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Baby, we got a bubble!?

Primer #4: CMHC- The enabler to Canada�s housing addiction

Something new to chew on Interested.


http://financialinsights.wordpress....mhc-the-enabler-to-canadas-housing-addiction/

I have long maintained that the net effect of these policies has been to pull demand forward, particularly in the past few years, and to raise home ownership rates to artificially high levels. In Canada we are currently at the highest home ownership rate in our history, hovering around 70%. How many more people can buy? CMHC has been absolutely pivotal in getting many new individuals into the market, but have massively skewed prices in the process.
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Condo George won't like this info. Condo George won't like this info one bit :(
 
Great article. I suspect the counter argument will be that foreign investors and new immigrants will continue (at least in the downtown core market to buy) and therefore there will not be the massive deflation.
The reality is however that since mortgages are non recourse (and even if alot recently are CMHC insured, alot are not ie. greater than 20% equity). If there was a catastrophic downturn in the market, CMHC as stated would require a bailout by the Government/taxpayers. My suspicion is that everything will be done prior to artificially prop up the market if we see a 20-30% drop in most markets.
 
Condo George said:
I am crying like a baby, wiping the tears away with KA1 leftover Kleenix from when I went away on my trip. I know he likes me
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It is not you George, but it is your inspirational and uplifting message that I love.

Having bought a unit in AURA on one of the top floors, at the top of the market and having paid, I think, top price, I need you to, constantly, remind me that "Real Estate prices always go up, Baby".

In simple language, in the current economic environment, I need your uplifting message as badly as an alcoholic needs his next bottle(grin).
 
KA1 said:
It is not you George, but it is your inspirational and uplifting message that I love.

Having bought a unit in AURA on one of the top floors, at the top of the market and having paid, I think, top price, I need you to, constantly, remind me that "Real Estate prices always go up, Baby".

In simple language, in the current economic environment, I need your uplifting message as badly as an alcoholic needs his next bottle(grin).
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well that wasn't very flattering ...
 
cdr108 said:
well that wasn't very flattering ...
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If you read my post again Cdr 108, I put the word 'grin' at the end -- I was just trying to add some humour. It seems that I definitely used the wrong words.

My sincere apologies to Condo George and thanks to you Cdr 108 for pointing this out to me.
 
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KA1 said:
If you read my post again Cdr 108, I put the word 'grin' at the end -- I was just trying to add some humour. It seems that I definitely used the wrong words.

My sincere apologies to Condo George and thanks to you Cdr 108 for pointing this out to me.
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sorry KA1, i wasn't trying to be critical of you/your comment. just noting that it wasn't flattering ... but accurate.

there are a few realtors on this forum that are objective IMO (i.e. realtor rick, andrew fare) who will criticize projects and prices, etc. and tell people it's not financially prudent to buy something if the cashflow is negative.

then there are others who don't think that's relevant and recommend to buy for capital appreciation, RE always goes up, etc.
 
interested said:
Great article. I suspect the counter argument will be that foreign investors and new immigrants will continue (at least in the downtown core market to buy) and therefore there will not be the massive deflation.
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If prices start to fall, foreign investors will look elsewhere to make their profits. People with lots of money tend to be smart like that.

New immigrants tend not to have a great deal of money or income. They won't be able to prop the RE economy up on their own.
 
There are a few articles -- from both sides of the fence -- in Saturday's New Homes and Condos section of The star. Might be worth a visit to their website.
 
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