Weekly Market Update, May 4/18

According to the benchmark and seeing that Alberta was in a recession it looks like a bubble specially in the detached market.

No chance UCP doesn't win

Tom, if UPC will win expect less gov jobs and recession in Edmonton.... NDP actually supported real estate in Edmonton....

I like Sara's comment about government intervention... Why you didn't complain when BoC lowered artificially the interest rate in the last years and why you don't complain about CMHC keeping interest rates even lower by taking the risk from the banks?

Well, no sense beating around the bush- prices falling, inventory climbing, sales:listing low, rates increasing and regulations growing. The question now becomes: how low do prices go, how long until we get to the bottom, and what is the best indicator of that bottom? Real estate is an unbeatable investment in rising markets, and the worst in falling. It’s the whole leverage thing- if you’ve got $50k, you can buy $50k in financial assets. That same $50k buys a $1,000,000 house with the right income, and your gains and losses are amplified 20-fold. The trick is to time it- which is impossible but fun to pretend you can :)

I'd hate to see what would happen to home prices if oil was falling rather than rising in price.

I would also hate to see how low housing and condos would go if the UCP gets in! I think Edmonton will be solidly NDP for that reason in 11 months.

bubu,

Going with your train of thought, that means if the NDP get in again they should hire 500,000 more government employees. That will make things boom in Edmonton.

In fact, they should hire a million more. That will be even better for the economy.
What could possibly go wrong?

GM, I'm not a NDP fun...My comment is about the stupid level of borrowing to not lay off gov employees... If they would spend what they get in revenue ( only 60% of what they spend), 20% of the gov employees would be unemployed... don't tell me that is not affecting real estate....

If people think the UCP will win, you really should save yourself $80,000 over the next few years and sell your house now.

You're right that they would need to lay off 20% of the government's workforce to balance the budget, but I'm sure they would just raise taxes instead. They would have to.

Trev, leverage isn't limited to real estate. An investor can use leverage to acquire any asset such as shares. The difference between property and shares is the price of the asset is not updated daily and the asset is not liquid. Also you are not forced to sell property in a down turn. Shares you will get a margin call which forces you to crystallize losses.

https://www.theglobeandmail.com/investing/personal-finance/household-finances/article-canadas-mortgage-test-just-got-tougher/

It looks like by the end of the year who qualified last year for a mortgage at 2% would need to qualify this year at 5.34% now and maybe 5.8-6% by the end of the year.... that is 35-40% less than a year ago.. ups.... Lower price market will be ok but condos at $400k and skinny houses for $6-800k will suffer...