$900 Billion Corp CEO Says Canada Housing Bubble Worst In World History

[Economy 53,087]

http://www.bnn.ca/toronto-housing-bubble-on-par-with-what-we-had-in-the-states-rosenberg-1.717144

 

RBC CEO (Canadas biggest Bank) whos always against regulation says in this case Canada needs to intervene immediately to prevent catastrophy saying that by many measures the housing bubble especially in Toronto has gotten so bad that in some ways its the worst bubble seen in the modern era

 

The housing boom began 17 years ago in 2000 to only accelerate in last 8 years with low interest rates. Year over year many markets with $2 Million homes are seeing annual spikes of over 30% with the Nation as a whole getting double digit growth year after year.

 

Canadas average home prices cost 10X median income and 13X in Toronto.  In USA by comparison prices peaked at 7X incomes in 2007.

 

Home prices continue to rise every month with no end in site.

[Economy 53,087]

Calling intelligent mr in such matters @Luc

 

what the hell should be done?

 

He suggested more taxation on forein capital and taxes on gains in home sales for population.

[Gaga Monster 13,001]

6 minutes ago, Economy said:

Calling intelligent mr in such matters @Luc

 

what the hell should be done?

 

He suggested more taxation on forein capital and taxes on gains in home sales for population.

Would it be a good idea to just let the free housing market continue to go the way it goes and then once people stop buying homes because they are too expensive, prices will drop? Or maybe regulations on prices?

[Economy 53,087]

9 minutes ago, Gaga Monster said:

Would it be a good idea to just let the free housing market continue to go the way it goes and then once people stop buying homes because they are too expensive, prices will drop? Or maybe regulations on prices?

Well theres been debate for years. And the Government has taken some measures (which didnt work) and now even the most right winged people say in this case the Government needs to interfear more

 

Year after year they predict a slow down yet year after year double digit gains is what we get. Economists dont understand why its surging so much

 

Up until last year some banks offered mortgages at 2%. One institution briefely offered 1.4%. That certainly kept the fire going.

 

Also people fear if they dont buy immediately they never will so they hump into market as soon as they can. That may be causing more demand also

 

Every single day the Toronto news brings up the Housing market issue. Thats all they ever talk about it doesnt stop.

 

Already people who live in Toronto get multiple room mates if single or they have multiple families in homes (1 in each floor) as thats the only way they can pay it

 

I live in a city in the suburbs (Brampton). My parents bought the house for $226,000 some 15 years ago. Now its worth nearly $700,000  

 

My crappy grandparents home near downtown Toronto that I feel closterphobic everytime I go in and is 110 years old and falling apart is valued at $1.4 Million 😳

[Computer 10,980]

I'm starting to wonder if a Canadian housing collapse will be the trigger to finally pop America's current stock valuation bubble too.

[JustinTrudeau 2,419]

My brother can't afford to buy his first house now, and I doubt he will be for a long time.  My parents are blaming the foreign buyers, but I doubt that's the only cause of this house market issue.

[Luc 4,776]

Does Canada have any housing/mortgage subsidies?

In the Netherlands you've got this thing where you pay less income taxes if you're paying mortgage interest. This is one of the reasons why private debt is so extremely high here.

 

 

If they don't know what the root cause is, how are they going to fix it?  this is disastrous. Can't they just build a shitton of houses to compensate for rising demand? Can't they check on houses to make sure people actually live there (rather than just investors)? Can't they make it more difficult to get a mortgage (more money, more stable job, etc.)? A debt bubble is never good, and Canada's economy is way too intertwined with the rest of the world that a burst could be disastrous. Let's remember Greece managed to make the whole Eurozone have a two-year long crisis, now imagine what Canada could do to the US, China and Europe.

[doppelganger 4,022]

In a way i understand the conundrum. When an economy is propped by its property market it's not wise to just put a stop to the growth. It affects the companies that rely on the industry ; architects, builders, specialists and suppliers. 

Foreign ownership should be limited to only high end off-the-plan properties. Billions are flooding from China into foreign property market  into the UK, Canada, Malaysia.

I personally think that planners should strive to build better suburban neighbourhoods with economic catalysts, good amenities and connectivity. It helps take the pressure off highly desirable inner city properties. Singapore'a done a great job providing housing for it's citizen despite not having much land ; they took swift steps to curb an overheating property market which has since corrected. 

[Economy 53,087]

32 minutes ago, Luc said:

Does Canada have any housing/mortgage subsidies?

In the Netherlands you've got this thing where you pay less income taxes if you're paying mortgage interest. This is one of the reasons why private debt is so extremely high here.

 

 

If they don't know what the root cause is, how are they going to fix it?  this is disastrous. Can't they just build a shitton of houses to compensate for rising demand? Can't they check on houses to make sure people actually live there (rather than just investors)? Can't they make it more difficult to get a mortgage (more money, more stable job, etc.)? A debt bubble is never good, and Canada's economy is way too intertwined with the rest of the world that a burst could be disastrous. Let's remember Greece managed to make the whole Eurozone have a two-year long crisis, now imagine what Canada could do to the US, China and Europe.

Only welfare or really low income people can get subsities for mortgages. 80% of the population or more wouldnt qualify

 

And the Government did take measures in the past years ago but it didnt work. They:

 

- Lowered max amortizations to 25 years (was 30 years before)

- Put a limit on people that can buy default insurance which gives them power for a 5% downpayment. Now more people have to do the full 20% downpayment.

- Increased lending standards

 

But theres not enough supply and major cities are growing quickly in population. Thats one issue. Also forein buyers. We dont have concret data over how much buying is forein exactly tho. Also rates have been low for very long. Lastly everyone wants to jump into market feeling if they wait they will never buy a house or condo.

 

It may be a combination of everything.

 

All i know is the Housing Market is on the Canadian News EVERYDAY and theres constant debate about whats gonna happen

 

They been talking about a crash for the past 8 years because market was too hot. Instead since that moment when the market was suppostu crash prices went up another 100%  

 

Oh and they been catching a lot of people doing illegal lending where they refinance their equity to sharkloan to others so they can put a downpayment on their house 😳

[Economy 53,087]

39 minutes ago, Computer said:

I'm starting to wonder if a Canadian housing collapse will be the trigger to finally pop America's current stock valuation bubble too.

I dont wanna make predictions anymore

 

The boom has been going on for 17 years now and was suppostu crash like a decade ago. 

 

Year after it its been proved wrong

 

Only in 2009 the housing market saw a brief slowdown after the recession but quickly resumed its surge 👀

[doppelganger 4,022]

5 minutes ago, Economy said:

Only welfare or really low income people can get subsities for mortgages. 80% of the population or more wouldnt qualify

 

And the Government did take measures in the past years ago but it didnt work. They

 

- Lowered max amortizations to 25 years (was 30 years before)

- Put a limit on people that can buy default insurance which gives them power for a 5% downpayment. Now more people have to do the full 20% downpayment.

- Increased lending standards

 

But theres not enough supply and major cities are growing quickly in population. Thats one issue. Also forein buyers. We dont have concret data over how much buying is forein exactly tho. Also rates have been low for very long. Lastly everyone wants to jump into market feeling if they wait they will never buy a house or condo.

 

It may be a combination of everything.

 

All i know is the Housing Market is on the Canadian News EVERYDAY and theres constant debate about whats gonna happen

 

They been talking about a crash for the past 8 years because market was too hot. Instead since that moment when the market was suppostu crash prices went up another 100%  

the ones that usually worry about an impending crash are the either academics or the ones that cannot afford the properties (the Gen-Ys basically). A property owner that benefits from capital gains of 10-15% annually wouldn't make much of a fuss, not realising that the ones who will suffer are their children

[Economy 53,087]

7 minutes ago, doppelganger said:

the ones that usually worry about an impending crash are the either academics or the ones that cannot afford the properties (the Gen-Ys basically). A property owner that benefits from capital gains of 10-15% annually wouldn't make much of a fuss, not realising that the ones who will suffer are their children

Many of those people have refinanced their equity and given out loans at higher rates so people can put a downpayment in their house since banks wont lend without that downpayment

 

if that doesnt spell ponzi scheme i dont know what does 😣

[JudasIsAHolyFoo 3,278]

1 hour ago, Economy said:

Well theres been debate for years. And the Government has taken some measures (which didnt work) and now even the most right winged people say in this case the Government needs to interfear more

 

Year after year they predict a slow down yet year after year double digit gains is what we get. Economists dont understand why its surging so much

 

Up until last year some banks offered mortgages at 2%. One institution briefely offered 1.4%. That certainly kept the fire going.

 

Also people fear if they dont buy immediately they never will so they hump into market as soon as they can. That may be causing more demand also

 

Every single day the Toronto news brings up the Housing market issue. Thats all they ever talk about it doesnt stop.

 

Already people who live in Toronto get multiple room mates if single or they have multiple families in homes (1 in each floor) as thats the only way they can pay it

 

I live in a city in the suburbs (Brampton). My parents bought the house for $226,000 some 15 years ago. Now its worth nearly $700,000  

 

My crappy grandparents home near downtown Toronto that I feel closterphobic everytime I go in and is 110 years old and falling apart is valued at $1.4 Million 😳

Totally understand this. I moved from Whitby to Barrie a few years ago and the 2 homes we sold in whitby were each valued at 600,000 and 700,000 each. when they were bought each at 200,000 and 400,000. The house I live in now here in barrie (which we bought coming up 3 years ago now) was 350,000 and is now almost work 600,000

[Economy 53,087]

13 minutes ago, JudasIsAHolyFoo said:

Totally understand this. I moved from Whitby to Barrie a few years ago and the 2 homes we sold in whitby were each valued at 600,000 and 700,000 each. when they were bought each at 200,000 and 400,000. The house I live in now here in barrie (which we bought coming up 3 years ago now) was 350,000 and is now almost work 600,000

Barrie used to be one of the few more affordable cities in Ontario now its expensive too but still cheaper than many areas

 

Hamilton used to be dirt cheap and now is rising a lot also

[JudasIsAHolyFoo 3,278]

5 minutes ago, Economy said:

Barrie used to be one of the few more affordable cities in Ontario now its expensive too but still cheaper than many areas

 

Hamilton used to be dirt cheap and now is rising a lot also

so many people have to keep moving up north in Canada to the muskoka area, and even more north like sudbury cause its so expensive