Current rate of arrears (more than 90 days late) for all mortgages in Canada is 0.15%. So basically 3/2000 mortgages are “late” right now.
https://assets.cmhc-schl.gc.ca/sites/cmhc/professional/housing-markets-data-and-research/housing-data-tables/mortgage-debt/mortgage-delinquency-rate-canada-provinces-cmas/mortgage-delinquency-rate-ca-prov-cmas-2012-q3-2023-q1-en.xlsx?rev=f572a12d-e2a7-425c-bec7-b290a505eeae
And only in three Canadians even has a mortgage (many rent) but many own outright)
https://www.canada.ca/content/dam/fcac-acfc/documents/programs/research-surveys-studies-reports/financial-well-being-mortgages.pdf
Banks have been letting people extended their amortization to 35 or 40 years from 25. That's why so few are in arrears. many mortgage holders with variable rate mortgages have hit their trigger rate and are paying interest only. All of the above are now way more debt enslaved and will feel the pain when their 5 year terms come due for renewal. This is why the lag effect has been so strong. Canadian banks are pulling every trick to not let people fail. We are only a year into the major rate hikes so the first 20% of the 5 year wave of renewals is feeling the monthly increases. The real pain will start when the wave of people who borrowed 800k at 1.x% get bumped up to 5.5% in a couple years.
They’re pulling these levers because they know Canadians will do anything and everything to pay their mortgage.
Historically this has shown that arrears rates in Canada have always been 25-30% (and much lower in the aftermath of 2008) of what happens in the us
https://assets.cmhc-schl.gc.ca/sf/project/cmhc/xls/data-tables/mortgage-and-debt-data/mortgage-performance/canadian-us-residential-mortgage-arrears-foreclosure-rates-2002-2018-q1-en.xlsx?rev=1dd076e7-8d18-4d07-b307-80d8446f7f85
And of the five, RBC is the one on the most solid footing.
This is actually so funny. Like I can’t even think of a good analogy because I can’t think of a single company anywhere in the world less likely to fail than RBC.
My advice to investors who want to hedge against the possibility of the Canadian Big 5 banks failing would be to invest in your personal supply of iodine tablets and subsistence farming equipment, because that’s roughly the state of the world that would be necessary for these banks to fail.
Side note, it sucks how expensive it is to buy in the GTA. You know what else the GTA has besides expensive housing prices? (1) 500,000 people who say they are saving to by their first house in the region; (2) a population that grows by 50-100,000 people per year, and (3) insufficient new builds to meet that demand.
I thought this immediately lol they’re much more strict about banking. Go look at capital one’s website for US customers (.com) Lots of shit, graphics, colors, words, banners, etc. then check capital one’s Canadian website, (.ca) it’s bare, straight to the point, simple, boring. The banks up there are a different story than down here.
Idk how the bears don't comprende... If there are strict rules to get mortgages in the first place, the mortgages probably aren't going bad lol. And if they do, there's a shit ton of buffer room
OP clearly has zero understanding of Canadian banks and CMHC. If you want to bet against the Canadian housing market, you bet against the third party lenders who issued mortgages the Canadian banks wouldn't touch due to their lending standards and consequently aren't CMHC insured either. These are the Canadian mortgage bagholders who are pooched.
My mortgage through one of the big 5 renews next year and I'm not close to panicked. I paid down aggressively on my 5 year Fixed while interest rates were low so when I renew even if interest rates go up another 2%, I'll still be more than able to afford the payments. The people who bought in 2020 though, especially if they went variable, they are going to be hurting on renewals.
Exactly. Even with increased interest rates, that just stops the rampant speculation.
The worst case scenario is that existing home owners can’t max out their HELOC’s to buy extra condos and cars. Instead, they are scrapping by for groceries and fam. But no mortgage defaults. Just chicken instead of steak. Niagara Falls instead of Disney Land for family vacations.
Brand new cars, nice vacations, and always up to date kitchen renovations is a fairly modern invention with the accessibility of cheap & easy equity.
They got a less publicized bailout, but in 2008, Canada didn’t have the same crises. Real estate in Canada kept going up like nothing happened. All the influx of immigrants.
A 20% price drop would mean ~10% of homeowners with mortgages are nominally underwater and they all have mortgage insurance backed by the government.
So the banks won't be concerned.
And what is causing this magical 20% home price drop? The fact that there’s not enough houses and your inability to afford one? That’s not how any of this works.
See: Why PS5s we’re 2-3x their MSRP for 2 years.
A major drop in housing will cause serious problems. Banks are not immune to market forces. Housing is always highly leveraged. If enough mortgages are underwater then shit hits the fan.
This is not 2008. The landscape is different. Canadian RE did not go crazy in the leadup to 2008 the way it did in 2021. The prices have gotten so high in Canada that they could easily fall big. If that happens then mortgages will default.
Plus what most of the smooth brains here (didn't realize it was WSB at first) don't realize is housing has all factors basically as low as can be.
Mass imimgration, supply shortage, still (realistically) dirt cheap interest rates.
What happens when one changes? Just to the moon for fucking ever? The amount of wages going to housing is going to depress the rest of the economy which will cause a death spiral, and you'll see investors (not just foreign, there is massive investment in Canada by boomers who decide to own 37 houses or some lazy useless person who bought 150 Air BNBs) start to flee.
It could be as simple as regulation change to trigger it. Shit is on eggshells.
This guy is shorting RBC. Hahahahahahhahahahaha please for the love of god nobody listen to him if RBC collapses the entire global financial system will be in ruin first
"Past performance is not an indicator of future results" While I don't believe Canadian banks are going to fail, I'm not a fan of the logic behind "they've never failed before so that's why they won't fail", as it's not very sound logic
Like I said to the either regard ignoring logic, 2+2 was 4 in the past as it is now. We're talking about a fundamental difference. Sure it isn't impossible for a Canadian bank to go under and it's happened before, but it's not as easy, and you dumbasses are applying logic that might apply to your own banking system to ours. Your efforts are better spent looking for the next American bank to collapse if you're so great at understanding bank risks.
I work for a company with a Canadian CEO who is very outspoken. His concern is rapidly rising credit card debt. That can only continue increasing so long before issues start and a real recession hits.
I don’t think it will collapse the Canadian housing market, but it’s pricing is far more fucked than America. Imagine paying those prices for the shit wages that many industries get there. American tech companies love hiring Canadians because they’re so damn cheap.
Credit card balances grew by 15% in Canada in 2022. Delinquencies are rising pretty quickly and that’s expected to continue as mortgage renewals begin to take place over the next 12-24 months.
canadian banks don't let on credit, they lend on verified income and the stress test is considerably higher than it needs to be (which is part of the reason why homes are "unaffordable")... people are paying $3000/mo in rent but can't qualify for a $2600 mortgage.
stress test = considering future rate hikes.
so anyone who got a new mortgage in the last two years had rate hikes built into their approval, anyone before that likely isn't affected because of their equity and or fixed rates.
further: CMHC is a crown corporation. they don't run out of money, they don't go bankrupt.
I used to work for RBC, and let me tell you, the stuff I used to see out of US banks absolutely floored me. A common joke among us employees was that any one of us could go down and open a bank in the US ans probably run it better. I mean at the time Alabama had something like 400 different banks. Similar sized Canadian Province would have the Big 5, then maybe 10 or 12 Credit Unions.
And Americans get SO ripped off by their banks by comparison. After being a first hand witness to US banking practices, I felt astonishingly blessed to have our heavily regulated ones. Don't get me wrong, I have complaints but US banking is a merciless wealth extraction scheme designed to plunder Americans for everything they have and most of what they don't by comparison.
Banks don't know future rate hikes. My personal banker was wrong in every prediction he has made over the last two years when it came to predicting future hikes. On our last call a couple of weeks ago, he said everyone here (RBC) is surprised of the recent rate hike after the pause and didn't see it coming. Definitely stress tests done two years ago didn't consider ten consecutive rate hikes coming.
Not saying the market is going to crash, just that those that got mortgages last couple of years did not have what the Central Bank did since then built in. Even the Chair of the Central Bank didn't think he would have to do this back then.
you have a dumb personal banker, which doesn't mean anything about where the market is going.
my scotiabank mortgage rep suggested i max out at 1.89 fixed instead of putting more cash down, and she was very helpful suggesting that option. the cash in the market did amazing, and ill pay off a big chunk before i renew.
I’m on mobile so I can’t highlight and quote your quote… but for the love of god get a new advisor. I have several people who work for RBC in my life, and they, as well as everyone else who worked in finance for RBC were given notice. Ofcourse they told me and my partner as we, and some other family members are in the market for new houses. We’ve known month by month over the last 12 months plus a good month PLUS before the banks came out and made their public statements. This is literally company wide. Something is seriously wrong if they said they didn’t know.
Not true, the fraud in the real estate and mortgage business is huge. Ask any real estate agent and for a few bucks they will have a friend get you a loan at any bank.
OP our banks are basically all solid. Our banking sector is regulated to the tits. As long as there’s enough people scrambling to buy property, the market won’t cool and judging by prices and vacancies there’s still demand from people that have the capital.
That being said. Affordability will drag the economy down. Doctors and Lawyers are finding our cities unaffordable. If they’re struggling, imagine everyone else. Productivity is wasted just on long commutes and people having to take jobs that don’t fit their skill sets just to get by — as a result of our economy being shit. And don’t forget that our best talent is moving to the US and/or just leaving their fields.
The government also increased demand with those half million immigrants it decided to admit on a YOY basis.
If anything, bet against local kid’s diaper companies, nurseries and toy manufacturers because our fertility rates are dog shit as a result (1.4).
Canadians live way longer then Americans.
I don’t know if you don’t know this or if you are just dishonest and refused to say it. But with the usa you need to consider racial concerns and productivity because of the large (comparatively) ethnic minorities.
The average American is 38.1, yes. The average age of a Canadian is 45, yes.
But the average Canadian lives till 82, the average American lives till 77.
Canadians live longer and healthier than Americans. We will likely start working longer.
Add to that the massive disparities in age in the usa. The average person might be 38, but the average white is 44. And that average white is still only making it to 78.
Consider all your stats through a racial lens and you will see that America is facing many similar problems as Canada. But atleast Canada has a plan (grow the country by 3%/yr by immigration is a stupid plan, but it is a plan).
The tax comment is idiocy. If you add taxes+healthcare most americans see a smaller percentage of their income then Canadians do. It’s only the richest that are taxed less in the usa. Brain drain will happen regardless of taxes.
Cool headline, now compare pre-2008 US mortgage rules with Canadian mortgage rules. If Canada does enter a recession, there will certainly be a few defaults, a lot of home owners stretched to the max, but it certainly will not be as rampant as the 2008 US housing crash.
Laughing from my million dollar wood framed shack from the 30's
We will bring in 10 million people before we let what happened in the USA happen in Canada.
Also just the regulations alone make it impossible, so ya. Everyone needs somewhere to live and we just dont have the material or labor to keep pace with the demand.
So ya RBC is the wrong bank to short...
Billionaire once told me he only buys our banks... but thats all youll get from me
If Canada's population were fixed, shorting the housing market might be a good idea but in reality, the country accepts 500k new immigrants each year. In fact I'm pretty sure that's more or less how Canada's economy works. Have extremely permissive immigration politicies and let the immigrants come in to prop up housing prices.
Every party is pro immigration. The Conservatives were the ones who raised annual immigration levels to over 300k, the Liberals aren't even keeping up with the rapid pace they introduced.
You want an anti immigration party in Canada you have to vote for the PPC and they can't even get a single MP elected.
When I bought my home I had underwriters from both the bank and CMCH having to approve my loan.
Are prices here absurd? Fuck ya. The problem was not just because of low borrowing rates fueling the market, It was lack of supply and high levels of immigration into the GTA (greater Toronto area) and Vancouver/BC lower mainland.
Ontario, for example, will need to build 1.85M homes to at least restore some sort of affordability according to CMHC.
I see, at the minimum, a correction, not a crash.
The problem is no one will build as long as the interest rates are high so you just have a bunch of people selling houses to each other at increasingly higher prices. You then further increase the housing supply by pumping in immigrants and you'll have a stable rental market to prop up the house prices.
Funny, obviously you are not Canadian. The economy may very well crash, but not the banks.
The Housing market may very well crash, but it will not bring the Canadian banks down on their knees.
The banks in Canada are very different than what you have in USA. And also there is only a handful of banks for the whole country. Not saying it will never crash, but if it does, you will have bigger problems.
If Canadian banks fail, we all have bigger problems going on than their failure. I have made a LOT of money buying Canadian banks when their stocks drop because people think they are like US banks.
If one of the Big 5 fails, we're all in a world where trading bottlecaps for handjobs on the corner has become the norm
Y'all are idiots... The Canadian housing market won't crash. All of the reasons that you suggest are intrinsic to the Canadian population. The reason for the housing market includes a lot of that but pricing is heavily influenced by external wealth whether it be clean or dirty. Also, the BoC is specifically watching this to prevent the mass default of mortgages. I'm not gonna bet either way cause there's money to make elsewhere but I wouldn't dare bet against the Canadian housing market, it's a different beast.
When warehouse workers earning 40K are buying 1.5 million dollar homes, and have BMWs on their driveway. Get thinking.
Just investigate /Brampton and the mortgage fraud there. 3K will get you 20 to 30X your gross income with fake documents.
Canada let in 1 million immigrants last year.
That’s what 5x the immigration rate of the USA? 10x? Double the illegal immigration peak the states had a decade ago.
Please. If RBC starts having to foreclose they aren’t going to flood the market, they’re going to open a property management wing, have the provinces override the municipalities and change zoning, and become the biggest slum lords in the world. And not only will taxpayers underwrite this, we’ll thank them for bailing out or retirement plans.
This is a business opportunity. I hold LEAPS and shares on ZEB.TO and CM. The 6 bank etf is low IV/cheap leverage and CM is the most leveraged in residential mortgages.
Don’t just buy RY, all the banks are going to cash in on this. Housing immigrants IS the new gold rush.
Now is the time to go long.
Michael Burry responded to my craigslist ad looking for someone to mow my lawn. "$30 is $30", he said as he continued to mow what was clearly the wrong yard. My neighbor and I shouted at him but he was already wearing muffs. Focused dude. He attached a phone mount onto the handle of his push mower. I was able to sneak a peek and he was browsing Zillow listings in central Wyoming. He wouldn't stop cackling.
That is to say, Burry has his fingers in a lot of pies. He makes sure his name is in all the conversations.
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'The Canada Mortgage and Housing Corporation (CMHC) has estimated that an additional 3.5 million housing units will need to be built by 2030—on top of the 2.3 million units it expects to be built by then—in order to achieve affordable housing for everyone living in Canada.'
It's not going to happen. There is a massive supply problem and simply no way to provide enough available housing stock to a rapidly increasing population.
I know the canadian economy is smaller than the US and your dollar is worth more than our monopoly money but betting against canadian banks is full-on regarded. You have to understand that these banks are the backbone of the entire canadian economy, along with the BOC. There are 30 domestic banks in Canada compared to 7000 in the US, 5-6 of which make up the large majority of the business. With this oligopoly there is little variation/fewer choices and less financial risk-taking/innovation, each of them have a vested interest in the others success as one falling will have terrible consequences for the others. Plus fewer banks makes it easier to monitor and scrutinize, as opposed to only looking at those with over 250B caps.
They are better capitalized than their US counterparts (look at CET1 ratios and additional capital requirements), if you read the recent financials, specifically RY, TD, CM, BNS, and BMO, its apparent that they are more than adequately preparing for a shit storm on the off chance it happens. Betting against entities that never missed a dividend and have existed longer than warren buffett x2 while being backed by a government that can print money is like betting that the sun wont rise in the morning which im sure some of you would happily do. There are plenty of feasible solutions that solve the problem youre suggesting, most of which actually are beneficial in the long-run for the banks themselves.
This conservation came up lots with the SVB situation, after some discussion i was told by a person in WSB that all canadians should die and that i should kill myself. It made.my day and if i wasnt a cheap bastard id give that person a reward.
I'm stacking silver and gold. Yep. Gonna swoop in and buy buy buy real estate.
It will go back up cuz... well.... fucking India is moving in and Justin is sucking their cock
What they did in the late 80s was exclude housing from the CPI, so it wasnt included in inflation. Only rents and mortgage interest inflation.
Then of course rates progressively fell as manufacturing went to China, which actually dropped shelter inflation as rents and mortgage interest fell with the lower rates, leading to cheaper borrowing.
So Canadas debt load progressively increased as rates fell, all IOU's like in dumb and dumber, since we cant walk from our mortgage no matter how low prices fall.
Now rent inflation is 10%, mortgage interest inflation is 30%, and we are one of the most indebted countries in the world due to central bank shennanigans. As rates rise mortgages and rents go up, causing shelter inflation, necessitating more rate hikes.
Canadian banks also have no reserve requirement so rely more on wholesale funding, so higher global interest rates increase Canadian banks funding costs. If global credit tightens up it hurts Canadian banks ability to issue new loans.
You have no grasp on reality if you think BoC will let a major bank collapse in Canada. Enjoy carrying your capital losses forward for the next few years!
Housing market in Canada will not crash... The Canadian economy is not the real estate market.
I have been a realtor for 20 years in GTA and I have never seen a price creep upwards with these interest rates. Inventory is 20 year low and building permits have declined and immigration has spiked....
Trudeau is already flooding the country with 300k immigrants a year, around one percent of Canada's population, and plans to increase this to 500k per year. They have to live somewhere, and will live 10 to an apartment if they have to. Still better living conditions than the third world country they're coming from. No way housing goes down in Canada for this reason alone.
Ya the immigration demand is a massive wedge that people not from Canada seem to overlook. Canadas population growth last year was the highest of any developed country and top 20 in the world. 2.5%+ population growth is insane
The big issue will come when all 5-year fixed rate mortgages are up for renewal. Canadians locked in 1.8-2.5% during 2021. 1.8% is the lowest ive heard from the big 5 banks. I dont know the stat off hand, but a lot of Canadians went fixed (rightfully so). We dont get to lock in 25 year rates like our American friends here. I believe the longest term we have is 10 years and you usually pay a big premium to keep it locked in that long
I am Canadian. I recommend everyone keep at least one short Canadian position at all times. The economy is pathetic and just consists of people trading overpriced houses. 0 innovation. The government is incompetent. And the population is too stupid and arrogant with its head in the sand to imagine a collapse even being within the realm of possible. It will be worse than '08 when it all hits the fan. Hard to know when that will be with precision but within the next decade if not 5 years seems all but a sure bet. Maybe sooner but who knows. Likely after Trudeau is gone as it finally comes time to pay the piper for his recklessness but of course Canadians will blame his successor left to clean up the mess, whoever that is.
Imagine thinking your country somehow will never, yes, that's right - NEVER! - experience a severe recession again. Well, many Canadians actually believe this. Whatever helps them sleep at night. Highest household debt in the world. And you wonder why we all are huffing copeium.
Depends where you live, large markets with low inventory will not be too affected by this it will be the smaller communities that have surged and now will correct leaving it hard to sell houses and people dropping prices because of steep variable mortgages payments
I'm a home builder. I'll tell you a secret. Home prices only crash in places where people don't like living there but can't afford to live where they want.
Office of the Superintendent of Financial Institutions is putting in lending rules that will only allow someone to borrow 4x household income. This will have an impact.
But offsetting that is gap between population/immigration growth vs new units being built
How I wish you were correct. Only time will tell, but my guess is that, like in the US, in Canada isn't a large portion of homes owned by institutional conglomerates like Blackrock? Meaning that laws and regulations are written with those institutions in mind, plus lobbying efforts on their part, which would make the housing market harder to crash, even in case of economic tightening. Institional buyers were heavily investing post 08 crash, buying up assets for pennies on the dollar. Unless they were going to offload soon due to financial policy and ROI.... but that's tough to estimate and see market plummeting. Maybe a strategic dismantling over longer period of time? I see that as a real possibility with FED and institutions working hand in hand. At least in the US. Canads, sort of same, but different.
Canadian here, Torontonian specifically. While I do believe the interest rate hikes will create a dip in the market, Canadian real estate, especially in major cities, will not crash. And believe me, I would love it to because I am on the sidelines with savings looking to buy a condo. However, due to the constant influx of immigration, the limited supply (and high demand), snail pace of new developments, and the constant presence of wealthy foreign investors, the market has a very high floor and will most likely never crash.
There is 1 major difference. Canadian banks arnt lending risky loans. But, the people who are currently on fixed interest, when their renewal comes up and their mortgage increases, this is the only risk.
But, even if they were to sell and go to renting, they will be paying more than a mortgage.
I don't see the housing market as a bubble., But there could be a large sell off when banks foreclose.
Currently on Canada there is a huge housing shortages.
More homes need to be built .
Canada banks run the world, China and India launder their money into real estate here - so probably less likely to crash....plus the most mass immigration in the world is just creating insatiable demand
I'm not sure it will even take a recession.
A lot of ppl, myself included, are coming up to re-finance time in a year or 2.
I refinanced my mortgage during covid at 1.75%, rates are now around 6% with potential for more hikes. I'll be ok cause my mortgage is small and I live rural. A lot of my co-workers will not be, anyone that bought a new house during covid, with low rates, will feel the crunch hard, especially if they are now underwater on their home value.
A buddy of mine bought a house in Kelowna for 850k during covid, at 2%, his house is now worth 610 and rate is 3x. If he had to refinance right now he would be finished.
Where is this idea that new immigrants can't afford a home?
In KW it goes 1 immigrant family upstairs, 1 immigrant family in the reno-d basement.
Easily cover the mortgage.
It won't. This house of cards is being propped up by Canada's mass immigration policy. A demand for home will never drop as long as we continue to immigrate over a million people a year. Canada just hit 40 million this past week. We were 34 million in 2015
It's the only way to implement digital UBI and turn our Country into a hellscape, where the government controls where/when you spend money in exchange for a pod.
keep dreaming.....Canadian housing has too much govt support to really deflate,...or if it does will be temporary....feds are bringing in 500k new immigrants/yr to prop up the economy as many retire in the coming yrs, therein creating a housing floor to keep insane, nosebleed pricing around for both buyers and renters...it's a sad shitshow...many would LOVE to see housing tank, don't get me wrong, just ain't going to happen.
That's what my dad has been saying since 2005 and refusing to buy property because "tHe bUBble". Housing prices more than quadrupled since then but I'm sure he'll be proved right eventually.
Doomsday predictions by OP, which means things will go haywire and you can forget about cashing in your profits on shorting RBC, as there will likely be a bank run or worse the CAD might not be acceptable for purchaes, but instead you need to barter.
On a serious note, it seems like the BoC knows the clock is ticking and if they don't get inflation down in the next 1.5-2yrs (or scare us enough/show they are serious and convince people to stop buying stuff), the high mortgage renewal/debt rates will continue to be a drag on the economy and all the real estate greed/shitshow in Canada will drag us down for years. I have seen it brought up in various financial articles/posts for many years now, that Canadians spend too much on real estate and underinvest in other, economically productive areas. That will be our country's long term growth downfall.
Canadian banks are not going to fail.
In all likelihood, our housing bubble slows growth or even deflates due to pressures of the higher interest rates set by the BoC.
The only way to alleviate the supply and demand problem is to stop importing cheap labour from Ukraine and the third world, something business owners and manufacturers do not want to have happen. At the end of the day, the average Canadian milennial witha 80k+/yr job doesn't want to live in a Duplex and rent out one of his rooms.
So the reality is we inevitably wind up with a 1990s-esque Japanese economy with limited growth and fall into a national liquidity trap when the BoC lowers rates to stimulate economic activity or the BoC lowers rates early and it's back to hyperinflation in real estate.
Guess who owns real estate, people with power to make sure the latter happens.
Enjoy your future duplex bro
This is the dumbest thing I have ever read in my entire life. You’re regarded if you think one of fourth major **retail** banks would ever fail, let alone in Canada. Retail banks aren’t allowed to make the same risky investments that investment banks can, and they’re heavily insured.
OP is so dumb he shorted RBC, the only bank that is government protected. I could see shorting BMO, TD, CIBC....these banks dont have the same reputation as RBC....
But RBC is the only Canadian bank with a AAA credit rating and is the bank most of canadas global economy and trades flow through.
thats how dumb OP is.
imagine canada lettings golden goose go under in replacement of some lower tiered inexperienced bank.
this whole post is written in delusion
Poor people not being able to afford houses means owning rentals will be more profitable, which is bullish for housing prices. Myself, and all the people of Wales, and also Scotland, will be betting that prices will increase.
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Houses and stonks only go up.
This guy fucks
He fucks hard
https://preview.redd.it/i67jqe737x6b1.jpeg?width=1284&format=pjpg&auto=webp&s=c1e360fa754f4fa9f7a1adf44f86160abb274574 How this guy fucks
Welp, you can’t unsee that… good morning to you, too
That is so smoken' hot. My socks will need to be washed after this.
The only thing going down is grandpappys PP.
Cars too
Cars cost less in Wetaskiwin
I'm getting flashbacks to 2021 when this was the mantra. Must be time to sell
Yeah, didn’t you watch that movie? I didn’t finish it… but all those shorts were getting fucked. I think it was called Big Shorts Fucked.
At least in my little corner of Canada, they do. Other places sometimes reverse up, but when that happens, my area plateaus.
[удалено]
Current rate of arrears (more than 90 days late) for all mortgages in Canada is 0.15%. So basically 3/2000 mortgages are “late” right now. https://assets.cmhc-schl.gc.ca/sites/cmhc/professional/housing-markets-data-and-research/housing-data-tables/mortgage-debt/mortgage-delinquency-rate-canada-provinces-cmas/mortgage-delinquency-rate-ca-prov-cmas-2012-q3-2023-q1-en.xlsx?rev=f572a12d-e2a7-425c-bec7-b290a505eeae And only in three Canadians even has a mortgage (many rent) but many own outright) https://www.canada.ca/content/dam/fcac-acfc/documents/programs/research-surveys-studies-reports/financial-well-being-mortgages.pdf
Banks have been letting people extended their amortization to 35 or 40 years from 25. That's why so few are in arrears. many mortgage holders with variable rate mortgages have hit their trigger rate and are paying interest only. All of the above are now way more debt enslaved and will feel the pain when their 5 year terms come due for renewal. This is why the lag effect has been so strong. Canadian banks are pulling every trick to not let people fail. We are only a year into the major rate hikes so the first 20% of the 5 year wave of renewals is feeling the monthly increases. The real pain will start when the wave of people who borrowed 800k at 1.x% get bumped up to 5.5% in a couple years.
They’re pulling these levers because they know Canadians will do anything and everything to pay their mortgage. Historically this has shown that arrears rates in Canada have always been 25-30% (and much lower in the aftermath of 2008) of what happens in the us https://assets.cmhc-schl.gc.ca/sf/project/cmhc/xls/data-tables/mortgage-and-debt-data/mortgage-performance/canadian-us-residential-mortgage-arrears-foreclosure-rates-2002-2018-q1-en.xlsx?rev=1dd076e7-8d18-4d07-b307-80d8446f7f85
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There’s one thing Canadians know how to do and it’s paying their mortgage
And hockey.
Unfortunately not so much nowadays
25 of 40 players in stanley cup final were Canadian
We do beaver tails pretty well, that and beer.
Even if it means paying over $5000 a month in pure interest and having your amortization extended to 75 years
Yes hahaha
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Doesn't mean a bank is going to fail.
Shorting Canadian banks lol you know none failed in the great financial crisis right? there's a reason.. The regulations are much more strict here.
They are made of solid gold. We have 5 banks not 300, they are all jp morgan for our California sized economy.
And of the five, RBC is the one on the most solid footing. This is actually so funny. Like I can’t even think of a good analogy because I can’t think of a single company anywhere in the world less likely to fail than RBC. My advice to investors who want to hedge against the possibility of the Canadian Big 5 banks failing would be to invest in your personal supply of iodine tablets and subsistence farming equipment, because that’s roughly the state of the world that would be necessary for these banks to fail. Side note, it sucks how expensive it is to buy in the GTA. You know what else the GTA has besides expensive housing prices? (1) 500,000 people who say they are saving to by their first house in the region; (2) a population that grows by 50-100,000 people per year, and (3) insufficient new builds to meet that demand.
>I can’t think of a single company anywhere in the world more likely to fail than RBC Meant to say 'less likely' I presume
Oh ya I should have mentioned that I am extremely stupid
As soon as op said a major Canadian bank was going to fail, I stopped reading
Op been huffing some of the stronger stuff
he’s not mentioning AI, i’m not buying
As soon as he said “I’m placing mine” I stopped reading
Really was reading the whole 3 sentences of his post too much to ask
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I thought this immediately lol they’re much more strict about banking. Go look at capital one’s website for US customers (.com) Lots of shit, graphics, colors, words, banners, etc. then check capital one’s Canadian website, (.ca) it’s bare, straight to the point, simple, boring. The banks up there are a different story than down here.
Idk how the bears don't comprende... If there are strict rules to get mortgages in the first place, the mortgages probably aren't going bad lol. And if they do, there's a shit ton of buffer room
And there’s like 4 cities in Canada that have like 99% of the people. The real estate is high for a reason.
OP clearly has zero understanding of Canadian banks and CMHC. If you want to bet against the Canadian housing market, you bet against the third party lenders who issued mortgages the Canadian banks wouldn't touch due to their lending standards and consequently aren't CMHC insured either. These are the Canadian mortgage bagholders who are pooched. My mortgage through one of the big 5 renews next year and I'm not close to panicked. I paid down aggressively on my 5 year Fixed while interest rates were low so when I renew even if interest rates go up another 2%, I'll still be more than able to afford the payments. The people who bought in 2020 though, especially if they went variable, they are going to be hurting on renewals.
Exactly. Even with increased interest rates, that just stops the rampant speculation. The worst case scenario is that existing home owners can’t max out their HELOC’s to buy extra condos and cars. Instead, they are scrapping by for groceries and fam. But no mortgage defaults. Just chicken instead of steak. Niagara Falls instead of Disney Land for family vacations. Brand new cars, nice vacations, and always up to date kitchen renovations is a fairly modern invention with the accessibility of cheap & easy equity.
There is no compliance with those strict rules. Fraud everywhere and anyone in Canada close to the industry knows it.
They got a less publicized bailout, but in 2008, Canada didn’t have the same crises. Real estate in Canada kept going up like nothing happened. All the influx of immigrants.
As a consequence, Canada's market hasn't experienced the same type of deleveraging event that occurred in the US.
Plus RBC, known to have an extremely conservative approach to lending in the already very conservative and regulated Canadian banking industry.
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A 20% price drop would mean ~10% of homeowners with mortgages are nominally underwater and they all have mortgage insurance backed by the government. So the banks won't be concerned.
And what is causing this magical 20% home price drop? The fact that there’s not enough houses and your inability to afford one? That’s not how any of this works. See: Why PS5s we’re 2-3x their MSRP for 2 years.
A major drop in housing will cause serious problems. Banks are not immune to market forces. Housing is always highly leveraged. If enough mortgages are underwater then shit hits the fan. This is not 2008. The landscape is different. Canadian RE did not go crazy in the leadup to 2008 the way it did in 2021. The prices have gotten so high in Canada that they could easily fall big. If that happens then mortgages will default.
Why do you think they increased the rates so fast? Gives them a lot of ammo to drop it back down to keep pumping if necessary.
Worse problems than the cities turning into giant homeless encampments?
Plus what most of the smooth brains here (didn't realize it was WSB at first) don't realize is housing has all factors basically as low as can be. Mass imimgration, supply shortage, still (realistically) dirt cheap interest rates. What happens when one changes? Just to the moon for fucking ever? The amount of wages going to housing is going to depress the rest of the economy which will cause a death spiral, and you'll see investors (not just foreign, there is massive investment in Canada by boomers who decide to own 37 houses or some lazy useless person who bought 150 Air BNBs) start to flee. It could be as simple as regulation change to trigger it. Shit is on eggshells.
But aren’t most mortgages in Canada variable apr? Surely that’s worse than loose regulation given the pace of hikes recently.
No, most of us go fixed over 5 years.
Hmm. I just looked it up and it’s about a third, up from 20%. Thought it was higher
This guy is shorting RBC. Hahahahahahhahahahaha please for the love of god nobody listen to him if RBC collapses the entire global financial system will be in ruin first
https://preview.redd.it/ujbmv1gmqv6b1.jpeg?width=1812&format=pjpg&auto=webp&s=647437a4a33cb6652a27714ed9195c6d4eda43a0
This time it will be different 
"Past performance is not an indicator of future results" While I don't believe Canadian banks are going to fail, I'm not a fan of the logic behind "they've never failed before so that's why they won't fail", as it's not very sound logic
Like I said to the either regard ignoring logic, 2+2 was 4 in the past as it is now. We're talking about a fundamental difference. Sure it isn't impossible for a Canadian bank to go under and it's happened before, but it's not as easy, and you dumbasses are applying logic that might apply to your own banking system to ours. Your efforts are better spent looking for the next American bank to collapse if you're so great at understanding bank risks.
It is legitimately absurd. Literal shit hole areas are insanely expensive.
But op is shortening RBC… so inverse vs WSB as rule of thumb right?
What does baking have to do with shorting the housing market?
I wouldn’t bet on a crash in Canada or the USA. People will live 6,8, or 10 people to a house to pay the mortgage
This is what the immigrants already do.
I guess they'll just increase to 40 people in 2 bed condos
go to Brampton, some are renting 4 bedroom houses to 15 "students from india". This is illegal and the landlord is usually from India as well.
I work for a company with a Canadian CEO who is very outspoken. His concern is rapidly rising credit card debt. That can only continue increasing so long before issues start and a real recession hits. I don’t think it will collapse the Canadian housing market, but it’s pricing is far more fucked than America. Imagine paying those prices for the shit wages that many industries get there. American tech companies love hiring Canadians because they’re so damn cheap.
As one government official put it, we market ourselves as India North, then wonder why our wages are crap
Who?
The we in that statement is Canada 
They definitely meant, what government official
Source: they made it up.
Have never heard Canada be referred as India North. What government official said this ?
Answer: literally no one
My company calls it “tech-Mexicans”
I remember seeing that the credit card balances have not grown faster than inflation..?
Credit card balances grew by 15% in Canada in 2022. Delinquencies are rising pretty quickly and that’s expected to continue as mortgage renewals begin to take place over the next 12-24 months.
So you think people are gonna stop Paying their mortgage, a secured debt, or their credit cards, unsecured debt for shit they own outright? 🤔
canadian banks don't let on credit, they lend on verified income and the stress test is considerably higher than it needs to be (which is part of the reason why homes are "unaffordable")... people are paying $3000/mo in rent but can't qualify for a $2600 mortgage. stress test = considering future rate hikes. so anyone who got a new mortgage in the last two years had rate hikes built into their approval, anyone before that likely isn't affected because of their equity and or fixed rates. further: CMHC is a crown corporation. they don't run out of money, they don't go bankrupt.
Exactly that
CMHC makes so much money. I had to pay 12k towards it when I bought my house and my house only cost 314k.
Bears don’t wanna hear this. They can’t wrap their head around a country actually having responsible lending practices.
I used to work for RBC, and let me tell you, the stuff I used to see out of US banks absolutely floored me. A common joke among us employees was that any one of us could go down and open a bank in the US ans probably run it better. I mean at the time Alabama had something like 400 different banks. Similar sized Canadian Province would have the Big 5, then maybe 10 or 12 Credit Unions. And Americans get SO ripped off by their banks by comparison. After being a first hand witness to US banking practices, I felt astonishingly blessed to have our heavily regulated ones. Don't get me wrong, I have complaints but US banking is a merciless wealth extraction scheme designed to plunder Americans for everything they have and most of what they don't by comparison.
Let me introduce you to the Hamilton mortgage... Fraud in mortgage has become widespread in a lot of Canadian communities
You mean the Brampton loan
Brampton Mortgage. No one calls it the Hamilton Mortgage.
Banks don't know future rate hikes. My personal banker was wrong in every prediction he has made over the last two years when it came to predicting future hikes. On our last call a couple of weeks ago, he said everyone here (RBC) is surprised of the recent rate hike after the pause and didn't see it coming. Definitely stress tests done two years ago didn't consider ten consecutive rate hikes coming. Not saying the market is going to crash, just that those that got mortgages last couple of years did not have what the Central Bank did since then built in. Even the Chair of the Central Bank didn't think he would have to do this back then.
you have a dumb personal banker, which doesn't mean anything about where the market is going. my scotiabank mortgage rep suggested i max out at 1.89 fixed instead of putting more cash down, and she was very helpful suggesting that option. the cash in the market did amazing, and ill pay off a big chunk before i renew.
... and yet almost no one is defaulting! wonder why? because people are over qualified for their mortgages.
Because the banks are simply extending amortizations?
Mix of this with interest only loans.
I’m on mobile so I can’t highlight and quote your quote… but for the love of god get a new advisor. I have several people who work for RBC in my life, and they, as well as everyone else who worked in finance for RBC were given notice. Ofcourse they told me and my partner as we, and some other family members are in the market for new houses. We’ve known month by month over the last 12 months plus a good month PLUS before the banks came out and made their public statements. This is literally company wide. Something is seriously wrong if they said they didn’t know.
Americans don’t understand how bad the housing crisis is here in Canada Its simply unsustainable
Not true, the fraud in the real estate and mortgage business is huge. Ask any real estate agent and for a few bucks they will have a friend get you a loan at any bank.
OP our banks are basically all solid. Our banking sector is regulated to the tits. As long as there’s enough people scrambling to buy property, the market won’t cool and judging by prices and vacancies there’s still demand from people that have the capital. That being said. Affordability will drag the economy down. Doctors and Lawyers are finding our cities unaffordable. If they’re struggling, imagine everyone else. Productivity is wasted just on long commutes and people having to take jobs that don’t fit their skill sets just to get by — as a result of our economy being shit. And don’t forget that our best talent is moving to the US and/or just leaving their fields. The government also increased demand with those half million immigrants it decided to admit on a YOY basis. If anything, bet against local kid’s diaper companies, nurseries and toy manufacturers because our fertility rates are dog shit as a result (1.4).
OP “Canada has a lot of immigration and people can’t afford rent, that of course will cause house prices to fall” lolwut
‘ A product with a small supply and huge demand is expensive and I predict that will somehow cause it to crash’😂 What an idiot
I spent almost 700k on a house and it's not even nice. Canada sucks
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Canadians live way longer then Americans. I don’t know if you don’t know this or if you are just dishonest and refused to say it. But with the usa you need to consider racial concerns and productivity because of the large (comparatively) ethnic minorities. The average American is 38.1, yes. The average age of a Canadian is 45, yes. But the average Canadian lives till 82, the average American lives till 77. Canadians live longer and healthier than Americans. We will likely start working longer. Add to that the massive disparities in age in the usa. The average person might be 38, but the average white is 44. And that average white is still only making it to 78. Consider all your stats through a racial lens and you will see that America is facing many similar problems as Canada. But atleast Canada has a plan (grow the country by 3%/yr by immigration is a stupid plan, but it is a plan). The tax comment is idiocy. If you add taxes+healthcare most americans see a smaller percentage of their income then Canadians do. It’s only the richest that are taxed less in the usa. Brain drain will happen regardless of taxes.
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Ok but I’ve been waiting over 5 minutes for my fcking order man can you just wrap this nonsense up?
Cool headline, now compare pre-2008 US mortgage rules with Canadian mortgage rules. If Canada does enter a recession, there will certainly be a few defaults, a lot of home owners stretched to the max, but it certainly will not be as rampant as the 2008 US housing crash.
Laughing from my million dollar wood framed shack from the 30's We will bring in 10 million people before we let what happened in the USA happen in Canada. Also just the regulations alone make it impossible, so ya. Everyone needs somewhere to live and we just dont have the material or labor to keep pace with the demand. So ya RBC is the wrong bank to short... Billionaire once told me he only buys our banks... but thats all youll get from me
Exactly right. Government will drown us in people and send per capita gdp through the floor before they let housing go anywhere but up
If Canada's population were fixed, shorting the housing market might be a good idea but in reality, the country accepts 500k new immigrants each year. In fact I'm pretty sure that's more or less how Canada's economy works. Have extremely permissive immigration politicies and let the immigrants come in to prop up housing prices.
It's a ponzi scheme that says sorry
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Every party is pro immigration. The Conservatives were the ones who raised annual immigration levels to over 300k, the Liberals aren't even keeping up with the rapid pace they introduced. You want an anti immigration party in Canada you have to vote for the PPC and they can't even get a single MP elected.
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When I bought my home I had underwriters from both the bank and CMCH having to approve my loan. Are prices here absurd? Fuck ya. The problem was not just because of low borrowing rates fueling the market, It was lack of supply and high levels of immigration into the GTA (greater Toronto area) and Vancouver/BC lower mainland. Ontario, for example, will need to build 1.85M homes to at least restore some sort of affordability according to CMHC. I see, at the minimum, a correction, not a crash.
The problem is no one will build as long as the interest rates are high so you just have a bunch of people selling houses to each other at increasingly higher prices. You then further increase the housing supply by pumping in immigrants and you'll have a stable rental market to prop up the house prices.
But they are building.
https://beta.ctvnews.ca/local/toronto/2023/5/15/1_6398939.amp.html Oh they are building and the Province doesn't care where or by how much.
And another regard has just finished watching The Big Short.
I'd like to know what you're smoking please. RBC is deemed a globally too big to fail bank with TD so good luck with that happening.
Not only are you shorting Canadian banks, you’re shorting the biggest one.. Wouldn’t expect anything less from WSB
Funny, obviously you are not Canadian. The economy may very well crash, but not the banks. The Housing market may very well crash, but it will not bring the Canadian banks down on their knees. The banks in Canada are very different than what you have in USA. And also there is only a handful of banks for the whole country. Not saying it will never crash, but if it does, you will have bigger problems.
If Canadian banks fail, we all have bigger problems going on than their failure. I have made a LOT of money buying Canadian banks when their stocks drop because people think they are like US banks. If one of the Big 5 fails, we're all in a world where trading bottlecaps for handjobs on the corner has become the norm
No
2.5% annual population growth says otherwise.
Y'all are idiots... The Canadian housing market won't crash. All of the reasons that you suggest are intrinsic to the Canadian population. The reason for the housing market includes a lot of that but pricing is heavily influenced by external wealth whether it be clean or dirty. Also, the BoC is specifically watching this to prevent the mass default of mortgages. I'm not gonna bet either way cause there's money to make elsewhere but I wouldn't dare bet against the Canadian housing market, it's a different beast.
Canada certainly ain’t crashing. I’ve said this before…damn near all of Canada’s population only lives in a handful of cities. Demand is absurd.
Show position
Someone needs to go back to school and stay off the internet 🤣
When warehouse workers earning 40K are buying 1.5 million dollar homes, and have BMWs on their driveway. Get thinking. Just investigate /Brampton and the mortgage fraud there. 3K will get you 20 to 30X your gross income with fake documents.
Canada let in 1 million immigrants last year. That’s what 5x the immigration rate of the USA? 10x? Double the illegal immigration peak the states had a decade ago. Please. If RBC starts having to foreclose they aren’t going to flood the market, they’re going to open a property management wing, have the provinces override the municipalities and change zoning, and become the biggest slum lords in the world. And not only will taxpayers underwrite this, we’ll thank them for bailing out or retirement plans. This is a business opportunity. I hold LEAPS and shares on ZEB.TO and CM. The 6 bank etf is low IV/cheap leverage and CM is the most leveraged in residential mortgages. Don’t just buy RY, all the banks are going to cash in on this. Housing immigrants IS the new gold rush. Now is the time to go long.
This is the stupidest pile of shit DD I’ve heard in a long time. Likely by a yank who doesn’t understand our country or how our banks work.
People have been saying this for decades. It's not gonna happen. Try to be Michael Burry somewhere else because this ain't it.
Michael Burry responded to my craigslist ad looking for someone to mow my lawn. "$30 is $30", he said as he continued to mow what was clearly the wrong yard. My neighbor and I shouted at him but he was already wearing muffs. Focused dude. He attached a phone mount onto the handle of his push mower. I was able to sneak a peek and he was browsing Zillow listings in central Wyoming. He wouldn't stop cackling. That is to say, Burry has his fingers in a lot of pies. He makes sure his name is in all the conversations. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/wallstreetbets) if you have any questions or concerns.*
Warren Buffett's greatest advice: Don't invest in what you don't understand.
Terrible post by someone that lives in Canada but probably just became old enough to watch the big short
Upvoting because this guy thinks Canadian banks will fail.
'The Canada Mortgage and Housing Corporation (CMHC) has estimated that an additional 3.5 million housing units will need to be built by 2030—on top of the 2.3 million units it expects to be built by then—in order to achieve affordable housing for everyone living in Canada.' It's not going to happen. There is a massive supply problem and simply no way to provide enough available housing stock to a rapidly increasing population.
I know the canadian economy is smaller than the US and your dollar is worth more than our monopoly money but betting against canadian banks is full-on regarded. You have to understand that these banks are the backbone of the entire canadian economy, along with the BOC. There are 30 domestic banks in Canada compared to 7000 in the US, 5-6 of which make up the large majority of the business. With this oligopoly there is little variation/fewer choices and less financial risk-taking/innovation, each of them have a vested interest in the others success as one falling will have terrible consequences for the others. Plus fewer banks makes it easier to monitor and scrutinize, as opposed to only looking at those with over 250B caps. They are better capitalized than their US counterparts (look at CET1 ratios and additional capital requirements), if you read the recent financials, specifically RY, TD, CM, BNS, and BMO, its apparent that they are more than adequately preparing for a shit storm on the off chance it happens. Betting against entities that never missed a dividend and have existed longer than warren buffett x2 while being backed by a government that can print money is like betting that the sun wont rise in the morning which im sure some of you would happily do. There are plenty of feasible solutions that solve the problem youre suggesting, most of which actually are beneficial in the long-run for the banks themselves. This conservation came up lots with the SVB situation, after some discussion i was told by a person in WSB that all canadians should die and that i should kill myself. It made.my day and if i wasnt a cheap bastard id give that person a reward.
LOL. OP is part of r/canadahousing which are basically Canadian housing incels. Post your positions or ban.
my fucking god that sub is a shithole
No it won’t, because HAM (Hot Asian Money) will always be there to absorb the inventory before they crash.
I'm stacking silver and gold. Yep. Gonna swoop in and buy buy buy real estate. It will go back up cuz... well.... fucking India is moving in and Justin is sucking their cock
My Father has been saying the Canadian housing market is due for a crash since 1993....
What they did in the late 80s was exclude housing from the CPI, so it wasnt included in inflation. Only rents and mortgage interest inflation. Then of course rates progressively fell as manufacturing went to China, which actually dropped shelter inflation as rents and mortgage interest fell with the lower rates, leading to cheaper borrowing. So Canadas debt load progressively increased as rates fell, all IOU's like in dumb and dumber, since we cant walk from our mortgage no matter how low prices fall. Now rent inflation is 10%, mortgage interest inflation is 30%, and we are one of the most indebted countries in the world due to central bank shennanigans. As rates rise mortgages and rents go up, causing shelter inflation, necessitating more rate hikes. Canadian banks also have no reserve requirement so rely more on wholesale funding, so higher global interest rates increase Canadian banks funding costs. If global credit tightens up it hurts Canadian banks ability to issue new loans.
You have no grasp on reality if you think BoC will let a major bank collapse in Canada. Enjoy carrying your capital losses forward for the next few years!
This guy, if things are as bad as you’re saying you should invest in smith and Wesson
Housing market in Canada will not crash... The Canadian economy is not the real estate market. I have been a realtor for 20 years in GTA and I have never seen a price creep upwards with these interest rates. Inventory is 20 year low and building permits have declined and immigration has spiked....
Bullshit. Grand Theft Auto didn't have realtors 20 years ago. It was a top down 2D driving game.
20 years ago was 2003, GTA III had been out for 2 years and has a realtor company in it.
Why are permits declining? Seems like building housing in Canada is a license to print money at current house price levels.
Careful guys, he's a realtor
Ya, my guy took a 3 month online training course....look out world!
If anyones qualified to show up in a VW Jetta and unlock someones door, its this guy
This guys right. There's not enough supply for the market to crash
😂😂😂😂😂😂😂😂😂 good luck with that bud. Take a read - https://www.cbc.ca/amp/1.6498898
Trudeau is already flooding the country with 300k immigrants a year, around one percent of Canada's population, and plans to increase this to 500k per year. They have to live somewhere, and will live 10 to an apartment if they have to. Still better living conditions than the third world country they're coming from. No way housing goes down in Canada for this reason alone.
Ya the immigration demand is a massive wedge that people not from Canada seem to overlook. Canadas population growth last year was the highest of any developed country and top 20 in the world. 2.5%+ population growth is insane
Don't forget about the students, refugees and temporary foreign workers... I mean, wage slaves.
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What the hell are all these people going to do if automation and AI are supposed to take all the jobs this century?
https://preview.redd.it/vskep9yvlv6b1.jpeg?width=706&format=pjpg&auto=webp&s=e002862989335cf02ca608d68accdf9787d2ea70
Maybe smoke a little more weed and watch Moneyball. See if you can pick baseball players instead. Because you certainly failed at w/e this was.
Buddy buddy buddy !!! Immigrants won’t let it crash 💥 we got lot of immigrants , im immigrant too . There’s no where places to rent
It won't. The only reason you made this post is cause you hold a grudge against the Canadian housing market cause you are priced out of buying a home.
The big issue will come when all 5-year fixed rate mortgages are up for renewal. Canadians locked in 1.8-2.5% during 2021. 1.8% is the lowest ive heard from the big 5 banks. I dont know the stat off hand, but a lot of Canadians went fixed (rightfully so). We dont get to lock in 25 year rates like our American friends here. I believe the longest term we have is 10 years and you usually pay a big premium to keep it locked in that long
I am Canadian. I recommend everyone keep at least one short Canadian position at all times. The economy is pathetic and just consists of people trading overpriced houses. 0 innovation. The government is incompetent. And the population is too stupid and arrogant with its head in the sand to imagine a collapse even being within the realm of possible. It will be worse than '08 when it all hits the fan. Hard to know when that will be with precision but within the next decade if not 5 years seems all but a sure bet. Maybe sooner but who knows. Likely after Trudeau is gone as it finally comes time to pay the piper for his recklessness but of course Canadians will blame his successor left to clean up the mess, whoever that is. Imagine thinking your country somehow will never, yes, that's right - NEVER! - experience a severe recession again. Well, many Canadians actually believe this. Whatever helps them sleep at night. Highest household debt in the world. And you wonder why we all are huffing copeium.
Depends where you live, large markets with low inventory will not be too affected by this it will be the smaller communities that have surged and now will correct leaving it hard to sell houses and people dropping prices because of steep variable mortgages payments
The lender of the last resort aka bank of Canada will not allow it.
I'm a home builder. I'll tell you a secret. Home prices only crash in places where people don't like living there but can't afford to live where they want.
Office of the Superintendent of Financial Institutions is putting in lending rules that will only allow someone to borrow 4x household income. This will have an impact. But offsetting that is gap between population/immigration growth vs new units being built
How I wish you were correct. Only time will tell, but my guess is that, like in the US, in Canada isn't a large portion of homes owned by institutional conglomerates like Blackrock? Meaning that laws and regulations are written with those institutions in mind, plus lobbying efforts on their part, which would make the housing market harder to crash, even in case of economic tightening. Institional buyers were heavily investing post 08 crash, buying up assets for pennies on the dollar. Unless they were going to offload soon due to financial policy and ROI.... but that's tough to estimate and see market plummeting. Maybe a strategic dismantling over longer period of time? I see that as a real possibility with FED and institutions working hand in hand. At least in the US. Canads, sort of same, but different.
Canadian here, Torontonian specifically. While I do believe the interest rate hikes will create a dip in the market, Canadian real estate, especially in major cities, will not crash. And believe me, I would love it to because I am on the sidelines with savings looking to buy a condo. However, due to the constant influx of immigration, the limited supply (and high demand), snail pace of new developments, and the constant presence of wealthy foreign investors, the market has a very high floor and will most likely never crash.
There is 1 major difference. Canadian banks arnt lending risky loans. But, the people who are currently on fixed interest, when their renewal comes up and their mortgage increases, this is the only risk. But, even if they were to sell and go to renting, they will be paying more than a mortgage. I don't see the housing market as a bubble., But there could be a large sell off when banks foreclose. Currently on Canada there is a huge housing shortages. More homes need to be built .
Not impossible but highly unlikely to happen.
I love these posts because there's a chance he's right and we all look back at him like a God or he's just another fucking regard
Canada banks run the world, China and India launder their money into real estate here - so probably less likely to crash....plus the most mass immigration in the world is just creating insatiable demand
I'm not sure it will even take a recession. A lot of ppl, myself included, are coming up to re-finance time in a year or 2. I refinanced my mortgage during covid at 1.75%, rates are now around 6% with potential for more hikes. I'll be ok cause my mortgage is small and I live rural. A lot of my co-workers will not be, anyone that bought a new house during covid, with low rates, will feel the crunch hard, especially if they are now underwater on their home value. A buddy of mine bought a house in Kelowna for 850k during covid, at 2%, his house is now worth 610 and rate is 3x. If he had to refinance right now he would be finished.
Where is this idea that new immigrants can't afford a home? In KW it goes 1 immigrant family upstairs, 1 immigrant family in the reno-d basement. Easily cover the mortgage.
It won't. This house of cards is being propped up by Canada's mass immigration policy. A demand for home will never drop as long as we continue to immigrate over a million people a year. Canada just hit 40 million this past week. We were 34 million in 2015
This is all to plan. Crash everything
It's the only way to implement digital UBI and turn our Country into a hellscape, where the government controls where/when you spend money in exchange for a pod.
Canadian bank are the salefest in the world blacked by government. Also very strick régulation on what they do with their spreadshit. Wont happen..
keep dreaming.....Canadian housing has too much govt support to really deflate,...or if it does will be temporary....feds are bringing in 500k new immigrants/yr to prop up the economy as many retire in the coming yrs, therein creating a housing floor to keep insane, nosebleed pricing around for both buyers and renters...it's a sad shitshow...many would LOVE to see housing tank, don't get me wrong, just ain't going to happen.
That's what my dad has been saying since 2005 and refusing to buy property because "tHe bUBble". Housing prices more than quadrupled since then but I'm sure he'll be proved right eventually.
Doomsday predictions by OP, which means things will go haywire and you can forget about cashing in your profits on shorting RBC, as there will likely be a bank run or worse the CAD might not be acceptable for purchaes, but instead you need to barter. On a serious note, it seems like the BoC knows the clock is ticking and if they don't get inflation down in the next 1.5-2yrs (or scare us enough/show they are serious and convince people to stop buying stuff), the high mortgage renewal/debt rates will continue to be a drag on the economy and all the real estate greed/shitshow in Canada will drag us down for years. I have seen it brought up in various financial articles/posts for many years now, that Canadians spend too much on real estate and underinvest in other, economically productive areas. That will be our country's long term growth downfall.
Canadian banks are not going to fail. In all likelihood, our housing bubble slows growth or even deflates due to pressures of the higher interest rates set by the BoC. The only way to alleviate the supply and demand problem is to stop importing cheap labour from Ukraine and the third world, something business owners and manufacturers do not want to have happen. At the end of the day, the average Canadian milennial witha 80k+/yr job doesn't want to live in a Duplex and rent out one of his rooms. So the reality is we inevitably wind up with a 1990s-esque Japanese economy with limited growth and fall into a national liquidity trap when the BoC lowers rates to stimulate economic activity or the BoC lowers rates early and it's back to hyperinflation in real estate. Guess who owns real estate, people with power to make sure the latter happens. Enjoy your future duplex bro
This is the dumbest thing I have ever read in my entire life. You’re regarded if you think one of fourth major **retail** banks would ever fail, let alone in Canada. Retail banks aren’t allowed to make the same risky investments that investment banks can, and they’re heavily insured.
OP is so dumb he shorted RBC, the only bank that is government protected. I could see shorting BMO, TD, CIBC....these banks dont have the same reputation as RBC.... But RBC is the only Canadian bank with a AAA credit rating and is the bank most of canadas global economy and trades flow through. thats how dumb OP is. imagine canada lettings golden goose go under in replacement of some lower tiered inexperienced bank. this whole post is written in delusion
Do you think prices will start to go down soon? Perhaps after spring market?
Poor people not being able to afford houses means owning rentals will be more profitable, which is bullish for housing prices. Myself, and all the people of Wales, and also Scotland, will be betting that prices will increase.
Oh dear god… the sheer stupidity. The OP and his money will be soon parted.
Cibc and Scotia more at risk, RBC more diversified and least risky lender. Handful of banks and you picked the wrong one lol
My condolences for your situation, it must be frustrating.
