Canada's Housing Bubble

Guest discovervancouver.com

If you don't buy property in vancouver, you'll be priced out forever. economists are expecting 10,000 new jobs every month and consumer confidence is increasing.

If we have 10-per cent-unemployment, that means 90 per cent of people are employed. People are re-entering the market and they have the confidence to take advantage of bargain-basement prices. There's been a release of pent-up demand, and that has a long time to play out. Prices have gone as low as they are going to go.

There are LOTS of people that CAN afford $400,000 for housing. Median after-tax household income in Canada is up around $65,000/year. In Vancouver that number is well over $70,000/year. With a 20% down-payment saved up that $400,000 condo means a $320,000 mortgage. Amortized over 25 years even with mortgage rates rising to 5% you're looking at $1,860/month or 31% of after-tax income. Another $400/month in condo fees and you're still only at 39% after-tax income. High yes, but that's for the MEDIAN family, meaning 50% of families in these markets are better off than that.

The bubble won't burst but a small hissing sound next July when the HST comes out, and Carney nudges the rates up. Most people are locked in 3 to 5 years so any increase in interest rate won't affect anyone

Countries all over the world are inflating the debt away. They are allowing assets to rise knowing that wages hikes will follow, making the debt easier to pay off.

Sitting in Cash right know is just plane Dumb!!!

Vancouver has been undervalued for years, still under valued.

Nov 17, 2009