“The Canadian housing market is poised for a deep and profound correction.”

“When we look at the Canadian housing market we realize how insane things have gotten. I’m amazed by how many of the debt rehab or home flipping shows have migrated to the Canadian market. Of course they rarely mention this thinking the American audience will mindlessly assume they are in some other US city to prime the consumption pump. Yet when we look at the metrics, Canada is poised for a deep and profound correction.”
– from ‘Canadian housing bubble goes into full mania mode – Canadian debt-to-personal income ratio near 145% while US at peak of the housing bubble was at 125%’, Doctor Housing Bubble, 5 Sep 2012

“Société Générale believes Canada still doesn’t have a handle on a frothy real estate market.”
– from ‘Housing bubble is not yet under control,’ SocGen warns Canada’, G&M, 5 Sep 2012

“Owning a home in Ontario – or anywhere in Canada, for that matter – is getting more difficult as affordability, particularly anything larger than a condo, deteriorates each year. …the steady increases are not sustainable. Eventually, this housing bubble will pop, and the economy will suffer.”
– from ‘Housing danger signs’, Simcoe.com, 5 Sep 2012

All three articles published today. -ed.

21 responses to ““The Canadian housing market is poised for a deep and profound correction.”

  1. these are all examples of bear propaganda!

    owners! we must display unity of purpose and price stability! anyone who opposes the glorious rise of the median prices of SFH to $3,000,000 is a disharmonious anti-harmony harmony killer! rise! rise! do not allow rational thinking to derail our gravy train! we still have opportunities along the Cambie St. corridor! EVERYONE wants to live on the best street on Earth – WE HAVE MOUNTAINS.

  2. Renters Revenge

    Gonna be fugly.

  3. James Macdonald Williamson

    “The Canadian housing market is poised for a deep and profound correction.”

    No it isnt. No it isnt. No it isnt.!!!!

    Its different here.

    This is the Best Place on Earth.

    This is the fault of Marxists and parasites and haters.

    Its the damn bicycle lanes.

    • UBCghettodweller

      >Its the damn bicycle lanes.

      I suggest leaving thumb tacks and/or silicon greased ball bearing is in corner sections.

  4. Vreaa you’re going to want to highlight that G&M comment on mortgage tightening. Proving income is a biggie.

    • I almost want to believe that comment is fake, even though I know it’s likely true. For years, bulls have been telling me that I didn’t understand the lending industry, that the biggest difference between here and the US is that *WE* didn’t write all those crappy loans to deadbeats. The referenced commenter claims that the banks haven’t really been looking at capacity to pay at all until now, and there’s another comment over at Greaterfool tonight — guy’s brother gets a 400k loan on the strength of a new $18/hr job when the lady at the bank writes in that he’s been steadily employed ten years.

      Come the dawn, virtually every last loan officer, mortgage broker and real estate agent is going to say that they’re shocked, SHOCKED to discover that poor underwriting was being practiced right here in River City, and that it must’ve been the other guy, because all their clients were Grade A. It’s going to be sickening.

      • All explained in this video Ralph. It is impossible for banks and lenders to be making double digit returns on prime loans because it is the least profitable. The crappier the loan, the more profitable it is.

        “The prior job of of many mortgage brokers, was literally flipping burgers.”

        That statistic was in the Financial Crisis Inquiry Commission’s testimony.

    • I think I see the one… thanks.
      Wow. Will headline.

      • If it’s the one I think it is… years ago, I had a similar thought when some of my friends first bought into RE. I came to the realization that it’s not house prices that anyone seems to be concerned with. It’s strictly the monthly payments.

        In fact, when I bought my last car late in 2003, I distinctly remember the sales guy focusing on monthly payments and telling me that his job was to find a way for me to “afford” the car. I thought that was done by reducing the total price of the car, not just extending financing for another 12 months… =/

        I also remember looking at cash discount of $1000 and realizing that there’s absolutely NO way an kind of monthly payment will make that back (even considering the saving rate) and the only way that it would be worth it is if I had much higher returns for the money that would have gone into it (which I didn’t).

        We’ve so used to “paying by month” for things we don’t own.

        We might have a lot of “house owners”, but I think they’re more like “cash renters”. The total they paid over the actual price of the house is their “rent” — but it comes w/ liquidity shackles. Actually it’s probably worst. The total they paid over the exit price of their house is the actual rent.

      • UBCghettodweller

        @RE Lurker

        A car salesman tried doing this to my father when he was looking for a new car. The salesman couldn’t quite understand that my father had the liquid assets to buy the car right then and there with cash and therefore only a reduction in price, or free upgrades in terms of packages, would make it car more affordable/worthwhile to him. The standard sales tactics wasn’t working. Eventually a different salesman at another dealership got the sale in about ten minutes. He told my father exactly how low the price could go before he’d get shit from his boss (this was much less than any other dealership was offering) and the perks that he was allowed to offer. A quick phone call to a cousin-in-law who used to work at at dealership confirmed that this wasn’t BS. Occasionally the truth will set you free or earn you a sale with minimal effort.

        Then again most people who sell cars do so because they aren’t actually cut out to do anything else. I have yet to meet a car salesman who is sharp enough to get himself in to a college or university program. Much could be said of Real Estate agents. It’s fun fucking with their minds for lulz every once in a while.

  5. US debt-to-income ratio peaked at 160%, same as the UK. So I’m not sure where that graph is getting its data from, but it’s wrong. The Canadian figure is correct, but US peaking at 125% That’s way understating things. Even now they’re not back down to 125%. I believe they just got below 140% about a year ago.

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