Calgarypuck Forums - The Unofficial Calgary Flames Fan Community
Old 04-04-2015, 06:31 AM   #21
afc wimbledon
Franchise Player
 
afc wimbledon's Avatar
 
Join Date: Jan 2010
Location: east van
Exp:
Default

Quote:
Originally Posted by Winsor_Pilates View Post
When can we expect this?
Who the hell knows, but it will come at some point, it always does.

Crash's are psychological not economic. All bubbles eventually burst, be they tulip bulbs or houses. It comes down to the realization that a detached house in East Vancouver just isn't worth 1.5 mill regardless of the market, everyone knows it, at some point buyers just walk away, then the panic sets in really fast.
afc wimbledon is offline   Reply With Quote
Old 04-04-2015, 06:41 AM   #22
bubbsy
Franchise Player
 
bubbsy's Avatar
 
Join Date: Aug 2008
Exp:
Default

How does a young family home owner prep for the potential burst??
bubbsy is offline   Reply With Quote
Old 04-04-2015, 08:18 AM   #23
Slava
Franchise Player
 
Join Date: Dec 2006
Location: Calgary, Alberta
Exp:
Default

Quote:
Originally Posted by bubbsy View Post
How does a young family home owner prep for the potential burst??
Well truthfully if you are sure that the bursting of the bubble is coming then you sell your house and get out of the asset before the price goes through the floor. There is a risk here in a couple of ways: (A) you have to be right that prices crater because if you're wrong then you sell and the prices never drop, and you're out of the market trying to get back in. (B) you're right and get out perfectly before the crash (woohoo!), but then are too scared to buy back in because you can't figure out the bottom. Obviously a better problem to have is (B), but you aren't really ahead there either.

I think that the commentators from the US are adept at seeing these issues now because they see the 2007 issue for them in hindsight. The economy doesn't have to crash here though, and we are already seeing a significant pull-back in housing prices in Calgary IMO. I know that people in real estate say that the drop is only 0.5%-1% and that seems a little light as March looks like we're down about 2.3%. But then you have to consider that from 2013-2014 the price change was nearly 10% (9.7%). Now we're looking at a reduction instead of almost 2.5% on the average house. So instead of having that rise you have the loss and the swing is almost 12.5%.

I can hear the naysayers already...you're comparing on a relative basis and that's not accurate; you're right but like it or not a lot of homeowners are going to do that. Truthfully when the real estate professional says we're down only a couple percent they're right, but people are factoring in growth and they're also right!

Let me leave you with some psychology here that impacts this as well. Say a homeowners property is worth $500k, and she makes 10%. The house is worth $550k and she's happy of course. Now the property loses 2.5% and is worth $536,250 which is a loss of $13,750. No big deal, except for two factors. One is that relationship I noted above where she will be hoping/expecting another ten percent gain. The other is that from a pure psychological perspective losing has a much bigger impact on people and that $13,750 feels like a loss of $34,375 (2.5 times as much). That painful loss does make people more likely to change their beliefs regarding these assets; they might want to sell to stem losses or might have a much more pessimistic outlook on the overall economy and curb spending. It works the opposite of the rising market where people aren't in and can anticipate and feel the gains before they actually get them.

Anyway, tl;dr things aren't great for the real estate market today in Calgary. I personally am not panicked and not selling my house to lock in gains. Maybe it crashes, maybe it just pulls back. I don't treat my house as an investment though so I could be a in a different position than a lot of others.
Slava is offline   Reply With Quote
The Following 6 Users Say Thank You to Slava For This Useful Post:
Old 04-04-2015, 09:08 AM   #24
CliffFletcher
Franchise Player
 
Join Date: May 2006
Exp:
Default

Yeah, I don't treat my house like an investment either. I bought into the market long enough ago that I'm not going to be underwater even with a 40-50 per cent fall in value. And I plan on living here until I die or can't take care of myself anymore.
__________________
Quote:
Originally Posted by fotze View Post
If this day gets you riled up, you obviously aren't numb to the disappointment yet to be a real fan.
CliffFletcher is offline   Reply With Quote
Old 04-04-2015, 09:39 AM   #25
Flash Walken
Franchise Player
 
Flash Walken's Avatar
 
Join Date: Sep 2005
Exp:
Default

Quote:
Originally Posted by Cowboy89 View Post
No, not really. Give Americans credit because they have the personal experience to provide the hindsight to identify a housing bubble. Now well on the other side of their bubble bursting and not emotionally or personally connected to our housing bubble they are probably better at identifying it.
Especially considering most of the data for this article is coming from Robert Shiller, the Yale Nobel Laureate economist that predicted the 'dot com' bubble bursting as well as the 2000s housing bubble in the states.

Spoiler!


__________________


https://streamable.com/dcxaz
Flash Walken is offline   Reply With Quote
The Following 2 Users Say Thank You to Flash Walken For This Useful Post:
Old 04-04-2015, 09:48 AM   #26
flylock shox
1 millionth post winnar!
 
flylock shox's Avatar
 
Join Date: Mar 2006
Location: Now world wide!
Exp:
Default

I can see some real estate markets in Canada undergoing a massive correction (oil prices alone could spur this in Calgary and Edmonton) but I think predictions that Vancouver is in for a crash are flatly wrong. I don't think Vancouver is part of the Canadian real estate market so much as the international market, and most of those buying from abroad aren't mom and pop mortgage, they're very wealthy and their purchase is an easily afforded pied-a-terre. Vancouver is also already high density with no room to expand, with a host of locals and internationals alike ready to snap up property if it dips 15%.

Basically, barring a few hiccups and earthquakes, Vancouver should keep on moving up as it has done for the last decade. Five years from now I doubt you'll find a detached home in Vancouver for under 7 figures.
flylock shox is offline   Reply With Quote
Old 04-04-2015, 10:01 AM   #27
Peanut
First Line Centre
 
Join Date: Oct 2006
Location: Fantasy Island
Exp:
Default

I thought a huge part of the American housing bubble was their ridiculous lending practices and all the sub-prime mortgages. Which has been stated again and again that Canadian banks have never been as aggressive on the lending front (not saying they're not agressive, just not as agressive as the U.S.) and the sub-prime market here is extremely small.

The market may be inflated in Canada but the conditions are not the same to the US in 2007/2008.

Also, I don't think people on VancouverPuck or TorontoPuck would be experiencing similar doomsday threads or feelings like we are in Calgary. We're very close to the oil price here and the lay offs and the downturn is right in our faces. If we're not employed directly by the industry, many of our friends are, and many Albertan businesses support the industry indirectly. The majority of Canadians aren't as affected (or, at least, they don't think they are affected).
__________________
comfortably numb

Last edited by Peanut; 04-04-2015 at 10:06 AM.
Peanut is offline   Reply With Quote
The Following 2 Users Say Thank You to Peanut For This Useful Post:
Old 04-04-2015, 10:01 AM   #28
Travis Munroe
Realtor®
 
Travis Munroe's Avatar
 
Join Date: Feb 2009
Location: Calgary
Exp:
Default

For those saying a fall off the cliff is inevitable and the Americans have the experience to see it, what are you basing this on?
Your essentially saying all of Canada would crash as all of the U.S. did.
I feel our governing is much more air tight than the system which led to a US housing crash. Just this week we see more regulations put in place which will help protect future "cliff falls". Between the CMHC changes and mortgage lending changes, prepare to pay an extra 4-5k for a average home in fees within a few months.
Instead of all fees being waived, 0 down (US) they price many people out or force them to wait for a larger DP.
Why can't Toronto and Vancouver crash (commonly referred to as the 2 most over valued markets). Why can't Calgary crash this year, stabilize next while Vancouver sees a massive pull back on investment properties and it crashes and then 6 years from now, the leafs make the playoffs, everyone goes bankrupt paying for playoff tickets and torontos market crashes.
All I am saying is that a universal Canada wide crash is not needed. Those who say there is a bubble are correct however I have heard "it's going to crash" long enough that yea, one day your prediction will be right and you are also going to be the type of person to tell everyone you saw it coming. Had you listened to your own advice from 10+ years ago and been renting all this time, let me know if you came out on top when said bubble does burst.

For the record, you can say it's a conflict of interest due to my profession however my prediction has been very consistent from the start and I feel I give a pretty unbiased view. Despite Remax or CREBs prediction, I see a 3-5% correction. As someone explained above, this will feel like a 6-10% correction to owners who are used to 10% gains.

I'm going to update my market trend thread today as the newsletter is ready... The doom and gloom crowd won't be happy but I am sure we will keep hearing that it hasn't started yet. (By doom and gloom crowd I refer to those saying 20%+ corrections are a sure thing)
__________________

OFFICIAL CP REALTOR & PROPERTY MANAGER
Travis Munroe | Century 21 Elevate | 403.971.4300

Residential Buying & Selling
info@tmunroe.com
www.tmunroe.com

Property Management
travis@mpmCalgary.com
www.mpmCalgary.com
Travis Munroe is offline   Reply With Quote
Old 04-04-2015, 10:02 AM   #29
Flash Walken
Franchise Player
 
Flash Walken's Avatar
 
Join Date: Sep 2005
Exp:
Default

Quote:
Originally Posted by Peanut View Post
I thought a huge part of the American housing bubble was their ridiculous lending practices and all the sub-prime mortgages. Which has been stated again and again that Canadian banks have never been as aggressive on the lending front (not saying they're not agressive, just not as agressive as the U.S.) and the sub-prime market here is extremely small.
Just look at this from the original article:

Quote:
Finally, craziness. Yup, not sure how to better categorize what I’m about to say. Here’s the situation, as told to me by Seth Daniels of JKD Capital, one of the most astute Canada-watchers I know. Daniels told me that there is now a booming private mortgage market in which ordinary citizens are borrowing from their home equity lines to lend money to desperate borrowers. Specifically, he noted “a homeowner acts as a subprime lender by drawing his home equity line at ~3%, and lends it to a subprime borrower at 8-12% for one year.”

I honestly didn’t believe him when he first mentioned this to me, but I then confirmed it myself. In fact, if you’re a Canadian and interested, here’s a sales pitch from one vendor. It’s only a matter of time before this shadow mortgage banking market slows, and the ramifications are likely to be enormous as defaults skyrocket, housing prices plummet, and consumer spending rapidly slows.
__________________


https://streamable.com/dcxaz
Flash Walken is offline   Reply With Quote
The Following 2 Users Say Thank You to Flash Walken For This Useful Post:
Old 04-04-2015, 10:14 AM   #30
Sylvanfan
Appealing my suspension
 
Sylvanfan's Avatar
 
Join Date: Sep 2002
Location: I ain't playing nose tackle in a 3-4 defence
Exp:
Default

I am one month away from having two kids, and have two big dogs. For me to rent a comparable property I would be locked into a lease paying 2000 bucks a month, and my land lord would still have an element of control over my life My mortgage with property taxes is 1600 per month and tied up 100 grand of my money when I bought it.

If you have a family it's tough to live in a box on the street, or in a VW Westfalla. You can live like a miser in a crappy one bedroom by the tracks and make your kids grow up to hate you while you save your millions I guess.

Fact is people require a place to live. If you treat your house as an investment go in knowing that it's risky. I treat mine as a necessity if life and was willing to spend a bit to get some everyday comfort for myself and the rest of my family.

I have investments which have lost value too. It's when you are in a position where you have to sell something to cover a debt....that's when you get in trouble. Case in point my sister in law and her husband have split and he's ting to build a bunch of rental properties and has been told he needs to pony up 400 grand by Wednesday....money he doesn't have in liquid for right now.
__________________
"Some guys like old balls"
Patriots QB Tom Brady
Sylvanfan is offline   Reply With Quote
Old 04-04-2015, 10:19 AM   #31
Slava
Franchise Player
 
Join Date: Dec 2006
Location: Calgary, Alberta
Exp:
Default

Quote:
Originally Posted by Peanut View Post
I thought a huge part of the American housing bubble was their ridiculous lending practices and all the sub-prime mortgages. Which has been stated again and again that Canadian banks have never been as aggressive on the lending front (not saying they're not agressive, just not as agressive as the U.S.) and the sub-prime market here is extremely small.

The market may be inflated in Canada but the conditions are not the same to the US in 2007/2008.

Also, I don't think people on VancouverPuck or TorontoPuck would be experiencing similar doomsday threads or feelings like we are in Calgary. We're very close to the oil price here and the lay offs and the downturn is right in our faces. If we're not employed directly by the industry, many of our friends are, and many Albertan businesses support the industry indirectly. The majority of Canadians aren't as affected (or, at least, they don't think they are affected).
There's no question that was a significant factor. Piled on top of that you had these subprime mortgages that were securities and rated as AAA which bled through the system. When people began seeing mortgage increases though, they began defaulting. Then because they were rated as AAA securities and suddenly seeing defaults, institutions got nervous. No one could trust anyone had assets that were worth what they were saying; that's how the system froze and exactly when the central banks stepped in to guarantee these assets. (Obviously a brief overview and not all encompassing...)

This situation just doesn't exist here in Canada in the same way. A drop we see here today will be due to the overall economy slowing and not due to lending practises or due to defaults specifically due to this lending system. That of course doesn't mean we won't have these defaults, but the reason is quite different, and people are held to a higher standard in the first place which should reduce some of that default rate substantially.
Slava is offline   Reply With Quote
The Following User Says Thank You to Slava For This Useful Post:
Old 04-04-2015, 10:23 AM   #32
Travis Munroe
Realtor®
 
Travis Munroe's Avatar
 
Join Date: Feb 2009
Location: Calgary
Exp:
Default

I will agree that these borrow against your home companies are dangerous and stiff regulation needs to be put in place.
I laugh but it is worrisome when a radio ad basically says I don't care what it's for, come max yourself out with us!
__________________

OFFICIAL CP REALTOR & PROPERTY MANAGER
Travis Munroe | Century 21 Elevate | 403.971.4300

Residential Buying & Selling
info@tmunroe.com
www.tmunroe.com

Property Management
travis@mpmCalgary.com
www.mpmCalgary.com
Travis Munroe is offline   Reply With Quote
Old 04-04-2015, 10:24 AM   #33
Slava
Franchise Player
 
Join Date: Dec 2006
Location: Calgary, Alberta
Exp:
Default

Quote:
Originally Posted by Sylvanfan View Post
I am one month away from having two kids, and have two big dogs. For me to rent a comparable property I would be locked into a lease paying 2000 bucks a month, and my land lord would still have an element of control over my life My mortgage with property taxes is 1600 per month and tied up 100 grand of my money when I bought it.

If you have a family it's tough to live in a box on the street, or in a VW Westfalla. You can live like a miser in a crappy one bedroom by the tracks and make your kids grow up to hate you while you save your millions I guess.

Fact is people require a place to live. If you treat your house as an investment go in knowing that it's risky. I treat mine as a necessity if life and was willing to spend a bit to get some everyday comfort for myself and the rest of my family.

I have investments which have lost value too. It's when you are in a position where you have to sell something to cover a debt....that's when you get in trouble. Case in point my sister in law and her husband have split and he's ting to build a bunch of rental properties and has been told he needs to pony up 400 grand by Wednesday....money he doesn't have in liquid for right now.
Right, but in the US one of the things observed was people walking away from a mortgage when they were underwater and keeping their vehicles. You need a place to live, but as values fell, renting became cheaper and people still needed the vehicle to get to work.
Slava is offline   Reply With Quote
Old 04-04-2015, 10:27 AM   #34
Flash Walken
Franchise Player
 
Flash Walken's Avatar
 
Join Date: Sep 2005
Exp:
Default

__________________


https://streamable.com/dcxaz
Flash Walken is offline   Reply With Quote
The Following User Says Thank You to Flash Walken For This Useful Post:
Old 04-04-2015, 11:02 AM   #35
Cuz
First Line Centre
 
Cuz's Avatar
 
Join Date: Aug 2013
Location: Royal Oak
Exp:
Default

I hate it when predictions are taken as fact and or the gospel...
Cuz is offline   Reply With Quote
Old 04-04-2015, 11:02 AM   #36
OMG!WTF!
Franchise Player
 
Join Date: Oct 2014
Exp:
Default

Quote:
Daniels told me that there is now a booming private mortgage market in which ordinary citizens are borrowing from their home equity lines to lend money to desperate borrowers. Specifically, he noted “a homeowner acts as a subprime lender by drawing his home equity line at ~3%, and lends it to a subprime borrower at 8-12% for one year.”

I honestly didn’t believe him when he first mentioned this to me, but I then confirmed it myself. In fact, if you’re a Canadian and interested, here’s a sales pitch from one vendor. It’s only a matter of time before this shadow mortgage banking market slows, and the ramifications are likely to be enormous as defaults skyrocket, housing prices plummet, and consumer spending rapidly slows.
I do lots of private lending in this spoooooky "shadow maket". I can't find any stats but I have been involved in looking for deals on a daily basis for several years. I look high and low, I use mortgage brokers, lending corps, kijiji, and by far the majority of the borrowers in the secondary market are non traditional borrowers....mosly people with land developments, building projects, commercial projects, stuff that normal banks won't touch. Very few deals come along with average Joe's trying to buy a home to live in and other average Joe's borrowing from their LOC's to lend.

In most cases, actually probably almost all cases, the qualifying terms for these deals are way more strict than any bank would ever create. Usually you need lower loan to value ratios (more cash from the borrower) personal guarantees, better credit, corporate security, normally part of the loan is held back to pay the interest payments so the borrower can not default in the first year.

The majority of the deals involve the borrower using the money to improve the land or building thus adding to the value of the property. So your risk goes down as the projects grows.

And most importantly, if you invest in private mortgages with a third party broker in Alberta, you have to be an acredited investor...have over a million in liquid assets or 250k a year in income. So average people borrowing off their LOC's to invest are not allowed to participate in this market. Sure, they can find a deal on their own, arrange the application and do the paper work, etc but that is not common. Most private lenders have to have enough dough to own the deals they've lent money on. Anyway, there's a diffrence between "sub prime" lending and private lending. I assure you the "shadow market" isn't American style predatory lending.

And I also think it's a mistake to not look at your house as an investment. If you have so much money that it doesn't matter, then great. Don't look at it as an investment. But the reality is, it is an investment and not treating it as such will cost you for no reason.
OMG!WTF! is offline   Reply With Quote
Old 04-04-2015, 11:06 AM   #37
CliffFletcher
Franchise Player
 
Join Date: May 2006
Exp:
Default

All booms end. All of them. Many end in crashes.

The human mind is remarkable in how easily it sheds all memory of earlier crashes and convinces itself that the current boom is a new normal that will endure forever.
__________________
Quote:
Originally Posted by fotze View Post
If this day gets you riled up, you obviously aren't numb to the disappointment yet to be a real fan.
CliffFletcher is offline   Reply With Quote
The Following User Says Thank You to CliffFletcher For This Useful Post:
Old 04-04-2015, 11:18 AM   #38
CliffFletcher
Franchise Player
 
Join Date: May 2006
Exp:
Default

Quote:
Originally Posted by OMG!WTF! View Post
And I also think it's a mistake to not look at your house as an investment. If you have so much money that it doesn't matter, then great. Don't look at it as an investment. But the reality is, it is an investment and not treating it as such will cost you for no reason.
If I have no intention of selling my house in the next 30 years, what good does treating my house as an investment do me? If the market drops 30 per cent in the next three years and then gradually picks up over 12 years back to its current valuation, that's no different to me than if it stayed steady the whole time.

I'm not selling. So the value of my house is irrelevant to me. If, owing to some unforeseen catastrophe, I'm forced to sell, I'll be buying into the same market for another house anyway. Having said that, if I was someone who didn't have kids, I would be postponing buying a house, or even selling now and renting or moving in with relatives for a couple years. A couple years of inconvenience and sub-optimal living conditions may end up saving you $50-80 thousand.

I have a younger co-worker who was looking to get into the housing market six months ago and the rest of my co-workers were encouraging her to buy now because housing is only going to get more expensive, when you pay rent your flushing money down the toilet, etc. etc. I was the only voice of caution. I even warned that the oil prices were likely to fall and the Calgary housing market would fall with it. The rest of my co-workers looked at me like I had three eyes. As I said, the irrational boom mentality is a remarkable thing. It can afflict even otherwise prudent and disciplined people.
__________________
Quote:
Originally Posted by fotze View Post
If this day gets you riled up, you obviously aren't numb to the disappointment yet to be a real fan.

Last edited by CliffFletcher; 04-04-2015 at 11:21 AM.
CliffFletcher is offline   Reply With Quote
Old 04-04-2015, 11:25 AM   #39
OMG!WTF!
Franchise Player
 
Join Date: Oct 2014
Exp:
Default

Quote:
Originally Posted by CliffFletcher View Post
All booms end. All of them. Many end in crashes.

The human mind is remarkable in how easily it sheds all memory of earlier crashes and convinces itself that the current boom is a new normal that will endure forever.
I think you're right, all "booms" end. But it's what happens after that is more intresting. Typically any traded commodity tends to revert to its underlying trend. If the real estate market had been trending upwards, then goes into a parabolic up trend, it will likely go back down to where its fomer up trend was and continue that trend. Since the Canadian housing market has been in a slow upward trend, it would be logical that it reverses, goes down, hits the upward trend line and starts going back up again.

There are all kinds of fundamental reasons that back this up....inflation, population growth, demand/supply correction, government policy. The 2008 crash did exactly that. Knowing this, I'd probably wait unil the upward trend resumes before I sold anything.

Quote:
If I have no intention of selling my house in the next 30 years, what good does treating my house as an investment do me? If the market drops 30 per cent in the next three years and then gradually picks up over 12 years back to its current valuation, that's no different to me than if it stayed steady the whole time.
Just the fact that you have money in it and it's part of a traded market makes it an investment. Of course stability trumps return on this investment, but factually it still is an investment and as such can go up or down a life altering amount. If you can do things to optimize that investment without causing too much stress then why not. Living anywhere for 30 years will create a huge bill in maintaining or replacing your asset. Selling even once every ten years when the life of your house is in its prime could save you that monster renovation bill most home owners don't think about. I'm not saying you should time the market and try to sell at the top and buy at the bottom. But I have yet to met a single person who charges themselves a condo fee on their single family home.

Last edited by OMG!WTF!; 04-04-2015 at 11:38 AM.
OMG!WTF! is offline   Reply With Quote
Old 04-04-2015, 11:52 AM   #40
Flash Walken
Franchise Player
 
Flash Walken's Avatar
 
Join Date: Sep 2005
Exp:
Default

Quote:
Originally Posted by OMG!WTF! View Post
I think you're right, all "booms" end. But it's what happens after that is more intresting. Typically any traded commodity tends to revert to its underlying trend. If the real estate market had been trending upwards, then goes into a parabolic up trend, it will likely go back down to where its fomer up trend was and continue that trend. Since the Canadian housing market has been in a slow upward trend, it would be logical that it reverses, goes down, hits the upward trend line and starts going back up again.

There are all kinds of fundamental reasons that back this up....inflation, population growth, demand/supply correction, government policy. The 2008 crash did exactly that. Knowing this, I'd probably wait unil the upward trend resumes before I sold anything.
Except the last time housing prices had such a precipitous climb, they were stagnant for about 20 years afterwards.

That's the big issue here.

Canadians are over leveraged in terms of the debt they carry, and most of these debt carriers are relying in some capacity on continuation of rising prices. With the ripple effect of Alberta shedding jobs, the potential for a cascading effect of people not being locked into their mortgages has a pretty serious potential impact.

A correction might not just mean a drop in value of 10-20 percent, based on wages in the country, it's likely that drop will remain where it is for 15-25 years until it begins to increase again. That's the historical market trend.

Quote:
Now, both Shiller and Drummond are quick to say Canadians are not likely to experience the near-total meltdown Americans experienced.

For one thing, Canadian banks never joined in the subprime-lending lunacy that inflated the American bubble to such extremes.

For another, Canadian mortgages are insured by the federal government through Canadian Mortgage and Housing Corp.

But Shiller says Canadians do seem to be suffering from the same delusion that afflicted Americans: the notion that housing prices always rise.

He has studied data going back a century, and says that when you factor in inflation, and depreciation of the home's physical structure, "historically home prices haven't gone up. Real home prices were essentially unchanged over that interval."

There are bursts of growth, as in the past 10 years in Canada, but historically they are offset by retreats.

Shiller says real estate bubbles are nothing more than groupthink, and that they "always have their end built into them."

"People are investing in real estate that is tough for their budgets because they think it will make them rich, and that can continue only as long as [prices] keep increasing.

"When they stop increasing," he says, people back off, and the bubble then collapses. "So it has its own internal dynamic."

Exactly when this groupthink changes course, says Shiller, is hard to pinpoint, but one sign is a flurry of media stories. Such as this one, I suppose. Not to mention the attention we are giving this subject on The National.

Even though many of us in the media own homes ourselves — and have a self-interest in the market continuing to rise — there clearly comes a point when the subject begins to dominate public discussion.

Shiller also points out that it was not the financial crisis that burst the American housing bubble. Rather, when the groupthink that caused the bubble turned, the market collapsed, and that in turn triggered the financial meltdown and the crisis among lenders.

"The same sort of thing might well happen in Canada," Shiller told me.

Canadians seem to think that stricter government regulation in Canada protects them. But they are in some ways more vulnerable than Americans.

Americans at least have the option of lifetime payment stability. The gold standard here is the 25- or 30-year fixed mortgage. The interest rate can be locked in for the life of the loan.

In Canada, most mortgages "renew" every few months, or years, and payments can spike by hundreds of dollars a month if rates rise even slightly.
__________________


https://streamable.com/dcxaz
Flash Walken is offline   Reply With Quote
Reply

Tags
bubble , canada , economy , housing , real estate

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

Forum Jump


All times are GMT -6. The time now is 11:10 AM.

Calgary Flames
2019-20




Powered by vBulletin® Version 3.8.4
Copyright ©2000 - 2020, Jelsoft Enterprises Ltd.
Copyright Calgarypuck 2016