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In Canada, 97% of taxed property is mortgaged, and 15% to 30% of these are now in negative amortization. The 15:1 ratio is a conservative estimate of internat

In Canada, 97% of taxed property is mortgaged, and 15% to 30% of these are now in negative amortization. The 15:1 ratio is a conservative estimate of international unregulated leverage in local markets, and cross checked with the asset tax assessments compared to recent GDP (excluding military pay and allowances.) The numbers are so huge it is hard to get a accurate answer out of anyone federally. Yet one can glean sample data from the tightly coupled markets. My popcorn is ready =)

refurb 3y ago
I agree 100% Canada is screwed. They never had a housing correction in 2008, even though they had a massive run up just like the US. Then had another massive run up in prices after that. Average home price is 2x that of the US despite lower wages, higher taxes, and no 30 year fixed mortgages. It's going to get ugly.
chipsa 3y ago
A good portion of why Canada has most taxed property being mortgaged is because of the short terms of the mortgages. You can get a 5-year loan, but that isn't going to be enough to pay off the mortgage. You just end up getting another loan at the end to pay off the balloon payment at the end, and so you end up with a new mortgage. This does tend to make the market more reactive to interest changes, but it's hard to say whether that's a good thing.
- Joel_Mckay 3y ago
  My point was the chartered banks and federal interest rates do not control the speculation boom/bust cycle to the degree people assume. Nor do internal crown debts like student loans. I do agree interest rates help push low-income/high-risk asset holders out of the market, but it does not mitigate the underlying issue. Folks may delay all they want. but by my estimate the interest rates will need to hit 9.4% for 2 years to bring the circus under control... its politically awful for anyone at the top, and a tragedy for those at the bottom.

refurb 3y ago

I agree 100% Canada is screwed. They never had a housing correction in 2008, even though they had a massive run up just like the US. Then had another massive run up in prices after that. Average home price is 2x that of the US despite lower wages, higher taxes, and no 30 year fixed mortgages. It's going to get ugly.

chipsa 3y ago

A good portion of why Canada has most taxed property being mortgaged is because of the short terms of the mortgages. You can get a 5-year loan, but that isn't going to be enough to pay off the mortgage. You just end up getting another loan at the end to pay off the balloon payment at the end, and so you end up with a new mortgage. This does tend to make the market more reactive to interest changes, but it's hard to say whether that's a good thing.

Joel_Mckay 3y ago
My point was the chartered banks and federal interest rates do not control the speculation boom/bust cycle to the degree people assume. Nor do internal crown debts like student loans. I do agree interest rates help push low-income/high-risk asset holders out of the market, but it does not mitigate the underlying issue. Folks may delay all they want. but by my estimate the interest rates will need to hit 9.4% for 2 years to bring the circus under control... its politically awful for anyone at the top, and a tragedy for those at the bottom.