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Welp. Parents put in an offer for a place the other day and the developers seem receptive, they are probably going to meet with the buyer's agent today to hash out a counter offer. 
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Aug 26, 2013 17:14
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Blade_of_tyshalle posted:I don't even know why anyone would bother having a single kid anymore, nevermind multiple children. Costs are outrageously high, growing higher all the time, and once again wages aren't climbing to compensate. Rather than a million schemes to incentivize home ownership, it's always struck me as a rather better use of the tax revenue to encourage couples to have children and/or make it financially easier with daycares and so on. Given our meagre population growth, and hilariously huge liabilities looming in the future, it seems a far better investment for the country to be making.
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Aug 26, 2013 17:18
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Well it's physically impossible to have a kid without a large suburban house with a huge yard and pretty much child-abuse, so clearly subsidizing the financing of single family homes is the best way to increase birth rates.
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Aug 26, 2013 17:22
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Baronjutter posted:Well it's physically impossible to have a kid without a large suburban house with a huge yard and pretty much child-abuse, so clearly subsidizing the financing of single family homes is the best way to increase birth rates. You guys should take that and combine it with our US system which actively punishes the parents for the rest of their lives for having a child. Works great, I tell you. Edit: VVVVV Jesus loving christ... Sundae fucked around with this message at 17:44 on Aug 26, 2013 |
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Aug 26, 2013 17:31
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enbot posted:0 down long term mortgages are bad, but how common are ARM's? In particular pay-option ARM's- the US crash followed very closely to those "resets". Canada doesn't really have ARMs as such, but the way our mortgage market works creates similar pressures. See, in Canada you can get a 25 year (or even 40 at one point, as we've discussed) amortization, but practically nobody offers a long-term mortgage. The mortgage terms are usually 5-year at most, with most people opting for lesser terms, or even floating-rate mortgages. Now, most people will tell you that the biggest problem with this setup is that people will come back at renewal time and find out that posted rates are much higher than they were when they originally set up the mortgage. While that's certainly a problem and creates somewhat of a similar situation to the U.S. ARM crisis, the real punch is here: Coylter posted:Now she might face a situation where her house is worth less than the mortgage and where there is 0 demand for houses at that price. I mean low interest rates pretty much enabled those economically dying community to stay afloat and keep their house. Now this all seems ripe for ending. What happens in this scenario, which is going to be increasingly common, is that when Coylter's mom goes into the bank to renew her term, the bank will run the numbers on comparable properties in her neighborhood, tell her the house is worth $40,000 less than the mortgage outstanding, and demand the cash balance before they'll renew. If she tries to go to another bank (and this stands for the people with the rate-shock problem I mentioned above, too), the bank will impose a penalty on her, the new bank will demand a fee for porting the mortgage, and she'll still be out tens of thousands of dollars. Not to mention, the new interest rate will be prohibitively high, since she has zero leverage and is a comparatively large balance-sheet risk due to her nonexistent equity. So, not quite ARMs, but a similar crisis.
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Aug 26, 2013 17:38
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Fine-able Offense posted:What happens in this scenario, which is going to be increasingly common, is that when Coylter's mom goes into the bank to renew her term, the bank will run the numbers on comparable properties in her neighborhood, tell her the house is worth $40,000 less than the mortgage outstanding, and demand the cash balance before they'll renew. If she tries to go to another bank (and this stands for the people with the rate-shock problem I mentioned above, too), the bank will impose a penalty on her, the new bank will demand a fee for porting the mortgage, and she'll still be out tens of thousands of dollars. Not to mention, the new interest rate will be prohibitively high, since she has zero leverage and is a comparatively large balance-sheet risk due to her nonexistent equity. She should just rent out her basement!!  If the mom BKs on a CMHC backed mortgage, what happens, the CMHC pays the bank out to the full term of the mortgage? Or the CMHC pays the bank the outsanding balance and takes possession? Something else?
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Aug 26, 2013 17:47
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Paper Mac posted:She should just rent out her basement!! I believe CMHC takes possession to liquidate the property. The bank gets the full insured value unless the CMHC finds something dubious with the paperwork, i.e. the EMILI numbers were prima facie pants-on-head retarded, due diligence wasn't done, whatever. In that case CMHC may deny insurance coverage, which is something they've been warning banks lately is a real possibility. Edit: Coincidentally, this is why I avoid Canadian bank stocks like they were made of polonium.
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Aug 26, 2013 17:49
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Fine-able Offense posted:In that case CMHC may deny insurance coverage, which is something they've been warning banks lately is a real possibility. How exposed is this decision making process to direct political influence?
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Aug 26, 2013 17:53
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Paper Mac posted:How exposed is this decision making process to direct political influence? Well, ask yourself which of these scenarios is more likely: the Federal government happily accepts tens of billions of dollars in Crown agency debt due to CMHC being a bunch of profligate morons, or Harper playing the populist anti-banker card and sticking as much of the losses on the Big 5's shareholders as possible without blowing up the banking sector entirely? CMHC isn't the Bank of Canada or CRA or something like that with a purpose-built firewall, so it's as political as the Department of Finance and Treasury Board want/need it to be. And boy howdy, will they lean on it to scrape every last free penny out of the big banks when it comes to that point.
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Aug 26, 2013 17:57
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Fine-able Offense posted:Well, ask yourself which of these scenarios is more likely: the Federal government happily accepts tens of billions of dollars in Crown agency debt due to CMHC being a bunch of profligate morons, or Harper playing the populist anti-banker card and sticking as much of the losses on the Big 5's shareholders as possible without blowing up the banking sector entirely? LOL That sounds like a sight. Any idea whether or not the deposit insurance is likely to get messed with? If they decide to go Cyprus bail-in style, it would be better to be in cash, methinks. E: please rate in terms of 1 to "tempurpedic already stuffed" Paper Mac fucked around with this message at 18:03 on Aug 26, 2013 |
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Aug 26, 2013 18:01
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Oh, they'll never touch the CDIC stuff, not when the banks have so much cash and assets in their uninsured portfolios. Given how profitable Canada's banking sector is, I suspect they'd just reinstate the bank tax or something like that. You could probably make back all the money owed to the Feds without destabilizing the financial sector, and the only people who would suffer would be the bankers and their shareholders, which everyone could live with. Just, you know, don't be a shareholder when that happens.
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Aug 26, 2013 18:11
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http://www.theglobeandmail.com/commentary/were-young-parents-with-good-jobs-so-why-cant-we-afford-daycare/article13681193/ Young parents making 'over 100k/year' can bare afford child care. Mortgage obligation. That's depressing as hell.
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Aug 26, 2013 20:50
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Cultural Imperial posted:http://www.theglobeandmail.com/commentary/were-young-parents-with-good-jobs-so-why-cant-we-afford-daycare/article13681193/ This is going to be me in six months. Not looking forward to it, but what the gently caress am I gonna do? And the people telling me we should be trying for *another* one? Because it's "so much easier" and because "it's so much better when they're close in age"? I want to stab them in the neck. There is zero chance that we'll be trying again until ours is in school or older, which will put us at a borderline 'too old' status (late 30s).
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Aug 26, 2013 20:54
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flashy_mcflash posted:This is going to be me in six months. Not looking forward to it, but what the gently caress am I gonna do? So how do you think you'll balance your budget?
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Aug 26, 2013 21:26
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http://www.theguardian.com/books/2013/aug/18/default-line-extract-faisal-islam-housingquote:
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Aug 26, 2013 23:47
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Cultural Imperial posted:http://www.theguardian.com/books/2013/aug/18/default-line-extract-faisal-islam-housing Thanks for this link, so fun read. Considering that for most borrowers now the real consideration is not what a house is worth but instead how much they can afford to pay monthly... Inflation and interest rates returning to "normal" will really hobble the market and given how thinly traded it is that will have the potential to snowball. What are RE commissions like in Canada? High transaction costs?
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Aug 27, 2013 05:25
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Shifty Pony posted:Thanks for this link, so fun read. Considering that for most borrowers now the real consideration is not what a house is worth but instead how much they can afford to pay monthly... Inflation and interest rates returning to "normal" will really hobble the market and given how thinly traded it is that will have the potential to snowball. Before everyone and their grandfather got into the game, and the market slowed down, there were realtors in Vancouver clearing 6 figures a month on commission.
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Aug 27, 2013 05:55
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Shifty Pony posted:What are RE commissions like in Canada? High transaction costs? Of course they're high! It's Canada.
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Aug 27, 2013 13:30
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This whole not getting the mortgage renewed due to depreciation business has me spooked. We were looking to skip all this 'starter home' bullshit and buy something we thought will do us until we retire and take a risk at paying more for a house worth less, but I definitely don't want to get caught in 5 years being told to fork over a huge wad of cash or have my house taken from me because nobody will renew the mortgage. When I brought this up with my wife and suggested that when our lease is up this fall we find a place, maybe a house, to rent that'll make us happy for a few years it started a huge argument. She's of the 'I hate renting and houses haven't gone down in price in over a decade' mindset.
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Aug 27, 2013 13:33
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Read back in the thread for everything people told BaronJutter to do. He eventually convinced her.
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Aug 27, 2013 13:37
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I've just spent a bit of time playing around with the mls mortgage calculator, simply because I can't believe I'm now of the frame of mind that 700k for a 3br townhouse is *reasonable* for this market. Specifically this: http://beta.realtor.ca/propertyDetails.aspx?PropertyId=13203897 Plugging in the following numbers into the calculator: -25 year amortization -250k down payment -5% interest rate -5 year mortgage term The monthly payment comes out to $3065/month NOT INCLUDING all the other poo poo like maintenance fees, utilities, insurance and taxes. wtf am I thinking, and wtf is anyone else thinking for that matter? Not to mention this area is a loving dump.
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Aug 27, 2013 18:34
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Just... don't. The financial parameters are particularly conclusive.
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Aug 27, 2013 18:42
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Lexicon posted:Just... don't. The financial parameters are particularly conclusive. Oh I definitely won't. It's just interesting how my own psychology is adjusting to this market and how my perception of normalcy has shifted.
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Aug 27, 2013 18:44
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As long as you don't have any car payments I think you should jump on that.
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Aug 27, 2013 19:37
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Sassafras fucked around with this message at 08:09 on Nov 26, 2013 |
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Aug 27, 2013 19:47
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Kafka Esq. posted:Read back in the thread for everything people told BaronJutter to do. He eventually convinced her. Yeah people really buy into the home ownership is amazing mythos even though the whole bubble situation makes it a risky idea and in some cases people could even get less yearly cost by renting. Owning a condo can get costly over time due to things such as a gradual creep up in things such as the condo association fee.
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Aug 27, 2013 19:54
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Cultural Imperial posted:http://www.theguardian.com/books/2013/aug/18/default-line-extract-faisal-islam-housing The introductory piece really makes it very clear. The mechanisms are different for Canada of course, but the broad conditions are not. It makes so much sense just on the face of it: the less what you pay for a house has to do with what you can actually afford to pay, the more home prices will rise above corresponding rises in income (if any) for that region. And sure enough, the one thing that DOES correspond to the crazy rise in home prices in Vancouver et al (because it sure as poo poo hasn't been income, or jobs, or population growth) has been CMHC lending terms. This really does seem to account for the situation in Vancouver, certainly to a much greater extent than empty investment condos or eccentric Hong-Kong millionaires or whatever the crazy theory du jour is making the rounds. Increasing the availability of credit for a specific thing regardless of income or likelihood of earning it back simply by willing to take on more risk (that usually ends up on the government's doorstep anyway) -> prices for that thing balloon in concert with that risk adjustment, and nothing else. The US Student Loan trainwreck-in-the-making is pretty much exactly that as well: It's not like eduction got more expensive to provide, it's just that government started taking on more risk for such loans and as a result, schools found they could keep raising tuitions and still keep their classes filled for as long as those loans were available. Madness! ... Having said all that, I'm not sure if this means the conditions for the bubble will actually burst as such... The main fallout from this is that per-household debt-load and the mortgage portion of their total expenditures have skyrocketed and this means people can't afford daycare will be in debt for ever and not be able to save for retirement and so forth. But as long as they can slog along in those conditions, why would any of it fall down? Like, if the current debt and mortgage-payment load just becomes the status quo, then the CMHC adjusts the risk terms to maintain the current pain levels for borrowers and prices merely stagnate, not crashing. Sure, all homeowners will now for-ever be more miserable, but hey the banking and real-estate sectors remain stable.
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Aug 27, 2013 22:31
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Yeah that's been my worry as well, that there won't be a crash, just more pain for everyone. Any crash will be staved off by the government and society in general will pay for it, but it will become the norm and people won't notice so much. Also when things just stagnate and ruin a majority of the country's retirement plans and the government has to waste billions propping it all up they will all smugly say "see, there never was a housing crash, bet you feel stupid not buying then!"
Baronjutter fucked around with this message at 22:44 on Aug 27, 2013 |
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Aug 27, 2013 22:40
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Mr. Wynand posted:Having said all that, I'm not sure if this means the conditions for the bubble will actually burst as such... The main fallout from this is that per-household debt-load and the mortgage portion of their total expenditures have skyrocketed and this means people can't afford daycare will be in debt for ever and not be able to save for retirement and so forth. But as long as they can slog along in those conditions, why would any of it fall down? It's completely plausible to me that Canada follows in Britain's footsteps of maintaining absurdly high property valuations for the foreseeable future, at the expense of other facets of life. As the author points out, it's not a liquid market, and normal supply/demand does not apply. At the first hint of reduced demand, projects get suspended/scaled back, and the political and capital-intensive nature of property development are a pretty high barrier to entry.
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Aug 27, 2013 23:20
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http://renx.ca/canadians-capacity-for-debt-the-key-driver-of-housing-prices-2/ Nice to see media talking about this.
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Aug 28, 2013 06:06
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Btw, the condo market is healthy y'all http://www.cbc.ca/news/business/story/2013/08/28/business-condo-market.html
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Aug 28, 2013 17:32
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It's loving hilarious to me that condo prices in Calgary, according to that article, are so low in comparison to places like Toronto, Montreal, Vancouver and Victoria. We still have lots of jobs, and an absurdly low rental availability (and correspondingly high rents). How/why did this happen? We have idiots with lots of money who love to speculate on things here too, yet we seem to have avoided the worst of it in comparison.
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Aug 28, 2013 17:37
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My favourite part is where he says Vancouver condos are affordable, with $350k being the average price. That comes out to an almost a $2000 a month mortgage payment.
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Aug 28, 2013 17:48
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PT6A posted:It's loving hilarious to me that condo prices in Calgary, according to that article, are so low in comparison to places like Toronto, Montreal, Vancouver and Victoria. We still have lots of jobs, and an absurdly low rental availability (and correspondingly high rents). How/why did this happen? We have idiots with lots of money who love to speculate on things here too, yet we seem to have avoided the worst of it in comparison. I think it's a combination of: 1) Demand for housing in Calgary missed the boat on the ridiculously lax mortgage terms that accounted for most of the insanity in Vancouver et al. 2) As described by that UK article earlier, when dealing with mortgage terms that are divorced from income, prices are ultimately decided by sheer optimism, and all the hype about these BEST PLACE ON EARTH #1 MOST LIVABLY CITY is like throwing hydrazine on a fire for inflating said optimism.
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Aug 28, 2013 17:53
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Calgary is also *really* not running out land. You'll notice that downtown Calgary is still pretty expensive even compared to BC, but the average and the SFH figures are somewhat more reasonable because people can(and are) build outwards more or less forever, and the transportation infrastructure is relatively decent making living in the far off suburbs slightly more tolerable. I was amazed at how difficult it was to get anywhere in Victoria, even though the place has 1/4 Calgary's population and no one there actually works.
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Aug 28, 2013 18:35
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Given the choice, who the gently caress really wants to live in Calgary? Sure it's not exactly the wasteland of Winnipeg but if you have no role in Calgary's economy, this is a pointless destination. I know people who commute from Canmore every day.
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Aug 28, 2013 18:47
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Throatwarbler posted:Calgary is also *really* not running out land. You'll notice that downtown Calgary is still pretty expensive even compared to BC, but the average and the SFH figures are somewhat more reasonable because people can(and are) build outwards more or less forever, and the transportation infrastructure is relatively decent making living in the far off suburbs slightly more tolerable. If you think Calgary's transportation infrastructure, especially from far-out suburbs, is decent, I hate to think of places you'd consider mediocre. Downtown Calgary condos are pretty expensive, but not insanely so. You could probably find a modest condo (let's say 2BR, around 1000sq.ft.) downtown or in one of our inner-city neighbourhoods for south of $300,000, which is something I'm led to believe is impossible in places like Vancouver or Toronto. I looked on MLS and there are definitely walking-distance-from-downtown properties in the $200,000-$250,000 range. Now, does that still represent a significant premium over places further out? Unquestionably.
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Aug 28, 2013 18:50
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Yeah in BC realistically the only direction you can build is east, whereas Calgary you can build wherever the gently caress you want on super flat land that extends to Ontario. I mean you'll eventually hit the Rockies in the west, but there's still like 100 kilometers of total flat you can build on until then.
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Aug 28, 2013 18:54
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Throatwarbler posted:Calgary is also *really* not running out land. You'll notice that downtown Calgary is still pretty expensive even compared to BC, but the average and the SFH figures are somewhat more reasonable because people can(and are) build outwards more or less forever, and the transportation infrastructure is relatively decent making living in the far off suburbs slightly more tolerable. You walk everywhere in Victoria, or take the bus for the 5-10 min it takes to get anywhere. A traffic jam in Victoria is missing a single light cycle at an intersection. We've traded auto-centric planning for something a bit more walkable (although not out of actual planning, just because the city is old) but we've got some horrific car-centric highway suburbs trying their best to be the worst aspects of Calgary, but on some hills. Every year they scream for more overpasses and highways and infrastructure. gently caress them and the whole idea that a city should be "easy to get around" in a car.
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Aug 28, 2013 19:11
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HookShot posted:Yeah in BC realistically the only direction you can build is east, whereas Calgary you can build wherever the gently caress you want on super flat land that extends to Ontario. I don't entirely disagree with your premise, but at the same time it fails to account for why downtown real estate is comparatively inexpensive to these other cities. I know why Okotoks is cheap, I'm just not quite sure why the areas closer into downtown are. Like I said, they're still a little more expensive (and realistically, they always will be), but there's affordable places to be had in some pretty excellent locations.
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Aug 28, 2013 19:40
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