Jump to content
House Price Crash Forum
AvidFan

Canada And Australia. Countries Rich In Natural Resources.

Recommended Posts

http://www.smh.com.au/business/home-loan-rates-tipped-to-hit-86-20100526-wegh.html

Home loan rates tipped to hit 8.6%

PETER MARTIN

May 27, 2010

AUSTRALIANS are being told to brace for much higher interest rates - the OECD predicts at least four more rises, and most likely five, in the year ahead.

The organisation's Economic Outlook, which was released in Paris yesterday, predicts the Reserve Bank will push up its cash rate from its present 4.5 per cent to 5.1 per cent by December and then 5.7 per cent by next June.

Australia's cash rate at the time would be one of the world's highest, exceeded in the the OECD by only Turkey, Poland, Mexico and Iceland.

The prediction is sharply at odds with that of Australian financial markets, which have priced in a tightening of only 0.25 percentage points in the year ahead.

The 120-point increase would push up standard variable mortgage rated from their present average of 7.4 per cent to 8.6 per cent, adding an extra $238 to the monthly cost of servicing a typical $300,000 mortgage and $318 to the cost of servicing a $400,000 mortgage.

The total extra costs since rates began climbing from their lows last October would be $540 a month for a $300,000 loan and $720 for a $400,000 loan. The increase would bring mortgage rates back to the high of 8.55 per cent reached when the Coalition left office but would leave them short of the peak of 9.6 per cent reached under Labor before the Reserve Bank began a series of cuts in response to the global financial crisis.

http://www.businessweek.com/news/2010-05-26/canada-s-teranet-house-price-index-increased-11-6-in-march.html

Canada’s Teranet House Price Index Increased 11.6% in March

May 26, 2010, 9:22 AM EDT

May 26 (Bloomberg) -- Canadian home prices rose 11.6 percent in March from a year earlier, accelerating from the previous two months, the Teranet-National Bank Composite House Price Index showed.

Prices rose 0.3 percent from February, according to a report released today by National Bank Financial. On an annual basis, prices outpaced gains of 9.9 percent in February and 7.5 percent in January, the bank said.

http://www.ctv.ca/generic/generated/static/business/article1580185.html

Nearly 20% of homes overvalued: report

Steve Ladurantaye

Seventeen per cent of Canadian homes are overvalued, CIBC warned Tuesday, with a 5 to 10 per cent price correction likely to hit in the next two years.

With higher interest rates likely to make housing less affordable in the coming years and the market beginning to show signs of cooling, prices are “probably” going to fall back as homeowners are increasingly cautious about how they spend their money.

“The most likely scenario is that higher interest rates will lead to a modest decline in prices in the coming year or two,” economist Ben Tal wrote in a report.

The bank used a model created by the International Monetary Fund, and updated it with April sales data from the Canadian Real Estate Association to reach its conclusion. The price of an average house has gained 23 per cent since hitting lows in January, 2009, and prices are now 7 per cent higher than they were before the recession.

He said prices are 14 per cent above their fair value, “as justified by housing market fundamentals such as income, rent or demographic changes.”

That means 1.5-million homes are overvalued, he said. Of those homes, 760,000 are overvalued by more than 5 per cent.

Twenty per cent of homes in BC are considered overvalued, 17 per cent in Alberta, 13 per cent in Manitoba and Saskatchewan, 13 per cent in Quebec, 11 per cent in Ontario and 8.6 per cent in Altantic Canada.

“Despite these troubling valuation statistics, a closer look at recent developments in the housing market shows that stabilizing forces are already at play,” he said.

He said new listings are hitting the market at the fastest rate since the early 1990s, and unit sales are decreasing. This is moderating price increases, “with the three-month moving average growth decelerating rapidly over the past six months.”

And while interest rates are poised to move higher, making mortgages more expensive for households, it is unlikely the Bank of Canada will be able to increase rates quickly.

“An array of limiting factors including a strong dollar, the end of fiscal stimulus, a slower pace of economic activity in the U.S., and a more rate-sensitive household sector suggest that rates will only climb very slowly over the next two years,” he said.

A rapid crash in prices isn’t likely, he said, as the market slowly adjusts.

“The fact that prices are overvalued today does not necessarily mean that they will crash tomorrow,” he said.

“A violent market correction needs a trigger such as the sub-prime crisis which ignited the U.S. real estate meltdown, or abnormally high interest rates as was the case during the 1991 property crash in Canada. Fortunately, that is not on the horizon this time around.”

Fun and games on the way for these two countries that have so far avoided the worst of the crash...

Share this post


Link to post
Share on other sites

http://www.smh.com.au/business/home-loan-rates-tipped-to-hit-86-20100526-wegh.html

Home loan rates tipped to hit 8.6%

PETER MARTIN

May 27, 2010

http://www.businessweek.com/news/2010-05-26/canada-s-teranet-house-price-index-increased-11-6-in-march.html

Canada’s Teranet House Price Index Increased 11.6% in March

May 26, 2010, 9:22 AM EDT

http://www.ctv.ca/generic/generated/static/business/article1580185.html

Nearly 20% of homes overvalued: report

Steve Ladurantaye

Fun and games on the way for these two countries that have so far avoided the worst of the crash...

with higher IR's comes a stronger currency.

I don't think either of these two countries have much to worry about.

their purchasing power of goods and services from elsewhere around the world will be quite substantial.

....you might even see the aussie $ approach parity with GBP.

not so long ago it was 2:1 or more.

Share this post


Link to post
Share on other sites

<snip>

Fun and games on the way for these two countries that have so far avoided the worst of the crash...

You're having a laugh about Canada; 2nd biggest country in the World, population about 25m, covered in (and sitting on) vast natural resources, no f*cked up banking structure.

And because their houses are overpriced they're in trouble?

I wish Britain was in so much trouble.

Share this post


Link to post
Share on other sites

You're having a laugh about Canada; 2nd biggest country in the World, population about 25m, covered in (and sitting on) vast natural resources, no f*cked up banking structure.

And because their houses are overpriced they're in trouble?

I wish Britain was in so much trouble.

They have run up massive private debt as a nation over the past decade. Plus, their housing sector is grossly over-priced compared to the neighbour to the South.

I wouldn't be too over-confident about their banks either.

Mega-Bubble imminently about to pop. :ph34r:

Share this post


Link to post
Share on other sites

http://www.smh.com.a...00526-wegh.html

Home loan rates tipped to hit 8.6%

PETER MARTIN

May 27, 2010

http://www.businessw...6-in-march.html

Canada's Teranet House Price Index Increased 11.6% in March

May 26, 2010, 9:22 AM EDT

http://www.ctv.ca/ge...cle1580185.html

Nearly 20% of homes overvalued: report

Steve Ladurantaye

Fun and games on the way for these two countries that have so far avoided the worst of the crash...

You are judging Canada by British criteria. These price increases or drops may apply to the cities like Toronto or Vancouver or the heady Ottawa but Canada has a vast land mass outside of the cities where house prices can be as cheap as chips and those places act as a damper to any price increases. Canada can hardly have a crash since it didn't have a boom. Houses are going up all around here and they are brand new, vast in size and still a third the price of anything similar in England.

Share this post


Link to post
Share on other sites

with higher IR's comes a stronger currency.

I don't think either of these two countries have much to worry about.

their purchasing power of goods and services from elsewhere around the world will be quite substantial.

....you might even see the aussie $ approach parity with GBP.

not so long ago it was 2:1 or more.

Having a chat with a wheat farmer the other day - high exchange rates were killing him.

Share this post


Link to post
Share on other sites

Yes that would mean that the British cities would also be chock a block filling up the top ten most liveable cities ranking as well, another scourge of these nations.

Yes very liveable - unfortunately they provide the same mental nourishment as a mcdonalds meal provides physical nourishment.

Share this post


Link to post
Share on other sites

I have my Canadian PR visa, and four interviews next week in Toronto and Montreal. Outside of Vancouver, property is petty cheap compared to the UK. I'll buy and I won't care if there's a crash because my mortgage will be tiny, even with a 4-5% hike!

Some of the above analysis is correct, Canada has quite big debts, but it has shed loads of natural resources to pay them off with. They will be bady affected by the coming mega crash and subsequent US/European depression, but they will be out of the gloom before those locations because China and India will want buy things from them once they learn to live without exporting to the US. I think canada is in a better position than Oz because of the variety of resources it has, almost 75% of electricity generated from hydro they have Oil, fish bears, water, culture ?!?! Anyway, I would say that, I'm hopefully going to be living there soon.

By the way, has anyone here anything to say about Halifax, one of the jobs is there.

Share this post


Link to post
Share on other sites

You're having a laugh about Canada; 2nd biggest country in the World, population about 25m, covered in (and sitting on) vast natural resources, no f*cked up banking structure.

And because their houses are overpriced they're in trouble?

I wish Britain was in so much trouble.

The funny thing is, all the Canadians I work with tell me house prices in Toronto are insane but I look at them and think how cheap everything is. It's all a matter of perspective I guess. I think the population is 30 million btw and, whilst it's true that it's a huge country, most of it isn't somewhere you'd want to live. There's certainly an enormous amount of space to expand into but it's nowhere near as much as you might imagine looking at a map.

Share this post


Link to post
Share on other sites

I have my Canadian PR visa, and four interviews next week in Toronto and Montreal. Outside of Vancouver, property is petty cheap compared to the UK. I'll buy and I won't care if there's a crash because my mortgage will be tiny, even with a 4-5% hike!

Some of the above analysis is correct, Canada has quite big debts, but it has shed loads of natural resources to pay them off with. They will be bady affected by the coming mega crash and subsequent US/European depression, but they will be out of the gloom before those locations because China and India will want buy things from them once they learn to live without exporting to the US. I think canada is in a better position than Oz because of the variety of resources it has, almost 75% of electricity generated from hydro they have Oil, fish bears, water, culture ?!?! Anyway, I would say that, I'm hopefully going to be living there soon.

By the way, has anyone here anything to say about Halifax, one of the jobs is there.

Good luck with the interviews. People tell me Halifax is nice, but I've never been there myself so can't comment. Toronto is a nice place to live though for sure. What business are you in?

Share this post


Link to post
Share on other sites
Guest The Relaxation Suite

I have my Canadian PR visa, and four interviews next week in Toronto and Montreal. Outside of Vancouver, property is petty cheap compared to the UK. I'll buy and I won't care if there's a crash because my mortgage will be tiny, even with a 4-5% hike!

Some of the above analysis is correct, Canada has quite big debts, but it has shed loads of natural resources to pay them off with. They will be bady affected by the coming mega crash and subsequent US/European depression, but they will be out of the gloom before those locations because China and India will want buy things from them once they learn to live without exporting to the US. I think canada is in a better position than Oz because of the variety of resources it has, almost 75% of electricity generated from hydro they have Oil, fish bears, water, culture ?!?! Anyway, I would say that, I'm hopefully going to be living there soon.

By the way, has anyone here anything to say about Halifax, one of the jobs is there.

There's very little difference in Canada/Australia in terms of future potential, exportsm etc. The main difference is the climate, and on that, winter in Halifax can start as early as September and stretches through to April or May. And when I say winter, I mean winter. The old joke about "three winters and you're out" stands for the whole country except lower coastal BC and VI, and that's why there are so many homeless there and why real estate is so expensive there.

Share this post


Link to post
Share on other sites

There's very little difference in Canada/Australia in terms of future potential, exportsm etc. The main difference is the climate, and on that, winter in Halifax can start as early as September and stretches through to April or May. And when I say winter, I mean winter. The old joke about "three winters and you're out" stands for the whole country except lower coastal BC and VI, and that's why there are so many homeless there and why real estate is so expensive there.

Toronto isn't that bad - no worse than Chicago for example. One thing that people don't realise is that most of the bits of Canada where people live (i.e. the 100km strip next to the US border) are actually south of the UK so, even when it's cold, there's more hours of sunlight. It really does make a difference.

Share this post


Link to post
Share on other sites
Guest The Relaxation Suite

Toronto isn't that bad - no worse than Chicago for example. One thing that people don't realise is that most of the bits of Canada where people live (i.e. the 100km strip next to the US border) are actually south of the UK so, even when it's cold, there's more hours of sunlight. It really does make a difference.

Britain is much further north than wher emost people live in Canada, but its temperatures are moderated by its island status. There is more light in a Canadian winter - in the 100km strip you mention, and less light in the summer - but its continental form ensures more extreme temperatures. Reports from people I know in Calgary have guaranteed I will never move there. LIke I said, those raised in warmer places usually last no more than a handful of winters before they're on Vancouver real estate websites, or trying to squeeze a job out of the NAFTA treaty and go to the warmer US states.

Edited by Tecumseh

Share this post


Link to post
Share on other sites

Britain is much further north than wher emost people live in Canada, but its temperatures are moderated by its island status. There is more light in a Canadian winter - in the 100km strip you mention, and less light in the summer - but its continental form ensures more extreme temperatures. Reports from people I know in Calgary have guaranteed I will never move there.

Well, you'll note I said Toronto... There's a lot of seriously cold places around these parts, e.g. Edmonton where it was still below zero as recently as a week ago. Personally I prefer the cold to the heat; I did some time in Adelaide a few years back and the temperature hit 50 on a few occassions. Give me the icy wastes of Canada over that any day!

Share this post


Link to post
Share on other sites
Guest The Relaxation Suite

Well, you'll note I said Toronto... There's a lot of seriously cold places around these parts, e.g. Edmonton where it was still below zero as recently as a week ago. Personally I prefer the cold to the heat; I did some time in Adelaide a few years back and the temperature hit 50 on a few occassions. Give me the icy wastes of Canada over that any day!

I know Adelaide (and Perth) and the hottest temperature record there is about 46 degrees (in the shade of course). The reason why I prefer heat to cold is that at night in hot countries it always cools down, so you can go swimming and sit outside and relax, whereas in the cold countries is just gets worse at night and even more heating is required.

Also, you might get a heatwave of 40+ in these cities lasting maybe five days, and then it drops to a pleasant 25 - 35 again, but eight months of sub zero and white-outs is too much if you ask me, but each oto their own! FWIW I love Canada and have spent quite a bit of time there in various provinces and have family there, and I would recommend it to any British person looking for a better life, though I would make sure they knowe about the 10 days annual leave and the cold first!

Share this post


Link to post
Share on other sites

I have my Canadian PR visa, and four interviews next week in Toronto and Montreal. Outside of Vancouver, property is petty cheap compared to the UK. I'll buy and I won't care if there's a crash because my mortgage will be tiny, even with a 4-5% hike!

Some of the above analysis is correct, Canada has quite big debts, but it has shed loads of natural resources to pay them off with. They will be bady affected by the coming mega crash and subsequent US/European depression, but they will be out of the gloom before those locations because China and India will want buy things from them once they learn to live without exporting to the US. I think canada is in a better position than Oz because of the variety of resources it has, almost 75% of electricity generated from hydro they have Oil, fish bears, water, culture ?!?! Anyway, I would say that, I'm hopefully going to be living there soon.

By the way, has anyone here anything to say about Halifax, one of the jobs is there.

Halifax, indeed the whole of Nova Scotia, has a Canadian reputation of being very friendly. My own experience reinforces that. If there were more work there just about everybody in Canada would want to live there. House prices in Halifax itself are quite high but if you look outside of the city (and not that far either) prices drop dramatically and are a fraction of UK prices. Good luck with your interviews.

Share this post


Link to post
Share on other sites

not a view shared by steve keen.

http://www.debtdeflation.com/blogs/2010/05/25/deleveraging-returns/

'Most currently argue that the fundamentals in Australia are good – low unemployment, a strong recovery in equity markets (notwithstanding the 14 per cent sell-off in the past month), a significant number of companies’ results beating expectations and so on.

The same economists and commentators (none of whom actually saw the GFC coming) then argue that if the recovery from the GFC is derailed, it will be because of an external shock – a China-led commodities slump, the sovereign debt crisis, or an abrupt carry trade reversal when the Fed starts raising rates (though the recent slump in the $A implies this is taking place now without the Fed’s assistance).

What these analyses overlook is the internal indicator which enabled me (and handful of other non-orthodox economists) to anticipate the GFC in the first place: the ratio of debt to GDP, and its rate of change. On this indicator, even if none of these other ’shocks’ eventuate, Australia still faces either a recession, or a return to the unsustainable trends that set the stage for the GFC. '

put that in yer pipe etc.it's probably safer to work on the basis that nowhere is safe.

You going to link to Keen's bet and his walk to Mt Kosciusko?

Share this post


Link to post
Share on other sites

I know Adelaide (and Perth) and the hottest temperature record there is about 46 degrees (in the shade of course). The reason why I prefer heat to cold is that at night in hot countries it always cools down, so you can go swimming and sit outside and relax, whereas in the cold countries is just gets worse at night and even more heating is required.

Also, you might get a heatwave of 40+ in these cities lasting maybe five days, and then it drops to a pleasant 25 - 35 again, but eight months of sub zero and white-outs is too much if you ask me, but each oto their own! FWIW I love Canada and have spent quite a bit of time there in various provinces and have family there, and I would recommend it to any British person looking for a better life, though I would make sure they knowe about the 10 days annual leave and the cold first!

Not all of Canada is in winter ten months of the year I live in the semi arid area called the Okanagan BC, shorts normally go on in March and stay on to end October nice 80 mile warm lake to swim in and hundreds of wineries to visit.

Edited by royalmike

Share this post


Link to post
Share on other sites

Good luck with the interviews. People tell me Halifax is nice, but I've never been there myself so can't comment. Toronto is a nice place to live though for sure. What business are you in?

Thanks. I'm in pharmaceuticals, have a Ph.D etc. I am seeing 8 people next week for 5 jobs (one of those, my ideal job, is only a potential one at the moment). Three of the jobs would be based in toronto, 1 in Halifax, and 1 in Winnipeg, and maybe another1 in Vancouver. I've pretty much discounted Winnepeg because of the winters. I've looked at the weather stats for all the cities on the BBC, (global city averages) and everywhere is sunnier and warmer than London in the summer, and that's a good starting point. I like the idea of proper seasons, and I love snow and real cold...I hate the endless 5 degrees and sleet that we get here, I'd much rather have -3, snow and that wonderful, dry crisp feeling you get in the air. I know there are going to be days when the temp won't get above -15, and the wind will strip your skin off if you stand outside for more than 5 minutes, but I'd rather endure a week or two like that than 6 months of dreary grey drizzle like we have here.

It's funny what you say about Toronto and people moaning about house prices. Looking on remax, you go a few miles out of the city and you get a decent 4 bed, 2 recep + den and a decent garden, in a nice neighbourhood for $350k...that feels like a bargain to me! I was thinking of living near Barrie, it's even cheaper there.

One thing I have heard is that the traffic in Toronto is a bit of a nightmare, is that Canadians over-reacting again, or is it actually worse than London?

My wife is a kiwi, so may do a stint in the centre, or East cost, then move to the West coast if property crashes...Vancouver is stunning, but the winter weather is rubbish...but you can ski, and looking at the stats, the summers are better than here...wamer, less rain, and more sun. I've heard about Okanagan, supposed to be a bit of a hidden paradise...shame there are few jobs there.

Share this post


Link to post
Share on other sites

One thing I have heard is that the traffic in Toronto is a bit of a nightmare, is that Canadians over-reacting again, or is it actually worse than London?

Yes, Canadians are over reacting to the Toronto traffic as compared to anywhere in Europe. You can normally drive from one side of Toronto to the other in half an hour if you use freeways and if you must use regular streets in about an hour. I have driven completely through Toronto on the 401 about 7:00pm on a weekday and never changed cruise control.

Share this post


Link to post
Share on other sites

Yes, Canadians are over reacting to the Toronto traffic as compared to anywhere in Europe. You can normally drive from one side of Toronto to the other in half an hour if you use freeways and if you must use regular streets in about an hour. I have driven completely through Toronto on the 401 about 7:00pm on a weekday and never changed cruise control.

But it can also take 90 minutes to drive from Front and Bay to Oakville if you leave at 5.30 pm.

Toronto traffic really depends on where you are and where you are going. Having Lake Ontario "block off" the edge of the city makes things worse (much like crossing the Thames here or getting from Vancouver to the North Shore.

Share this post


Link to post
Share on other sites

Thanks. I'm in pharmaceuticals, have a Ph.D etc. I am seeing 8 people next week for 5 jobs (one of those, my ideal job, is only a potential one at the moment). Three of the jobs would be based in toronto, 1 in Halifax, and 1 in Winnipeg, and maybe another1 in Vancouver. I've pretty much discounted Winnepeg because of the winters. I've looked at the weather stats for all the cities on the BBC, (global city averages) and everywhere is sunnier and warmer than London in the summer, and that's a good starting point. I like the idea of proper seasons, and I love snow and real cold...I hate the endless 5 degrees and sleet that we get here, I'd much rather have -3, snow and that wonderful, dry crisp feeling you get in the air. I know there are going to be days when the temp won't get above -15, and the wind will strip your skin off if you stand outside for more than 5 minutes, but I'd rather endure a week or two like that than 6 months of dreary grey drizzle like we have here.

It's funny what you say about Toronto and people moaning about house prices. Looking on remax, you go a few miles out of the city and you get a decent 4 bed, 2 recep + den and a decent garden, in a nice neighbourhood for $350k...that feels like a bargain to me! I was thinking of living near Barrie, it's even cheaper there.

One thing I have heard is that the traffic in Toronto is a bit of a nightmare, is that Canadians over-reacting again, or is it actually worse than London?

My wife is a kiwi, so may do a stint in the centre, or East cost, then move to the West coast if property crashes...Vancouver is stunning, but the winter weather is rubbish...but you can ski, and looking at the stats, the summers are better than here...wamer, less rain, and more sun. I've heard about Okanagan, supposed to be a bit of a hidden paradise...shame there are few jobs there.

The traffic's usually much lighter than any big city in the UK but it can clog up a bit at peak times. The fact that it's possible to commute to and from the financial district (Bay & Front) by car and that many people do (there's a plentiful supply of public car parks around there) tells you everything you need to know really. The commuter trains are good but they do tend to stop running quite early in the evening (there's then a bus instead) - I'm living in downtown and I walk to work most days.

The contrast between the winter and summer in Toronto is extreme for sure. In winter it's really cold (-20 is not uncommon) although it tends to be dry at the same time which makes it feel less unpleasant than it would otherwise. Also, other than a few evergreen trees, all the other outside plant life seems to die off. In summer on the other hand, it's suddenly green all over.

For skiing, there's some small slopes around an hour north of toronto but the serious skiers seems to head off to Vermont which isn't that far away.

Share this post


Link to post
Share on other sites

I have my Canadian PR visa, and four interviews next week in Toronto and Montreal. Outside of Vancouver, property is petty cheap compared to the UK. I'll buy and I won't care if there's a crash because my mortgage will be tiny, even with a 4-5% hike!

Some of the above analysis is correct, Canada has quite big debts, but it has shed loads of natural resources to pay them off with. They will be bady affected by the coming mega crash and subsequent US/European depression, but they will be out of the gloom before those locations because China and India will want buy things from them once they learn to live without exporting to the US. I think canada is in a better position than Oz because of the variety of resources it has, almost 75% of electricity generated from hydro they have Oil, fish bears, water, culture ?!?! Anyway, I would say that, I'm hopefully going to be living there soon.

By the way, has anyone here anything to say about Halifax, one of the jobs is there.

I lived there for a year, although I was working up at the airport, the missus was working in Halifax/Dartmouth... If you have the choice of Toronto or Montreal I really wouldn't bother with Halifax/the maritimes... Although it is quite a nice place to visit :)

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 259 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.