Mish Shedlock is notable for getting credit as a component of a lack of hyperinflation in that great debate. He is mystified as to how his predictions of a real estate bust in Canada have not yet occurred.
For a decade most homes in USA were bought with nothing down, sometimes even negative LTV, but in Canada someone actually had to demonstrate enough discipline to save a down. A much more responsible customer base.
Next, with mortgage interest deduction on taxes in USA, buying a house is a tax dodge, making the reason for having a house to that extent abstruse.
When it comes to usury (interest) even slight rules can have large effects.
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No one knows for sure precisely when any bubble will burst. I got the US housing bubble correct but missed Canada by a mile.Read more at http://globaleconomicanalysis.blogspot.com/#QMR6i3beHYGO4FFu.99This is easy: Canada requires a 20% down payment and there is no mortgage deduction on Canadian taxes. So those seemingly insignificant points actual have profound effects.
For a decade most homes in USA were bought with nothing down, sometimes even negative LTV, but in Canada someone actually had to demonstrate enough discipline to save a down. A much more responsible customer base.
Next, with mortgage interest deduction on taxes in USA, buying a house is a tax dodge, making the reason for having a house to that extent abstruse.
When it comes to usury (interest) even slight rules can have large effects.
Please feel free to share this post with three of your friends.
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