I was a guest on CBC Radio: The Current with Anna Marie Tremonti Monday morning at 8:30am est. We were discussing the bubbling Canadian housing market along with Gregory Klump, Chief Economist with the Canadian Real Estate Association. An audio clip of the segment is available on the CBC web site here. See April 19, 2010 Pt 2: Housing Bubble or Featured Audio April 19,2010 Part 2 on the right hand side as you scroll down.
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I just finished listening to this interview. Thank you for providing objective truth sound advice.
It is unbelievable that the CREA is so incredibly obtuse about all of this.
Here are some counter-points to Mr. Klump:
*** To suggest that increasing interest rates aren't going to start affecting household finances for 5 years is ridiculous. That is the best case scenario. Most people will have to renew between now and then.
*** Saying Baby Boomers aren't a predictable demographic is absolute nonsense…they are THE DEMOGRAPHIC…of course they are going to start downsizing and try to capitalize in the process. The trouble is, supply, and a multitude of other issues, will erode profit that was supposed to augment their retirement income.
*** There is no reason why Canadian real estate should be so out of touch with the USA. We have propped up our real estate sector by taking on HUGE debt. This will end badly.
Just look at the reasons why prices are on a VERY slippery slope:
*** Artificially low cost of borrowing has made ownership possible for people who really shouldn't own a house, and some in this group can't afford any increase interest rates.
*** New mortgage rules just hit.
*** HST to hit in ON and BC.
*** Continuosly increasing interest rates for a LONG time.
*** Boomers that can't afford to retire, and pension/RSP shortfalls for many Candians, regardless of demographic.
*** Deficit, Deficit, Deficit = Tax, Tax, Tax.
*** Continued unemployment.
*** Average household debt-loads that are staggering.
*** YOU CAN'T OWN DEBT, IT OWNS YOU.
Phew! Glad I'm debt-free and just starting to pinch pennies for my first home. I truly feel sorry for all those who bought in the lst five years, especially, the 5-down/35-year folks….OUCH.