Author Topic: Garth Turner - Real Estate in Canada  (Read 518102 times)

Liberty

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 11634
  • twitter.com/libertyRPF
    • twitter.com/libertyRPF
Re: Garth Turner - Real Estate in Canada
« Reply #710 on: March 17, 2016, 05:53:27 AM »
Liberty not sure if they can make it retroactive. It is already too late in the game to have much of an impact - i.e deductibles.

Too late to avoid damage if defaults rise, but not necessarily too late to affect the marginal buyer going forward and make banks tighten their lending standards. This might not be the thing that does it, but could be one more step in that direction.
"Most haystacks don't even have a needle." |  I'm on Twitter  | This podcast episode is a must-listen


bizaro86

  • Hero Member
  • *****
  • Posts: 1118
Re: Garth Turner - Real Estate in Canada
« Reply #711 on: March 17, 2016, 10:14:14 AM »
Post from another forum I thought was interesting. Data not sourced, so YMMV.

Here is a Chronology of CMHC rules & mortgage data:

1954-1990- Somewhere along this time, 10% became minimum down payment.
1990- 5% was introduced as a trial run, officially accepted in 1999.
2001 Genworth (GE Capital) enters the Canadian mortgage insurance market
2001 CIBC offered below-prime mortgages.
Pre-2003 CMHC: 5% down with price limit depending on area, 25 yr amortizations, no price limit if 10% or more down
Sep 2003 CMHC: 5% down, 25 yr amortizations, removed all price ceiling limitations. Now any mortgage would be insured regardless of the cost.
Mar 2004 CMHC: Flex-Down product allows 5% down to be borrowed and 1.5% closing costs to be borrowed (essentially zero down, but 95% insured)
Mar 2006 AIG enters the Canadian mortgage insurance market
Mar 2006 CMHC: 0% down, 30 yr amortizations (Genworth announces 35 yr amortizations)
Jun 2006 CMHC: 0% down, 35 yr amortizations, interest only payments allowed for 10 years
Nov 2006 CMHC: 0% down, 40 yr amortizations, interest only payments allowed for 10 years
Oct 2008 CMHC: 5% down, 35 yr amortizations, investors need 5% down.
April 2010- CMHC did some minor tightening of their guidelines, investors need 20% down.
March 2011- CMHC only allows 30 yr amortizations, restrictions on pulling equity out
2012 - CMHC only allows 25 yr amortizations, insured mortgages limited to $1 million, home equity refinance drops from 85% to 80%.

The amount of credit expansion and loosening that occurred from 2003 to 2006 was crazy. Any wonder home prices almost doubled in 30 months?
Calgary SF Median (January 2005) +/-$240,000
Calgary SF Median (July 2007) +/-$440,000

bbarberayr

  • Full Member
  • ***
  • Posts: 161
Re: Garth Turner - Real Estate in Canada
« Reply #712 on: March 17, 2016, 12:17:58 PM »
In case you haven't seen this, the Teranet web site is good:

http://www.housepriceindex.ca/default.aspx

What's interesting is many cities have done pretty much nothing pricewise for 5 years now, the Vancouver and Toronto/Hamilton areas continue to do well.

I'm also not sure why the Vancouver market is so heavily weighted - more than Calgary and Edmonton combined.

JBTC

  • Sr. Member
  • ****
  • Posts: 255
Re: Garth Turner - Real Estate in Canada
« Reply #713 on: March 17, 2016, 05:44:31 PM »

What's interesting is many cities have done pretty much nothing pricewise for 5 years now, the Vancouver and Toronto/Hamilton areas continue to do well.


If this is accurate, it indicates the boom in V and T is mostly not due to nationwide factors, such as interest rate or mortgage policy. It likely reflects a combination of individual fundamental investment merits and fundamentals-fueled speculation.

As scorpioncapital already suggested earlier, the key is to figure out how much of the boom is due to sustainable fundamentals vs. unsustainable speculation. That'd be a much more productive discussion.

wisdom

  • Hero Member
  • *****
  • Posts: 745
Re: Garth Turner - Real Estate in Canada
« Reply #714 on: March 17, 2016, 06:04:25 PM »
10% moves in a day - can there really be any fundamentals in play.

How can a house be worth that much more overnight.

merkhet

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 3001
Re: Garth Turner - Real Estate in Canada
« Reply #715 on: March 17, 2016, 06:05:50 PM »
10% moves in a day - can there really be any fundamentals in play.

How can a house be worth that much more overnight.

Two words: platform value

Jurgis

  • Hero Member
  • *****
  • Posts: 4758
    • Porfolio
Re: Garth Turner - Real Estate in Canada
« Reply #716 on: March 17, 2016, 06:09:46 PM »
10% moves in a day - can there really be any fundamentals in play.

How can a house be worth that much more overnight.

Two words: platform value

That was very good! ROFLMAO.
"Before you can be rich, you must be poor." - Nef Anyo
--------------------------------------------------------------------
"American History X", "Milk", "The Insider", "Dirty Money", "LBJ"

JBTC

  • Sr. Member
  • ****
  • Posts: 255
Re: Garth Turner - Real Estate in Canada
« Reply #717 on: March 17, 2016, 07:18:43 PM »
10% moves in a day - can there really be any fundamentals in play.

How can a house be worth that much more overnight.

Can you please list the houses that moved 10% a day? How many? What are the quotes over time?

Most houses don't have quotes most of the time. Because of this, housing value can be less certain. A 10% difference in prices offered by two different buyers is normal.

In a competitive auction, prices can move up dramatically. A 10% move doesn't indicate anything unusual.

Stocks move up 10% easily. Are those moves all speculation?

Please explain your logic.


wisdom

  • Hero Member
  • *****
  • Posts: 745
Re: Garth Turner - Real Estate in Canada
« Reply #719 on: March 17, 2016, 09:46:49 PM »
http://bc.ctvnews.ca/house-flipping-concerns-as-368-vancouver-homes-sold-at-least-twice-since-2014-1.2769801

Jbtc since you asked I will refer you to some stuff that is common knowledge in this market. Not sure where you live or how informed you are about Vancouver or just trolling.

Because of privacy I am not giving you specific addresses but it is common to see houses that are up 100% or more in 18 months or to see bids of $200-500k over asking.

I can only imagine that you have no idea about what is happening in this market to make the statement  you just did. I would ask you to look into the general market, you don't need any specific address.

http://www.theglobeandmail.com/news/investigations/the-real-estate-technique-fuelling-vancouvers-housing-market/article28634868/

Let me know how many more examples would you like.

http://globalnews.ca/news/2506976/rapid-home-flipping-in-vancouver-maybe-this-is-when-it-will-be-caught/

Look at increase on the average house.

http://www.ctvnews.ca/business/expert-tips-to-lock-down-properties-in-vancouver-s-red-hot-housing-market-1.2805228

http://bc.ctvnews.ca/red-hot-or-reprehensible-vancouver-home-sells-for-735-000-over-asking-1.2792911
« Last Edit: March 17, 2016, 10:24:23 PM by wisdom »