We're all on the hook for Canada's mortgages?
Jul 3rd 2012 | 9:01 am
#61
Dive Bar Drunk
Joined: Nov 2006
Posts: 8,671
From: Toronto
Re: We're all on the hook for Canada's mortgages?
Thanks Steve, that was actually a very interesting article.
By pure coincidence, The Economist (arguably one of the most respected financial newspapers in the world) has just published an article on the Canadian housing market. And I quote:
"Some say that Canada’s banks are flattered by a huge indemnity offered by Canada Mortgage and Housing Corp (CMHC), a public institution that insures mortgages with a loan-to-value ratio of more than 80%. CHMC’s book grew to C$567 billion ($557 billion) in 2011, up from C$345 billion four years earlier. And Canada’s housing market looks very frothy on some measures: The Economist’s analysis of price-to-rent ratios suggests that Canadian properties were about 75% above their long-run “fair value†in the first quarter of 2012 (see chart). Although less than 0.5% of CHMC’s mortgages are in arrears, such exuberance is a worry. The central bank recently labelled housing as “the most important domestic risk to financial stability in Canadaâ€."
http://www.economist.com/node/21557731
Ok, I'm downing my spade now, as requested. All's well, nothing to see here.
By pure coincidence, The Economist (arguably one of the most respected financial newspapers in the world) has just published an article on the Canadian housing market. And I quote:
"Some say that Canada’s banks are flattered by a huge indemnity offered by Canada Mortgage and Housing Corp (CMHC), a public institution that insures mortgages with a loan-to-value ratio of more than 80%. CHMC’s book grew to C$567 billion ($557 billion) in 2011, up from C$345 billion four years earlier. And Canada’s housing market looks very frothy on some measures: The Economist’s analysis of price-to-rent ratios suggests that Canadian properties were about 75% above their long-run “fair value†in the first quarter of 2012 (see chart). Although less than 0.5% of CHMC’s mortgages are in arrears, such exuberance is a worry. The central bank recently labelled housing as “the most important domestic risk to financial stability in Canadaâ€."
http://www.economist.com/node/21557731
Ok, I'm downing my spade now, as requested. All's well, nothing to see here.
The interesting change of late was changing the mortgage period to a maximum of 25 years as a lot of Canadians have been taking longer periods.
Also there was some stat about the mortgage not allowed to being over 39% of income.
This could potentially restrict demand as wages certainly aren't going up as fast as properties in the major commercial centers anyway.
Ultimately I think any crash will come to Toronto courtesy of the condo market and it's supply. The city now boasts more unfinished condo's than New York and Mexico combined. I saw some frightening stats on the prospect of "white elephants" that this city faces in one of the major candian dailies recently- I just cant remember where.
Last edited by JamesM; Jul 3rd 2012 at 9:05 am.
Jul 3rd 2012 | 12:26 pm
#62
Assimilated Pauper
Joined: Mar 2005
Posts: 40,070
From: Ontario
Re: We're all on the hook for Canada's mortgages?
Arguably so. It's not, of course, presented as "sign here to absolve me of responsibility". However, the contract with the lawyer contains a clause stating that, since title insurance exists, the lawyer is no longer obligated to act in a diligent fashion. I assume, but don't know, that this makes it even more difficult to sue the lawyer than would otherwise be the case.
Arguably not, one hires a lawyer to handle the administrivia of a house purchase. Similarly, one hires a electrician to connect the wires. If the wires short out and the house burns down then one has not been thick in hiring an incompetent electrician, one has hired a professional and left the matter to his expertise. One could not be expected to know that the professional was incompetent (I was going to add "or dishonest" but thought of the case of the lawyer).
One expects a less standard of professionalism of a lawyer then an electrician but the standard should not be so low as to allow mildly deceiving the client and then sticking the tongue out at them for being too thick to catch they were being cheated.
Arguably not, one hires a lawyer to handle the administrivia of a house purchase. Similarly, one hires a electrician to connect the wires. If the wires short out and the house burns down then one has not been thick in hiring an incompetent electrician, one has hired a professional and left the matter to his expertise. One could not be expected to know that the professional was incompetent (I was going to add "or dishonest" but thought of the case of the lawyer).
One expects a less standard of professionalism of a lawyer then an electrician but the standard should not be so low as to allow mildly deceiving the client and then sticking the tongue out at them for being too thick to catch they were being cheated.
Jul 3rd 2012 | 12:30 pm
#63
Assimilated Pauper
Joined: Mar 2005
Posts: 40,070
From: Ontario
Re: We're all on the hook for Canada's mortgages?
I strive to be alarmed, but the count of unfinished condos in Mexico seems as relevant as the price of eggs in Russia.
Jul 4th 2012 | 1:11 am
#64
Lost in BE Cyberspace
Joined: Aug 2005
Posts: 13,402
From: South of Calgary
Re: We're all on the hook for Canada's mortgages?
Arguably so. It's not, of course, presented as "sign here to absolve me of responsibility". However, the contract with the lawyer contains a clause stating that, since title insurance exists, the lawyer is no longer obligated to act in a diligent fashion. I assume, but don't know, that this makes it even more difficult to sue the lawyer than would otherwise be the case.
Arguably not, one hires a lawyer to handle the administrivia of a house purchase. Similarly, one hires a electrician to connect the wires. If the wires short out and the house burns down then one has not been thick in hiring an incompetent electrician, one has hired a professional and left the matter to his expertise. One could not be expected to know that the professional was incompetent (I was going to add "or dishonest" but thought of the case of the lawyer).
One expects a less standard of professionalism of a lawyer then an electrician but the standard should not be so low as to allow mildly deceiving the client and then sticking the tongue out at them for being too thick to catch they were being cheated.
Arguably not, one hires a lawyer to handle the administrivia of a house purchase. Similarly, one hires a electrician to connect the wires. If the wires short out and the house burns down then one has not been thick in hiring an incompetent electrician, one has hired a professional and left the matter to his expertise. One could not be expected to know that the professional was incompetent (I was going to add "or dishonest" but thought of the case of the lawyer).
One expects a less standard of professionalism of a lawyer then an electrician but the standard should not be so low as to allow mildly deceiving the client and then sticking the tongue out at them for being too thick to catch they were being cheated.
I seem to recall your distain for lawyers is a result of something like this:
I need assistance with a divorce - explain to lawyer what the issue is
You're screwed (or words to that effect) and you can't afford my fees
(one assumes you instruct a different lawyer), you get screwed and pay a lawyer lots of money to achieve this.
I apologize if I have the terminology incorrect, it was some time ago you posted the circumstances.
From what you have stated, you believe this lawyer screwed you as well.
Do you see the common denominator here?
Jul 4th 2012 | 2:11 am
#66
Lost in BE Cyberspace
Joined: Aug 2005
Posts: 13,402
From: South of Calgary
Jul 4th 2012 | 6:16 am
#67
Dive Bar Drunk
Joined: Nov 2006
Posts: 8,671
From: Toronto
Re: We're all on the hook for Canada's mortgages?
I do know it is somewhat larger than Toronto and also growing faster- so on the basis that they have more people to house and are building far less condo's it makes for an interesting comparable when discussing over supply of accommodation.
