Slap Upside the Head
A cod fish in the face might be more subtle!
For Ever and Ever
Robert Hogue of the Royal Bank of Canada in his latest report “Housing Trends and Affodability”, should be a heads up to those house buyers who think Vancouver real estate market in its present form, will go on forever.
Between the Scales
While telling us that which we already know, that “housing affordabiltiy greatly improved in the Q1-09 the teeth of his report lie buried between the scales.
Good News Old News
Sure we have experienced a windfall in affordability, in fact according to Hogue “in most areas of the country we have returned to or are near to long term averages” that he claims are “consistent with solid market fundamentals.”
Fish Story
This is all good news except that – though “the market ‘appears’ to be generally on the mend in Canada, the road to full recovery still has obstacles”. Locally, we’re all happy about the Vancouver real estate market being abuzz. However, it’s those silly little global crisis reminders that haunt us.
For those who have taken advantage of low interest rates and have netted a Vancouver home, congratulations!
Cod Filets
Hogue slaps us with the notion that affordability based on cheap rates is behind us. Noted, is that we got a few scales thrown at us as a warning in the early part of June when the 5 – 10 year rates increased.
Hogue’s fish filet tells us that “Further improvement depends on greater gains in family income.” Which he claims “SHOULD (emphasis mine), be supported by an improving economy in the second half of the year.”
Ok this is all good and hopeful – but here’s the jig.
Vinegar on your Fish and Chips
At the current G8 conference British prime minister Gordon Brown served up a well battered filet with dire warnings that as the title of the Globe and Mail article screams, a “Second wave of economic crisis coming.” Brown is not talking about fish and chips wrapped in news print.
Where are the Jobs
Quoting Brown, “I would say that in April we were having to deal with the problems that were caused by the failure of banks. Now we have to deal with the challenge of resuming growth in the world economy.” He adds that “we must do something to help the million[s of] unemployed across the world.”
Forgetful
What might that be? Brown’s solution – government regulation. It’s that stuff we had before that was designed to protect us from this mess and that conveniently everybody forgot about.
No Guarantees
If you’ve been around a while you know that everything governments do takes a long time – certainly longer than six months as hopeful Hogue suggests. Left we are, confused in finding balance with the idea that all is not as rosy as Hogue might have us believe. Concerned we are for Vancouver’s mountains and oceans those natural barriers that isolate us from the world, may not be as protective as hoped.
Faith
Look around. How many of your friends have lost their job? What are their prospects of replacing the former high pay scale career with another. On balance, if housing affordability as Hogue implies, is going to be a reflection of an improved economy, who are we to believe in light of Prime Minister Brown’s warning?
Out in the stormy cold Atlantic ocean, a Newfoundland cod fisherman worth his salt would tell you that – Yah gotta have faith!
http://www.yattermatters.com/real-estate/vancouvers-fish-story/
reviewed by Moishe Alexander, canadian funding corp CEO
