Canada's 'housing bubble' deemed close to bursting

[losername]

Originally Posted by ssiguy

Also they state "foreigners" which doesn't include the thousands of people who "invested" in the country by buying real estate and hence getting a fast passport. They may not live here but aren't foreigners as they technically have a residence and have a passport due to their wealth from their ill gotten gains.

I thought the investor visa program was stopped a few years ago, no?

[caltrane74]

http://m.thestar.com/#/article/life/home...ng_year_for_torontos_condo_industry.html


2014 was a record year for new condo completions in the GTA

25,000 - new Condo units completed in 2014

[kwoldtimer]

Originally Posted by caltrane74

http://m.thestar.com/#/article/life/home...ng_year_for_torontos_condo_industry.html


2014 was a record year for new condo completions in the GTA

25,000 - new Condo units completed in 2014

25,000 completed, 21,500 sold.

[caltrane74]

A lot of those sales were probably, back in 2010/2011, which is the timeline required to get some of the bigger towers completed.

Some big towers like Aura which was recently completed started construction almost 5 years ago. (eg. Feb 2010) had something like 1000 units. ICE Condos west tower, also was completed this year. Toronto might have the longest time lag of any city in Canada, just because Toronto builds bigger and taller buildings than any other city in Canada. The completion number there is probably lagging sales by an average of 3 years minimum.

[SignalHillHiker]

An article about London dealing with the same problem that's often brought up in relation to Vancouver but appears to not be such a big deal there after all?

http://www.theguardian.com/society/2014/...t-as-foreign-investors-buy-up-home-sites

[whatnext]

Originally Posted by caltrane74

http://www.bloomberg.com/news/2014-12-16/foreign-condo-owners-scarce-in-vancouver-and-toronto.html

Foreign Condo Owners Scarce in Vancouver and Toronto

Anyone who follows real estate knows that is based on such poor data it's laughable. There are so many ways to purchase real estate and avoid looking like a foreign buyer. In my view a "Canadian" who has bought their passport or was fortunate to be born here, but then toddles back to Hong Kong or China as soon as they can earn a buck is foreign. In order to even purchase real estate you should have to show at least three years of tax returns filed with the Canada Revenue Agency.

Unfortunately the powers that be at all levels of government have decided it is more important to prop up the real estate industry by letting them cater to foreign interests looking for places to stash cash, rather than ensure affordable housing for Canadians.

[GreaterMontréal]

Vancouver home prices worry businesses as they seek to hire staff

'There's just not enough high calibre people here. They all leave when they realize they can make more money in other cities and live there for cheaper.'

http://www.cbc.ca/news/canada/british-co...ses-as-they-seek-to-hire-staff-1.2885057

[ssiguy]

When they say only a small portion of buyers are "foreign" that doesn't include the 37,000 almost all Chinese "investors" who have moved to the province in the last 15 years. Nearly every single one of them is as corrupt as the day is long as corruption is a requirement for wealth accumulation in China.

Vancouver is a resort city and is not one for people who actually work for their money as opposed to house flippers and real estate agents.

It's a shame as Vancouver use to be an interesting, livable, and funky kind of place and now it is Canada's most money-hungry city that is sacrificing it's history and soul for Chinese buyers, real estate agents, developers, and the politicians they bribe.

[Berklon]

Originally Posted by GreaterMontréal

Vancouver home prices worry businesses as they seek to hire staff


http://www.cbc.ca/news/canada/british-co...ses-as-they-seek-to-hire-staff-1.2885057

Yep, this has been an issue for a while now. There's a huge brain-drain in BC. All the talent moves out of the province and with it goes the business - which will result in a worse economy. This isn't a new phenomena.

[caltrane74]

Chinese money is the new economy...

[Berklon]

Originally Posted by caltrane74

Chinese money is the new economy...

Except it's not an economy. It's a recipe for disaster.

[WhipperSnapper]

Don't really care about the individual investor. It's the investment groups buying several hundred units at a time that lead to the inflated prices for crappy layouts. These guys hail from everywhere here.

[lio45]

Originally Posted by SignalHillHiker

An article about London dealing with the same problem that's often brought up in relation to Vancouver but appears to not be such a big deal there after all?

http://www.theguardian.com/society/2014/...t-as-foreign-investors-buy-up-home-sites

The problem in Vancouver is that salaries are completely out of phase with property prices. Other expensive cities like London (England, not Ontario) and NYC don't have that problem.

Even in smaller, West Coast cities that aren't global financial hubs, like San Francisco (at least last time I checked), you'll at least earn quite a bit more than you would for the same job in the middle of nowhere, offsetting at least part of the extra cost of the expensive urban West Coast living.

Originally Posted by CBC link from GreaterMontreal

The median family income in Vancouver in 2012, the last data available, was just $71,140 a year, the lowest of any major city in Canada, putting home ownership far out of reach for most. The median income in Regina, by comparison, was $91,200... [while property prices there are about a third of what they are in Vancouver]

[lio45]

Originally Posted by caltrane74

Chinese money is the new economy...

I wonder if the falling petroloonie might actually give Vancouver's main industry (Chinese money importing) a little boost?

[milomilo]

Originally Posted by lio45

The problem in Vancouver is that salaries are completely out of phase with property prices. Other expensive cities like London (England, not Ontario) and NYC don't have that problem.

Don't just look at the average wage - to a normal person in London the house prices are even more insane than Vancouver's. There are a good few people earning millions, but I wouldn't be surprised if most people in London received a lower wage than in Vancouver.

[Policy Wonk]

Originally Posted by GreaterMontréal

Vancouver home prices worry businesses as they seek to hire staff


http://www.cbc.ca/news/canada/british-co...ses-as-they-seek-to-hire-staff-1.2885057

One of my school friends is pretty high up at one of the big telecom providers and they struggle with staffing in Toronto in this way.

For his department they are basically in competition for every single candidate with US providers. One is based in suburban New Jersey, one is split between suburban Atlanta and Dallas, one is in suburban Kansas City and one is in suburban Seattle.

The successful candidates eventually comes up with their wives to house hunt and then 75% of the time turn around and decline the offer citing the cost of living.

[Policy Wonk]

Originally Posted by milomilo

Don't just look at the average wage - to a normal person in London the house prices are even more insane than Vancouver's. There are a good few people earning millions, but I wouldn't be surprised if most people in London received a lower wage than in Vancouver.

I don't think it's an issue of averages or normal so much as to whether or not there is a local market of any significance in the first place.

[koops65]

Hold on a second... there are literally millions of people living in London (England) and in Vancouver, and hundreds of thousands living in London (Ontario), if things were as bad as you, and others, are implying, they would all leave... clearly people living in those cities do manage to pay their bills somehow...

[Berklon]

Originally Posted by koops65

...if things were as bad as you, and others, are implying, they would all leave... clearly people living in those cities do manage to pay their bills somehow...

Canadian household debt is at record levels again - so I think that's how they "manage" to pay their bills.

[lio45]

Originally Posted by koops65

Hold on a second... there are literally millions of people living in London (England) and in Vancouver, and hundreds of thousands living in London (Ontario), if things were as bad as you, and others, are implying, they would all leave... clearly people living in those cities do manage to pay their bills somehow...

Mostly by renting, and I don't think it's a trend that augurs well for the long term. Youngsters might tolerate renting and small apts for a while, but they eventually likely will aspire to own and/or have a place to raise a family. That's when they might leave. It seems that the trend is already under way in Van for the ~25-40 demographic IIRC what the article says.

Quick example just to show you that it can easily be a fact that there's a property bubble somewhere. The (invented) figures below show that there's definitely a speculative bubble in City B. It might last for a while, but it's still there, plain as day.

--------------------------- City A ----- City B ----- City C
Average income ----------$50k--------$70k-------$100k
Average property price--$500k--------$1M---------$1M
Average monthly rent----$500---------$700-------$1,000

Of course it's a pretty basic example but if you look at real world data sets for Van there's just no way such property prices are justified.