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Rick Potter
11-18-2009, 11:10 PM
While watching a Canadian based TV show called 'Buy Me', about selling your home, they mentioned how US home values went down partially because of the sub-prime mortgage fiasco.

I am curious if home prices in Canada went down also, considering you did not have the same laws regarding mortgages??

My house dropped about 25%, although a lot of that was because of the unrealistic price increases in the three years or so before the bust. I understand some US houses dropped more.

Rick Potter

Stephen Stark
11-18-2009, 11:43 PM
In the larger cities in Ontario, housing prices did drop, more because of the recession rather than a mortgage financing problem, but recently prices seem to have rebounded to their past levels. Our home dropped about 5% but I think that has mostly been regained. Of course in the locations that are heavily into the auto sector, prices are still somewhat depressed. House sales remain strong and I just noticed a 5 year variable rate mortgage could be obtained at 2.15%, almost makes you want to buy something:p

Eric Larsen
11-19-2009, 12:25 AM
While watching a Canadian based TV show called 'Buy Me', about selling your home, they mentioned how US home values went down partially because of the sub-prime mortgage fiasco.

I am curious if home prices in Canada went down also, considering you did not have the same laws regarding mortgages??

My house dropped about 25%, although a lot of that was because of the unrealistic price increases in the three years or so before the bust. I understand some US houses dropped more.

Rick Potter

My house dropped 50%. I have a friend in the Great White North who's house is holding steady.

Then again, I live in the worst real estate market in America (http://www.bloomberg.com/apps/news?pid=20601103&sid=aR81RssZVdn4). (But it's a great place to pick up a cheap foreclosure! There are people who are going to make BILLIONS on this recession.)

Art Mulder
11-19-2009, 7:52 AM
I have not had my _own_ house appraised. However, I have been looking casually at other houses that are for sale, and to my eye the prices are pretty much steady. (I live in Southern Ontario, about halfway between Detroit and Toronto, for those who don't know where London is)

There certainly are not bucketloads of foreclosed houses out there as I saw in western Michigan a few weeks back. (friend of mine lives there and picked up one for his child who was going to College to live in and rent out.)

Chuck Wintle
11-19-2009, 11:02 AM
Here in Canada we experienced the normal fluctuations in the housing market and that is very city dependent. For example Vancouver is very expensive and the houses there hold their prices because of the limited space. In Montreal its a different story. House prices are very reasonable.

Rod Sheridan
11-19-2009, 1:05 PM
Hi Rick, due to strict government regulation of the banking system, Canada was spared the financial institution failures of other countries.

While the economy in Canada has suffered due to world conditions, it hasn't been as bad as elsewhere. There have been no bailouts of financial institutions, or failures.

I live in Toronto, and I don't think my house value has changed.

Regards, Rod.

Dennis Peacock
11-19-2009, 1:52 PM
.....for those who don't know where London is


I do, I do.!!!! It's in "England".....London, England :p

Art Mulder
11-19-2009, 2:22 PM
I do, I do.!!!! It's in "England".....London, England :p

ha ha. :cool:

Ontario is, unfortunately, chock full of town names that are re-used from Europe (Chiefly Britain). I wonder if Australia is as well... :confused:

Rod Sheridan
11-19-2009, 2:59 PM
I do, I do.!!!! It's in "England".....London, England :p


That's the real one, Art lives in the faux city:D

Art's certainly correct about the re-use of place names, I live in Scarborough, which is a re-used name.

Scarborough is a suburb of Toronto, which was a native name, however Toronto was formerly York, which was another re-used name.

York was attacked and partially burned by the Americans in the war of 1812.

We colonials sure liked to re-use names............regards, Rod.

Wayne Watling
11-19-2009, 3:11 PM
I've noticed the same as the others, that is a small dip then back to previous levels, I'd only add that in some cases the prices have bounced back to go on and exceed previous levels. There seems to be a growing demand in certain sectors of the market.

Regards,
Wayne

Darius Ferlas
11-19-2009, 3:16 PM
My house in Niagara went down 2% in value last Winter but now it bounced back.

paul cottingham
11-19-2009, 6:39 PM
I live in Victoria, and my house has gone up in value of late.

Dan Carroll
11-20-2009, 7:15 AM
Housing has held up in Canada for a bunch of reasons, however I would not put too much emphasis on bank regulations as preventing the problems. Yes Canadian banks have higher reserve requirements, but the accounting smoke and mirrors that have hunt American banks is not something that reserve requirements can prevent. Rather I think it has more to do with the nature of the Canadian banking. There are not the 'investment' banks and the largest banks in Canada are more like the US regional banks (Think BB&T, etc.). The regional banks in the US are doing okay largely because they did not get into the subprime business because they are closer to their customers and communities and thought the underwriting was silly. And for a while the regional banks faced big pressure from Wall street for not turning the paper profits the others were. When the meltdown came, the regional's did much better. Some of the small banks got hurt because they were holding Fannie/Freddie debt as assets on their books, but that was not the case with the larger regional banks. By the way, I am waiting on the TD/RBC shopping spree in the US. I suspect they are looking to pick up some US banks cheap.

Rick Moyer
11-20-2009, 8:57 PM
That's the real one, Art lives in the faux city:D

Art's certainly correct about the re-use of place names, I live in Scarborough, which is a re-used name.




I thought you had to be in Quebec to use the word "faux":D

Anthony Scira
11-20-2009, 9:42 PM
Yes you Canadians should be afraid when Americans keep asking you questions. Just be glad you don't have oil ! Oh wait.......

http://www.rense.com/general37/petrol.htm :D

Rick Potter
11-21-2009, 2:33 AM
Thanks guys,

It is nice to see other areas are weathering the storm better than us. My house has stabilized, and maybe even gone up a bit, but it doesn't matter to me since I am not moving anyway.

Phoenix got hit pretty badly, and I just bought a two bedroom, two bath condo there for $37,000 a short time ago. I am told that like units were going for $120,000 before the drop.

I have good credit, and it was still difficult to get the loan, so I bought it with refinance money I got from my house, and paid cash. They snapped that up quickly.

My daughters have a business there, and we have an aunt that lives there, so we will use it for a motel for family members and friends, then hopefully make some money on it someday. My grandaughter has lived there, running the business for the past month, and will stay another month before coming home.

Rick Potter

Glen Gunderson
11-22-2009, 4:02 AM
I think housing prices in Canada are going to be taking a big hit in the future. While there wasn't the meltdown that the US saw, there are some fundamental problems with the way things are run right now that will eventually come home to roost. Until recently people were getting 35-40 year mortgages with little to no money down and even now, with cash back mortgages, it's still possible for someone to get a mortgage that's 7-8X their income with little money down.

The reason for this is that the government run Canadian Mortgage and Housing Corporation (CMHC) will insure almost any loan to remove any risk on the bank's part. If the person defaults on their mortgage, the CMHC will step in and pay the bank any losses it incurs. As a result, banks aren't nearly as discerning about who they lend to and there are a vast number of loans that are nearly subprime in quality being handed out to people who aren't really in a long term position to be owning an expensive home. When interest rates go up, a lot of people are going to see large increases in their monthly payments that they won't be able to afford. With the pittance of money that most people are putting down (I believe the average right now is in the 5% range) many people are going to find themselves owing more than their houses are worth just as many in the US found themselves.

Housing in every other industrialized nation has seen 15%-50% drops over the last year or two, so in my mind, it's very likely that Canada will join suit at some point. There are simply too many fundamentals relating to historical home prices that aren't being followed right now for prices to not come down.