Canadian housing bubble thread

Gotcha said:
I really have no idea where people are getting the money. When you consider that the mortgage should be maxed out at 30-33%, very few households should be qualifying for million dollar homes. I get that some are moving up and hence whatever they sell will sell for a high price, but still, considering the average wage in Canada is what, 50k, and household is maybe just a bit more than that... where is the money coming from? Even if a couple making 60k each, and hence 120k combined, the most they should be able to afford is some starter condo for 500k. There must be lots of rich people out there.
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The average Canadians are a lot richer than the average Americans and they saved more?
 
m22au said:
HCG crash:
http://www.zerohedge.com/news/2017-...-biggest-mortgage-lender-crashes-most-history

CMHC on the Canadian housing market:
http://www.zerohedge.com/news/2017-...warns-strong-evidence-housing-market-problems

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I thought I'd seen it all from linked articles from Zerohedge and this joke shows up. Home Capital is a bit player in Canada's housing market. Of course the record profits of Canada's banks aren't supportive of their narrative, but the vast majority of home owners in Canada got their mortgage through their bank.
 
Nine_Ender said:
I thought I'd seen it all from linked articles from Zerohedge and this joke shows up. Home Capital is a bit player in Canada's housing market. Of course the record profits of Canada's banks aren't supportive of their narrative, but the vast majority of home owners in Canada got their mortgage through their bank.
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I'm confused as to why you have characterized those articles as a 'joke', and why you think there is an underlying 'narrative'.

I could have just as easily provided links to similar stories from a range of other publications:
https://www.google.com.au/search?q=home+capital&tbm=nws

https://www.bloomberg.com/news/arti...ts-c-2-billion-loan-will-miss-financial-goals

In any case, it doesn't take too much financial knowledge to work out that a financial institution cannot survive for very long by borrowing at 15% (10% interest rate + $100 million fee) and then lending to customers at about 5%.

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m22au said:
In any case, it doesn't take too much financial knowledge to work out that a financial institution cannot survive for very long by borrowing at 15% (10% interest rate + $100 million fee) and then lending to customers at about 5%.
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What I heard was that Home Capital engaged in fraud and has since fired two people blamed for that fraud. Home Capital can entirely disappear and have no impact on our housing market. All that would do is mean the riskiest buyers cannot buy a home. There is no shortage of buyers in Canada's top markets. There is a shortage of homes to buy and it's going to take many years to alleviate that shortage in Metro Toronto if it ever gets alleviated.

Here's a fun fact for you. TD Bank, just one of our 6 big banks, could buy out Home Capital in entirety with less then 2 months worth of profits. Before the stock crash, less then 6 months. But what they have been buying up instead is US banks at distressed prices.
 
Martinghoul said:
Yep, another load of bollocks from ZH...
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I'm confused - I'm fairly sure I wasn't dreaming when
(1) Home Capital announced a non-binding agreement to borrow
(2) The CMHC released a report titled "Strong evidence of overall problematic conditions despite some housing markets showing signs of improvement"

Do you agree that these things happened?

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m22au said:
I'm confused - I'm fairly sure I wasn't dreaming when
(1) Home Capital announced a non-binding agreement to borrow
(2) The CMHC released a report titled "Strong evidence of overall problematic conditions despite some housing markets showing signs of improvement"

Do you agree that these things happened?

.
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I agree... I disagree with the usual breathless ZH headlines, is all. They've never let facts stand in the way of a good piece of drama and this story is no exception.
 
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