CMHC: Home prices could fall 47.9%

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Originally Posted by 3030

I wonder how much property this guy own's in Toronto and Vancouver



https://www.cbc.ca/news/politics/men...visa-1.5872287

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Maybe plenty

Bill Gates owns the largest amount of farm land in the USA lol. He just keeps on buying it up .

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Originally Posted by fishfood

Wait until the government stops paying everyone lol.

The government is only cushioning the fall. .

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A ton of variables to consider. Given most of the job losses, and those being hit the hardest by far are low income. How many do you think have mortgages of 300,00-600,000? Largely a non factor Im thinking...

Interest rates.
A big concern. But what would most likely have to happen before they start soaring. A booming economy???

Could a crash happen?
Sure. Never say never. But those betting on it.......

But if it happens, there are so many variables and scenarios. Find a deep dark cave and pray you aren’t caught in a landslide. Just read the first post.

25% unemployment
4 med sizes financial institutions toast...

What do we think banks will be doing? Making it easy to borrow $ so they can lose more???

Etc.

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Originally Posted by JBen

Not bragging here - but if more people lived BELOW their means they’d be better off IMHO.

No argument that is part of it. I think especially for the upper midddle class. Those lower down the food chain, it gets blurred. How much of it is living beyond their means by choice and how much because is "cost of living". Which is really, driven by those who have more.... Just look at what cars cost these days....let alone appliances, etc, etc, etc.
Look at how much rent is...Kind of hard to leave the Credit card alone, when X cost Y because others want to paid Z and buy ABCD and rent is $2,000/month and the median duo income for the have nots is 80k.

Not sure what you do Fisherman. So I'll use 41000 to "illustrate" the next thing. 4100 would likely not own his house, be able to afford vacations, or a boat or what ever 2 cars are in his driveway. If the masses weren't in debt, fueling the economy, creating the need for his products/services and putting food on his, your and my tables.

Some comnenting here I know are or were public servants. No mountains of debt, no economic growth, no income or corporate taxes, no paychecks and no pensions.
"food for thought"

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Debt makes the world go around - moderate debt is healthy for an economy but deep debt is unhealthy for an economy due to it's crippling effect. Debt makes each one of us wake up every morning and go to work to make a better life. It makes us want to perform better at work to sell more and get a bigger bonus, a better raise, and aspire one to apply for that next job that will offer more room for development. Personally I do not see this in the public sector. In the public sector it seems that things operate in a vacuum - compensation is based more on tenure than performance. The same thing would happen if we had no mortgage, truck payment, or kids in University - there would be no incentive for us to give 100%. Meh.......I'll show up and coast across the finish line after my extended lunch.

In my day job I primarily deal with large end users, PUC's, Municipalities, and large contractors that need to be compliant to CSA Z462, operate more efficient, safer & eliminate unwanted shutdowns, and mitigate risk. Cheap money help with some customers but most customers it is all about ROI or fear of doing nothing (risk mitigation). In my side hustle (electrical) COVID has helped drum up demand tremendously. People that were putting off home renovations or upgrades are now going ahead with them because they are now working from home, schooling from home and STUCK at home. Fueled by rising house prices and low cost of borrowing has but most trades in high demand and short supply - which everyone knows inflates prices of both labour and material.

Interesting facts from the BMO on house prices:

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BMO Uncovers Simple Reason Canadian House Prices Now 46% Higher Than U.S.

In fact, at this point, the cost of a house is 46 per cent higher in Canada than in the U.S., when adjusted for purchasing power and exchange rates, Porter found.

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“A much more fundamental answer may simply be that on balance Canadians have made a collective choice to allocate more resources to (and thus ‘consume’ more) housing than other countries,” he wrote.

In other words, we pay more for housing because we’re willing to ― because it’s worth it for us.

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That may have to do with the fact the average resale price of a house jumped 17 per cent over the course of 2020, to a record high of $607,280. If the worst economic shock in decades can’t stop the housing market, what can?

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However, he notes this type of consumption comes with a big asterisk: debt. Amid soaring house prices, Canadians have become among the most indebted people in the developed world.

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from: https://www.huffingtonpost.ca/entry/...b6d64153ac675b

4100
I wasn’t referring to our own personal motivations or the rat race :) What is “debt”, no matter the form or by who, other than additional spending. Public sector is by far “the worst”. See debt and deficits :)

Look at CNs balance sheet. All kinds of credit. It helps lay track, buy cars etc. Which inturn employs people, who in turn spend....”on you”. Hire you.

if we were to magically eliminate 40 years of debt spending, especially the last 20. Your life, my life would not be what they are.

As much as we mention debt, the Jones. All that “spending” has fueled economic growth. A lot of it.
R/E alone is 9% of GDP. Consumer spending, be it mtg debt, or vehicles, or TVs....has kept the economy going... lol, since 2010 growth has been under 2%. How much debt have Canadians piled on...

As for housing in the US.
If a person loses a job there, or moves there. How many big cities are there to choose from to find work. Make a life for themselvesHousing in the US is trending down, here soaring.
Porter said it.

Population growth ( higher than US). Fewer places to live and work. It’s not rocket science.

Appetite
Sure, has to be some of it.
See people being sold on white picket fences, and the “American dream”.. but also since around the 90s the stark realization that if the majority want to retire someday....

See also these trends since around 2005.
https://financialpost.com/real-estat...y-to-pay-debts

Why might a crash wipe affect everyone....Debt makes the world go round.

And for the lower middle class. The tax base and single largest numerical component......

Let them eat cake