Canadian Real Estate could Plunge.

http://www.cbc.ca/money/story/2008/09/08/bc-080908-real-estate-study-ubc.html?ref=patrick.net

Affordable housing in other words

The lead article was written September 8th, and the sell-off has already begun.

I would add: ...and the fact that prices will diminish somewhat will only reflect the fact that people will have so much less money to buy with lost jobs & savings. So there are no opportunities down the road for individual buyers, only for developers, corporations...

quote:Originally posted by Doug:
Here's hoping, I would like to afford a condo that is larger than a closet.

Oh shoot, I read the article..."except Toronto and Edmonton". [img]frown.gif" border="0[/img]

Toronto house prices plummet 15%

quote:Originally posted by aka Mycroft:
The problem of course is that a) people who own their homes will end up losing a lot of their investment and b) people with mortgages could well end up with a mortgages that are worth more than the house.a) is a misunderstanding of investment principles. Over an extended period an investment will grow, but over short term it may shrink, or at least grow very slowly. You don't lose unless you sell. If you stay living in your house, you're investment will continue to grow, just not 40% a year (exagerating) like it has been the last few years.

If someone bought 2 years ago speculating and hoping to make a quick buck, then it will be a long buck instead.

If someone has owned their home for 40 years and is disappointed they didn't sell 6 months ago and make the most, that is unfortunate, but really it is like complaining you didnt buy a lottery ticket last week. You make your profit when you pull the trigger, up until then it is just a possibility.

quote: I think it's a matter of over building as much as anything else.
It's hard to believe with so much homelessness and so many 2-hour commutes, that there has been a problem of over-building in the cities.

I live in a housing coop, and we are preparing to buy our buildings form the city government. I am very worried about the value of our buildings crashing five minutes after we sign our mortgage.

However, I am encouraged by the fact that massive numbers of people will all be in the same situation as the members of my coop if the value of our property suddently falls.

But this latest mortgage "spectre" just reminds me of how dangerous it is to turn housing into a commodity, like diamond earings and Tang futures.

"Those are the people who hear that housing prices in Phoenix have plummeted so they panic in Vancouver. Different market."

I know people in real estate in Vancouver and they are suffering. Nothing is selling, and prices are plummeting faster than the media is telling us.

This is a full blown crash, my friends.

The regional markets are not exactly the same, but there many similarities and the underlying problems exist all over most of North America.
Its just a questions of WHEN things break down, and Vancouver is about two years behind the US.

There is good reason to panic.

People who own outright or have small mortgages, and never bought as an investment anyhow, have no need to worry. That's true, they can ignore everything for the short term.

BUT what about everyone who has bought in the last three years. They are screwed if they have to sell in the near future. At least, here in Vancouver. That's a lot of young families in trouble if anyone loses a job. [img]frown.gif" border="0[/img]

There is only 1 country that needs to collapse, the USA. It has 3 trillion dollars, at least, in NSF cheques, aka the US dollar, littering the world's financial markets. At this point one does not know whether to thank them for causing capitalism to collapse, or scream about ruined lives and future.

Most Americans have yet to feel these costs. The price in blood has been paid by our voluntary military and by hired contractors. The price in treasure has, in a sense, been financed entirely by borrowing. Taxes have not been raised to pay for it - in fact, taxes on the rich have actually fallen. Deficit spending gives the illusion that the laws of economics can be repealed, that we can have both guns and butter. But of course the laws are not repealed. The costs of the war are real even if they have been deferred, possibly to another generation.

quote:Originally posted by thorin_bane:
I bought my house almost 8 years ago. Up until 2 years ago it had risen all of 10% in 6 years while our city was supposedly booming. However the market crashed in Windsor 2 years ago and has been getting worse ever since, My house is now worse less than I paid for it 8 years ago. I am on 'temporary lay off' so if we don't get our call back in january I will have to sell the house and basically be debt free by the time everthing is said and done(No house,but no debts, or much in savings. Starting from scratch all over again). Which really blows for the 8 years you commit to mortgage payments. I would have been better to rent during this time and would have had the same debt free(ness) with less worrying. Yet I am so hoping that things get even worse so we can ALL start EVERYTHING over from scratch not just all the people at the bottom.
We need a revolution. The rich got us into this with being greedy pigs, yet we are going to pay again for their faults...yeah yeah a few of them are getting a nibble in the bum, but that is nothing compared to the arm and leg severing people in the bottom are taking.

Boy, do I hear you thorin, we are in much the same boat, waiting for call backs too. Only at present we would make a bit off of our house, after mortgage debt is paid, but not much. Perhaps not even enough to move our stuff to a larger centre and pay damage deposit and rent.

And yes, we the poor again pay for the rich to get richer, and why do more working poor not realize this? There won't be any changes until they do! Moreover, I think the acadamia and middle civil servants play a large part in keeping the status quo!

Historically, and again today, hope goes West young man, goes West. And when the H2 S and climate gets a little hard to handle, c'mon back. It's going to be increasingly all about location, location, location. [img]wink.gif" border="0[/img]

-------------------------------------------- quote:

It just could be the right time to buy up the back forty and get a few chickens and goats and a milch cow.
Sure hope not

Just 100 years ago, people could benefit from housing these benevolent life forms at the back end of their town lots in some smaller communities.

[ 04 November 2008: Message edited by: George Victor ]

The best advice anyone can receive about buying a house/condo is dont do it with less than 25% down. People are in such a rush to be perceived as big shots. When a person buys a home with %5 or zero down they're begging for trouble. Wait a few years and save up and protect yourself.

Ask yourself this. Who the hell buys a house with %5 down or less?

quote:Originally posted by aka Mycroft:
The problem of course is that a) people who own their homes will end up losing a lot of their investment and b) people with mortgages could well end up with a mortgages that are worth more than the house.

Oh, I'm supposed to feel real sorry for property speculators and people who can actually afford a $500,000 house. My heart bleeds. Really, it does.

Slow real estate is a mater of demographics (age groups). There won't be any real uptrend in real estate for 3-5 years. 28% of the Canadian economy is the echo generation which the top end is still renting and will not be buying untill approximately 33 years of age. No hurry to buy.

"That's indicative of a much larger problem."

 The problem is the price of houses doubled (or more) in Vancouver and incomes didn't. Simply enough, those prices will fall back to incomes. And as incomes fall in a recession, the prices will fall even further.

 Expect a Vancouver house that costs $500,000 right now to cost $200,000 in two or three years. Keep renting for now.

Any word on when the housing crash will hit Manitoba? More than once, I would click the national story to hear that housing prices were down, only to see that Manitoba was swimming against the trend.

I don't know how far housing prices will drop but what i do know if that the newspapers, realtors, contractors, and developers all have a vested interest in suggesting that prices are going up, so it is just prudent to take any of their pronouncements with a large grain of salt. And rumours are constantly flying around such as a recent one for the BC housing market that China is now making it more difficult for their people to purchase property abroad. If that were true then yes the BC housing market could take a hit as the Chinese have been buoying up property prices here for the past 30 years. Just don't expect to see widespread coverage of that though in the press. 

Limited conversation. I don't own any property and I'm sure many babbler's don't either. Quite elitist, at times...

I have a low-interest CMHC mortgage which is actually 50% cheaper than renting an apartment here. However, that advantage is muted by the fact that I'm paying for taxes and renovations myself - when I was renting, the owner paid for the renovations and property taxes. But it's also an investment - if I ever do sell, I'll get a nice sum, but I have no plans to do so. I'll never go back to renting if I can help it - after all those years of renting and making the landlord rich with nothing to show for it at the end? Hell, no!

Is this it?

http://www2.macleans.ca/2012/01/26/what-happens-when-canadas-housing-bub...

Be careful what you wish for. A bubble this large bursting would bring down the entire economy, even absent any external shocks.  We are talking about families' net worth taking a huge hit, which would of course lead to lowered spending (consumer spending is way overextended), major job losses, etc. Combine the bubble with an external recession (e.g. in Europe) and the net result could be devastating for Canada's economy.

Ireland is about 15% unemployment right now several years after their bubble burst. Yes, Canada's bubble is only half the size, but Canada is starting already at 7.6% unemployment.  And of course you have Harper's government which would be reluctant to provide any Keynesian stimulus, and would in fact use a recession as an excuse for austerity.

The economic situation is looking dire.