Government Is To Blame For Canadian Housing Bubble.

[esaino]

I'm just wondering what's taking them so long.

Finding a clever scapegoat outside of normal public view. Today they announced the CMHC goes under OSFI oversight:

http://business.financialpost.com/2012/04/26/osfi-to-supervise-cmhc/

Mission accomplished.

This is what I am thinking as well. Mr. Carney has too much exposure on the news lately on the issue of housing debt and interest rate. It's time to point finger to someone else to redirect audiences' attention.

Although tightening CMHC is more specific to mortgage debt and should have be done long ago, interest rate deals with broader issues (inflation, price of goods, housing, gas.... exchange rate and bankers' pockets). It's all calculated and we are watching the Live Show.

[eyesthebye]

TLP,

So long as the asset is affordable I see no reason to wait until financing rates rise before locking in the purchase, do you?
In fact, if I can get 10 year fixed at 4% I'd probably lock it if it's available when my current mortgage comes due.
Why would you put off buying a new car if you need one with some companies offering 0% interest. Would you like them to wait until it costs 5%?
Not sure I see the wisdom in waiting.
HELOCs are a different topic - we need totighten up here.

[fishguy15]

Why would you put off buying a new car if you need one with some companies offering 0% interest.

Define need. One doesn't need to purchase RE, no matter the financing rates.

[Taipan]

TLP,

So long as the asset is affordable I see no reason to wait until financing rates rise before locking in the purchase, do you?
In fact, if I can get 10 year fixed at 4% I'd probably lock it if it's available when my current mortgage comes due.
Why would you put off buying a new car if you need one with some companies offering 0% interest. Would you like them to wait until it costs 5%?
Not sure I see the wisdom in waiting.
HELOCs are a different topic - we need totighten up here.

Affordability. Hmm interesting concept. Its why the world is in such a mess.

The instant gratification concept. I want it, ill get somebody elses money and have it.

Ill worry about paying it back tomorrow. Now lets party!



They thought the same thing in the 70's with low interest rates. Where were they 10 years later? 18%. And that was with 25% deposit!

Now 100% loans, 95% loans emergency interest rates. Its the perfect storm for cheap finance which will end in tears.


2020 and you have interest rates of 15% you could afford a shoe box in the middle of the main highway and youd be lucky to have it!

[thirdlittlepig]

TLP,

So long as the asset is affordable I see no reason to wait until financing rates rise before locking in the purchase, do you?
In fact, if I can get 10 year fixed at 4% I'd probably lock it if it's available when my current mortgage comes due.
Why would you put off buying a new car if you need one with some companies offering 0% interest..

I have no idea why I would put off buying a car, I have never done that. I don't care if it's 0% or whatever % is normal, I just buy my car outright.
Why would you buy something that ties you up with interest costs for 25 or 30 years? That's not what I would call affordable. If I wanted to buy another house, I would just buy it. If I can't afford it, it's not affordable. That's my definition of affordable. I don't buy it with money I ain't got and call it affordable.

[eyesthebye]

"thirdlittlepig"

I have no idea why I would put off buying a car, I have never done that. I don't care if it's 0% or whatever % is normal, I just buy my car outright.

that's called 'dumb money'
A car company offers you a free loan of 25K, instead of using your cash to make money you decide buy the car outright?
You're probably throwing away 10K there TLP. You're choice - all the best with it. You and I can compare bank accounts
in the retirement home lol

[thirdlittlepig]

"thirdlittlepig"

I have no idea why I would put off buying a car, I have never done that. I don't care if it's 0% or whatever % is normal, I just buy my car outright.

that's called 'dumb money'
A car company offers you a free loan of 25K, instead of using your cash to make money you decide buy the car outright?
You're probably throwing away 10K there TLP. You're choice - all the best with it. You and I can compare bank accounts
in the retirement home lol

Yeah, I am just that rich, that I can throw away 10k. And I'm so dumb that I never had a loan. I am so dumb that I worked my way through university instead of sponging off my parents. My sister was much smarter in that way and now has a bunch of debt that I can't see how she's going to pay for. Man am I stupid.

[eyesthebye]

"thirdlittlepig"

I have no idea why I would put off buying a car, I have never done that. I don't care if it's 0% or whatever % is normal, I just buy my car outright.

that's called 'dumb money'
A car company offers you a free loan of 25K, instead of using your cash to make money you decide buy the car outright?
You're probably throwing away 10K there TLP. You're choice - all the best with it. You and I can compare bank accounts
in the retirement home lol

Yeah, I am just that rich, that I can throw away 10k. And I'm so dumb that I never had a loan. I am so dumb that I worked my way through university instead of sponging off my parents. My sister was much smarter in that way and now has a bunch of debt that I can't see how she's going to pay for. Man am I stupid.

some of the smartest people I know are not good with money TLP.
And if your sister owns her home she is smarter than you (if mortgage is what you mean by "a bunch of debt")

[Taipan]

That’s the comment of hormones. No price can be put on hormones when it comes to housing.

They call it house horny! My hormones tell me I must own my own home to raise my family, and the marketeers exploit that human weakness.

It is however a totally stupid argument as children can be born into rental accommodation and live a wonderful life.

Children born into houses under mortgage stress and money stress can have a far inferior upbringing. Mortgage and financial stress is a major cause of marriage breakdown.

Today my eldest son had his 19th birthday, and 19 years ago, we were renting. He is now at university with a scholarship studying computer programming.

Yes we now own our own home and we have paid the mortgage off. A mortgage is a debt, you owe somebody and one way or another you have to pay all that money back.

If your lucky enough to get it at low interest rates the smartest thing to do is pay it off as fast as you can!

If you have borrowed at 95% or 100% of the price of the property, how the hell are you going to pay that back?

Forget about just selling it.

Volumes of unsold property continue to rise and are now over 17,000 properties across Vancouver

In a falling market buyers are scarce, and most vendors get left behind as prices fall.

That means you have to earn that money and pay the debt back.

Time for a reality check.

Get the home mortgage statement out and look at it.

Look at it real hard, look at the money you owe and say how long am i going to have to work to pay this off!

The government create the conditions for a property bubble. The individual is to blame for allowing themselves to be exploited and cajoled into an unwinable position by buying with rediculous prices, and loan to valuation ratio's. LVR. It isnt just the governments fault, its the publics fault for participating.

But some didnt, and they are smarter then all the buyers that bought at rediculous prices.

[thirdlittlepig]

Yeah, I am just that rich, that I can throw away 10k. And I'm so dumb that I never had a loan. I am so dumb that I worked my way through university instead of sponging off my parents. My sister was much smarter in that way and now has a bunch of debt that I can't see how she's going to pay for. Man am I stupid.

some of the smartest people I know are not good with money TLP.
And if your sister owns her home she is smarter than you (if mortgage is what you mean by "a bunch of debt")

THere's that special unique ETB logic again that says a person who has sponged off her parents and anyone else her whole life with no paid off home and no visible means of support is smarter than someone who has never carried debt, has a paid for home, and put three kids through college. If having debt and sponging off folks makes you smarter it's no wonder this country is in a boatload of trouble with that logic. if she croaks in the near future, she passes on her debt and real estate that's worth less than when she bought it, I pass on clear title to a country acreage and real assets, and kids who have a future and won't be living off welfare.

[registered]

THere's that special unique ETB logic again ...

Not at all strange viewed dispassionately:

[BCAccountant]

OMG, that thread was hilarious.... released some pent up stress from tax season. tlp, we need more Canadians like you!