House prices 20% overvalued in Canada, Fitch warns

[Fallguy007]

At least the USA took it on the chin and let it crash. While that happened our government let it's people pile on more debt with cheaper money.

In the USA the lenders would let anyone take out a mortgage. and they had rates that would go up after a set amount of time. The CMHC in Canada makes it harder to mess around like that. If you want a second property you need 30% down for example.

[atenbacon]

The government kept interest rates low so that half of Canadians carrying a mortgage wouldn't go under water like the USA did when their market corrected. They also didn't want to cripple the Real Estate Cartel.

At least the USA took it on the chin and let it crash. While that happened our government let it's people pile on more debt with cheaper money. Now we carry the most debt of any of the G7 countries. Think you're smart for taking on so much debt? If you're really smart, pay all that debt off by next year.

If you have a debt on something, you don't own it until the debt is paid. The bank loves charging you interest, and then taking the house away from you when you default. It's great for them!

I feel sorry for people that are in denial and have so much debt. It's gonna tear your family apart.

Oh well, record debts, record divorces. No shame for some people. It's their right after all!

Maybe you don't understand that people with debt includes renters too right? Did you think Students were in on that number? Business owners? You are doing your best to show others that only those that own houses carry debt. Did you think that there are other groups that buy cars etc. as well? How stunted a view of the financial world you seem to have. Ask a University or College student if they are debt free and if they can pay off their loan by next year.

You sound like a child stomping his feet because you didn't get a share of the cake like the other kids.

[LANDM]

This is Canada wide. So I would say it's more like 40% in Kelowna.
http://www.cbc.ca/news/business/housing ... -1.2706388

Cue the Realtors saying Kelowna is different because...reasons.

Hey, TheDudeAbides, how's the crystal ball doing? So, you started this thread over two years ago......lets get your update.
And how about updating on the Kelowna rental situation since then also.

[atenbacon]

Hey, TheDudeAbides, how's the crystal ball doing? So, you started this thread over two years ago......lets get your update.
And how about updating on the Kelowna rental situation since then also.

Remember, this thread as you said is over two years old. If you go back to the original from 8 or 9 years ago Rekabus would be saying that real estate is 167% overpriced by now.

[Atomoa]

Remember, this thread as you said is over two years old. If you go back to the original from 8 or 9 years ago Rekabus would be saying that real estate is 167% overpriced by now.

Canadians are in consumer debt to the tune of 168%, the average wage is 48,000/year and the average home is 500,000 dollars.

"This is fine"

[atenbacon]

Canadians are in consumer debt to the tune of 168%, the average wage is 48,000/year and the average home is 500,000 dollars.

"This is fine"

I guess its a matter of perspective, if you are in the above situation it may be worry some for you. If you are in my position which is debt free why would you be worrying? Unless you are going with the angle that I should be sympathetic to those that asked for money and may get into some hot water. I promise I will bake an "I'm sorry your car was repossessed" cake to make them feel better.

Another scenario, the rock bottom cost to carry a debt load leaves little incentive to pay it off quickly, especially if you can carry that debt load and generate revenue from said debt. But hey! I am sure there is not a single time in history where interest rates were so low that people just decided to carry the debt load and pay off when interest went up, so certainly now is the time to panic!!!

[forum]

If you went to work and earned $100 for your 8 hours of work, but then had to pay someone else $171 at the end of that day for the debt you owe. That is a very risky position to put your family in. That is your average Canadian Household's position right now.

Unless your Salary is keeping up with the housing market gains, now is the time to panic if you are an average Canadian homeowner.

I am also debt free and own and run a business. I panic for the average Canadian homeowner, because I need them to have a healthy savings account so that they can afford my business when they need it.

You see, if the community can't afford my services because they simply don't have enough spare money, I can only lower my prices to a certain point until the business can sustain itself. Then I will need to relocate my business to a more profitable community. I can't ask the community to move their houses :)

For example, less people will go to the dentist because their employer can't afford to offer dental in their compensation packages. So people frequent the dentist less. The dentist doesn't stop dentistry, he relocates and the community is left with low quality dentists.

[delSol97]

Unless your Salary is keeping up with the housing market gains, now is the time to panic if you are an average Canadian homeowner.

It's like doomsday cult for some people ... if your mortgage does not exceed the cost of renting, then there is no need to panic.

You have to live somewhere. If you're really that bad off, then the average cost of a home is irrelevant and you're headed to Leon Ave regardless.

I'm not saying prices don't seem absurd, but at the same time there is not going to be some massive bubble burst that puts 75% of families out on the street.

It won't happen.

The banks don't want that, they want you to keep accumulating debt and paying interest. The banks control the gov't, and they won't let that happen either.

At the end of the day, the majority of us will be slaves to our paychecks, working as hard as we can while making the rich banks richer ... while dangling the fear of a collapsing economy in front of our faces to keep us working longer and harder in to retirement.

[Even Steven]

Unless your Salary is keeping up with the housing market gains, now is the time to panic if you are an average Canadian homeowner.

Wait, what? Why does my salary has to keep up with the housing market?

[Jonrox]

Wait, what? Why does my salary has to keep up with the housing market?

I have to say I don't quite understand this either. I bought my first home about 10 years ago. As house prices climbed and I sold the first house, I just used the increased equity in the first home as a larger down payment for the second. Then the second one sold and the rising equity amount went into our current home.

As a result, my mortgage payments stayed relatively the same... as did my income. The way I look at it, I pretty much locked in at prices from 10 years ago and as long as I kept rolling my increasing equity into the new homes, I'm safe.

I'd say as a renter, I'd be more worried about my income keeping pace with increasing real estate prices. I know the place I was renting 10 years ago has now just about doubled in it's rental rates. I'd be in much more trouble in that scenario because my income hasn't grown by that much.

[Lady tehMa]

Things are definitely in an upswing again. I'm glad we own - I'm hearing stories about people pressed to find housing because the rentals are being bought up as starter homes.

[Fallguy007]

i hear its super hard to find a rental right now.

[Even Steven]

i hear its super hard to find a rental right now.

Yup. Which puts pressure on rental rates that keep going up and up.

And if you own your mortgage goes the other way - down.

[Hassel99]

If you went to work and earned $100 for your 8 hours of work, but then had to pay someone else $171 at the end of that day for the debt you owe. That is a very risky position to put your family in. That is your average Canadian Household's position right now.

Who has to pay the debt at the end of the day? You pay the $171 over 5 days when you have earned $500.

[LANDM]

Who has to pay the debt at the end of the day? You pay the $171 over 5 days when you have earned $500.

Stop using logic and common sense. Everyone knows you have to pay off your entire debt by the end of the day!

(Shhhhhhh........don't fill him in on it. We need a steady supply of tenants!!)