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Christie Park

Taming Toronto's housing bubble requires ban of foreign buying | Diane Francis | Financ... - 0 views

opinion.financialpost.com/...sing-bubble-ban-foreign-buying

housing bubble canada foreign investments artificial prices characteristics

shared by Christie Park on 18 May 12 - No Cached
  • Nearly three times’ more condo high-rises are being built in Toronto than are being built in New York City and nearly seven times’ more than in Chicago, according to Bloomberg News.
  • Conventional wisdom is that this is the market at work. This is not the market at work. This is manipulation of a government system of open-ended mortgage insurance that is poorly supervised.
  • What is going on here is a deluge of hot money from abroad that is creating an artificial and potentially dangerous real estate bubble.
  • ...1 more annotation...
  • This is what is happening. For example, a modest bungalow in Toronto sold last month for $1,180,800, $400,000 more than the asking price of $759,000. Canadian bidders were furious and deserved to be. The winning bid was made by a university student whose parents have a business in the United States but who live in China.
  • Christie Park on 18 May 12
     
    This article says that foreign investments are creating an artificial housing bubble.
sheba birhanu

What happens when Canada's housing bubble pops? - Econowatch - Macleans.ca - 1 views

www2.macleans.ca/...en-canadas-housing-bubble-pops

Artificially high prices covered bonds Government-insured Mortgages What a Bubble Burst can Effect

shared by sheba birhanu on 22 Apr 12 - No Cached
  • The real price of Canadian homes has increased by 85 per cent on average since 1998. Prices stagnated in 2008, at the height of the financial crisis, but they were back on the rise again as soon as 2009, when they grew by nearly 20 per cent
  • the debt burden of Canadian families stands at 153 per cent of their disposable income
  • Canadian market is overvalued by over 70 per cent
  • ...13 more annotations...
  • our housing market is afflicted by “overvaluation, speculation and over supply.
  • 2012 is going to be the year when housing prices start heading south
  • subprime mortgages are virtually non-existent in Canada, and government guarantees on mortgage insurance act as a buffer protecting the banking sector from housing market downturns. A whopping 75 per cent of mortgages in Canada are fully insured by Ottawa
  • prices nationwide will slip by five per cent this year in the best-case scenario. A spike in unemployment could trigger a 10 per cent price drop
  • Secondly, even in areas where there is a bubble, not all sectors of the market are equally inflated
  • condo prices have already declined 15 per cent
  • Canada’s pop won’t bring down the entire financial system
  • “We watch the housing market carefully and we are prepared to intervene if necessary,” he said.
  • Last week Finance Minister Jim Flaherty hinted he is also worried about housing:
  • hough job creation is softening in Canada, there’s little reason to believe joblessness will rise to America’s level.
  • Even economist Nouriel Roubini–famously dubbed Dr. Doom for accurately predicting the great recession–doesn’t think Canada is headed for disaster. He predicts a 10-per cent correction, but not a U.S. style meltdown.
  • The government already cut the maximum length on federally insured mortgages from 35 to 30 years in early 2011,
    • sheba birhanu
      sheba birhanu on 18 May 12
       
      Flaherty responded to further changes in the housing market - developed concern.
  • Christie Park on 22 Apr 12
     
    This article includes charts and graphs.
sheba birhanu

Carney warns of potential housing market trouble - Canada - CBC News - 0 views

www.cbc.ca/...pol-the-house-mark-carney.html

Current Characteristics of the Canadian Housing Market Artificially High Prices Preventative Measures Rising Levels of Household Debt Interest Rates

shared by sheba birhanu on 23 Apr 12 - No Cached
  • stopped short of saying a housing bubble exists in Canada.
  • condo markets in Toronto and Vancouver as being particularly unsustainable.
  • issues particularly in some parts of the country, in the condo market,
  • ...8 more annotations...
  • The average home price in Vancouver finally saw a decline in March at $730,998 from $823,749
  • average home price in Toronto rose again in March at $503,998 from $499,354
  • t's the decisions of the individuals who take out the loans, and Canadians are a smart and prudent people
  • onus isn't just on individual Canadians, but also on the banks and institutions that must make some wise decisions and not lend to people who clearly can't pay the money back
  • as well as the federal government for tightening mortgage lending rules.
  • Carney repeated warnings against Canadians taking on too much household debt,
  • Carney said interest rates "are going to go higher,"
  • Canadians should make sure they can carry that debt when interest rates "are at a more normal level."
  • sheba birhanu on 18 May 12
     
    This article contains preventative measures from Bank of Canada Governor Carney and evidence that we are headed for a housing bubble.
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