It’s the weekend again, but not just any weekend, this is the relaxing weekend in the midst of holiday and vacation land.
But it is Friday, and that traditionally means it’s Friday Free-for-all time here at VCI.
This is our open topic discussion thread for the weekend, here are a few recent links to kick off the chat:
–RBC: healthy 15% drop
–Soft landing is?
–Oil nosedives, what about stocks?
–Zinc, Wood, is all good
–An order of Canada for Carney
–Some debt numbers
So what are you seeing out there? Post your news links, thoughts and anecdotes here and have an excellent holiday!
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.
It’s the end of another workweek and that means it’s Friday Free-for-all time!
This is our regular end of the week news roundup and open topic discussion thread for the weekend.
Let’s get to it!
Here are a few recent links to kick off the chat:
–Biggest new home price drop in Canada
–Average house price takes record fall
–Inflation adjusted HPI lower than 2008?
–New house prices lower than 2007?
–Condo owners ignore depreciation reports
–Cashback mortgages, great way to cash in on suckers
–Removed all 4’s from floors, Vegas tower still doomed
So what are you seeing out there? Post your news links, thoughts and anecdotes here and have an excellent weekend!
Teranet has released their latest numbers and they are down.
Vancouver house prices on the Teranet index are now down 2% over where they were the same time a year ago.
Prices would have to really start rocketing up to keep the YOY numbers from staying negative for a while since prices peaked around June 2012.
What does the RE industry report when they can no longer claim YOY price increases?
Now that the Canadian housing bubble appears to be running out of steam we’re starting to hear concerns that automated appraisals have helped push prices up higher than they ought to be.
This article in the globe and mail was linked in fridays free-for-all post, but is worth a closer look.
Automated appraisals save time and money but have such a big margin of error that they are practically worthless.
Now people involved in lending are starting to worry about the fall out of relying too much on an automated system:
Introduced in 1996 as a way for the CMHC, banks and other lenders to quickly and inexpensively determine how much money can be lent against a residential property, the database known as Emili is relied upon too heavily by lenders, the documents suggest.
Emili is an automated system that uses figures such as recent sales of nearby homes to gauge values, without sending an actual appraiser to the address. However, the potential margin of error in calculations may pose significant problems. For home buyers, or homeowners with home-equity lines of credit, an inaccurate valuation by the database could allow them to overpay or borrow much too heavily for the home, industry members argue.
For banks, it could mean the collateral they have against the mortgage is not worth as much as believed.
Ooops! But as a comforting side effect, it appears that appraisals that came in too high in a hot market did enable the CMHC to collect higher fees. Read the full article here.