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.

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

Rime posted:

It's worth noting that the same applies to student loan debt: completely unaffected by bankruptcy and your wages will be garnisheed after too long in arrears.

I wonder what the outcome is going to be if we end up with vast swathes of our population drowning under hundreds of thousands of dollars in debt which they can never get rid of?

No - student loans are a very unique beast - and you're likely thinking of the American rule. Student loan debt can never be discharged there by bankruptcy - it's not quite as ironclad here.

Recourse simply means that the lender can go after your other assets to be made whole if the seizure and sale of the mortgaged property is insufficient to recompense for the mortgage amount. Non-recourse means - drop off the keys at the bank and it's their problem entirely.

# ? Jun 5, 2014 19:09

Adbot: ADBOT LOVES YOU

# ? May 27, 2024 06:43

Rime: Nov 2, 2011; by Games Forum

Ah, yes, my mistake. It can be discharged via bankruptcy after seven years in Canada, but before that it follows the American rules.

# ? Jun 5, 2014 19:13

enbot: Jun 7, 2013

Rhobot Mk. II posted:

Most loans in the US are non-recourse, meaning that the loan is secured solely against the asset securing the property, i.e. the house. If the borrower defaults, the lender is limited to foreclosure on the property to recover their money. Hence, many people didn't declare bankruptcy, but simply walked away from the property and left the bank holding the bag. While they'll probably never get a loan again, they're also not liable for the huge negative equity on the property.

In Canada, all debt is recourse debt, including mortgages. Even if you walk away from your property and the bank forecloses, you're still liable for the negative equity and they can garnish your wages, seize other assets, etc, to recover this money.

Many banks in the US went tits up because people just simply tossed them the keys, and it helped speed the US consumers debt deleveraging and as a consequence, their recovery.

Should the same thing happen here in Canada, there's no escaping the mortgage, even if the property is foreclosed on. This means in a real estate crash, people are going to be buried in debt for a great deal longer, and that means they're money is going to useless debt service rather than purchasing goods in the economy, which lowers aggregate demand and torpedoes a recovery.

Point is if housing goes kablooey like it did in the US this difference is negligible. Even in recourse states in the US banks often didn't do pursue available options simply because they just had too much poo poo to deal with. Hell, people were living rent free for 1-2 years in many areas because of how far backed up the courts were.

Also I'm presuming bankruptcy would still wipe the debt- most of the people involved don't actually have assets that can be seized and it's like trying to get blood from a rock. I'm presuming the laws are at least similar up north- in the states the only other real asset the average person has (if any) is a car or two and they can't touch those (usually).

enbot fucked around with this message at 20:03 on Jun 5, 2014

# ? Jun 5, 2014 20:00

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

Professor Shark posted:

But preferably a change in government policy or something.

hahah

I predict (more of) a return to feudalism first

# ? Jun 5, 2014 21:23

VERTiG0: Jul 11, 2001; go move over bro

Rime posted:

I wonder what the outcome is going to be if we end up with vast swathes of our population drowning under hundreds of thousands of dollars in debt which they can never get rid of?

Jesus gently caress could you imagine? Has that happened in any other country before?

# ? Jun 5, 2014 22:34

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)

VERTiG0 posted:

Jesus gently caress could you imagine? Has that happened in any other country before?

Jubilee.

# ? Jun 5, 2014 22:38

namaste friends: Sep 18, 2004; by Smythe

Patience comrades. When the impending crash takes place, you, my fellow debtless renters, shall rise from the ashes adorned with gold and monster houses.

# ? Jun 5, 2014 23:09

Saltin: Aug 20, 2003; Don't touch

Cultural Imperial posted:

Patience comrades. When the impending crash takes place, you, my fellow debtless renters, shall rise from the basements adorned with gold and monster houses.

You almost got that right.

# ? Jun 6, 2014 01:37

namaste friends: Sep 18, 2004; by Smythe

Hay guys

quote:

The average detached house price on the West Side of Vancouver will reach more than $7 million within ten years, suggests Altus Group, one of Canada�s premier appraisal and valuation firms.

�If [the current] trend continues, in the year 2024 the average price for older [detached housing] stock could be greater than $2 million on the Eastside and $7 million on the Westside of Vancouver. We are not saying this will happen, we are simply applying the math from the past decade and extrapolating forward to the next decade,� said Pedro Tavares, Altus Group�s director of research, valuation and advisory.

http://www.biv.com/article/20140604/BIV0111/140609973/-1/BIV/do-the-math-vancouver-house-prices-will-reach-7-million

o rly

# ? Jun 6, 2014 02:30

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

drat, I just came here to post that.

quote:

we are simply applying the math from the past decade and extrapolating forward to the next decade

In a county less wholly-innumerate, such a statement would render the speaker unqualified for any role ever other than flipping burgers. Sadly, this is Canada, so it passes unchallenged.

# ? Jun 6, 2014 02:37

namaste friends: Sep 18, 2004; by Smythe

Lexicon posted:

drat, I just came here to post that.

In a county less wholly-innumerate, such a statement would render the speaker unqualified for any role ever other than flipping burgers. Sadly, this is Canada, so it passes unchallenged.

literally innumerate

quote:

Pedro Tavares, B.A., AACI, P.App, Director, Research, Valuation & Advisory, Altus Group

http://www.buildexvancouver.com/a_seminars2013.htm

# ? Jun 6, 2014 02:44

etalian: Mar 20, 2006

lmao

we are simply applying the math from the past decade and extrapolating forward to the next decade

# ? Jun 6, 2014 02:46

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

etalian posted:

lmao

we are simply applying the math from the past decade and extrapolating forward to the next decade

this is how forecasting works we even used the word extrapolate :downs:

# ? Jun 6, 2014 02:48

Rime: Nov 2, 2011; by Games Forum

Can this be the new thread subtitle ? It's the best ever. :allears:

# ? Jun 6, 2014 02:57

etalian: Mar 20, 2006

It's the dumbest sort of bubble since there's nothing in Vancouver to justify sky high prices unlike high economic production areas like NYC or the bay area

# ? Jun 6, 2014 02:57

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

uh we have mountains and have you seen how great the housing marke-- wait, poo poo

# ? Jun 6, 2014 03:07

namaste friends: Sep 18, 2004; by Smythe

Rime posted:

Can this be the new thread subtitle ? It's the best ever.

How do you set this?

# ? Jun 6, 2014 03:28

less than three: Aug 9, 2007; Fallen Rib

A mod has to change it. If you PM one and ask nicely you might get it!

# ? Jun 6, 2014 03:30

namaste friends: Sep 18, 2004; by Smythe

less than three posted:

A mod has to change it. If you PM one and ask nicely you might get it!

Sweet thanks!

# ? Jun 6, 2014 03:37

HookShot: Dec 26, 2005

I just asked Xylo so it should be done soon because he is awesome.

# ? Jun 6, 2014 05:17

XyloJW: Jul 23, 2007

Done.

# ? Jun 6, 2014 06:01

HookShot: Dec 26, 2005

See? Awesome. Thanks Xylo!

# ? Jun 6, 2014 06:02

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

Franks Happy Place posted:

Saying Canadian banks are safe from this coming shitstorm is wildly optimistic, bordering on dumb. American banks had Fannie and Freddy, securitized huge swaths of their debt, and yet Washington Mutual and others still ceased to exist.

Not understanding procyclical demand seems to be a key hallmark of a bubble denier. Canadians can vastly increase their personal debt levels to the tune of hundreds of billions of dollars, but our five loving banks somehow won't have business interest in ANY of that debt?

I didn't say they were safe, but the risk is also not as catastrophic as it appears to be on the surface. Most of the worst mortgages are actually held by non-bank lenders, and they'll be the ones to get soaked if poo poo goes south.

Rime posted:

Ah, yes, my mistake. It can be discharged via bankruptcy after seven years in Canada, but before that it follows the American rules.

Close, almost any personal debt can be discharged by bankruptcy whenever you declare it. What disappears after 7 years is the record of he bankruptcy on your credit report. Sadly, a close member of my family went through this due to a business failure that had been supported by a personal guarantee.

In his case the house and mortgage survived because they were owned jointly by his wife so the bank wasn't allowed to foreclose as part of the proceedings.

Cultural Imperial posted:

Hay guys

http://www.biv.com/article/20140604/BIV0111/140609973/-1/BIV/do-the-math-vancouver-house-prices-will-reach-7-million

o rly

I interpret that more as the article putting the sensationalist spin on the math, but it's stupid either way. I can imagine the valuator going "well, yeah if you just extended the trend line you'd get to here, but that's not really how we do things" and the author going "you said it will get to 7million holy poo poo that will sell papers thanks".

# ? Jun 6, 2014 06:16

Precambrian Video Games: Aug 19, 2002

We're not saying that past performance guarantees future results, but if it did

# ? Jun 6, 2014 06:20

ocrumsprug: Sep 23, 2010; by LITERALLY AN ADMIN

etalian posted:

lmao

we are simply applying the math from the past decade and extrapolating forward to the next decade

This has actually been my go to argument with bulls. "You realize that if things continue, in 20 years houses will be 19 million right?"

I didn't guess there would be a type of bull that would hear that and go 'hell yeah'.

# ? Jun 6, 2014 06:26

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.

I don't think they are bulls at all, I think they are simply saying that the math is crazy and leaving people to draw the obvious conclusions on their own.

# ? Jun 6, 2014 06:51

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

Franks Happy Place posted:

I don't think they are bulls at all, I think they are simply saying that the math is crazy and leaving people to draw the obvious conclusions on their own.

This is what I was getting at.

I somehow doubt the appraiser is on his way to the bank to load up on whole blocks of west van real estate on the basis of his extrapolation. If anything, the real point is that this is a bearish comment, meaning values today are sustained by growth expectations that are unrealistic with respect to long term interest rates and population growth.

I still don't think the world is going to end when everyone figures that out :v:

There will be headlines saying that it is, a non-bank mortgage lender or two might even bite it, but it won't actually happen.

# ? Jun 6, 2014 08:01

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

why bother putting it like that then? Toeing the line?

# ? Jun 6, 2014 08:03

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

JawKnee posted:

why bother putting it like that then? Toeing the line?

Putting it the way I put it takes more words and wouldn't get the same headline effect, two big strikes for a lovely journalist.

# ? Jun 6, 2014 08:24

Professor Shark: May 22, 2012

Lexicon posted:

this is how forecasting works we even used the word extrapolate

Works for Bitcoin!

If trends continue, in 50 years houses will cost :supaburn:

$65 million! :supaburn:

# ? Jun 6, 2014 11:37

colonel_korn: May 16, 2003

eXXon posted:

We're not saying that past performance guarantees future results, but if it did

https://www.youtube.com/watch?v=R9ALqhgVK9M

# ? Jun 6, 2014 16:00

namaste friends: Sep 18, 2004; by Smythe

https://businessincanada.com/2014/06/06/canada-labour-market-employment-job-trends-awful/

quote:

Even though Statistics Canada reported thatemployment grew by roughly 26,000 in May, it’s hard to focus on anything but the negatives – and that’s not just because the unemployment rate ticked up to 7 percent.

The details in May’s Labour Force Survey were damning: full-time employment fell by 29,100, but was more than offset by an increase of 54,900 part-time positions.

Of course, these reports are notoriously volatile, and it doesn’t pay to put too much emphasis on any one reading.

That being said, it’s evident that Canada’s labour market isn’t in a good place: the headline, regional, and industry trends all paint the portrait of a country in which job growth is increasingly elusive and of poor quality.

Here’s a handful of facts about the all-bad, no-good, downright depressing state of Canada’s labour market:

Full-time employment is down 0.2 percent over the past year; the adult population and labour force have grown by 1.3 and 0.4 percent, respectively, during that time period.Job growth has disconnected from economic growth: “There now appears to be an almost 100K jobs gap between actual employment levels and what real economic output would suggest,” writes CIBC economist Nick Exarhos.There’s a definite lack of breadth amongst the jobs that are being created: 75 percent of net job growth since May 2013 comes from one sub-sector (heath care and social assistance).We’re losing some of our previous job drivers, and the long-suffering segments are continuing to move lower: employment in finance, insurance, real estate and lending is down nearly 3 percent year-over-year, as are construction jobs; employment in the manufacturing sector is 0.3 percent below levels seen in May 2013.Well, Canada’s labour market isn’t all bad – the trends in Alberta are just peachy. As BMO chief economist Doug Porter observes, 83.3 percent of net job growth across the nation since May 2013 comes from that one, oil-rich province.Excluding Alberta, Canada is down 62,300 full-time positions from May 2013.Two-thirds of the other nine provinces have experienced negative job growth over the past year, according to Porter, a group that includes all five provinces east of Ontario.Employment in British Columbia is below levels seen in June 2012.…and recently, Quebec’s labour market has taken a dramatic turn for the worse. As Ben Rabidoux, president of North Cove Advisors,points out, the six-month moving average for annual employment growth is at a place that rivals the level it reached during the depths of the Great Recession:

Taking a big-picture view, our preferred labour market indicator – which takes a “chicken in every pot” approach to job growth – hit its lowest level since the Great Recession in May, and has lingered in ‘uh-oh’ territory for five of its past six readings:

As you can see, though the monthly increase in the working-age adult population has been trending slightly higher, the 12-month moving average of net monthly job growth has failed to keep pace.

Not to add to the doom and gloom, but there’s more bad news: even if the United States’ economy picks up steam and reaches escape velocity, many economists don’t think that Canadian employment growth will go gangbusters. Canada requires a rebalancing of growth towards exports and business investment after years of consumer-driven growth. Unfortunately, a pick-up in those segments doesn’t bode nearly as well for job growth as rising consumer spending, which boosted employment in the services sector.

After a brisk job-filled recovery from the Great Recession, especially compared to other advanced economies, Canada might be in for an extended stretch of mild employment growth during the global economic resurgence.

# ? Jun 6, 2014 18:23

namaste friends: Sep 18, 2004; by Smythe

http://www.theprovince.com/touch/story.html?id=9904085

quote:

Decades of environmentally-friendly planning are the key factor that has made Vancouver one of the least affordable cities in the world, according to a new report.

The study, by Wendell Cox of The Frontier Centre for Public Policy, points to restrictions on developable land in Metro Vancouver as the driving factor in rising housing costs.

Cox calls for immediate “steps to liberalize the housing market,” including a substantial expansion of Metro’s urban containment boundary and a roll back of the Agricultural Land Reserve, which sets aside farm land in the Fraser Valley.

Cox claims that green policies that have been prominent since the 1970s — urban planning that seeks to reduce traffic, protect farmland and densify Vancouver’s centre — have had only a marginal positive impact on the environment, but have caused major pain for the average citizen.

“Having some of the worst housing affordability and traffic congestion in the world seems inconsistent with Vancouver’s reputation as one of the world’s most livable cities,” the report states. “Certainly, for … people able to afford homes in multiple countries and others of substantial means, Vancouver rightly earns this reputation. However, for the average household, the first principle of livability is affordability.”

Cox cites international studies in arguing that urban containment increases poverty in cities and leads to a reduction in ethnic diversity in some neighbourhoods. The greatest disconnect between local incomes and housing costs is seen mostly in cities with “strong” land containment policies, and these cities also attract more real estate speculators, according to the study.

However, Tsur Somerville, director of the UBC Centre for Urban Economics and Real Estate, said it is “folly” to believe that reforming Metro Vancouver’s land containment policy would significantly impact affordability in Vancouver.

“The major containment factor in Vancouver is God,” Somerville said. “The mountains, the sea and the border is what causes about 70 per cent of the land (surrounding Vancouver) to not be developed.”

Somerville said that ending the ALR protection policy would allow a huge number of single family homes to be built between Surrey and Abbotsford, which could improve affordability in that market segment by about 15 per cent.

“The question is about values,” Somerville said. “Do we think that is worth what is lost (with an increase in urban sprawl.)”

Somerville said in his opinion, it is the “collective unwillingness” to see neighbourhoods change through increased density that is driving up housing prices in Vancouver.

However, Somerville said it is also true that the “greenest city” values promoted in Vancouver come with a cost and tend to make the city more “elitist.”

According to its website, The Frontier Centre for Public Policy is an independent think tank mandated to promote the economies of Alberta, Saskatchewan and Manitoba.

Cox served three terms on the Los Angeles transportation commission and was appointed to the “Amtrak Reform Council” by U.S. Republican party heavyweight Newt Gingrich, according to Cox’s biography.

# ? Jun 6, 2014 18:25

Baronjutter: Dec 31, 2007; "Tiny Trains"

God drat the whole "NOT ENOUGH LAND" is the biggest crock of poo poo. Sprawl is only cheap when subsidized by the government and it quickly bites the whole region in the rear end once those infrastructure replacement costs come down the line 20-50 years later.

There's so much god drat unbuilt or under-built land in Vancouver proper let alone the greater area.

# ? Jun 6, 2014 18:28

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.

Baronjutter posted:

God drat the whole "NOT ENOUGH LAND" is the biggest crock of poo poo. Sprawl is only cheap when subsidized by the government and it quickly bites the whole region in the rear end once those infrastructure replacement costs come down the line 20-50 years later.

There's so much god drat unbuilt or under-built land in Vancouver proper let alone the greater area.

Wait, you mean all those empty parking lots and one-storey buildings along the Main Street corridor aren't highest and best use? :aaa:

# ? Jun 6, 2014 18:31

namaste friends: Sep 18, 2004; by Smythe

Ahem, land use isn't the cause of high prices. See that IMF report I posted in this thread.

# ? Jun 6, 2014 18:34

Baronjutter: Dec 31, 2007; "Tiny Trains"

Basically every time any city has expensive real-estate developers push HARD to get deregulation and more land opened up and jump up and down screaming it's because the statist government is straight-jacketing supply with foolish ARL and "basic fire codes". They also love to tell everyone that building tons of tons of mansions and luxury condos will lower all prices due to a trickle-down effect.

# ? Jun 6, 2014 18:39

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.

There are more bedrooms than people in Metro Vancouver by a long margin.

Baronjutter posted:

Basically every time any city has expensive real-estate developers push HARD to get deregulation and more land opened up and jump up and down screaming it's because the statist government is straight-jacketing supply with foolish ARL and "basic fire codes". They also love to tell everyone that building tons of tons of mansions and luxury condos will lower all prices due to a trickle-down effect.

It's called "filtering", and its the latest neoliberal policy adopted by Vision Vancouver.

# ? Jun 6, 2014 18:40

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

^ Can you expand or link to what you mean by 'filtering'? "neoliberal filtering" gives about as useful Google results as one would expect.

# ? Jun 6, 2014 18:44

Adbot: ADBOT LOVES YOU

# ? May 27, 2024 06:43

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.

Lexicon posted:

^ Can you expand or link to what you mean by 'filtering'? "neoliberal filtering" gives about as useful Google results as one would expect.

http://rabble.ca/blogs/bloggers/mainlander/2013/05/trickle-down-affordability-and-citys-rental-100-program
http://themainlander.com/2012/03/13/task-force-interim-report-neoliberal-strategies-to-vancouvers-housing-crisis/

# ? Jun 6, 2014 18:48

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

«‹›1518 »