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Mortgage Broker News | 21 Apr 2016, 08:15 AM Agree 0
Author and industry observer notes that the current situation in Canada’s housing markets has similarities with the conditions prior to the ‘90s dot-com crash
  • DAR | 21 Apr 2016, 02:33 PM Agree 0
    This article, like 99% of Canada housing bubble articles that I read, offers up the massive price run-up, or extreme price-to-rent ratios, as the primary pieces of evidence that housing is over-priced and we are in a bubble. But high "sticker price" is not really a meaningful indicator that we're in a bubble. It doesn't matter what the "sticker price" is. What matters is what people can afford to pay on a monthly basis. With today's ultra-low interest rates, monthly carrying costs seem to be manageable by most households, even with the high "sticker prices" we are seeing. The only factors that will cause prices to retreat are increased unemployment and/or increased interest rates.
  • TWH | 26 Apr 2016, 04:12 PM Agree 0
    Prices Nationally would retreat by 32% immediately when the sales mix returns to it natural levels (pre 2013). Remember housing bubbles are measured through Average Buying Price paid and Canada has never in its history had the current sales mix take place.
    No need for interest rates, unemployment or mass extinction but rather a shift back to the natural order is all that is needed.
    As that happens panic selling sets in and real prices begin to drop compounding Sales Price deflation.
    Contrary to popular myth that is how the GTA bubble burst last time around.
  • BJ | 27 Apr 2016, 10:06 AM Agree 0
    “housing is bought out of wages and salaries"? REALLY? In Vancouver/Victoria it isn't. Housing is bought with cash. Often foreign cash or as a result of people selling with a large profit (as a result of foreign cash driving up prices). Salaries and interest rates are almost irrelevant on the West Coast - unfortunately. First time buyers are getting pushed out as they can't even save to keep up with house appreciation. Wealth over wages - I don't see that changing barring significant Government controls over foreign ownership - good luck with that.
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