“I’m surprised that everyone else is so surprised to hear anyone talk about a housing bubble…” “Housing prices went up 17% in a year where underlying wage growth is stagnant…” “I called the bubble in the US in 2005-2006… I was looking at price to rent ratios, I was looking at price to rent ratios… household exposure to RE… I’ve got news for you… the numbers in Canada now are worse than they were in the US 13 years ago” [asked about colleagues who say there is a “bubble in calling bubbles in Canadian RE”] “Bubbles can go further than you think, but they don’t correct by going sideways…” “I list ..read more

As a mortgage agent, Lorina Serafico, a home-financing adviser with Scotiabank, often gets asked when is a good time to buy a home. “If a household has the income, down payment, and the credit score to qualify for a mortgage, it is always the right time,” she said. According to Serafico everyone needs a home, whether owned or rented. “I consider mortgage payments as a forced savings plan,” Serafico said. “A $500,000 property you bought today will be worth $873,000 in 10 years. That’s an average of 7.45 percent annual increase, beating a medium-risk investment portfolio.” … With more than a dec ..read more

“Two days ago, my mortgage holder (a Credit Union, no less) called and told me that after 22 years, I was no longer an “A-list” borrower, and they would not renew my mortgage. I have no credit cards, never late with a payment, never late with utilities, taxes, etc., etc., BUT, because of the ‘new’ mtg. rules, they could not renew my mtg. because two years ago (as a result of a series of family crises), I took a small 2nd mtg. (ridiculous rates, but I’ve met EVERY payment, etc. – the credit union wouldn’t ‘help’). My total debt is only the two mtgs. against the property and, together, they are ..read more

According to CMHC estimates, the ratio of household debt to GDP in Canada could reach 130 per cent in the third quarter of this year, a sharp increase from around 99 per cent before the pandemic. Debt as a share of disposable income, meanwhile, could also rise precipitously to 230 per cent in the third quarter, up from 176 per cent. Siddall said those ratios are well over a critical 80 per cent threshold, above which “the Bank for International Settlements has demonstrated that national debt intensifies the drag on GDP growth.” Such high debts risk future economic growth by “effectively conve ..read more

“If homeowners can just hold off selling, the Canadian housing market will emerge fine from its current “deep freeze”. According to a recent TD Economics housing forecast update, the market is expected to gradually recover from the effects of the COVID-19 pandemic. After an anticipated “historic” plunge in sales in the month of April 2020, a “much stronger activity” is seen next year. A lot of that depends on whether homeowners can avoid distressed selling during this pandemic. “Absolutely key to our forecasts is the assumption that listings mirror sales by dropping substantially in the near-t ..read more

Urban planner Andy Yan, director of the City Program at SFU, thinks the pandemic has exposed Vancouver’s economic fragility. Besides real estate, Yan explains, the economy is driven by service industries such as tourism, which has been clobbered by COVID-19. Not only do tourists help fuel short-term rentals like Airbnb, but many long-term renters work in tourism and hospitality. “If you were either counting on Airbnb or on a renter living in your secondary suite helping pay for your mortgage, and now they can’t, what do you do?” Yan asks. Add in the fact that international travel is now very ..read more

“While lockdowns, job losses and uncertainty are roiling property markets from the U.K. to Australia to Hong Kong, Canada’s situation is more precarious than most. As its oil sector shriveled in recent years, Canada’s economy became ever more driven by real estate, an industry now in a state of paralysis. Nearly one in three workers has applied for income support. What’s more, its households are among the world’s most indebted, poorly placed to weather the storm. “I think it is the Great Reckoning,” says Douglas Hoyes, a bankruptcy trustee in Kitchener, Ontario. “We’ve been in a period for so ..read more

“A recent report from Central 1 Credit Union suggests a rebound in Metro Vancouver’s housing market is coming. However, at the moment there are property owners losing hundreds-of-thousands of dollars on their investments.” There follow examples of homeowners losing money, care of @mortimer_1: 1. Burnaby. Bought $1.9M May 2016, Sold 2019 $1.495M, Loss $405K + expenses (over 21%) 2. Burnaby. Bought $3.11M 2016, Sold $2.1M 2019, Loss $1.01M + expenses (over 32.5%) 3. Vancouver Westside. Bought $2.7M Feb 2016, Sold $2M 2019, Loss $700K + expenses (over 25.9%) 4. North Vancouver. Bought $2.36 ..read more

REBGV headline detached averages have dropped from peak $1850 K to current $1486 K, about 17%. Sleuths such as @VanREflipflops have revealed many examples of substantially higher drops. At what price levels will support come in? and from where? and when?… All of this currently speculative (cough, cough). Using the price chart and other past markets as a guide, REBGV headline detached prices (real, adjusted for inflation) could drop back to support determined by prices seen in 2013 (-45% from peak), 2009 (-60%), or even 2003 (-78%). This will still seem incredible to most, but it is the l ..read more

“The cost of buying a home in B.C. increased by as much as five per cent last year due to more than $5 billion in dirty money from organized crime laundered through the province’s real estate sector, according to a new expert panel report. Former deputy attorney general Maureen Maloney chaired the panel on money laundering, which released a report Thursday that concluded it “cautiously estimates that almost five per cent of the value of real estate transactions in the province result from money laundering investment.” In addition, she concluded: “The estimated impact of that would be to incre ..read more