Home prices at lowest point in more than 10 years

[dexlargo]

Originally posted by Xtrema
As for Chinese money flowing in, I don't know if it will end. Chinese always want out. Especially corrupted officials. There are no shortages of those. China also wants to offload their population to the world.

And remember, what you are seeing now is a small% of Chinese moving in middle and upper class. There will be more having the ability to migrate.

Agreed, but it's not just corrupt officials, it's anyone in China who has money. I have friends who are connected with some rich Chinese, one of them owns several properties in Vancouver, one of which is basically a mansion, which sit empty most of the time. What they are doing is trying to move some of their capital out of China as a fallback plan.

I think they don't 100% trust the government to not reverse the economic freedoms that have been allowed to their citizens, so they are preparing boltholes for themselves and their families so they have a soft place to land, if it comes to that.

Honestly, I don't think they care what the price is that they pay.

[Canucks3322]

Ya that's what I thought you meant...might wait and see too, may as well pay off the rest of my debt and put more cash up into a down payment as well in the meantime...I think the chances of prices actually rising or interest rates rising significantly is pretty slim.

[Abeo]

Surprised this article wasn't mentioned:

http://www.theglobeandmail.com/globe...rticle2347630/

That pretty much echos my sentiment. Anyone recall when it was hard to get a mortgage? Let alone a 5x income mortgage with 5% DP.

[Beerking]

It does not matter if we have oil, or if Vancouver and Toronto are more expensive than Alberta. All that matters is that almost everywhere in Canada, home prices:Income is greater than the traditional affordability of 3:1.

The real breaker will be when bond yields rise, and oh they will. CND bonds just reached record highs and too think that that will last is foolish, especially with worldwide CB's printing money to infinity.

It will get bad, housing will come down/crash. I am backing this up by selling my house as we speak. My wife and I will rent and have no problem doing so.

[Tik-Tok]

We're in a changing world. Just because the market isn't doing what it's "historically" done in the past, doesn't mean it's going to all come tumbling down. I'm not saying it can't happen, but you have many more angles then prices:income.

Vancouver is a sure sign of that, with all the overseas money in it.

[kenny]

Housing will crash.

Let's say it all together.

Housing will crash.

Say it enough times and eventually we'll all be right and totally saw it coming!

[Tik-Tok]

Originally posted by kenny
Housing will crash.

Let's say it all together.

Housing will crash.

Say it enough times and eventually we'll all be right and totally saw it coming!

Either

A) Giant crash happens, everyone's poor, life sucks, all those people say "I told you so!!"
or
B) Crash doesn't happen, people are living life fine, all those people keep saying it's still going to crash for the rest of their lives.

Pretty sure most of the "sky is falling" folk said it was going to happen before now, like in 2008, 2009, 2010, 2011, January 2012, etc.

[codetrap]

Originally posted by Tik-Tok
Either

A) Giant crash happens, everyone's poor, life sucks, all those people say "I told you so!!"
or
B) Crash doesn't happen, people are living life fine, all those people keep saying it's still going to crash for the rest of their lives.

Pretty sure most of the "sky is falling" folk said it was going to happen before now, like in 2008, 2009, 2010, 2011, January 2012, etc.

Yeah, I've been hearing the bubble won't last since we bought our house in 2005, it's gonna crash we're all doomed OMG the world is coming to an end boo fucking hoo our house will only be worth half of what we paid oh nooooooooooo.....

In all honesty? Who gives a fuck. Make sure your own shit is in order so that if interest rates hit double digits you're not on the street, and stop worrying so much about what other people are doing. They can deal with their own shit. If house prices crash and you don't want it to affect you? Then don't friggen sell your house and you haven't lost a damned thing! It's not like the size expands and contracts with the current house market price. Oh no, the market is down, our bonus room disappeared!

Don't worry about it, be happy.

[01RedDX]

.

[masoncgy]

Originally posted by codetrap
Don't worry about it, be happy.

If your job is directly connected to real estate/construction, you have plenty to be worried about in terms of a downturn/correction. I managed to escape a lay off in 2008... who knows what the current instability will bring, since I still work in the industry.

The market is dead where I live now. This is impacting local construction trades who are having to seek out work outside of the region. The lack of local market activity is also keeping me from moving back to Alberta, a personal negative situation that, for lack of other words: fucking sucks ass.

Someone else mentioned how price to income ratios are completely out of whack. This is especially true in the major centres. The only thing fueling the increases is speculation and cheap money. This will eventually come undone.

I own real estate, so I try to maintain a positive outlook, but unfortunately the current environment gives me little confidence.

[arian_ma]

Bump.

Minister of Finance spits more warnings, as does Maclean's

[benyl]

Originally posted by arian_ma
Bump.

Minister of Finance spits more warnings, as does Maclean's


» Click image for larger version

haha, nice way to sell magazines.

[Kloubek]

Fear sells.

[kenny]

Originally posted by arian_ma
Bump.

Minister of Finance spits more warnings, as does Maclean's

Compared to the January 2012 cover:

[arian_ma]

Originally posted by kenny

I don't see your point. We are on top of the world compared to most of the Western world. Anyway, my post was meant to be less about the Maclean's magazine and more about what Flaherty is screaming:

"We are cautioning people not to assume too much long-term debt on the assumption that interest rates will stay as low as they are -- because they won't," Flaherty said Sunday on CTV's Question Period.

"We want to make sure Canadian households plan ahead and know, if they renew a mortgage in the next several years, it's likely that the interest rate will be higher," he added.

"Interest rates have nowhere to go but up."

Flaherty's remarks echo those of a Bank of Canada report last week that said high household debt is now the most significant risk to the Canadian economy.

http://www.ctv.ca/CTVNews/TopStories...-rates-110626/

Edit: also, am I correct to assume that all 3 of the above posters are homeowners?

Edit 2: I agree that fear mongering is a tactic that has been used many times before by government and media to press social agendas, however in this case it seems to me like the government is back tracking on their own words and just now realizing that what they pushed 2 or 3 years ago was a bad move. The media just likes to blow things out of proportion, you're right, but that doesn't change the facts. There is no benefit of fear in this case (for the government). A bust would be terrible for everyone involved.

[Xtrema]

If the banks are so scared of a bubble, why don't central bank raise the interest rate now on mortgages?

Not an economic major, but what's the legal or economic ramification if they raise interest only real estate loans? Can it be done while keeping general loan low to help the economy? IMO, if the government is really worried about RE bubble, kill CMHC insurance or reform the rules on qualification and coverage.

IMO CMHC artificially inflated the market. I don't know by how much but I would guess a fair bit.

[kenny]

Originally posted by arian_ma
I don't see your point. We are on top of the world compared to most of the Western world. Anyway, my post was meant to be less about the Maclean's magazine and more about what Flaherty is screaming:
http://www.ctv.ca/CTVNews/TopStories...-rates-110626/

Edit: also, am I correct to assume that all 3 of the above posters are homeowners?

Haha I wasn't making any point, just thought it was funny that in January they have such a feel good cover and two months later its a "you're fucked!" cover.

[kaput]

.

[sputnik]

Originally posted by kaput


I don't understand the system very well but I'm quite sure that the central bank doesn't have any direct influence over mortgage rates.

Fixed rates.

The central bank has no direct influence. They are based on the bond market and banks hedge against it to cover the costs of lending money long term.

Variable rates.

The central bank does have the ability to influence prime rates. However banks can still discount against those increases (or increasing trends) to get more customers. However fiddling with the central bank's overnight lending rate has far greater global financial implications to the Canadian currency and is generally not used to cool one specific sector in the economy.

[kaput]

.