Canadian Real Estate Bubble Starting to Pop?

CanadaSue · 07-06-2012, 10:35 PM

Hard to say but these are the 2 biggest & priciest markets as well as the trend leaders. For a real estate agent to be saying what he's saying... scary:

***Tepid sales numbers spur call to cash out of housing market***

http://business.financialpost.com/20...rket/?tw_p=twt

Ross · 07-07-2012, 03:58 AM

Same story in Melbourne Australia .

Time to cut and run , unfortunately I cannot .

Coyote · 07-07-2012, 04:46 AM

Quote:

For a real estate agent to be saying what he's saying... scary:

What about it is scary? It sounds like the natural rhythm of real estate.

CanadaSue · 07-07-2012, 07:07 AM

Scary because right now, Canada is sitting where the US was when the housing market crashed. Debt ratios of households are about were yours were. We're overdue for a housing market connection & as of Monday, new mortgage qualification rules comes into play:

http://ca.finance.yahoo.com/blogs/in...162124736.html

Potemkin · 07-07-2012, 03:04 PM

Quote:

Originally Posted by CanadaSue

Scary because right now, Canada is sitting where the US was when the housing market crashed. Debt ratios of households are about were yours were. We're overdue for a housing market connection & as of Monday, new mortgage qualification rules comes into play:

http://ca.finance.yahoo.com/blogs/in...162124736.html

Take the draught now or take it when things are really bad.

But politicians in quite a few countries want to pass it off to the next generation.

rb. · 07-07-2012, 04:39 PM

Yeah, and of course we close on a house Aug. 1. My timing is ALWAYS off.

Market here has slowed to a crawl, right about the time we put our offer in. Prices rose too quickly this year, and most decent places were $250,000, or more. Just too high for most buyers here, for your standard 2 or 3 bedroom home, that's 40-60 years old. It's very quickly turned to a buyers' market. Sellers were getting so loopy that they were
Isting for weeks before allowing a date for showing, and then another date for offers, trying to create bidding wars. They lose.

Coyote · 07-07-2012, 04:50 PM

Still nothing to be scared of.

Your government sees some problems so it's tightening up the regulations. Your banks and mortgage companies wont be able to be quite so irresponsible with their lending. Some of the people who really can't afford to buy a house will be closed out.

The house prices in Vancouver and Toronto are unrealistic and the inevitable correction is coming.

Those with some money saved should be able to get some good deals in a while.

This is the way things should work.

Or am I just missing something?

rb. · 07-07-2012, 05:48 PM

Actually, Coyote, houses in Toronto will still sell well, it's the condo market that now has too much supply.

I agree with your other statements. If one buys a principal residence, you can get away with putting only 5% down. As we were buying a house as a rental property, we were required to put 20% down. That's not 20% of purchase price, but 20% of the amount we're borrowing (purchase plus $15,000 for improvements). We only get the improvement amount IF value increases by that amount. If it doesn't, we've got MORE than 20% equity.

Coyote · 07-08-2012, 08:09 AM

Quote:

...houses in Toronto will still sell well, it's the condo market that now has too much supply.

Well, maybe things aren't quite so bad.

I'd really like to see banks and mortgage companies require 20% down on all purchases and a reduction in interest rates for those who who put down even more. I think it would help smooth out the boom and bust cycle.

rb. · 07-08-2012, 10:20 AM

I'm not 100% sure on this, but I believe the banks DO give a discounted rate to those with 20% or more down up here. I know we got the mortgage on our new rental house at 3.6%.

as for more down for primary residence, we'd never have been able to buy our current house if we'd had to pay more than 5% down. We've never missed a payment, never been late, and in 9 years we nowowe less than 50% of the original mortgage. Value, between our renos and market increase has more than doubled our house's value, in a segment of the market that's currently highly sought. That would be the $100,000 - 200,000 3 bed family home.

Let us put 5% down, but no heloc. That makes more sense to me, as apartments to rent run much higher than mortgage and related expenses.

Coyote · 07-08-2012, 05:53 PM

Quote:

as for more down for primary residence, we'd never have been able to buy our current house if we'd had to pay more than 5% down. We've never missed a payment, never been late, and in 9 years we nowowe less than 50% of the original mortgage. Value, between our renos and market increase has more than doubled our house's value, in a segment of the market that's currently highly sought.

From the sounds of it, you'd have come up with the 20% before too long.

Malcolm · 07-08-2012, 08:06 PM

As "Ross" said ... time to cut and run. Link below
http://theage.domain.com.au/real-est...708-21pkl.html

rb. · 07-09-2012, 12:56 AM

Quote:

Originally Posted by Coyote

From the sounds of it, you'd have come up with the 20% before too long.

I'm not so sure. In 2003, when we bought, DH had taken a 25% cut in pay...to $13/hr...so we could move to my home town. In 2003, our mortgage payment was below $500, but apartments for us, with two kids, would have been $700-$1,000 a month. With a vacancy rate near zero for at least a decade, we would have been at the mercy of landlords, and likely never would have saved the 20%, as house prices rose over the years. Now we're the landlords.