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Mortgage Broker News | 08 Dec 2014, 12:24 PM Agree 0
One economist believes there are signs of overbuilding in Canada, a trend that that may be contributing to a housing bubble.
  • Victor Simone | 08 Dec 2014, 03:16 PM Agree 0
    "So, when rates eventually go up..."

    It seems to me that the macro economy and foreign investors like China are happy to earn low rates on Yankee Bonds. So, when other global bonds start to be more attractive to China, then I suppose rates will go up.

    However, this low interest rate environment went lower and longer than I could have imagined, so I stop even thinking about it. Most borrowers like the 5 year fixed anyway, so listening to these interest rate speculators is like listening to the weather. Nobody knows, and eventually things might change.

    Affordability and good lending policies is the best way to combat interest rate increases. I think Canada is in a good place to deal with a decrease in property values, when that eventually happens.
  • AnthonyC. | 08 Dec 2014, 03:26 PM Agree 0
    Justin....perhaps you should have sent David Madani an article which was posted earlier this morning in the M.B. News, published by one of your fellow colleagues, Jaime Henry, which reviewed the study from Urban Futures, which states that "Canada will need another 4.5 million homes over the next three decades..."

    Interesting how the M.B. News covers all the sides to an argument...
  • Gerald D | 08 Dec 2014, 03:46 PM Agree 0
    What is the transmission mechanism or the response lang that is causing the over building while prices increase. Is it an increase in houses under construction inventory? I'm trying to figure out the comment. Is there a separate lag time for the response to interest rate increases and the response time to interest rate decreases? The 'very typical' in the quote suggests to me this is an observed trend, and I'd like to interact with those data points. If the data sources could be disclosed I'd appreciate that.

    “We do see signs of overbuilding in new construction. So, even as the new supply of housing has risen, we’ve also seen a run-up in prices — which is very typical of what you would see in a housing bubble.”
  • Gerald D | 08 Dec 2014, 03:46 PM Agree 0
    What is the transmission mechanism or the response lang that is causing the over building while prices increase. Is it an increase in houses under construction inventory? I'm trying to figure out the comment. Is there a separate lag time for the response to interest rate increases and the response time to interest rate decreases? The 'very typical' in the quote suggests to me this is an observed trend, and I'd like to interact with those data points. If the data sources could be disclosed I'd appreciate that.

    “We do see signs of overbuilding in new construction. So, even as the new supply of housing has risen, we’ve also seen a run-up in prices — which is very typical of what you would see in a housing bubble.”
  • Gerald D | 08 Dec 2014, 03:47 PM Agree 0
    What is the transmission mechanism or the response lag that is causing the over building while prices increase. Is it an increase in houses under construction inventory? I'm trying to figure out the comment. Is there a separate lag time for the response to interest rate increases and the response time to interest rate decreases? The 'very typical' in the quote suggests to me this is an observed trend, and I'd like to interact with those data points. If the data sources could be disclosed I'd appreciate that.

    “We do see signs of overbuilding in new construction. So, even as the new supply of housing has risen, we’ve also seen a run-up in prices — which is very typical of what you would see in a housing bubble.”
  • Jake Abramowicz | 08 Dec 2014, 04:51 PM Agree 0
    David Madani has been blowing the same horn for how long now? If anyone has listened to his advice and stayed on the sidelines, I truly feel for you. This isn't a story - this is regurgitation by the same old David Madani that tries to sell headlines by making bold statements that have yet come to fruition. Why can't he admit he's been wrong all this time, I wonder?

    May 2013: http://www.theglobeandmail.com/news/national/canadian-housing-market-slows-but-avoids-crash/article11780996/

    July 2012: http://metronews.ca/news/toronto/308210/no-bubble-in-torontos-condo-market-rbc-report-says/

    And so forth. I mean, sure, eventually David Madani will be right. Eventually. When? Time will tell.
  • Jake Abramowicz | 08 Dec 2014, 04:51 PM Agree 0
    David Madani has been blowing the same horn for how long now? If anyone has listened to his advice and stayed on the sidelines, I truly feel for you. This isn't a story - this is regurgitation by the same old David Madani that tries to sell headlines by making bold statements that have yet come to fruition. Why can't he admit he's been wrong all this time, I wonder?

    May 2013: http://www.theglobeandmail.com/news/national/canadian-housing-market-slows-but-avoids-crash/article11780996/

    July 2012: http://metronews.ca/news/toronto/308210/no-bubble-in-torontos-condo-market-rbc-report-says/

    And so forth. I mean, sure, eventually David Madani will be right. Eventually. When? Time will tell.
  • Angela Wong-Liao - Invis | 09 Dec 2014, 10:11 AM Agree 0
    In the world of investment, price goes up, it will subsequently comes down.

    Housing prices is at an all time high, especially in Toronto, Vancover & Calgary, it may be beneficial to potential buyers, particularly first time home buyers if the housing prices adjusted down.

    Yes, I fully agree that debts will be a big impact to our economy in future, especially when interest rates start inching up.
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