Thursday, March 3, 2011

Peter Schiff: Canadian Real Estate Overpriced

Home Ownership Isn't For All
....“We’re no different from Americans, that’s for sure,” says John Cocomile, a broker with in Toronto. He says of 100 first-time homebuyers he arranged mortgages for in the past three years, 95 of them took the longest amortizations possible. “Generally homeowners are not conservative. They want the most they can get.” Some of those clients are now living hand-to-mouth, Mr. Cocomile says. And he worries that when interest rates correct upwards, as they inevitably will, they’ll be underwater. “I think there’s a lot of homeowners who probably shouldn’t be homeowners.... There’s a lot of teetering right now.” Those who have acknowledged they are on the edge are seeking the help of counsellors like Laurie Campbell, executive director of Credit Canada. She notes that the average Canadian with a credit profile owes $1.48 for every dollar they make in disposable income, the highest debt-to-earnings-power ratio on record. And she says mismanagement of personal finances remains rampant.

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