Bravo festival condos review. The real estate debt crisis in Canada broke out. Canada’s debt crisis is at the height of the storm.Please Visit: Bravo festival condos review to Get Your VVIP Registration Today!
Data show that by the end of April, the total outstanding debt of Canadian households reached $2.025 trillion, an increase of $104.7 billion, or 5.5%, over the same period last year, and an increase of $20 billion in the first four months of this year alone. Among them, housing mortgages account for the vast majority of debt growth. The total housing debt of Canadian households reached $1.454 trillion, an increase of 6.1 per cent over the same period last year, accounting for 71.8 per cent of total household debt.
Previous data showed that the average price of a new home in Canada in April was C $751881 (US $559123), while the average price of a new home in the US was C $495271 (US $368300) in April, meaning the average price of a new home in Canada was 51.8 per cent higher than in the US. No wonder Canada’s housing debt accounts for a high proportion of total household debt.
Brother Han was frightened when he looked at the Canadian data. Last year, when he wrote about the revelation of the 2008 financial crisis in the United States, he wrote that real estate is not the key to the problem, but debt. Because, from the perspective of simple self-occupation, whether the real estate price goes up or down, it is difficult to have a greater impact on everyone’s life. Residential housing represents residential attributes, so it can not be called a commodity. For example, if you own a house and you live in it, you won’t sell it for money when house prices rise, and falling prices won’t have much impact on your life.
However, if it is a house + debt, then the problem is probably not so simple. If most people get a house through a housing mortgage, when the house price rises, because the house has sufficient mortgage value, so it will not have any impact on people’s lives, but once the price of real estate falls, when the real estate mortgage in the bank is insufficient, There is a huge risk in this kind of mortgage debt. When a family’s real estate mortgage debt and consumer debt reach a certain scale and exceed the scope of the family’s bearing, the risk of the family will rise rapidly. as a result, families have a serious debt crisis, which is the kind of problem that Canada is facing now.
Looking at the huge problems encountered in Canada is actually a warning to ourselves. Mr. Fredermond Malik, a famous management scientist, once put forward specifically in his book “Transformation”: whether it is a family or a business, the problem of excessive debt at this stage does not lie in the family economy itself, but the result of the excessive pursuit of short-term effects in the way we accept consumption. There are such problems for both Canadian and Chinese families:
First, many people have become short-term investors. In China, the key saying left to us by our old ancestors is: be vigilant and be prepared for thinking. Not long ago, China was a big savings country, and everyone was willing to deposit their assets in the bank, but everything has been changing in recent years. More and more households are turning their savings into liabilities, either into mortgage loans for investment in real estate or into installment consumer loans. These debts are unwittingly increasing. Let me ask you a question. How much of your monthly household income can be left after deducting mortgage, car loan and credit card?
Second, how many people are aware of their debt crisis? For most people, it is not clear that the boom in real estate or the stock market is largely a house of cards based on debt, which is not reliable, and the imaginary wealth appreciation engine may also be the engine of destroying assets. because asset prices have been rising before, few people wonder what will happen if asset prices fall. For example, due to the shortsightedness of most people’s thinking, what we can see is that real estate prices have been rising in recent years or more than a decade, but no one has seen that in a fairly long historical period, real estate prices may be in a downward cycle, and most Canadians have seen that the prices of their real estate are much higher than those of the United States, coupled with the policy of quantitative easing, everyone is able to borrow low-interest loans from banks. So a large amount of debt has been rapidly accumulated, but these debts have promoted the prosperity of the debt economy at another level. No one has noticed whether there is enough support behind this prosperity.
Third, many people are overdrawing their spending power. With the development of economic globalization, more and more people believe in the concept of advanced consumption, and many people believe that we can use future money to enjoy today’s life. In the field of real estate, an old American lady and an old Chinese lady, I believe everyone is familiar with the story of a loan to buy a house and a savings to buy a house. However, have you ever considered that although credit is a very good way, debt is a mode of overdrawing our future spending power, and we always believe that our income will only grow and not decline, so we feel free to go into debt. However, is it true that income will not fall? Is it true that income declines after every financial crisis? Is it a story for companies to lay off staff on a large scale after every overcapacity? However, many people fail to see that this behavior of overdrawing spending power is very likely to increase household risk.
The fourth is overconfidence in interest rates. After the international financial crisis in 2008, due to the recession of the world economy, a large number of countries began to adopt the monetary policy of quantitative easing, which made the world enter an era of extremely low interest rates. everyone can borrow money from banks at very low interest rates, but for most families, no one may be affected in a period of low interest rates, but the interest rates on a lot of our debt are floating. With the end of quantitative easing, interest rates are bound to rise, but little attention has been paid to this risk.
