USA Housing Analyst "Canada Housing Biggest Disaster Waiting 2 Happen Ever"

[Economy 52,968]

http://news.nationalpost.com/news/canada/u-s-short-sellers-betting-on-canadian-housing-crash-an-accident-waiting-to-happen http://www.huffingtonpost.ca/2015/06/24/canadian-housing-bubble-accident-waiting-to-happen_n_7657018.html http://www.theglobeandmail.com/news/british-columbia/vancouvers-vacancies-point-to-investors-not-residents/article10044403/

With Canada in a recession yet having real-estate still continue to grow regardless and consumers still spending wrekcklessly, American CEO of major investment firm calls Canadas Real Estate "Accident Waiting To Happen" and later rephrased it "biggest disaster waiting to happen ever". Heres a few statistics

 

- Major Banks offering mortgages for little more than 2%. Smaller institutions have offered as low as 1.4%

- Homes prices are now 9X median income (was 7X at peak of US Housing Boom 2006-2007)

- Consumer Debt to Income ratio is at 166% (peaked at 134% in the US in 2007 by comparison)

- The most expensive city in Canada (Vancouver) has 25% of its condos vacant as Chineese investors keep buying up property no one is living in

- Toronto still has 133 skyscrappers under construction  that will bring fresh supply to market

- Home prices have jumped 140% since the year 2000 with construction remaining robust

 

How on Earth is any of this sustainable

 

[Computer 10,980]

 I hate to say but it does seem this way.

I get all my Canada economy news here and it does seem this was the direction of things.

I hope it isn't a horrible crash.  

[Economy 52,968]

 I hate to say but it does seem this way.

I get all my Canada economy news here and it does seem this was the direction of things.

I hope it isn't a horrible crash.  

i took out a few stats i originally put in OP cause it was too long and some people might not read it

 

but the recent drop in the Canadian dollar is making it even worse... forein investors are taking advantage of a recent drop in the currency to buy more properties... and since Canada doesnt currently have regulations on forein buyers putting limits like many Countries do, rich scared Chineese (China has big problems right now) are dumping tones of money into Canadian real estate...

 

For whatever reason Chineese have loved buying up properties here and since theres no limit and they are scared of what could happen to the yuan they are creating even more artificial demand here causing prices and construction to rise even more despite Canada now in a recession

 

BTW consumers spending more cause they feel confident about assets and home prices continue to climb during a recession is not normal at all in the slightest, but because rates are so low the bubble continues to inflate

[Yves 1,891]

I remember you also posted something about this from the past.

- Major Banks offering mortgages for little more than 2%. Smaller institutions have offered as low as 1.4%

- Homes prices are now 9X median income (was 7X at peak of US Housing Boom 2006-2007)

- Consumer Debt to Income ratio is at 166% (peaked at 134% in the US in 2007 by comparison)

- The most expensive city in Canada (Vancouver) has 25% of its condos vacant as Chineese investors keep buying up property no one is living in

- Toronto still has 133 skyscrappers under construction  that will bring fresh supply to market

- Home prices have jumped 140% since the year 2000 with construction remaining robust

Jesus Christ.  

[Economy 52,968]

I remember you also posted something about this from the past.

Jesus Christ.  

if ur not Canadian and/or you dont own Canadian real estate your safe lol

 

im seeing this as an oppurtunity. im 22 and wanna buy a home. this could be my chance if prices collapse!!!

 

my parents that already own one though wont be impressed

[Shadow 6,697]

Would a Canadian recession affect the world market strongly as China's? Something is wrong with today's economy overall, as there are too many bubbles risking to pop and governments forcing or determined to forgo recession although it drags out the bear market even longer, especially if demand drops below the production of goods and supply.  If Chinese and other foreign investors continue to buy property, how long could collapse be delayed? Btw, how is the oil and energy market in Canada lately?

[Economy 52,968]

Would a Canadian recession affect the world market strongly as China's? Something is wrong with today's economy overall, as there are too many bubbles risking to pop and governments forcing or determined to forgo recession although it drags out the bear market even longer, especially if demand drops below the production of goods and supply.  If Chinese and other foreign investors continue to buy property, how long could collapse be delayed? Btw, how is the oil and energy market in Canada lately?

Well China is the worlds 2nd biggest Economy, Canada is the worlds 10th largest. So a recession in Canada wouldnt affect the world as much as China but it still would

 

So far ther ecession is very mild. a 0.6% contraction in GDP in 1st quarter of 2015 and they estimate a contraction of 0.5% in 2nd quarter. The over-all jobs btw is not in negative territory its merely stalling...

 

As long as Chineese keep investing outside of China i dont see them dumping Canadian real estate anytime soon, especially since most developed nations have limits on forein purchases but Canada does not so here its unlimited territory... They especially loove Vancouver real estate a lot for some reason. Small condos there in some areas sell for $1 million to $1.5 Million depending on the area and the type of condo

 

And the oil industry itself is ok for now... The thing about Canadas oil sands is that it has a very long cycle in comparison to most types of oil... Oil Sands projects take years to set up and Many billions in upfront investments but once set up, an area can yield oil for 20-50 years (depending on the project) without the need for further investment so all you have is operating costs (as low as $30/barrel or lower). So short term dips in prices dont affect a Canadian oil sands field profitability over its lifespan average

 

Its the industries that service them that are really suffering... because lower profits still means oil companies slow down expansion and investment and companies thaty supply them with equipment are feeling the squeeze and shedding many jobs. Canada has become dependant on manufacturing for the oil sands especially in West of the Country and it is suffering big time.