Housing Bubble II: The Quest To Build Enough Homes Where People Actually Need Them

[kwoldtimer]

Originally Posted by casper

Hard to be sympathetic for someone that buys a $3M condo and then flips it for $2.3M.

The poor guy that purchased a penthouse for $40M and is now selling it for $20.8 M. Maybe he over paid?

There are stories out of Toronto where more modestly priced condos are going down in value. Perhaps the federal government housing policy is starting to kick in and its helping prices moderate.

Interesting quote from the developers on how important the China market use to be. Feds has put in rules to try to reverse that. So maybe it is working.

They may have overpaid, but they'll be walking away with clean money. I doubt they're upset.

[Changing City]

Originally Posted by whatnext

Here’s one big reason why you can’t afford a house kids. From a major media outlet today , so haters read it and weep:

Canadian condo specialist Jordan Scrinko has estimated that, at the peak of Chinese overseas buying, one third of property investments in Vancouver were made by people from China, with a similar figure for Toronto.…[/I]

And before anyone says “that’s just Vancouver and Toronto”, where do you think buyers priced out of those two cities went? Psst, Kelowna, Calgary, Halifax thus bumping up prices there.

So at most, for a brief time, one guy says a third of property investments in Vancouver were made by people from China. That's a third of property investments, not a third of property sales.

StatsCan research shows that before foreign purchasing bans, and empty homes taxes, 7% percent of BC condos were owned as investments by overseas investors - not just from China. 18.1% were owned by BC residents, 2.6% by out of province investors, and 8.6% by businesses. The rest (the majority) were owner occupiers.

For a few developers of expensive condos, the purchases by Chinese investors helped make a project viable. So now they're no longer in the market, those types of tower are on hold. That means the majority of the potential purchasers, the ones who would have lived there, and the local investors who would have rented them out, are now more likely to buy in less fancy, less expensive projects. That's presumably helping keep prices up for those other projects.

Especially as overall, construction of new condos isn't going up, even though overall housing starts haven't fallen. Westbank have switched to rental projects instead of high end condos, and so have Bosa.

I'd be very surprised if many would-be Vancouver buyers bought a condo in Halifax.

[whatnext]

Originally Posted by Changing City

So at most, for a brief time, one guy says a third of property investments in Vancouver were made by people from China. That's a third of property investments, not a third of property sales.

StatsCan research shows that before foreign purchasing bans, and empty homes taxes, 7% percent of BC condos were owned as investments by overseas investors - not just from China. 18.1% were owned by BC residents, 2.6% by out of province investors, and 8.6% by businesses. The rest (the majority) were owner occupiers.

For a few developers of expensive condos, the purchases by Chinese investors helped make a project viable. So now they're no longer in the market, those types of tower are on hold. That means the majority of the potential purchasers, the ones who would have lived there, and the local investors who would have rented them out, are now more likely to buy in less fancy, less expensive projects. That's presumably helping keep prices up for those other projects.

Especially as overall, construction of new condos isn't going up, even though overall housing starts haven't fallen. Westbank have switched to rental projects instead of high end condos, and so have Bosa.

I'd be very surprised if many would-be Vancouver buyers bought a condo in Halifax.

You conveniently ignore the “local” buyers, PR, students etc who got a cheque from the homeland to buy. We wasted over ten years letting developers like Westbank use up land and resources to build for people outside the country. I pray that they lose their shirt on The Butterfly and Oakridge. Karma for how they screwed over Canadians. As to Bosa, why cast them as a local hero? They’re behind the pile of pretention that is 1515 Alberni. Your Aunt Millie isn’t moving in there anytime soon.

As to Halifax, who said condos? I personally know two people who cashed out of Vancouver to buy houses there. Perfectly nice folks but yes, they drove up prices for Haligonians.

[Changing City]

Originally Posted by whatnext

You conveniently ignore the “local” buyers, PR, students etc who got a cheque from the homeland to buy. We wasted over ten years letting developers like Westbank use up land and resources to build for people outside the country. I pray that they lose their shirt on The Butterfly and Oakridge. Karma for how they screwed over Canadians. As to Bosa, why cast them as a local hero? They’re behind the pile of pretention that is 1515 Alberni. Your Aunt Millie isn’t moving in there anytime soon.

As to Halifax, who said condos? I personally know two people who cashed out of Vancouver to buy houses there. Perfectly nice folks but yes, they drove up prices for Haligonians.

So you want Permanent Residents to leave their money in whichever country they come from, rather than bring it to Canada? (Where it's obviously completely legal for them to buy a home to live in).

And you want everyone to stay in the same place, and not move around the country? Better mention that to Alberta, who have a whole advertising campaign trying to get people to move there. Vancouver's benchmark detached home prices are up 5.9% and apartments only 2.2% higher, while Calgary is up 9.4% for detached, and 20% for apartments, year-on-year. So Vancouver is getting relatively more affordable (especially apartments) - I thought that was what you wanted?

The downside of not having as many wealthy buyers is that less gets built for sale. So prices don't fall as much as might be expected. Almost nobody - Chinese or from anywhere else - is buying an investment property to leave it empty any more, and if they are, they're paying a lot of extra tax to leave it unoccupied, and now investors pay more tax on any windfall profits.

[whatnext]

Originally Posted by Changing City

So you want Permanent Residents to leave their money in whichever country they come from, rather than bring it to Canada? (Where it's obviously completely legal for them to buy a home to live in).

And you want everyone to stay in the same place, and not move around the country? Better mention that to Alberta, who have a whole advertising campaign trying to get people to move there. Vancouver's benchmark detached home prices are up 5.9% and apartments only 2.2% higher, while Calgary is up 9.4% for detached, and 20% for apartments, year-on-year. So Vancouver is getting relatively more affordable (especially apartments) - I thought that was what you wanted?

The downside of not having as many wealthy buyers is that less gets built for sale. So prices don't fall as much as might be expected. Almost nobody - Chinese or from anywhere else - is buying an investment property to leave it empty any more, and if they are, they're paying a lot of extra tax to leave it unoccupied, and now investors pay more tax on any windfall profits.

If renting is good enough for 1/3 of Canadians, it is good enough for permanent residents. And funny, we used to be able to build homes, even crappy condos, without needing foreign millionaires money. Of course since they drive up land prices (which you continue to deny, strangely) maybe that isn’t possible any more.

[P'tit Renard]

A first account of Canada's best and brightest ditching this country for the US. Canada's real estate obsession continues to cannibalize the real economy, while young Canadians rebel against high housing prices:

The best and brightest don’t want to stay in Canada. I should know: I’m one of the few in my engineering class who did
https://www.thestar.com/opinion/cont...8e7d17a26.html

[whatnext]

It doesn’t seem like developers are in a big hurry to build anything, despite government policies.

Annual pace of housing starts in Canada down 9% in June from May, CMHC says
OTTAWA
THE CANADIAN PRESS
PUBLISHED 2 HOURS AGO
UPDATED 1 HOUR AGO

Canada Mortgage and Housing Corp. says the annual pace of housing starts in June fell nine per cent compared with May.

The housing agency says the seasonally adjusted annual rate of housing starts in June amounted to 241,672 units, down from 264,929 in May.

The move came as actual housing starts were markedly lower in two of Canada’s three major cities compared with June 2023, with Toronto down 60 per cent and Vancouver down 55 per cent…

https://www.theglobeandmail.com/busi...nth-cmhc-says/

[YOWetal]

Originally Posted by whatnext

It doesn’t seem like developers are in a big hurry to build anything, despite government policies.

Annual pace of housing starts in Canada down 9% in June from May, CMHC says
OTTAWA
THE CANADIAN PRESS
PUBLISHED 2 HOURS AGO
UPDATED 1 HOUR AGO

Canada Mortgage and Housing Corp. says the annual pace of housing starts in June fell nine per cent compared with May.

The housing agency says the seasonally adjusted annual rate of housing starts in June amounted to 241,672 units, down from 264,929 in May.

The move came as actual housing starts were markedly lower in two of Canada’s three major cities compared with June 2023, with Toronto down 60 per cent and Vancouver down 55 per cent…

https://www.theglobeandmail.com/busi...nth-cmhc-says/

Aparently a big chunk of these starts are getting massive CMHC subsidies for private sector landlords to build rentals. Of course the rental market is softening and its ground based housing those millenials want. All more rentals lets us do is bring in more immigrants many who will bleed away into the SFH market very soon.

[Changing City]

Originally Posted by YOWetal

Aparently a big chunk of these starts are getting massive CMHC subsidies for private sector landlords to build rentals. Of course the rental market is softening and its ground based housing those millenials want. All more rentals lets us do is bring in more immigrants many who will bleed away into the SFH market very soon.

One month's housing starts aren't very useful as an indicator of the overall construction activity. So far this year, in the first six months, there have been over 110,000 housing starts, 7% more than in the first six months of 2023.

The majority are market units for sale. Only around 40% of starts were rentals in Q1 of 2024. Very few will have been built with CMHC support, and the government programs for market rentals are only a 'subsidy' in the sense that the construction loans are offered at slightly less than market rate construction loans. They're not giving developers money that they don't have to pay back, with interest.

[Acajack]

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[Changing City]

Is that post on the thread you intended?

[Acajack]

Originally Posted by Changing City

Is that post on the thread you intended?

Oops!

[whatnext]

Originally Posted by YOWetal

Aparently a big chunk of these starts are getting massive CMHC subsidies for private sector landlords to build rentals. Of course the rental market is softening and its ground based housing those millenials want. All more rentals lets us do is bring in more immigrants many who will bleed away into the SFH market very soon.

Yep, all the political theatre coming from left and right adds up to a big nothing burger in terms of getting stuff built. BC’s supposed Left NDP government went full Poilievre and trampled over municipal governments in a show to see what action they were taking. Here’s the result, a nice big drop in housing starts.

[Changing City]

Originally Posted by whatnext

Yep, all the political theatre coming from left and right adds up to a big nothing burger in terms of getting stuff built. BC’s supposed Left NDP government went full Poilievre and trampled over municipal governments in a show to see what action they were taking. Here’s the result, a nice big drop in housing starts.

The BC legislation was introduced in November 2023, and while a few areas were required to allow specified densities around transit stations in December, most municipalities had until June 30, 2024, to designate the areas. So no housing starts will have resulted from the legislation yet. Most municipalities already had plans that allowed higher densities than the provincial legislation requires, but a few had pockets of single family homes that didn't allow redevelopment to higher densities, despite proximity to transit.

The other big move was to remove parking requirements for residential projects within those Transit Oriented Development areas. So far developers are still proposing to provide parking, but in some cases less than one space for each unit, which many municipalities used to require. That should speed up some projects (less digging) and make them less expensive to develop as a result.

[GenWhy?]

Not to mention Vancouver will not have a City-wide Official Development Plan (City Plan) until some time in 2026 and the Transit-Oriented Areas Designation By-law was only passed a few weeks ago.

[Coldrsx]

An underused/surplus field in a mature Calgary neighbourhood with a proposal for ~450 multi-fam to help support schools, with good transit there and walkable amenities was just turned down because of fears over 'congestion/traffic, construction noise and dirt'???

Seriously?