– this infographic from ratehub.ca, a ‘mortgage blog’, 27 Mar 2012.
The link was kindly forwarded to us by frequent contributor ‘Zerodown’, who adds:
“I admit to being impressed with the thoroughness of this info graphic. However, just because it is in the form of a Tintin book, doesn’t make it true. An annotated version will be required.”
We think this infographic overstates the strength of Canadian borrowers: 5% has not been the minimum downpayment; 32% of income has not determined the ‘maximum affordability’; 153% debt-to-disposable-income ratio is a very significant level; “Long term low interest rates” do not “shield the market from a bubble burst”.
We personally can’t see a soft-landing (a coolly deflating balloon?) playing out.
Who do we expect to keep buying Vancouver RE at these extremely lofty price levels once the promise of future abnormally large price gains disappears? Because, that is what would be required for a ‘soft landing’; a steady stream of buyers prepared to take out ginormous loans to buy RE that is no longer appreciating, or is very likely dropping, in real terms.
Who do those calling for a ‘soft landing’ propose to be doing that buying?