Canada's 'housing bubble' deemed close to bursting

[milomilo]

Originally Posted by Truenorth00

After this is done we all need to have a long chat about how CMHC is distorting the housing market and removing moral hazard by letting the banks run wild.

And forcing responsible potential mortgage holders like myself to pay a higher rate of interest than those with <20% deposits .

We should have been having this conversation for years prior to now, but the implication that it will take a disaster to force the conversation is correct.

[misher]

Condo sales in Greater Vancouver have gone up from 22/day last week to 37/day this week.

It’s just an update so don’t scream sources or something negative. Believe what you will.

[csbvan]

That makes sense, life in city is getting back to more normal levels of busy-ness. It will be interesting to see how this plays out next. Those are still brutal numbers for May, the busiest sales month generally, and it looks like this May will end with historic sales lows, well down from last year's disastrous spring season.

[Truenorth00]

Originally Posted by milomilo

And forcing responsible potential mortgage holders like myself to pay a higher rate of interest than those with <20% deposits .

We should have been having this conversation for years prior to now, but the implication that it will take a disaster to force the conversation is correct.

I'd bet that 99% of Canadians have no clue how CMHC enables housing speculation by securitizing mortgages for the banks. You wouldn't know it unless you trade/buy bonds.
Most people only think of mortgage insurance with CMHC. They don't recognize this whole other massive business that CMHC undertakes, which while profitable, has risk to the taxpayer and arguably economic impacts that a lot of Canadians would not agree with.

[csbvan]

AirBnB effect?

Rental costs for Vancouver two-bedroom units drop by over 15 per cent

...

Average rents in Canada’s two biggest markets, Toronto and Vancouver, declined by six per cent and 6.8 per cent month over month, respectively.

One-bedroom apartment costs decreased 5.6 per cent in Vancouver, and two-bedrooms decreased 15.8 per cent — the largest decline in any Canadian rental market.

...

https://vancouversun.com/news/local-news...-bedroom-units-drop-by-over-15-per-cent/

[Truenorth00]

Originally Posted by csbvan

AirBnB effect?


https://vancouversun.com/news/local-news...-bedroom-units-drop-by-over-15-per-cent/

Absolutely.

[misher]

Originally Posted by csbvan

AirBnB effect?


https://vancouversun.com/news/local-news...-bedroom-units-drop-by-over-15-per-cent/

I suspect more to do with lower demand than supply.

Supply only went up 0.1%. You’d expect more if AirBnB units were significant.

[Truenorth00]

Originally Posted by misher

I suspect more to do with lower demand than supply.

Why do you think that is?

Originally Posted by misher

Supply only went up 0.1%. You’d expect more if AirBnB units were significant.

Source?

[misher]

While this is liquid assets only it is a bit scary. BoC estimates for all Canadian mortgagees.

Though surprising that half of homeowners with a mortgage can afford to pay 12 months using just liquid assets.


https://www.ratespy.com/stress-test-rate-to-drop-next-week-051413728

[Chadillaccc]

This is probably the only thread even close to relevant to my question, but it’s coming time for me to either renew my lease or find another place. I have been looking on rentfaster and there are some places with significantly better amenities and layouts than mine, for only $35 to 55 more than I pay (but they all have a way shittier view). So my question is, should I try to renegotiate a better deal with my landlord? I feel like given that I put a garden in the front, have taken really good care of the unit, and obviously given the economic climate, I feel like it would be fair to ask for a $50 reduction.

This is my first apartment I’ve ever had on my own (no roommates or partners), so figured I’d ask since one of you may know better.

[rbt]

Originally Posted by Chadillaccc

So my question is, should I try to renegotiate a better deal with my landlord? I feel like given that I put a garden in the front, have taken really good care of the unit, and obviously given the economic climate, I feel like it would be fair to ask for a $50 reduction.

It rarely hurts to ask. If you're happy with the place and don't expect to move soon then you can also offer to sign a multi-year lease. Locking in a good profitable tenant for 2+ years is worth a bit of a discount, particularly now.

Alberta doesn't have a cap on the amount a landlord can increase rent; so they shouldn't be concerned that a short-term discount will limit revenue in future years.

[lio45]

Originally Posted by Truenorth00

You'd still have to have the financing to get through the eviction process which takes time. So anybody claiming they'd be safe through eviction despite not being able to handle two months of no revenue is being dishonest. They are irresponsibly overleveraged. Simple as that.

You're missing the point here. Eviction is a tool that's supposed to be fair game to use, and it's just been outlawed.

90% of my Florida tenants haven't been able to pay their rents. (Mostly honest people, just jobless now due to the pandemic.) I'm very unleveraged (and rich ) so I've barely noticed that I had nearly no incoming rents for the past couple months. However if this situation continues I might be slightly annoyed at the fact I can't even bring up the possibility of eviction as a pressure tool.

When I hear that the BC government is "asking people to please pay their rents", it seems to me that there's a huge contradiction with the fact that evictions have been taken off the table.

What if the government allowed people who lost their jobs to start taking food from the shelves at Sobeys or Loblaws without paying, instead giving the grocers IOUs theoretically payable after the pandemic? Because that's basically what we're talking about here.

[Truenorth00]

Originally Posted by Chadillaccc

This is probably the only thread even close to relevant to my question, but it’s coming time for me to either renew my lease or find another place. I have been looking on rentfaster and there are some places with significantly better amenities and layouts than mine, for only $35 to 55 more than I pay (but they all have a way shittier view). So my question is, should I try to renegotiate a better deal with my landlord? I feel like given that I put a garden in the front, have taken really good care of the unit, and obviously given the economic climate, I feel like it would be fair to ask for a $50 reduction.

Given how many AirBnB landlords are coming online I'd be weary. Many won't want a long lease. And you can't trust most of them to stick to the spirit of it. So watch out for those.

But there are opportunities and you should absolutely lowball them, below asking. Given how many places are coming online, many will be desperate. Take advantage of this.

[Truenorth00]

Originally Posted by lio45

You're missing the point here. Eviction is a tool that's supposed to be fair game to use, and it's just been outlawed.

90% of my Florida tenants haven't been able to pay their rents. (Mostly honest people, just jobless now due to the pandemic.) I'm very unleveraged (and rich ) so I've barely noticed that I had nearly no incoming rents for the past couple months. However if this situation continues I might be slightly annoyed at the fact I can't even bring up the possibility of eviction as a pressure tool.

Nobody ever said the protections would last forever. They were always going to be a few months. And non-payment would then provide grounds to apply when the the landlord-tenant boards open up.

Originally Posted by lio45

When I hear that the BC government is "asking people to please pay their rents", it seems to me that there's a huge contradiction with the fact that evictions have been taken off the table.

Didn't someone hear mention that the BC government is providing direct payments to landlords?

Originally Posted by lio45

What if the government allowed people who lost their jobs to start taking food from the shelves at Sobeys or Loblaws without paying, instead giving the grocers IOUs theoretically payable after the pandemic? Because that's basically what we're talking about here.

Food banks and food stamps. We have ways to get people free food. Albeit, not from a specific retailer.

[wave46]

Originally Posted by lio45

You're missing the point here. Eviction is a tool that's supposed to be fair game to use, and it's just been outlawed.

90% of my Florida tenants haven't been able to pay their rents. (Mostly honest people, just jobless now due to the pandemic.) I'm very unleveraged (and rich ) so I've barely noticed that I had nearly no incoming rents for the past couple months. However if this situation continues I might be slightly annoyed at the fact I can't even bring up the possibility of eviction as a pressure tool.

When I hear that the BC government is "asking people to please pay their rents", it seems to me that there's a huge contradiction with the fact that evictions have been taken off the table.

What if the government allowed people who lost their jobs to start taking food from the shelves at Sobeys or Loblaws without paying, instead giving the grocers IOUs theoretically payable after the pandemic? Because that's basically what we're talking about here.

I'm mostly wondering about when they restart evicting people.

How long can we really delay this - in BC the most acute portion of the crisis is mostly over. So, the province is going to have to make noise about 'We're now enforcing evictions' soon.

However, it will be hard to overcome the free ride some have received. There will be much wailing from certain groups, but there's definitely a limit to how much one can make landlords eat their costs.

[Truenorth00]

Originally Posted by wave46

I'm mostly wondering about when they restart evicting people.

The boards will open up as the provinces open up. I suspect they'll be up in July.

[Truenorth00]

Originally Posted by misher

While this is liquid assets only it is a bit scary. BoC estimates for all Canadian mortgagees.

Though surprising that half of homeowners with a mortgage can afford to pay 12 months using just liquid assets.

https://www.ratespy.com/stress-test-rate-to-drop-next-week-051413728

Not surprising. And it's why the Bank of Canada said arrears could be double of 2009:

https://www.cbc.ca/news/business/bank-of-canada-thursday-1.5569391

[wave46]

Originally Posted by misher

While this is liquid assets only it is a bit scary. BoC estimates for all Canadian mortgagees.

Though surprising that half of homeowners with a mortgage can afford to pay 12 months using just liquid assets.

It actually looks reassuring to me. If 70% of people have at least 6 months of mortgage payments available, that means they've time to figure out their lives before defaulting. They can sell in a relatively orderly fashion. I thought it would be much worse. A lot of the 12 month liquidity people are probably people in the declining years of their mortgage payments, as they bought at much lower prices and have benefited from declining interest rates.

It's that 20% of '2 months or less' that worries me. That's where the disorderly stuff starts happening rapidly - foreclosures and whatnot.

I'm curious about what proportion of homes are owned outright in this country. 50-60%? I mean, the Boomers should pretty much all be owners (in the real sense) by now, save for a few with financial problems.

Edit: It's in the 45% range.

[Innsertnamehere]

Wouldn’t be surprised if it’s 50-60%, Sounds about right to me.

[milomilo]

Originally Posted by Chadillaccc

This is probably the only thread even close to relevant to my question, but it’s coming time for me to either renew my lease or find another place. I have been looking on rentfaster and there are some places with significantly better amenities and layouts than mine, for only $35 to 55 more than I pay (but they all have a way shittier view). So my question is, should I try to renegotiate a better deal with my landlord? I feel like given that I put a garden in the front, have taken really good care of the unit, and obviously given the economic climate, I feel like it would be fair to ask for a $50 reduction.

This is my first apartment I’ve ever had on my own (no roommates or partners), so figured I’d ask since one of you may know better.

I've managed to get a reduction in rent before by asking, and I promise you I am no master negotiator. No harm in asking. But also keep a good eye out and see if there are places similar to yours for cheaper that you'd consider moving to (and show them these examples). If one of these places is good enough be serious about moving - the landlord would probably be willing to pay $50/month to not have the unit vacant.