Comments on: Canadian Real Estate Owners Aren’t Selling, Here’s Why

By: Neil

Neil — Thu, 13 Apr 2023 15:39:34 +0000

I’m fifty and never bought. I always thought it would crash and it hasn’t yet. So, I’m giving up on real estate in Canada. It’s a completely distorted, propped up by government and a total mess. At these prices if you buy and it drops, you will never retire like you thought you would. Any normal and sane lender would not extend a loan of that size to the average Canadian worker. In our country however, a CMHC insurance program along with savings/finance incentives can the Canadian sucker to enslave him/herself. And when it drops, there will be some government social support program I’m sure. Forget it. All you have to do is look at US/CAD border towns: Go to Realtor.ca and check out a border town near you. Then, go to Zillow and search for the nearest US comparable housing product. Canada’s product is inflated by 2-3 times. Kind of sad to see this kind of socialism and it’s effects.

By: JCH

JCH — Tue, 11 Apr 2023 02:56:14 +0000

Franky, glad to know we’re not the only ones who stayed on the sidelines.
I always used to think that if the mighty US couldn’t prevent a 50% collapse of some house prices, that Canada couldn’t either, but alas Canada has the special sauce the US lacks – unshakeable conviction on the part of nearly all Canadians that RE only goes up and it’s always a good time to buy, interest rates be damned.
I’ve even been cheering on the high inflation, hoping that will force some fiscal discipline by BoC and Fed, but I now feel they’ll weasel their way out of it, or at least Canada will throw the currency under the bus instead.
Super angry to not be able to purchase a home here in the LML for 3,4,5x income the same as had been done here for generations.
And we’ve already done our stint down South in software in the US for 4 years, and another 4 years internationally, but after a career change my skills are rather less portable now. So instead I’m looking at us retiring early in a lower cost jurisdiction and living off the $ we didn’t dump into Canadian real estate – a far better use than being indebted up to our eyeballs here.

By: R2D2

R2D2 — Mon, 10 Apr 2023 23:39:04 +0000

Govt providing “investment stimulus” is nothing more than a fancy name for creating market distortions.

The free market is supposed to protect the consumer, not govt picking winners and losers.

When this while thing crashes, please don’t send the mortgage defaults, bankruptcy and banker bailout bills to the rest of society. They enjoyed the profits on the way up, don’t socialize *their* loss on the way down.

By: Franky T

Franky T — Mon, 10 Apr 2023 21:49:00 +0000

In reply to JCH. Absolutely correct. Like you, I refuse to be the greater fool, just as I did 8 years ago. But we never know what might happen. The 2008 crisis happened in the US and we can only hope that such a reset also occurs here. If not, I am eyeing a temporary move down south. I have skills that are portable.

By: Timmie O'Toole

Timmie O'Toole — Mon, 10 Apr 2023 17:28:36 +0000

In reply to GK. This is an important point. Canada's bank regulator is allowing banks to cook the books by pretending the decline in value didn't occur in its LTV models, and preventing any actual downside. They can't rig the game forever, but they can rig it long enough to ruin opportunity for a whole generation.

By: JCH

JCH — Mon, 10 Apr 2023 17:25:33 +0000

So, what is a rational family to do? Didn’t buy a decade ago. Never going to be willing to take on a million dollar mortgage.
Given that falling house prices are an existential threat to the Canadian financial system, government, and homeowers, there will be no further significant resets of house prices toward where they should rationally be — government/BoC will do absolutely anything to prevent it.
So, what next for us? Looks like we’ll have to keep renting another 5 years til our kids finish high school, then leave Canada for more affordable pastures. There’s no future here for them or us.
I give up – I can never compete with fools willing to take on an unlimited amount of debt just to own a home.

By: Razz

Razz — Sun, 09 Apr 2023 17:51:18 +0000

In reply to Im Therious. We all win?

By: Bob Vila

Bob Vila — Sun, 09 Apr 2023 12:28:15 +0000

I think if ratings agencies decided that the 40% of Canadian mortgages that have amortizations beyond 35 years are all subprime ( like they are), then the market would implode overnight. An asset doesn’t have to be in forced sale to devalue if the fundamentals are this bad.

By: Norm Petrin

Norm Petrin — Sat, 08 Apr 2023 21:59:10 +0000

Excellent article. 100% on point. I am quite well off and have every reason to enjoy where property values have gone over the last few years. But it is to the point I would guess most well off Canadians feel for lower income and immigrant families that can’t afford homes. It would appear our government and central bankers don’t seem to care or be able to start righting the wrongs of the last few years by somehow tempering investor demand, speculation and laundering in our residential property markets. What a backwards country we are turning into. Poor leadership by all levels of government. No one seems to have a backbone.

By: Quix

Quix — Sat, 08 Apr 2023 13:26:23 +0000

In reply to Cto. Boom! Each policy they enact is less effective than the last. Our government is tremendously short-sighted, every brainless thing they do makes the inevitable bust much worse.