Global TV News, 23 Mar 2012
Announcer - “Canadians are carrying more personal debt than ever before, and cheap mortgages are just adding to the problem”.
[... actually, have been adding, for the last 9 years. - ed.]
Announcer - “The financial markets are already betting that the BOC will begin raising it’s trend setting rate by years end. It’s all adding up to a financial landscape that is about to shift.”
Announcer - “For those thinking of buying now, the warnings are out: What you pay today may be considerably more than what your unit’s worth when you finally take possession”.
[Remarkable. That statement, taken to heart, should freeze any prospective buyer. -ed.]
Michael Levy, Financial Analyst – “I think Vancouver and Toronto will probably lead on the way down, and it wouldn’t surprise me to see a 10-15% in this market.” … “The condo market is overbuilt in Vancouver.. and the financial institutions are saying maybe we better take a better look at the developers who are putting these schemes in front of us, because this market is heavy right now.”
Announcer – “…BC and Alberta are the two provinces with the highest average household debt. And in BC much of that debt is secured by equity in our homes. But what happens when property values drop and mortgage rates go up? which is now widely predicted to happen.”
Scott Hannah, Credit Counselling Society Of BC – “What a lot of consumers aren’t aware of is how quickly their circumstances can go from being able to manage their affairs effectively to being in extreme financial difficulty, in a short period of time..”
Announcer – “But Canadian banks have only themselves to blame for ramping up household debt that in some cases may never get repaid. Every one of them offers HELOCs, encouraging you to use your home as collateral for yet another line of credit.”
This is the kind of news piece that can herald the start of the implosion.
10-15%-off will be nothing but a good start.
You can imagine the negative synergies that will be at play once the wheels come off: Buyers pause, construction freezes, economy freezes, buyers even more moribund, offshore buyers become sellers, owners come to market en-masse, etc. etc.
Virtuous cycle turns vicious.
50-66%-off, here we come.