Category Archives: equity

Debt addicts face painful withdrawal

Canadians love debt that gets sunk into ever rising property prices and banks and other lenders have been happy to provide.  As long as rates only go down this is a pretty good situation, but what if rates were to go the other way one day?

Financial companies have been more-than-willing lenders. But there are several reasons why Canadians have been such enthusiastic borrowers.

Last week, new figures showed that consumer lending now totals more than $2 trillion, a new record. As we reported last week, for every dollar of Canadians’ disposable income, they owe almost $1.67.

From the point of view of Canadians, money has never been so cheap. But the rising cost of housing, especially in the country’s biggest cities, has also drawn people into taking on more debt.

Continue reading Debt addicts face painful withdrawal

Banks would rather not take on more risk

southseacompany pointed out this article in the financial post:

Canada’s banks are pushing back against taking on more mortgage risk

“Canada’s financial industry is urging the federal government to consider alternatives to proposals that could require them to take on a greater share of mortgage defaults through a deductible — calling it one of the biggest shakeups to hit housing finance in 50 years.”

Read the full article here.

Eliminate character to avoid affordability 

There are some old homes on Vancouver and some people think we shouldn’t be tearing down 1000 of them each year.  The city has some heritage and ‘character’ protections in place, but these have the unfortunate side effects of slowing the relentless rising of house prices:

“The real data on the house next door is that it reduced the value by 15 per cent,” said Jackson, whose neighbour’s house was re-listed and sold for less money after the city determined it has “character features” on the exterior. 

Read the full article here

Condo sales see big drop in December

So far it’s been single family homes that have seen the biggest drop in sales and prices in Vancouver with condo sales chugging right along.  That may be changing. Whether you blame it on market changes or weather, Vancouver condo sales saw a 23.7% drop in December.

Bubble talk might be impacting sales, as they declined significantly across the GVR. 915 sales were logged through the MLS, this represents a 23.7% decline from the month prior. Of those sales, 1 in 4 were in Vancouver West – which only experienced a 19.9% decline from November. Declining sales is expected in December, but this was a 25.3% decrease across the GVR from the same time last year.

Of course prices are still way up from a year ago.

Read the full article over at betterdwelling.com.

Vancouver renters help pay homeowner taxes

If you own a small run down million dollar house in Vancouver, let’s take a moment to thank the renters who help pay for some vital services, like the new first time buyer loans and the homeowner grant, the cap of which has just been raised to 1.6 million.

“This is a remarkably lousy policy,” said Thomas Davidoff, head of the University of British Columbia’s Centre for Urban Economics and Real Estate. “You’re going to take money from people who don’t own homes and give it to people who own homes. That seems to be a step exactly in the wrong direction if the dominant issue is affordability.”

Read the full article over at Bloomberg.