Could this be the pin to pop the housing bubble?

[nottellin]

Markets crashing, Cdn dollar getting slammed, mass layoff or at least reductions in consumer spending coming for sure. Combined with record levels of debt. Is this the perfect storm people thought would never happen?. Government handouts are not going to cover new car payments, kitchen renovation line of credit payments and visa bills so something will have to give no matter how low they make the benchmark rate. Or not? I've been wrong for the last 12 years but this feels a little different....
Thoughts???

[TurkeyFarmYQX]

Sadly I doubt it, now the BoC has cut interest rates to induce borrowing I'm sure things will actually get worse.

[rookiepilot]

Yes, but not for the reasons people think.

[nottellin]

Yes, but not for the reasons people think.

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

[dialdriver]

If above normal unemployment occurs for a prolonged period there will be a decline in housing prices. People will be forced to sell or even go bankrupt, increasing the supply of housing while demand decreases.

[youhavecontrol]

I like planes...

[rookiepilot]

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.....

[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.

[Heliian]

No.

Private aviation might actually get a boost from this. There was already a surge in private jet charters.

Just the up's and downs of the world.

Don't Panic.

[derateNO]

I hope so. I've been waiting patiently for something to happen. Couple with low interest rates and my savings ready to jump in, I'm looking forward to my 1/2 acre rancher with detached garage for $500k thank you.

[ayseven]

I've been waiting on things for about 20 years...

[KenoraPilot]

It will all depend on how dramatic the containments get (provincial/city quarantines and business closures like Italy) and for the duration of how long this last. The low interest rates + relaxation of the mortgage stress test in April could lead to a sellers market and give a huge bump to house prices. This situation is changing every day if not every hour of the day, so no one will know where this is going until we get there.

[7ECA]

The economy runs on faith and perception, much more than reality - and the government knows this, so they will do everything possible to ensure that the wheels continue to turn just enough to keep money moving.

[nottellin]

The economy runs on faith and perception, much more than reality - and the government knows this, so they will do everything possible to ensure that the wheels continue to turn just enough to keep money moving.

Agree %100, but will it be enough this time, we shall see. This is much harder hole to plug. Time will tell.

[RRJetPilot]

It will all depend on how dramatic the containments get (provincial/city quarantines and business closures like Italy) and for the duration of how long this last. The low interest rates + relaxation of the mortgage stress test in April could lead to a sellers market and give a huge bump to house prices. This situation is changing every day if not every hour of the day, so no one will know where this is going until we get there.

LOL

FYI Even though the BOC lowered the overnight rate by 1% the banks are actually increasing rates due to risk. Also FYI CMHC just announced the proposed changes that were to take affect in April are on hold.

We are heading for mass layoffs and a recession. Expect the prices of homes to drop substantially in the next 2 years.

[nottellin]

It will all depend on how dramatic the containments get (provincial/city quarantines and business closures like Italy) and for the duration of how long this last. The low interest rates + relaxation of the mortgage stress test in April could lead to a sellers market and give a huge bump to house prices. This situation is changing every day if not every hour of the day, so no one will know where this is going until we get there.

LOL

FYI Even though the BOC lowered the overnight rate by 1% the banks are actually increasing rates due to risk. Also FYI CMHC just announced the proposed changes that were to take affect in April are on hold.

We are heading for mass layoffs and a recession. Expect the prices of homes to drop substantially in the next 2 years.

Really, CMHC delaying the rule change, I did a quick search and couldnt find any info, source?

[RRJetPilot]

It will all depend on how dramatic the containments get (provincial/city quarantines and business closures like Italy) and for the duration of how long this last. The low interest rates + relaxation of the mortgage stress test in April could lead to a sellers market and give a huge bump to house prices. This situation is changing every day if not every hour of the day, so no one will know where this is going until we get there.

LOL

FYI Even though the BOC lowered the overnight rate by 1% the banks are actually increasing rates due to risk. Also FYI CMHC just announced the proposed changes that were to take affect in April are on hold.

We are heading for mass layoffs and a recession. Expect the prices of homes to drop substantially in the next 2 years.

Really, CMHC delaying the rule change, I did a quick search and couldnt find any info, source?

https://twitter.com/RateSpy/status/1238531124688826369

https://twitter.com/ewsiddall/status/12 ... 3963970562

https://business.financialpost.com/pmn/ ... est-change

Gotta learn to google i guess.

[complexintentions]

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

[nottellin]

LOL

FYI Even though the BOC lowered the overnight rate by 1% the banks are actually increasing rates due to risk. Also FYI CMHC just announced the proposed changes that were to take affect in April are on hold.

We are heading for mass layoffs and a recession. Expect the prices of homes to drop substantially in the next 2 years.

Really, CMHC delaying the rule change, I did a quick search and couldnt find any info, source?

https://twitter.com/RateSpy/status/1238531124688826369

https://twitter.com/ewsiddall/status/12 ... 3963970562

https://business.financialpost.com/pmn/ ... est-change

Gotta learn to google i guess.

I googled cmhc news and none of that came up, sorry to inconvenience you but thanks for the links and tips , very interesting and a good move imo none the less.

[nottellin]

But I also see now CMHC is also trying to defer people's mortgage payments for up to 6 months, bending over backwards to keep this ponzi scheme going..

[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.