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Old 12-16-2010, 03:12 PM   #1521
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Can you substantiate this with anything?
Off the top of my head at 4% interest, $350,000, 35 years is about what just over $1500/month?

The same $1500/month at 4% for 25 years can cover something like . . . $300,000?

Not sure, math might be wrong.

EDIT: I'm picking some pretty rough round numbers. I guess you can do some sensitivities for various interest rates and "average" house prices to see what an equivalent monthly payment could cover for the borrowing portion of the house cost.

Last edited by chemgear; 12-16-2010 at 03:17 PM.
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Old 12-16-2010, 03:19 PM   #1522
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I dont agree it would hurt 1st time buyers. Most people can meet 10% fown based on equity in their 1st home, etc when they sell it.
Other than the spelling error, this doesn't make sense.
Do most first time home buyers already have equity in their first home?

How do they get the extra 5% to meet the new 10% down stipulation to have that first home to sell it?
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Old 12-16-2010, 03:27 PM   #1523
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I am thinking there is a break between the "agree" and "it."

(I had to read that a bunch of times.)

Edit: And maybe an "only" after "buyers." Maybe, lol.
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Old 12-16-2010, 04:05 PM   #1524
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Ob la dee, ob la daa, life goes on.
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Old 12-16-2010, 06:09 PM   #1525
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Quote:
Originally Posted by chemgear View Post
Off the top of my head at 4% interest, $350,000, 35 years is about what just over $1500/month?

The same $1500/month at 4% for 25 years can cover something like . . . $300,000?

Not sure, math might be wrong.

EDIT: I'm picking some pretty rough round numbers. I guess you can do some sensitivities for various interest rates and "average" house prices to see what an equivalent monthly payment could cover for the borrowing portion of the house cost.
Still not following; how does this equal a 15% drop in prices?
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Old 12-16-2010, 10:30 PM   #1526
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Still not following; how does this equal a 15% drop in prices?
I think the poster means a 15% drop in the amount of mortgage you'd get for the same amount ($1500/month) and same rate (4%) not price. Not sure what that change would have on sales prices but my guess would be that prices would drop. How much not sure but without 5/35 and 0/40 mortgage terms I don't think we would have seen as large a jump in home prices. It's a key variable after low interest rates that I think have created an unsustainable and volatile housing market.
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Old 12-20-2010, 02:30 PM   #1527
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http://www.cbc.ca/canada/calgary/sto...al-market.html

Apparently 40,000 rental units sit vacant.
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Old 12-20-2010, 04:24 PM   #1528
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http://www.cbc.ca/canada/calgary/sto...al-market.html

Apparently 40,000 rental units sit vacant.
That's interesting. Appartment vacancies actually decreased in 2010, after 3 stright years of increases.
Oct 2010 was at 3.6% vs Oct 2009 at 5.3%

source: https://www03.cmhc-schl.gc.ca/catalo...=1292887238218

From personal experience: I took possession of a Beltline condo in November and had 2 good renters to choose from 1 day after listing the ads. Could have just got lucky though.

Last edited by Winsor_Pilates; 12-20-2010 at 04:27 PM.
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Old 12-22-2010, 09:53 AM   #1529
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Nothing really new here, just an interesting comparison of long-term fundamentals versus the US prior to their drop in housing prices.

http://ca.finance.yahoo.com/news/Cou...480210207.html
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Old 12-22-2010, 12:16 PM   #1530
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^
I heard Donald Coxe earlier this week and I will summarize what he said below as it relates to this.

"Canada is a well managed country in a world that has been badly mis-managed and Canadian individuals are making up for that by mimicking the US real estate buyers of the last decade on the basis that they have nothing to learn from the US experience so you have a balance in Canada between really good management at the top with the Federal Government and the Bank of Canada and a population that has been a bit giddy and will at some point have to learn from it but meanwhile what is means is that Canadian assets will rise in value based on the fact that on a relative basis Canada is financially a strong country. Because of the Bernanke Gush exports from Canada to the US will actually be stronger next year than they were this year".

Regarding the massive amounts of liquidity being artificially pumped into the world economies :
"A recovering alcoholic after a couple of years being dry may feel good about things but that doesn't nescessarily mean that they are going to be healthier in the longrun for it".
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Old 12-22-2010, 12:30 PM   #1531
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US Housing Market Struggles to Gain Traction
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Old 12-22-2010, 12:40 PM   #1532
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...I just want a magic 8 ball for Christmas...
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Old 12-22-2010, 12:41 PM   #1533
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And just because 0 down isn't advertised anymore does not mean that it is not done.
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Old 12-22-2010, 01:53 PM   #1534
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Here's an interesting financial literacy test put out by the Globe and Mail on Monday. The test is only three questions and is about mortgage rates (I got two out of three):

http://www.theglobeandmail.com/repor...rticle1844647/
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Old 12-22-2010, 03:44 PM   #1535
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The government needs to change mortgages to 10% down min and max 25 years. That would bring down house prices back to normal historical averages.
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Old 12-22-2010, 03:48 PM   #1536
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The government needs to change mortgages to 10% down min and max 25 years. That would bring down house prices back to normal historical averages.

http://www.theglobeandmail.com/repor...rticle1847034/

IMF is basically saying this also

"Ottawa could curb borrowing by making it tougher to take out a mortgage, the IMF said.
“At this point, probably the appropriate thing to do is to wait and see how the credit cycle matures but one option would be to take more steps on the mortgage market, or others, to rein that in a bit more if it doesn’t decelerate further to a level that’s more sustainable,” Mr. Kramer said."

It also highlighted an issue that has grabbed policymakers’ attention in Canada recently - the alarming rise in household debt levels to 143.6 percent of disposable income, just below the U.S. level of 148.6 per cent.
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Old 12-22-2010, 04:43 PM   #1537
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Quote:
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The government needs to change mortgages to 10% down min and max 25 years. That would bring down house prices back to normal historical averages.
I wonder if that would create a buying frenzy though as people try to get in before the changes, which at least in the short term could push prices further up.
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Old 12-22-2010, 06:43 PM   #1538
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Originally Posted by Winsor_Pilates View Post
I wonder if that would create a buying frenzy though as people try to get in before the changes, which at least in the short term could push prices further up.
It could certainly do that - but I'd imagine it would come back down pretty hard/fast afterwards. I wonder how much notice they'll give if they go ahead with it. Interesting times.
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Old 12-28-2010, 06:37 AM   #1539
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Or they could do nothing . . .

http://www.bloomberg.com/news/2010-1...ebt-soars.html


Quote:
Originally Posted by Realtor 1 View Post
And just because 0 down isn't advertised anymore does not mean that it is not done.
Hmm, and you can even get a 7% cash back now!

http://www.cibc.com/ca/mortgages/art...t-csh-bck.html

It's what bothers me in the whole borrowfest silliness. That the CMHC (and correspondingly, the tax payer) is ultimately backing up all these loans.

An older article, but still a good read as get close towards the same prices again when it was written:

http://www.theglobeandmail.com/repor...e317737/page1/

'SUBPRIME' DEFINED

The word subprime has created much confusion because many mistakenly believe that it refers to an interest rate that is below the prime rate - which would obviously be a less risky and more affordable mortgage.

That is not what the word means. Rather, subprime refers to the credit-worthiness of the borrower.

There is no standardized definition of the word, but many mortgage experts interviewed agree that subprime mortgages are best described as loans that include at least two of the following characteristics: a borrower with a bad credit history, an interest rate that is significantly higher than prime lending rates and mortgage values that amount to more than 80 per cent of the market value of the house.
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Old 12-28-2010, 09:26 AM   #1540
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Hiking the down payment to 10% would be crazy. I think it would kill any recovery we have seen.
For many of my buyers 5% is a good chunk of change. I think 5% is a great number because it shows that you can save but doesnt have to leave you stranded for years in recovery mode.
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Property Management
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