Vancouver Real Estate - Knuckle Fight
Posted September 26th, 2008 in Buying or Selling, Real Estate, Real Estate Stuff
“Canada’s Mortgage Market is NOT Like the U.S.”
ScotiaCapital’s Derek Holt and Karen Cordes have taken their gloves off.
The bottom line is that we do believe there to be considerable downsides to the Canadian housing market, but that comparisons of Canadian mortgage market prospects to the U.S. experience are off-base.
Holt and Cordes Highlights
Debt Growth
Leverage — night and day comparisons
Canadian mortgage markets are fundamentally healthier than the U.S.
Canadian mortgages are funded, underwritten, and enforced in a totally different manner
They say: “Canadian debt growth relative to incomes over recent years has been on par with the U.S. experience. Ergo, one is led to conclude, Canada must face similar stresses to its own housing and mortgage markets.” “Nonsense!”
They say: “Canada’s ratio of household debt-to-income is much lower than the U.S.”
They say: “Canada’s subprime market is small (5-6% of outstanding mortgages) whereas the U.S. share peaked at about three times that.”
They say: “Canada’s funding model is completely different from the U.S.”
Knuckle Fight
This is great! In direct opposition to yesterday’s Wolf and Kwan report from Merrill Lynch that raised many eyebrows in the Vancouver Real Estate market, one of the oldest respected banks in Canada is now laying it on the line.
It’s the 2nd round. The crowd roars as this jab to the eye is certain to open a cut.
Help Is At Hand
I’m off to get the Vancouver Market Medical Kit.
Got a Vancouver Real Estate question? Always happy to answer it.
Call or send me an email
Twitter or Skype me at YatterMatters.
Larry
*Disclaimer: Statistics Courtesy REBGV. While believed to be accurate they are not guaranteed.
**Numbers provided may vary as they are dynamically posted by the REBGV.
