Tag Archives: correction

Friday Free-for-all!

It’s that time of the week again!

Friday free-for-all time!

This is our regular 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 much is Canada overvalued?
More on debt levels
CMHC rates correction risk low
Raise taxes?
Everyone wants to live in… LA?
Poloz: no risk of bubble
Developer is corruption suspect?
What if you could only get 5 mortgages?
Yellens’ zombie economy

So what are you seeing out there?

Post your news links, thoughts and anecdotes here and have an excellent weekend!

As oil, so goes Real Estate?

Over at the CBC Don Pittis notes that what goes up can also go down.

Specifically, he notes that in the oil market there were a number of ‘experts’ with access to detailed data and analysis, yet seemed to be as surprised as anyone at the drop in oil prices.

Canadas housing market is of course a completely different beast, and we don’t really lack for ‘experts’ noting that prices are a bit out of sync with reality.  When the Finance Minister speaks up and the Bank of Canada estimates that real estate is as much as 30% overpriced nationwide that’s not exactly ‘without warning’.

Pittis notes another key difference between oil and housing is of course the liquidity of the market:

This is one example of how housing is different from oil. While oil trades on big, well-informed central trading desks by large corporations, housing is a market made of individual, many of whom have only bought and sold a house once in their life.

Partly because of that, housing is an illiquid market. Unlike stocks or oil, you can’t just sell a house at today’s price and get out. You have to go through the long process of finding another individual who wants to buy your exact house at a price at which you are willing to sell.

In previous housing downturns that has meant a stock of overpriced houses builds up because buyers are unwilling to pay the price sellers expect.

At that point, prices in the market are set by people who have to sell immediately and will take the price offered. Sudden divorces. A new job across the country. A death in family. People who can’t afford to keep up their payments. Overpriced properties waiting for their price actually fall in value while the seller waits.

Read the full article here.

Harper: No Bubble in Canada

Getting tired of the word ‘bubble’ yet?

With all the news stories and predictions of an Canadian real estate market crash, it’s time for the leader of this great nation to chime in with his opinion:

…Harper told a New York business audience that he did not anticipate a housing crisis in Canada, and that that there was no comparison between the Canadian housing market now and the U.S. market before the crash of 2008.

He said only  small percentage of Canadian households would be vulnerable to interest rate hikes or a downturn in prices.

On the flipside of the argument is a securities analyst with a book to sell and a negative message:

In an interview published in the Globe and Mail today, MacBeth predicts a serious crash in house prices as soon as this coming spring, and advises people with large mortgages to sell, and rent.. His book, When the Bubble Bursts, forecasts a drop of up to 50 per cent in housing prices.

Read the full article here.

FFFA! gas, bubble, soft landing

Well here we are, the end of another week.

That means it’s time for another Friday Free-for-all!

This is our regular 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:

Russia/China shakes up LNG market
No housing or mortgage crisis
Overdue for a full blown correction?
CMHC: get ready for soft landing
Rennie: focus on old people
Millenials richer with more debt
Greatest RE bubble not done bursting

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

FFFA! Interest rates, towers & debt

Hey, it’s that time of the week again!

Friday Free-for-all time!

This is when we do our regular 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:

Canadian house prices flatten
Is it really non-mortgage debt?
Surrey discovers murphy beds
Zero % loans for suckers?
HPI & Teranet Disconnect?
Burnaby grows up
Jim will intervene
A major correction?

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