Yes..I am waiting for 2 yrs.

"Crash barely lasted 6 months”
Why that period stayed for 6 months only??
-- Houses become more affordable
-- High paying jobs are created
-- Mass population got lucky with lottery
-- Very Rich people moved to Canada
-- Mortgage became more affordable with govt's special low interest and with 0/40, 5/35.

"World over the Re market is linked to the job market".
Yes I agree. Are we expecting new high paying mass jobs (in high CAD$ era) so we can keep RE bubble getting bigger.


nytimes.com - Some See a Real Estate Bubble Forming in Canada

http://www.nytimes.com/2010/03/20/business/global/20real.html?src=me

The Canadian Real Estate Association reported that the average price of existing homes rose 19.6 percent in January compared with those in the month a year earlier, the latest in a string of substantial gains dating back through last autumn. By contrast, the average price of existing homes rose 2.6 percent in the United States in the same period, according to the National Association of Realtors.




Days of rock-bottom interest rates are numbered

http://www.theglobeandmail.com/report-on-business/days-of-rock-bottom-interest-rates-are-numbered/article1506701/

Canada is on course to become the first in the Group of Seven – which also includes the United States, Great Britain, France, Germany, Japan and Italy – to raise borrowing costs since the global crisis. The U.S., in contrast, shows no signs of hiking rates any time soon. U.S. consumer prices last month failed to increase for the first time in almost a year, and producer prices dropped.

Most economists say Canada's central bank will lift rates in increments of no more than 0.25 of a percentage point and may stop after a few moves to re-evaluate. That's how the Reserve Bank of Australia has proceeded since last fall, when it became the first major central bank to tighten as the dust started to settle on the crisis.

Canadian Housing Bubble- Schulich School of business
http://www.zerohedge.com/sites/default/files/Canadian-Housing-Bubble.pdf

The basic annuity formula or any mortgage calculator shows that for interest rates between 4 and 14 percent on a mortgage amortized over 25 years, an increase in lending rate by one percent would result in an average monthly payment increase of 9 percent.

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Just my 2 cents - Our govt can bring new home buyer tax credit when RE will go too much south.

How do we see effect of new rules, higher CAD$, future higher interest rates and taxes on RE?

Quote:

---

Originally posted by dudewheresmycar

Lol, u are hilarious...

Rahul Singh has waited 2 years for the RE market to crash..

If he waits long enough he will see it one day or the other and all his prophecies will become a reality.. The last crash barely lasted 6 months and then the turn around must have left him spell bound..

World over the Re market is linked to the job market.. If the job market recovers.. there is no stopping the Re market.. because most people like to own their house..

Quote:

---

Originally posted by WEST-IS-THE-BEST

---

---

Lower Home Prices Can Fix What Government Can’t: Caroline Baum

http://www.businessweek.com/news/2010-03-25/lower-home-prices-can-fix-what-government-can-t-caroline-baum.html?source=patrick.net

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This holds good to personal finance too if there is no plan to save money or reduce debt/spending.

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The globe and mail-
U.S. bond rates raise alarm - Yields on 10-year Treasuries are rising, and economists warn the trend could lead to higher interest rates

http://www.theglobeandmail.com/report-on-business/economy/us-bond-rates-raise-alarm/article1513879/

“What's happening in Greece and Dubai is headed our way, eventually,” argued Eric Roseman, president of Montreal-based ENR Asset Management.

“No nation, not even a reserve currency, can continue to fund deficits externally in the absence of domestic savings and no plan to reduce deficit spending.”

The yield on 10-year U.S. Treasuries is now just shy of 4 per cent – its highest level this year and roughly where it was at the peak of the 2008 credit crisis. Yields are up 25 basis points in the past week alone.

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http://www.rickackerman.com/2010/03/canada-won%e2%80%99t-escape-drag-of-slumping-u-s/

So we are not special. We are not different in Canada. The same rules of economics function here as they do South of our borders. Trade matters. Our housing crisis is coming, and we are merely a little behind schedule, so pay attention or you will lose your shirt.

California USA vs. Ontario Canada - Which State (Province) Is In Worse Shape? Canadian Banks vs. US Banks Comparison

http://globaleconomicanalysis.blogspot.com/2010/03/california-usa-vs-ontario-canada-which_29.html

State/Province Population Deficit Per Capita Deficit
Ontario 11,410,046 $21 Billion $1,840
California 36,961,664 $20 Billion $ 541


Hate to say it, but by this simple comparison California is looking pretty good.

---------------------------------

Despite supposedly tougher regulation and similar leverage limits on paper, Canadian banks were actually significantly more leveraged – and therefore more risky – than well-run American commercial banks. For example JP Morgan was 13 times leveraged at the end of 2008, and Wells Fargo was 11 times leveraged. Canada’s five largest banks averaged 19 times leveraged, with the largest bank, Royal Bank of Canada, 23 times leveraged.

Rahul,

As much as your posts are informative and you spend lots of time hopping between the sites to copy & paste the information, it hasn't helped stun the Real Estate market in Canada. Since the time of reading your advice of intended real estate market crash, the prices are almost 30% higher in the GTA. I feel for those who would have taken your suggestions to heart and are still waiting for the day when they would be able to afford a home now.

Yes, mortgage rates will increase...but they will still be low compared to where they usually are. I remember, when I bought my 1st home 12-13 years ago, I was paying close to 8.5%. Today, I am paying 1.35%. To get to 8.5 it will take (perhaps) a good 5 years. Even if it jumps tomorrow, I have already reaped the benefit of low rates for good 5 years.

Comparing Ontario to California? Just comparing debt makes Ont. in worse shape? What about the jobless rate in both places? What are the prominent industries that generate income for that state? How are they likely to fare post recession? What were the long term effects of recession? Who has invested more in people?

Anyway, to change the topic....enjoy this blog for a change: http://indiansinpakistan.blogspot.com/

-----------------------------------------------------------------
Rajeev Narula, Broker, REALTOR®
ACE TEAM REALTY INC., Brokerage
10 Kingsbridge Garden Circle, Suite 704
(Opp Square One - HWY10/403)
Mississauga, ON L5R 3K6
Bus: 1-888-355-3155 Ext. 300
Fax: 1-888-443-3155
Email:
Web: http://www.RAJEEV.ca" rel="nofollow">LINK

Thanks Rajeev.

"I bought my 1st home 12-13 years ago, I was paying close to 8.5%. Today, I am paying 1.35%."

There is lot of smart people like you who bought 8-10 yrs before and near to mortgage free. They fully utilized lifetime opportunity for lowest interest rates and pay their debt/mortgage faster. But it does not mean that carry forward jumbo mortgages (last 2-3 yrs) with 0/40, 5/35 (50% buyers) down makes sense. Principal debt is constant its evaluation with interest rates changes.

500K (10% down- 50K down), mortgage rates 3% with 35 yrs is better or House with 400K (50k down), 6% with 20 yrs is better deal?? Real Estate Board, brokers, banks and govt like 500K numbers.

There are lot of people here in western Canada who bought at peak of bubble are 70k+ under water. There is lot of people who can not take possession of their new condos who booked at peak time with 20K down and they are under huge loss ( http://www.greaterfool.ca/2010/03/28/condo-cowboy ). Rent can not pay the mortgage even. How long it takes to save or pay in mortgage such a big amount?

"Since the time of reading your advice of intended real estate market crash, the prices are almost 30% higher in the GTA. "

Same Q again- what does happen in last 2 yrs?

-- Houses become more affordable
-- High paying jobs are created
-- Mass population got lucky with lottery
-- Very Rich people moved to Canada
-- Mortgage became more affordable with govt's special low interest and with 0/40, 5/35.

How do you see effect (advice to buyers/sellers??) with coming higher interest rates, new mortgage rules (April 19), higher taxes and higher CAD$ effect on RE? Is there RE bubble in GTA or Canada?


I think we all can agree with this:---House price are drived by easy and maximum mortgage possible in North America. When credit gets tighter and converts into lower mortgage amount that will bring down house price.


-------------------------------------------------


Nice comment by kitchener1:
http://www.greaterfool.ca/2010/03/31/change/#comments

This whole RE game is kind of like a game of poker:
All the good cards in the deck have already been played:
0/40 mortgage= first ace
5/35 mortgage= second ace
Lowest interest rate in history= thrid ace
Self employed CMHC mortgage= fourth ace
Speculators buying multiple properties with 5% down, bogus rental income, easy credit etc.. are the rest of the good cards.

All of the good cards are already in play, nothing left in the deck, but no worries, the tables at the RE casino are always open.

Quote:

---

Originally posted by Rajeev Narula

Rahul,

As much as your posts are informative and you spend lots of time hopping between the sites to copy & paste the information, it hasn't helped stun the Real Estate market in Canada. Since the time of reading your advice of intended real estate market crash, the prices are almost 30% higher in the GTA. I feel for those who would have taken your suggestions to heart and are still waiting for the day when they would be able to afford a home now.

Yes, mortgage rates will increase...but they will still be low compared to where they usually are. I remember, when I bought my 1st home 12-13 years ago, I was paying close to 8.5%. Today, I am paying 1.35%. To get to 8.5 it will take (perhaps) a good 5 years. Even if it jumps tomorrow, I have already reaped the benefit of low rates for good 5 years.

Comparing Ontario to California? Just comparing debt makes Ont. in worse shape? What about the jobless rate in both places? What are the prominent industries that generate income for that state? How are they likely to fare post recession? What were the long term effects of recession? Who has invested more in people?

Anyway, to change the topic....enjoy this blog for a change: http://indiansinpakistan.blogspot.com/

---

We are talking here from long time that how over price RE sucks money from other industry and pushing people into unmanageable debt. We need to investment money in competitive export, university, research, tax break to private industry which supposes to create wealth not debt.

Finally news media start focusing on that and govt slowly leaving RE in comma with new changes and future interest rates.

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theglobeandmail-

http://www.theglobeandmail.com/report-on-business/the-great-sucking-sound-of-ottawas-housing-focus/article1524381/

The great sucking sound of Ottawa's housing focus

The biggest policy tool is the CMHC. Through it, the government uses its triple-A credit rating to hold down interest rates for less creditworthy people who want to take out really big mortgages with low down payments. That appears to make homes more affordable but in fact leads to bigger interest charges over the years, leaving less cash for RRSP contributions or university tuition, or just a stress-relieving night on the town.

“ The theory is we feel richer, so we spend more, supporting the rest of the economy. Except the figures show the rest of the economy isn't getting as much benefit, and besides, there's a good argument that such thinking doesn't make much sense for a house. ”

CIBC, TD, Laurentian latest to hike mortgage rates

http://www.calgaryherald.com/business/CIBC+Larentian+latest+hike+mortgage+rates/2905631/story.html


Home sellers rush to market in record numbers

http://www.theprovince.com/business/fp/Home+listings+leap+still+seller+market/2909977/story.html

Calgary real estate listings soar by 43% in March

http://www.calgaryherald.com/business/Calgary+real+estate+listings+soar+March/2909904/story.html


These days people only seem to care about the this month's payments rather than their future ability to repay the debt.
--------------------------------------------

Blame game is going to start now:

1. The problem is banks are letting average people borrow twice as much money,

2. Govt. does not care.

3. CMHC is not supporting home owners but bankers only

4. Higher interest rates/Taxes/HST is hurting average Canadian and a sad pic of family with kids on front page

No-one asking same Q from buyers: what are they thinking when signing the papers? Accountability…..responsibility?