Scustin Bieburr
Baby baybee baybee UUUGH
Yo, if people end up defaulting on their mortgages, will that take down the prices of homes? Can a house that costs 500k now cost 300 or 200k in 4 years?
Will Canada's housing bubble burst?
- Thread starter ogc163
- Start date
ogc163
Superstar
Yeah the prices will go down.
ogc163
Superstar
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Domingo Halliburton
Handmade in USA
time to short Vancouver REITs. I hear the bubble is bad there.
john goodman
All Star
it's tough to short the canadian real estate market because the companies that will be most affected are private
i think the big reit's will be fine... they're just gonna rent those apartments and still eat
shorting the big real estate brokerage companies in canada is probably a good move... if there's a public brokerage company that is big and operates mostly in canada. worth looking into. maybe there's some mortgage lenders that will be hurt..
as for reincar... sell that house breh before it's too late
john goodman
All Star
although maybe it won't really burst...
isn't most of the demand from overseas $$$?
if so as long as rich foreigners want to get out of their shytty countries and be in canada (tor/van)... the market could continue
like in miami. people said the bubble burst but after a year or so hiatus the market picked back up where it left off
isn't most of the demand from overseas $$$?
if so as long as rich foreigners want to get out of their shytty countries and be in canada (tor/van)... the market could continue
like in miami. people said the bubble burst but after a year or so hiatus the market picked back up where it left off
ogc163
Superstar
The Reason God Created Central Banks
Matt Yglesias notes the housing bubble in Canada and then asks what the Canadian government could do about the bubble. His point is that it would be enormously unpopular if the government deliberately took steps to burst the bubble.
This is of course true and it is one reason why the government should have acted years earlier to prevent the bubble from getting as large as it did. However there is another actor that doesn't appear in Matt's story, the Bank of Canada. The official story on central banks is that they are supposed to be independent so that they can do what is best for the economy without fear of the immediate political repercussions.
As a practical matter, central banks tend not to be independent of political influence, especially from the financial sector. However it is reasonable to ask why the central bank is not doing what it is supposed to do. Suppose the Bank of Canada announced a 1 percentage point increase in the overnight money rate and that it would continue to increase interest rates until house prices fell by 30 percent, or whatever amount it considered appropriate.
It is difficult to believe that this policy would not quickly deflate the bubble. This may not be pretty (if the bank had been awake it would have done this 5 years ago), but it would be better than letting the bubble just continue to grow. And what is the Bank doing that is more important, targeting 2.0 percent inflation?
The Reason God Created Central Banks | Beat the Press
Matt Yglesias notes the housing bubble in Canada and then asks what the Canadian government could do about the bubble. His point is that it would be enormously unpopular if the government deliberately took steps to burst the bubble.
This is of course true and it is one reason why the government should have acted years earlier to prevent the bubble from getting as large as it did. However there is another actor that doesn't appear in Matt's story, the Bank of Canada. The official story on central banks is that they are supposed to be independent so that they can do what is best for the economy without fear of the immediate political repercussions.
As a practical matter, central banks tend not to be independent of political influence, especially from the financial sector. However it is reasonable to ask why the central bank is not doing what it is supposed to do. Suppose the Bank of Canada announced a 1 percentage point increase in the overnight money rate and that it would continue to increase interest rates until house prices fell by 30 percent, or whatever amount it considered appropriate.
It is difficult to believe that this policy would not quickly deflate the bubble. This may not be pretty (if the bank had been awake it would have done this 5 years ago), but it would be better than letting the bubble just continue to grow. And what is the Bank doing that is more important, targeting 2.0 percent inflation?
The Reason God Created Central Banks | Beat the Press
Broke Wave
The GOAT
They been saying this for years now. But I do think something will happen.
They guy gives a easy breaks.
They guy gives a easy breaks.
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ogc163
Superstar
You sliding closer and closer to the left, friend
A Keynesian no longer trivializing/dismissing the ability of the central bank to create and deflate bubbles by way of increasing/decreasing interest rates and I'm the one moving to the left? 
Your favorite Keynesian dismissed the notion that interest rates are relevant in both the U.S. and Canada Worthwhile Canadian Example - NYTimes.com"Those who blame the Fed for keeping interest rates too low too long have to explain why Canada, which basically had the same interest rate experience we did, didnt have anything like the same problems.
So whats Canadas secret? Regulation, regulation, regulation. Much stricter limits on leverage, much stricter limits on unconventional mortgages, and an independent consumer protection agency for borrowers."
But as long as Canada can print money they should be okay right? Paul Krugman: The World's Two Most Impressive Economies Have One Thing In Common - Business Insider :D:D
Broke Wave
The GOAT
"Those who blame the Fed for keeping interest rates too low too long have to explain why Canada, which basically had the same interest rate experience we did, didnt have anything like the same problems.
So whats Canadas secret? Regulation, regulation, regulation. Much stricter limits on leverage, much stricter limits on unconventional mortgages, and an independent consumer protection agency for borrowers."
But as long as Canada can print money they should be okay right? Paul Krugman: The World's Two Most Impressive Economies Have One Thing In Common - Business Insider :D:D
Keynesians never dismissed this, you are conflating what you think to be true from the reality.
Keynesian economics is about the multiplier effect friend, anything outside of that is superfluous.
Keep quoting matt yglesias and Krugman you might learn a thing or two tho
ogc163
Superstar
Keynesians never dismissed this, you are conflating what you think to be true from the reality.
Keynesian economics is about the multiplier effect friend, anything outside of that is superfluous.
Keep quoting matt yglesias and Krugman you might learn a thing or two tho
most of the folks buying these rich properties in van city and toronto are asians, they send their kids over to universities then they buy a house, and indian investors
reg folks cant afford this, unless you bought your house years ago.
the average family income in toronto before taxes is 68k
i wish i was like 27 10 years ago id be caking
Domingo Halliburton
Handmade in USA
yeah, the chinese are buying a ton of real estate in vancouver