NOTE: CANADA was voted the #2 Subprime REAL ESTATE bubble in the WORLD after Australia. Vancouver voted #1 LINK: HERE
For years Garth Turner has been telling anyone who will listen that Canada's long-running housing market boom is about to crash. The politician-turned-financial commentator has been wrong so far, much to the delight of realtors, bankers and homebuilders. But, like the boy who cried wolf, Turner's day may have come.
How bad could things get?
"If you bought in ‘08 you better be damn sure that your income will be 40% higher in order to qualify for the same mortgage at renewal time," says Turner. "I just can't see economy of Canada percolating enough over the next three years in order for people to reap those huge salary increases."
Even the Bank of Canada seems to agree things are not looking particularly rosy. The central bank's latest Financial System Review indicates that almost 6% of Canadian households are vulnerable to rising interest rates because servicing their debts eats up more than 40% of their gross income. A 300-point rise in interest rates would increase that number to 8.5%. And yet mortgage credit is rising at more than 7% a year and the household debt-to-income ratio is at an all-time high. Something has to give when interest rates undoubtedly start rising this year and it just might be the housing market.
More Here
this guy has been preaching this "doom and gloom" prediction for years. he writes books and claims "you can avoid the futurtistic problems by purchasing his books. he will give you insight."
ReplyDeleteno body take this guy seriously, he has no accurate knowledge. you might as well pick up a toronto star and read the business section for your business forecasts.
when i think of him, i think about the rock group supertramp singing 'DREAMER, NO NOTHING BUT A DREAMER".
1:03 and you're the guy who actually believes that real estate lasts forever and goes on for eternity. Sort of like the shills on TV in 2006 that stated we have a long way for the top. Those guys should be in jail.
ReplyDeleteNo kidding! All the pukes that laughed at Peter Schiff keep going on with their BS. The Art Laffers, the Ben Steins, and all the other dimwits.
ReplyDeleteHonestly, Garth Turner is a joke in Canada. He was a conservative then he was a Liberal candidate. He flopped at both and has been hanging on trying to be relevant with his predictions on the economy which he has no expertise to say the least. Bottom line, he has zero credibility and shouldn't be interviewed on this subject anymore than a bum on the street. Yes, Canadian real estate is frothy, particularly in Calgary and Vancouver. But this isn't a systemic issue like America. There will be a correction, but not an all out crash like the U.S.
ReplyDeleteGarth turner isn't a joke in Canada. If it wasn't for the GOVERMENT of Canada back stopping the mortgages the housing market would of crashed years ago. My sister bought a house with NOTHING DOWN and laughs that worse comes to worse she will just go bankrupt and walk away. Stupid Canadian think they are better then Americans and will not suffer the SAME FATE.
ReplyDelete4:16 I agree. We (Canadians) WILL duffer the same fate. We are even more blind to what's really going on than so many of our American neighbors. I only managed to "wake up" since being unemployed for the last year gave me the time to catch up with reality.
ReplyDeleteGarth Turner IS a joke. Exactly who does he represent now. Oh I forgot his ass got booted out and the door hit him on the way by the citizens of Halton Region.
ReplyDeleteYes, there was SOME subprime. But nowhere near the size of the U.S. There wasn't CDO market like the U.S. either. It is all a matter of scale. Besides, I mentioned that Calgary and Vancouver are the only areas similiar to the likes of California and Arizona. Toronto as a global metropolis is STILL undervalued as far as real estate is concerned. There will be a correction and there will be bankruptcies and foreclosures as a result. But let's not get carried away here. There weren't NINJA loans handed out in Canada like all across the States and banks weren't overleveraged as much as U.S. banks (though I still find Canadian banks too leveraged to be honest)
Hey don't worry about housing values in Canada.
ReplyDeleteThe elephant in the room is health care which is going to steal/suck the equity of the aging boomers. And what health care don't steal their hedonistic offspring will take to keep their own sorry asses out of foreclosure.
Seniors pack up the bus is coming!!!!
Norman
ReplyDeleteYou're not putting me in that fruit cellar!!!!
Trex...Do you even know what NINJA loans means? NI is no income, so $10 an hour as bad as that is is not the same as a bank giving a loan to someone with NO INCOME like in the US dumbass. Again, YES there were bad loans given out in Canada but not even close to US. Why can't you get this through your thick heads. There are bigger concerns like our health care system. And yes, Toronto prices are high but not a 'bubble'. What you will find is more and more people continuing to move to the 905 area code which will soften the T.O market. The Toronto Star has already written an article yesterday about this talking about Pickering having the highest year over year rise in property values because of this. Again people personal anecdotes and sisters and other losers in your lives who have loans that will go bad. This all represents a small minority of the hhousing markets. Did all of you even read the whole article? It was pretty balanced in it's assessmet. Which was basically as long as we don't go back 80's interest rates there won't a catastophy only a correction. If any of you have actual facts or data to suggest otherwise please do so. And I mean macro data not your neighbour or sister.
ReplyDeleteCANADA has been voted the #2 subprime real estate bubble in the world. Its tough for Canadians to realize the truth.
ReplyDeleteDamn it anonymous 8:00am. You think you can throw a statement like that out there and then direct everyone to a 57 page document. Come on now..lol..Anyway, luckily you can do a word search on acrobat and low and behold the words subprime isn't even in the text. Do us all a favour and let me us know what page this "#2 subprime real estate bubble in the world" is.
ReplyDeletePage #4, 12 and 15
ReplyDeleteTable 6
Housing Affordability Ratings by Nation
Nation
Affordable
(3.0 &
Under)
Moderately
Unaffordable
(3.1-4.0)
Seriously
Unaffordable
(4.1-5.0)
Severely
Unaffordable
(5.1 & Over)
Total
National
Median
Australia 0 0 1 22 23 6.8
Canada 5 13 5 5 28 3.7
Ireland 0 3 2 0 5 3.7
New Zealand 0 0 3 5 8 5.7
United Kingdom 0 0 14 19 33 5.1
United States 98 58 8 11 175 2.9
TOTAL 103 74 33 62 272
That's all gobblygoop. Again, where does it say the words 'subprime'. Don't give me 6 degrees of separation.
ReplyDelete1:08 your head is up your a$$ Read it HERE:
ReplyDeleteSUBPRIME BUBBLE
5:38 There...was that hard...This is the link you should have started with. Ok. Now you need to let me know what will be the catalyst for a U.S. style collapse. Because that isn't mentioned in the article per se. Since the banks are already "bailed out" what we would need is a drastic short term spike in fixed interest rates by at least 4-5% within a year. I feel like we are getting somewhere now...
ReplyDelete8:45 I know its tough to grasp, but you'll get over it..sheeesh
ReplyDelete8:45pm Child please...Just post articles that get to the point. Not 57 page dissertations that meander all over the place or convoluted diatribes. Also, ease up on the phrase "emminent". It is just sensationalizing things and makes you lose credibility. Tough to grasp? Get over yourself.
ReplyDelete4:41 kids that don't understand the economic model wave should NOT be posting here. Tough to grasp not one but 2 articles, showing the collapse of YOUR MAGICAL SUBPRIME MORTGAGE ..Yes IT IS "EMINENT" wherever that word is.
ReplyDeleteEmminent implies within this second...minute...hour or even day. Is that what you are trying to tell me? Because when tomorrow comes and goes you can't use it again. Any day now can't last years and still be emminent numbnuts.
ReplyDelete12:36 where is this word Eminent in the article or posts above?
ReplyDeleteI was referring to the blogger using it in every other article in a general sense. Not necessarily this specific article.
ReplyDelete5:44 please paste posts with this word..christ I can't see it, you mental turd
ReplyDeleteAnyone who criticizes Garth Turner for being early or 'preaching this "doom and gloom" prediction for years' really does have their head up their ass. Either that or they are as smart as a rock. Nobody could have predicted the level of the intervention the government initiated. Now before you say government intervention is a good thing, know that when there is a correction it will be revealed to be a terrible mistake that will probably cost the Neo-Cons the next election.
ReplyDeleteAs far as NINJA loans being no income, you are just being pedantic. NI means No Income DECLARED!
Further, anyone who trusts anything reported in the Toronto Star let alone reads that POS rag has already proven themselves to be irrelevant in any reasonable discussion.
Please name one person in Canada with a subprime mortguage? I would also like the writer to provide the name of one failed bank here?
ReplyDeleteThe banking and mortguage industry here is 10 times more regulated than anywhere in the US. This is why a crash was never seen here. Banks have to follow much stricter rules, and qualifying someone for a zero down mortguage is the 1st one they can't break.
While some areas of the country have a heated market because of the threat of rising interest rates, its far away from any subprime fiasco seen in the US. Here if you feel like buying a 2nd property for speculation, you had better have a 35% down payment.
Let me guess, this guy sells gold futures?
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The Canada Immigration and education systems Ponzie Scheme is producing too many excess educated workers. That means everyone is under employed, unemployed below their levels. Who is going to buy homes, or have more babies for the economy workforce when everything seems to be falling apart? These factors will kill off consumption. All the jobs and markets in Canada are broken. Some more broken than others. Victoria BC metro is a good example. Read the people's comments on this on www.ratemyemployer.ca, www.topix.com, www.yelp.com, www.thedirty.com, Yahoo Answers, BBB, others.
ReplyDelete