I was curious to see the percentage of people who thought
that the real estate market is going to crash in the near future. I organized the comments by the following
categories; market will correct, no crash,
no side, and irrelevant.
Market Will Correct – This category included all the people who
thought that there was a real estate bubble in Canada, who thought there was a
major correction was coming, who thought that market was unsustainable, or
where ridiculing how expensive the market is. Below are some of the comments in
this category:
“A child can see what is going to happen
now. After all, when you have no underlying incomes or ecomomic growth (as in
Vancouver, Toronto, etc) what is there to support outrageously high house
prices?”
“When I first entered the house ownership
market (circa1970) the suggested rule of thumb was that you spent 25% of your
income on housing. That figure now seems ridiculous. What happened? Let me answer
part of that. The gouging greedy pigs got to the trough and found out how to
parasitically bump up prices to where they are at heir ridiculous values now.”
“Yep. You know you are in trouble in Ontario
when the only economic activity is in immigration consulting and residential
real estate speculation.”
“If your house ownership strategy cannot
survive a doubling of current interest rates, and a 15% drop in property value
when you renew your mortgage, then you are living on a bubble.”
No Crash -
This category included all the people who expressed in their comments a belief that
things are different in Canada, that there will be no crash and that even though a real estate crash has been predicted in Canada for years,
nothing has happened. Some examples below:
“well
gee, do i live in fear of a housing crash? or of the polar ice cap(s) melting?
or ? there's only so much fear to go around. so, instead, i will carry-on and
not spend unnecessarily and not worry about all the crises that are being
shovelled at all of us. i wonder how many are real...”
“It is my understanding that in Vancouver at
least, house prices have always been high. That may be more to do with
geography (there's not much room) and climate (it doesn't snow very much in the
winter) than anything else. It is highly unlikely that a US style
housing crisis will hit Canada any time soon. The difference is that in the US
you could buy a house with no downpayment, no assets and no job.”
“So we have another doom and gloom news
paper expert wading into the crap they post. Three years ago these same idiots
were predicting that Canada would fall into a deeper recession that the US was
in, (and is still in for the most part). The Canadian banks were supposed to
collapse two and three years ago. The looney was supposed to be worthless. The
housing market was supposed to collapse two and three years ago. Canada's job
loss was supposed to be in the double digits two and three years ago.
“Well all you self appointed experts, you have made a complete a*s of yourselves again. Canada is still the shining light on the global economic pole. Why don't you blow hards go find some other media to work in. Like comic books for instance.”
“Well all you self appointed experts, you have made a complete a*s of yourselves again. Canada is still the shining light on the global economic pole. Why don't you blow hards go find some other media to work in. Like comic books for instance.”
Undecided – This category
included people who expressed their uncertainty whether there was something
wrong with Canadian real estate or not. The key word here was “if”.
“If you get into trouble if prices drop or
mortgage rates increase, its not the banks or governments fault, its your own
fault.”
“If you purchase a property with only 5% down, you know at the time you make the purchase that if the property's value drops by more than 5% you will owe more than the property is worth. If you make the decision to buy anyway, you take the risk, no one else.”
Irrelevant – These were
all the comments that did not express a clear opinion in regards to the real estate condition in Canada. Examples:
“In the process, household debt has doubled,
going from a manageable 75 per cent of household income in the early 1990s to
150 per cent today.”
“Huh? How can debt be 150% of income? Only the government can pull that off.”
“Huh? How can debt be 150% of income? Only the government can pull that off.”
“The housing market of any country is the
exact reflection of how well or how poorly the country is doing.”
Results
- The original article contained over 300 comments, and I only examined the
first 141. Almost two thirds of the comments were irrelevant, as you can see on
the graph below, while just over the half of all comments thought, directly or
indirectly, that the market is going to correct in some way or another. While I
did not group the individual comments any further, the biggest theme was how
overpriced houses and condos are especially in Toronto and Vancouver (surprise, surprise).
Now, what do you think?
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