Canada's 'housing bubble' deemed close to bursting

[sunsetmountainland]

Originally Posted by lio45

I would be glad to compare our respective real estate portfolios but for very understandable reasons you don't really want to divulge too much to complete strangers online, and it's the same thing for me.

I don't have a sis living in Vancouver any more so I probably won't be in the area any time soon... but if you ever are out East nearby I wouldn't mind meeting you so we can discuss real estate. You were lucky with your timing in Nanaimo in the '90s. I will admit I was a bit lucky too. I had identified Sherbrooke (happens to be my hometown) as a place where downtown properties had a surprisingly good ROI in the early/mid 2000s compared to basically everywhere on this continent (the Americans were in their bubble then), and my bet was that the prices couldn't go anywhere but up... I did not expect them to actually double like they did in the downtown over the last decade.

Face it, there's a component of luck with real estate investing in any speculative/overheated market. It's not only hard work and "drive".

Yes and you told me you had five weeks but you travelled across Canada at the time! So you did not have much time in BC. Now talking about Nanaimo that market as well as Vancouver island is doing very well as the asian/chinese buyers are coming to the island now. Also lets face it hard work as well as drive and intelligence help being lucky!

[lio45]

Originally Posted by sunsetmountainland

I will state that is the first positive thing you have done so far! I think that is great. However, what happens if the Parti Québécois wants to leave Canada again? How will that be for your investments?

Won't be catastrophic... Plus, that eventuality is already kind of built in the prices of Quebec real estate. But yeah, those assets will go down if that happens.

Right now, though, it's not anywhere on the horizon. So if I really wanted, I could easily sell everything at the first hints of PKP maybe getting a majority... if it worried me that much.

You bring a good point through this, though: it's a good idea to diversify. I have barely bought anything in Sherbrooke since everything went up (I think it's in a bit of a bubble). My latest investments for the last few years have been in New Hampshire (basically next door to Sherbrooke) and Florida. I also got a bit lucky on everything I bought when the dollar was close to parity... I did not expect oil to get down to $50 a barrel. Nice surprise.

I used to do everything myself in my buildings, but now I really have to sit back and watch because I can't be everywhere all the time. It's a refreshing change.

[sunsetmountainland]

Despite salt spring island guy not liking CMHC and he has no alternative info but his dislike! I posted this on May 5th.

https://www.cmhc-schl.gc.ca/en/corp/nero/nere/2015/2015-04-30-0900.cfm

Because it does not agree with salt spring island guy you should be suspect of this research because it was not his thought!

[lio45]

Originally Posted by sunsetmountainland

Yes and you told me you had five weeks but you travelled across Canada at the time! So you did not have much time in BC. Now talking about Nanaimo that market as well as Vancouver island is doing very well as the asian/chinese buyers are coming to the island now. Also lets face it hard work as well as drive and intelligence help being lucky!

Yeah, I would definitely choose Vancouver Island over Vancouver at this time if you forced me to invest somewhere in SW BC. In fact I'm pretty sure I recall at some point thinking that Victoria was cheaper than I would've expected. (For the capital, a charming retirement place, and arguably the best climate in BC.) The prices in Vancouver are likely to spread over to the next closest areas eventually.

Keep in mind that throughout this thread when people say Vancouver they mean the city.

[st7860]

Originally Posted by lio45

Yeah, I would definitely choose Vancouver Island over Vancouver at this time if you forced me to invest somewhere in SW BC. In fact I'm pretty sure I recall at some point thinking that Victoria was cheaper than I would've expected. (For the capital, a charming retirement place, and arguably the best climate in BC.) The prices in Vancouver are likely to spread over to the next closest areas eventually.

Keep in mind that throughout this thread when people say Vancouver they mean the city.

What would you do with Vancouver Island? I dont think you can get a 3 bedroom apartment close to transit for $120,000 there.

[sunsetmountainland]

Originally Posted by lio45

Won't be catastrophic... Plus, that eventuality is already kind of built in the prices of Quebec real estate. But yeah, those assets will go down if that happens.

Right now, though, it's not anywhere on the horizon. So if I really wanted, I could easily sell everything at the first hints of PKP maybe getting a majority... if it worried me that much.

You bring a good point through this, though: it's a good idea to diversify. I have barely bought anything in Sherbrooke since everything went up (I think it's in a bit of a bubble). My latest investments for the last few years have been in New Hampshire (basically next door to Sherbrooke) and Florida. I also got a bit lucky on everything I bought when the dollar was close to parity... I did not expect oil to get down to $50 a barrel. Nice surprise.

I used to do everything myself in my buildings, but now I really have to sit back and watch because I can't be everywhere all the time. It's a refreshing change.

So having built in prices because of an unstable government? Do you not see that as a bad thing? It limits growth. Lets face it when you have a liberal government things are secure. But you will always have a question mark on your investments in Quebec! So I do find it funny that you would question investing in Vancouver or British Columbia?
Your risk is much more than mine!

[lio45]

Originally Posted by sunsetmountainland

Despite salt spring island guy not liking CMHC and he has no alternative info but his dislike! I posted this on May 5th.

https://www.cmhc-schl.gc.ca/en/corp/nero/nere/2015/2015-04-30-0900.cfm

Because it does not agree with salt spring island guy you should be suspect of this research because it was not his thought!

Well, as was pointed out already, the CMHC has a lot at stake here, so I'd take what they say with a grain of salt.

[sunsetmountainland]

Originally Posted by lio45

Yeah, I would definitely choose Vancouver Island over Vancouver at this time if you forced me to invest somewhere in SW BC. In fact I'm pretty sure I recall at some point thinking that Victoria was cheaper than I would've expected. (For the capital, a charming retirement place, and arguably the best climate in BC.) The prices in Vancouver are likely to spread over to the next closest areas eventually.

Keep in mind that throughout this thread when people say Vancouver they mean the city.

Dude if you have money you should buy a 3 million dollar house in Vancouver in two years you will make big money. I mean Vancouver proper. However an investment in greater Vancouver is also awesome!

[lio45]

Originally Posted by st7860

What would you do with Vancouver Island?

What I'd do? Try to find a few multiplex buildings in neighborhoods that I think have a good upside potential that have cap rates significantly higher than current interest rates. If that turns out to not be possible, then look somewhere else.

[sunsetmountainland]

Originally Posted by lio45

Well, as was pointed out already, the CMHC has a lot at stake here, so I'd take what they say with a grain of salt.

Well grain of salt or not what research do you have other than Salt Spring island guy?

[lio45]

Originally Posted by sunsetmountainland

Dude if you have money you should buy a 3 million dollar house in Vancouver in two years you will make big money. I mean Vancouver proper.

I could do that but I think it's just too risky. (And yes, I realize that at any point in the last decade at least, I would have said exactly that, and been wrong.)

[lio45]

Originally Posted by sunsetmountainland

Well grain of salt or not what research do you have other than Salt Spring island guy?

Mostly, rents. Incomes, as well.

I posted in this very thread a while ago a rent comparison for Vancouver vs another West Coast market, San Francisco.

Rents in Vancouver are scary low, and that frightens me. It's not normal.

[sunsetmountainland]

Originally Posted by lio45

I could do that but I think it's just too risky. (And yes, I realize that at any point in the last decade at least, I would have said exactly that, and be wrong.)

So you are still wrong then!

[sunsetmountainland]

Originally Posted by lio45

Mostly, rents. Incomes, as well.

I posted in this very thread a while ago a rent comparison for Vancouver vs another West Coast market, San Francisco.

Rents in Vancouver are scary low, and that frightens me. It's not normal.

The thing is if you have equity you can afford to rent for cheap because the value will go up! We are not in Quebec with uncertain governments.

[GreaterMontréal]

if I had millions to invest, I would buy farmland.

We are not in Quebec with uncertain governments.

no more uncertain than in Ontario or Alberta.

[lio45]

Originally Posted by sunsetmountainland

So you are still wrong then!

Maybe, maybe not.

As I like to say (which you don't like to hear), we'll see in due time.

One thing is for sure, though, if you make a graph of Vancouver real estate prices, the trend can't continue like this forever. That's a mathematical impossibility.

(BTW, I think that if Quebec separates it will also impact real estate values in the rest of Canada.)

[lio45]

Originally Posted by GreaterMontréal

if I had millions to invest, I would buy farmland.

I have been looking at farmland for years as well. It went up a lot lately (last few years).

The "rent" that you can charge for it though is really surprisingly low compared to land values, unfortunately. In Quebec at least. That's kept me from investing in farmland.

FWIW, part of my diversification effort is a very gently sloping riverfront 115 acres that used to be farmland in the 1800s and early 1900s. Currently forested but could be farmed again. It's in a valley, soil quality is quite high. Cheaper than farmland in farmland state, and if farmland ever becomes profitable enough for farmland rents to make it worth it, well, it could be reverted to farmland.

(I'm saying this but I know I'll never have the heart to ever do more than very selective cutting in that forest. I love nature too much.)

[casper]

Originally Posted by lio45

Yeah, I would definitely choose Vancouver Island over Vancouver at this time if you forced me to invest somewhere in SW BC. In fact I'm pretty sure I recall at some point thinking that Victoria was cheaper than I would've expected. (For the capital, a charming retirement place, and arguably the best climate in BC.) The prices in Vancouver are likely to spread over to the next closest areas eventually.

Keep in mind that throughout this thread when people say Vancouver they mean the city.

Vancouver Island is a much better investment. That said, there are a number of projects in a hold pattern waiting on more buys to show up. When I relocated to Victoria from Saskatoon I was impressed at what I could get for so little relatively speaking.

[sunsetmountainland]

Originally Posted by lio45

Maybe, maybe not.

As I like to say (which you don't like to hear), we'll see in due time.

One thing is for sure, though, if you make a graph of Vancouver real estate prices, the trend can't continue like this forever. That's a mathematical impossibility.

(BTW, I think that if Quebec separates it will also impact real estate values in the rest of Canada.)

Good point we will no longer have a burden to deal with and our economy will flourish. Half of Quebec would move to the rest of Canada!

[sunsetmountainland]

Originally Posted by lio45

I have been looking at farmland for years as well. It went up a lot lately (last few years).

The "rent" that you can charge for it though is really surprisingly low compared to land values, unfortunately. In Quebec at least. That's kept me from investing in farmland.

FWIW, part of my diversification effort is a very gently sloping riverfront 115 acres that used to be farmland in the 1800s and early 1900s. Currently forested but could be farmed again. It's in a valley, soil quality is quite high. Cheaper than farmland in farmland state, and if farmland ever becomes profitable enough for farmland rents to make it worth it, well, it could be reverted to farmland.

(I'm saying this but I know I'll never have the heart to ever do more than very selective cutting in that forest. I love nature too much.)

I agree you should buy farmland in Quebec and hope your high horses it does not separate!