“As Canada’s record housing costs continue to slide, an Ottawa-based organization is suggesting parts of the nation are in a housing bubble, which may soon burst. Prices in six of the country’s largest housing markets have hit 30-year highs and are in bubble territory. A report by the Canadian Centre for Policy Alternatives coming out Tuesday also says a U.S. style correction cannot be ruled out. The Ottawa-based think-tank says home prices are 4.7 to 11.3 times Canadians’ annual income — much higher than historical comfort levels. Sales are down 25 per cent since reaching a peak at the start of the year, but in major cities, home prices were up 13.6 per cent in June from a year ago. The centre warns that a rise of one per cent to 1.25 per cent in mortgage rates would be enough to cause a housing crash similar to the one in the U.S. The report says bubbles occur when housing prices increase more rapidly than inflation, household incomes and economic growth.”

What Caused the American Sub-prime Crisis:
Low interest rates and large inflows of foreign funds created easy credit conditions for a number of years prior to the crisis, fueling a housing market boom and encouraging debt-financed consumption. The USA home ownership rate increased from 64% in 1994 (about where it had been since 1980) to an all-time high of 69.2% in 2004. Subprime lending was a major contributor to this increase in home ownership rates and in the overall demand for housing, which drove prices higher.

Approximately 80% of U.S. mortgages issued to subprime borrowers were adjustable mortgage rates.  After U.S. house prices peaked in mid-2006 and began their steep decline thereafter, refinancing became more difficult and adjustable-rate mortgages began to reset at higher rates leading to soaring mortgage delinquencies. The result has been a large decline in the capital of many banks and U.S. government sponsored enterprises, tightening credit around the world.

Can We Expect to See a Crash Like this in Canada:
We must remember that Canada has a very different centralized federal banking system that has provided us with a few advantages when facing an international economic crisis:

1. More fiscal regulation.
2. Stricter lending practices than in the US.
3. Stable interest rates.
4. More conservative economy and higher employment rates.

While I don’t neccessarily believe that ” a rise of one per cent to 1.25 per cent in mortgage rates would be enough to cause a housing crash similar to the one in the U.S” we should contiune to see the American housing crisis as a cautionary tale of  loose lending standards and unchecked real estate values. Because these factors were not as prevalent in Canada, there are a lot less borrowers in Canada who are stuck with unaffordable mortgages. That said, not all lenders have been as responsible and if unemployment goes up and/or interest rates go up, we could see some evidence of sub-prime mortgage troubles here in Canada but not to the extent of what happened to our Southerly neighbors.

What’s your dream pad? Let our Award-Winning Design Build construction projects inspire you and then let us transform your vision into reality!

Visit us at our booth at Vancouver’s Home & Interior Design show (Sept 9 – 12, 2010) at the new Vancouver Trade & Convention Centre where you will also have the opportunity to ‘spin & win’ one of our many other fabulous prizes!

Click here to enter the contest and see you at Vancouver’s Home & Interior Design Show!

General Overview of the Home & Interior Design Show:
Showcases the latest in innovative products and new ideas from 325 retailers, designers and contractors!

When & Where:
The Home & Interior Design Show is taking place September 9-12, four full days of innovative products and design ideas.  The trade show is taking place at the Vancouver Convention Centre located at 1055 Canada Place, Vancouver (near the East end of Coal Harbour).

How to Purchase Tickets:
Tickets can be purchased at the Ticket Centre on site located outside of Hall B & C, Lower Level at the Vancouver Convention Centre. You can also purchase tickets online from the Vancouver Home & Interior Design Show website where tickets are being sold at a discounted price.

Celebrity Guests:
Bryan Baeumler host of Disaster DIY, David Adjey from Restaurant Makeover, Janette Ewen co-host of Inside the Box and my personal and local favorite, Meeru Dhalwalaa local restaurateur and wife of Vikram Vij. Meeru is passionate about food ethics and sustainable products.

Win an Apple iPad from Klondike Contracting!
Visit us at our booth at the show where you will  have the opportunity to ‘spin & win’ one of our many other fabulous prizes. Don’t forget to click here to enter the “Dream Pad” contest for a chance to win an Apple iPad!

that Canada is planning to phase out incandescent bulbs completely in 2012 and that there is a long list of South American and European Countries that already have.

What is an incandescent bulb:
It is a source of electric light that works by heat-driven light emissions.  Essentially, an electric current passes through a thin filament heating it to a temperature that produces light.

Why are incandescent bulbs being phased-out:
Incandescents are being phased-out because they are really energy inefficient.  Newer technologies such as Compact Fluorescent Lights (CFL’s) and Light Emitting Diodes (LED’s), give more visible light and less heat for the same amount of electrical energy input as an incandescent.

• LED’s do not contain the toxic substance mercury like CFL’s do
• LED’s last 10 times longer than CFLs
• The cost of both bulbs are approximately the same
• Both bulbs use the same amount of energy when in use

Light bulb of choice:
Given that LED’s are more green and have a longer life-span, they are clearly the best eco-alternative to the incandescent bulb.

Casulo is an ingenious modular living system that folds into a small 31” x 47” cube. This complete apartment set includes a wardrobe, bed, desk and storage, shelving, stool and two multifunctional boxes that can be used for sitting or eating.

Mobility and flexibility were the conceptual starting points for Casulo. Designers Marcel Krings & Sebastian Mühlhäuser made a statement with their complete mobile living system suggested to their buyers, this is what you need and no more.  An interesting marketing approach directly targeted at the king over-consumer, the urban-professional city dweller.

Can we truly create more freedom for ourselves by restricting our living environment?  You will never know until you try!

Klondike Contracting will keep you informed with new Interior Design products.