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Did Canada Just Pop Its Housing Bubble?

Tyler Durden's picture




 

The Canadian economy is rolling over and their recent jobs situation is worse than the US (and it's always cold weather-y up there?!) but the last great pillar of the 'recovery' in Canada is perhaps about to get crushed. As the WSJ noted recently, Canada's housing market is the most expensive in the world (60% over-valued by historical standards) and one simple reason explains it - Canada has been very open to foreign investors, which means that in an age of unprecedented global liquidity cash-rich wealthy individuals who are looking for places to park their excess funds can do so in its housing market. Until now... As SCMP reports, Canada’s government has announced that it is scrapping its controversial investor visa scheme, which has allowed waves of rich Hongkongers and mainland Chinese to immigrate since 1986. Soft landing?

 

Deutsche Banks's house-price-to-rent index says Canada has the most expensive housing market in the world - 60% over-valued...

 

"Canada, for example, is very open to foreign investors, which means that in an age of unprecedented global liquidity cash-rich wealthy individuals who are looking for places to park their excess funds can do so in its housing market far more easily than in Japan, with its closed system. "

 

As it's home price index hardly missed a beat while the US plunged... (different scales but point is to illustrate drastic difference when financial crisis started - and where the liquidity went...)

 

Via The South China Morning Post,

Canada’s government has announced that it is scrapping its controversial investor visa scheme, which has allowed waves of rich Hongkongers and mainland Chinese to immigrate since 1986.

 

The surprise announcement was made in Finance Minister Jim Flaherty’s budget, which was delivered to parliament in Ottawa on Tuesday afternoon local time. Tens of thousands of Chinese millionaires in the queue will reportedly have their applications scrapped and their application fees returned.

 

The decision came less than a week after the South China Morning Post published a series of investigative reports into the controversial 28-year-old scheme.

 

The Post revealed how the scheme spun out of control when Canada’s Hong Kong consulate was overwhelmed by a massive influx of applications from mainland millionaires. Applications to the scheme were frozen in 2012 as a result, as immigration staff struggled to clear the backlog.

 

In recent years, significant progress has been made to better align the immigration system with Canada’s economic needs. The current immigrant investor program stands out as an exception to this success,” Flaherty’s budget papers said.

 

For decades, it has significantly undervalued Canadian permanent residence, providing a pathway to Canadian citizenship in exchange for a guaranteed loan that is significantly less than our peer countries require,” it read.

 

Under the scheme, would-be migrants worth a minimum of C$1.6 million (HK$11.3 million) loaned the government C$800,000 interest free for a period of five years. The simplicity and low relative cost of the risk-free scheme made it the world’s most popular wealth migration program.

 

A parallel investor migration scheme run by Quebec still remains open. Many Chinese migrants use the alternative scheme to get into Canada via the French-speaking province and then move elsewhere in Canada. The federal government has previously pledged to crack down on what it said was a fraudulent practice.

 

Flaherty also announced yesterday the scrapping of a smaller economic migration scheme for entrepreneurs.

 

All told, 59,000 investor applicants and 7,000 entrepreneurs will have their applications returned, Postmedia News reported. Seventy per cent of the backlog, as of last January, was Chinese, suggesting more than 46,000 mainlanders will be affected by yesterday’s announcements.

 

The Immigrant Investor Program, which has brought about 185,000 migrants to Canada, was instrumental in facilitating an exodus of rich Hongkongers in the wake of the 1989 Tiananmen massacre and in the run-up to the handover. More than 30,000 Hongkongers immigrated using the scheme, though SAR applications have dwindled since 1997.

So, the Canadian government is looking a liquidity-splooging gift-horse in the mouth and saying "no, thanks" - an impressive decision to take given the potential weakness in the real economy... we'll see how long it takes for the decision to be unwound or altered...

 

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Wed, 02/12/2014 - 22:08 | 4430734 ZeroPower
ZeroPower's picture

The Canadian economy is rolling over and their recent jobs situation is worse than the US

 

It's comparable or even better than recent US jobs reports. Just look at the monthly data.

Wed, 02/12/2014 - 22:13 | 4430752 booboo
booboo's picture

That was a joke right? Soooo... nobody told you that the data.......never mind.

Wed, 02/12/2014 - 22:13 | 4430761 The Dunce
The Dunce's picture

Canada sucks.  I don't blame the fat mayor of Toronto for smoking crack.  Have you seen the price of houses in Vancouver.  Yikes.

Wed, 02/12/2014 - 22:25 | 4430802 Freddie
Freddie's picture

Make all those Chinese triads and commie party looters robbing the Chinese blind stay in Quebec.  They will be begging to go back to China after dealing with the cheap Quebecois. 

Wed, 02/12/2014 - 22:33 | 4430835 ACP
ACP's picture

Triumph the Insult Comic Dog in Quebec:

http://www.youtube.com/watch?v=UF43P-FJrFo

Wed, 02/12/2014 - 22:58 | 4430936 Freddie
Freddie's picture

LOL!  Well at least they have a good sense of humor. 

Thu, 02/13/2014 - 23:42 | 4435217 msamour
msamour's picture

If I go to your country and start insulting you in my language will you understand? That asshole is lucky he didn't get his ass kicked. One popular thing to do up here is take an asshole like that, and tie him up to a tree in the woods. Pour some honey on him. Let the bear take care of the rest...

 

Fucking ass wipes!

Thu, 02/13/2014 - 00:31 | 4431186 ReactionToClose...
ReactionToClosedMinds's picture

very good ....very funny....very true

Wed, 02/12/2014 - 22:31 | 4430829 DumpsterFire
DumpsterFire's picture

According to douche bank, U.S. housing is undervalued.... WTF?

Wed, 02/12/2014 - 22:37 | 4430856 Carpenter1
Carpenter1's picture

Chinese Govt. talking to Canadian Govt. "Stop facilitating our embezzling criminals or we'll stop buying your resources."

Canadian Govt. "GULP!, ok, right away!"

 

And like that, the housing bubble ends

Thu, 02/13/2014 - 00:33 | 4431189 ReactionToClose...
ReactionToClosedMinds's picture

that very well may be true sadly ..but still good comment

Thu, 02/13/2014 - 01:15 | 4431280 pitz
pitz's picture

Very little of Canada's resource output ends up in China. 

Thu, 02/13/2014 - 01:21 | 4431293 disabledvet
disabledvet's picture

really? well they sure want it to.

Thu, 02/13/2014 - 03:37 | 4431456 Lore
Lore's picture

I have no problem with this comparatively insignificant and apparently temporary influx of solvent Chinese migrants who can pay their bills.  They bring their capital, invest, create jobs, pay taxes.  And we're only talking a few tens of thousands of investor applicants: a mere slice of the population of one small city.  Wouldn't at least 91.8 million Americans love to be in the same position! 

Seriously, my observation from travel across the nation and discussion with family realtors is that the Chinese phenomenon is highly concentrated in small parts of a few major centers and doesn't influence the broad Canadian real estate market at all. Regional markets seem driven to a much greater extent by local resource wealth, small 'c' conservative government, Agenda 21 manipulation, demographics, and other factors. It's noteworthy that <1% of mortgage holders are in arrears. Canadians carry an awful lot of debt, but seem to be managing it.

Furthermore, read the following article and you get the sense that the Harper government may be closing the gates to pre-empt a boomerang effect: 

Thousands of Chinese-Canadians lured back to Hong Kong by better job prospects than Vancouver can offer (National Post, 27-May-2013)

Surgical deflation of the hottest urban bubbles (e.g., "HongCouver's Glass Skyline") could be the intended effect, with promise of greater stability overall. Knowing how absurd Vancouver prices have become, I favour a strategy that checks speculative forces that otherwise exacerbate market volatility. If this interpretation is correct, more such measures could and likely should be in the pipeline. Rgds

Thu, 02/13/2014 - 04:51 | 4431522 Carpenter1
Carpenter1's picture

You seem to think these are primarily hard working entrepreneurial people. Maybe you're unaware  of the gargantuan losses  China has suffered due to embezzlement. Hundreds of thousands of Chinese officials, politicians, and business types have fled the country with trillions of dollars, not Yuan, dollars. 

 

No, these are not "solvent Chinese migrants who pay their bills." These are thieves needing a place to stash their stolen cash. Maybe you're cool with that too, so long as it ends up in your hands. 

 

 

Thu, 02/13/2014 - 15:52 | 4433421 Lore
Lore's picture

Well, the few that I know personally are NOT "thieves," and I'd rather invest in one of their productive enterprises than put my trust in psychopaths on Wall Street.

Furthermore, their eligible daughters are educated, well spoken, know who their real parents are, and don't show up for a date looking like Wal-Mart dumpster trash.

Regards

Thu, 02/13/2014 - 20:05 | 4434437 MeelionDollerBogus
MeelionDollerBogus's picture

When in Rome... I'm sure China labels the founding of Taiwan as the same, embezzlers & thieves, but we regard Taiwan as a real nation & NOT part of China, don't we?

Thu, 02/13/2014 - 04:44 | 4431513 Carpenter1
Carpenter1's picture

A distant 2nd to US, but a country Canada is desperate to court given the US economy's problems.

Thu, 02/13/2014 - 20:03 | 4434436 MeelionDollerBogus
MeelionDollerBogus's picture

So it goes where?

Thu, 02/13/2014 - 05:19 | 4431538 ebear
ebear's picture

You're kidding, right?   The Chinese govt. (AKA Communist Party) are the chief embezzlers.  Besides, immigration is not the key driver behind the bubble.  A lot of this property is owned offshore and managed through trusts.  Until they change the rules on foreign ownership, the bubble will persist.

It's really very simple.  The world is awash in money - much of it looted from places like Russia, China, India, Brazil... need I go on?   That money has to go somewhere.  So, what does it look for in these unstable times?  A nation with liberal foreign investment rules and a history of upholding the Rule of Law.  It also doesn't hurt if the people are welcoming, being mainly immigrants themselves, and that the country isn't overpopulated or lacking in anything resourcewise, thus ensuring social stability. So name one other country that fits that description?

That's not to say that prices can't come down.  I'm sure the RE market in Monaco and Geneva have their fluctuations as well, but frankly, until the looting stops, I don't think you'll see much change.  This is not speculation, as most understand it.  It is more a form of insurance.

Thu, 02/13/2014 - 05:49 | 4431560 StychoKiller
StychoKiller's picture

Beg to differ, the World is awash in FIAT Munny, NOT MONEY!

Thu, 02/13/2014 - 17:52 | 4433957 20-20 Hindsight
20-20 Hindsight's picture

There's a difference between FIAT and "real" money?

Thu, 02/13/2014 - 20:04 | 4434435 MeelionDollerBogus
MeelionDollerBogus's picture

You wrote THAT... on ZEROHEDGE?
STEP AWAY FROM THE space-time spreadsheet,
do NOT dare try to DIVIDE BY ZERO.
I'm watchin' you.

Thu, 02/13/2014 - 20:01 | 4434431 MeelionDollerBogus
MeelionDollerBogus's picture

If I was as miserable as that fat fuck perhaps I'd consider smoking crack too.

Wed, 02/12/2014 - 22:12 | 4430758 Wahooo
Wahooo's picture

Yes, I think I just heard her sigh.

Wed, 02/12/2014 - 22:15 | 4430759 eucalyptus
eucalyptus's picture

native vancouver-ites might actually be able to afford a shoebox now?

Wed, 02/12/2014 - 22:15 | 4430768 pitz
pitz's picture

Not likely to make much, if any of a difference.  Because there was very little "foreign money"  invested in Canadian RE.  The Canadians that run their mouthes off, claiming 'foreigners' are buying Canadian RE, are those who haven't really accepted that immigrants, from Asia, and elsewhere, move to Canada and take out subprime CMHC mortgages just like Canadians who emigrated from Europe and elsewhere have been doing for decades. 

After all, if "foreign money" were a factor in Canadian RE, then overall leverage would be declining.  But when you really dig into what's going on, it is apparent that the root cause of Canada's housing bubble is an enormous amount of subprime credit emmitted into the market.  Canada has the CMHC, guaranteeing nearly $900B of subprime debt.  Fannie & Freddie were only $5-$6T entities at the top, so $900B multiplied by the traditional 10:1 ratio between Canada and the USA, implies dramatically more government participation and subprime mortgage activity in Canada than was ever experienced in the USA at the peak of its housing bubble.   

Wed, 02/12/2014 - 22:28 | 4430827 logicalman
logicalman's picture

Few Canadians know this.

CMHC looks almost exactly like the US sub-prime madness, just under a different name.

 

Wed, 02/12/2014 - 22:31 | 4430832 pitz
pitz's picture

The CMHC even lies about guaranteeing subprime mortgages, on their own webpage.  And incompetent or ignorant Realtors and other sell-siders point to such as 'proof' there's no subprime in Canada.  By definition, nobody would go to the CMHC and ask for subprime mortgage insurance, if the loan in question was considered to be a prime asset. 

Wed, 02/12/2014 - 22:44 | 4430882 logicalman
logicalman's picture

If you want to see some real madness take a look at tax shelters, Commercial Mortage Backed Securiies, illegal banking practices and identity theft in Canada.

http://paperednotes.com/

 

Wed, 02/12/2014 - 23:41 | 4431062 Dingleberry
Dingleberry's picture

We've seen this movie before. 

Reminds me of all the Friday the 13 sequels I watched as a kid. 

Same shit. Same killer. Different victims.

We know the ending.

Thu, 02/13/2014 - 01:05 | 4431257 Spitzer
Spitzer's picture

Trust me.. ZeroHedge member Canadians know this all too well.

I talked my X out of buying a house in 2010. And I guess Im still wrong eh..  It has been awfully hard to cling to reality in Canada over the last few years.

Thu, 02/13/2014 - 01:53 | 4431345 Seer
Seer's picture

I can empathize.  I "talked*" my current wife into selling hers in 2009 (I think that's the year).  And yet the market has continued to go up...  But, she'd worked for a large bank and it's quite likely that she'd have been axed and would have had to dump the mortgage.  So, I'd gotten her away from a market that's going to crash, and away from a Big Bank: I'm a good influence :-)

* She's extremely bright.  I just kind of painted the picture and the next thing I knew she was contacting an agent.

Thu, 02/13/2014 - 12:58 | 4432632 LauraB
LauraB's picture

Hard after 2 years?  Just wait until 8 years have passed.  In 2006, I talked my husband into selling our townhouse and renting a single family home while waiting to buy our own after the bubble popped.  Our kids were 2 and 4 then.  Now they are 9 and 12 and we are still renting.  Lucky for us, we found a single family home in a nice neighborhood to rent at a good price.  Today there are very few SFHs for rent in our area and those that are of equal size to ours are asking about $1000/month more than we're paying.

We made the right move, as our townhouse had tripled in price between the time we bought and sold.  Although prices have fallen in our area, they are still about twice what they were pre-bubble.  This past Sept-Nov, prices seemed to finally be falling back to reality and I was starting to think about buying.  Over the winter, there have been very few sales, but the houses that have sold went for $100s of thousands more than they should have based on the price/sq. ft. of the most recent sales around them (i.e. they sold for more than twice the price that similar houses in their neighborhoods sold for just a month or two before them).  I don't understand how they appraised based on the most recent sales data, unless there is some mortgage fraud involved. Also, several of the houses that sold at the high prices this winter had been sitting on the market for years because they were so overpriced, but sold all of a sudden (probably because there was very low inventory and they were the best houses of what was left).  I'm now watching to see what happens in the Spring as more inventory comes on the market - will the sky-high prices of Dec-Feb hold up or will price declines that started occurring in Sept-Nov resume? 

Thu, 02/13/2014 - 20:00 | 4434425 MeelionDollerBogus
MeelionDollerBogus's picture

Appraised?
Last time an appraiser came to a friend's house he literally was told to pick a number and that is what would be written down.
Since my friend wanted the real number he told the "appraiser" to go fuck himself & leave.

Wed, 02/12/2014 - 22:49 | 4430897 Seer
Seer's picture

Yes.

And recently didn't they terminate 40-year terms?  Maybe they saw that they were holding too much heat to the fire...

From what I could see immigrants tended to have multiple wager-earners in a given residence.  Good in that the loss of a single job might not be catastrophic.  Bad in that there are fewer big earners: lower-wage jobs tend to be more easily severed.

I think that the Chinese influence is more of a marketing thing, a facade in that it provides an appearance that big money wants in (and if big money wants in then all is well).  BUT, make no mistake about it, in some places it's pretty clear that money is being thrown around.

Just when I think that Australia is going to beat Canada to the dive something like this pops up (and while in numerical terms it might not have a lot of punch I'm thinking that it's a big hit to confidence).  The longer they go the bigger will be the crash.  Should be pretty spectacular...

Wed, 02/12/2014 - 22:52 | 4430927 pitz
pitz's picture

Most of the immigrants arrive with little more in cash than enough to buy a used car and rent an appartment.  Yes many of them work hard, but its usually lower paying jobs.  But they also borrow hard, in the belief that borrowing for home ownership will get them ahead. 

Thu, 02/13/2014 - 02:04 | 4431358 Seer
Seer's picture

That's pretty much it.

I tend to think that immigrants are just the next round of suckers.  At some point the collective will realize that spinning the hamster wheel faster and faster not only is unhealthy but it's pointless.

Wed, 02/12/2014 - 22:16 | 4430771 y3maxx
y3maxx's picture

Western Canadian Provinces will secede before agreeing to this.

Wed, 02/12/2014 - 22:26 | 4430812 Freddie
Freddie's picture

Agreeing to what?  Letting China invade?  Most of the hosers up in energy rich parts of Central West Canada are like conservatives.   We should band together and take both countries back from the ****ing NWO tribes.

Wed, 02/12/2014 - 22:53 | 4430915 Seer
Seer's picture

"Most of the hosers up in energy rich parts of Central West Canada are like conservatives."

Your notion of what a conservative is is, well, interesting...

Shitting in one's water and calling it a success/conservative is a pretty sad thing.

Wed, 02/12/2014 - 23:35 | 4431044 Rock On Roger
Rock On Roger's picture

Into which water are we shitting Mr. Seer. And where does your shit go? Or maybe you don't shit? Or maybe you don't know shit?

 

Stack On

 

Thu, 02/13/2014 - 00:39 | 4431201 ReactionToClose...
ReactionToClosedMinds's picture

mespeculates "Seer' is a bolshevik wannabe...... but has no idea what I just said

Thu, 02/13/2014 - 02:05 | 4431360 Seer
Seer's picture

I know shit.

I'm a farmer.

Thank you for inquiring.

Thu, 02/13/2014 - 03:50 | 4431476 Rock On Roger
Rock On Roger's picture

I understand now. I have shit on my boots too.

 

Stack On

 

Thu, 02/13/2014 - 01:12 | 4431268 Spitzer
Spitzer's picture

Fuck off you sad sack of ever living shit.

 

Took time from jacking off to watch an anti fracing propaganda piece eh..

Thu, 02/13/2014 - 02:13 | 4431374 Seer
Seer's picture

Are you directing this drivel towards me?  If so, well, you're a pretty sad thing...

BTW - I don't riide on ANY bandwagons.

BTW2 - Fucking up one's environment is fucking up one's environment.  The logic in this is independent of any propganda campaign.  The rich fucks getting tax favors from their paid-for politicians won't be living in the lands that they destroy.  Sorry if the facts are inconvenient to your myopia...

Thu, 02/13/2014 - 09:16 | 4431776 Spitzer
Spitzer's picture

keep getting your advice from Micheal Moore and the Daily show all you want

Thu, 02/13/2014 - 19:44 | 4434363 MeelionDollerBogus
MeelionDollerBogus's picture

The confusion is deliberate: in Canada they actually call themselves the Conservative Party of Canada or CPC.
It's annoying. They don't act conservative to me & the Liberals seem only liberal with compliance to the law (like the "Conservatives").

Wed, 02/12/2014 - 22:16 | 4430772 Osmium
Osmium's picture

Housing prices in Stratford seemed quite high when I was there in 2002.  I knew a couple that managed to buy a house, but they said they would be eating Kraft Dinner (Kraft mac and cheese) for years because of the high payments.

Wed, 02/12/2014 - 22:16 | 4430775 Confundido
Confundido's picture

Canada devalued its currency from 0.988 to 1.11 in the past months. Why doesn't this count in the analysis?

Wed, 02/12/2014 - 22:27 | 4430807 Rising Sun
Rising Sun's picture

oil, in spite of recent ascent, is ready to go for a big slide - oil companies have already capitulated

 

CDN is tightly coupled to oil

 

 

Wed, 02/12/2014 - 22:28 | 4430825 Freddie
Freddie's picture

Anyone in the USA notice that gas prices have been frozen for almost the same price for about the past 6 months?  WTF is that?  Tyler should investigate.

Thu, 02/13/2014 - 01:28 | 4431301 disabledvet
disabledvet's picture

well... the rumor is that the Hudson Bay contains hundreds of trillions of cubic feet of natural gas.

Thu, 02/13/2014 - 02:16 | 4431385 Seer
Seer's picture

Rumor as in the "fishing for capital" kind?

There was some Australian company that was claimed to be sitting on some mega tar sands shit (the usual- "more oil than in Saudi Arabia" B.S.), folks pumping it big time.  Problem was, it was OLD news, AND, the company itself wasn't giving any big push in its own info to existing stockholders.

Thu, 02/13/2014 - 02:32 | 4431399 Rock On Roger
Rock On Roger's picture

Gaz Hydrates. Gaz trapped in an icy cage. So much gaz... all under the ocean floor.

 

Stack On

 

Thu, 02/13/2014 - 05:30 | 4431549 ebear
ebear's picture

Yup.  Bermuda Triangle Gas.  Get it, before it gets you!

Wed, 02/12/2014 - 22:31 | 4430833 Confundido
Confundido's picture

Genau! Deswegen! Which is why the CAD is more likely to keep devaluing. That is Canada's escape valve, making houses even cheaper, more attractive to foreigners awash in freshly printed US dollars. Plus, Canada's banking sector is nothing short of a currency/loan distribution subsidiary of the central bank. You cannot short it, except via shorting the CAD and then you fall into a circularity. CAD is going to fall to the historical $1.25. Canada's real threat is gold rallying, for reasons beyond the scope of this note. But to understand this, you have to think in which context gold would rally. And no, I don't mean going to the $1,300s..

Wed, 02/12/2014 - 23:54 | 4431095 PeeramidIdeologies
PeeramidIdeologies's picture

It does seem to be a losing proposition to be holding ones cash in CAD. There is a lot of talk of deflation increasing, and for good reason. Personally I don't think the deflation is such a bad thing, but I'm curious about the dangers of a rally in gold. Being resource rich and export inclined it's seems to me a sustained rally in gold would be a good a thing no?

Thu, 02/13/2014 - 02:34 | 4431402 Seer
Seer's picture

I held CAD for a bit.  Served me fine: I wasn't looking to get rich, just preserve.

Stuff works on velocity.  A declining CAD doesn't insure velocity maintains or picks up.  And the notion that the USD would hold up the CAD seems a bit precarious: this is kind of what was suggest above, with supposed cheap housing (where, I wonder).

"Being resource rich and export inclined it's seems to me a sustained rally in gold would be a good a thing no?"

I've always maintained that Canada is one of the last survivors, and I don't waver from this view.  That said, this doesn't mean that I feel that is is immune from suffering.  Being resource rich is good for sustaining oneself, but expectations for exporting resources requires that there are buyers, folks with money.  And, margins... margins are everything, and with growth stalling and starting to reverse we'll find that no matter whether we want shit or not it all come down to the fact that things only work (in the economic systems that we know of) with growth.

While Canada produces gold it doesn't appear that it's a strong suit:

http://www.indexmundi.com/minerals/?country=ca&product=gold

Prodution having dropped durring the times with gold prices being up kind of suggests that it doesn't have much ability to leverage its production.

Deflation would likley reduce costs for conventional oils, which negatively impacts Canada and it's (shitty) tar sands oil.

And then there's the timber industry... housing boom will die there and there won't be any revival in the US.  Timber industry won't see any big up-tick.

Thu, 02/13/2014 - 03:23 | 4431449 Rock On Roger
Rock On Roger's picture

My wife bought the local newspaper today while she was in town. The paper serves a rural area including 20-30,000 people. The classified section is six pages, of which five are dedicated to help wanted.

The world turns at different speeds in different places.

 

Stack On

Thu, 02/13/2014 - 12:25 | 4432461 PeeramidIdeologies
PeeramidIdeologies's picture

I agree with your statement that velocity is a big piece of the puzzle. There are many signs that point to further reduction in CAD. Reduced foreign investment, a legitimate correction in housing (which there hasn't been in decades, and has its own implications), an undercover slow down in exports to the south, and resulting trade disputes, a balanced budget, increased demand for USD?....

You make an interesting point about in regards to demand for what people want, I would say there is another large tell in that statement. It will be interesting to see where things go from here.

Wed, 02/12/2014 - 23:05 | 4430956 Seer
Seer's picture

"Price" is pretty hard to call when it comes to energy.  Let's just say that margins are really starting to falter.  I'd figured that there would be a drop but that then prices would have to be bumped up in order to pull margins out of the red: and, well, back down again as the infrastructure depends on volume; economies of scale in reverse, this is going to get VERY interesting...

Austrailia is pretty much in the same boat.

Wed, 02/12/2014 - 22:26 | 4430811 pitz
pitz's picture

Mostly speculative.  Go read the CoT report.  If the BoC rate cuts don't materialize, it will be back over parity soon enough.

Wed, 02/12/2014 - 23:26 | 4431024 GoldmanSux
GoldmanSux's picture

Disagree. The move was too big, too fast to be speculative. It was orchestrated by the new central bank governor, likely with acceptance by Treasury/Fed.

Wed, 02/12/2014 - 23:50 | 4431086 pitz
pitz's picture

Go plot the number of contracts shorted in the CoT reports over the past year.  Nearly 100,000 additional contracts shorted by the leveraged funds compared to year prior levels.  That's pretty significant.  Central bank governors are relativley impotent. 

Thu, 02/13/2014 - 00:45 | 4431219 GoldmanSux
GoldmanSux's picture

 Do you think so? I think the big ones are very potent and I'm starting to believe co-ordinating levels. Look at the EU vs. USD for the past 4 years or so. Flat line with subtle year to year variances that end up reverting to the mean. Pound not much different. Doesn't make sense to me. The new governor used to be head of the Export association, which is something I wish I'd paid more attention to at the time. Speculators increased, true, but that can mean they are good/plugged in.

Thu, 02/13/2014 - 00:39 | 4431205 ReactionToClose...
ReactionToClosedMinds's picture

I remember the Loonie at less than 67 cents on the US$ (not too long ago) ...hence what you just suggested....makes no sense    (what a pun)

Thu, 02/13/2014 - 19:43 | 4434358 MeelionDollerBogus
MeelionDollerBogus's picture

In Canada we can't make cents - we just discontinued the penny.

Thu, 02/13/2014 - 01:14 | 4431275 Spitzer
Spitzer's picture

Canadians gold rally came early... Yet the dumb fucks I buy my gold from probably think I am still down because all they see is the USD price.

Wed, 02/12/2014 - 22:17 | 4430779 akak
akak's picture
 
Did Canada Just Pop It's Housing Bubble?

Well, it's aboot time!

Wed, 02/12/2014 - 22:23 | 4430790 max2205
max2205's picture

Chinada. The first entry point for the Chinese army to attack

Wed, 02/12/2014 - 22:36 | 4430853 Freddie
Freddie's picture

Bring it MF'ers.  The Chinese invaded Vietnam in 1979.  The Chinese got their asses kicked by Vietnam's like national guard and militia because the main army was in Cambodia kicking Pol Pot's ass.

https://www.google.com/#q=china+vietnam+war+video

I am not sure what happened in Korea but General McCarthur was a douchebag who was only really tallented at beating and killing Bonus Army (WW1) vets along with cowards Patton and Ike. 

http://en.wikipedia.org/wiki/Bonus_Army

Thu, 02/13/2014 - 00:00 | 4431109 nightshiftsucks
nightshiftsucks's picture

The only reason the US might lose a war is because the politicians get in the way.It's obvious you need to read up on the Korean War,the landing at Inchon was a great move by McCarthur.

Thu, 02/13/2014 - 00:16 | 4431142 Freddie
Freddie's picture

Sorry but McArthur will always be a tool and coward for his actions against The Bonus Army.  A tool for the elites, NWO, and the private Federal Reserve european banking cartel.

Thu, 02/13/2014 - 00:52 | 4431231 ReactionToClose...
ReactionToClosedMinds's picture

sorry Freddie...you just lost your credibility

why you ask?

MacArhtur had NOTHING TO DO with FACT that twice in less than 12 months in 1950 UN (USA & West) forces were surprised completely.  The entire USA 8th Army was destroyed as an effective fighting force and the most powerful fighting force in the West, the US Marine Corps 1st Division came within 48 hours of being totally surrounded by 3 PRChinese Field Armies around the Chosin Reservoir...but against "someone's" fait accomplit......they escaped.  Where did you ever read that?  No where because the powers at be do not want you to see the OBVIOUS!!

Again, repeat after me, MacAthur had nothing to do with that (1950 & Korea surprises ...he had local  (Japan & So Korea)  intelligence but this was theatre (nnow PRChina) intelligence that leads to Washington DC .....hint hint hint) yet the 'media' taint the guy ( and I am no MacArthur supporter)

Dig Deeper... and Zero Hedge will not steer you in the best direction on this front as  mewonders this is a Putin propaganda website.

Mock & laugh at me now ....but will you be doing the same in 10 years when obvious evidence comes out after they declassify ?

Wed, 02/12/2014 - 22:25 | 4430798 seek
seek's picture

OT,but Venzuela appears to be having a revolution starting. Most major media outlets have been ordered to stop reporting news and/or shut down.

Wed, 02/12/2014 - 22:48 | 4430905 Freddie
Freddie's picture

Sad.  Poor people.  I am so sick of the NWO.

Wed, 02/12/2014 - 22:25 | 4430799 ziggy59
ziggy59's picture

Line from Breaking Away... "Refund??"

Wed, 02/12/2014 - 22:26 | 4430805 FieldingMellish
FieldingMellish's picture

This affects Vancouver for the most part. Canada's housing markets are fairly well isolated due to the varied local economies. Calgary prices will remain strong while oil is over $90/bbl, for example.

Wed, 02/12/2014 - 22:29 | 4430819 pitz
pitz's picture

I disagree.  Canada is tied together heavily by common lenders, and common lending standards as enacted by the country's main sub-prime mortgage insurer, the CMHC.

Wed, 02/12/2014 - 22:34 | 4430850 Frank Owen
Frank Owen's picture

Well, if it tanks at least the banks will be ok because most of it will fall on the CMHC. Feel sorry for whoever owns that... uhhh... damn.

Wed, 02/12/2014 - 23:05 | 4430964 Seer
Seer's picture

pitz's argument/rebuttal holds water...

Wed, 02/12/2014 - 22:27 | 4430808 Bunga Bunga
Bunga Bunga's picture

... but but but Canada is tiny and will be contained.

Thu, 02/13/2014 - 01:16 | 4431281 Spitzer
Spitzer's picture

Iceland... says hi

Thu, 02/13/2014 - 03:56 | 4431480 TradingFinn
TradingFinn's picture

And of course it's different this time.

Wed, 02/12/2014 - 22:28 | 4430813 Frank Owen
Frank Owen's picture

Did the "print" option get scrapped or am i just blind?

Edit: never mind, the fog has cleared and I can see it. lol

Wed, 02/12/2014 - 22:28 | 4430815 william114085
william114085's picture

Golden visas are springing up all over the EU.  Buy real estate in Latvia for 100K.... Cyrus, Malta or Greece for 250K....Portugal or Spain for $500k....these purchases get you residency in any EU country and after 5-7 years, you can apply for citizenship from the country where your dwelling sits. 

Wed, 02/12/2014 - 23:16 | 4430992 GoldmanSux
GoldmanSux's picture

The USA has something similar if one buys Commercial Real Estate. Been in place for a year or two. I know of a mainland Chinese guy who bought a boarded up tavern in rural Wash state. The tavern will never be reopened.

Thu, 02/13/2014 - 10:22 | 4431932 RaceToTheBottom
RaceToTheBottom's picture

Direct flights from Seattle to Detroit, code shared with South China Air.  No other city in the US has that relationship.  They apparently are buying up the areas in Detroit and then selling them to chinese retail. 

If the numbers are right both in numbers and price, they could be getting an in to the country and a good (eventually) investment.

Wed, 02/12/2014 - 22:28 | 4430816 The_Prisoner
The_Prisoner's picture

Australia will take up the excess Chinese cash. Even middle class chinese residents are leveraging up.

Everyone wants to be a rentier.

 

Wed, 02/12/2014 - 22:29 | 4430821 Bloah
Bloah's picture

60 Great Charts that visualize the scope of the housing bubble in Canada http://www.torontocondobubble.com/p/canadas-housing-bubble.html

Wed, 02/12/2014 - 22:45 | 4430883 Freddie
Freddie's picture

+1

Just show the average Canadian a hockey stick.  Then they will get it - hosers.

Wed, 02/12/2014 - 22:30 | 4430826 i_call_you_my_base
i_call_you_my_base's picture

Housing prices are a function on wages. Any deviation over the long-term is a bubble.

Wed, 02/12/2014 - 22:32 | 4430840 Confundido
Confundido's picture

Canada's real danger is a rally in gold. It would make the country f..ing expensive.

Wed, 02/12/2014 - 22:39 | 4430864 spanish inquisition
spanish inquisition's picture

Rising interest rates is the biggest factor for housing in Canada. Most mortgages have a 4-5 year ARM like interest rate reset with the originating bank. You pay a penalty if you switch banks.

Wed, 02/12/2014 - 23:38 | 4431049 Seer
Seer's picture

Yup.

Fucking ARMs... never touched one.  US introduced them during the Reagan era (part of de-regulation of the banking sector).

Thu, 02/13/2014 - 08:43 | 4431721 pitz
pitz's picture

You're right.  40% of the mortgages in Canada have overnight resets.  The other 60% are generally up to 5 year resets.  Nobody uses long-term financing.  

Thu, 02/13/2014 - 19:42 | 4434352 MeelionDollerBogus
MeelionDollerBogus's picture

Man, my landlord wanted to switch NAMES due to a deceased spouse & paying the mortgage in the other name, and the SAME bank demanded a 6k penalty & changing all the terms JUST for that.
Banks are fuckin' thieves. I say it & I get no argument from my landlord when saying it then.

Wed, 02/12/2014 - 22:46 | 4430885 chump666
chump666's picture

Australia:

* unemployment @ 6%, exp %5.9.  Highest in 10yrs.

Boom to major bust coming.  Japan just pulled the rug on Toyota car manufacturing in Aust (you can blame Abe's the Keynes YEN destruction), mining finsihed, just cronies and construction left.  Just like Canada.

Wed, 02/12/2014 - 23:39 | 4431057 Seer
Seer's picture

Australia and Canada are way long-in-the-tooth for "correction."

Toyota may just have seen the writing on the wall that foretold of the looming collapse in Australia.  Best to get out of a collapsing market early.  Problem is, where to go?  Seems the old playbooks are worthless going forward...

Thu, 02/13/2014 - 00:34 | 4431195 chump666
chump666's picture

It's madness that markets shifted to cover manufacturing, retail and industry collapse with housing/construction and credit bubbles.

NYC is vulnerable too.  Housing blows there...be like 1977.  Bankruptcys are creeping through now.

There will be nowhere to hide except for gold. 

Thu, 02/13/2014 - 02:48 | 4431414 Seer
Seer's picture

chump, the game's about growth.  If real growth can't be had (one can argue whether it's finished yet for sure, but there is no arguing that growth WOULD always end) then the only other thing would be virtual growth.  In a way I see it as more desperation than some sinister scheme: the general meme has not been changed, it's just that no one has any answers as to how we can continue to operate with zero/no growth.

Again, the greatest error is in our inability to ask ourselves what we'd do if growth were to come to an end.

Wed, 02/12/2014 - 22:51 | 4430919 Cabreado
Cabreado's picture

The greatest lesson that Canada's housing situation has to offer is...

even with all the information, experience, and history...

a critical mass of humans, with too much false wealth, and too much ignorance,

will in concert neglect corrupt forces, neglect control, prance around, and bring the house down anyway.

Wed, 02/12/2014 - 22:55 | 4430928 thorgodofthunder
thorgodofthunder's picture

So there's all come through Quebec now.

Did anyone even read the story?!

Thu, 02/13/2014 - 19:41 | 4434350 MeelionDollerBogus
MeelionDollerBogus's picture

You ever live in Quebec? They really don't like people who don't speak French. By all means if those rich investors can quickly learn the language, go for it, otherwise, you won't like your experience there.

Wed, 03/05/2014 - 15:35 | 4512985 thorgodofthunder
thorgodofthunder's picture

but once they're in, they're in and they will move to the better Canadian spots, won't they?

Wed, 02/12/2014 - 22:54 | 4430930 billwilson
billwilson's picture

Can't anyone do math anymore?

Worthless statistics!

1) You can't average 2 averages against historical averages and call that "overvalued" PURE AND UTTER BULLSHIT statistics. It is like having 2 apples and 3 bananas and saying that you really have 5 pineapples.

2) Using 2002 as a base year (deceptive to start with), Canadina prices are up 57% to today. US prices are up 43%. NOT a huge difference, and far less than implied by the misleading graph.

Look some cities in Canada are way overvalued (toronto/Vancouver) and are in bubble territory, but where I live I can pick up a semi detached house, 3 bedrooms, 2 stories, and have paymenst less than renting by a mile, even with almost nothing down. Yes, due to low rates and stupid government policy that allows for longer amortizatiosn and lower down payments. Damn conservatives can't run anyhting properly.

 

Wed, 02/12/2014 - 23:50 | 4431080 Seer
Seer's picture

"Look some cities in Canada are way overvalued (toronto/Vancouver) and are in bubble territory, but where I live I can pick up a semi detached house, 3 bedrooms, 2 stories, and have paymenst less than renting by a mile, even with almost nothing down. Yes, due to low rates and stupid government policy that allows for longer amortizatiosn and lower down payments. Damn conservatives can't run anyhting properly."

Ahem, the larger cities are where the financial instututions are, and where a lot of commerce happens.  When they take a hit I guarantee you that it will reverberate.

That you can afford something somewhere is meaningless to all but yourself.  And as stated is empty since there's no analysis as to your "revenues" or to any cost projections as pertains to cost of living: are you secure in facing hyperinflation? how about crushing deflation?

Lastly, blaming any entity or group is silly in the face of the underlying premise that is the universal failure: perpetual growth on a finite planet.  It was never a question that the diver would hit the water, so arguing about his/her style as it having any bearing on any other outcome than that (hitting the water) is, well, a bit empty...

Thu, 02/13/2014 - 01:44 | 4431333 daedon
daedon's picture

Why are you being down-voted ????  If you want to lie, always always begin with Statistics.  Example: math abilities are directly proportional to foot size (40 year old is better at math than a 2 year old). Math abilities seem to drop like a rock if you study economics.  Man asks the economist "What's 2+2" - the economist answers "what would you like it to be ?".

Thu, 02/13/2014 - 19:43 | 4434348 MeelionDollerBogus
MeelionDollerBogus's picture

Actually you can but you need to have enough of them & to use logarithms.
You average the logarithms THEN go back to the factor & express it as a %.
By all means if I still got it wrong for this particular case go ahead & explain how.
While stats was definitely part of my computer science degree it is in fact the course I was poorest at so I won't be offended if corrected.
At the very least I'd say in getting each average you need to match up the right dates.  Disparate dates or one time window being much larger than another screws the pooch completely.
Worse, I'm not even sure the right question is being asked:
why do we care how much the average overprice is compared to historical?
Shouldn't we care how much the prices are overburdening to WAGES? Annual income?
Wouldn't that be meaningful?
That's a critical problem with bullshit statistics. It isn't the wrong answer, it's the wrong fucking question pasted in numbers enough to blind people to the simple self-check of ASKING if it's the wrong question.
That is all too common.

Wed, 02/12/2014 - 23:03 | 4430958 DangerClams
DangerClams's picture

Wait.  Isn't it more like a popping of the housing hymen?

Wed, 02/12/2014 - 23:03 | 4430961 GoldmanSux
GoldmanSux's picture

The first runup in Vancouver was the lead up to the Hong Kong handover in 94. Few locals even realize it took 8 years to get back to the highs of 94. This latest runup is in part due to mainland Chinese buying an insurance policy if they need a quick exit. They are defenitely the marginal high end buyer so this will have an effect. The other reasons listed in the comments here are also valid. The local opinion is similar to the US in 2007. Won't go down much. Wishful but naive.

Wed, 02/12/2014 - 23:57 | 4431098 Seer
Seer's picture

I've been to Vancouver (where I extracted my wife from), and while I don't pretent to be an expert on the housing market there I can say that I have first-hand experience.  There are LOTS of Indians and Chinese there.  It's hard to tell which group has the largest impact.  However, I have seen that the numbers of folks stuffed into houses is pretty high: my wife actually was renting out rooms to her house before she sold it (I'd advised her to do so before the bubble burst- early, but... better early than late).  Lots of jobs serving one another.  I suspect that a slight stall in growth will pretty much take it out, set off a chain reaction; and, as I responded to someone else, when this happens in Canada's "finest" cities I'm quite certain that it'll cast a long shadow over the entirety of the country.

The "rich Chinese" thing has more meaning in it being a destabilizer of "confidence," and, well, we know that confidence is everything in keeping a bubble going...

Thu, 02/13/2014 - 05:47 | 4431555 ebear
ebear's picture

"The first runup in Vancouver was the lead up to the Hong Kong handover in 94."

That would be 97, if you mean the date of the actual handover, and there was an earlier bubble that many don't remember that took place in the 80's - the Volker years.  

Wed, 02/12/2014 - 23:14 | 4430988 solomon_ru
solomon_ru's picture

Wow! Just an astonishing call from Flaherty!

Oh, and absolutely Canada doesn't need any more investors when there is a pure depression in places like Kitchener, Barrie, Niagara Falls and... well, pretty much everywhere across Ontario more or less and as well as in Toronto itself, once known as Golden Horseshoe, a manufacturing booming spot of NA but now just a subsidized city by other oil provinces but also (not forgeting) being a financial, education, hospital and other industries capital of Canada.

Oh, and absolutely it is better to just give more PRs to refugees from Bangladesh, Syria and other similiar states by giving them free health care, free education, unemployment and other material benefits because... well, isn't it just so much easier to process their applications?

Besides, wouldn't it be nice too just to destroy booming construction, real estate agents businesses, all the immigration law firms and other retail where all these newly immigrants buy IKEA beds for their new condos without mortgages as well as all the jobs dependent on these and also cutting off on income of third level education institutions when their children pay fees for education at York, UoT and Seneca college and etc... Oh, and how about all the hi-end stores where they shop for clothes, bags, cars and.... ?

Well done, well done, Flaherty with your cost cutting measures and new policies!

How about just starting using a mail only instead of emails, internet and express post too? So many cost cutting measures could be achieved when not spending money on these expensive IT costs, eh?

Wed, 02/12/2014 - 23:59 | 4431107 Seer
Seer's picture

"Besides, wouldn't it be nice too just to destroy booming construction, real estate agents businesses, all the immigration law firms and other retail where all these newly immigrants buy IKEA beds for their new condos without mortgages as well as all the jobs dependent on these and also cutting off on income of third level education institutions when their children pay fees for education at York, UoT and Seneca college and etc... Oh, and how about all the hi-end stores where they shop for clothes, bags, cars and.... ?"

Are you thinking that the growth ponzi party can last forever?  Maybe some folks see the end coming and are swatting at shit that'll send signals to those who actually understand/get it?

Wed, 02/12/2014 - 23:16 | 4430994 0INK
0INK's picture

In terms of the Canadian economy vs the US, here is what Rosenberg recently said in congressional testimony: Canada’s unemployment rate on an apples-to-apples comparison is now 5.7%.  Link to the Feb 5 Gluskin Sheff PDF is here http://t.co/fE4H2RgwOU

Wed, 02/12/2014 - 23:54 | 4431094 Hongcha
Hongcha's picture

This is hugely great news for SEA and SF because that money is going there instead.  I think the 'stop facilitating our corrupt officials' theory is interesting but unlikely.  More likely is the BC voters just got sick of it and pressured their representatives.  In any event what a remarkable development.

Thu, 02/13/2014 - 03:47 | 4431471 August
August's picture

Legalisation of marijuana growing and consumption in Washington State is probably good for a 2% drop in the BC economy.

The BC cash economy, for sure.

Thu, 02/13/2014 - 01:26 | 4431299 kedi
kedi's picture

Canadian government data, though massaged, is not quite as imaginary as US data. Also, Canadian mortgage rules and obligations to the mortgage holder are different than many US mortgages. Canadians are less able to walk away from a mortgage with little forfiture than the property itself. Canadians are more legally and financially bound to their morgage property's fate, after default. So Canadians will have to keep putting money into and residing in, their mortgaged property. This will keep the average prices higher, longer, than in the US markets. New property prices are going to take a hit, as stagnant wages and debt loads decrease peoples ability to pay for first homes. But the debt load on an existing home, will force people to stay in it till they go bankrupt, or someone buys them out somewhere near what is owed on it. Prices will stagnate or decrease to what is owed on it. If things continue as is, property just won't sell. Prices will reflect paying off the debt owing only. No equity accrued in it. The US is not yet seeing the real decrease in house prices. As the banks are not putting the dead properties out there in the true light of day and market. Canada is likely going to see more bankruptcies to clear other debt, with the people hanging onto the property and it's mortgage.

The bank and I own a house in Alberta Canada. This province has seen a few boom and bust cycles due to it being an oil and gas based economy. Jobs and home owners have vacated en masse a couple of times. I have not looked into how this was dealt with. A Canadian housing bubble popping in one province. While the rest of the country was in just a general malaise. Right now, my particular home is underwater financially, though in general, because of the fossil fuel economy, prices are stable, maybe rising a bit. But unlike many US mortgage holders I cannot cut my losses and walk away. Losses on the resale of the property will follow me.

I am holding out till the real crash. When the vast majority of the average home owners will finally not be able to borrow against their declining against inflation wage and assetts to pay the motgage. When everything else notches up that little bit more and Peter is really broke, so Paul has to really face reality. Paul being the bank and governemnt CEO's. At some point, reality, real dollars, real labor, needing food and shelter and a reason to work for tomorrow, will have to be seen as real wealth. A limited resource. Not digital or numbers on paper. Things will reset to reality. And really, most of the losses will just be digital, on paper. A few less imaginary zeroes to brag about. A few less zeroes owed. Trillions of sighs of releif. 

Thu, 02/13/2014 - 08:27 | 4431690 gmak
gmak's picture

The fall in price may be more rapid than you realize, and sooner. Most are carrying 3 - 5 year mortgages with 25 year amortization. they have to roll over rates. If prices move down, then the borrowers need to cough up cash to reduce mortgage amount to below 80% of new 'price' of house. Either that, or get insurance - but still < 100% of new price of house.  Not many over-extended variable rate mortgage holders will be able to cough up that much cash, especially in the face of rising rates. 

Many believe that they can be fast and smart and lock in the fixed rate as soon as rates start up, but fixed rate is already twice the floating rate. So their interest payments will DOUBLE.  Plus, a $600K house suddenly priced at $400K means $100 - $200K is due to bank before mortgage will be rolled over. Pretty hard to stay the course when one's monthlly payments double AND half the new price of the house is suddenly due. 

Consumption will drop if they do stay the course = declining economy and sales = layoffs (unless somehow Martians come in and boost global growth) = BOOM!

Thu, 02/13/2014 - 01:35 | 4431321 daedon
daedon's picture

Let me get this straight:
Home price / rent ratio is 88% above historical averages.
Home price / income ratio is 32% above historical averages.
Averaging these 2 averages gives house over valuation ?

Are we:
* Assuming rent control hasn't kept the cost of renting artificially low ?
* Assuming salaries have kept up to inflation ?
* Assuming inflation exists and if so at which rate  ?
   (A) 0%, (B) 1.9% (C) None of these (E) All of these (F) Some of these
   A yes, inflation, that number which magically hovers below 2% even whilst
   the BoC jacks M1 by an average of 9% a year.

This 60% figure is one heck of a stretch.  

Thu, 02/13/2014 - 19:40 | 4434346 MeelionDollerBogus
MeelionDollerBogus's picture

Agreed, I'd like to see detailed figures city by city going back 20 years to give credibility.
Until then I file it under 'maybe so'

Thu, 02/13/2014 - 01:52 | 4431339 benqbiggis
benqbiggis's picture

Housing bubble in Canada ?

In Brazil the prices tripled in 2 years hehe

Thu, 02/13/2014 - 02:16 | 4431378 TradingTroll
TradingTroll's picture

Most Chinese investor-immigrants buy in three markets: Vancouver, Calgary and Toronto. While those are big markets, Quebec is 1/3 of Canada on a population basis and Chinese immigrants barely touch it

The main problem with the immigrant investor is it creates a different drag on the economy than the refugee or worker immigrant.

 

Investor immigrant buys house or condo. Municipality in bed with builder adds nothing to infrastructure. Thats why Vancouver has the worst traffic in N. America. The Port Mann bridge project cost 43.5bn and it still takes 2 hours to corss the 2nd narros in rush hour.

 

Refugee or worker immigrant creates a drag on ESL programs, health and social services. But they settle a bit more dispersed, into cheaper towns, so the load isnt just in the cities. lots of Somalians in Edmonton for example.

 

It must be time for the pendulum to swing the other way.

Thu, 02/13/2014 - 08:30 | 4431695 gmak
gmak's picture

Isnt Quebec more like 1/4 of the population? 8 million out of 32 milliion?

Thu, 02/13/2014 - 19:42 | 4434344 MeelionDollerBogus
MeelionDollerBogus's picture

AND after the bridges in Van are turned to toll-only the tax-payers get NONE of the benefit for having funded it yet ALL of the cost for having to use the  bridge instead of boats to cross the damn river.
Drutter on youtube lives there & has been on about this frequently.
The PERFECTLY WORKING toll-free bridge, of course, will be torn down, and you'll pay for that too.
Whoever -1'd  you doesn't live there and doesn't get it. It's robbery.

Thu, 02/13/2014 - 02:20 | 4431389 Deathrips
Deathrips's picture

This should be a great event considering that all canadian mortgages are full recourse. You cant walk away form the house, without taking the loan. Debtors prisons....bullish?

 

RIPS

Thu, 02/13/2014 - 19:41 | 4434340 MeelionDollerBogus
MeelionDollerBogus's picture

Really? I never tried. So you can't discharge in bankruptcy?
All the more reason I should never own a house if that's the case.

Thu, 02/13/2014 - 03:20 | 4431448 Quantum Darwinism
Quantum Darwinism's picture

Well I've been waiting for this for 4 fuckin years IT'S ABOUT FUCKIN TIME.

Gives me hope that one day I may be able to afford an apartment without resorting to living 4 in a 2-bedroom... *sigh* 

I'm in the epicenter of the bubble here in Vancouver and will be watching with a great smile when the thing finally comes down to earth and there's realtor blood on the streets. :)

Thu, 02/13/2014 - 06:38 | 4431595 Peter Pan
Peter Pan's picture

The immigrants who bought their way into Canada, Australia and the other places have added very little to the entrepreneurial life of these nations and only served to push up home values to the detriment of the young and the satisfaction of those nearing retirement.

The imbalances are going to rock the boat when the trend slows and then reverses.

Fleeing Chinese nationals will not continue forever.

Thu, 02/13/2014 - 18:44 | 4434144 MeelionDollerBogus
MeelionDollerBogus's picture

Fuck 'em. We need lower housing & rent, especially with inflation.

There's no reason all the savings of people who can't afford housing at these prices should see the money go right into the government's hands. They'll just be paying out for welfare & subsidized housing anyhow so what's the gain? Let the markets be fair, do not give special subsidy to non-citizens just to drive up prices artificially so citizens who are working can't afford to work and have a home at the same time.

Fri, 02/21/2014 - 11:40 | 4461914 dan123
dan123's picture

Here is Canadian Debt Stats http://www.moneyinside.ca/blog/finance/canadian_debt_statistic_b-87.html and her is Canadian Homeowners http://www.moneyinside.ca/blog/finance/canadian_homeowners_b-67.html Look, how much can prices go up? They are already close to the moon

Tue, 03/11/2014 - 10:47 | 4534200 amanda33
amanda33's picture

The reason no Canadian economist will predict a bubble is because they all work for the banks and a bursting bubble will bankrupt them. Since housing and Canada loans has become about emotions, and not economics, any negative press could be the figurative nail. We would have been far better off taking our medicine before, but now we have an out of control bubble that will eventually burst. It's just a matter when.

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