Canada's 'housing bubble' deemed close to bursting - Page 215

ssiguy · #**4281** Posted **Oct 28, 2015, 9:20 PM**

Quote:

Originally Posted by st7860

http://m.thetyee.ca/Opinion/2015/09/03/Less-Focus-on-Foreign-Buyers/#.Vehos-xxmQ0.twitter
"We need to reframe the affordability debate in the following ways: i) less focus on which buyers caused the escalation of property prices, and more on increasing housing supply; ii) less nostalgia about single-family dwellings, and more investment in community facilities to support higher density housing; and iii) more openness to international trade and head office investment to improve Vancouver incomes.

Above all, let's put a stop to the insidious characterization of Chinese investors as villains in our affordability problems. On the contrary, let's seize on the presence of so many well-heeled entrepreneur and investor immigrants, from everywhere, as an opportunity to attract new business capital to the province, create jobs and raise incomes."

The problem is that we don't get Chinese investors in business but rather Chinese house flippers investing in real estate.

Also this idea of density to solve the housing crisis is pure 🞵🞵🞵🞵..........the lowest density cities tend to be the most affordable and high density are usually much more expensive. It may make for a more pleasant urban environment but saying it is the savior of high prices is like saying VISA is the solution to rising car prices.

Density is almost always a CAUSE of high real estate prices and certainly never the answer to them but the real estate agents seem to say so. Think about it, would real estate agents advocate for high density if it resulted in lower prices and hence a drop in their income? Sorry but real estate agents are right up there with lawyers, politicians, used car salesmen in the trust factor.

If you think a real estate agent will advocate for lower real estate prices then you really need help.

Procrastinational · #**4282** Posted **Oct 28, 2015, 9:26 PM**

Quote:

Originally Posted by ssiguy

Also this idea of density to solve the housing crisis is pure 🞵🞵🞵🞵..........the lowest density cities tend to be the most affordable and high density are usually much more expensive. It may make for a more pleasant urban environment but saying it is the savior of high prices is like saying VISA is the solution to rising car prices.

Density is almost always a CAUSE of high real estate prices and certainly never the answer to them but the real estate agents seem to say so. Think about it, would real estate agents advocate for high density if it resulted in lower prices and hence a drop in their income? Sorry but real estate agents are right up there with lawyers, politicians, used car salesmen in the trust factor.

I think you are confusing correlation with causation. Dense cities almost always have a limited supply of land. Indianapolis, Dallas, Houston, etc, are all very cheap because they can sprawl endlessly. The only reason prairie cities in Canada and Toronto don't have similarly cheap real estate is that the higher gas prices in Canada effectively limit how far cities can sprawl, and thus artificially limit the supply of land.

In every expensive city, the supply of land is relatively scarce. Manhattan is expensive because the supply of land is limited to an island. Vancouver is surrounded by mountains, and the supply of land is further squeezed by ALR restrictions. Hong Kong and Singapore are both expensive for similar reasons.

Both density and high real estate prices are symptoms of the real culprit. Limited supply of land.

Without changing demand, the only way to reduce real estate prices in Vancouver is to increase the supply of housing. It's just supply and demand. Vancouver would be even more expensive if density was lower.

TorontoDrew · #**4283** Posted **Oct 28, 2015, 9:33 PM**

Quote:

Originally Posted by Procrastinational

Sure they can. 312 weeks is about 6 years. There's quite a bit of evidence that suggests that housing and land prices seem to follow a roughly 18 year cycle (likely related to population demographics). It sounds a bit far fetched, but it actually explains the timing of other events in the economy quite well.

I will agree we are in the midst of a cycle but not a bubble. 312 weeks is also on the low end of how long the word Bubble has been floating around the Canadian Housing market. I'm not in denial as my troll has said (not Stryker), merely basing my opinion more towards the side of the story that says our housing economy at most will see a correction not a burst. This has been stated more often by experts then not. Claiming this is a bubble is a way to sell papers and keep forums busy like this with chicken little mentalities about our real estate market.

Personally I would not mind a bubble bursting at all so I could do a little investing but I just don't see it happening, not in another 312 weeks , 624, or more.

Procrastinational · #**4284** Posted **Oct 28, 2015, 9:38 PM**

Quote:

Originally Posted by TorontoDrew

I will agree we are in the midst of a cycle but not a bubble. 312 weeks is also on the low end of how long the word Bubble has been floating around the Canadian Housing market. I'm not in denial as my troll has said (not Stryker), merely basing my opinion more towards the side of the story that says our housing economy at most will see a correction not a burst. This has been stated more often by experts then not. Claiming this is a bubble is a way to sell papers and keep forums busy like this with chicken little mentalities about our real estate market.

Personally I would not mind a bubble bursting at all so I could do a little investing but I just don't see it happening, not in another 312 weeks , 624, or more.

I'd tend to agree that the majority of Canada is not in the midst of a bubble. Or if it is a bubble, it's a relatively mild one.

However, certain local real estate markets (Vancouver comes to mind) are seeing prices beyond anything one could reasonably expect under normal market conditions.

WhipperSnapper · #**4285** Posted **Oct 28, 2015, 10:57 PM**

You can find experts that will support any line of reasoning. The most popularized opinion is not necessarily the closest to the truth. Get people to talk off the record and whether they think this is a bubble or not, there is concern how real estate investment dominates the Toronto economy.

My business is real estate oriented. I very much want this to continue. At the same time, my partners and I have to continually remind ourselves to not get ourselves hung up in property with something that can turn within a few months.

someone123 · #**4286** Posted **Oct 29, 2015, 12:58 AM**

I'm not sure cycle vs. bubble is a meaningful distinction. The thing to keep in mind either way is that real estate prices can increase for many years and then decrease for many years. Japan's real estate bubble lasted for at least 6 years, and 20 years or more into the future property values in a lot of places in Japan had not recovered to levels from the 1980's.

I think it's entirely possible that you could have people buying property in Vancouver or Toronto in 2015 or 2016 and then failing to make a return on it for many years.

I also think that if the real estate market starts to get into a deflationary cycle it could have a very bad effect on the overall economy. A lot of people right now are relying on the real estate market for their financial security in the future, which isn't a great idea. There's a growing sort of underclass of younger people who can't afford anything in large parts of the country, won't buy even if prices drop significantly, and cannot economically support baby boomers in retirement. There's also a lot of consumer debt that has been driving the economy but that might not grow much more. There could be a lot of people in Canada all having to severely tighten their belts at once.

Procrastinational · #**4287** Posted **Oct 29, 2015, 1:01 AM**

Quote:

Originally Posted by someone123

Japan's real estate bubble lasted for at least 6 years, and 20 years or more into the future property values in a lot of places in Japan had not recovered to levels from the 1980's.

That gives weight to the idea that real estate super cycles are tied to demographic factors. With a population that continues to age and decline, property prices in Japan might not reach 1980's levels for a very long time, if ever.

WhipperSnapper · #**4288** Posted **Oct 29, 2015, 1:16 AM**

A bubble is an exaggeration of the normal cyclical nature. It's not difficult to delineate. Just because certain submarkets within the GTA have taken on the form of a bubble doesn't mean it will play out that way. Let's hope a possible downward trend for 6 month or more doesn't create a mass panic.

Berklon · #**4289** Posted **Nov 1, 2015, 2:10 AM**

Vancouver house-buying frenzy leaves half-empty neighbourhoods

Yea, that's healthy. No bubble here and little foreign money being parked. Sure.

st7860 · #**4290** Posted **Nov 1, 2015, 2:13 AM**

I haven't seen anything ever that states vacancy rates in vancouver are rising (usually people say it's less than two percent )so not sure about a few empty houses

Berklon · #**4291** Posted **Nov 1, 2015, 2:17 AM**

And there he is, like clockwork. Took 3 whole minutes to respond. Real Estate Defence Force to the rescue!

Vacancy rates? What does that have to do with anything? These are houses that are purchased and NOT set as a rental property - so they're not listed as vacant... they're just empty. And it's not "a few"... there are A LOT of houses/condos that are sitting empty in Vancouver... and plenty of condos in Toronto that way as well.

It's Chinese money laundering at it's finest... and plenty of it.

st7860 · #**4292** Posted **Nov 1, 2015, 2:19 AM**

Two percent is in error . It's actually under one percent in some areas

Berklon · #**4293** Posted **Nov 1, 2015, 2:24 AM**

Quote:

Originally Posted by st7860

Two percent is in error . It's actually under one percent in some areas

Once again... these emtpy homes are NOT rental units and aren't listed as vacant. They are sitting EMPTY and are creating a ghost-town effect in many neighbourhoods. Money laundering will do that.

MolsonExport · #**4294** Posted **Nov 1, 2015, 2:37 AM**

Hard Landing: Vancouver Housing Market Projected to have a Major Correction, According to IMF Chief Economist

ssiguy · #**4295** Posted **Nov 1, 2015, 2:39 AM**

Well we can't say it's a particular ethnic group lest we be called racist to shut the conversation down. Well I for one don't give a damn.........the Bolivian investors must be stopped!

mistercorporate · #**4296** Posted **Nov 1, 2015, 4:27 AM**

Quote:

Originally Posted by Berklon

And there he is, like clockwork. Took 3 whole minutes to respond. Real Estate Defence Force to the rescue!

Funniest thing I heard all day!

Loco101 · #**4297** Posted **Nov 1, 2015, 5:03 AM**

Quote:

Originally Posted by ssiguy

Well we can't say it's a particular ethnic group lest we be called racist to shut the conversation down. Well I for one don't give a damn.........the Bolivian investors must be stopped!

Don't forget that China is a country of people of many different ethnicities...

geotag277 · #**4298** Posted **Nov 1, 2015, 5:49 AM**

Quote:

Originally Posted by Berklon

Vancouver house-buying frenzy leaves half-empty neighbourhoods

Yea, that's healthy. No bubble here and little foreign money being parked. Sure.

Another sloppy lazy populist hack piece by the Globe and Mail. This media outlet just cannot be arsed to print anything worth while these days.

The entire summation of the research the "journalist" did for this article is in the quoted passage:

Quote:

The Globe and Mail looked at land titles records on properties within a three-block radius in the Point Grey neighbourhood, where 13 houses are unoccupied, under construction, vacant or have been demolished. All were bought in the past five years.

13 houses within a 3 block radius is not bad at all. Due to land values increasing many of those properties have a mismatch between the square footage of the existing house and the expectations of the buyers, therefore, newly bought houses will be torn down.

The bigger question for Vancouver residents should be: if land values are so high, why are we still supporting single family detached housing developments on this land when it is unaffordable? (And getting more unaffordable?) Shouldn't we perhaps maybe sort of kind of start rezoning these high land values into multi family developments, low rises, high rises, town homes? You know, the sort of thing that brings the price of these homes down and over time matches the demand? Vancouver should be running single family detached housing out of the city, instead, they are sitting on their hands pointing fingers at foreigners and wondering why they all can't afford their own plot of land in their city of 2.5 million and growing rapidly towards 3.

And I've been in Vancouver several times over the past year. The "empty neighbourhoods because the garbage man says so" meme over there is overblown. Yes, there are properties with the lights off, for several reasons:

- people aren't home
- people have black out blinds
- people generally go out at different times on different days of the week

For condo buildings, the % lights on in most buildings was very similar to Calgary, a place that by all accounts has virtually zero foreign investor problem.

I could say the same about empty buildings in Calgary (and indeed, if you go to the Calgary subforum, you will see similar comments about "abandoned empty buildings because the lights are off) but in actuality it's just baseless anecdotal hooey.

Berklon · #**4299** Posted **Nov 1, 2015, 1:32 PM**

No, it is a real problem. This is not a new issue... it's been around a while. Plenty of news stories about this.

It's not just a matter of the lights being off at certain times of the day/week. There are neighbours who know for a fact that no one is living in the house next door. The light's aren't EVER on... no one is EVER home... there isn't even any furniture inside (from the neighbours who snoop). Neighbours who are frustrated because houses around them are being neglected because no one lives in them.

Just because you choose to turn a blind eye, doesn't mean it doesn't exist. It does.
But of course, many on this forum choose to believe the BS that's being handed to them by Realtors and people who have a vested interest in this house of cards.

casper · #**4300** Posted **Nov 1, 2015, 1:35 PM**

Quote:

Originally Posted by ssiguy

Well we can't say it's a particular ethnic group lest we be called racist to shut the conversation down. Well I for one don't give a damn.........the Bolivian investors must be stopped!

The problem is all the generalization.

Calling the purchase of property in Vancouver money laundering is a stretch. That implies these properties are from the proceeds of crime. I have not seen a single news article pointing to a court case where Vancouver is used to launder money. Has any one else?

I don't but f I ran a business in China I would want to move part of my investment out of the country. That is a country where the government has no problem messing with the free market any time it chooses.