Canada's 'housing bubble' deemed close to bursting

[ssiguy]

^ In what way??

[Wentworth]

Originally Posted by urbancanadian

Skimming through this thread (which was painful), I don't understand where some of these posters are coming from? I've never seen them in the Vancouver section. Hell, I've barely noticed them outside this thread. I dunno, just thought it was weird...

RealEstateTalks.com. Haven't been there in years, but I recall a "pair" of posters from there who had an identical posting style and mentality. No idea if they are still there or if there is still even a bubble debate thread going on over on that forum.

[SteelTown]

Vancouver, Toronto, Hamilton see eye-popping home price increases in past year
http://www.theglobeandmail.com/report-on...f-hundreds-of-canadians/article27225904/

If you needed more evidence of where the action is, the latest reading of Canadian home prices spells it out.

Values rose in Vancouver by 0.6 per cent in October from September, and in Toronto by 0.3 per cent, according to the Teranet-National Bank home price index released today.

But it’s the year-over-year figures that are eye-popping: 9.8 per cent in Vancouver and 9.3 per cent in Toronto and nearby Hamilton.

Those are the three cities that have seen prices surge repeatedly, and in the case of Vancouver and Toronto have led to warnings about the froth in the markets.

There’s also Victoria, where prices climbed 0.3 per cent from September and 6.4 per cent from October of last year.

“The regional dichotomy in the Canadian housing market is more obvious than ever,” said National Bank senior economist Marc Pinsonneault.

“The 12-month composite price increase, the largest since May 2012 ... was driven by only four markets (Toronto, Hamilton, Vancouver and Victoria) where home resale market conditions are known to be rather tight.”

Across Canada, prices rose 0.1 per cent from September, marking the 10th consecutive month of gains. On a yearly basis, prices climbed 5.6 per cent.

The Calgary market, which has been hit by the oil shock, saw an annual decline of 1 per cent, though a monthly rise of 1.7 per cent.

[Docere]

While real estate isn't as expensive as in Vancouver, Toronto is quite expensive nonetheless. What I find strange is the focus on the wealthy West Side of town. There seems to be resentment because the buyers are Chinese and a mythology that it used to be an "affordable", humble middle class area. But it's not like the average person was buying in Dunbar and Shaughnessy 20 years ago.

In Toronto, we have a lot of wealthy neighborhoods - several that are heavily Asian (like York Mills and increasingly wealthy Willowdale) and others that aren't. But nobody is complaining that the "middle class" is being "driven out" of Rosedale, Forest Hill and North Toronto and that politicians must "do something" about this.

Looking at housing prices, there seems to be a significant price difference between Toronto and Vancouver is in the nonelite neighorhoods. The East Side and Burnaby (not sure exactly what the Toronto equivalents are - but I guess a mishmash of the farther-flung gentrifying neighborhoods like the Junction and working class inner suburbs like East York and parts of Scarborough) are far more expensive. But I don't see a huge difference between say, the Annex and Kitsilano, or Point Grey and Rosedale.

West Vancouver is separated by water from the city and has kind of a (wannabe) "quaint" feel, but quite close-in: it's sort of like a close-in Oakville I guess, but much more Chinese/Iranian.

[someone123]

Originally Posted by Docere

But it's not like the average person was buying in Dunbar and Shaughnessy 20 years ago.

Well, it depends on the neighbourhood. The West Side is roughly half of the city of Vancouver, and only a small portion of that was high-end real estate 20 years ago. Dunbar is nice enough. It's the kind of place where an average university prof would could have bought a house around 2000 or so. The houses themselves are not particularly impressive.

Part of the spin with this story is that real estate agents are calling $2M properties "luxury housing" when a lot of them are run down and get demolished when they're purchased. They are expensive because the land is considered a good investment by some people. A 1200 square foot grey stucco house with one retro bathroom is not luxury housing, no matter what the price tag is.

Looking at housing prices, there seems to be a significant price difference between Toronto and Vancouver is in the nonelite neighorhoods.

Yes, the median price in Vancouver is high, not just the average. There are hideous Vancouver specials in third rate neighbourhoods going for $800k and up. This is another area where there's been spin in the past. People will come on here and say that prices in Vancouver are old high because $50M mansions are bumping up the average. This isn't true. Prices are high even at the low end.

[Procrastinational]

Originally Posted by someone123

Well, it depends on the neighbourhood. The West Side is roughly half of the city of Vancouver, and only a small portion of that was high-end real estate 20 years ago. Dunbar is nice enough. It's the kind of place where an average university prof would could have bought a house around 2000 or so. The houses themselves are not particularly impressive.

Part of the spin with this story is that real estate agents are calling $2M properties "luxury housing" when a lot of them are run down and get demolished when they're purchased. They are expensive because the land is considered a good investment by some people. A 1200 square foot grey stucco house with one retro bathroom is not luxury housing, no matter what the price tag is.



Yes, the median price in Vancouver is high, not just the average. There are hideous Vancouver specials in third rate neighbourhoods going for $800k and up. This is another area where there's been spin in the past. People will come on here and say that prices in Vancouver are old high because $50M mansions are bumping up the average. This isn't true. Prices are high even at the low end.

The city of Vancouver needs to radically change some of the zoning to help affordability. There are huge swaths of the city covered in Vancouver specials that have little to no redeeming qualities. Keep the nicer, more historic SFH neighbourhoods intact, but replace all the post war housing with row houses, condos or laneway housing.

Vancouver is at the centre of a reasonably large and growing metro area. It's time for some radical densification.

[casper]

Originally Posted by Procrastinational

The city of Vancouver needs to radically change some of the zoning to help affordability. There are huge swaths of the city covered in Vancouver specials that have little to no redeeming qualities. Keep the nicer, more historic SFH neighbourhoods intact, but replace all the post war housing with row houses, condos or laneway housing.

Vancouver is at the centre of a reasonably large and growing metro area. It's time for some radical densification.

A good start would be to zone any area within 3 blocks of a skytrain station as multi-family. Zone any property on a major road as mixed use requiring at least 4 stores.

[dleung]

Originally Posted by cornholio

Ok. Where can a doctor with a 200k salary afford to buy a home? Because that qualifies you for roughly a $1 million dollar mortgage. You will not find a home in Vancouver for under a million that is not a tear down (requiring a $500k additional investment), that doctor will live a pretty modest life for the privilege, and by the way I think 95% of doctors can be replaced since their jobs are procedure oriented and as a result are overpaid (but that's another topic). Yes some locals are still buying houses, usually because they were already leveraged in the market and e just moving around, or helping their kids. It still happens, but less and less. I get this feeling you are out of touch with reality (no disrespect). I can tell you Killarney in east Vancouver is probably 90% mainland Chinese buyers right now, and very few are local's. Before you bring out the race card I have plenty of Chinese friends and co workers, people who live and work here obviously, hell I am a European Canadian refugee married to a South American East Asian immigrant so don't even bring out the xenophobic card.

Lmao the "i have friends who are Chinese" card Everyone knows Killarney is hugely Asian. Where's your "90%" and "very few are locals" sourced from?

In my uneducated opinion based on land value, income and interest rates relative to the 90's, an average house in metro Vancouver should only cost $750K ($600K in Toronto), and a one bedroom condo downtown in both cities should be $200K tops. There are people arguing houses should be closer to $500K. This wouldn't happen even if you drove out all the "foreigners", local and foreign

[ssiguy]

The problem is that you guys are proceeding from a false assumption............that Vancouver and/or the province want housing to become affordable.

The city and province have gone out of their way in the last 20 years to create such an environment where house flipping proliferates and the province and city reap the windfall. The city and province don't want to house the poor but quite the contrary, they want to get rid of them. This is obvious by the city encouraging SFH to be torn down and replaced by more expensive SFH which they know will encourage foreign house buying. The province hasn't raise welfare rates in 7 years and again BC will be back to having the lowest minimum wage in the country by the end of this year.

The province is so offended {and nervous} about the stopping of laundered money thru the real estate market that they refuse to even keep any data so they can say there is not data to support the claim that Chinese money launderers are effecting the market. The 3 largest contributors to Mayor Moonbeam's election campaign were all development companies so guess where his sympathies lie? Of course both governments and the powerful development/real estate companies always use the race card when convenient.

Vancouver will never again have anything even remotely close to affordable house because the city and province don't want them and will never enact any legislation to curtail the flow of money laundering into the market.

Vancouver's economy is a real estate based one and now it can't be stopped. The healthy real estate market in Vancouver has gone from a reflection of a strong economy to be backbone of it and bringing in affordable housing or anything even remotely able to curtail the spiraling housing costs would be like Windsor City council creating a law to close the auto plants.

[Docere]

Originally Posted by someone123

Well, it depends on the neighbourhood. The West Side is roughly half of the city of Vancouver, and only a small portion of that was high-end real estate 20 years ago. Dunbar is nice enough. It's the kind of place where an average university prof would could have bought a house around 2000 or so. The houses themselves are not particularly impressive.

Exactly Dunbar was not an "average" neighborhood by any means 20 years ago. The "average university prof" is in the top 5% of income earners.

It's also surrounded by a bunch of long-time wealthy neighborhoods, so it's not surprising there's been wealth consolidation in a pretty contiguous area (this has happened in Toronto too).

Also, the West Side (basically the federal ridings of Vancouver Quadra and Vancouver Granville) is 1/3 of the city's population, and the city of Vancouver is pretty small relative to the metro area.

Only 26% of the dwellings are detached houses (21% in Granville and 31% in Quadra). Only 8% of Vancouver CMA detached dwellings are on the West Side of Vancouver. This has always been an elite group.

So implying the West Side is "half of the city" is a bit of a stretch.

That being said, there is an issue related to housing affordability in Vancouver and you do have local elites being "displaced" by overseas elites on the West Side. I'm fine with them having speculation taxes like they do in other cities.

I'm not sure why focusing on a couple of rich West Side neighborhoods though (as Yan's study did) really tells us about housing for the bulk of Vancouver residents.

However I guess Toronto has too much established wealth for Asian money to fundamentally transform real estate markets and demographics in blue chip neighborhoods.

[casper]

Originally Posted by dleung

Lmao the "i have friends who are Chinese" card Everyone knows Killarney is hugely Asian. Where's your "90%" and "very few are locals" sourced from?

In my uneducated opinion based on land value, income and interest rates relative to the 90's, an average house in metro Vancouver should only cost $750K ($600K in Toronto), and a one bedroom condo downtown in both cities should be $200K tops. There are people arguing houses should be closer to $500K. This wouldn't happen even if you drove out all the "foreigners", local and foreign

Thouse proposed prices sound low to me in comparison to places such as Victoria or Saskatoon.

[someone123]

Originally Posted by Docere

Exactly Dunbar was not an "average" neighborhood by any means 20 years ago. The "average university prof" is in the top 5% of income earners.

I guess. A lot of these households probably have incomes in the $150,000 a year range. If these are the cream of the crop of Vancouver wage earners that just makes the story worse, because they can hardly afford anything now.

[casper]

Originally Posted by someone123

I guess. A lot of these households probably have incomes in the $150,000 a year range. If these are the cream of the crop of Vancouver wage earners that just makes the story worse, because they can hardly afford anything now.

The question you should ask is:

What kind of housing does a prof at Columbia University (New York) expect to live in? Perhaps a small apartment in the city or a home an hour away in the suburbia.

What kind of housing does a prof at City University in London epect to live in? Perhaps a small apartment in the city or a hose two hours away in suburbia.

I could go on. You could do better from a housing perspective in the rest of Canada than Toronto or Vancouver. In Toronto or Vancouver you are still doing better than most major international cities.

[mistercorporate]

Originally Posted by Docere

However I guess Toronto has too much established wealth for Asian money to fundamentally transform real estate markets and demographics in blue chip neighborhoods.

Asian "money" hasn't transformed blue chip neighbourhoods, but blue chip neighbourhoods have a fair share of various Asian groups. The richest neighbourhoods are ethnically diverse, Old Money Toronto is just wealthy as opposed to rich. A very different dynamic to Vancouver when I was there (and it appears the dynamic has only intensified in recent years).

[Docere]

Instead of "established money" I probably should have meant a very diverse wealthy population and/or many wealthy subgroups. I didn't mean "old money" in the sense that it's people living off 100 year old fortunes etc., which today represent a miniscule percentage of the wealthy in Toronto. Even in so-called "old money" Rosedale (old money neighborhoods really mean I think neighborhoods that have been wealthy for a long time, not that a majority of residents are multigenerational wealth). But we have your very WASP neighborhoods like Lawrence Park, the Jewish "gilded ghetto" of Forest Hill, the Italian construction/developer fortunes of Vaughan etc. as well as wealthy suburbs that are heavily Asian.

In Toronto as well, as a general rule, it seems like the pre-WWII wealthy neighborhoods are WASP/Jewish while wealthy Asians gravitate toward postwar and newer suburbs. That seems to be the pattern in a lot of other North American cities as well, like New York, Washington, L.A. etc.

In Vancouver however they're moving into the 20s-40s neo-Tudor areas and transforming these areas demographically.

[Stryker]

Originally Posted by urbancanadian

Skimming through this thread (which was painful), I don't understand where some of these posters are coming from? I've never seen them in the Vancouver section. Hell, I've barely noticed them outside this thread. I dunno, just thought it was weird...

I think your mistaking the part where

me: Man st john's homes are over priced, they go for like 350k in some parts.

Random: Yeah but that's nothing compared to vancouver.

Random#2: Yeah but Vancouver has magical qualities that you can't find in Vancouver.

me: Never mentioned vancouver.

Random#3: You east coast folk just don't get the magic of bc.


You can insert any place in the country with vancouver and you get the same response.

[Stryker]

Originally Posted by Docere

Instead of "established money" I probably should have meant a very diverse wealthy population and/or many wealthy subgroups. I didn't mean "old money" in the sense that it's people living off 100 year old fortunes etc., which today represent a miniscule percentage of the wealthy in Toronto. Even in so-called "old money" Rosedale (old money neighborhoods really mean I think neighborhoods that have been wealthy for a long time, not that a majority of residents are multigenerational wealth). But we have your very WASP neighborhoods like Lawrence Park, the Jewish "gilded ghetto" of Forest Hill, the Italian construction/developer fortunes of Vaughan etc. as well as wealthy suburbs that are heavily Asian.

yah there is a very strong narrative of classicism arising in these cities.

What kills me is that a immigrant regardless of their parents success in the home country are being counted as people who have risen the class divide.

Alot of the time the rich from the old country maintain their status in the new.


I seen alot of classicism in general emerging in Toronto and it was fucking bizarre.

I met alot of people on the autism spectrum and it was disturbing how blatant the class-ism is, when your on the spectrum.

[mistercorporate]

Originally Posted by Stryker

yah there is a very strong narrative of classicism arising in these cities.

What kills me is that a immigrant regardless of their parents success in the home country are being counted as people who have risen the class divide.

Alot of the time the rich from the old country maintain their status in the new.


I seen alot of classicism in general emerging in Toronto and it was fucking bizarre.

I met alot of people on the autism spectrum and it was disturbing how blatant the class-ism is, when your on the spectrum.

I don't know if it's classisism. I mean, the "Old Money" parts of Toronto are not that wealthy though their real estate prices are astronomic relative to what you get with your money. $2-3 million for a barely detached narrow home with next to no backyard. This is why the new immigrants with money tend to buy in newer parts of the city as there's just way more bang for your buck (big houses with big yards for kids/dogs), it's more timing than anything else. Of course, for people who inherit those Old Money neighbourhood homes, they just have to pay property taxes as the house was paid off long ago.

[Stryker]

Originally Posted by mistercorporate

I don't know if it's classisism. I mean, the "Old Money" parts of Toronto are not that wealthy though their real estate prices are astronomic relative to what you get with your money. $2-3 million for a barely detached narrow home with next to no backyard. This is why the new immigrants with money tend to buy in newer parts of the city as there's just way more bang for your buck (big houses with big yards for kids/dogs), it's more timing than anything else. Of course, for people who inherit those Old Money neighbourhood homes, they just have to pay property taxes as the house was paid off long ago.

It's not just the property itself it's the being connected.

I.e. Your school, your hockey team, etc etc all give a much more connected environment to develop.

[Docere]

Originally Posted by mistercorporate

I don't know if it's classisism. I mean, the "Old Money" parts of Toronto are not that wealthy though their real estate prices are astronomic relative to what you get with your money. $2-3 million for a barely detached narrow home with next to no backyard. This is why the new immigrants with money tend to buy in newer parts of the city as there's just way more bang for your buck (big houses with big yards for kids/dogs), it's more timing than anything else. Of course, for people who inherit those Old Money neighbourhood homes, they just have to pay property taxes as the house was paid off long ago.

Not sure what you mean. Toronto has plenty of top-tier wealthy neighborhoods that aren't that "new immigrant" - it's not as if there's any sense that immigrant wealth is "displacing" local elites or making "middle class" neighborhoods "out of reach" to the average homebuyer.

Rosedale is just as elite today as it was 100 years ago.