"Canadian Home Sales Crash In June" http://www.zerohedge.com/news/2017-07-17/canadian-home-sales-crash-june The Canadian Real Estate Association says home sales in June posted their largest monthly drop since 2010, with the Greater Toronto market leading the decline. .
No, I am not. I was just looking at the math relevant to Canada: per capita, wealth distribution, affordability of medium home price by medium household income, income of the top 10% vs top 10% housing price.... and tried to make sense of the Canadian housing situation. I own some Canadian company stocks so the health of the Canadian economy is important to me.
i Would just like to share this piece http://www.bankofcanada.ca/wp-content/uploads/2015/12/fsr-december2015-mordel.pdf [CMHC’s securitization programs facilitate the supply of reliable funding for mortgage lending in Canada and foster competitiveness within the mortgage industry. Risk exposure under the timely payment guarantee is managed through robust risk mitigating practices including stringent approval criteria for program participants. CMHC’s securitization activities are operated on a commercial basis and do not receive Parliamentary appropriations. These programs contribute to CMHC’s Net Income and help to improve the Government’s fiscal position.] I haven't found the time yet to research this situation but will absolutely do ASAP. Public securitization has the putrid smell of bankruptcy and vomit. The C MBS market is said to be 500b , a third of GDP and close to that in Pension funds asset which would be the primary happy owners of these fine yielding cakes. Not sure if there is a bubble waiting to burst but the situation warrants additional scrutiny.
%% Thanks for the link , Mr M22 with line-chart= long term charts. NOT that Canadian RE has crashed, not on that chart. BUT as your Bloomberg warning notes debt to house ratio is scary.Even though --those that paid cash, may not get hurt , even in a crash. SF+ much of CA , [USa ]has been overpriced for decades. Of course if you have a gold mine , Warner Bros or oil / oil wells on your real estate + some do -that is different LOL. That line chart of Canadian RE [home sales] reminds me of some sand states.-condo market crashes[ USa]. Condo market [ USA, Canada or anywhere] is a typical seller's market ; condo may have plenty of problems -homes never have had.LOL,
Wait until TO interest rates go up a few points or back to normal. And Trump attract chinese immigrants to USA with investor visas and no world wide income reporting. It's all in the works and just a matter of time ...
Canadian mortgages are term and can be variable rate. Term is 1 - 5 yrs, then it must be renewed at market rates. Not exactly sure what happens when mortgagee do not qualify at renewal time. They must get high risk mortgage at increased interest rate and higher mortgage insurance cost.
Do we have a view on when the next big batch of remortgaging is gonna be ? could be a great opportunity to short the banks that are hosting these people.
%% NOT exactly sure also. But since no borrower owns the home until its paid for--not likely any good, for the borrower.WOW ;1-5 years puts most of risk on borrower. [ Most likely that is addressed in the contract?? ]Cash buyers could clean up; even in a severe ,overvalued realty market ;cash buyers could come out smelling like a rose With some/enough equity + in good a neighborhood even a forced sale could be profitable for both partys, assume the neighborhood did not go to pot.
%% Ironchief;Good thing IBD [Investors Business Daily] founder taught us[USa] not to pay much attention to PE ratios[Example CNQ, IBD rated # 1 in group; PE ratio of 272, but looks like its going up more; not a prediction simply a Canadian trend comment. Canadian taxes ARE TO HIGH; BUT canadian corp tax rate was lower than usa, which helps a lot.......