Canada's 'housing bubble' deemed close to bursting

[someone123]

Originally Posted by Pinion

I don't like the comparison to oil because oil helped make regular people rich in AB. Chinese money laundering is destroying the lives of people who didn't own property before the bubble.

It is not just about money laundering but the fact that Canadians are selling off land, their most valuable resource, theoretically in perpetuity. Theoretically, these foreign owners can extract economic value from these plots of land 200 years from now if they want.

It's not at all like exporting oil. It is like selling off tracts of the oil sands.

I thought this was interesting. A story about the US offering to buy Greenland in the 1940's:

https://www.gwern.net/Greenland

What did Denmark's prime minister have to say about this in 1948?

Why not sell Greenland? Because it would not be in accordance with our honor and conscience to sell Greenland. The Greenlanders are and feel they are our countrymen and we feel tightly bound to them. It cannot be our generation’s task to make the Danish state smaller, and it is not in accordance with the policy of the Danish government or the wishes of the Danish people.

Not the same as Canada's present situation because the sovereignty of the land would have changed, not just the title. However, it is notable that they didn't mindlessly do whatever generated the most income at the time. And they had a sense of duty not just to their present compatriots but to future generations. Heresy!

[Pinion]

New BC property assessments are out. Let's check in with my dad's old place, which you may remember he bought for $25,000. Upper end housing is supposed to be slowing...



ONLY a $388,000 increase since last year! Pish posh, what are millennials whining about. Just save a bit of your paycheque each month...

https://www.bcassessment.ca

[MonctonRad]

Originally Posted by Pinion

New BC property assessments are out. Let's check in with my dad's old place, which you may remember he bought for $25,000. Upper end housing is supposed to be slowing...

ONLY a $388,000 increase since last year! Pish posh, what are millennials whining about. Just save a bit of your paycheque each month...

https://www.bcassessment.ca

Move east young man!!!!

I know of several offshore islands in both NS and NB that can be yours for this price, with enough left over to build a nifty house, a dock and a boat to get back and forth to the mainland. Heck, I think we could throw in a garage onshore for your car and put a BMW 550 in the garage for your comfort and transportation.......

[someone123]

That assessment is weird. Was something built on the property? The assessed land value fell but the building value went up enormously.

My condo is up by over 20% this year. The theory that Vancouver's natural land constraints are the primary driver of detached housing prices doesn't explain why condos and apartments have been going up so quickly.

Originally Posted by MonctonRad

I know of several offshore islands in both NS and NB that can be yours for this price, with enough left over to build a nifty house, a dock and a boat to get back and forth to the mainland. Heck, I think we could throw in a garage onshore for your car and put a BMW 550 in the garage for your comfort and transportation.......

Yes although it is not as if the typical young person in Vancouver is contemplating where to spend their $4M.

[Pinion]

Originally Posted by MonctonRad

Move east young man!!!!

I know of several offshore islands in both NS and NB that can be yours for this price, with enough left over to build a nifty house, a dock and a boat to get back and forth to the mainland. Heck, I think we could throw in a garage onshore for your car and put a BMW 550 in the garage for your comfort and transportation.......

Thanks but I am moving southwest... very very far southwest. I read weather reports, now is not the best time to be selling most of Canada.

Originally Posted by someone123

That assessment is weird. Was something built on the property? The assessed land value fell but the building value went up enormously.

True, I didn't even really look at it yet. Maybe my dad's old house is gone. :/ Oh well, just went through my old neighbourhood (around Edgemont Village) and everything is being replaced by mega-mansions squeezed onto the relatively small lots. 'Tis the way.

[whatnext]

Originally Posted by MonctonRad

Move east young man!!!!

I know of several offshore islands in both NS and NB that can be yours for this price, with enough left over to build a nifty house, a dock and a boat to get back and forth to the mainland. Heck, I think we could throw in a garage onshore for your car and put a BMW 550 in the garage for your comfort and transportation.......

Um, yeah. And then look at the weather forecast for Eastern Canada. Very few westcoasters would find that remotely appealing.

[TownGuy]

Originally Posted by whatnext

Um, yeah. And then look at the weather forecast for Eastern Canada. Very few westcoasters would find that remotely appealing.

Oh god. Is 5C and rain appealing to anyone? It's record breakingly cold, record breaking cold on the west coast is cold as 🞵🞵🞵🞵 as well.

[whatnext]

Originally Posted by TownGuy

Oh god. Is 5C and rain appealing to anyone? It's record breakingly cold, record breaking cold on the west coast is cold as 🞵🞵🞵🞵 as well.

Lol there’s a big difference between 5 and -25. And I don’t have to shovel my way out of the house if it rains. Beside, you missed the pint - sure maybe you’re used to it, but most on the west coast aren’t. If posters were willing to argue endlessly that nobody west of Alberta retires to B.C., then believe me very few people from BC will ever retire to the Maritimes for a cheaper house.

[GreaterMontréal]

Originally Posted by whatnext

Lol there’s a big difference between 5 and -25. And I don’t have to shovel my way out of the house if it rains. Beside, you missed the pint - sure maybe you’re used to it, but most on the west coast aren’t. If posters were willing to argue endlessly that nobody west of Alberta retires to B.C., then believe me very few people from BC will ever retire to the Maritimes for a cheaper house.

people (with money) from the East Coast stay in Canada between May and October, and move to Florida during the winter.

[TownGuy]

Originally Posted by whatnext

Lol there’s a big difference between 5 and -25. And I don’t have to shovel my way out of the house if it rains. Beside, you missed them pint - sure maybe you’re used to it, but most on the west coast aren’t. If posters were willing to argue endlessly that nobody west of Alberta retires to B.C., then believe me very few people from BC will ever retire to the Maritimes for a cheaper house.

The -25C is record breaking. Get back to us during a record breaking stretch of cold weather there. Might not be -25 but it's still extremely cold.

[someone123]

Originally Posted by whatnext

Lol there’s a big difference between 5 and -25. And I don’t have to shovel my way out of the house if it rains. Beside, you missed the pint - sure maybe you’re used to it, but most on the west coast aren’t. If posters were willing to argue endlessly that nobody west of Alberta retires to B.C., then believe me very few people from BC will ever retire to the Maritimes for a cheaper house.

Yes except it snowed a couple times in Vancouver already and the Fraser Valley just got hit with a freezing rain storm as bad as what you might see in the Maritimes. Here in Vancouver we've hit around -6 and Halifax during the cold snap went down to -14 (and on Christmas Eve it was +12). The difference is not as big as people say it is. I'm not even sure I prefer Vancouver winters; I would take 0 with bright sun over 6 and drizzle most of the time.

Behold the brutal winter, mid cold snap:

Source

The bigger reason why few British Columbians will retire to the East Coast, or move to the East Coast, is that it's a $1000, 6 hour flight away. It is hard to go back and forth. You have to completely uproot your life, and few people have personal connections in both places.

[Pinion]

.

[riverviewer]

Originally Posted by Pinion

I'm not ok with any amount of snow or temperatures below 0. A lot of the world isn't. You just don't ever meet them in the east.

Having been born and raised in Winnipeg, I find Maritime winters mild in comparison.

[Doug]

Originally Posted by someone123

It is not just about money laundering but the fact that Canadians are selling off land, their most valuable resource, theoretically in perpetuity. Theoretically, these foreign owners can extract economic value from these plots of land 200 years from now if they want.

It's not at all like exporting oil. It is like selling off tracts of the oil sands.

I thought this was interesting. A story about the US offering to buy Greenland in the 1940's:

https://www.gwern.net/Greenland

What did Denmark's prime minister have to say about this in 1948?

Why not sell Greenland? Because it would not be in accordance with our honor and conscience to sell Greenland. The Greenlanders are and feel they are our countrymen and we feel tightly bound to them. It cannot be our generation’s task to make the Danish state smaller, and it is not in accordance with the policy of the Danish government or the wishes of the Danish people.

Not the same as Canada's present situation because the sovereignty of the land would have changed, not just the title. However, it is notable that they didn't mindlessly do whatever generated the most income at the time. And they had a sense of duty not just to their present compatriots but to future generations. Heresy!

At the prices foreigners are paying for most Canadian residential real estate, they won't ever extract any value. Real estate's true value is based on the rental income it could earn. At current prices in the Vancouver or Toronto markets, rental rates wouldn't even come close to earning a return. Citizens in both cities would be best to rent rather than own. What is really being sold is the perceived stability of Canada's legal and political systems.

[someone123]

Originally Posted by Doug

At current prices in the Vancouver or Toronto markets, rental rates wouldn't even come close to earning a return. Citizens in both cities would be best to rent rather than own. What is really being sold is the perceived stability of Canada's legal and political systems.

The problem with renting in Vancouver is that rentals tend to be poor quality and tenancy tends to be precarious. There aren't many nice rental buildings. Most of the halfway decent rentals seem to be condos owned by amateur landlords who are waiting to flip. Expect to move every couple years if you move into one of those. Beyond that, you are mostly looking at aging 50's and 60's walkups and illegal basement apartments in $2M houses. The vacancy rate for rentals is something like 0.6% and the market could easily get worse. Renting is risky.

There is a frenzy of speculative presale buying of condos which seems to be gobbling up all of the new supply. There doesn't seem to be much real competition between developers, which is unsurprising because most of the developments are megaprojects in a few areas owned by large companies that get bespoke planning consideration from city hall. I don't think the multi-unit construction market is actually working well at all to provide housing for people living in the city.

Foreign buyers are overpaying relative to rents but they also pay very little in taxes and aren't benefiting anyone other than the sellers. A lot of the land they buy is underused so it is imposing a big cost on the city as people have to commute farther and infrastructure is strained.

If the overall market and planning regime in Vancouver were healthy I think foreign buyers would be a much smaller problem or wouldn't be a problem at all. But unfortunately we are stuck with this system for the foreseeable future.

[dreambrother808]

Originally Posted by Pinion

I'm not ok with any amount of snow or temperatures below 0. A lot of the world isn't. You just don't ever meet them in the east.

God forbid some people prefer the Vancouver climate.

As for the East Coast, I’m sure many or most lower mainlanders have never been there and don’t know a lot about it.

As an avid skier I couldn’t give up what is so readily accessible here.

[whatnext]

Originally Posted by dreambrother808

God forbid some people prefer the Vancouver climate.

As for the East Coast, I’m sure many or most lower mainlanders have never been there and don’t know a lot about it.

As an avid skier I couldn’t give up what is so readily accessible here.

Yes, it wasn’t meant as a slam to the other parts of the country. They’re great and have lots to offer, but as someone aclimatized to a temperate climate it would be hard to live there year round. For the same reason I could never live in Palm Springs or Phoenix.

For me I’d be much more likely to move to the similar climate of the UK, which also has more of the things I enjoy.

[ssiguy]

Vancouver's mild climate has always been a drawing cards for other Canadians but that is far less the case now and even for Victoria.

The difference in housing prices is so grotesque now between Van/Vic and the rest of the country that many aging Canadians no longer see the benefit. For the massive amount of extra money needed to live in Vancouver they could stay in the larger home where they are now with family and friends and take that extra money and head to Florida/Ariz for 3 months and enjoy a real mild winter.

BC has always been a draw due to it's milder climate and beautiful surroundings but when considering the move now for both the young and the old the first thing that comes to everyones mind who may want to move here is the province's reputation as being completely unaffordable.

[240glt]

^ they're still churning out a lot of 55+ townhouse style developments in both Vernon and Kelowna. Downtown Vernon has a couple of multi unit mid rise complexes oriented towards senior underway right now


My folks are at the point where they no longer want to maintain a 3000 sf house on a massive lot, and are looking to downsize. There are options out there but they are still really expensive

[MonctonRad]

I just finished reading an article in the NY Times about China trying to re-establish a "silk road" trading corridor overland to Europe via rail through Kazakhstan and was taken by this ancient Kazakh proverb quoted in the article about some Kazakh discomfort with the Chinese ambitions. I though the quote germane to the discussion here regarding Chinese influence on the Vancouver housing market:

“When the Chinese come, the apocalypse follows,” runs a Kazakh saying.