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I think a quick win would be that CMHC should only provide mortgage insurance on houses below a certain cap. If you can only put 5% down, you shouldn't be spending $500,000. Maybe $350,000, maybe $325,000.

And yes, the prices are very high, and although I personally don't see a crash coming (as you probably know from my posts) I would agree that this is it for big gains. I'd expect prices to flatten out over the next 3-4 years and possibly decline slightly in areas where the prices are overinflated (think The Beaches).

I personally feel Milton is a tad overpriced as well given it's long distance commute. I think the popularity of it being the only affordable place to buy a new home made it too popular for it's own good driving up prices without understanding the real reason why it was popular -- it was affordable.

There are several other areas to buy houses within a similar commute to downtown Toronto and they are priced sometimes up to $120,000 less.

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Let's not forget that in the states, who own's the banks.

Did we forget about the part where the banks would give money to anyone, just show up with a letter from your boss stating how much you make and we will give you money...

Cause after the customer left, the bank had plans to call an other country and sell all these mortgages to them, make all the mortgages look like they are legit mortgages, with people that will actually will pay. Then the banker would take the real money from an other country and walk away. This is what happened in many of these cases.
When the people did not pay cause they did not have the funds they stated they had on paper... everything started to collapse.

Canadian Banks don't do this, you have to prove you make the money via T4 slips... Big difference in making the perfect storm.

Yes, I do see your point, but I fell Canadians are still pretty solid, there may be a few loss ends but not that many. I really do not think too many people have a mortgage of $500,000+ like some people seem to think this is average. i think most people are around $200,000 - $300,000 with 2 people working in the home. If I am wrong then maybe we are in trouble.

I feel that Canada is A Lot better off than the states, not only because of the housing but even the cars and other accessories

We travel to Florida every year, we drive threw 8 States on the way. We always drive in a minivan. Before the States got hit we use to wonder how everyone could afford their trucks and cars. Most ladies drove huge high end SUV the bigger the better and the name brands... The only minivan we would see had Ontario plates. It seemed like there were three types of cars on the road before the recession, really old beaters owned by the very poor, huge SUV and high end cars owned by everyone else and minivans owned by Canadians.

We used to joke, and say how conservative Canadian are. Americans are a different type of people, they are flashy, bling, bling people not all of them, but a good percentage of them.

Here’s an example:
Canadian picking a diamond, we are looking at the cut of the diamond, the quality of diamond, the shape of the diamond, and the way the light hits, and bounces threw the diamond, before the size

Americans are looking at the size of the diamond; they don't care about the cloud in the diamond. Most Americans wear over 2.5kt, but the diamond is not a clear diamond, but from far no one can tell.

This is the difference between Canadians and Americans we are more conservative and we by quality when we do spend.

I feel this is another reason why we did not fall,

When we drive down now after the recession we have seen many minivans, like a lot of them all with American plates.

This is makes a huge difference, if Americans where more conservative in there spending this would have helped them. Canadian are not nearly as crazy spenders as to what I witnessed in the USA before the crash.

I believe it was reported that most of Canadian debt was from mortgages. When the US economy collapsed, the interest rates went down and many people who had been sitting on the sidelines decided it was a good time to jump in and lock in for 5 year mortgages. The market got hot quickly (and most agree too quickly) but I think it's important to look at WHERE the debt is.

I think we can look at isolated pockets (Downtown Toronto, Downtown Vancouver) and say "woah, the housing market is insane"... but you have to also look at the rest of the country. Majority of my friends earn over $100k a year combined income and majority bought houses well under $400k. I think it's easy to look at statistics but the true story lies somewhere in between.

In the US, they were ENCOURAGED to buy more house than they could afford (knowingly), no money down, then ENCOURAGED immediately to open a HELOC and use the money to buy a new car (like a giant Escallade or a Mercedes Benz), and then maybe even buy a nice 28' boat and fund a family vacation.

I agree. I have many friends state side and visited many times and their lifestyle during the 2000s was MUCH more lavash than ours. You would have people doing average jobs buying $800 Coach purses, driving BMWs, owning $80,000 boats etc. and it was ALL on borrowed money from the house.

To add insult to injury, people were buying 2-3-4 other properties because you didn't need any money down and then using them as rental properties or flipping them. This is the time when "flip this house" became popular and it was increasing the market artificially.

The problem in the US is inventory levels. We don't have that problem here. If everyone in the country owns 2-3-4 properties, and then there is no money to be made -- what do you think happens.

When you have 10 houses for sale on a single street.. how much do you think you will get for yours?

How many houses are on the market in Canada right now? Not very many.. and in some areas, the supply is low. When supply is low, prices are high.

In the US right now, 13% of all homes are vacant. I just don't see that issue in Canada.

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I know in Milton Real Estate is not falling, my neighbor just listed his 43' home for $709,000. He got asking price in 1 day. I don't see house prices falling. Canada's real estate already got hit from the recession, that was 1.5 years ago, real Estate is now climbing, not dropping.



When has making mortgage payment, and paying the bills ever been easy? Our parents struggled, I remember not having everything we wanted. I remember tough times when we were kids. If we had it all, and easy, then my parents would have purchased a larger house, this is how life is. Our parents struggled to pay the bills, but the bills got paid, and so will we.

I think you have hit the nail on the head here... I think that we all live very privledged lives now compared to our parents (if you are of my generation). I know what my parents house cost, and I know what they made back then. They were relative (about 3:1) compared to today except everything except the basics cost more. VCRs, TVs, Cars, etc. relative to income. Interest rates were very high, but we managed.

My parents NEVER owned a brand new car, they never went on expensive vacations, they didn't buy DVDs and Blu-Rays and new Mp3 players every other month, and cell phones, and ipads, and computers, etc. They paid the mortgage, they drove older cars, we ate decent (but they couponed), we had a vacation every 2-3 years (road trip), we paid for our own education etc.

The reality is, most Canadians with houses can go back to this lifestyle (if they had to) to make the mortgage payment. This will prevent this "crash". I don't think this generation really knows how to "cut back" and "just get by".

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My folks went on holidays twice a year. old man drove a new car every three years. if you have to struggle for the sake of a mortgage whats the point? you people are describing house poor. not everyone lives like that, whether 30 yrs ago or 2011. when shopping for my new house in milton we were approved for 900K. does than mean i will go spend that? not at all, i spent less than half of that. i know people that throw a barbecue and you have to bring your own meat?? no joke. go in the house and the t.v. is on a milk crate. but from the sidewalk all seems fine. to eaches own. id rather a smaller house where i dont have to struggle to pay the bills. yet i can still holiday when i want, drive that i want, etc. balance is key word. to struggle to pay bills is not commendable, rather sad that people sacrifice life for bricks.

There will not be any major corrections to the real estate market in the GTA. Home values in Milton should continue to rise but most likely not at the rate we've seen the past few years.

The new mortgage insurance changes will help stop people from using their homes as piggy banks.
CMHC puts out forecasts if anyone is interested. http://www.cmhc.ca/en/hoficlincl/homain/foan/index.cfm

I don't believe prices will fall, prices rarely fall, and when they do they do not fall by much, plus, they always go up again. As for credit, credit will never dry up, if that happens the bank cannot make money off us. I do hope they tighten credit up a little, giving mortgages is relatively ok but I feel the lines of credit they offer are insane.




I also do not believe they are giving loans for 700k with 5% down to 2 people who make 180K. If they are, I am sure there are very few people taking up this offer. I think most people that live in a 700k home has close to, or more then 400k paid into the home. I do not believe too many people hold a 700K mortgage on a 700K home. I am not saying no one has a 700k mortgage, I think most people with 700k mortgage own a home that is worth 1.5 million. This would mean they have about 800k into the home and owe 700k.

how old are your parents? im 42 and mine had visas and others.

2 people making 180k a year can often qualify for a 700k mortgage, even if they only put 5% down.
For the majority of lenders 750k is when sliding scale kicks in and they start increasing the amount of downpayment required. Some lenders will even go to 1 million with 5% down.

What I've come to realize is that prices are directly tied to desire to live in an area/country.

Vancouver is the "best" place to live if you've got money (or want to pretend you have money) as the lifestyle is second to none. You have the ocean.. recreation.. mountains.. best climate in Canada... flowers everywhere... relaxed/healthy lifestyle etc. so it will always remain the most expensive place to live in Canada. If all real estate drops, Vancouver will still be the most expensive.

Toronto is the "next best" place to live because you are in the heart of the Canadian economy. That's where the jobs are. That's where the big salaries are. That's where the specialty infrastructure is (top hospitals, universities, museums, art, entertainment, etc). Toronto will always be the second most expensive.

The subburb areas (within 100km commute) will always be the next in demand due to their proximity to the big centers. I think it's impossible to look at housing as a whole (entire country) and relate it to these two regions. GTA and GVA. The laws of affordability, ratios, etc. don't jive in these areas the same way they would in the rest of the country. People truly give up luxuries and extra income to live in these areas. The alternative is finding a job at half the rate up in Sudbury or out in St. Johns -- where you could easily afford your house.

Nobody is mentioning what the average prices are like in other countries major cities (or average price vs. average income).

What is the average price in Manhattan? (Our downtown Toronto)
What is the average price in Los Angeles? (Our downtown Vancouver)
What about London UK?
What about Madrid Spain?
What about Frankfurt Germany?

Yes, the US housing crisis really killed their market, but I believe the main cities did not get affected the same way as say Arizona or places in Ohio, Detroit, Louisiana, and other places plagued by lack of jobs and low incomes. People in Manhattan did not lose their shirts -- because even if prices drop, they are bound to shoot up quickly -- it's the TOP place to live in the country. Just like Toronto & Vancouver are to Canada.

http://therealdeal.com/newyork/articles ... dated-data

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LA. May 2006- 603,000K /Jan 2011- 385,000K
Unemployment Rate: 12.3%

NY- Metro May 2006- 454,000K/Jan 2011- 355,000K
Unemployment Rate: 8.7%

Florida
Unemployment Rate: 11%

All of US
Unemployment Rate: 9.2%

Spain
Unemployment Rate: 20.5%

Ireland
Unemployment Rate: 14.9%

Canada
Unemployment Rate: 7.7%

I`m curious how many markets have experienced a crash with Unemployment below 8%.

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That makes no sense.. Credit/Property deflation is only a problem when you have no job. Nobody cares what their house is worth until they want/need to sell.

If prices are down.. people don't sell unless they need to... i.e. find themselves unemployed.

Canada is doing VERY strong in the world stage in both Exports and internal growth. I don't see a massive amount of unemployment coming anytime soon.

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Mainstream media is starting to catch on...

http://www.theglobeandmail.com/globe-in ... le1979229/