Be very afraid of the Canadian housing bubble

[RWGR]

I want you to be afraid. Very afraid of the Canadian housing market.

I want people who are considering buying a house in Canada to be the most frightened. People who just bought a house also have every right to be nervous. But even if you don't have a stake in the property market, I would like you, too, to be fearful of a bubble in Canadian property.

Right now in Canada we are at the Chicken Little stage. The real estate industry and the banks say there is no bubble. Our finance minister, Jim Flaherty, has warned repeatedly about high debt levels, but even he is on the record saying there's no bubble.

I don't want you to listen to them. I want you to listen to the Economist, Canadian Business, the Wall Street Journal — each of which have sounded scary warnings. Macleans magazine went a step farther with a screaming headline saying it was "Time to Panic."

http://www.cbc.ca/news/business/stor...vp-pittis.html

[Soundbear]

Somebody dig up a half dozen economists with a different view.

[Roll The Bones]

If he spent more time reading the article than being enthralled with the title, he would have read the following:

"I know that the Canadian mortgage market is not the wild west that it was in the United States in 2007. I know that the U.S. central bank, which effectively controls our mortgage rates, is planning to keep money cheap until at least 2014. I know that markets can go up, and up, for a long time without crashing. I know that the only proof of a bubble is when it pops."

He would never cut and paste that part, however, because the vulture knows those three lines destroys his ... umm... argument? Why not read past the title next time! Some teacher!!!

And Soundy, just because you asked so nice - rebuttal argument:

"Looking at debt-to-income is only part of the story. You need to see what that debt was spent on. In other words, why do so many analyses ignore the other half of the balance sheet: assets? A lot of that debt is mortgage debt. Housing has done well, so on the asset side, we are doing much better. Our net-worth to-income ratios are higher.

Secondly, our lending practices are more conservative. We don't have as many people, proportionately, in over their heads.

Third, while there may indeed be a drop in housing prices, it may not cascade into a financial system meltdown anywhere near what happened in the U.S. If you have 50 per cent equity in your house and the price drops 30 per cent, you get angry but you don't necessarily default on payments. The sub-prime mortgage market in Canada is virtually non-existent. Anyone with a mortgage balance outstanding close to the value of their home is also required to have mortgage default insurance."

http://www.theglobeandmail.com/globe...rticle2200432/

It really is too bad that more yankees don't take care of their own problems (ie ongoing housing crisis) before pointing at others. Then again, that is and has always been the American way.

[Soundbear]

Good input, Bones. Thanks.


Wait for it, wait for it....

[Roll The Bones]

Wait for it, wait for it....

~snore

[Roll The Bones]

more:

http://www.moneyville.ca/article/116...oling-nah?bn=1

"The average house price across the rest of Ontario should hit $378,700 this year, up about 3.4 per cent, and register further gains of 4 per cent next year before slowing to about 2.6 per cent in 2014, says the Ontario Housing Outlook 2012-2014 report.

While interest rates are expected to climb further in 2014, they are likely to remain at near historic lows, says the report by Central 1 chief economist Helmut Pastrick.

“My view is that the market is not overvalued, that we’re not in a housing bubble. What we’re seeing is high prices that are just due to supply and demand fundamentals, for the most part,” says Pastrick.

“I don’t expect a price correction any time in the next couple of years.”

Next!!!

[The Voice]

Good input, Bones. Thanks.


Wait for it, wait for it....

I figured you got it.

[Anapeg]

Once his feathers are singed he rarely if ever returns. He is a ninja buzzard. Always on the move never resting, always trying to make his country look better by belittling others. It works in his estimation, mores the pity.

[NewCasa]

I'm sorry, but...the Canadian housing bubble?

What did you fools just go through? What are you STILL going through?

Balloon this! LMAO!!