Canada's 'housing bubble' deemed close to bursting

[kwoldtimer]

Originally Posted by geotag277

Three bedrooms gives you the freedom to have purpose rooms outside of the common area. I imagine you probably don't have two room mates and can use that space in practical ways that don't necessarily involve being full time bedrooms.

In the given layout, with the second bedroom occupied, where would you put the computer? TV? Reading area? Dining area? Work space/office area? Where do you sit with guests over? How do you entertain more than 2 people? These are generally challenges with a 350 sq ft single bedroom apartment, not a 900 sq ft two bed room affair.

Two bedrooms in my case, the second being used exclusively as a guest bedroom. My extra space resolves some of the problems seen in the given layout (which I don't like, btw). There is certainly a trade-off, however. Friends of mine in standard condos of 1000-1100 sq ft can seem to have as much space in their apartments as I have in mine. Although the 14ft ceilings also help keep me from feeling cramped!

[dleung]

Originally Posted by ssiguy

dleung..........I try never to swear on any forums but you are really starting top piss me off.

If you think everything I am saying is fantasy I don't give a shit. If you think everything everyone says that doesn't fit into your narrative is mythical then do us all a favor and get lost!

False dichotomy you keep insisting on. I totally agree red china money launderers are a big part of the problem, along with all the other factors geotag keeps saying. Doesn't make it any less funny that you have so many apparently-xenophobic "family members" to quote so handily No need for the pretense, we won't blame you for having those feelings!

[casper]

Originally Posted by dleung

False dichotomy you keep insisting on. I totally agree red china money launderers are a big part of the problem, along with all the other factors geotag keeps saying. Doesn't make it any less funny that you have so many apparently-xenophobic "family members" to quote so handily No need for the pretense, we won't blame you for having those feelings!

I agree with everything your saying except one point.....

Red China money laundering is a problem for China. I don't see why it is a problem for Canada or Canadian. Export controls on money is not a Canadian value, quite the opposite.

I don't see it as a problem.

[lio45]

Originally Posted by casper

I agree with everything your saying except one point.....

Red China money laundering is a problem for China. I don't see why it is a problem for Canada or Canadian. Export controls on money is not a Canadian value, quite the opposite.

I don't see it as a problem.

The obvious "problem" for Canada is that the city to which all that Red China money gets funneled has become a lot less liveable for its residents because the market gets completely distorted (completely out-of-whack with local incomes) due to that unending stream of foreign cash. That's been the jackpot for some Canadians, but it's also a problem for others.

[Acajack]

Originally Posted by kwoldtimer

You make it sound like they had a choice - Montreal's historic mulit-family housing, much of it rental, reflects that ciity's economic realities more than anything else, no? The decline in Vancouver's housing standards is well under way, however, so they'll get there eventually.

Yes, Montreal (and other cities in Quebec, including many smaller ones) had a larger and earlier "worker proletariat" population that was usually housed in denser housing than the more dominantly "genteel" populations in other parts of the country were.

Even smaller towns and even villages in Quebec have visibly more of their housing stock that is (small) apartments than you typically see in the rest of the country.

[CanSpice]

This is just an anecdote and not a sign that the craze has hit townhouses outside of the City of Vancouver, but back in December 2015 I purchased a 2-br + den townhouse in New Westminster that was listed at $465,000. Our neighbour listed theirs a couple of weeks ago at $525,000 (which is above what we paid). 13% increase in about five months.

Edit: $525k is above what we paid, not below.

[kwoldtimer]

Originally Posted by CanSpice

This is just an anecdote and not a sign that the craze has hit townhouses outside of the City of Vancouver, but back in December 2015 I purchased a 2-br + den townhouse in New Westminster that was listed at $465,000. Our neighbour listed theirs a couple of weeks ago at $525,000 (which is below what we paid). 13% increase in about five months.

Your post is confusing. Your townhouse was listed for $465G (or is that a typo?) and you paid more than $525G? Where is the increase?

[lio45]

Originally Posted by kwoldtimer

Your post is confusing. Your townhouse was listed for $465G (or is that a typo?) and you paid more than $525G? Where is the increase?

The increase lies in the natural assumption that the relative gap between listed price and final transaction price will be roughly the same.

[someone123]

I've noticed that some mid-range (North) Burnaby condos (next door to New West) are up significantly as well this year, after many years of little change in prices.

2 bedroom, 900 square foot units in my building are being listed for as high as $420,000 or so. I knew somebody who was renting one for $1,400 a month up until fairly recently.

For New West in particular there's something to be said for the general gentrification happening in the area. But most of the increase is probably spillover from the insane rise in Vancouver prices over the last year.

[kwoldtimer]

Originally Posted by lio45

The increase lies in the natural assumption that the relative gap between listed price and final transaction price will be roughly the same.

As per the other thread - assuming that selling price above asking is the norm for that area.

[CanSpice]

Originally Posted by kwoldtimer

Your post is confusing. Your townhouse was listed for $465G (or is that a typo?) and you paid more than $525G? Where is the increase?

Whoops, ours listed for $465,000 and we paid more than that ($511,000 actually), but less than $525,000.

[geotag277]

Originally Posted by CanSpice

This is just an anecdote and not a sign that the craze has hit townhouses outside of the City of Vancouver, but back in December 2015 I purchased a 2-br + den townhouse in New Westminster that was listed at $465,000. Our neighbour listed theirs a couple of weeks ago at $525,000 (which is above what we paid). 13% increase in about five months.

Edit: $525k is above what we paid, not below.

It stands to reason that the real estate agent selling the next door property is directly using your sale as a comp to come up with a reasonable starting price (which seems to be a bit over what you bought for last year - although not outrageously so).

The fact that you paid 40k+ over list means it was probably listed under fair market value to inspire a bidding war/silent auction to drive the price up. It is also probably fair to say that the realtor listing your neighbour's property has a different strategy in mind.

A lot of it depends on the sellers as well, as there are many sellers in Vancouver who find the price increases somewhat disheartening and work with their realtor on providing a fair and potentially under market value sales strategy to throw a bone to buyers who might borderline qualify to buy the property in the first place.

As an aside, I have casually made inquiries into the Vancouver market over the years and I've found the quality of realtors I've dealt with, even through recommendations from the time I lived there, to be generally quite bad. In Calgary, I would describe realtors in general as being sophomoric, but in that context Vancouver was like kindergarden. Some of it might be of course related to the deep roots I have to the Calgary market, but I think it is also a consequence of Vancouver's market being generally hot and quick selling for going on 3 decades now. Calgary has had quite a few opportunities over the years to slow down on the real estate front and thin out the wheat from the chaff over the years, but I get the distinct impression that hasn't happened in Vancouver for real estate agents for a very very long time.

[cornholio]

Well this is going to be interesting. I consider this the most important news in a long time in regards to the real estate market in Vancouver and Toronto.
http://www.bloomberg.com/news/articles/2...ages-in-vancouver-toronto-as-prices-soar

Hot housing markets in Vancouver and Toronto prompted Bank of Nova Scotia to ease off on mortgage lending in those cities, Chief Executive Officer Brian Porter said.

“We’re a little concerned about housing prices in the greater Vancouver area and Toronto," Porter, 58, said Tuesday in an interview on Bloomberg TV Canada. “We just took our foot off the gas the last couple quarters in terms of mortgage growth for the reasons I cited, in terms of Vancouver and Toronto."

Scotiabank is the third bigest lender in Canada and they are clearly backing of at this point. Other lenders won't be far behind. When the Banks try to distance them selves and can't hide it anymore you know something big is on the horizon.

[casper]

Originally Posted by cornholio

Well this is going to be interesting. I consider this the most important news in a long time in regards to the real estate market in Vancouver and Toronto.
http://www.bloomberg.com/news/articles/2...ages-in-vancouver-toronto-as-prices-soar



Scotiabank is the third bigest lender in Canada and they are clearly backing of at this point. Other lenders won't be far behind. When the Banks try to distance them selves and can't hide it anymore you know something big is on the horizon.

Hard to know how much to read into this. He also said "“Generally, Canadians have a strong ability to self regulate and they’ve demonstrated that before," Porter said." He did not say they will not lend into this market. They simply being less aggressive. Not a bad thing.

[Berklon]

How high home prices have buried Canadians in debt

The data show that neighbourhoods where household debt is the highest and has risen the most tend to be home to the country’s most expensive real estate, as well as parts of Alberta that have seen an influx of young, first-time buyers. Meanwhile, households in Atlantic Canada, where home prices are among the lowest in the country, have the highest consumer debt balances.

This is all so very healthy for Canadians. A nation of debters.

House prices (and debt) to the moon!

[rbt]

Originally Posted by lio45

The increase lies in the natural assumption that the relative gap between listed price and final transaction price will be roughly the same.

The numerous $1 listings and other less severe low-ball listings to attract attention show that assumption is broken.

[esquire]

Originally Posted by Berklon

How high home prices have buried Canadians in debt



This is all so very healthy for Canadians. A nation of debters.

House prices (and debt) to the moon!

No problem, as long as interest rates remain low

[whatnext]

Originally Posted by geotag277

Pretty sure this is a Canada wide problem. Vancouver probably has the most experience behind Toronto of building usable floor plans for condos, so you can imagine how bad the rest of us have it.



Vancouver at this point is really a place that needs to be doing everything at once (rezoning, foreign capital restrictions) and yes, land use policies are part of that. It becomes a self fulfilling prophecy that few 3 bedroom units are made, few units over 1000 sqft are made, so when they do come on the market, they are priced to the moon as luxury options like penthouses.

Land use should be requiring family friendly layouts everywhere as a percentage of the building. More units will mean more options will mean lower prices. Of course, you can't then complain that you bought a 3 bedroom condo, it isn't appreciating as much as you'd like, there are so many new units coming on the market that are devaluing your unit, and you can't soon upgrade to a single family detached home.

You can't have it both ways - either developers overbuild to put downward pressure on prices, or developments don't build enough and your property appreciates. It seems many here want to have their cake and eat it too.

The problem is that developers aren't going to build affordable 3 bedroom townhouses when they know there are baby boomers cashing out who can afford to pay top dollar now with their house-lottery money, courtesy of a Chinese buyer. Case in point, around City Hall there was a trend to gut and rebuild the old early 20th century SF homes into three units in the main house and a coach house out back. Now they are doing just 2 units in the main house so they can give the buyer more luxury bells and whistles.

There is no practical way to legislate non-luxury finishes.

[cornholio]

Originally Posted by casper

Hard to know how much to read into this. He also said "“Generally, Canadians have a strong ability to self regulate and they’ve demonstrated that before," Porter said." He did not say they will not lend into this market. They simply being less aggressive. Not a bad thing.

No one will not lend in the market at all. Less aggressive is not a bad thing obviously as it puts the breaks on sales and reduces potential buyers, it is however a bad sign for the market and indicates in not so many words that the Banks are no longer optimistic about the future. There is a reason I think this is the most interesting news to come out in a while and signifies that we are getting near the top of the hill.

Here is the full interview with him.
http://www.bnn.ca/News/2016/5/31/Bank-of...a-to-raise-down-payment-rules-again.aspx

“It is not sustainable and I don’t think it is healthy, there is a bit of an aberration here,” Porter said. “I know OSFI [Office of the Superintendent of Financial Institutions] is concerned about it, the CMHC [Canada Mortgage and Housing Corporation] is concerned about it, the Department of Finance is concerned about it… so I think there [are] more things the government can do.”

Things will be getting more and more interesting.

[whatnext]

OECD warns Canada more action is needed to cool overheated Toronto and Vancouver markets, though they mistakenly focus solely on interest rates:
https://www.thestar.com/business/2016/06/01/cool-off-hot-housing-markets-oecd-tells-ottawa.html