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Throatwarbler posted:Oh good more well considered government affordable housing initiatives that this thread has been calling for. edit: above article is from the end of 2012, disregard below rant ARghhhhh this is the opposite of helping. I don't get it, why was Flaherty just this week poo-pooing the CMHC while and then increase the available government backed insurance to their private competitors just a few days later. Oh wait, I do get it, he's just being a caricature of "conservative" economics: socialize the losses, privatize the profits! Ahaha, gently caress that guy. Mrs. Wynand fucked around with this message at 18:31 on Mar 22, 2013 |
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Mar 22, 2013 17:57
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Throatwarbler posted:Oh good more well considered government affordable housing initiatives that this thread has been calling for. Mr. Wynand posted:ARghhhhh this is the opposite of helping. Waaait... that article was from 12/27/2012. This isn't nearly that crazy. The housing drops only started in earnest January. So he could just be urgently backpedaling, which is quite exclusable I guess.
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Mar 22, 2013 18:20
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JawKnee posted:The article posted suggests that most of the absentee investment is by Canadians - though Canada is a big place so to my mind there's not a huge amount of difference between absentee owners. While I don't think there should be restrictions on foreign ownership, I would like to see some kind of regulation with respect to people actually living in the units they've purchased, rather than treating them solely as a commodity, difficult though that might be to achieve. One of the posts earlier in this thread (not too far, a few pages at most) showed a map of the distribution of foreign owners. The vast vast vast majority (like, more then 75%) were from the GVRD itself. Honestly, this confirms what I've actually seen in terms of landlords - most seem to be local professionals, basically still middle class (though towards the upper end thereof), buying an "investment home". That editorial was mostly garbage but he is probably right about the super duper rich being primarily interested in penthouses and kits beach homes that have nothing much to do with the regular apartment market for the rest of us plebes.
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Mar 25, 2013 00:14
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Dusseldorf posted:Seeing that the Major League minimum is $480,000 and most lenders will approve 3 times annual income for a mortgage they don't have to make nearly that much. Well that's my concerns put to rest!
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Mar 28, 2013 00:36
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So has the inventory in GVRD rebounded yet or what's happening now. Don't let me down bubble thread!
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Apr 26, 2013 02:07
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More like happiness trumpet! At the very least the tuba of schadenfreude...
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May 2, 2013 22:07
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In realted news, hey look, a literal lynch mob: How about that...
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May 2, 2013 22:16
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Baronjutter posted:Victoria check in! It's called a bull trap.
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May 14, 2013 23:44
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Oh poo poo, we're getting name-dropped by the Krugman:http://www.huffingtonpost.ca/2013/06/15/paul-krugman-canada-economy_n_3447898.html posted:If that’s the case, Krugman argues, then the fact that Canada’s banks didn’t get involved with the “toxic” mortgage-backed assets that sank U.S. banks won’t stop the country from experiencing the same sort of economic stagnation and high unemployment that has plagued the U.S. for the past half decade.
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Jun 16, 2013 17:02
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Baronjutter posted:And the other key question is: when is this bubble going to pop and by how much? I'm fine waiting but I wish I could see a light at the end of the tunnel. I know no one knows for sure, but even some rough estimates would be nice along with the reasons for those estimates. Yes I read the thread... I read it quite often and find my self going back to old posts when I try to research things. I'm just VERY financially illiterate and I usually don't even know what half the terms mean, let alone how to put it all together and understand the conclusions. Soon-ish, maybe. Whatever is happening, it is happening like right now because even the most diehard beliebers are now acknowledging that prices have, at the very least, stagnated. Also inventory being record-high. All of this is quite recent, roughly speaking having started at the end of 2012 depending on who you believe and has only really been acknowledged uncontroversially in the past few months. You could wait, I dunno, another two years, maybe even just one? If nothing changes in that time I would maybe just maybe be inclined to believe all this overly optimistic talk of a smooth bubble deflation in the form of nominal price stagnation being slowly reduced by inflation. If. If the wheels come off the bus instead then, well, huzzah, we can all buy houses, assuming we still have jobs to do so with (we probably won't). The only reason you'd buy now is if you actually believe this is some sort of bear trap. If that doesn't strike you as immediately farcical, consider this: What the gently caress do you even lose walking into said "trap" and not buying? Not being able to afford an apartment worth living in vs really not being able to afford an apartment worth living in?
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Jul 12, 2013 05:11
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Kombotron posted:There has been alot of discussion about buying vs. renting, but what about buying land and building a house? It is obviously not an immediate solution but Vancouver has many sorrounding areas including beautiful islands (Bowen, Galiano etc) relatively close by. There are also areas right outside Vancouver that seems untouched. Land is the thing that is actually "bubbling", the cost of construction has not changed in any major way (it's gone up a bit just because of the surge in demand, but it is not a significant component of whacky real estate price increases). Land is expensive because of what you can do on it. "Land", generically speaking, as in "solid ground with breathable atmosphere" is, as you point out, plentiful and not actually that expensive. The difference between land a 3 hour drive inland from Gibson and land in Yaletown by the skytrain station is all the stuff you can do from one but not the other: go to some job that pays money (this is a big one), buy food, see a doctor, visit other human beings. These are kind of important. Notice also that they are all things you travel to, so how accessible these destinations are from the piece of land we are discussing is extremely important. You obviously want to be close to existing destinations, so this provides a fair amount of pressure to build within or very near to the existing city. Moreover, when you move to a city, you yourself become a destination: people want to visit you, and do business you, etc. Even more pressure. It's very self-perpetuating. So since everything wants to get to everywhere else as effectively as possible prices can't help but shoot up the more people want join these concentrated balls of awesome that are cities. The only way to release that upwards pressure on prices is to make more land available that is still "accessible" to/from existing destinations. This means that it is not enough to simply build outwards without providing transportation links that make the existing city accessible. Same story for building upward: simply increasing density without also increasing transportation capacity can't work because all that extra traffic can make previously accessible destinations no longer accessible. Now to bring all this back to land value in Vancouver specifically: all these transportation links are all very expensive (highways, skytrains, all that stuff) and become much more expensive when dealing with difficult terrain - e.g. rivers need bridges, mountains need tunnels and much more expensive construction in general. Vancouver is bounded by open sea, rivers and mountains on all sides, so this definitely plays a large in why it's a fairly expensive city. You also see this with say Hong Kong which is bound by some heavy duty mountains (and previously also, you know, The People's Republic of China), and Manhattan which is an island. The geographical constraints means that as long as more people want to live in those places there really is no upper limit on land value there, which is why both are world record holders in cost of living. Right so anyway, should you build a house in the boonies? Sure, now is as good (or bad) a time as any - they are not particularly affected by the current nuttyness. It is probably cheaper to buy an existing place rather than build a new one just because of the aforementioned demand pressure on construction companies (and workers) in the city, which does affect the interior as well. So yeah, if you don't need a job or easy access to food, medical aid and human contact, go nuts.
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Jul 12, 2013 06:00
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You can get "portable" laundry AND dishwasher by the by. I'm very understanding of that as a "deal breaker". The only silly thing is they will become worthless when you move out to a proper place, but considering how much you are putting away net, that is probably a-ok. You could also buy them used from people that just did this... I'm actually pretty sympathetic to your situation all in all, it sucks to live so far below what you expect given your income just because the property market decided to poo poo into the ceiling fan. And I do think you will have to reconcile your priorities with that of your wife's. Just rent a better place though, for god's sake, don't buy one. Rent something reasonably livable. A 40% down payment may be overdoing it, especially if it's straining your relationship and day-to-day wellbeing.
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Jul 12, 2013 23:07
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Throatwarbler posted:Pretty much. No one (or very few people) are actually that interested in the petty details of their interior paint or the size of their windows or any of that House Hunters bullshit, not even women. Bullshit, I am extremely interested  .And I really think one of the biggest casualties of this whole slow motion trainwreck are all these homes and condos that are built with absolutely no thought given whatsoever to utility or livability or personal preference or anything else. Buyers are only looking at how resellable the property looks, not what it would actually be like to live in it, either because they don't actually plan on living in them that long or because the narrative of "home ownership" is full of idyllic fictions from the 50s and leaves little room for day to day considerations like how a dining room separate from a kitchen separate from the living room is the dumbest loving idea ever, or how 2 pocket door closets and a 1x1 meter locker are not enough storage space for 2 adults not currently on vacation.
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Jul 12, 2013 23:19
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Throatwarbler posted:"live so far below what you expect"? Did you sign a contract coming out of high school that guarantees you a certain sq ft of gypsum board and granite countertops? Oh well excuse me Mr. Insightful Hard Life Lessons, you're right, just because someone went to the same school and worked just as hard as every age cohort before them down to the post-war era does not mean that they'll be able to afford to live in a place that has a dishwasher, in suite laundry, proper heating and other such luxuries from turn of the century as everyone else that is older than them. gently caress those whiners, they just need to get real! Like you. You my friend. You keep it real. 
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Jul 13, 2013 01:30
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PK loving SUBBAN posted:I don't think that's how supply and demand works. Tortonto is the best place on earth, therefore, demand will increase indefinitely, and with it price. You just got econ-served, 
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Aug 3, 2013 02:01
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Wait a minute, wait a minute, Vancouver is already the best place on earth! They can't both be the best place on earth!
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Aug 3, 2013 02:02
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Whiteycar posted:So let's assume the market correction is going to happen sometime within the next 2 years. What's going to happen is that that first of all the economy as a whole will take a very bad hit in the dick because as things stand, a) business are still too shy/scared (b/c of the ongoing instability) to do any serious investment that really creates jobs, b) the CPC sure as poo poo isn't creating government jobs or any sort of direct spending and c) housing bullshit is actually one of the last few things driving "growth" and spending. So once that falls down we're gonna be poo poo out of stuff. IMO neither the CPC nor the LPC is likely to do start significantly increasing government spending, which is the only thing that will make this less painful. So, probably more unemployment and wage stagnation. The second thing that's going to happen is that a whole loving truckload of boomers that are about to retire or already retired were sort of counting on the bubble never ever bursting, so you know, that would no longer be the case. They'll have to lean on the government (who is revenue starved and whose tax base is hurting) and their children (who are already stretched to the limits if they are employed at all) to get by. And we'll still have articles wondering how "the Me generation" managed to gently caress up all those retirement plans for BEST EVER GENERATION baby-boomers. That will be the best part of all!
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Aug 13, 2013 03:48
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Fine-able Offense posted:Honestly, Main Street from 7th down to Terminal is either vacant lots or single-story commercial buildings. This is the heart of Vancouver, a few blocks from the Skytrain, and there's loving used car lots and vacant strips of scrub. It's a loving disgrace. A lot of that is being developed, though it's still pretty spotty around Terminal. Also a lot of is tied up with rail operations. I wonder how close Pacific Central Station is to being sold off (together with the sizeable rail yards nearby), or even, whose call it is - I don't think all that crap is owned by a single entity. I love rail and all and it would be great if that station got more use, but it doesn't and won't for the foreseeable future. It could be developed into some prime real-estate without a doubt, though it would take some very serious work.
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Aug 14, 2013 23:53
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Also, just in general, although (as is no secret!) I am extremely in favor of densification, there is no way the existing transportation network would be able to handle the additional capacity. All this talk about opening up building height is sort of meaningless without the corresponding funding for mass-transit. For building up south-of-Broadway, that should almost certainly be streetcars.
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Aug 15, 2013 00:01
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Cultural Imperial posted:Are you young? Not that young on that chart, but either way, friends, family and so forth. These old fashioned institutions are underrated by those who haven't had life throw them a curveball covered in poo poo. If I was a forever-alone I would have left looooooong time ago to I dunno, anywhere else. As it stands I am stuck with Vancouver and Vancouver is stuck with me never shutting the gently caress up about how much I hate Vancouver.
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Aug 15, 2013 00:34
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And you, dear housing thread, you will be forever stuck with me and my incoherent rage on induced demand and that loving bridge. For ever.
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Aug 15, 2013 00:37
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Cultural Imperial posted:http://www.theguardian.com/books/2013/aug/18/default-line-extract-faisal-islam-housing The introductory piece really makes it very clear. The mechanisms are different for Canada of course, but the broad conditions are not. It makes so much sense just on the face of it: the less what you pay for a house has to do with what you can actually afford to pay, the more home prices will rise above corresponding rises in income (if any) for that region. And sure enough, the one thing that DOES correspond to the crazy rise in home prices in Vancouver et al (because it sure as poo poo hasn't been income, or jobs, or population growth) has been CMHC lending terms. This really does seem to account for the situation in Vancouver, certainly to a much greater extent than empty investment condos or eccentric Hong-Kong millionaires or whatever the crazy theory du jour is making the rounds. Increasing the availability of credit for a specific thing regardless of income or likelihood of earning it back simply by willing to take on more risk (that usually ends up on the government's doorstep anyway) -> prices for that thing balloon in concert with that risk adjustment, and nothing else. The US Student Loan trainwreck-in-the-making is pretty much exactly that as well: It's not like eduction got more expensive to provide, it's just that government started taking on more risk for such loans and as a result, schools found they could keep raising tuitions and still keep their classes filled for as long as those loans were available. Madness! ... Having said all that, I'm not sure if this means the conditions for the bubble will actually burst as such... The main fallout from this is that per-household debt-load and the mortgage portion of their total expenditures have skyrocketed and this means people can't afford daycare will be in debt for ever and not be able to save for retirement and so forth. But as long as they can slog along in those conditions, why would any of it fall down? Like, if the current debt and mortgage-payment load just becomes the status quo, then the CMHC adjusts the risk terms to maintain the current pain levels for borrowers and prices merely stagnate, not crashing. Sure, all homeowners will now for-ever be more miserable, but hey the banking and real-estate sectors remain stable.
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Aug 27, 2013 22:31
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PT6A posted:It's loving hilarious to me that condo prices in Calgary, according to that article, are so low in comparison to places like Toronto, Montreal, Vancouver and Victoria. We still have lots of jobs, and an absurdly low rental availability (and correspondingly high rents). How/why did this happen? We have idiots with lots of money who love to speculate on things here too, yet we seem to have avoided the worst of it in comparison. I think it's a combination of: 1) Demand for housing in Calgary missed the boat on the ridiculously lax mortgage terms that accounted for most of the insanity in Vancouver et al. 2) As described by that UK article earlier, when dealing with mortgage terms that are divorced from income, prices are ultimately decided by sheer optimism, and all the hype about these BEST PLACE ON EARTH #1 MOST LIVABLY CITY is like throwing hydrazine on a fire for inflating said optimism.
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Aug 28, 2013 17:53
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PT6A posted:I don't entirely disagree with your premise, but at the same time it fails to account for why downtown real estate is comparatively inexpensive to these other cities. I know why Okotoks is cheap, I'm just not quite sure why the areas closer into downtown are. Like I said, they're still a little more expensive (and realistically, they always will be), but there's affordable places to be had in some pretty excellent locations. For all my/our bitching about the "BEST PLACE ON EARTH", its not thy there isn't some truth to all that. Like, people do actually want to live here (and Montreal, and Toronto). There is nothing especially sinister about these cities, especially the fashionable downtown cores, being a fair bit more expensive then less hip downtowns. It's just insane when prices get ideas far above their station, e.g. London (UK) or New York - they have no business being in that league.
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Aug 28, 2013 20:24
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Why isn't the 2013 line starting where the 2012 one ended?
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Aug 29, 2013 19:56
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indeed
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It is the most disgustingly named english-speaking city that I can think of.
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Sep 3, 2013 17:49
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Matthew_O posted:
Can you share more details about this? I remember several studies coming out not too long ago that put foreign investors at ~15%, which doesn't seem that high. Like, what is the actual figure? Also are many of these foreign investors actually keeping apartments empty as everyone suspects? Again, I recall some actual numbers coming out on the topic more recently and it seemed that vacant apartments have in fact gone up significantly. I'm also wondering what you think about the role of laxer mortgage terms has been in the current Van/To bubbles - stuff like 0% down and long-rear end repayment terms that have only been constricted relatively recently, after most of the damage was done. Basically the way I am wrapping my head around Vancouver's current prices is that it was primarily driven by overly generous mortgage terms which allowed people to take on debt far in excess to what would usually have been seen as acceptable or affordable. I think there is a visible increase across Canada that corresponds with this. The reason Vancouver in particular has grown so much faster is a combination of desirability increasing to people that can afford to bid each-other up to the current prices (foreign investors like you mentioned I suppose), at least some amount of vacant homes being kept for flipping (though it's hard to say exactly how much), and (as you mentioned) limited geography - Vancouver can only really expand east which is already pretty far away from where the city wants to grow... How does all that sound to you? I am wondering though - once fixed term interest rates start to expire and people have to pay the current much higher rates, couldn't that actually start a wave of foreclosures just because the previously mentioned mortgage terms have already put many (most?) buyers at the very limit of what they can actually afford? (btw, does anyone have a historical chart of mortgage expenses to income ratios for vancouver v rest of canada?)
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Sep 20, 2013 00:07
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Why shouldn't they feel sad? There is much to feel sad about. All these pillars of the middle class that were built up after a great deal of struggle seem to have crumbled overnight sometimes soon after people your parents age took advantage of them: education leading up to a reliable job, affordable home ownership that pays for your retirement, these were all good things. They were not essentially unsustainable, there is no inevitable reason why those things should not still be available now. And although I'm sure your parents are personally perfectly nice Vancouver Island hippies, it is still for the most part their generation that has allowed or even encouraged (for their own personal gains) the policies which lead to the eventual collapse of these institutions. Maybe they shouldn't be feeling personally responsible or anything, but feeling sad and disheartened at how different the experience of new families is compared to their own? Those feelings are entirely warranted I think...
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Oct 8, 2013 18:00
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Lexicon posted:Look, the bottom line is: Vancouver, as a culture, is absolutely obsessed with real estate. Absolutely obsessed. It's quite sad, because aside from natural beauty, that's really its main defining characteristic as a city. Whatever regulations get enacted (capital controls, rental restrictions, higher-non-domicile property taxes) are not going to materially dissuade this obsession. They'll just channel it into new accounting tricks, and other unintended consequences. I really disagree. Sure, it is absolutely the case now, because real estate being what it is, nobody can help but become interested in it. It affects everyone, even if you rent. But it is hardly immutable and certainly not something that was baked into the city culture at any time pre-2000, at least nothing that I would classify as standing out from any comparable city. The "obsession" with real estate was triggered by all that "BEST PLACE TO LIVE" bullshit but it was primarily fueled into a mass hysteria by cheap credit. Then catching Hong Kong's overflow of "very rich, just not preposterously so" investors kind of provided all the confirmation people needed to really buy into the idea that oh yeah, this is totes reasonable and not batshit crazy. Although any reasonable person without family ties (not I  ) really should leave as soon as they can, the situation absolutely is fixable, just not easily so. Tightening credit is the first part, and this is already happening and seems to have been at least the proximate clause of the hold up in price growth. The bigger problem being that of course is that the economic fallout from that is going to be quite painful. Because people have started to accept simply taking on a much higher debt load relative to their income, 1) prices won't go down easily - people will continue to keep taking on credit even when they can only barely afford it with new more stringent terms and 2) when prices do drop and interest payments rise (e.g. because their fixed term expired) there are going to huge swathes of people that just cannot afford those payments. This won't just mean some satisfying schadenfreude for those of us who have been on the skeptical side all this time - this will seriously impact spending and overall economic activity in the region.Tightening regulation is definitely the second part though. There are still far too many incentives out there that encourage home buying for no good reason. Strate and RTA rules can help tremendously. And of course social housing is a thing that is good although the current line of mayorships seem to have been treating the issue with either disdain or incompetence or both. Mrs. Wynand fucked around with this message at 18:44 on Oct 14, 2013 |
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Oct 14, 2013 18:31
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Lexicon posted:It seems to be an "Anglosphere" problem. Us, the USA, the UK, Australia, New Zealand - they are all loving obsessed about property ownership. Paris, Moscow and Hong Kong of course famously known for their reasonable attitude around property ownership.
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Oct 14, 2013 19:00
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Lexicon posted:It is my firm belief that the Vancouver nuttiness will only be solved by real estate becoming its own undoing. Well yeah. Like I said, the cure will in some ways hurt more than the disease, so it is politically more palatable to just let the patient die on their own.
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Oct 14, 2013 19:01
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Lexicon posted:I didn't say exclusively Anglosphere. These [global] cities are obviously very expensive. I know you didn't, but I don't see it as even just disproportionately anglo either. A whole lot of eastern europe went through or is still going through property bubbles. I know for a fact the attitude in Romania was much the same as here (it's smart to own, at any price, can't go down, etc). IIRC all EU PIIGS went through it as well. China and SE Asia are also going nuts apparently but I'm less familiar with that. What they have in common is pretty much the same thing that happened here: influx of credit, proximity to wealthy buyers crowded out of their home markets (in the EU that would be the Germans rather than the Chinese of course). Writing this off as a cultural thing is somewhat harmful because it frames it as some intractable "we did this to ourselves" issue that can't really be addressed through government. We didn't and it isn't. This was a credit issue first and foremost.
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Oct 14, 2013 21:53
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Cultural Imperial posted:Wynand, the obsession with Vancouver real estate was in full gear as far back as the 80s and 90s. Prices have gone through at least two bubbles and collapses. It's been mentioned in this thread but I encourage you to talk to some baby boomers about home ownership in the lower mainland on the 80s. Ask them what happened to their friends or themselves when the market collapsed. I was indeed not here during the 80s, but going by all the pricing charts I've seen that was a whole order of magnitude less of a "bubble" then what we are seeing now. As I understand it there was a lot of weird demand drummed up by Expo, but that was the end of it. I've gently caress all idea how credit was like in the 80s though. I know a fair bit of Reaganomics bled through to Canada, but did that translate to laxer mortgage terms? Was it even the CMHA back then?
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Oct 14, 2013 22:01
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ductonius posted:It's very useful to remember that "the middle class" started out as people who were landed but not aristocracy. You know, the people who were in the middle: between the sin-swilling plebs and the God-ordaned blue-bloods; those people who had to be respected due to their economic power but who still didn't have royal ties. You were middle class if you owned land, something that traditionally belonged only to the crown, those it favored and their descendants. The middle class lived in the country, away from the dirty I hate to keep posting all these Mr. Negative Contrarian posts, but I really don't think that has anything to do with anything. The middle class in North America is made up of immigrants whose family background is largely going to have been farming, maybe mining and later factory work. You could say that maybe they aspired to the ideal of the higher classes they saw, but they owned expansive country houses and lavish town houses alike (as well as anything else worth owning). The suburban "American Dream" home was overwhelmingly just pushed by the auto industry (together with the dismantling of mass transit and the buildup of highways). Ownership via mortgage specifically needed no specific "pushing" - it actually honest-to-god was a better way to pay for your housing and save up for retirement if you had the discipline to save up all that exciting young adulthood money for a down payment instead of just spending it as you go. This whole trope about renting for all your life being a mistake made by people lacking in wisdom, discipline or some other character had a real basis to it not too long ago at all! The same narrative played out in Europe as well despite a lack of suburban sprawl. (Save up for your apartment/townhouse/whatever instead!)
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Oct 14, 2013 22:15
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Lexicon posted:I would love to be wrong about this, but I absolutely do see this as a [relatively recent] cultural thing first and foremost. In my opinion, the credit and official incentivizing policies flow from that (i.e. vote buying), not the other way round. It really is more "law selling" than "vote buying" IMO. Sure people like cheap credit but it's not exactly something you see clamoring for as an election platform. My impression is that most people look at credit as something that you can fail, not something you are failed by. It's part and parcel of the post-80s economic narrative. A lot of this crap is very overtly being pushed by the real estate industry at the municipal level. It is being less overtly pushed at the federal level by much larger interests, like banks and established investors. As for the breaks government is finally applying, I've gone off on this before, but my theory is that government does not want to actually trigger a drop in pricing, they may deem it best to just let it flatline at the current levels (and I'm not even sure I disagree). If prices go up again (in year over year terms) like they just did in September (was it?) for longer than a year or so and the CMHC doesn't tighten terms further I'm going to very surprised and start eating a lot of my past words. If prices go up and the CMHC does tighten the terms and prices continue to go up I will be both bewildered and worried. If prices stay at this level I will be least surprised or worried. If prices go down and the CMHC doesn't respond (or can't - and I think that could easily be the case) I'm going to be feeling smug as gently caress but also very worried.
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Oct 14, 2013 22:56
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Having said all that though, I am also starting to question whether a pricing collapse really would be that devastating compared to the ongoing economic damage cause by having so much of potential spending be swallowed up by mortgage payments.
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Oct 14, 2013 23:02
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The Economist Who Just Won a Nobel Prize Thinks Owning a Home Is a Terrible Investment I kind of which the article were more substantial with the details, but there ya go, something to throw at your "BUYING IS ALWAYS A GOOD INVESTMENT" relatives.
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Oct 16, 2013 08:50
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Fine-able Offense posted:-Cut off the banks' access to sweet sweet CMHC gravy, and force them to actually insure their own portfolios. I don't see how this wouldn't effectively pop the bubble. Once mortgages are actually "difficult" (i.e. not irresponsibly easy) to get, buyers dry the gently caress up and the the best possible scenario would be that everyone just sort of decides to leave their property on the market for ever without dropping their asking price. Of course as soon as a handful of people can no longer afford their mortgage payments because the economy sucks poo poo or because their interest rate went up or both they will have no choice but to cut their price, and then it's a race to the bottom. You could adjust CMHC restrictions and other pseudo-subsidies gradually to control this process so you have exactly the "right" amount of buyers in the market at any given time, which should in theory give the government direct access to the acceleration pedal. I'm pretty sure that is in fact what they are actually doing now. My question would be what they consider the "right" amount - try to keep it at current levels and play chicken with people's debt load, or slowly bring it down, and by how much? At the end of the day no matter how slowly you bring it down you are bringing it down. Just as many people are going to be hosed, it's just spreading out over a longer time period. This is certainly preferable to a sudden "shock" that can cause weird panics all over the place, but you're still going to eat more or less the same recession, just spread out over a longer time. The only way you can avoid a recession or recession-like scenario that is driven by a drop in spending (be it sudden or gradual) would be by directly bolstering spending. Of course that is also the way to get out of the current completely unrelated recession and is obviously not actually on the table, because debt overhang nightmares or laffo curves or whatever the gently caress the neoliberal economic narrative du jour is.
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Oct 16, 2013 21:33
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Lexicon posted:This is an aside, but why does this word pop up over and over again, but only ever on the internet? I've never heard a human speak it live, either in person or TV/radio. It's not my favorite term because it does have quite a few different meanings to different people. It's not really a pejorative either though IMO. It's supposed to refer to the current "mainstream" economic dogma - e.g. control social spending, more tax cuts, more free trade, less protectionism etc. It is distinct from the older "liberalism" because it really does take a much harder line on spending and introduces some new ideas like austerity and worrying about debt overhang. It is without a doubt what has actually been driving economic policy in the entirety of the "western" world and most of the rest of the world as well for the past few decades (post-Reagan/Thatcher, give or take). Weather you not you think that it should be a moniker uttered with disdain depends on how well you think it actually works.
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Oct 16, 2013 22:18
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Cultural Imperial posted:http://www.theglobeandmail.com/report-on-business/bank-of-canada-rate-stance-could-have-adverse-effect-on-housing-market/article15032903/ Argh, this isn't/shouldn't be a BoC issue. This should stay a CMHC issue. Using a low central bank rate as an excuse for cheap/irresponsible consumer credit is exactly that: an excuse. I don't get why they themselves are framing it in those terms.
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Oct 24, 2013 23:31
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