Comments on: Four Reasons Canada’s Real Estate Bubble Is A Systemic Banking Risk

By: Conor

Conor — Sun, 02 Jul 2023 21:43:32 +0000

In reply to Kimberley Hedger. What does this even mean?

By: pw

pw — Fri, 23 Jun 2023 17:34:59 +0000

I disagree with the analysis here – these longer amortization periods aren’t due to negative amortization, but the structure of most variable rate mortgages.

Higher rates and fixed monthly payments = longer amortization. It’s still a big concern, but I don’t think the data as presented supports the conclusion.

By: Kimberley Hedger

Kimberley Hedger — Thu, 22 Jun 2023 12:41:51 +0000

Remove homes/residential property from the Banks stock market shares. Only allow shares in banks be based on the productivity of our businesses and manufacturing.

By: Scott

Scott — Thu, 22 Jun 2023 12:14:58 +0000

And an ad for CIBC just popped up on my screen…

By: Scott

Scott — Thu, 22 Jun 2023 12:12:00 +0000

Wow! Is this how a “Post Nationalist State” economy is supposed to work?

By: M.Bury

M.Bury — Thu, 22 Jun 2023 09:15:29 +0000

1. The mortgage stress test was supposed to protect against this very problem, you know, by approving only people who could afford higher rates.
2. Many people (you know to whom I’m referring) criticized the stress test’s validity because interest rates would never go up.

By: Willynilly

Willynilly — Thu, 22 Jun 2023 04:11:02 +0000

The Quiet before the Storm…………

By: AllenB

AllenB — Wed, 21 Jun 2023 19:14:56 +0000

What a mess. A system doing everything possible to protect homeowners, speculators and investors for as long as possible on the backs of renters who are fast being driven into poverty.

Borrowers are being allowed to push out their mortgages into negative amortization territory, but no such luck for renters, many of whom in the GVRD are now paying more than 50% of gross income on rent.
By comparison only 39% GDS seems positively luxurious.

Ironically, the very same investors and speculators that drove property to the stratospheric prices we are now faced with, making it impossible for renters without family money to get a foothold in the market, are the same ones that are pushing up rents faster than ever, and the same ones that the banks are doing their utmost to protect.
The BUBBLE NEEDS TO BURST, just sooner rather than later. The current system is not sustainable and is fast creating a class system of “landed gentry” with serfs to serve.

By: Hubba Bubba

Hubba Bubba — Wed, 21 Jun 2023 19:07:42 +0000

“The regulator wasn’t too impressed, but warned removing the ability may cause defaults and downward pressure on home prices. ”

Downward pressure on prices is exactly what we need right now, no??? Prices have ballooned since Easter to insane heights… how much longer can this keep going? We should let nature take its course, i.e. banks should stop rescuing underwater borrowers and just let them drown, sink to the bottom, which would help bring prices down to more affordable levels. Who would ever have thought the average price of a standard shack 200-300 km outside of the GTA would be one million…

By: Dennis_K

Dennis_K — Wed, 21 Jun 2023 18:55:11 +0000

One thing I noticed about the audit regarding CIBC’s over-leveraged borrowers — it assumes that the data they have on (all) the borrowers is accurate. If persons have misstated incomes, debts, assets, etc. (possibly thanks their own dishonesty or unscrupulous mortgage brokers), then this risk is higher, not just for CIBC, but all
lenders, no? Hence the ‘systemic banking risk’ the title of the article refers to, yes?