Housing crash is coming says portfolio manager

Housing crash is coming says portfolio manager

Housing crash is coming says portfolio manager An Edmonton portfolio manager is so sure there will be a crash in the housing market that he’s written a book on how to survive it. Hilliard MacBeth from Richardson GMP wrote the book after realising the extent to which many of the hundreds of households he manages funds for are very exposed to the housing market. MacBeth says that historic data suggests that we could see a correction of 50 per cent, taking prices back to the level they were at when the current bubble started, which he says was 1999 or 2000. With high levels of household debt and some investors owning large property portfolios, he sees a potentially devastating problem for the market and wider economy. MacBeth’s prediction for the crash is spring or summer next year. The book is called “When the Bubble Bursts: Surviving the Canadian Real Estate Crash”. Read the full story.
  • James Loewen 2014-09-25 9:05:04 AM
    From his article: " So the advice is that people who have a lot of debt should sell and rent. The number one advice would be to sell the condo.."

    From Eco 101 - If all condo owners from 30-50 sell there condo's, thus increasing supply from an already high supply situation - while maintaining the present demand of condo's - PRICE DECREASES.

    If Price / Value of condo's drops then due to this over influx of supply below then remainder of condo owners existing debts on the condo's, there's a negative-equity position for owners and would as it did in the US incite owners to simply "walk away" from their condo given owing more than its worth. Resulting then in further supply, thus further price reduction.

    Its brilliant ... forecast a correction in prices - then give the advice that will actually cause the collapse of the condo market and actualize your very prediction.

    Its similar to predicting a decrease in XYZ stock in Canada, then colluding with every investor and client to recommend the sell position of a stock thus increasing sell orders with minimal buys, stock will have to decrease and I'm now cited as a wizard by creating its own demise.

    Great "Self Actualizing Prophecy".
    (am not even going to touch the fact that owning is forced savings for most, that without equity created in homes most wouldn't have any retirement planning and all the other pro's of ownership vs renting etc)
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  • Dustan Woodhouse 2014-09-25 10:45:35 AM
    Well put James Loewen. I too disagree with this sort of hype. My own counterpoint; http://dustanwoodhouse.ca/vancouver-real-estate

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  • Brian Lambert 2014-09-25 11:30:53 AM
    Good way to hype your point to sell a book? The bubble did not start in 1999-2000, actually the housing recovery started at that time as home values were depressed for over 10 years with little to no growth. Like all housing recovery's some time the market does not know when to slow down as we are seeing today in some of the bigger city centers, but its good to note that it is not happening everywhere. The book will probably be a BUST?
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