{"id":7562,"date":"2015-04-25T07:09:26","date_gmt":"2015-04-25T12:09:26","guid":{"rendered":"http:\/\/olduvai.ca\/?p=7562"},"modified":"2015-04-25T07:09:26","modified_gmt":"2015-04-25T12:09:26","slug":"how-insane-is-canadas-housing-bubble-42-of-second-time-buyers-need-a-lot-of-money-from-mom-dad-to-buy-a-home","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=7562","title":{"rendered":"How Insane Is Canada\u2019s Housing Bubble? 42% of \u201cSecond-Time\u201d Buyers Need (a lot of) Money from Mom & Dad to Buy a Home"},"content":{"rendered":"

How Insane Is Canada\u2019s Housing Bubble? 42% of \u201cSecond-Time\u201d Buyers Need (a lot of) Money from Mom & Dad to Buy a Home<\/a><\/h3>\n

A housing bubble is a huge party. Everyone gets drunk and has a good time. The economy booms because housing, particularly construction, is a very local business. It creates local jobs. People spend this money. Businesses get this money. Governments exact their pound of flesh. But there is a drawback to a housing bubble, beyond the fact that it will eventually\u00a0crash with terrible consequences: New entrants into the market are getting locked out by soaring prices.<\/p>\n

Canada\u2019s housing bubble has been a sight to behold. Home prices only dipped 8% when the US housing market crashed. Then it re-soared. Now, across the country,\u00a0home prices are 26% higher<\/u><\/a>\u00a0than they were at the already crazy peak in 2008. In Toronto, they\u2019re 42% higher! Prices in the major urban centers where young people like to live have become a challenge for first-time buyers.<\/p>\n

First-time buyers are special. One, they\u2019re the foundation of a healthy housing market; they represent growth. And two, they don\u2019t benefit from any run-up in home prices. Current homeowners profit from the housing bubble by owning a home that has gotten pricier. When they move, they sell an overpriced home, which soothes the pain of buying another overpriced home. But first-time buyers feel the full brunt of the bubble price.<\/p>\n

So the Bank of Montreal (BMO), in its\u00a0Home Buying Report<\/u><\/a>, determined just how difficult it\u2019s getting in Canada. The survey found that 42% of the potential first-time buyers, those hardy folks that haven\u2019t been discouraged by the soaring prices, expect to recruit the help of mom and dad, and in a big way.<\/p>\n

To begin with, which is not a good sign, first-time buyers whittled down their budget by C$3,400 on average from last year to C$312,700 (US$259,000).<\/p>\n

 <\/p>\n

…click on the above link to read the rest of the article…<\/p>\n","protected":false},"excerpt":{"rendered":"

How Insane Is Canada\u2019s Housing Bubble? 42% of \u201cSecond-Time\u201d Buyers Need (a lot of) Money from Mom & Dad to Buy a Home A housing bubble is a huge party. Everyone gets drunk and has a good time. The economy booms because housing, particularly construction, is a very local business. It creates local jobs. People […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[36,2984,103,195,406,2340,4254,4255],"class_list":["post-7562","post","type-post","status-publish","format-standard","hentry","category-economics","tag-asset-bubble","tag-bank-of-montreal","tag-canada","tag-debt","tag-housing-bubble","tag-housing-market","tag-wolf-richter","tag-wolfstreet"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/7562","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=7562"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/7562\/revisions"}],"predecessor-version":[{"id":7563,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/7562\/revisions\/7563"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=7562"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=7562"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=7562"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}