Comments for Washington Post Touts Unaffordable Housing In Canada at http://www.cepr.net , comment 1 to 5 out of 5 comments http://www.cepr.net Wed, 19 Jun 2013 13:45:16 +0100 FeedCreator 1.7.3 http://www.cepr.net/index.php/blogs/beat-the-press/washington-post-touts-unaffordable-housing-in-canada/#comment-1135 Keep in mind that we have less than 10 Canadian lending institutions that probably account for 95% of all mortgage lending. The Canadian Mortgage and Housing Corporation a 'government enterprise' allowed these lenders to unload approx $50 - 70 billion of dodgy mortgages during 2008/2009. Sweet deal huh? The CMHC and the taxpayers now own them. It is the beauty contest management model - get rid of the ugly ones! The largess of CMHC is to the detriment of any 'cash' buyers who are constantly having to chase a market that is drugged by 0 - 5% down payments. There is no reward for having 100% equity because with ultra low down payments there is no distress selling. A commentator, Mark McQueen of Wellington Financial summarized the situation adeptly in his blog. http://tinyurl.com/37qxm4m - R West Thu, 24 Jun 2010 06:04:38 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/washington-post-touts-unaffordable-housing-in-canada/#comment-1131 Canada's "remarkable" economic recovery is also connected to its housing bubble. Unlike most recessions, this latest one was tempered by ordinary Canadians taking on massive amounts of debt, mostly in the form of mortgage debt, with spending and investment by private corporations at a standstill. Canada's national bank has chided the manufacturing sector et al for not doing more, but they were content to sit back while everyday Canadians took up the slack in spending and supported the economy during a tough period. The problem, as Dean points out, is that as housing prices begin to catch up with reality and decline--even if only very little--consumers' ability, and willingness, to spend will be greatly restricted, revealing the weakness of Canada's recovery. - Anthony Thu, 24 Jun 2010 05:36:46 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/washington-post-touts-unaffordable-housing-in-canada/#comment-1130 In addition, the "facts" of the story are egregiously wrong. The real story about what is going on in the Canadian housing market can be read here. http://www.greaterfool.ca/ - John Charlton Thu, 24 Jun 2010 05:11:23 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/washington-post-touts-unaffordable-housing-in-canada/#comment-1116 One of my online friends lives in Sweden. He has said that their banking laws set criteria for how much can be loaned on a house based on fixed factors: square footage, number of rooms, year built, lot size, etc. You are free to pay whatever you want, but banks may only loan up to the calculated amount. So if the formula says a house is worth $100k, but because it's in a nice neighborhood the average price of comparables is $150k, you have to have at least $50k down. This means you can't borrow against the equity in your house unless there is [i]genuine[/i], not [i]speculative[/i], equity. And if you're going to trade in real estate as a business, you have to use your own money to do it, not the investors' -- who will of course beg the government to bail them out if the investment tanks. - Drew Kime Wed, 23 Jun 2010 15:13:54 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/washington-post-touts-unaffordable-housing-in-canada/#comment-1115 [quote]It is not clear why anyone would view this as a desirable outcome. It involves a massive transfer from the young people who do not own homes to those who already do.[/quote] The IMF has decided to respond to the US for financial aid and permission to default on its staggering debt, permitted under the following austerity program: Given the massive intergenerational transfer of wealth in the US from the old to the young per the busted housing bubble, and given the ongoing massive intergenerational transfer of wealth in Canada in the opposite direction from the young to the old, the entire population in each nation is directed to trade places with each other per respective housing arrangements to correct the corresponding wealth surplus and deficit. Since Social Security and Medicare will no longer be necessary after this correction given the added net wealth and single payer health care, the US will bounce back in no time from the deep recession with enough output to reimburse the newly nationalized Canadians for their losses in a win-win outcome. - izzatzo Wed, 23 Jun 2010 13:38:15 +0100