CNN - Canada's coming housing bust
Recent government data shows that the average Canadian with a two-story home spends almost 50% of his household income on mortgage servicing, with the average is closer to 70% in red-hot markets like Vancouver. "By and large the affordability situation remains within a safe range in Canada; however there are local markets where the share of household income taken up by homeownership costs is at worrisome levels," the Royal Bank of Canada wrote in September, adding that the situation in Vancouver raises "a red flag."
http://money.cnn.com/2010/11/12/real_estate/canada_housing_bust.fortune/?section=magazines_fortune
Canadian household debt continues to rise and currently runs at about 144% of disposable income, comparable with rates in the US, although household debt is falling there. As with their American counterparts, debt-sodden Canadians could soon begin putting away those charge cards too.
"We pay more for gas, car, food, restaurant, flight, hotel, taxes and everything than American then how can we afford higher house price with lower salary?" Even medical is not free for most of the people here except people filing taxes on 40K with 4 kids.
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CBC-
http://www.cbc.ca/canada/story/2010/11/17/housing-bubble-warning.html?ref=patrick.net#storyhead
Dean Baker of the Washington-based Centre for Economic and Policy Research said he sees no reason why average home prices in Canada should be about 50 per cent higher than in the U.S. Baker said if interest rates rise by two per cent, Canadians could see house prices collapse by 25 to 30 per cent.
Study: No Reason to Pay Realtor Commissions When Selling a House
http://money.blogs.time.com/2010/11/02/study-no-reason-to-pay-realtor-commissions-when-selling-a-house/?source=patrick.net#post-5352
"Our key finding is that Realtors do not offset the cost of their commission; they do not get you a higher price."
Canadian home prices drop for first time in 16 months
http://www.financialpost.com/news/Canadian+home+prices+drop+first+time+months/3877708/story.html
Quote:
Originally posted by hopesrforever27
Canadian home prices drop for first time in 16 months
http://www.financialpost.com/news/Canadian+home+prices+drop+first+time+months/3877708/story.html
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MK
Debt is very bad mistress and does not care borders, cities,color or race.
I think Canadians are challenging Albert Einstein - we are expecting different result for same stupid mistake.
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Canadian Household Debt Exceeds U.S. Levels for First Time in 12 Years
http://www.bloomberg.com/news/2010-12-13/canadian-household-saw-their-net-worth-and-debts-increase-in-third-quarter.html
Ottawa, banks discuss measures to rein in Canadians’ personal debt
http://www.theglobeandmail.com/globe-investor/ottawa-banks-discuss-measures-to-rein-in-canadians-personal-debt/article1834870/
We have same symptoms and more debt..how long we need to wait for RE crash?
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CMHC is answer to ballooning consumer debt
http://www.cbc.ca/fp/story/2010/12/23/4019930.html#ixzz199s93XSG
The reason consumers are borrowing so much is that the government has been encouraging them, just as it's also been encouraging the banks to lend. It's called CMHC insurance and the way it works is that Ottawa guarantees virtually all of the risky home loans made by the banks.
The program was originally conceived as a way for low-income Canadians to get mortgages and buy homes.
That's a good thing but it also provides a key benefit to the lenders since it removes risk of default. In effect, CMHC insured home loans are as safe as government bonds and that's allowed the banks to treat them as such.
Simply put, loans that would otherwise be regarded as less than top quality are transformed into triple A gold, courtesy of the tax payer.
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