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.

cowofwar: Jul 30, 2002; by Athanatos

Cultural Imperial posted:

"the other shoe has dropped"

http://www.theglobeandmail.com/repo...rticle11908008/

The language in the article is not appropriate for the numbers. The numbers suggest a decline, but not one that is precipitous. A decline in the market is expected due to the restrictions on mortgage lenders and terms. Obviously numbers are going to be in decline when compared to a massive bubble period.

# ¿ May 16, 2013 00:14

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# ¿ Apr 29, 2024 02:14

cowofwar: Jul 30, 2002; by Athanatos

Cultural Imperial posted:

Yes I do actually. My judgement is based upon the broad generalization that most Vancouverites are carrying too much debt. We know this because of:

http://www.theglobeandmail.com/glob...article4181115/
http://www.vancouversun.com/business/High+student+debt+levels+stress+students+lead+delays+starting+families/8785183/story.html
https://www.vancouversun.com/business/Canadians+going+overboard+consumer+debt+British+Columbians+most+money+with+video/7549887/story.html

Who am I to judge? This isn't about judgement. This is about instrospection. We've been provided with a plethora of examples to what happens when a country's collective consumer debt levels go too high, while real estate markets are in a bubble state. This is also a loving lamentation that we are simply repeating the mistakes that have taken place in the very recent past. When all these motherfuckers gorge out on their credit cards, helocs and pay day loans, everyone's standard of living declines when it comes time to collect and oops, no one could really afford their nice vacations, restaurant and bar bills, and impreza STIs.

You know how else we know this? The median family income in BC is $66k/year. This is family income, meaning two breadwinners. The average non-mortgage debt load per person in BC is $38619.

http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/famil107a-eng.htm
http://www.vancouversun.com/business/mortgages/Average+mortgage+debt+grows/8478530/story.html

Wait these are just numbers. I have no right to judge. or make any sort of moral argument against profligacy.

You can't do this. You're comparing a median to an average (mean). Also you can't just compare two unrelated numbers like that and infer some sort of conclusion.

That said, being over-leveraged is a problem but you can't blame the debtors - the problem is that the interest rates are being held artificially low by multiple parties which creates bubbles. But as usual, corruption and greed drives short term decisions with long term consequences.

cowofwar fucked around with this message at 23:20 on Aug 22, 2013

# ¿ Aug 22, 2013 23:17

cowofwar: Jul 30, 2002; by Athanatos

Albino Squirrel posted:

Welp, the end is nigh.

I suppose, to be fair, that the end is not quite nigh; no one has yet paid almost a quarter-million dollars for a bathroom-less shack on less than 300 square feet of land.

And hey, check out how low the tax bill is! I pay like $4K in Edmonton, and we barely have transit!

Shack indeed

# ¿ Aug 23, 2013 03:24

cowofwar: Jul 30, 2002; by Athanatos

If you're just comparing rent payments to mortgage payments the. You're missing a lot of additional costs associated with home ownership.

# ¿ Oct 19, 2013 15:16

cowofwar: Jul 30, 2002; by Athanatos

It would be nice if Canada actually collected better data more thoroughly about a lot of things. But thanks to the non-evidence based decision making of the government this is unlikely to happen. So enjoy the heresay and speculation from unregulated and self-regulated markets.

Cultural Imperial posted:

http://www.theglobeandmail.com/report-on-business/bank-of-canada-rate-stance-could-have-adverse-effect-on-housing-market/article15032903/

Boc might hike interest rates in the future.

I don't think the BOC overnight rates are as closely associated with mortgage rates as people think.

# ¿ Oct 24, 2013 23:23

cowofwar: Jul 30, 2002; by Athanatos

Cultural Imperial posted:

Sorry. Don't give a gently caress. All of these people need a strict lesson in the consequences of being greedy and financially irresponsible.

You know what can really take a flying gently caress off the Lions gate into burrard inlet? The retarded film industry. 30 or more years of subsidies and it is still so poorly established the entire industry can gently caress off to Ontario overnight. Why didn't the government just pay everyone in bc to sit at home and smoke weed instead?

The problem is the system encouraging the behaviour, not the people.

# ¿ Oct 26, 2013 16:05

cowofwar: Jul 30, 2002; by Athanatos

Cultural Imperial posted:

It would be really interesting to find out how the tories came up with the idea to shift the housing industry into overdrive after the 2008 lehman collapse.

Everything the CPC does is populist bullshit. Like cutting the GST. It's all about pandering for votes and not about running a country.

# ¿ Oct 30, 2013 00:11

cowofwar: Jul 30, 2002; by Athanatos

PT6A posted:

Yeah, they cut a regressive tax. Those bastards!

Should income or capital gains taxes have been increased to make it a revenue-neutral proposition? Yes, probably. That doesn't make the GST cut a bad thing, and I firmly oppose a provincial sales tax (and the constant increases in sin taxes) here in Alberta for the same reason. Sales taxes and sin taxes (which are really just an ultra-regressive sales tax, considering that the poor are more likely to use cigarettes and possibly alcohol) are both regressive, and anyone claiming to be the least bit progressive should oppose them.

EDIT: This is the housing bubble thread, probably not the best place for this decision. Still, the GST cut is hardly the best example of lovely CPC populist policy.

They cut it and then promptly ran a deficit which they used to justify cuts. Whether or not the tax is regressive is irrelevant, knee capping the government to pander for votes is irresponsible populist bullshit.

As you said a responsible government that was concerned about it being regressive would adjust other revenue streams to make it revenue neutral. They just cut it because they knew it would buy votes.

cowofwar fucked around with this message at 12:14 on Oct 30, 2013

# ¿ Oct 30, 2013 12:11

cowofwar: Jul 30, 2002; by Athanatos

ocrumsprug posted:

Yeah, but this is countered by the BMO.

Globe and Mail link

Whew, I am sure glad that housing ~~collapse~~softness is already over with.

What the hell? Buyer's market in BC for last two years?

# ¿ Oct 30, 2013 21:07

cowofwar: Jul 30, 2002; by Athanatos

We have one full bathroom and a half bathroom on the main floor. I am good with that number, I don't have the desire to clean more bathrooms than that. Nevermind seven.

# ¿ Oct 30, 2013 23:37

cowofwar: Jul 30, 2002; by Athanatos

Relative to cities outside of Canada the transit in Vancouver sucks, but within Canada it's one of the best.

The westcoast express is great and the skytrain is pretty good with three lines . Bus system sucks hard.

# ¿ Nov 1, 2013 03:32

cowofwar: Jul 30, 2002; by Athanatos

Buying a house in Alberta is basically the same as giving up on life.

# ¿ Nov 21, 2013 01:45

cowofwar: Jul 30, 2002; by Athanatos

If someone wants me to take a 6 year car finance at 0% I'll take it. And I could afford to pay in cash.

# ¿ Nov 22, 2013 21:13

cowofwar: Jul 30, 2002; by Athanatos

The only thing keeping a lot of small town BC towns alive is money from weed cultivation.

# ¿ Nov 23, 2013 23:44

cowofwar: Jul 30, 2002; by Athanatos

Whatever, it's probably all fake anyways. Canadian newspapers are all trash or right-wing rags.

# ¿ Nov 24, 2013 23:39

cowofwar: Jul 30, 2002; by Athanatos

Baronjutter posted:

I don't understand how people don't even do the most basic of research. This isn't picking a printer cable brand or something, these are the biggest purchases you'll make in your life and people can't be bothered to google "condo prices after Olympics" let alone listen to people actually telling them? Christ it's up there with people who just walk onto a dealership and buy the car they thinks looks cool without reading any consumer reports or lemonaid guide or gently caress off anything.

Have people always been this impulsive and stupid or is this something that's been manipulated via marketing to create a culture where this total lack of thought/research before a major purchase is the norm? Talking to like grandparent's generation they seemed to put a ton of thought into any purchase, even small ones. It's pure anecdotes but I get a real sense marketing culture has really made a huge portion of people after the boomers mindless consumers who see debt as simply the price you have to pay to get the toys you deserve.

Financial decisions lose their gravity when the transactions involve debt and not cash.

# ¿ Nov 25, 2013 19:49

cowofwar: Jul 30, 2002; by Athanatos

Xoidanor posted:

What is even an "illegal nightly rental"? Maybe it's because I'm living in a country where zoning isn't the fundamental aspect of urban planning but I have no idea what the article is even talking about.

Hotels, chalets, and other tourism accommodations are considered 'legal'. Some homeowner renting out a room for a couple nights to a tourist on airbnb is considered illegal. It's considered different from normal month to month renting.

# ¿ Nov 30, 2013 18:21

cowofwar: Jul 30, 2002; by Athanatos

If the BoC or government states on record that there is a bubble everyone will rush to sell and it will encourage a crash. Denial always precedes bubbles.

# ¿ Dec 13, 2013 01:24

cowofwar: Jul 30, 2002; by Athanatos

RBC posted:

I have a pretty good theory that the toronto housing bubble is funded entirely by drug money laundering. I also have no proof but history will be the judge. When your mayor is involved in crack trafficking its a pretty good bet the reach of trafficking syndicates has reached its peak.

The condo boom is fueled by speculators using condo starts as a way to make large gains on minimal investments over short periods of time with no subsequent liability after a year.

It should be regulated but the developers have the local government by the balls and the federal government relies on the housing boom to keep poo poo from getting retarded before 2015.

# ¿ Jan 12, 2014 05:25

cowofwar: Jul 30, 2002; by Athanatos

PhilippAchtel posted:

Is a 30 year fixed rate mortgage not an option? Aren't they the standard in the US?

Furthermore, how can you forecast "my payments will be X for 25 years" if the mortgage becomes variable after five years?

I'm realizing how little I know about mortgages.

If a couple percent changes whether you can make payments then you could never afford it in the first place.

# ¿ Jan 18, 2014 16:35

cowofwar: Jul 30, 2002; by Athanatos

sitchensis posted:

Toronto leads North America in ~~blowing bubbles~~ highrise projects

New York, one of the most culturally significant and economically important cities on Earth, ranks second to Toronto in terms of highrise construction. Take that as you will.

You could argue that a mature city doesn't need to build as much as a growing city. I imagine most of the building growth from NYC would be in NJ or other areas from where workers live and commute.

# ¿ Jan 21, 2014 19:27

cowofwar: Jul 30, 2002; by Athanatos

I think Canadian banks actually are very large and have lots of international exposure.

# ¿ Jan 23, 2014 06:11

cowofwar: Jul 30, 2002; by Athanatos

Yeah. When I travel on business I hate having to pay with cash because half the time I get no receipt and the other half I get some bullshit chicken scratch business card receipt thing. Hell for expensing.

# ¿ Jan 26, 2014 21:51

cowofwar: Jul 30, 2002; by Athanatos

LemonDrizzle posted:

Is there really no governmental database of housing transactions and prices in Canada?

Canada is a glorious regulation-free free market.

# ¿ Jan 31, 2014 02:46

cowofwar: Jul 30, 2002; by Athanatos

Lexicon posted:

Well we do have the regulation that says "only a chap blessed by the real estate board may sell your house" so there's that at least.

Right but that's the good regulation. Regulation needs to be in place to protect corporations from the tyranny of the people.

# ¿ Jan 31, 2014 03:09

cowofwar: Jul 30, 2002; by Athanatos

etalian posted:

Yup there's no such thing as a bubble that can go on forever despite all the optimism from the people like realtors.

The only bright side is Canadian banks are much better capitalized than in the US meltdown but still it's going to be devastating for the economy due to things such HELOC spending getting yanked out of the system.

Also remember in terms of home affordability and also debt loading Canadians have exceeded the peak of the US housing bubble.

It will be devastating because a large portion of our economy is in the housing sector. Finance jobs, labor jobs, service jobs. We have a lot more people employed in that sector than the US per capita.

# ¿ Feb 1, 2014 20:37

cowofwar: Jul 30, 2002; by Athanatos

Condo towers are in development for a long time so they can lose money by not finishing the project even if the market is turning against them.

But that said, developers use investor money to build the towers. As long as the investors continue to give them money to build they will build. Once built and sold the developers and investors get their return and the developers are off the hook in a year.

# ¿ Feb 1, 2014 23:35

cowofwar: Jul 30, 2002; by Athanatos

US is currently our largest export destination but the trends are that US consumption and Chinese consumption is increasing so it's possible and quite likely that their positions will switch over the next decade . That's why the CPC government is so gung-ho (hah) on the Chinese.

# ¿ Feb 2, 2014 07:08

cowofwar: Jul 30, 2002; by Athanatos

The insane rush to get on to the "property ladder" before they miss out is pretty much proof of a bubble. They are agreeing with you but too dumb to realize it.

# ¿ Feb 3, 2014 22:32

cowofwar: Jul 30, 2002; by Athanatos

FoE posted:

Maybe you guys can give me some advice. I own a 3 bedroom semi-detached in the Ottawa South Neighborhood. We bought at $212k and could probably get around $270k right now. We owe $155k on the mortgage and that's the only debt we have. We love the area, my wife has a 5 minute walk to work, and I have a 15 minute bike ride in the summer. Problem is we have a third child on the way, and he's going to want his own bedroom sometime in the next few years. How should a popping bubble change our timing on buying a new house? We aren't interested in moving too far from where we are now so I expect any price changes in either direction will hit both our house and the house we wish to be. Any sage advice?

You'd be selling and buying in the same market so not very much.

But if you are happy where you are why not just get bunk beds and stick there for a few more years?

# ¿ Feb 5, 2014 15:58

cowofwar: Jul 30, 2002; by Athanatos

jet sanchEz posted:

I'd guess around $300K or so. He can actually afford the house and the neighbourhood is full of professionals who can afford to be there which was also an attractive quality of the neighbourhood, according to my friend. When I walk around my neighbourhood of Roncesvalles, I keep thinking about how crazy the prices of houses are here and that there will be a lot of for sale signs once the interest rates start to go up.

There are a lot of professionals out there who live in expensive houses that can afford the mortgage payment but who are effectively house-poor, cash-strapped and sensitive to changes to mortgage interest rates and any kind of interruption in their incomes.

It's not the poor people who can't get credit that bring the average personal debt up to 160%. It's the white collar workers paying huge mortgages and carrying 200-300% personal debt levels.

# ¿ Mar 6, 2014 22:46

cowofwar: Jul 30, 2002; by Athanatos

A house isn't an asset until you own it and you don't own it until the mortgage is paid off.

# ¿ Mar 7, 2014 01:58

cowofwar: Jul 30, 2002; by Athanatos

Defaults happen at the end of a bubble just before poo poo hits the fan. It's not a useful metric because once they start happening it's too late.

# ¿ Apr 10, 2014 18:24

cowofwar: Jul 30, 2002; by Athanatos

Bubbles need a crisis to pop and thankfully Canada is a bit more insulated to crises due to our social welfare systems. The obvious elephant is increasing interest rates but BoC can hold that down. So we may see slowing growth and eventual stagnation in the best case. Worst case 1 is that the bubble is further inflated. Worst case 2 is that an unseen crisis causes rates to rise, unemployment to rise, resource demand to decrease, etc. Anything that puts financial strain on all those people barely making payments which will result in people flooding the market with properties or defaulting.

The absolute worst case is speculators getting spooked. If enough people get scared and try to sell their condo "investments" it will start a run on the "condo bank" with the most solvent holding on to their worthless condos long term and the least solvent forced out of their positions. This is why all the banks, media and agents are overly optimistic. They know once sentiment turns it will be a cluster-gently caress given the number of condos that are sitting empty as "investment" properties.

Smart money is probably already making its way out or already gone leaving average Joe holding the bag. The time to get out was when the international stories about the housing bubble started getting exposure which coincided with the banks adjusting their tone slightly. They are buying time to remove themselves from the market but keeping the spin alive so that someone is willing to buy their bag of magic beans. Same thing that the big investment brokers on wall street do - tell their investors one thing and release reports to the public saying another. Pump and dump.

cowofwar fucked around with this message at 21:48 on Apr 16, 2014

# ¿ Apr 16, 2014 21:41

cowofwar: Jul 30, 2002; by Athanatos

Wages haven't stagnated, they have in fact decreased over time.

# ¿ Apr 17, 2014 21:52

cowofwar: Jul 30, 2002; by Athanatos

I moved from Vancouver to Hamilton and it is pretty nice here. It has a bad rap but once you get familiar with it, it is nice. Just avoid the suburbs and stay in west hamilton proper.

# ¿ Apr 25, 2014 04:51

cowofwar: Jul 30, 2002; by Athanatos

Realtors are commission based salespeople. Anyone expecting them to be impartial is an idiot.

# ¿ May 8, 2014 00:51

cowofwar: Jul 30, 2002; by Athanatos

This thread is getting really terrible.

# ¿ Jun 28, 2014 05:22

cowofwar: Jul 30, 2002; by Athanatos

We like to check out open houses and I always have an eye for the kitchens given that we cook and bake from scratch every day.

Good knives and a gas range is right. Fancy pots and pans are bullshit. They tend to be very heavy and full of dumb poo poo like copper. No professionals use these - just basic frying pans and pots. The heavy ones defeat the purpose of a gas range which is fine temperature control.

Anyways, lots of renovated kitchens look pretty but are completely impractical. You can tell they were designed and planned by people who don't use their kitchen. Useless islands full of poo poo in the direction path between fridge, sink, range. No counter space. Appliances everywhere.

# ¿ Jul 2, 2014 06:10

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# ¿ Apr 29, 2024 02:14

cowofwar: Jul 30, 2002; by Athanatos

Persona non grata posted:

Hey, I have a friend who's a lazy low-info leftist, and obviously I know lots about finance and economics, but could you help me explain to him the obvious solution to the Canadian Housing Bubble that I'm missing? Also, if some of the experts in this thread could post their predictions for how the bubble will come apart I would appreciate it. I know with absolute certainty there won't be a soft landing, only and idiot would think that, but I'd like to compare notes on the inevitable future.

A soft landing is indeed possible in the absence of any and all crises that could possibly affect all aspects of interest rates and housing demand and with strong government intervention and message control at the exact time needed. But the reality is that humans are irrational and respond to crises irrationally and in mass. So there probably will be a crisis at some point that deflates the bubble.

Although to be fair when the bubble is big enough even the appearance of a soft landing can cause a crisis through positive feedback. The more financially savvy and more liquid investors will cash out when they smell the downturn, with more following suit until the over-leveraged masses catch on at which point it will implode as peoples' positions get squeezed.

# ¿ Jul 10, 2014 00:00

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