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Takloo.wordpress.com
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deja vu for our american friends... wasn't this the start of the housing bubble? albeit with a big difference - CMBs are backed by Government of Canada... equivalent to Fannie & Freddie bonds... i would love to know if the underlying MBS and loans in the recent CMB issues are similar to CMBs issued 2 years ago.
According to the June 2010 TD First Time Home Buyer's survey: 91% first time home buyers got pre-approved mortgages vs 22% of all (not just first time) home buyers in Genworth survey 63% of first time home buyers will need CMHC, in other words 63% are expected to make less than 20% down payment... vs 51% for all home owners in the TD Survey & 58 % in the CMHC survey earlier...
For the average working canadian, I agree but real-estate is a major a investment asset class and hence bares no direct correlation to average income... plus the reported income is seldom the real earned income... consider self-employed professionals, immigrants and speculators, etc... GDP at least reflects this income...
House prices are dependent on multiple factors: Average Income Interest Rates Overall Health of Economy Employment Natural Population Increase Inflation You are right that house prices have roughly doubled from 1999 to 2010 (http://takloo.wordpress.com/2010/07/09/is-canadas-housing-market-about-to-collapse-us-style/) But for the same period: Inflation has been 25%... AND more importantly Canada's GDP has roughly increase by 65% (http://www.google.com/publicdata/explore?ds=d5bncppjof8f9_&ctype=l&strail=false&nselm=h&met_y=ny_gdp_mktp_cd&hl=en&dl=en#ctype=l&strail=false&nselm=h&met_y=ny_gdp_mktp_cd&scale_y=lin&ind_y=false&rdim=country&idim=country:CAN&hl=en&dl=en) Don't get me wrong, like I have said before, I am looking to buy a house too and I do think prices will come down... just not crash US style.
thanks... what are the other sources of funding variable rate loans? treasuries, bonds, commercial paper?
you are right... I was refering to the 5-yr bond yield for 2010
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Jul 7, 2010