Tag Archives: affordability

FFFA! End of boom, TFW, Teranet, Banks

It’s the end of another week!

That means it’s time for another Friday Free-for-all. This is our news round up and open topic discussion thread for the long weekend.  Here are a few links to kick off the chat:

Scotiabank: bubble warning
BMO: bubble warning
TD Bank: bubble warning
RBC: bubble warning
CIBC: data warning
Pimco: bubble warning
Teranet stays flat in march
Open houses – true or false?
Import workers for $11/hour?
More complaints over TFW
Ka-shing dumps china property
New Zealand targets affordability
Sunshine coast sales challenge

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

RBC warns of mortgage rate increases

RBC sees mortgage rates going up instead of flat or down.

Their forecast is for housing to get less affordable due to rate increases.

The Royal Bank of Canada says the ability of Canadians to keep up with housing costs has been improving of late, but warns that’s about to change.

RBC’s latest housing affordability measure shows home servicing costs relative to incomes dipped slightly in the last three months of 2013 after having risen the previous two quarters.

But the relief will be temporary, the bank says in a new report, because mortgage rates are due to start rising this year.

“RBC anticipates that as longer-term interest rates begin to moderately rise, the costs of owning a home at market value will gradually outpace (growth) household incomes by late-2014, leading to strained affordability in several markets across Canada, much like the trend in Toronto,” RBC chief economist Craig Wright said in the report.

The finding bucks the recent trend, which has seen mortgage rates remain stable or even moving lower, with some brokers offering five-year fixed rates below three per cent.

Read the full article here.

FFFA! Affordability, Overpriced, Comparisons

It’s that time of the week again!  This time, we’re going to use the assistance of commentor Snake who posted most of these links.

Thanks Snake and everyone else who contributed links.

But as a general reminder, if you post more than one or two links your comment will get held up in moderation. Inconvenient yes, but better than getting inundated with spam links.

Ok! On to the links:

Most Over And Undervalued Markets
Market overvalued, but crash worries ease
7 Remarkable Numbers From Canada’s Housing Market
Carney To Stop Mortgage Funding Scheme
Housing Bubble? Canada’s Top Banking Regulator Refuses To Say
Vancouver Real Estate Canada’s Least Affordable: Report
How much house can you handle?
Home affordability worsens, new report shows
The Chase: Toronto couple’s search for a $650,000 house
Goldman Sachs recommends shorting CAD$
Babies ‘R’ Expensive
Angry in Whistler

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

Government meddling hurts first time buyers

Peter Simpson is the former president and CEO of the Greater Vancouver Home Builders Association and he’s got a column in the Vancouver Sun that strings together some numbers and anecdotes and then blames the federal government for hurting affordability.

Since this column is about first-time homebuyers, I must comment on federal Finance Minister Jim Flaherty’s changes to the rules governing federally insured residential mortgages, including a reduction in the maximum amortization period from 30 to 25 years.

It is not clear that a tightening of mortgage rules helped Canadians to manage their debt. What is clear is that the shorter amortization period has reduced housing demand by eroding affordability.

Now of course this ‘reduction’ in the maximum amortization period is actually just a reset to a historical norm, not to mention that it only applies to government insured loans.

Mr. Simpson refers to an older generation with homes that are paid off, but I can guarantee you that those homes were not bought on a 30 year amortization, so did longer morts help or hurt affordability? Is it possible that pushing more money into the housing market simply helped to drive up prices and worsen affordability?

It may be that Mr. Simpson is not primarily concerned with the well being of the first time buyer, but is instead concerned with a reduction of customers for his industry.

His conclusion is especially telling:

Finally, Vancouver-area pundits predict there is a sales shift to moderately priced homes, and a buyers’ market will continue until mid-2013. There is no assurance interest rates will remain low through 2013. The bottom line is it seems to be a good time to consider buying a new home.

Read the full thing over at the Vancouver Sun.

Friday Free-for-all!

It’s that time of the week again, lets do our regular end of the week news roundup and open topic discussion thread for the weekend!

Here are a few links to kick off the chat:

Doors shutting on first time buyers
How many realtors is enough?
Vancouver RE plunges
Families leave BC
Housing affordability?
Moodys warn on Canadian debt
Sales/list Sept 2010-2011
Great new source for data
Toronto sales drop 12.5%
Kleptocrats flee china

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