Comments on: Canada’s housing bubble – time to take away the punch bowl http://www.wellingtonfund.com/blog/2009/12/23/canadas-housing-bubble-time-to-take-away-the-punch-bowl/ News, Views & Purviews Fri, 03 Feb 2012 02:44:40 +0000 http://wordpress.org/?v= hourly 1 By: Mark McQueen http://www.wellingtonfund.com/blog/2009/12/23/canadas-housing-bubble-time-to-take-away-the-punch-bowl/comment-page-1/#comment-2206 Mark McQueen Wed, 03 Feb 2010 19:45:40 +0000 http://www.wellingtonfund.com/blog/?p=3088#comment-2206 Thanks for stopping by our site, Pedro I think these facts are well understood. Cheers MRM Thanks for stopping by our site, Pedro

I think these facts are well understood.

Cheers

MRM

]]> By: Pedro http://www.wellingtonfund.com/blog/2009/12/23/canadas-housing-bubble-time-to-take-away-the-punch-bowl/comment-page-1/#comment-2205 Pedro Wed, 03 Feb 2010 18:56:06 +0000 http://www.wellingtonfund.com/blog/?p=3088#comment-2205 Just so you know - the CMHC does not issue mortgages nor does it set the minimum down payment requirements. CMHC provides insures mortgages with less than 20% down. Just so you know – the CMHC does not issue mortgages nor does it set the minimum down payment requirements. CMHC provides insures mortgages with less than 20% down.

]]> By: doctor stock http://www.wellingtonfund.com/blog/2009/12/23/canadas-housing-bubble-time-to-take-away-the-punch-bowl/comment-page-1/#comment-2033 doctor stock Fri, 25 Dec 2009 04:40:23 +0000 http://www.wellingtonfund.com/blog/?p=3088#comment-2033 Exactly...the pre-tax perspective is critical to getting a true read on the numbers. Thanks and Merry Christmas all. Exactly…the pre-tax perspective is critical to getting a true read on the numbers. Thanks and Merry Christmas all.

]]> By: TH http://www.wellingtonfund.com/blog/2009/12/23/canadas-housing-bubble-time-to-take-away-the-punch-bowl/comment-page-1/#comment-2031 TH Wed, 23 Dec 2009 20:10:12 +0000 http://www.wellingtonfund.com/blog/?p=3088#comment-2031 Mark, Great post. Every Canadian blogger that I regularly follow is commenting on the BoC/FM comment, but only you have put this right perspective with regards to what this means for 'Pre-tax' perspective. This mirrors my thoughts and advice to my friends and colleagues on the topic. I cannot understand how many of my very educated colleagues(who are financial bankers) don't factor this issue in their own real-estate investments. It is so easy when the cost is broken down into a per-month basis to reduce the $$ impact. For example, $50/mth cell phone, $25/mth security monitoring, etc and using "oh, I can afford that!" justification without paying attention to what it really costs on an Annual basis and let alone what this means on a pre-tax income level. I am 'in the market' for a house since I sold my place earlier this year, but despite having the possibly one of the best credit (Zero Debt, >150K income, stable job)I cant stomach the current housing prices that sellers are demanding and getting. This past summer I saw many families bidding up the house prices using the same justification of "$20 per month of high mortgage payment on that extra 10K- I can afford that". I guess I will happily be renting for some more time! Mark,

Great post. Every Canadian blogger that I regularly follow is commenting on the BoC/FM comment, but only you have put this right perspective with regards to what this means for ‘Pre-tax’ perspective. This mirrors my thoughts and advice to my friends and colleagues on the topic.

I cannot understand how many of my very educated colleagues(who are financial bankers) don’t factor this issue in their own real-estate investments.

It is so easy when the cost is broken down into a per-month basis to reduce the $$ impact. For example, $50/mth cell phone, $25/mth security monitoring, etc and using “oh, I can afford that!” justification without paying attention to what it really costs on an Annual basis and let alone what this means on a pre-tax income level.

I am ‘in the market’ for a house since I sold my place earlier this year, but despite having the possibly one of the best credit (Zero Debt, >150K income, stable job)I cant stomach the current housing prices that sellers are demanding and getting. This past summer I saw many families bidding up the house prices using the same justification of “$20 per month of high mortgage payment on that extra 10K- I can afford that”.

I guess I will happily be renting for some more time!

]]> By: Brad J. http://www.wellingtonfund.com/blog/2009/12/23/canadas-housing-bubble-time-to-take-away-the-punch-bowl/comment-page-1/#comment-2027 Brad J. Wed, 23 Dec 2009 13:34:19 +0000 http://www.wellingtonfund.com/blog/?p=3088#comment-2027 Mark, I really have a tough time when inflammatory words like "bubble" are used to describe the Canadian housing market. Our variable mortgages are nothing like American ARMs. Our 35-year am periods are nothing like American zero and negative am mortgages that fuelled unsustainable valuations. Our interest payments are not tax-deductable. Real estate is cheap in Toronto compared to other global cities. A professional couple can still buy a house in Leslieville or Trinity-Bellwoods for around 3.0-3.5x income (150K income/$450-525K house) without resorting to an am period beyond 25 years. As long as there are professionals in Toronto, there will be demand. Just out of business school we purchased a modest rowhosue in downtown east. I can walk to Bay St in under 25 minutes and our mortgage is "normal" (25y am, fixed at c.5%, c.75% LTV). I can't think of another global financial hub where an early career guy like myself could easily afford real estate in the city centre. Mark, I really have a tough time when inflammatory words like "bubble" are used to describe the Canadian housing market.

Our variable mortgages are nothing like American ARMs. Our 35-year am periods are nothing like American zero and negative am mortgages that fuelled unsustainable valuations. Our interest payments are not tax-deductable.

Real estate is cheap in Toronto compared to other global cities. A professional couple can still buy a house in Leslieville or Trinity-Bellwoods for around 3.0-3.5x income (150K income/$450-525K house) without resorting to an am period beyond 25 years. As long as there are professionals in Toronto, there will be demand.

Just out of business school we purchased a modest rowhosue in downtown east. I can walk to Bay St in under 25 minutes and our mortgage is "normal" (25y am, fixed at c.5%, c.75% LTV). I can’t think of another global financial hub where an early career guy like myself could easily afford real estate in the city centre.

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