- Baronjutter
- Dec 31, 2007
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"Tiny Trains"
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Also only staying a few days in a city is a waste of time and your trip gets eaten up by soft costs and travel time like an idiot buying a house in the military (it the government didn't give them huge handouts). Stay about a week in each city, go to the grocery store and live as if you lived there. Our last place had a panini press so we got a half loaf of nice bread, cheese, meat, cans of tuna, and lived on panini tuna melts and other delicious sandwiches and cooked up a huge pot of soup. We did a full grocery shop when we arrived and the only thing we left behind was a half finished thing of mayo. If you have only a few days in a major city you're going to maybe have time to see some of the most famous tourist attractions but that's it. I'd rather plop my self in one apartment in one city for at least a week and really get to know that place, beyond the tourist attractions. It's also a lot cheaper to travel this way since transport/time between each place adds up, and once you get to know a city you learn how to save money in it. We had 3 weeks and did Kiev, Prague, Haarlem and that seemed like too much moving around for the time we had.
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Oct 13, 2015 16:01
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- Adbot
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ADBOT LOVES YOU
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May 31, 2024 22:57
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- tagesschau
- Sep 1, 2006
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D&D: HASBARA SQUAD
THE SPEECH SUPPRESSOR
Remember: it's "antisemitic" to protest genocide as long as the targets are brown.
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spend 100% of your vacation time in one city
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Oct 13, 2015 16:15
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- Rick Rickshaw
- Feb 21, 2007
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I am not disappointed I lost the PGA Championship. Nope, I am not.
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My girlfriend and I did Airbnb in Banff. We bought peanut butter and just took it back home. We went without mustard though.
Had to throw out a bit of milk and apple juice. Also took some butter home. All-in-all a pretty good experience. Not much waste!
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Oct 13, 2015 16:28
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- PT6A
- Jan 5, 2006
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Public school teachers are callous dictators who won't lift a finger to stop children from peeing in my plane
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The other great thing about a short-stay apartment is that it makes it really easy to travel for 2-3 days to another place you want to see, because you don't have to bring all of your poo poo with you. Did that on a few occasions in Spain last year, it worked out great!
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Oct 13, 2015 16:29
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- HookShot
- Dec 26, 2005
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Nice! We stayed in the same place. Yeah just a few blocks from the Shichauweg station. Basically as far south as you can go in Berlin yet still super convenient to get to the centre in like 15 min by suburban train. Airbnb and other such things like that are great. You can pack a lot less too when you have a washing machine.
Haha that's awesome. That was a great place, it was really well furnished and laid out, and yeah, super convenient, especially with the grocery store right next to the train station too.
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Oct 13, 2015 16:56
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- I would blow Dane Cook
- Dec 26, 2008
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So a major Australian bank (westpac) just raised mortgage rates by 0.20% without a hike from the central bank to prompt it.
http://www.afr.com/business/banking-and-finance/westpac-to-raise-35bn-cash-profit-up-3-per-cent-20151013-gk8f8q#ixzz3oUAigTP3
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Oct 14, 2015 00:38
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- PT6A
- Jan 5, 2006
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Public school teachers are callous dictators who won't lift a finger to stop children from peeing in my plane
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Please link an article when there is more wailing and gnashing of teeth, this barely even gave me a semi.
Seriously, though, how can one bank alone do this? Surely they will see a dropoff in the number of people looking for mortgages, if they're raising rates when everyone else is holding steady, no?
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Oct 14, 2015 01:41
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- MickeyFinn
- May 8, 2007
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Biggie Smalls and Junior Mafia some mark ass bitches
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Please link an article when there is more wailing and gnashing of teeth, this barely even gave me a semi.
Seriously, though, how can one bank alone do this? Surely they will see a dropoff in the number of people looking for mortgages, if they're raising rates when everyone else is holding steady, no?
My guess is that the bank wants fewer of these loans so it can adjust its exposure.
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Oct 14, 2015 02:25
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- HookShot
- Dec 26, 2005
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Please link an article when there is more wailing and gnashing of teeth, this barely even gave me a semi.
Seriously, though, how can one bank alone do this? Surely they will see a dropoff in the number of people looking for mortgages, if they're raising rates when everyone else is holding steady, no?
The other 3 majors will have matched the price rate by tomorrow.
Australian banks are also known to not lower their interest rates when the central bank does, too.
Basically one bank does something lovely, the others all follow. My personal conspiracy theory is that they organize among themselves and take turns being the first one to do it that gets the bad press before the others follow.
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Oct 14, 2015 02:25
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- Kraftwerk
- Aug 13, 2011
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i do not have 10,000 bircoins, please stop asking
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Basically one bank does something lovely, the others all follow. My personal conspiracy theory is that they organize among themselves and take turns being the first one to do it that gets the bad press before the others follow.
I get to blow your mind now.
A number of years ago one of the big Canadian chartered banks (I think it was BMO) put out a sign in a major downtown branch location saying "ATM Fees going up in 1 month". One month passed and the signs were quietly taken down with no ATM fee changes.
Basically they were hoping the other banks would notice this policy and see if they follow suit. They didn't and thus the change was never implemented and the bank simply pretended this never happened.
Your theory isn't that far off the mark. They nudge eachother with changes like this and if the others adopt them the changes are kept.
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Oct 14, 2015 02:35
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- HookShot
- Dec 26, 2005
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I get to blow your mind now.
A number of years ago one of the big Canadian chartered banks (I think it was BMO) put out a sign in a major downtown branch location saying "ATM Fees going up in 1 month". One month passed and the signs were quietly taken down with no ATM fee changes.
Basically they were hoping the other banks would notice this policy and see if they follow suit. They didn't and thus the change was never implemented and the bank simply pretended this never happened.
Your theory isn't that far off the mark. They nudge eachother with changes like this and if the others adopt them the changes are kept.
Hahahahahaahaha that BMO thing is hilarious.
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Oct 14, 2015 02:55
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- Lexicon
- Jul 29, 2003
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I had a beer with Stephen Harper once and now I like him.
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It's fairly obvious that our various oligarchical industries must explicitly collude - but do they really need to resort to public signalling in that manner? Of course, they're smart enough not to leave any sort of digital breadcrumbs, but I'd imagined they'd be more sophisticated about it than a sign in a branch.
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Oct 14, 2015 04:36
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- I would blow Dane Cook
- Dec 26, 2008
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Harro me asian me no understand
quote:
New CBD skyscraper rules 'stunned' Asian investors
Asian investors in Melbourne's central business district have been "stunned" by new rules restricting skyscraper density in the city centre, a planning consultancy that works extensively with overseas firms building apartment towers has warned.
Urbis director Sarah Horsfield said the new rules risked putting "a handbrake on investment".
Ms Horsfield told a Property Council breakfast that the introduction of the one-year interim rules last month had hurt the confidence "of a lot of our Asian investor clients who have been quite frankly stunned that the rules of the game can be so fundamentally changed overnight without any prior warning".
But the government insists that billions of investment dollars are expected to flow into the CBD.
The measures impose mandatory height limits for an initial one-year period and require more space between buildings and shadow and wind controls.
The measures dictate that highrise buildings in the CBD can only go above set, lower height limits if they make trade-offs with contributions to public open space or other community facilities.
City real estate agents CBRE, which has been successful in marketing scores of CBD properties to Asian investors, said there had "been a major shift in terms of confidence from developers coming to Melbourne from Malaysia, Singapore and China since the election of the Andrews government" because former planning minister Matthew Guy signed off on so many high-rise apartment projects.
"Victoria needs to be very aware of how many of these groups are now looking to deploy capital to both New South Wales and Queensland. It's real and they are a major threat to Victoria's competitiveness and future prosperity," said CBRE's Mark Wizel.
However, Planning Minister Minister Richard Wynne said this year he had approved more than $3.7 billion worth of construction around the inner city, including 6000 apartments and 1550 hotel rooms.
He said it was his responsibility to ensure investment improved the city rather than creating "dark, windy streets".
"What sort of a city does not have a plan for how it will grow?" he said. "Sydney, New York, Tokyo, Hong Kong are among the major cities which have a plan for growth with far stricter conditions than what I have introduced."
The interim controls apply to the Hoddle Grid, which covers the CBD and Southbank.
Mr Wynne said he could also use his discretion to approve applications that "give something back to the community", such as open space or a child care centre.
The government will conduct consultation on the measures early next year before they are fully implemented.
Property Council Victorian deputy executive director Asher Judah said the property industry generally agreed that rules governing development in the CBD needed to be "refreshed". However, he said the latest measures had eroded the confidence of investors.
"The interim measures have undermined investor confidence and have raised question marks over the values of some properties in the city, particularly along Flinders Street," he said.
Mr Judah said Asian investors may have been rattled by the combination of the cancellation of the East West Link contract, a new foreign investors' tax and the latest interim measures.
He said those particular conditions did not exist in other cities, including Sydney and Brisbane.
http://www.theage.com.au/victoria/new-cbd-skyscaper-rules-stunned-asian-investors-20151013-gk84oz.html
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Oct 14, 2015 07:19
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- mastershakeman
- Oct 28, 2008
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by vyelkin
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So its a controlled stupid instead of the hands-off stupid we have up here.
Is there still a risk of another bubble developing even with the current set up?
There definitely is, but it won't be the same type of as all encompassing. There's also a bubble that's going to pop about 25-30 years from now, because a large number of the homeowners who got federal assistance for modifications have a balloon payment at the end of their new loan, which none of them will be able to pay and most don't realize is required.
But in the short term, if interest rates ever go back up no one's going to be able to sell their property for what they bought it for, let alone at a profit. It shouldn't have the huge domino effect though and will probably just hurt middle class whites, not everyone else.
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Oct 14, 2015 13:48
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- MiddleOne
- Feb 17, 2011
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There definitely is, but it won't be the same type of as all encompassing. There's also a bubble that's going to pop about 25-30 years from now, because a large number of the homeowners who got federal assistance for modifications have a balloon payment at the end of their new loan, which none of them will be able to pay and most don't realize is required.
But in the short term, if interest rates ever go back up no one's going to be able to sell their property for what they bought it for, let alone at a profit. It shouldn't have the huge domino effect though and will probably just hurt middle class whites, not everyone else.
There's no such thing as hitting the middle class without there being domino effects. It will always manifest somewhere whether it be by a financial crash or just a slump in internal demand.
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Oct 14, 2015 13:54
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- PC LOAD LETTER
- May 23, 2005
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WTF?!
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The US market is a bit different- areas considered upscale prior to the last crash are back up to or above the 06-07 prices, and hot new areas are also way up. However, less desirable areas haven't recovered whatsoever. All the money has fled to "safe" places .
Prices are actually higher than they were during the peak of the bubble around 2007 on some of these homes. And I've seen these homes up close, they're nothing to get worked about. Many were built by CBH (in Idaho) which are notorious for cutting corners and those homes they make age rapidly due to the shoddy quality of construction. Its insane. There hasn't been much of an increase in jobs and certainly not wages since then either. That is also true on a national scale as well. Which means there should've been little to no price appreciation at all. Its safe to say we're in another boom, not sure if you could call it a bubble this time though. What isn't clear to me is how nasty it'll be when it pops. Home sales have been mediocre for a while, most have become renters recently, and home ownership rates have dropped back to where they were decades ago.
Supposedly its REIT's and investors doing the buying for the most part. I'm sure a fair number of families will get burnt all over again but its looking like it won't be as widespread as it was back in 2007-8. Inventories have been peaking lately in some of the more boom-ish areas and price increases have been slowing or plateauing in those areas too so hopefully we'll get another bust soon before it gets any bigger. Of course US presidential elections are coming soon so I wouldn't be shocked if somehow an attempt was made to goose the market a little while longer if the cracks start to become obvious until after the election is done and over with.
Origination is still poo poo despite the promises of stringency. You only need a job, rather just a pulse like before , to qualify for the max nonjumbo loan (417k, which is where all prices are trending to). PC LOAD LETTER fucked around with this message at 15:31 on Oct 14, 2015
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Oct 14, 2015 15:28
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- mastershakeman
- Oct 28, 2008
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by vyelkin
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Yeah I agree with everything you're saying, I'm just not sure what can pop this without unemployment going back up or interest rates going up. Both seem to be flat and until some new shock happens nationally not much will change. I'm sure local areas will still bust though.
I do foreclosure law in Illinois and at the peak of filings there were 55k cases a year in the biggest county. Last year was under 25k and this year is even slower. I think Canada and Australia are going to blow up at least a few years before the USA.
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Oct 14, 2015 16:08
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- PC LOAD LETTER
- May 23, 2005
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WTF?!
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If the US boom really is driven significantly by "investors" then them exiting the market, which is supposedly happening now and the reason why sales are dropping and inventories rising, could be enough to pop it.
And yes I'd agree its definitely possible Canada or Australia could blow up first. We're only just starting to hit the price plateau + inventory increase that you typically see at the top of a boom/bubble here in the US. Housing is very slow to crash and we don't know yet what, if any, price propping methods would be used and how effective they'd be at slowing things down.
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Oct 14, 2015 16:31
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- I would blow Dane Cook
- Dec 26, 2008
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Remember what I said about buying unbuilt apartments and pre-ordering video games. Well this is like the Duke Nukem Forever of apartments:
quote:
Sydney off-the-plan buyer discovers finished apartment is a bedroom short
When excited first home buyer Jae Jun Kim went to inspect the one-bedroom apartment he’d bought off the plan in Sydney’s CBD, he discovered something vital was missing: the bedroom.
Where the wall to the bedroom and the much-lauded feature decorative glass sliding screen door should have been was … nothing.
Instead, the slick one-bedroom apartment in the new 15-storey building The Castlereagh that Kim had paid $560,000 for in October 2012 was actually a studio. He was distraught.
When excited first home buyer Jae Jun Kim went to inspect the one-bedroom apartment he’d bought off the plan in Sydney’s CBD, he discovered something vital was missing: the bedroom.
Where the wall to the bedroom and the much-lauded feature decorative glass sliding screen door should have been was … nothing.
Instead, the slick one-bedroom apartment in the new 15-storey building The Castlereagh that Kim had paid $560,000 for in October 2012 was actually a studio. He was distraught.
“I went to the inspection and it was an absolute shock,” says Kim, 27, a senior design consultant with Deloitte Australia. “I couldn’t believe my eyes. It was nothing like the vision I had been sold.
“My first question, of course, was, ‘What happened to the bedroom?'”
The answer from developer Lenland Property Development wasn’t at all helpful. Their lawyers wrote to Kim to say they’d had to remove the bedroom wall and sliding doors that created the room. They noted that was a “substantial and detrimental” change to the property but passed the blame to Sydney City Council.
Planning officials, they said, had insisted they remove the wall and sliding doors separating the bedroom “to comply with solar access requirement (sic).”
But according to Building Code of Australia design rules, the council had no choice; the unit in the block, on the corner of Bathurst Street and Castlereagh Street, should never ever have been classified, marketed and sold, as a one-bedroom apartment.
Firstly, the bedroom was set against a blank, windowless wall, offering no natural ventilation. A glass sliding door to the rest of the unit wasn’t an acceptable substitute.
And secondly, the apartment was too small, at 42.3 square metres internally. At the time the development application was assessed, a council spokesperson said it was required to comply with the NSW Residential Flat Design Code which required one-bedroom apartments to have a minimum internal area of 50 square metres, not including balcony areas.
Lenland’s lawyers then gave Kim seven days to either accept the studio – with the sweetener of a free timber floor in the area where the bedroom should have been instead of the carpet – or they would rescind the contract.
Lenland managing director Benny Deng messaged Domain to say he couldn’t return calls and passed us on to project manager Richard Abbott of RJ Projects.
When excited first home buyer Jae Jun Kim went to inspect the one-bedroom apartment he’d bought off the plan in Sydney’s CBD, he discovered something vital was missing: the bedroom.
Where the wall to the bedroom and the much-lauded feature decorative glass sliding screen door should have been was … nothing.
Instead, the slick one-bedroom apartment in the new 15-storey building The Castlereagh that Kim had paid $560,000 for in October 2012 was actually a studio. He was distraught.
First home buyer Jae Jun Kim went to inspect the one-bedroom apartment he'd bought off the plan, only to find it was missing the bedroom.First home buyer Jae Jun Kim went to inspect the one-bedroom apartment he’d bought off the plan, only to find it was missing the bedroom. Photo: Brtendan Esposito
“I went to the inspection and it was an absolute shock,” says Kim, 27, a senior design consultant with Deloitte Australia. “I couldn’t believe my eyes. It was nothing like the vision I had been sold.
“My first question, of course, was, ‘What happened to the bedroom?'”
The answer from developer Lenland Property Development wasn’t at all helpful. Their lawyers wrote to Kim to say they’d had to remove the bedroom wall and sliding doors that created the room. They noted that was a “substantial and detrimental” change to the property but passed the blame to Sydney City Council.
Artist's impression of a one-bedroom apartment in The Castlereagh.Artist’s impression of a one-bedroom apartment in The Castlereagh.
Planning officials, they said, had insisted they remove the wall and sliding doors separating the bedroom “to comply with solar access requirement (sic).”
But according to Building Code of Australia design rules, the council had no choice; the unit in the block, on the corner of Bathurst Street and Castlereagh Street, should never ever have been classified, marketed and sold, as a one-bedroom apartment.
Firstly, the bedroom was set against a blank, windowless wall, offering no natural ventilation. A glass sliding door to the rest of the unit wasn’t an acceptable substitute.
Artist's impression of a one-bedroom apartment in The Castlereagh.Artist’s impression of a one-bedroom apartment in The Castlereagh. Photo: Supplied
And secondly, the apartment was too small, at 42.3 square metres internally. At the time the development application was assessed, a council spokesperson said it was required to comply with the NSW Residential Flat Design Code which required one-bedroom apartments to have a minimum internal area of 50 square metres, not including balcony areas.
Lenland’s lawyers then gave Kim seven days to either accept the studio – with the sweetener of a free timber floor in the area where the bedroom should have been instead of the carpet – or they would rescind the contract.
Lenland managing director Benny Deng messaged Domain to say he couldn’t return calls and passed us on to project manager Richard Abbott of RJ Projects.
He said, “There was a discrepancy between the architectural drawings that we submitted to council and the detail in the sales documents for that particular unit. I’m not sure of the detail but we were required to remove the wall. It was an oversight.”
He said the buyer had been offered an opportunity to rescind the contract, so he wouldn’t have to settle on the apartment, and there had been an offer to change the floor covering in the area that would have been the bedroom.
“There may be other things we can offer, compensation, depending on the individual circumstances.”
The website for The Castlereagh also went offline on Wednesday after Fairfax Media placed calls, and images of the tower appear to have been taken off the website of its builders Hamilton Marino.
In the meantime, Kim remains devastated by his discovery. “I was very heavily dependent on buying this one-bedroom apartment,” says Kim, who’s now consulted a lawyer about what he can do. “I’d been planning to live there and I’d been waiting for three years for this to be finished as it went over time too. Now this is so distressing.
“How can developers get away with this kind of stuff when people buy off the plan? They sold it as a one-bedroom apartment and how come it’s only now that they’re telling me it’s turned into a studio? What chance does the ordinary buyer stand when developers act like this, and the authorities let them?
“If I’d wanted a studio, I would have bought one – and for a lot less money! Now prices have gone up a lot in the last three years while I’ve been waiting.”
In addition, from Kim’s inspection, he says the actual finishes bear little relation to the “rich and elegant materials” that were advertised. “As a designer, I’d been drawn to the design of the apartments, but that’s extremely disappointing too,” he says.
http://www.domain.com.au/news/sydney-offtheplan-buyer-discovers-finished-apartment-is-a-bedroom-short-20151014-gk902m/
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Oct 15, 2015 12:20
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- triplexpac
- Mar 24, 2007
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Suck it
Two tears in a bucket
And then another thing
I'm not the one they'll try their luck with
Hit hard like brass knuckles
See your face through the turnbuckle dude
I got no love for you
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http://www.theglobeandmail.com/repo...rticle26766966/
Nationally, September also proved to be an unusually strong month for new home construction.
Housing starts surged unexpectedly by 7.7 per cent, hitting an eight-year high and surprising many economists who had called for a slowdown. It was the second month of strong growth after starts surged 11 per cent in August.
...
But even with little in the way of government or central bank policy expected to cool home prices, the market just may slow itself.
“The deeper you go into all-time record-highs on every housing and consumer spending and household finance metric, the less likely you are to get continued growth,” Mr. Holt said.
So people thought things were going to slow down with no evidence, and the market actually surged. Now again, people are saying things will slow down with no evidence?
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Oct 15, 2015 14:22
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- PC LOAD LETTER
- May 23, 2005
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WTF?!
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Price vs income and stupid lending practices are evidence though. Bubbles and booms just tend to go on for longer than anyone sensible can believe.
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Oct 15, 2015 19:40
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- Rime
- Nov 2, 2011
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by Games Forum
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Can’t afford Vancouver or Toronto? Well, you can’t afford the burbs, either
quote:The burbs
The Toronto and Vancouver suburbs may have a lot of things going for them, but not when you’re shopping for a home.
When you dig into the latest Royal LePage housing report, you find that costs in those areas are surging, eclipsing those of the city core in some cases.
“As homes in legacy central Toronto neighbourhoods move increasingly out of reach, we are observing that the more affordable areas in Southern Ontario, including the GTA suburbs, are experiencing substantial price appreciation and heightened sales activity levels,” LePage chief executive officer Phil Soper said in releasing the third-quarter report this week.
The areas around Vancouver, a city already hit by what some observers say is an affordability crisis, show the same phenomenon.
“As with Toronto, house price increases in some surrounding areas outpaced those in the city core,” Mr. Soper said.
“A notable difference is that these prices are now in excess of $1-million.”
Several groups report on home sales and prices, and they can differ, although the trend is the same: Toronto and Vancouver are awfully pricey and becoming pricier.
The LePage survey found that home prices in the Toronto area climbed 11.3 per cent in the third quarter from a year earlier, to $612,261. In the city proper, the cost was almost $640,000.
But consider the median price of a two-storey Toronto home, up 17.1 per cent to $961,656. The price of a similar home in nearby Richmond Hill rose 18.6 per cent to $963,561 and in Vaughan by 18 per cent to $842,173.
Vancouver, of course, is sharply high, up 17.3 per cent at more than $1.9-million. The corresponding prices in Richmond and Burnaby surged 23.5 and 20.9 per cent, respectively, to about $1.2-million.
And if you’re interested, a two-storey in North Vancouver is $1.3-million, while those in West Vancouver are going for about $2.8-million.
Affordability in the Toronto and Vancouver areas, Mr. Soper said, is a challenge.
Across Canada, home prices rose 0.6 per cent in September from August, and 5.6 per cent from a year earlier, according to the Teranet-National Bank home price index released today.
Prices climbed 10.4 per cent in Vancouver and 8.6 per cent in Vancouver, the index showed.
And note this: “The Vancouver index, at 201.24 in September, is the first to top 200, meaning that prices in that market are slightly more than twice as high as in June 2005.”
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Oct 16, 2015 00:08
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- Gorau
- Apr 28, 2008
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Watch the government bring in 75 year mortgages to keep homes "affordable". Next stop after that is 100 year mortgages that are inherited!.
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Oct 16, 2015 03:15
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- namaste friends
- Sep 18, 2004
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by Smythe
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Holy gently caress have you never heard of Robert Schiller
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Oct 16, 2015 03:29
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- I would blow Dane Cook
- Dec 26, 2008
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There were 100 year mortgages in Japan during their bubble.
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Oct 16, 2015 03:50
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- PC LOAD LETTER
- May 23, 2005
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WTF?!
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Yea they introduced 40 and 50 yr mortgages in the US during the bubble around 2005. Turns out extending the mortgage term out past 30 yr doesn't make a big difference in the monthly payment so they didn't get very popular.
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Oct 16, 2015 06:57
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- OhYeah
- Jan 20, 2007
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1. Currently the most prevalent form of decision-making in the western world
2. While you are correct in saying that the society owns
3. You have not for a second demonstrated here why
4. I love the way that you equate "state" with "bureaucracy". Is that how you really feel about the state
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There were 100 year mortgages in Japan during their bubble.
Somewhat related: http://www.wsj.com/articles/sweden-mulls-encouraging-mortgage-repayment-1404916596
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Oct 16, 2015 12:42
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- mastershakeman
- Oct 28, 2008
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by vyelkin
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Can you paste the text for those of us without a wsj subscription?
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Oct 16, 2015 16:57
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- namaste friends
- Sep 18, 2004
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by Smythe
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http://www.theglobeandmail.com/glob...?service=mobile
quote:
It’s time to stop coddling Canada’s housing sector
Anything for the housing sector.
That’s our country’s topline economic policy, federally and provincially. Our politicians take orders from the housing industry and long-time home owners. Whatever sells more houses and keeps prices firm is good.
It’s such a flawed strategy. In coddling the housing sector, we’ve pushed prices higher and created a market that’s increasingly inhospitable for first-time buyers. The big winners are the broad swath of the economy that profits from home sales, and the long-time owners who have doubled and tripled their money.
What’s good for housing is supposed to be good for the country. This explains why the Conservatives announced a goal in the federal election campaign of creating 700,000 new homeowners by 2020. They’d help move things along with an upgrade of the federal Home Buyers' Program, which allows people to withdraw money tax-free from a registered retirement savings plan to use in house down payment. First-time home buyers would be able to take $35,000 out of their RRSPs, up from the current $25,000.
The HBP was introduced in 1992 – a Globe and Mail report from the day said the Canadian Real Estate Association and the Canadian Home Builders’ Association were its chief promoters. The HBP is a present from government to the housing industry to support demand for homes and keep builders and real estate agents busy. It’s also an avenue for buyers to inadvisably self-subsidize their home purchase. Can’t swing a down payment? Just drain some cash from your retirement account.
Here’s a random sampling of other measures taken over the years to support housing:
The First-Time Home Buyers’ Tax Credit: Designed to offset closing costs when you buy a home.Ontario’s Land Transfer Tax Refund: The province may refund up to $2,000 of land transfer tax paid on the purchase of a first home.GST/HST rebates: People who move into a new or thoroughly renovated home may be eligible for a rebate of sales tax paid on the purchase.Lower minimum down payments: The minimum down payment was cut to 5 per cent from 10 per cent back in 1992.Lower down payments, continued: The minimum down payment required to be excused from paying mortgage default insurance premium was dropped to 20 per cent from 25 per cent several years ago.
We also saw the maximum amortization period for mortgages increased to as long as 35 and even 40 years in the last decade, and the introduction of zero-per-cent down payments. These options were later eliminated, but not before contributing in a big way to rising house prices.
There are some subtle ways housing is coddled, starting with low interest rates. By no means is it correct to say the Bank of Canada is keeping rates down to support housing. But raising rates will certainly upset this economically dominant sector. That has to figure into the bank’s thinking.
Another factor is the passivity of the federal and provincial governments in coming to grips with foreign buyers who are helping to elevate prices in cities like Vancouver and Toronto. The Conservatives said they’d study the matter if re-elected. Up until now, we’ve seen politicians acting as if they’re afraid to do anything that would upset baby boomers living in houses worth many times what they paid.
Yet another way we do backflips for housing: With price increases leaving income growth way behind in many places, parents are using their own savings to help their kids build down payments.
All the support for housing can be rationalized as helping people achieve the dream of home ownership in a market where prices have moved higher as a result of cheap mortgages, immigration, urban land scarcity and foreign money. What gets overlooked is how helping people buy houses also contributes to rising prices.
What we’re in fact doing is overstimulating demand. If we really want to open the market up, we’d remove some of the supports for housing and let prices settle. Existing home owners would give back just a little of their gains, while new buyers would benefit from lower prices.
Tough love is what housing needs, not more measures that drive prices higher. Bury the HBP, boost interest rates a bit and let’s have a debate on whether we should adjust the flow of foreign money into housing. Let housing sink or swim on its own merits, not misguided notions that what’s good for this sector is good for the nation.
Follow Rob Carrick on Twitter: @rcarrick
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Oct 16, 2015 18:19
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- mastershakeman
- Oct 28, 2008
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by vyelkin
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Holy cow that's amazing. No wonder prices are so high in Stockholm. Do swedes not have a tradition of passing down property to the next generation?
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Oct 16, 2015 19:26
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- Pimpmust
- Oct 1, 2008
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I'd say the 30% government rebate on interest payments have had a larger influence on prices (along with negative <2% interest rates for a while now). There's some voices popping up now in the mainstream about maybe removing or lowering the rebate but nothing will happen until 1-2 years from now the way things are sounding.
The politicians are quite happy with people maybe paying down to 50-70% mortgage level.
Also rebates on renovating the house (i.e government paying the craftsmen so they can increase their prices too).
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Oct 16, 2015 20:44
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- Freezer
- Apr 20, 2001
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The Earth is the cradle of the mind, but one cannot stay in the cradle forever.
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Holy cow that's amazing. No wonder prices are so high in Stockholm. Do swedes not have a tradition of passing down property to the next generation?
Just read the article and had the same reaction. This is pretty much renting from the bank with a contract to buy at a fixed price if you so wish, without the nasty landlord nuisances. Also, the banks eat all the inflation risk (granted, not much of that in Sweden). The world of 0%ish interest rates is pretty weird.
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Oct 16, 2015 22:20
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- Lexicon
- Jul 29, 2003
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I had a beer with Stephen Harper once and now I like him.
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Canada's housing sector needs the tough love of total nationalization.
How would that work, pray tell?
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Oct 16, 2015 22:47
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- Adbot
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ADBOT LOVES YOU
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May 31, 2024 22:57
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- Freezer
- Apr 20, 2001
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The Earth is the cradle of the mind, but one cannot stay in the cradle forever.
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Imagine a communism dial that goes from 0 to 10, turn that dial all the way to 10.
Kind of like getting a 0% interest full loan for a house that you never pay back, yet get to live in it? That sneaky Marx, he won after all!
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Oct 16, 2015 23:28
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Oct 13, 2015 16:01
