Canada Housing/Debt: Trust me, I'm a landlord.

The Something Awful Forums > Discussion > Debate & Discussion > Canada Housing/Debt: Trust me, I'm a landlord.

tagesschau: Sep 1, 2006; Guten Abend, meine Damen und Herren.

I think that prices really began to decouple from fundamentals in the early 2000s (around '02 or '03). By the time the U.S. housing bubble burst, you could look at Canadian data and tell that something was wrong here. Unfortunately, it's gotten worse since then, and I think we're at the point where, once the poo poo hits the fan, you will have a lot of people demanding that the government provide them with the money they had been counting on from the perpetual increase in value they thought they were entitled to.

# ? Dec 5, 2013 16:47

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# ? May 11, 2024 22:57

Lexicon: Jul 29, 2003; I had a beer with Stephen Harper once and now I like him.

tagesschau posted:

you will have a lot of people demanding that the government provide them with the money they had been counting on from the perpetual increase in value they thought they were entitled to.

A virtual certainty.

# ? Dec 5, 2013 17:20

EvilJoven: Mar 18, 2005; NOBODY,IN THE HISTORY OF EVER, HAS ASKED OR CARED WHAT CANADA THINKS. YOU ARE NOT A COUNTRY. YOUR MONEY HAS THE QUEEN OF ENGLAND ON IT. IF YOU DIG AROUND IN YOUR BACKYARD, NATIVE SKELETONS WOULD EXPLODE OUT OF YOUR LAWN LIKE THE END OF POLTERGEIST. CANADA IS SO POLITE, EH?; Fun Shoe

Their demands will be met, too.

# ? Dec 5, 2013 19:09

Rime: Nov 2, 2011; by Games Forum

Anyone looked in the great white north recently? I was perusing job openings in Whitehorse and was immediately scared away by the fact that a city of 30,000 has vacancy rates somewhere between zero and "We rented that yesterday, had 500 people banging down our door!". The average house price up there is over $400,000 now, up from $150,000 in 2006.

Both points are loving insane. It's an administrative center with little else driving the economy.

Rime fucked around with this message at 20:34 on Dec 5, 2013

# ? Dec 5, 2013 20:30

Rick Rickshaw: Feb 21, 2007; I am not disappointed I lost the PGA Championship. Nope, I am not.

Rime posted:

Anyone looked in the great white north recently? I was perusing job openings in Whitehorse and was immediately scared away by the fact that a city of 30,000 has vacancy rates somewhere between zero and "We rented that yesterday, had 500 people banging down our door!". The average house price up there is over $400,000 now, up from $150,000 in 2006.

Both points are loving insane. It's an administrative center with little else driving the economy.

My sister is in Yellowknife and paid over $400k for her townhouse. She and her husband also make a boatload of money and pay effectively no taxes.

You can own a mobile home for the low price of $339,000!

http://bux10.biz/pdf_listings/dmPDF/81hordalroad/81hordalroad.pdf

# ? Dec 5, 2013 21:22

HookShot: Dec 26, 2005

Isn't the population of Whitehorse under 10,000?

# ? Dec 5, 2013 21:25

Kafka Esq.: Jan 1, 2005; "If you ever even think about calling me anything but 'The Crab' I will go so fucking crab on your ass you won't even see what crab'd your crab" -The Crab(TM)

Northern pay grades and taxation are ridiculous and could easily contribute to a McMurray-like inflation of prices. I don't know if it's on the same level as a Toronto-style pay-for-it-with-debt bubble.

# ? Dec 5, 2013 21:38

EoRaptor: Sep 13, 2003; by Fluffdaddy

The sad part of all this is that what people are willing to spend, per month, on a home hasn't budged that much.

People make this judgement based on how much they earn, how hard they work for that money, and a sort of 'inner feeling' they have for the value of money, learned as they grew up. The total price of a home isn't anywhere near as important to most people as the monthly cost.

So, when interest rates go down, people are able to borrow more for the same 'acceptable' monthly payment. They can, it follows, spend more, and so the people making homes (condo's, houses, etc) are able to charge more. This increase is the price of new homes is reflected into older homes as well, because we treat all homes as 'equal' (unlike, say, cars, where one model or manufacturer is treated very differently form another).

Low interest rates don't promote home ownership, they just promote price increases (and the attendant speculation, bubbles, etc). We can do home ownership promoting things, but low interest rates aren't one of them.

# ? Dec 5, 2013 21:49

Mrs. Wynand: Nov 23, 2002; DLT 4EVA

EoRaptor posted:

Low interest rates don't promote home ownership, they just promote price increases (and the attendant speculation, bubbles, etc). We can do home ownership promoting things, but low interest rates aren't one of them.

See also: the student loan catastrophe brewing up in the states.

This is something even lolbertarians can get through their thick skulls but I think the more market-apologetic of liberals haven't quite grasped it: Public subsidies for a private sector that cannot increase supply without difficulty is a phenomenally bad idea. Doing it via subsidizing loans, even more so. Doing it by socializing risk, could easily be one of the top 10 worst economic policies of the century.

# ? Dec 5, 2013 22:05

Rime: Nov 2, 2011; by Games Forum

Kafka Esq. posted:

I don't know if it's on the same level as a Toronto-style pay-for-it-with-debt bubble.

Rural prices are your best indicator of whether the entire market has gone off the rails, rather than this being a mere metropolitan bubble. Take BC for example, the lower mainland has been so inflated for so long that there are homes in literal ghost towns selling for over $100k. This isn't isolated, browse MLS and look at how much people are flogging 70's era bungalows in dying company towns for in this province.

The situation in the Yukon is demonstrating that our markets are pretty sick.

# ? Dec 5, 2013 23:36

etalian: Mar 20, 2006

Rime posted:

Rural prices are your best indicator of whether the entire market has gone off the rails, rather than this being a mere metropolitan bubble. Take BC for example, the lower mainland has been so inflated for so long that there are homes in literal ghost towns selling for over $100k. This isn't isolated, browse MLS and look at how much people are flogging 70's era bungalows in dying company towns for in this province.

The situation in the Yukon is demonstrating that our markets are pretty sick.

Yeah it's the other side effect of the cheap credit since it leads to price inflation even in hee-haw towns.

# ? Dec 6, 2013 15:55

Helsing: Aug 23, 2003; DON'T POST IN THE ELECTION THREAD UNLESS YOU JOE BIDEN

Mr. Wynand posted:

See also: the student loan catastrophe brewing up in the states.

This is something even lolbertarians can get through their thick skulls but I think the more market-apologetic of liberals haven't quite grasped it: Public subsidies for a private sector that cannot increase supply without difficulty is a phenomenally bad idea. Doing it via subsidizing loans, even more so. Doing it by socializing risk, could easily be one of the top 10 worst economic policies of the century.

In the short term it seems as though this policy has allowed the Canadian government to keep consumer spending up even though wages are stagnating or even falling. Rising home values has seemingly become a major prop in keeping aggregate demand up at a time when the government is cutting spending and the corporate sector is hoarding cash. It's also given a lot of people jobs in industries like construction and real estate.

None of this, of course, is to say that you're wrong about how disastrous the long term effects of this policy could turn out to be. But there is an underlying logic here that seems to tie into a reliance on housing to help power the economy ever since the great productivity slow down of the 1970s.

It seems like politicians have relied on housing (though perhaps not consciously) to mask the weakness of our economic performance over the last few decades.

# ? Dec 6, 2013 16:33

etalian: Mar 20, 2006

Helsing posted:

It seems like politicians have relied on housing (though perhaps not consciously) to mask the weakness of our economic performance over the last few decades.

I guess the only other bright side is the energy boom.

# ? Dec 6, 2013 16:36

Helsing: Aug 23, 2003; DON'T POST IN THE ELECTION THREAD UNLESS YOU JOE BIDEN

The energy boom is contributing to the wrecking of the environment and its crowding out value added industries like manufacturing so I'm not sure how much of a bright side it really is. Its given a lot of people out west jobs and that's certainly a good thing but it would be easier to celebrate if places like Alberta were at least spending some of that money to prepare for the day when the energy boom ends.

# ? Dec 6, 2013 16:43

Baronjutter: Dec 31, 2007; "Tiny Trains"

Helsing posted:

The energy boom is contributing to the wrecking of the environment and its crowding out value added industries like manufacturing so I'm not sure how much of a bright side it really is. Its given a lot of people out west jobs and that's certainly a good thing but it would be easier to celebrate if places like Alberta were at least spending some of that money to prepare for the day when the energy boom ends.

Do you even understand how many long term jobs cleaning up the mess it will create? Or the mercenary army needed to guard the pipelines from "eco-terrorists"! If a broken window creates jobs just imagine how many jobs a broken country will create.

# ? Dec 6, 2013 18:47

Precambrian Video Games: Aug 19, 2002; Can't post for 5 hours!

Baronjutter posted:

Do you even understand how many long term jobs cleaning up the mess it will create? Or the mercenary army needed to guard the pipelines from "eco-terrorists"! If a broken window creates jobs just imagine how many jobs a broken country will create.

Too bad nobody in China is willing to pay for an un-wrecked environment. Unless...

# ? Dec 6, 2013 20:03

MickeyFinn: May 8, 2007; Biggie Smalls and Junior Mafia some mark ass bitches

Helsing posted:

None of this, of course, is to say that you're wrong about how disastrous the long term effects of this policy could turn out to be. But there is an underlying logic here that seems to tie into a reliance on housing to help power the economy ever since the great productivity slow down of the 1970s.

I don't think there has been a 'productivity slump' at least not by any metric I have seen. Can you explain this?

# ? Dec 7, 2013 05:41

Helsing: Aug 23, 2003; DON'T POST IN THE ELECTION THREAD UNLESS YOU JOE BIDEN

MickeyFinn posted:

I don't think there has been a 'productivity slump' at least not by any metric I have seen. Can you explain this?

I didn't say anything about a slump, which would suggest an actual decline in labour productivity, I said that productivity growth has slowed down after its postwar peak:

From Statistics Canada:

Other than a slight bump in the 1990s - due to the implementation of computers? - the trend has been toward slower growth.

The picture is even worse when you compare Canada to other advanced countries, in particular the US.

The Globe and Mail posted:

Canadian productivity: Even worse than previously thought

GLEN HODGSON

Special to The Globe and Mail
Published Wednesday, Aug. 28 2013, 5:00 AM EDT
Last updated Wednesday, Aug. 28 2013, 10:28 AM EDT

For three decades, growth in Canadian labour productivity (at its simplest, output in dollars per hour worked) has lagged behind productivity growth in the United States and other major countries. A recent update of the productivity data by Statistics Canada, to the end of 2011, has revealed that the problem has gotten even worse.

If we continue to discount or dismiss the productivity issue, Canadians� future incomes will be threatened � particularly if there is a sustained downward adjustment in the price of key natural resources. If there ever was a time to take poor productivity growth seriously, that time has arrived.

For years now, the Conference Board of Canada and others have been warning Canadians about our poor track record on productivity growth compared with the U.S. and other major industrial countries. The result of lagging productivity growth is a significant gap in per-capita income that has opened up between Canadians and Americans � at least $7,000, and still rising.

Statistics Canada recently updated the data comparing Canadian labour productivity growth with that of the United States from 1960 to 2011. While the productivity performance of the two countries was comparable up to 1980, the trend lines have diverged since then. Labour productivity in Canada grew by 1.4 per cent annually over the 1980-2011 period, while it grew at a much faster 2.2 per cent in the U.S. [See chart.]

Even more striking are the different growth trends for the specific components of labour productivity growth. Capital deepening (i.e. greater use of cutting-edge physical capital such as information technology or robotics) has been a bit better in Canada than the United States. Labour composition growth (or the deepening skills and knowledge of the work force) has also been a bit better in Canada. So for two of the three underlying factors, Canada's labour productivity growth was slightly better than that of the U.S.

But there is a big difference between the two countries in terms of the third factor, multi-factor productivity (MFP) � or what we have previously labelled as �innovation.� MFP is calculated as whatever is left over once growth in labour composition and capital deepening is subtracted from overall labour productivity growth. As hard as it is to believe, Canada had zero growth in MFP over the 32-year period covered by Statistics Canada.

There are several possible explanations for this stunning result. Canadian business investment has shifted away from manufacturing toward resource development, and there is likely a long payback period from innovative investment in resources. Some key resource sectors, such as the oil sands, have absorbed significant and innovative investment, but have yet to see a significant and sustained increase in output that would boost productivity. Innovation may be embedded in the growth in capital deepening and changing labour composition, where Canada did slightly better than the United States.

Due to anticipated labour shortages, Canadian firms may be more inclined to hire workers within an existing business model than American firms. Or maybe there is excessive protection or insufficient competition in some important business market segments in Canada, reducing the drive for innovation.

Just as there is no single explanation, there is unlikely to be a quick fix to the problem. Canada continues to lack an overarching productivity strategy. There has been some action � for example, governments have taken steps to make the business tax environment more attractive to private investment, but with little apparent return so far. And this issue is not solely the responsibility of governments; many Canadian businesses have yet to embrace innovation as a core element of their business culture. The Conference Board�s Centre for Business Innovation is undertaking original research on how an innovation culture and related good practices can be fostered within Canadian firms.

But the inescapable bottom line is that growth in Canadian labour productivity is falling further behind that of our American neighbours; the problem is even worse than previously thought. Unless productivity growth becomes more of a national priority, there is no reason to expect that long-term pattern to change.

Glen Hodgson is senior vice-president and chief economist at the Conference Board of Canada.

Glend Hodgson tries to dance around the implications of his own conclusion by suggesting that maybe somehow the oil sands will eventually start contributing more substantially to productivity growth rather than just draining capital out of the value added sectors of the economy, but the following graphs taken from Jim Stanford's "Staples, Deindustrialization, and Foreign Investment give further evidence that the rise and fall of the Canadian manufacturing sector play a large role here, and that our drift back toward being a raw resource economy plays a big role in the slow down.

Note how mining lags behind manufacturing in terms of productivity:

# ? Dec 7, 2013 18:48

namaste friends: Sep 18, 2004; by Smythe

Ever wonder who Vancouver's Mayor hangs out with?

http://www.francesbula.com/uncategorized/the-vision-vancouver-annual-fundraiser-a-precis/

quote:

For those who missed my scintillating tweets on Monday night, when I was at the Vision Vancouver fundraiser at Floata, here�s a recap, plus a bit more about the 650-person event, which included some singing by the Jewish contingent and people imitating salmon swimming upstream at a certain point. Designated talking point of the evening seemed to be: �We still have lots to do to make the city better.�
(It used to be, by the way, that civic political reporters always attended these to get a sense of the temperature of various parties. But I was the only one there � possibly because it wasn�t publicized to the media? And no word yet on whether the NPA, which used to have the powerhouse annual dinners, is organizing anything.)
Who was there?
Yes, lots of developers. (And I hear there was a pre-party for VIPs beforehand, where it was almost exclusively developers. One developer there wondered why Vision would even do something like that, given that it already has the rep of being in developer pockets.) The ones I spotted were: Onni, ParkLane/Wesgroup, Century Group, Concord Pacific, Anthem, Beedie Group. Interestingly, the two developer types whom developers themselves consider to be getting the best deals from Vancouver council, Wall Development and Westbank (Ian Gillespie), were not in sight.
Who else was there?
Politicians and political types. NDP MLAs Mike Farnworth and Spencer Herbert, Liberal Senator and former mayor Larry Campbell (sporting a silvery beard), former Christy Clark executive assistant Gabe Garfinkel (now with lobbying firm FleischmanHillard), former Vision president Ian Baillie (now a lobbyist, doing a lot on liquor issues these days).
Others?
Various tables were labelled as �Friends of� someone or another � a sign that people were genuinely buying seats because they were friends or someone had bought a lot of seats and these were seat-fillers, I don�t know. Some of the Friends of: Narinder Chinna, Adrian Le, Deal Alexander, Dana and Joel Solomon, Latin Friends of Vision. Also spotted: Liz Evans and Dan Small of PHS Community Services; a table from Perkins + Will architects, CUPE secretary-treasurer Paul Faoro and city hall�s new CUPE 15 president, Leanne Toderian; John Teti of BarWatch; VAG director Kathleen Bartels, at her most warm and outgoing; Cultch director Heather Redfern; and an extremely good-looking guy I met in the elevator who said he works with the Bollywood industry.
The message?
Vision seems to have learned that half-hour speeches from the mayor and introducing every single politician doesn�t make for the best evening out. So that was limited and the mayor�s speech was short to the point.
It felt like Gregor Robertson was testing out the campaign messages for the next year. (And the slogan that kept appearing on the TV screens through the night � �5 Years of Vision/More Work to Do� � seemed to boil it right down.) What did I hear?
- �We represent that entrepreneurial, caring, compassionate, creative voice in the city.�
- A direct attack on the NPA: �We brought fiscal responsibility to city hall� after years of tax hikes and the Olympic village train wreck. (Negative campaign ad No. 1?)
- �The population of people sleeping on the street is down by two-thirds � but there are still going to be people sleeping on our streets tonight.� (And more needs to be done.)
- �We have a bold agenda. Going forward, we�re not even close to getting our big list done.�
- Lots of mentions of addictions, homelessness, the Broadway subway line, better bus service, and �standing up to protect our water, our air, our land, making sure we take on a greater role in tackling climate change.�
- Again, �we�re just getting started. We feel like we still have a lot to do.�
- Interestingly, no mention of bikes, bike lanes, bike share, etc. Also not a lot of emphasis on the efforts to create affordable housing or to bring in new city plans or to create park board universal pass, even though these are all the issues where the Vision council has been expending the most of its political capital and taken the subsequent beatings.
The mood?
Relaxed and party-like. People seemed to be willing to hang around longer than usual at these events and schmooze. The evening did start with a YouTube-worthy scene of people at various tables getting up and imitating fish swimming upstream (or possibly spawning, I couldn�t quite figure it out), initiated by the First Nations woman who opened the official part of the agenda. (Sorry, didn�t catch her name, but she performed a near miracle getting some of that crowd on its feet.)
It also felt a little more insider team. I didn�t see any COPE people, the taxi drivers, other union members, the theatre and arts groups that I�ve seen in the past.

# ? Dec 7, 2013 19:51

Lobok: Jul 13, 2006; Say Watt?

How is there not video of a bunch of the Vancouver business and political elite all miming sperm just like Homer Simpson?

# ? Dec 7, 2013 20:42

etalian: Mar 20, 2006

Still really sad how Vancouver had a multi-billionaire dollar cleanup after the 80s condo boom but is repeating the exact same mistakes.

Which brings to mind the Einstein quote about the definition of insanity is repeating the same steps but expecting a different result.

# ? Dec 8, 2013 04:46

Big K of Justice: Nov 27, 2005; Anyone seen my ball joints?

Rime posted:

Anyone looked in the great white north recently? I was perusing job openings in Whitehorse and was immediately scared away by the fact that a city of 30,000 has vacancy rates somewhere between zero and "We rented that yesterday, had 500 people banging down our door!". The average house price up there is over $400,000 now, up from $150,000 in 2006.

Both points are loving insane. It's an administrative center with little else driving the economy.

Same thing is happening in parts in Newfoundland due to jobs expansion in oil and mining industries (mainly oil).

My folks purchased a house near my grandmothers in northern newfoundland, away from any large cities in a town of 3000, for $10,000-15,000 in 1999 along with a few plots of land.

Today? The occasional real estate agent calls and tells them if they were willing to sell they can get $200,000 easy just for the land alone, and St. Anthony is about as far as you can get from the oil sector in Newfoundland. Moms planning on selling while the going is good and retiring down in the US Southwest to be closer to me and not have to deal with snow anymore. Unfortunately that means swapping huge heating bills with A/C bills.

Parts of St. John's are more expensive than Los Angeles now :v:

# ? Dec 8, 2013 19:54

flashman: Dec 16, 2003

Big K of Justice posted:

Same thing is happening in parts in Newfoundland due to jobs expansion in oil and mining industries (mainly oil).

My folks purchased a house near my grandmothers in northern newfoundland, away from any large cities in a town of 3000, for $10,000-15,000 in 1999 along with a few plots of land.

Today? The occasional real estate agent calls and tells them if they were willing to sell they can get $200,000 easy just for the land alone, and St. Anthony is about as far as you can get from the oil sector in Newfoundland. Moms planning on selling while the going is good and retiring down in the US Southwest to be closer to me and not have to deal with snow anymore. Unfortunately that means swapping huge heating bills with A/C bills.

Parts of St. John's are more expensive than Los Angeles now

Yeah you've got that right. The load of people working in Alberta and coming back with lots of money buying houses and putting in a basement apartment is keeping the price crazy high where I am in Newfoundland as well. This town has basically nothing in terms of employment besides a hospital and schools and a soon to be closed mill but houses are around the 300,000 mark for anything decent. I just keep hoping for the money supply to tighten up and at least if nothing else keep prices stagnant for a few years while I continue to save for a down payment, as it's pretty hard to stomach throwing out 300k to live in a "suburb" of a town of 20 thousand people.

# ? Dec 8, 2013 21:14

Mrs. Wynand: Nov 23, 2002; DLT 4EVA

Helsing posted:

In the short term it seems as though this policy has allowed the Canadian government to keep consumer spending up even though wages are stagnating or even falling. Rising home values has seemingly become a major prop in keeping aggregate demand up at a time when the government is cutting spending and the corporate sector is hoarding cash. It's also given a lot of people jobs in industries like construction and real estate.

None of this, of course, is to say that you're wrong about how disastrous the long term effects of this policy could turn out to be. But there is an underlying logic here that seems to tie into a reliance on housing to help power the economy ever since the great productivity slow down of the 1970s.

It seems like politicians have relied on housing (though perhaps not consciously) to mask the weakness of our economic performance over the last few decades.

Well sure, I mean it's not straight up government spending but it might as well be - just in a roundabout way (the bill will be due later, if the CMHC has to actually starting eating bad mortgages, and I do think it's still "if" not "when" - it may not actually happen). Risk is still risk, even if the "bad" scenario doesn't actually come to pass - it's still artificially injecting the economy with action on the government's tab. Keynes "works" IMO, it always has, even if over the long term it can't help but be unreliable and self-defeating.

You make an interesting point though - it probably wasn't a conscious decision. But Conservatives may well draw all the right conclusions from this using hindsight: this is a great way of propping up the economy without making any intellectual concessions to the idea of social spending. It lets you continue with the narrative of austerity without actually putting your money where your mouth is. And hey if it all comes crashing down you can always have a "revelation" about what you were really doing - "Can't you see? It was this indirect spending we were doing all along! Oh what fools we were, we have once more failed Conservatism and if anything must redouble our discipline!"

# ? Dec 9, 2013 02:51

MickeyFinn: May 8, 2007; Biggie Smalls and Junior Mafia some mark ass bitches

Helsing posted:

I didn't say anything about a slump, which would suggest an actual decline in labour productivity, I said that productivity growth has slowed down after its postwar peak...

Yeah, I misunderstood your original post, but I got a good answer anyway!

# ? Dec 9, 2013 02:58

Lexicon: Jul 29, 2003; I had a beer with Stephen Harper once and now I like him.

Assuming you accept the premise that we live in bizarro-house price land (and in late 2013, this tends to be uncontroversial among thinking, non-captured, people), two opposing points of view emerge regarding our big-5 charter banks. Either:

The banks are hosed and will require taxpayer rescue in a manner similar to that seen in the USA, Ireland, Spain, etc.
The taxpayer is hosed, as the banks have shrewdly ensured the vast majority of the actual risk is borne by the CMHC.

Both seem equally plausible, but both cannot be true, at least as far as I can deduce it. So which is it?

# ? Dec 9, 2013 03:07

Baronjutter: Dec 31, 2007; "Tiny Trains"

Seems either way the tax payer is hosed.

# ? Dec 9, 2013 08:29

ocrumsprug: Sep 23, 2010; by LITERALLY AN ADMIN

Lexicon posted:

Assuming you accept the premise that we live in bizarro-house price land (and in late 2013, this tends to be uncontroversial among thinking, non-captured, people), two opposing points of view emerge regarding our big-5 charter banks. Either:

The banks are hosed and will require taxpayer rescue in a manner similar to that seen in the USA, Ireland, Spain, etc.

The taxpayer is hosed, as the banks have shrewdly ensured the vast majority of the actual risk is borne by the CMHC.

Both seem equally plausible, but both cannot be true, at least as far as I can deduce it. So which is it?

I suspect that a lot of insured loans would not stand up to an audit of the originating paperwork, if push came to shove from the CMHC. However, my gut tells me that the Conservative party would shut down the tar sands before they let the banks take a hit remotely resembling what happened in the USA, Ireland and Spain. Our banks being rock solid, prudent lenders operating in a perfectly regulated market is just too strong of a national narrative to endanger. (I personally think it is a nice fairy tale.)

They will let the banks eat some of it, likely the outright fraudulent parts, but the taxpayers will foot the lions share. You can see them already starting this by requiring the CMHC to start paying into a risk fund to the government. If you are paying attention, you probably are asking "Isn't the CMHC already the housing risk fund for the government?"

e: I am actually not sure if that announcement only applied to third party insurers.

ee: Nope, it was just for the CMHC.

ocrumsprug fucked around with this message at 19:19 on Dec 9, 2013

# ? Dec 9, 2013 19:12

Throatwarbler: Nov 17, 2008; by vyelkin

ocrumsprug posted:

However, my gut tells me that the Conservative party would shut down the tar sands before they let the banks take a hit remotely resembling what happened in the USA, Ireland and Spain.

Haha what? The banks in all those countries except for Lehman were bailed out by the taxpayers? Ireland's government expanded public debt from 20% of GDP to 120% of GDP specifically so that the banks didn't lose a penny.

"let the banks take a hit" :roflolmao:

# ? Dec 9, 2013 19:42

Baronjutter: Dec 31, 2007; "Tiny Trains"

Didn't Iceland actually just let "the market" sort out the banks rather than socialize their losses?

# ? Dec 9, 2013 19:59

ocrumsprug: Sep 23, 2010; by LITERALLY AN ADMIN

e: Iceland couldn't have socialized the losses even if they wanted to. It was out-right fraud that dwarfed their actual economy.

Throatwarbler posted:

Haha what? The banks in all those countries except for Lehman were bailed out by the taxpayers? Ireland's government expanded public debt from 20% of GDP to 120% of GDP specifically so that the banks didn't lose a penny.

"let the banks take a hit"

Oh, not every bank in the US got bailed out. There was a pretty hefty round of enforced banking consolidations that occurred post-2008. However, Ireland managed to go the extra mile and also bailed out foreign banks that were heavily invested in their real estate.

Full bailout is my expectation for what will happen here too. However, the credit unions being provincially regulated might be left to their own devices.

ocrumsprug fucked around with this message at 20:05 on Dec 9, 2013

# ? Dec 9, 2013 20:00

HookShot: Dec 26, 2005

Also Iceland is now in another major bubble. When I was there in 2012 it was really big news that once again prices were rising to unsustainable levels, and they were actually quite worried about it since they saw what had happened the last time a bubble burst, which had been literally four years earlier

# ? Dec 9, 2013 21:11

Lexicon: Jul 29, 2003; I had a beer with Stephen Harper once and now I like him.

Baronjutter posted:

Didn't Iceland actually just let "the market" sort out the banks rather than socialize their losses?

Their banks had liabilities exceeding the GDP of the country by some factor of 5-10 or so, and were completely insolvent.

# ? Dec 9, 2013 21:37

Rime: Nov 2, 2011; by Games Forum

HookShot posted:

Also Iceland is now in another major bubble. When I was there in 2012 it was really big news that once again prices were rising to unsustainable levels, and they were actually quite worried about it since they saw what had happened the last time a bubble burst, which had been literally four years earlier

I would hazard that, since the people responsible for the previous bubble are neither dead nor in prison and for the most part still in their former jobs, if this is a surprise to anyone they may be too stupid to live.

# ? Dec 9, 2013 22:26

namaste friends: Sep 18, 2004; by Smythe

This is what housing bulls think:
http://thethirtiesgrind.com/2013/12/10/my-vancouver-real-estate-story/

quote:

I feel like I opened up the Pandora�s box of real estate strife with my posts about Absurd Property pricing in Vancouver. I thought I would share my real estate story and would be very interested to hear yours, too. I want to preface this by saying that although I find the housing prices crazy, I do love it her. I grew up in Vancouver. My family is here. My friends are here. My children go to school here and I love our neighbourhood�I never want anyone to confuse my criticism of the real estate market in Vancouver with my love for the city.

My husband and I got on the property ladder considerably early. Well, I shouldn�t say we got on it as much as we jumped and and clung on for dear life! As anyone in Vancouver knows, owning a sliver of anything here is becoming less and less realistic for our generation. The rule that your mortgage payment should be less than 30% of your income does not apply.

Our first property was a run down house on King Edward Avenue in East Vancouver. Our realtor literally called me up and told me it was do or die time. It was a �smoking deal� (his words) and we would be crazy not to buy it. Ends up he was right. We bought the house for under $300K (I know, right!) sight unseen. After a few months of fixing it up we decided to sell it in order to invest in a place we could live in ourselves. We bought ourselves a spacious stuck-in -the-70s walk up 2 bedroom apartment in South Granville. It was the perfect location for our still childless lifestyle. We could both walk or cycle to work, shop (we actually had disposable income back then) at cute botiques and eat (yes! we went out to eat!) at amazing local restaurants. We were living the Vancouver dream!

We fixed the apartment up and were so happy there�however, after our daughter arrived (and we knew we would be having at least one more child) the reality that our happy home wouldn�t suit us forever sunk in. Also, real estate pricing in Vancouver had started to rise exponentially. We had to make a quick move or we might miss the opportunity to own something bigger that was still within city limits. We listed our beloved apartment. It sold within a week and we had enough for a very, very small down payment. So, off we went to find our first �family home.�

The search itself was anything but easy. Every day was spent reviewing new listings and weekends were back to back open houses. We made offers on a handful of properties, but got beaten out over and over again in bidding wars. It was really, really disheartening. We began to think we would never find anything within our price range. The West Side of Vancouver was already completely out of reach. We focused our search in the neighbourhoods of Main Street and Cedar Cottage. Even in these areas, competition was fierce and anything we were interested in was being sold for $50 to $70K over the asking price. It. Was. Crazy.

One day I came across the listing for our home. We knew this was what we could (just barely) afford so we went for it, knowing if we waited any longer a home in Vancouver would not be possible.

We�ve been living the �house rich, cash poor� lifestyle for a while now. I get that it is what we chose and, believe me, we question our choice all the time. The fact is that with no significant wage increases in sight, steady inflation and the price of houses continuing to rise, if we want to move on from this home to somewhere else in Vancouver proper, we can�t. We either have to down-size, move to the suburbs or rent. All great options�for sure�just none that we want to make a decision about right now.

Homes in our neighbourhood are selling for double the amount of what we paid for our house. We are at the top rung of our property ladder in this city�so, we are clinging on and hoping we can stay put for a good while.

Some would say we are crazy and foolish�others would argue that our investment will pay out over time.

What do you think?

Well melissa carr, I think you and your husband are incapable of assessing financial risk. You've forsaken your financial health for a housegasm. Enjoy living without savings!

# ? Dec 10, 2013 20:25

namaste friends: Sep 18, 2004; by Smythe

In other news, consumer confidence is high!
http://www.businessweek.com/news/2013-12-09/canada-consumer-confidence-increases-on-resilient-housing-market

# ? Dec 10, 2013 20:28

Rime: Nov 2, 2011; by Games Forum

Can someone enlighten me: if a parent dies with $750k outstanding on their $800k mortgage, what happens to the house? Can it be willed to the child, forcing them to take on the mortgage or sell it? Does the bank repossess it and put a lien on the remainder of the estate?

I'm interested in what's going to happen to the market when all these over-leveraged boomers start dying off soonish.

# ? Dec 10, 2013 20:46

namaste friends: Sep 18, 2004; by Smythe

Rime posted:

Can someone enlighten me: if a parent dies with $750k outstanding on their $800k mortgage, what happens to the house? Can it be willed to the child, forcing them to take on the mortgage or sell it? Does the bank repossess it and put a lien on the remainder of the estate?

I'm interested in what's going to happen to the market when all these over-leveraged boomers start dying off soonish.

According to this: http://www.ratesupermarket.ca/blog/what-happens-to-debt-after-death/

A mortgage is a secured loan so the creditor will pursue the estate for the balance.

Apparently with credit cards, since they're unsecured loans, the CC company eats the loss.

# ? Dec 10, 2013 21:00

Lexicon: Jul 29, 2003; I had a beer with Stephen Harper once and now I like him.

Cultural Imperial posted:

According to this: http://www.ratesupermarket.ca/blog/what-happens-to-debt-after-death/

A mortgage is a secured loan so the creditor will pursue the estate for the balance.

Apparently with credit cards, since they're unsecured loans, the CC company eats the loss.

Surely they'd also pursue the estate for CC bills also? It seems inconceivable they would do otherwise.

If not, wouldn't you generally hear about cards being revoked from elderly or infirm holders?

# ? Dec 10, 2013 21:15

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# ? May 11, 2024 22:57

ocrumsprug: Sep 23, 2010; by LITERALLY AN ADMIN

Lexicon posted:

Surely they'd also pursue the estate for CC bills also? It seems inconceivable they would do otherwise.

If not, wouldn't you generally hear about cards being revoked from elderly or infirm holders?

I think it is unsecured in that if the debt > assets of the estate CC companies get to eat the loss. Though they will try and make your heirs believe that they owe. The mortgage holder can foreclose the house to recoup their money.

# ? Dec 10, 2013 21:20

The Something Awful Forums > Discussion > Debate & Discussion > Canada Housing/Debt: Trust me, I'm a landlord.

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