“Even more importantly, the number of proposals for personal bankruptcies – a possible signal of increased bankruptcies down the road – is now rising by 14.9 per cent on a year-over-year basis – the fastest pace since the 2001 recession,” [CIBC Senior Economist Benjamin Tal] added.That's OK say the bulls. After all it's those Easterners in the manufacturing sector that are suffering, everyone knows that the West is still hot. Except that when Canada's manufacturing sector slows down, so does the need for resource extraction. China's bubble is popping, nickel and copper prices are declining; natural gas has been down for 18 months now. Ignore the warning signs at your own peril. The economy is global. It's slowing down globally.
Incomes don't support current debt levels. Hence why the rate of bankruptcies is expected to climb by 15% this year. Banks will get tighter with that debt which means people will get less money and more personal bankruptcies will happen as this generation remembers the lessons they didn't learn in the last credit rate induced crash of 1981. History has a way of repeating itself, non?
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Thread hijack: Anyone else see this story on the cover of the TC? A 45 story building and 653 total units added to Bear Mountain, where the traffic already beyond bad and into ludicrous territory. Plus, their starting price (presumably for an 800sqft ground floor condo) is half a million dollars.
My mind is boggling. I really don't see any way for this to not end badly. If it gets built, it'll be a massive eyesore and create even worse traffic problems. If the market tanks in the next 5 years (and how could it not?), then there's a chance the building will be abandoned mid-construction creating a worse, but smaller local eyesore. And any suckers who buy a presale are going to get screwed.
Talk about overbuilding,once people see the traffic joke when there is one little fender bender between town and Langford and how the whole transportation route comes to a grinding halt I would think they will think twice. This is gonna end in a very ugly manner.
Talked to my buddy in Nashville today, he was up here a couple years ago so he has a knowledgeable opinion as he has lived in alot of he major cities in the USA and when I told him the prices up here now he was in total shock,we are like double the average house down there and there some real nice areas to live there. In other words folks we have a nice place here but not that nice.
“Even more importantly, the number of proposals for personal bankruptcies – a possible signal of increased bankruptcies down the road – is now rising by 14.9 per cent on a year-over-year basis – the fastest pace since the 2001 recession,” he added. "
Thanks HHV,another eye opening article with some serious signs of what is to come here,looks like a Tsunami in the works.
speaking of bankruptcies, there is a segment on
http://www.bnn.ca/shows/past_archive.tv at 2 PM pacific,wont be on til after 3 PM. Interesting questions asking how can people be affording all these houses at all time highs, as we know : no down payment mortgages which were unheard of til the past year or two. Didn't paint a pretty picture at all,too much loose spending by the consumer and easy lending by the banks cause its all about profits.
Yeah, I'm pretty skeptical of the claims that we don't have "subprime" mortgages like the US. We may not have the interest-only and neg-am mortgages, but there are a lot of people getting approved for mortgages now who would not have been just 10 years ago. If you add in all the people taking out HELOCs and refis, there could be a lot of people unable to make their payments with any sort of interest rate increase or economic slowdown.
Please post the link from last week that showed Chicago to be a danger-zone for falling real estate prices and sub-prime problems. I do not recall where I read that item. Many thanks
"but there are a lot of people getting approved for mortgages now who would not have been just 10 years ago. "
aleks,
Try even two years ago without taking a huge penalty or having to take out a second mortgage. We have adopted a similar US style with a different twist in sheeps clothing. Giving kids with bad credit and low incomes is the same as in the US and is a matter of the banks making profit or not.They are not the banks I grew up with that you knew to not even try walking in the door without 10-20% down and a good job with long term employment history or they would laugh you out of the bank.
Just heard a good one from Nanaimo,long time agent friend of a family member up there, was getting about 10-12 email enquiries daily on houses he was selling,last 2 weeks not one enquiry. He did two open houses the past 2 weekends,not one looker. He stated he couldnt believe how fast things have changed. Coming soon to a neighborhood near you,keep the faith bears.
Aleks,
I know a few people with interest only mortgages. One guy bought a 2nd house with that. Another was a kitchen cabinet maker telling me that was the only way to go. I know many people with million plus houses who are taking out second mortgages to do renovations.
I also think the crash will happen before 5 years. I have a gut feeling we will see things really changing in September.
I went to a movie tonite, before which was a Scotiabank ad for 100 percent mortgages.
I also know two people who have interest-only mortgages, I know quite a few who withdrew "equity", and I know many many people with some pretty heavy debts.
How are we better off here?
I really think it is the Canadian mentality. "We are Canadian!".
When I lived in Europe and used to cringe when I would see my countrymen walking around Paris covered in maple leafs. They looked pretty naive and embarassing. Or this stupid idea that when the Olymics start everyone will want to come and live in BC????
"We are Canadian" We are not American. Things are different. We are actually better you know.
I think it is country's mentality to keep propping itself up no matter what.
Bear Mountain,
They are really trying to turn this town into another Vancouver.
The reason people came here to retire was that it was a nice livable city. This is just too sad for words.
A friend from Europe was in Vancouver and thought it was an apalling city. Victoria is on its way
Bear Mountain,
One more thing. A friend moved from Shanigan (?) Lake to Langford to avoid the traffic as he loved Shanigan but it was too hard to come in every morning,. He thought Langford would be easier.
Good Lord.
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