Canada's 'housing bubble' deemed close to bursting

[Acajack]

Originally Posted by Blader

Well Lio, here's an eyopener
http://www.cbc.ca/news/canada/calgary/pi...across-canada-in-covered-wagon-1.3086662

Wow. Sounds like the start of a trend that could become very widespread!

[lio45]

Originally Posted by 1overcosc

I'm not a real estate expert but to me the Kingston RE market seems undervalued.

Rents here are about as high as they are in Ottawa & Toronto but land values are much lower. There's properties here worth $190k yielding $2000/month in rental income.

That's indeed a good cap rate by today's urban Canada standards. I personally wouldn't call Kingston undervalued; I'd call most other large urban markets overvalued at the moment, thanks mostly to temporarily abnormally low (by historical standards) interest rates.

[I can tell you though based on my own real estate experience in a university town that it's normal to have student-targeted buildings show a higher cap rate on paper. It makes up for the extra trouble of managing them (high turnover, noisy/destructive tenants, general lack of responsibility of your tenants, etc.)]



Even in Ottawa I found the cap rates to be almost acceptable for the bunch of Sandy Hill buildings I was considering (centered on Wilbrod/Friel/Laurier generally). Hull was even better.

Central areas of Ottawa outside Sandy Hill, though -- no.

[st7860]

Interest rates are reasonable unless you're a person looking to keep most of your funds in gics and term deposits.

[lio45]

Originally Posted by Blader

Well Lio, here's an eyopener
http://www.cbc.ca/news/canada/calgary/pi...across-canada-in-covered-wagon-1.3086662

Okay, that's one guy... but obviously he's a very atypical guy, a special case on many counts:

1) he sold all his belongings and has (nearly) none now;
2) he is traveling by horse and wagon;
3) he is willing to be on the road for months;
4) he is moving to BC.

[1overcosc]

Originally Posted by lio45

That's indeed a good cap rate by today's urban Canada standards. I personally wouldn't call Kingston undervalued; I'd call most other large urban markets overvalued at the moment, thanks mostly to temporarily abnormally low (by historical standards) interest rates.

[I can tell you though based on my own real estate experience in a university town that it's normal to have student-targeted buildings show a higher cap rate on paper. It makes up for the extra trouble of managing them (high turnover, noisy/destructive tenants, general lack of responsibility of your tenants, etc.)

Aha, that makes sense. As a current renter and aspiring owner in both cities I thought the discrepancy strange... that explains it.

As for the tenants issue... in Kingston you'd get this kind of thing a lot even outside student housing areas. A good chunk of non-student renters are ex-cons.

[lio45]

Originally Posted by 1overcosc

In Kingston you'd get this kind of thing a lot even outside student housing areas. A good chunk of non-student renters are ex-cons.

Well, no wonder the (theoretical) cap rates are better (on paper) there than elsewhere, then.

Buildings in "crappy areas of town" always have high theoretical cap rates, but in practice you have either super high vacancies or a high rate of non-payment / eviction and also a lot more management hassles and less appreciation potential too (unless you're arriving at the right time to get lifted by the gentrification tide, which obviously is THE reason to invest in crappy areas in the first place).

[lio45]

Originally Posted by 1overcosc

As a current renter and aspiring owner in both cities

I'm guessing that you'll end up owning in only one of the two...?

[lio45]

Originally Posted by rousseau

Sounds unlikely to me. In my experience eighteen-year-olds complaining about the February cold in Toronto...

Wait a minute, the "February cold in Toronto"?!?!?

You've been in Toronto during a month of February lately, haven't you? Since you're a SSP user whose opinion I generally trust, would you be so kind as to either confirm or refute this, below? Just to hear it from the horse's mouth...

Originally Posted by st7860

I'll try to make it as easy as possible for you to understand. Canada is a warm country in many areas such as Toronto, Vancouver, and the interior of BC

Originally Posted by st7860

Exactly. Canada is a warm country and people are coming to Toronto.

[st7860]

Originally Posted by Blader

Well Lio, here's an eyopener
http://www.cbc.ca/news/canada/calgary/pi...across-canada-in-covered-wagon-1.3086662

That is a current, modern story .

In addition:
http://www.vancitybuzz.com/2015/05/b-c-lead-canada-economic-growth-first-time-10-years/
"Overall labour market performance has been deemed “disappointing” as employment is only up by 0.5 per cent year-over-year during the first quarter because of weakness in the public sector and construction industry, but the unemployment rate is low at 5.8 per cent and interprovincial migration is now positive."

[someone123]

Originally Posted by rousseau

That first one: really? Kids in their teens or early twenties in Ontario or Quebec wanting to go to BC for school or jobs due to the cold here?

I think what happens is that young people want to move someplace new and different, and BC gets a certain number of bonus points for its moderately nicer climate and natural environment. Vancouver's also a reasonably-sized town so the overall package is fairly attractive, million-dollar(-definitely-appropriately-priced-nothing-to-see-here-folks) shacks aside.

[1overcosc]

Originally Posted by lio45

I'm guessing that you'll end up owning in only one of the two...?

Yes, but I've been debating which one. Almost certainly going with Kingston now.. I'm Kingstonian full time starting in August.

[Pinion]

.

[Xelebes]

Originally Posted by Blader

Well Lio, here's an eyopener
http://www.cbc.ca/news/canada/calgary/pi...across-canada-in-covered-wagon-1.3086662

Bye bye mon cowboy?

[rousseau]

Originally Posted by lio45

Wait a minute, the "February cold in Toronto"?!?!?

You've been in Toronto during a month of February lately, haven't you? Since you're a SSP user whose opinion I generally trust, would you be so kind as to either confirm or refute this, below? Just to hear it from the horse's mouth...

I assume that said poster was attempting a joke of some sort. For those in doubt, let it be known unequivocally that Canada, Toronto included, is cold in February. By varying degrees according to region, but always within the realm of what is universally accepted as cold.

Nowhere in Canada in February is it hot, or warm, or mild, or pleasant, or indeed anything but cold.

I can also confirm that the sun rises in the east, that dogs bark, that boiling water is hot, that Chinese food comes from China, and that Adam Sandler has never said or done anything remotely amusing or funny.

[st7860]

For individuals unsure, it is certain that Canada, including Ontario is warm near the beginning of the year. It is well known. In several places of Canada it is good. Also the F word in inappropriate.

[st7860]

Originally Posted by Pinion

Now quote someone that is actually from Vancouver/Vancouver Island who denies it. It's like saying Chinese people aren't moving to Vancouver - if you have eyes you know better.

http://www.saltspringislandrealty.com/saltspring_about.php
"Salt Spring Island is home to many enthusiastic retirees. Programs exist across the board for those more energetic, and support services are in place for those in need. 'Seniors for Seniors' is a local organization that supports the island seniors in many ways. Grocery stores make deliveries to local seniors and there is a hospice organization for those in need."

[WhipperSnapper]

Originally Posted by niwell

Anecdotally speaking I have heard of a very small number of young people from Ontario who want to move to B.C. They generally fall in Acajack's last category, although some try and combine it with school. Or they fit into a category of people who think themselves modern day hippies and think Ontario is too fast-paced / uptight. Most are back after school is finished.

Still I know far more people who have done the opposite and moved here for work. Similarly, more people who have moved from Ontario to Alberta simply for work.

I've known a lot of people who dreamed of moving to BC over the years and people that made that dream a reality. Most do end up coming back here for economic reasons. They loved it out there but, also felt stuck there. They do envision retiring there.

[MolsonExport]

via Imgflip Meme Maker

[lio45]

Lake Ontario in February

[TownGuy]

The white sand looks a little like snow. Can't explain the palm trees though.