to Quebec already if you’re so miserable!

 

Let the grandkids solve the TFSA problem.

Wednesday, April 22nd, 2015

If you’re someone who has your money somewhere other than Vancouver real estate you’re probably familiar with the TFSA.  And you probably know the limit has just been doubled to $10k a year.

Critics say this move only helps the wealthy and creates a future tax problem.

Joe Oliver says we should leave that problem for the PMs grand-daughter to solve.

On Tuesday’s The Exchange with Amanda Lang on CBC News Network, the finance minister told Lang that criticism of his recently unveiled budget is unfounded, arguing that the benefits for Canadians today more than offset any future revenue problems associated with it that may or may not ever come to pass.

The doubling of the TFSA limit to $10,000 per taxpayer every year was a core plank of Oliver’s balanced budget. But critics including the opposition parties and private sector economists have said the populist move will create a revenue problem for governments down the line, as more and more investments get protected from taxation.

So what do you think about the TFSA limit increase? A tool only for the wealthy or a bit of extra help for savers?

CMHC & Genworth increase mortgage insurance premiums.

Tuesday, April 7th, 2015

An article over at the Financial Post by Garry Marr asks if recent hikes in mortgage insurance fees are targeting first time buyers.

The move by Genworth Canada, which matches an increase announced Thursday by Canada Mortgage and Housing Corp. will raise insurance costs by 15% for those Canadians with the highest debt-value mortgages allowed by Ottawa.

Of course lets keep things in perspective here – that 15% increase may result in an extra cost of about $5 dollars a month.

You’d have to be really stretched for that to be an issue.

Rob McLister, founder of ratespy.com, said insurers are padding their margins and doing it for loans that usually result in the least amount of money recovered during defaults.

Read the full article here.

Friday Free-for-all! Crazy market edition.

Friday, April 3rd, 2015

Well hello there!

Looky here, it’s the end of another week already and you probably already know what that means…

Friday Free-for-all time!

This is our standard end of the week news round up and open topic discussion thread for the weekend.

But first a note. Many news sites have moved to a subscription model which limits views of articles (hello Globe and Mail!). This is a bit of a downer for a news and link round-up feature since you might use up your monthly limited article views on articles that don’t interest you beyond their headline.

So with that in mind we’re switching most of our FFFA links to the original VCI comment that pointed them out.  This means you get the context with selected quotes or excerpts to decide if you want to follow the link to the original article and you can see who here originally pointed out the article, but it means you need to click an extra link to read the full story.

Does this change drive you crazy as an overbred purse dog or are you west-coast chill about it? As always your comments about this change are welcome.

OK! Now here are the links to kick off the chat:

-Did you short Genworth at the right time?
-There will be fewer hungry realtors this month
-All about those rates?
-Vancouver is the next… Calgary?!?
-Economy shrinks
-Over 55? Stop paying property tax sucker!
-Who ya gonna blame for this crazy market?
-What is the Difference between bulls and bears?
-An orderly correction please.

So what are you seeing out there?

Post your news links, thoughts and anecdotes here and have an excellent long weekend filled with bunnies, eggs and chocolate!

Dutch Disease: Alberta Canada vs. Norway

Wednesday, April 1st, 2015

The term ‘Dutch Disease‘ refers to an increase in natural resource based economy crowding out manufacturing and other sectors. It’s also a stand in descriptor for taking all your winnings in a booming market and re-investing them in the same market.

When Oil prices were high, both the province of Alberta and the country of Norway benefited from a petroleum based economy, but they approached the future in different ways.

Brian Ripley over at CHPC summarizes Bruce Campbells take-away of the differences between these two economies approach to oil wealth:

Alberta’s so called “progressive” conservative governments; 7 consecutive iterations since 1971, have squandered their provincial energy resources leaving their treasury with a CAD 12 billion dollar debt and a 500 million dollar deficit.

Norway, a county of 5.2 million people (Alberta’s population is similar at 4.2 million), began their first successful North Sea oil drilling in 1971 and by maintaining sovereign control and creating partnerships with the private sector “… now sits on top of a CAD ONE TRILLION DOLLAR pension fund established in 1990 to invest the returns of oil and gas. The capital has been invested in over 9,000 companies worldwide including over 200 in Canada. IT IS NOW THE LARGEST SOVEREIGN WEALTH FUND IN THE WORLD”

Read the full article over at CHPC.

Where’d yo job go? Build or perish.

Tuesday, March 31st, 2015

Good news!

There was a big jump in full time jobs in February!

The bad news?

Some people think this is ‘unsustainable‘ because most of the jobs were in construction or ‘public sector’ and the recent drop in oil prices may have an effect on these parts of the economy.

Screenshot 2015-03-29 18.03.24

 

But in the meanwhile if you’re looking for work and want to know who’s hiring find your nearest construction pit or government office.

Read the original article over at wolfstreet.

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