A more apt title might have been "Why the Canadian Housing Market Hasn't Crashed YET", or "How the hell are Canadian homebuyers THAT stupid?", or "How the Canadian taxpayers are funding subprime mortgages so that the big 6 can reap monstrous profits". I could go on all day...but back to the article:
They saw a housing boom, they saw a recession, and yet the Canadian housing market is still cooking with gas.
Fundamental differences in Canadian banking, borrowing and home buying.Umm...no. Going back to your opening line, we watched you dump gasoline on your housing market and then light yourselves on fire. So while watching you do this, and wondering, "What the fuck were they thinking?", we have been slowly marinating gasoline pool of debt in large part due to CMHC and are just trying to find someone with a match to get this party started. In short: the correct answer appears to be: "We're to stupid (or arrogant) to think the same thing can't happen here."
Lloyd Atkinson is an economist and also an empty nester, who just sold his large family home in Toronto and downsized to a condo overlooking the city. He sold his home in one day.
Really? Your representation of "normal" is interviewing a BANK ECONOMIST who sold his home in the housing boomville of Toronto (second only to the idiocy of the Vancouver housing market). Fair and balanced right?
"In the U.S., the whole idea of owning a home, there is almost a national obsession," Atkinson says. He knows because he's an American citizen as well. But he also knows that the banking system in Canada does not allow for the type of irresponsible buying and borrowing that we saw in the U.S. at the height of the recent housing boom (2004-2006).
I love how Lloyd is an "expert" on the US housing market as well because he's an American citizen...reminds me of how Sarah Palin is an "expert" in foreign relations because she's aware Alaska is near Russia (don't ask her to find either on a map though).
Finally, the biggest difference is that if a Canadian borrower goes into foreclosure, the bank can and will come after that borrower's assets until the balance is repaid.
There is no easy way to walk away.
These are full recourse loans.OOOOOHHHHH... The "recourse" argument. Damn, you guys did your homework...or did you? How many US states had recourse loans as well? How did that work out? And how exactly does a recourse loan help the lender if the owner HAS NO OTHER ASSETS besides their grossly overvalued home?
"There is an element of conservatism that runs right through the Canadian housing industry, from the banking, financing element, to the homebuilders and even in the resale of homes," says Phil Soper, CEO of Brookfield Real Estate Services - Royal LePage. "The innovation has safety valves."Way to interview a realtor to balance the views of the bank economist. I wasn't aware 5% down (which you can borrow to boot) and 35 year amortizations was the definition of "conservative".
Bubble it may be, and the air is coming out a bit now, but every one of the realtors, economists, and homeowners I interviewed said no way, no way would the Canadian housing market crash as the U.S. market did. Benjamin Tal put it best: "This was not a made in Canada, this was a made in the U.S. recession, and in many ways Canada was a second hand smoker here."Wait, what? NOW YOU ADMIT IT'S A BUBBLE?!? Don't you guys understand that you can't say "that word"? And thanks for summarizing that this entire shitpile of "reporting" was based upon the thoughts of a bank economist, a CEO of a real estate company, and a homeowner (oh wait, the homeowner was the bank economist). Shit. (I love the double "no way" for emphasis by the way...brilliant)
As for the smoking analogy...we may have used to be a second hand smoker. But it looked so cool watching you smoke, we had to give it a try. And we'll be damned if we're now going to give up our 3+ pack a day habit, because we're fucking RESPONSIBLE, and there's no way that we're going to get lung cancer, despite what the massive government adds say on the packs.
Why? Because, "It's different here."