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

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RBC: Nov 23, 2007; IM STILL SPENDING MONEY FROM 1888

Pixelboy posted:

What policy changed in 2010?

Interest rates, among other things:

# ? Apr 12, 2014 16:19

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# ? May 26, 2024 11:46

etalian: Mar 20, 2006

cheap credit is pretty much the only way to make a home price bubble "affordable"

I liked the mortgage as percentage of bank assets since it shoots down the argument that better capitalization would make the bubble crash not as bad.
Yup banks could survive without a bailout when almost half of their assets go underwater in the span a of few months, not mention other thinks like HELOC total credit
getting sucked out of the economy.

etalian fucked around with this message at 17:32 on Apr 12, 2014

# ? Apr 12, 2014 17:25

RBC: Nov 23, 2007; IM STILL SPENDING MONEY FROM 1888

etalian posted:

cheap credit is pretty much the only way to make a home price bubble "affordable"

I liked the mortgage as percentage of bank assets since it shoots down the argument that better capitalization would make the bubble crash not as bad.
Yup banks could survive without a bailout when almost half of their assets go underwater in the span a of few months, not mention other thinks like HELOC total credit
getting sucked out of the economy.

It's not the banks that would be in trouble, it's the government. The mortgages are mostly insured.

# ? Apr 12, 2014 18:35

etalian: Mar 20, 2006

RBC posted:

It's not the banks that would be in trouble, it's the government. The mortgages are mostly insured.

Can't remember exactly but wasn't some big number like half of the total mortgages being back by the CMHC?

# ? Apr 12, 2014 20:09

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

etalian posted:

Can't remember exactly but wasn't some big number like half of the total mortgages being back by the CMHC?

It's in that range for sure. The very definition of private profit and social risk.

# ? Apr 12, 2014 20:31

etalian: Mar 20, 2006

Lexicon posted:

It's in that range for sure. The very definition of private profit and social risk.

I found this, so basically almost of half of all Canadian mortgages are backed by public trust:

# ? Apr 12, 2014 20:38

LemonDrizzle: Mar 28, 2012; neoliberal shithead

etalian posted:

I found this, so basically almost of half of all Canadian mortgages are backed by public trust:

Now plot it by the value/size of those mortgages and, if Canada's anything like other countries, watch the guaranteed pool swell up until it completely blocks everything else from view.

# ? Apr 12, 2014 20:44

etalian: Mar 20, 2006

LemonDrizzle posted:

Now plot it by the value/size of those mortgages and, if Canada's anything like other countries, watch the guaranteed pool swell up until it completely blocks everything else from view.

basically the mortgage security version of long cat

# ? Apr 12, 2014 20:46

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

etalian posted:

I found this, so basically almost of half of all Canadian mortgages are backed by public trust:

And the genworth ones are 90% gov guaranteed anyway. Welp.

# ? Apr 12, 2014 20:54

namaste friends: Sep 18, 2004; by Smythe

etalian posted:

basically the mortgage security version of long cat

I love you

# ? Apr 12, 2014 21:26

namaste friends: Sep 18, 2004; by Smythe

quote:

Glad @TDBank_US Ed Clark says TD has requested tightening of mtg finance rules from fed gov't. Not uncontroversial but needed #HumanAfterAll

Check out @Ailish_Campbell's Tweet: https://twitter.com/Ailish_Campbell/status/454995672404877312

hahahahahahahahaha

# ? Apr 12, 2014 22:37

namaste friends: Sep 18, 2004; by Smythe

quote:

We have made debt free. Therefore we need gov't regulation to ensure leverage used productively says Ed Clark @TDBank_US
#HumanAfterAll

# ? Apr 12, 2014 22:50

namaste friends: Sep 18, 2004; by Smythe

moral hazard is a cruel mistress

# ? Apr 12, 2014 22:51

etalian: Mar 20, 2006

Cultural Imperial posted:

moral hazard is a cruel mistress

on a side note the UK is having a housing bubble right now with big price increase each year:
http://www.bloomberg.com/news/2014-04-10/u-k-house-prices-record-biggest-annual-increase-since-2010.html

The government response to the problem was just to back mortgage loans even more, since if prices go up you need even more
cheap government backed credit to keep homes affordable.

# ? Apr 12, 2014 23:01

LemonDrizzle: Mar 28, 2012; neoliberal shithead

etalian posted:

on a side note the UK is having a housing bubble right now with big price increase each year:
http://www.bloomberg.com/news/2014-04-10/u-k-house-prices-record-biggest-annual-increase-since-2010.html

The government response to the problem was just to back mortgage loans even more, since if prices go up you need even more
cheap government backed credit to keep homes affordable.

The government just introduced new "tighter" regulations on mortgage lending to ensure that banks don't go crazy like they did between the mid-90s and 2007.

The new regulations allow them to issue mortgages of up to 7x income.

# ? Apr 12, 2014 23:08

namaste friends: Sep 18, 2004; by Smythe

Anecdotally, a contractor is absolutely losing his poo poo about kitimat. He's planning on spending 4 months up there to build a house to sell. Spent 100k on a piece of land. loving lol

# ? Apr 13, 2014 05:59

Franks Happy Place: Mar 15, 2011; It is by weed alone I set my mind in motion. It is by the dank of Sapho that thoughts acquire speed, the lips acquire stains, stains become a warning. It is by weed alone I set my mind in motion.

Pixelboy posted:

What policy changed in 2010?

In addition to what everyone already mentioned (interest rates etc.), between 2008 and 2010 the federal government gave the banks around $70 billion in dollars in return for their existing mortgage holdings, freeing them to turn around and issue billions more in mortgages. When you factor in a one-year delay in valuation, that chart looks pretty spot on.

# ? Apr 13, 2014 06:01

etalian: Mar 20, 2006

heh

Canadians also stole the america a granite countertop in every flipped home idea:

# ? Apr 13, 2014 06:02

Whiskey Sours: Jan 25, 2014; Weather proof.

Cultural Imperial posted:

Anecdotally, a contractor is absolutely losing his poo poo about kitimat. He's planning on spending 4 months up there to build a house to sell. Spent 100k on a piece of land. loving lol

Kitimat and Terrace are nuts right now. There's a lot of construction going on in the northwest, if he can sell it soon he can probably get a good return.

In five years it'll be worthless though.

http://skeena.en.craigslist.ca/apa/4403828744.html
$1250 for a 2 bedroom apartment in loving Terrace

Whiskey Sours fucked around with this message at 06:07 on Apr 13, 2014

# ? Apr 13, 2014 06:05

namaste friends: Sep 18, 2004; by Smythe

Whiskey Sours posted:

Kitimat and Terrace are nuts right now. There's a lot of construction going on in the northwest, if he can sell it soon he can probably get a good return.

In five years it'll be worthless though.

these people are so loving dumb

# ? Apr 13, 2014 06:06

Whiskey Sours: Jan 25, 2014; Weather proof.

Holy gently caress:

quote:

$2200 / 2br - 1000ft� - 2 bed fully furnished/stocked includes internet, cable & all utilities (Terrace)
http://skeena.en.craigslist.ca/apa/4401576313.html

# ? Apr 13, 2014 06:15

JawKnee: Mar 24, 2007; You'll take the ride to leave this town along that yellow line

Whiskey Sours posted:

Holy gently caress:

uh:

http://skeena.en.craigslist.ca/apa/4405644540.html

# ? Apr 13, 2014 06:19

namaste friends: Sep 18, 2004; by Smythe

what is this the best place on earth?

http://skeena.en.craigslist.ca/apa/4375770473.html

# ? Apr 13, 2014 06:28

Kalenn Istarion: Nov 2, 2012; Maybe Senpai will finally notice me now that I've dropped :fivebux: on this snazzy av

After living in Dense urban centres most of my adult life, those prices look pretty good. :suicide:

# ? Apr 13, 2014 08:47

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

Rental prices are not a function of the quality of a particular town (not a first order function anyway). It's purely a matter of the supply and demand for rental accommodations, and the pricing level is set in accordance with incomes. It shouldn't be surprising that rental prices are high in a place like Kitimat.

# ? Apr 13, 2014 13:27

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

Cultural Imperial posted:

Anecdotally, a contractor is absolutely losing his poo poo about kitimat. He's planning on spending 4 months up there to build a house to sell. Spent 100k on a piece of land. loving lol

I have to imagine quite a few financial geniuses are making GBS threads bricks today given that [non-binding] plebiscite in Kitimat ruling against the northern gateway. If they don't want it, and you'd think many of their citizens would, I don't see it happening at all.

# ? Apr 13, 2014 13:31

Bleu: Jul 19, 2006

Kalenn Istarion posted:

In case you missed it, Flaherty passed away yesterday. Whatever else you think about the conservatives, it seems that they have mostly been measured and careful in their fiscal policy and I hope that whoever comes in behind him can carry the torch.

CPC staffers apparently need more work to do in between icing each other in the elevators. May he rest in peace, but the man was a disaster of a Finance Minister. I just wish I could find the 22 Minutes clip of Crazy Jim's Housing Tonic, because that's how I'll always remember him.

edit: Okay, to be fair, a CPC flack would know Oliver was already the new Minister.

Bleu fucked around with this message at 03:58 on Apr 14, 2014

# ? Apr 14, 2014 03:44

Professor Shark: May 22, 2012

Bleu posted:

CPC staffers apparently need more work to do in between icing each other in the elevators. May he rest in peace, but the man was a disaster of a Finance Minister. I just wish I could find the 22 Minutes clip of Crazy Jim's Housing Tonic, because that's how I'll always remember him.

edit: Okay, to be fair, a CPC flack would know Oliver was already the new Minister.

gently caress you you loving oval office. Even if you didn't like the man's politics you have to admit he was a good Finance Minister and a good guy, you loving Socialist flake!

If you would care to convey a rebuttal I calmly and respectfully put forth that you utilize the websites privatized messaging system.

Edit: ^^^This is a reference to the Canadian Politics Thread btw; I got worried that Bleu would think I was being serious :ohdear:

Professor Shark fucked around with this message at 09:52 on Apr 14, 2014

# ? Apr 14, 2014 09:46

Bleu: Jul 19, 2006

Professor Shark posted:

Edit: ^^^This is a reference to the Canadian Politics Thread btw; I got worried that Bleu would think I was being serious

There were a good couple seconds at the beginning, there, before I recognized it. :shobon:

# ? Apr 14, 2014 10:43

ZShakespeare: Jul 20, 2003; The devil can cite Scripture for his purpose!

Professor Shark posted:

gently caress you you loving oval office. Even if you didn't like the man's politics you have to admit he was a good Finance Minister and a good guy, you loving Socialist flake!

No. No he really needn't

# ? Apr 14, 2014 15:51

namaste friends: Sep 18, 2004; by Smythe

http://m.theglobeandmail.com/report...b+Article+Links

quote:

The real estate industry is breathing a sigh of relief after seeing the long-awaited set of guidelines for mortgage insurers that many had feared would cause home sales to slow.

The new rules from Canada’s financial regulator contain little to dampen the housing market, industry players say. That is welcome news to real estate agents and mortgage brokers, as home sales have recently turned sluggish.

Three key questions about Canada’s new mortgage insurance rulesCanadian home prices flat in MarchHoles in housing market data have economists worried

The guidelines, which came out Monday, have been in the works since 2012. That was the year that the financial regulator, the Office of the Superintendent of Financial Institutions (OSFI), released mortgage underwriting guidelines for banks.

Those guidelines, which were known in the industry as B-20, were mainly broad principles spelling out what banks must to do to ensure they were properly scrutinizing potential borrowers and the properties they wanted to buy.

But B-20 also imposed a cap on the amount that homeowners can borrow on a home equity line of credit at 65 per cent of the home’s value, a rule that real estate players said had a tightening effect on the housing market. As a result, there was concern that the new guidelines for mortgage insurers, known as B-21, might also affect the market.

In an interview Monday, OSFI deputy superintendent Mark Zelmer said he doesn’t expect the guidelines to have a major impact, observing that they’re similar to B-20 except that they are written for mortgage insurers rather than banks.

The guidelines spell out steps that mortgage insurers should take to ensure they’re not taking on too much risk, including assessing the banks that are selling the mortgages. Indeed, many of the guidelines essentially tell mortgage insurers they are responsible for ensuring that banks are being careful.

The general idea is to ensure that mortgage insurers are following strict practices that will minimize defaults of mortgages that they insure. As such, the full set of rules could have a tightening effect, but industry players say any such impact will be small.

“The market impact of these regulations [B-21] will be modest in comparison to B-20,” said Andy Charles, the chief executive of Canada Guaranty, the country’s third-largest mortgage insurer. “The impact of B-20 combined with previous changes by the Department of Finance, have resulted in insurers underwriting a much stronger borrower. The new guidelines serve to reinforce some of these practices.”

For instance, B-21 tells mortgage insurers that incentives and rebate payments (i.e. cash back from the bank) should not count as part of a down payment. B-20 told banks the same thing.

Mortgage insurance is mandatory for banks and other federally regulated lenders if the home buyer has a down-payment of less than 20 per cent. It compensates the lender if the borrower defaults.

Real estate players are breathing a sigh of relief because the guidelines come as home sales have levelled off.

The Canadian Real Estate Association will release March data on Tuesday, and Bank of Montreal chief economist Douglas Porter is expecting home sales to come in 3 per cent higher than a year earlier.

If that’s the case, sales will be only slightly above February’s level, having ticked up for two months in a row after sliding for five consecutive months. That would suggest a relatively lacklustre start to the all-important spring market. It would put March’s sales level about 10 per cent below March of 2012, Mr. Porter says.

Last month, marked the first March – with the exception of the recession of 2009 – that home prices basically didn’t budge from February, according to data released by the Teranet-National Bank house price index on Monday.

OSFI is taking comments on the guidelines until May 23, after which it will release final rules.

# ? Apr 15, 2014 13:58

Dreylad: Jun 19, 2001

Well as long as the mortgage brokers and real estate agents are happy! That's the important thing.

# ? Apr 15, 2014 14:11

Rime: Nov 2, 2011; by Games Forum

Lexicon posted:

Rental prices are not a function of the quality of a particular town (not a first order function anyway). It's purely a matter of the supply and demand for rental accommodations, and the pricing level is set in accordance with incomes. It shouldn't be surprising that rental prices are high in a place like Kitimat.

I'll quote my CP Megathread post on this from a while back regarding the topic of rent & property spikes in remote regions:

Rime posted:

Yes, a remote community which has been slowly dying for years aside from the smelter has suddenly seen an influx of migrant workers from out of the province due to a large industrial project, but there is nowhere to house them. From the article you posted:

quote:
Vacancy plummeted from a high of around 45.4 per cent in the early 2000s to less than one per cent now, and homes that would have gone for $450 per month in 2010 are now renting for closer to $1,800.

There's a vast number of people in Kitimat jumping for joy that they have essentially won the lottery, unloaded their lovely 50's Alcan bungalow for lower mainland prices, and finally gotten the gently caress out of there. Once the smelter upgrades are complete, upgrades which will result in a 30% reduction of the workforce due to automation, Kitimat will be even worse off than it was before. Why will it be worse off than before? Let's break it down:

Anyone who was living there and propping up the local economy because they couldn't sell their house for enough to make moving worthwhile, just did so, and now those dollars are gone.

Anyone living at or below the poverty line, but contributing to the local economy, has been forced out by the ludicrous spike in rental prices.

The workers who have just lost their jobs permanently, obviously, are going to leave.

The reduction in population due to the above 3 combined will likely tank income at several businesses enough that they will close, removing their contribution from the local economy.

So tell me again, how is the north coast doing JUST FINE?

I doubt Alcan will ever shut the smelter down, as long as they can keep that sweet sweet pseudo-IPP Hydro money rolling in from Kemano. The 30% reduction in the workforce alone will likely keep profit margins ticking along for many years to come.

I watched a similar situation unfold in Revelstoke in 07/08, where the town bet that having an american corporation build the largest ski resort in North America would be a boon for the economy. Instead, 40% of the town sold their houses as they quadrupled in price overnight (townhouses that Hydro built in the 1970's were clearing $1m+ at the top of that bubble, compared to $98k in the late 1990's), a huge number of families were forced out of town due to rents exceeding Vancouver, and the economy subsequently imploded spectacularly. At one point the housing crisis was so dire that poor people were living in uninsulated sheds, in a town that gets over sixty feet of snow a year. Since Revelstoke is in the middle of bumblefuck nowhere rather than two hours drive from a metro region ala Whistler, all this proved to be catastrophic.

What was once a sustainable (albeit sleepy) tourism and resource town with locally owned shops and an annually growing population, is now a rapidly dying resort with shops focused on catering to the seasonal influx of Australians. The population dropped so hard that they closed 3 of the five elementary schools and merged them into the highschool, whereas when I started grade 8 in 2003 the highschool was so crowded they were using temp trailers out back. I think it went from around 10,000 at it's peak to 6,000ish today. Literally every commercial building in the downtown core is for sale at rock bottom prices right now. And, of course, there is the situation of elderly residents who are now lacking the robust community which would have taken care of them previously.

I mean, Kitimat & Revelstoke are towns that had something going for them economically, however slight. You go to places like Lilloett, or Burns Lake, or Bella Coola, and holy poo poo the despair is just...depressing. Storefronts all closed down, maybe a wal-mart came by and that's now the towns "everything" depot. Restaurants that haven't been open in years. Go to the even smaller, totally remote towns like Vavenby or Tahsis or Dease Lake? You may as well be in loving Siberia. The local Tim Hortons will still be staffed by Filipinos on a TFW visa though, because regardless of how remote you are gently caress hiring the few local kids left to serve your coffee when you can just import slaves.

Anyone who thinks that the mythical "BC Jobs Plan" is going to help the people who actually need it, needs to go on a road trip and get a hard dose of reality. Outside of six or so increasingly overcrowded and expensive metropolitan areas, BC is dying.

Rime fucked around with this message at 18:09 on Apr 15, 2014

# ? Apr 15, 2014 18:04

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

^ Ugh, that all sounds awful. I really feel for people who live in these boom-bust resource towns.

# ? Apr 15, 2014 18:26

namaste friends: Sep 18, 2004; by Smythe

Lol I remember when people were saying Revelstoke was going to be the next Whistler.

Seriously, is it that bad now?

# ? Apr 15, 2014 19:08

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

Cultural Imperial posted:

Lol I remember when people were saying Revelstoke was going to be the next Whistler.

Seriously, is it that bad now?

'X is never going to be the next Y', no matter the field you're talking about. Purely by stating it, you affirm its falseness.

# ? Apr 15, 2014 19:13

HookShot: Dec 26, 2005

Yeah I recently drove from Whistler to Kimberley via the 99, 1 and 95 and holy poo poo are good chunks of this province really, really loving depressing.

# ? Apr 15, 2014 19:54

namaste friends: Sep 18, 2004; by Smythe

So it's safe to say the housing boom in Salmon Arm is over?

# ? Apr 15, 2014 19:58

Baronjutter: Dec 31, 2007; "Tiny Trains"

Rural living and small towns are inefficient and any good business cuts its failing parts. Why have 10 small offices when you can have 1 big office and save? Gotta run things like a business, it's good for the economy. The resources freed up by no longer having to support failing small towns can be more efficiently used to create new better jobs. All those people could move to Alberta to work the tar sands or Vancouver to work the condo mines.

# ? Apr 15, 2014 19:59

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# ? May 26, 2024 11:46

Rime: Nov 2, 2011; by Games Forum

HookShot posted:

Yeah I recently drove from Whistler to Kimberley via the 99, 1 and 95 and holy poo poo are good chunks of this province really, really loving depressing.

There are so many places in the interior which you could film, claim to be a village in some eastern european post-soviet backwater, and nobody would bat an eye until you told them it was actually Canada. I mean, there's towns that don't even have a working gas station anymore, in 2014.

I think it's safe to predict that BC is going to see a full-scale ghost town cycle (the likes of which is remembered by only a few elderly souls) within the next fifteen years, if not the next decade, and the ramifications of this on the provincial economy are going to be ~~loving horrifying~~ just fascinating to watch unfold. There is a palpable ignorance in people who never leave the GVRD, or who only do so to visit resorts, wherein they envision the rest of BC as still living the "sleepy rural dream of the 1990's". :allears:

Cultural Imperial posted:

Lol I remember when people were saying Revelstoke was going to be the next Whistler.

Seriously, is it that bad now?

I lack a sufficient enough grasp of simile and metaphor to properly describe the desolation visited upon the economic and social fabric of that town since 2007. It may as well be an entirely different town, aside from name and geography, so completely has it imploded. They are concerned they can no longer afford the snow removal budget, due to the tax base shortfall.

The economic, social, and in some ways cultural; disintegration of BC is something I find myself spending way too much time dwelling on than is probably healthy. :emo:

Rime fucked around with this message at 20:40 on Apr 15, 2014

# ? Apr 15, 2014 20:34

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