Could this be the pin to pop the housing bubble?

[iflyforpie]

Housing will be the absolute last thing to go because unlike the US, you can’t simply walk away from a mortgage in Canada without being 100% liable for the difference between what you owe and what the banks finally flog it for.

Add the fact that you still need a place to live and qualified for the mortgage based on your employment and debt servicing ratio, you won’t ever see a US style bubble pop in Canada.

Foreclosure will increase and prices will go down, but for those who are upside down in equity and struggling it’s far better to keep going. It will be discretionary and frivolous spending that will be cut first with a spike in consumer proposals and liquidation of other assets.

Sure, and the coronavirus won't have much impact on aviation.

Cutting frivolous spending sounds great, but it's irrelevant when you lose your income entirely and have a negative net worth.

Nearly Half of Canadians (48%) Are $200 or Less Away from Financial Insolvency

Nobody is going to lose their income entirely. Nobody is going to lose their jobs entirely.

Look at 9/11. That’s about as bad as it could get. There were still plenty of senior guys with Air Canada and WJ actually expanded at unprecedented rates during the period. Lots of people left aviation and lots of people found employment with other operations outside of airlines. Post 9/11 saw huge gains in real estate prices. I know because that’s when I bought my first house.

What about 2014 and on in Alberta? Five solid years of shit kicking on a one-horse economy yet the median house price is still almost $500,000 in Calgary.

Hmm... lose my house or find a different job.. which will I choose? Negative equity sucks but it’s still something you can work your way out of and it still worlds better than the alternative with our progressive banking and mortgage rules.

So I reiterate again, there will never be a US style bubble pop in Canada where people are tearing the appliances out of their homes and walking away even though they are gainfully employed but have negative equity. And home values in Canada simply won’t fall that far because most people will hang on, and will be brutally penalized if they foreclose.

I don’t know anyone $200 away from insolvency. Personally I’m well over an order of magnitude higher than that just on income... and can coast for a long time if I have to.

The nice thing about Canada is that we have three huge oceans and a metric fucton of land separating us from the cesspools of Europe and Asia.. and only border one nation to the south run by a paranoid and xenophobic leader.

I’ll be munching popcorn from the safety of my own country while this all blows over... not having to worry about essential services or denial of insurance coverage or repatriation or the complete breakdown of society.

https://www.cnbc.com/2020/03/13/europe- ... -says.html

https://www.cnbc.com/2020/03/12/trump-b ... -know.html

[tbaylx]

This is having a much more significant effect on aviation than Sept 11th. Either you don't fully appreciate the disruption that's occurring to aviation worldwide now or you weren't around for sept 11th.

[tsgarp]

Yes, but not for the reasons people think.

So you know something the rest of us laymen dont know?

Yes.

Nice planes are likely to get cheaper.....

I was thinking the same thing. And low interest rates.... I am an asshole.

[rookiepilot]

This is having a much more significant effect on aviation than Sept 11th. Either you don't fully appreciate the disruption that's occurring to aviation worldwide now or you weren't around for sept 11th.

Both are wrong.

I see a lot of analogs....to 1929. Might take some more time. And it's nothing to do with any virus.

You all can laugh now. I wouldn't.