ARE YOU THE VICTIM OF THE PROPAGANDA?
The state of the economy and greediness are two major elements that determined whether home owner will face financial hardship.
As we know the US housing market is flooded with foreclosures and most of us worries if this will happen here in Canada especially in BC. Based on the Canadian Bankers Association tracks mortgage delinquencies -- which occur when mortgage payments are three or more months in arrears. The numbers are from Canada's seven major banks, which together issue about 60 per cent of the country's mortgages. In B.C., up to April 2008, only 0.15 per cent of those mortgages were in arrears. That number has steadily declined from about 0.65 per cent in 2001. According to Sal Guatieri, a senior economist with BMO Capital Markets said in an interview, due to Canada's economic situation has been "markedly different" than the U.S. situation, the foreclosure rate remains quite low -- if not historically low -- in Canada, and it's miles different from the U.S. situation."
Sub-prime mortgages in the US are aimed at borrowers with lower credit ratings. With the current housing value less than the mortgages, it gives greater incentive for the homeowner to walk away from the mortgage. On another hand, Canada's tight banking lending policy plus the rising house prices, Canadians who get in trouble can sell their houses and move on.
For there to be a rise in delinquencies in Canada, we probably have to wait for the economy to really weaken, the unemployment rate to rise sharply and then people have a harder time.
I had a very educational and interesting 4 hours long conversation this week with one of my Iranian investors who is in mining business in Iran. His input on the US and Iran matters will be resolved in approximately 6 months time. The political games between all the countries leaders totally manipulating their citizens through the media. He said even the oil prices jump from $30 to $100 a barrel, the gas pumps should approximately be gone up by 25 cents not $2. All governments are enjoying the profits from the taxes in between without telling the citizens. Food and beer prices going up are claimed to be all oil related matters, again, governments are benefiting it. He foresees as soon as next year arrives, there will be a lot more Iranian immigrants coming to Canada esp. BC & bring lots of money to purchase real estate. Therefore, he feels that this year is the best time to buy.
I understand no matter how many positive news out there to ensure us our housing market is still very strong though it is going through a balancing market, people usually choose to remember the negative we sees on the news till it proves differently otherwise. Buyers who are trying to watch the market as well as those speculators overly stretched their financial plans in the last few years have created perfect opportunities for "smart" buyers who will not be influenced by the propagandas. In order to be ahead of the majority of the people, we have to be braved enough to do the opposite instead of following the sheep. It is your choice to see the glass is half full or half empty.
