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.

RealityWarCriminal: Aug 10, 2016

It applies to all of BC, not just Vancouver. Expect to see a bunch of $749,000 houses being built in Prince George and Rupert.

# ? Dec 15, 2016 22:05

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# ? Jun 1, 2024 08:39

Lain Iwakura: Aug 5, 2004; The body exists only to verify one's own existence.; Taco Defender

The Butcher posted:

Hope you are all cool with the upcoming 1000 year rule of the BC Liberal Party.

Long enough to renew the BC Rail lease deal. :unsmith:

# ? Dec 15, 2016 22:15

I would blow Dane Cook: Dec 26, 2008

How long till this gets added onto house prices?

# ? Dec 15, 2016 22:38

Baronjutter: Dec 31, 2007; "Tiny Trains"

OSI bean dip posted:

Long enough to renew the BC Rail lease deal.

Did someone say BC Rail?!
Decided to get rid of the red-text finally. Had no loving clue what to have instead and that was the last post I read. Thanks.

# ? Dec 15, 2016 22:59

Square Peg: Nov 11, 2008

Man, really looking forward to in 5 years when BC first-timers renew their mortgages at hugely higher rates AND have to start paying off their down payment loan and basically all go bankrupt en masse. Kick that can, Liberals! Kick that can.

Square Peg fucked around with this message at 23:02 on Dec 15, 2016

# ? Dec 15, 2016 23:00

Powershift: Nov 23, 2009

Square Peg posted:

Man, really looking forward to in 5 years when BC first-timers renew their mortgages at hugely higher rates AND have to start paying off their down payment loan and basically all go bankrupt en masse. Kick that can, Liberals! Kick that can.

That's what bail-outs are for.

# ? Dec 15, 2016 23:17

leftist heap: Feb 28, 2013; Fun Shoe

lmao

# ? Dec 15, 2016 23:22

the talent deficit: Dec 20, 2003; self-deprecation is a very british trait, and problems can arise when the british attempt to do so with a foreign culture

Square Peg posted:

Man, really looking forward to in 5 years when BC first-timers renew their mortgages at hugely higher rates AND have to start paying off their down payment loan and basically all go bankrupt en masse. Kick that can, Liberals! Kick that can.

the 'deduct your downpayment from your taxes' and 'defer your property taxes until death' programs will have been introduced by then ensuring today's buyers will have enough positive equity to refinance

# ? Dec 15, 2016 23:26

Baronjutter: Dec 31, 2007; "Tiny Trains"

I'm so glad the liberals have time to quickly roll out a program like this but don't have time to look into the loving rental loop hole that's stripping people of nearly all tenants rights.

# ? Dec 15, 2016 23:28

McGavin: Sep 18, 2012

I would blow Dane Cook posted:

How long till this gets added onto house prices?

LOL. As if you can find a house under 750k. It's more like all 1br bachelor condos start at 750k now.

# ? Dec 15, 2016 23:42

Subjunctive: Sep 12, 2006; ✨sparkle and shine✨

Baronjutter posted:

don't have time to look into the loving rental loop hole that's stripping people of nearly all tenants rights.

Oh sweetie, the limit isn't their time.

# ? Dec 16, 2016 00:28

Kreez: Oct 18, 2003

So the loan is payment and interest free for the first 5 years, but after 5 years market rate interest applies. The press conference made it sound that there was never any interest charged.

With market rates being 2.5-2.7 right now for a 5 year fixed loan, it's essentially just an up to $5000 handout (in the form of savings on interest you'd otherwise be paying). Obviously the government isn't borrowing cash at 2.5%, so it costs them significantly less than $5000.

Kreez fucked around with this message at 00:33 on Dec 16, 2016

# ? Dec 16, 2016 00:29

Subjunctive: Sep 12, 2006; ✨sparkle and shine✨

In before extension of the interest-free period to support the middle class.

# ? Dec 16, 2016 00:33

Kreez: Oct 18, 2003

I wonder why lenders would even accept this loan as a down payment? You can't borrow money from a line of credit to count as a down payment, so why would this, which is just borrowing money from the government at subsidized rates, be any different?

The down payment rules are federal I believe?

# ? Dec 16, 2016 00:39

Subjunctive: Sep 12, 2006; ✨sparkle and shine✨

The down payment rules are CMHC policy for mortgage insurance. The RRSP thing is basically a loan too (you have to repay it). CMHC can make whatever rules they want.

Or banks could do loans that aren't CMHC insured, haha.

# ? Dec 16, 2016 00:42

Kreez: Oct 18, 2003

https://www.bchousing.org/news?newsId=1479148447000

It looks like you're only eligible for the loan in the first place if you're getting a <20% down insured mortgage.

quote:

Obtain a high-ratio insured first mortgage on the property for at least 80% of the purchase price.

# ? Dec 16, 2016 01:04

Lain Iwakura: Aug 5, 2004; The body exists only to verify one's own existence.; Taco Defender

So basically I am being punished for saving 20% like a sane person, because I'd happily take an extra 5% with no interest for five years on top.

# ? Dec 16, 2016 01:16

flashman: Dec 16, 2003

You can still get the loan to bring you to 19.9 percent and use your cash to lump sum in what you had saved over the first five years of your mortgage.

# ? Dec 16, 2016 01:18

the talent deficit: Dec 20, 2003; self-deprecation is a very british trait, and problems can arise when the british attempt to do so with a foreign culture

it's not interest free for the life of the loan? bullshit

i thought this was free money

# ? Dec 16, 2016 01:20

Rime: Nov 2, 2011; by Games Forum

drat, this is monumentally dumber than what I predicted. :staredog:

# ? Dec 16, 2016 01:31

Kreez: Oct 18, 2003

flashman posted:

You can still get the loan to bring you to 19.9 percent and use your cash to lump sum in what you had saved over the first five years of your mortgage.

Does the insurance premium go away as soon as the mortgage value ticks below 80% of the purchase price?

Otherwise the premium would surely outweigh the $1000 you'd save each year on interest?

# ? Dec 16, 2016 01:33

flashman: Dec 16, 2003

Kreez posted:

Does the insurance premium go away as soon as the mortgage value ticks below 80% of the purchase price?

Otherwise the premium would surely outweigh the $1000 you'd save each year on interest?

Your chmc premiums are calculated with the mortgage interest at the beginning of the loan so you would still pay.

# ? Dec 16, 2016 01:41

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

It's increasingly clear that those of us who haven't bought into the property mania are the real idiots.

# ? Dec 16, 2016 03:31

The Butcher: Apr 20, 2005; Well, at least we tried.; Nap Ghost

Lexicon posted:

It's increasingly clear that those of us who haven't bought into the property mania are the real idiots.

TBH I'm going to have to run the numbers again taking this 5 year interest free loan into account.

If the provincial and federal governments are actually this hell bent on just flooring it until we drive off the cliff in a few years... Might be worth just saying gently caress it.

Not as investment, just as stability.

The Butcher fucked around with this message at 03:39 on Dec 16, 2016

# ? Dec 16, 2016 03:36

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

Lexicon posted:

It's increasingly clear that those of us who haven't bought into the property mania are the real idiots.

The sad thing is this is probably true. All levels of government have a vested interest in doing everything in their power to keep this house of cards from toppling. It's getting close to the point where the housing bubble actually bursting, rather than the few holes we've seen poked in it so far, will quite possibly cripple our economy for decades.

# ? Dec 16, 2016 04:19

Rime: Nov 2, 2011; by Games Forum

At this point the vast majority of the population is so loving up to their dickshitting eyeball titties in debt that a jubilee is all but foregone down the road anyways. Might as well say gently caress it, put the dial at 11, and ride that technicolor HELOC unicorn into a distant nuclear-tinged sunset.

# ? Dec 16, 2016 04:22

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

The worst part is I hightly doubt any politician thinks this housing nonsense will last. What we're seeing is politicians maintaining the status quo because as long as the can is kicked far enough down the road that they aren't hit when the grenade inside goes off, they don't care.

# ? Dec 16, 2016 04:36

namaste friends: Sep 18, 2004; by Smythe

Rime posted:

At this point the vast majority of the population is so loving up to their dickshitting eyeball titties in debt that a jubilee is all but foregone down the road anyways. Might as well say gently caress it, put the dial at 11, and ride that technicolor HELOC unicorn into a distant nuclear-tinged sunset.

you first hermanos :chord:

# ? Dec 16, 2016 04:49

namaste friends: Sep 18, 2004; by Smythe

http://www.cbc.ca/news/business/bank-of-canada-financial-system-review-poloz-housing-1.3897875

quote:

Nearly a third of recent Canadian homebuyers with so-called high-ratio mortgages wouldn't qualify for their loans under new rules recently implemented by the federal government.

That was one of the findings of a wide-ranging report from the Bank of Canada on Thursday looking at the biggest risks facing the financial system.

Known as the Financial System Review, the twice-a-year report from the central bank singled out a familiar theme that poses a risk to the economy: high debt levels related to inflated house prices.

In the past year, Ottawa has moved repeatedly to address high housing debt. As part of new mortgage rules, for instance, the government now requires that borrowers have their finances stress tested to gauge their ability to pay back mortgages in the event of a rise in borrowing rates. The new rules also stipulate that the total cost of a mortgage payment plus property tax and utilities must not take up more than 39 per cent of a borrower's gross income.

Despite those moves, the bank says it has noticed an increase in the number of homebuyers who are borrowing more money than they can pay back, based on their income. A borrower would be considered a "high-ratio" mortgagee if he or she has less than 20 per cent in equity, and considered especially vulnerable if the total value of a loan is at least 450 per cent of annual income.

The bank calculates that almost half of new high-ratio borrowers in Toronto are above that threshold, and 39 per cent are in Vancouver. In Toronto's case, such monster mortgages are spreading to nearby cities like Oshawa and Hamilton too.

"In these cities," the bank said, "the proportion of high-ratio mortgages with ... ratios exceeding 450 per cent has more than doubled over the past three years, from around 10 per cent to roughly 25 per cent."

Across the country, the bank says, nearly a third of people who took on high-ratio mortgagees in the past year wouldn't qualify for their loans under the new rules.

"All else being equal, about 31 per cent of high-ratio mortgages issued nationally during that period would not have qualified."

The report comes the same day as a report from the Canadian Real Estate Association shows that the average house price has risen another seven per cent in the past year, up to $489,591 in November.

The central bank noted that means house prices are now "just under six times average household income, their highest recorded level."

The good news on the housing front, however, is that the central bank thinks the new rules will eventually achieve the goal of bringing down debt levels.

"The policy measures introduced by the federal government in the autumn will, over time, have a constructive effect on the number of highly indebted households," the bank said. It also warned that "self-reinforcing price expectations may also be supporting price increases" in the major housing markets of Toronto and Vancouver.

I don't know how much more clear how loving stupid christy clark and rich coleman are

# ? Dec 16, 2016 05:12

quaint bucket: Nov 29, 2007

Pop-o-Matic Trouble posted:

It applies to all of BC, not just Vancouver. Expect to see a bunch of $749,000 houses being built in Prince George and Rupert.

I'm looking forward to the new generation of slums.

# ? Dec 16, 2016 06:05

cowofwar: Jul 30, 2002; by Athanatos

Fuzzy Mammal posted:

It makes more sense for something like dividends. I own shares in a company. The company earned some profit and payed taxes on that income. That is, I as part owner of the company paid taxes on those earnings. It then 'transfers' some of those earnings to me as dividends. Was there more income somehow? Why should it be taxed again?

Not that I really buy the argument but that's how it goes at least.

The corporate tax rate is very low.

# ? Dec 16, 2016 07:32

Aramis: Sep 22, 2009

Kreez posted:

It looks like you're only eligible for the loan in the first place if you're getting a <20% down insured mortgage.

I'm guessing this basically means that with the current interest rates, banks are actually losing money on non-insured mortgages. That's the only rational explanation that comes to mind for this insanity.

Aramis fucked around with this message at 08:06 on Dec 16, 2016

# ? Dec 16, 2016 08:03

PT6A: Jan 5, 2006; Public school teachers are callous dictators who won't lift a finger to stop children from peeing in my plane

cowofwar posted:

The corporate tax rate is very low.

Yes, but dividends aren't taxed at a zero rate, so it just so happens that the total amount of tax paid is eerily similar. Almost like it was designed to work that way...

# ? Dec 16, 2016 15:03

Risky Bisquick: Jan 18, 2008; PLEASE LET ME WRITE YOUR VICTIM IMPACT STATEMENT SO I CAN FURTHER DEMONSTRATE THE CALAMITY THAT IS OUR JUSTICE SYSTEM.; Buglord

cowofwar posted:

The corporate tax rate is very low.

Corporate tax rates are not the issue, the issue is supply of tax credits to drive growth of housing starts.

# ? Dec 16, 2016 16:12

Lain Iwakura: Aug 5, 2004; The body exists only to verify one's own existence.; Taco Defender

To warm CI's heart, Don Campbell was on Radio 1 today saying that the CoV needs to allow more construction to make the new home buyers loan more effective.

# ? Dec 16, 2016 16:19

cowofwar: Jul 30, 2002; by Athanatos

Inflate the bubble. Run this poo poo in to the ground.

# ? Dec 16, 2016 20:40

The Butcher: Apr 20, 2005; Well, at least we tried.; Nap Ghost

cowofwar posted:

Inflate the bubble. Run this poo poo in to the ground.

I think we just extended it another 5 years.

At that point people will need renew their 5 year (most common) at higher rates, start needing to pay back the govt loan, suddenly find themselves even less able to service their consumer debt...

Give it a year or two after that to catch up with people and run em dry, could be some serious deals coming online then.

# ? Dec 16, 2016 21:25

flashman: Dec 16, 2003

PT6A posted:

Yes, but dividends aren't taxed at a zero rate, so it just so happens that the total amount of tax paid is eerily similar. Almost like it was designed to work that way...

It would be if schemes like paying dividends to your whole family were tightly regulated. As it stands I probably pay more in taxes than most "entrepreneur" doctors or what have you.

A particularly grating example to me is the ability to claim a business lease off your personal income for heavy machinery. I have co workers that lease excavators and skidsteers with a lease structure designed to end with a 1 dollar buyout and claiming the expense of the lease against their unrelated income. Excellent use of government funds to subsidize almost half the expense of this poo poo over 4 years.

Small business regulation stinks and needs to be tigtened immensely

# ? Dec 16, 2016 23:38

Reince Penis: Nov 15, 2007; by R. Guyovich

Small Business! Middle Class! Economy!

e: Red tape!!!

Reince Penis fucked around with this message at 00:48 on Dec 17, 2016

# ? Dec 17, 2016 00:40

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# ? Jun 1, 2024 08:39

namaste friends: Sep 18, 2004; by Smythe

BC startup pioneering bank ownership through crowdfunding
https://www.biv.com/article/2016/12/bc-startup-pioneering-bank-ownership-through-crowd/

quote:

B.C. startup pioneering bank ownership through crowdfunding

The president and co-founder of Montreal’s Impak Finance is in the midst of raising capital for what he describes as the “first responsible bank in Canada.”

“Responsible,” Allard said, because it will invest only in “companies that want to solve a social and/or environmental issue by using innovation and making money.”

For any Canadian retail investors wanting in, Impak is relying on Vancouver startup FrontFundr to help raise capital using its equity crowdfunding platform.

It’s the first bank in Canada to sell shares directly to investors through a crowdfunding platform.

Traditional crowdfunding allows groups and individuals to solicit donations to raise money for projects like films or devices.

Equity crowdfunding allows startups to sell its shares directly to investors. But regulations differ between provinces, making it difficult to launch a nationwide campaign in Canada.

In September 2015, FrontFundr became the first platform in Canada to help a business raise capital through equity crowdfunding after six provinces, including B.C., adopted new exemptions allowing companies to sell shares through an approved funding portal.

Since then, FrontFundr has worked with regulators to make its platform available in all jurisdictions except Prince Edward Island and the territories.

“We’re based in Vancouver, but it’s absolutely key for us to establish and roll out our position as a Canadian platform,” Van Hoeken said FrontFundr CEO Peter-Paul Van Hoeken. “Impak basically put us on the map in Quebec.”

Impak set out to raise $500,000 in October by putting up 6.25% equity through FrontFundr.

It raised $425,000 in 24 hours and that tally has exceeded $1 million from 1,500 investors ahead of the December 15 closing of the campaign.

Van Hoeken said the majority of investors are from Quebec, “so it’s totally changed the demographics of our user base.”

Allard said using a crowdfunding platform might seem off the beaten path for a bank, but it’s in line with Impak’s mandate to promote collective governance and ethical investing.

Impak is modelled on the Dutch bank Triodos, which has billed itself as a pioneer in ethical banking since its founding in 1980. It invests members’ money only in businesses it deems to have social benefits, such as solar energy or organic farming.

Allard said Impak will give members seven options ranging from sustainable buildings to aquaculture when deciding where they want their money invested.

“You’ll be able to see exactly where we invest and where we do the loans in each of the companies and trace them [with] 100% transparency,” Allard said.

A single Impak share costs $1, but the minimum buy-in for investors is $100.

While credit unions subscribe to the one-member, one-vote principle, Impak investors must agree to give away their voting rights to a foundation.

Investors are permitted to vote for board directors elected to the foundation, which is responsible for ensuring members’ money goes into social impact investments.

So an investment bank capitalized through crowd funding. How disruptive

I guess it's great if you don't care that your money will have zero return

# ? Dec 17, 2016 17:49

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