Comments on: Global Housing Bust http://www.canadiancapitalist.com/global-housing-bust/ Helping you invest and prosper Sat, 11 Feb 2012 19:27:54 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Gord http://www.canadiancapitalist.com/global-housing-bust/#comment-195599 Gord Tue, 14 Jul 2009 03:00:48 +0000 http://www.canadiancapitalist.com/?p=935#comment-195599 Er, to all those hurling invective at the dumb saps who are still buying homes, you do realize that those are the folks who are keeping this economy from completely tanking. If everyone suddenly stopped buying real estate, home values would plummet to near zero, and this gossamer thin recovery would turn into a depression the likes from which we may never recover. So, to all those generous, kind-hearted dummies loading up on overpriced real-estate–bless you. You’re the reason I still I have a job, an internet connection and a sliver of hope. Er, to all those hurling invective at the dumb saps who are still buying homes, you do realize that those are the folks who are keeping this economy from completely tanking. If everyone suddenly stopped buying real estate, home values would plummet to near zero, and this gossamer thin recovery would turn into a depression the likes from which we may never recover. So, to all those generous, kind-hearted dummies loading up on overpriced real-estate–bless you. You’re the reason I still I have a job, an internet connection and a sliver of hope.

]]> By: Gerry http://www.canadiancapitalist.com/global-housing-bust/#comment-195597 Gerry Tue, 14 Jul 2009 02:57:16 +0000 http://www.canadiancapitalist.com/?p=935#comment-195597 The sooner we accept the Canadian housing market has been overcooked and needs to adjust, the better, not least because mapping out the future requires an understanding of what has happened. Canadian politicians need to accept the bursting of the property bubble as an economic coming of age and play their part in adjusting downwards expectations of wealth, wage and inflation. They must begin to focus on where we would like to be in 10 years, and not just in 10 months. The biggest mistake policymakers and politicians could make at this stage is to continue propping up the asset bubble in the property market. (30, 35, 40 year mortgages/No money down mortgages/ridiculously low interest rates/etc….) And don’t believe the housing market in Canada has improved at all. That’s just realtors and realestate related machines trying to create false hope and predictions for the future. Affordability index spells it out loud and clear. Canadians can not afford housing any more and prices will crash. That’s a fact! The sooner we accept the Canadian housing market has been overcooked and needs to adjust, the better, not least because mapping out the future requires an understanding of what has happened. Canadian politicians need to accept the bursting of the property bubble as an economic coming of age and play their part in adjusting downwards expectations of wealth, wage and inflation. They must begin to focus on where we would like to be in 10 years, and not just in 10 months. The biggest mistake policymakers and politicians could make at this stage is to continue propping up the asset bubble in the property market. (30, 35, 40 year mortgages/No money down mortgages/ridiculously low interest rates/etc….) And don’t believe the housing market in Canada has improved at all. That’s just realtors and realestate related machines trying to create false hope and predictions for the future. Affordability index spells it out loud and clear. Canadians can not afford housing any more and prices will crash. That’s a fact!

]]> By: JK http://www.canadiancapitalist.com/global-housing-bust/#comment-195596 JK Tue, 14 Jul 2009 02:56:16 +0000 http://www.canadiancapitalist.com/?p=935#comment-195596 Existing home sales across Canada have plunged by more than 60,000 units in the first six months of 2009, according to figures released Thursday by the Canadian Real Estate Association (CREA). The report showed that as of the end of June, 142,899 homes were sold nationwide through the multiple listing service (MLS) compared with 233,213 in the same period last year - a drop of 43%. New listings continued to outpace sales in June, with the number of properties coming on to the market rising 8.8% from the prior month to a record 98,878, while sales declined month-over-month by 8.2% to 48,133 units. Compared with May of 2008, the number of sales dropped 35.9%. Existing home sales across Canada have plunged by more than 60,000 units in the first six months of 2009, according to figures released Thursday by the Canadian Real Estate Association (CREA).

The report showed that as of the end of June, 142,899 homes were sold nationwide through the multiple listing service (MLS) compared with 233,213 in the same period last year – a drop of 43%.

New listings continued to outpace sales in June, with the number of properties coming on to the market rising 8.8% from the prior month to a record 98,878, while sales declined month-over-month by 8.2% to 48,133 units. Compared with May of 2008, the number of sales dropped 35.9%.

]]> By: Cory in Winnipeg http://www.canadiancapitalist.com/global-housing-bust/#comment-195595 Cory in Winnipeg Tue, 14 Jul 2009 02:54:53 +0000 http://www.canadiancapitalist.com/?p=935#comment-195595 The collapse of the housing market in the States has exposed the vulnerable balance sheets of many Americans. They are debt rich and asset poor. You can talk favorable demographics all you like. But the fundamental question for any housing decision is whether a borrower can make his mortgage payment. That's getting to be an expensive proposition here in Canada. There hasn't been a house price crash here, like the ones unfolding in America and Britain……YET! But affordability in the Canadian housing market is clearly a problem. Of 227 cities surveyed, found 9 Canadian cities in the top 50 of "least affordable" in the world. "There are no affordable [housing] markets in Canada and there are no moderately unaffordable markets. Five of the nine markets are rated severely unaffordable." “All of the large capital cities (Vancouver, Victoria, Calgary, Edmonton, and Toronto) are rated severely unaffordable”. Vancouver rated 8th out of 227 cities surveyed with a marginal difference between 1st and 8th place. The best ratings are seriously unaffordable in four smaller markets Saskatoon, Regina, Winnipeg, and Halifax. The collapse of the housing market in the States has exposed the vulnerable balance sheets of many Americans. They are debt rich and asset poor. You can talk favorable demographics all you like. But the fundamental question for any housing decision is whether a borrower can make his mortgage payment. That’s getting to be an expensive proposition here in Canada.
There hasn’t been a house price crash here, like the ones unfolding in America and Britain……YET! But affordability in the Canadian housing market is clearly a problem. Of 227 cities surveyed, found 9 Canadian cities in the top 50 of “least affordable” in the world. “There are no affordable [housing] markets in Canada and there are no moderately unaffordable markets. Five of the nine markets are rated severely unaffordable.”
“All of the large capital cities (Vancouver, Victoria, Calgary, Edmonton, and Toronto) are rated severely unaffordable”. Vancouver rated 8th out of 227 cities surveyed with a marginal difference between 1st and 8th place. The best ratings are seriously unaffordable in four smaller markets Saskatoon, Regina, Winnipeg, and Halifax.

]]> By: The Financial Blogger | April Monthly Top Ten http://www.canadiancapitalist.com/global-housing-bust/#comment-132154 The Financial Blogger | April Monthly Top Ten Wed, 07 May 2008 09:36:26 +0000 http://www.canadiancapitalist.com/?p=935#comment-132154 [...] Global Housing Bust by Canadian [...] [...] Global Housing Bust by Canadian [...]

]]> By: Tony Danza http://www.canadiancapitalist.com/global-housing-bust/#comment-131350 Tony Danza Thu, 01 May 2008 15:13:57 +0000 http://www.canadiancapitalist.com/?p=935#comment-131350 Thanks for the answer CC, I fear for many of my friends who have bought in the last few years with 0 down! <i>I simply can’t find a property with a cap rate that is worth my while - the house prices are way too high to justify the potential rental income.</i> That means house prices are too high and will fall, the same conditions existed in the US, GB, Aus and India where prices are taking a nose dive. Thanks Thanks for the answer CC, I fear for many of my friends who have bought in the last few years with 0 down!

I simply can’t find a property with a cap rate that is worth my while – the house prices are way too high to justify the potential rental income.

That means house prices are too high and will fall, the same conditions existed in the US, GB, Aus and India where prices are taking a nose dive.

Thanks

]]> By: ThickenMyWallet http://www.canadiancapitalist.com/global-housing-bust/#comment-131347 ThickenMyWallet Thu, 01 May 2008 14:05:42 +0000 http://www.canadiancapitalist.com/?p=935#comment-131347 ... and if the housing correction brings us from insanity to historical valuations why is this such a bad thing? … and if the housing correction brings us from insanity to historical valuations why is this such a bad thing?

]]> By: Canadian Capitalist http://www.canadiancapitalist.com/global-housing-bust/#comment-131225 Canadian Capitalist Thu, 01 May 2008 02:08:28 +0000 http://www.canadiancapitalist.com/?p=935#comment-131225 Jon: Thanks for the link to the fascinating CBC story. Personally, we don't want to own any vacation property at this stage of our lives in Arizona or Florida. Tony: I believe an appraisal is done and loan-to-value determined each time a mortgage is renewed. So, if a home owner is upside down, they'll have to come up with the difference. One more reason to be careful about taking a loan against the home to invest... Phil: I totally agree with you on the cap rate is very low now and has been that way for many years. While real estate sales are down, prices are still firm here. Jon: Thanks for the link to the fascinating CBC story. Personally, we don’t want to own any vacation property at this stage of our lives in Arizona or Florida.

Tony: I believe an appraisal is done and loan-to-value determined each time a mortgage is renewed. So, if a home owner is upside down, they’ll have to come up with the difference. One more reason to be careful about taking a loan against the home to invest…

Phil: I totally agree with you on the cap rate is very low now and has been that way for many years. While real estate sales are down, prices are still firm here.

]]> By: Cash Instinct http://www.canadiancapitalist.com/global-housing-bust/#comment-131217 Cash Instinct Thu, 01 May 2008 00:28:16 +0000 http://www.canadiancapitalist.com/?p=935#comment-131217 I personnaly hope that residential real estate prices will go down during the next years for the prices to become more affordable when I will buy a piece of real estate. This is a personal bias I suppose! I personnaly hope that residential real estate prices will go down during the next years for the prices to become more affordable when I will buy a piece of real estate.

This is a personal bias I suppose!

]]> By: Phil S http://www.canadiancapitalist.com/global-housing-bust/#comment-131207 Phil S Wed, 30 Apr 2008 22:50:34 +0000 http://www.canadiancapitalist.com/?p=935#comment-131207 I hear a lot of people talking about real estate going bust, but I personally just don't see it. I've been semi-active in looking to upgrade to a bigger condo or townhouse but the prices have NOT been falling in Toronto, from what I've seen. It might be falling in some less desirable neighbourhoods (where I haven't been shopping for homes), but all along the subway line or along the lakeshore, the prices are simply NOT falling and in fact they still seem to transact fairly quickly. I'd also been considering getting into rental properties, but the same problem applies. I simply can't find a property with a cap rate that is worth my while - the house prices are way too high to justify the potential rental income. If I can make the same rate of return from a GIC than I can from the cap rate of a rental property, you can sure as heck bet I'm not going to go through the trouble of buying, renovating and finding renters for that property! I hear a lot of people talking about real estate going bust, but I personally just don’t see it. I’ve been semi-active in looking to upgrade to a bigger condo or townhouse but the prices have NOT been falling in Toronto, from what I’ve seen. It might be falling in some less desirable neighbourhoods (where I haven’t been shopping for homes), but all along the subway line or along the lakeshore, the prices are simply NOT falling and in fact they still seem to transact fairly quickly.

I’d also been considering getting into rental properties, but the same problem applies. I simply can’t find a property with a cap rate that is worth my while – the house prices are way too high to justify the potential rental income. If I can make the same rate of return from a GIC than I can from the cap rate of a rental property, you can sure as heck bet I’m not going to go through the trouble of buying, renovating and finding renters for that property!

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