Canada's 'housing bubble' deemed close to bursting

[ssiguy]

Despite the ALR having some of the best agricultural land in the country much of it is now obscenely unproductive. Vancouver Condo Info has just reported that a piece of ALR was bought less than 2 years ago for $2 million, had no crops, a monster house was built, and now is back on the market for $.7.7 million. This happens all the times as the ALR refuses to put realistic minimums on production under pressure from developers, real estate agents, and politicians.

Right now the penalties are miniscule and the farm only has to produce $5000 worth of product per year which is half an acre of carrots. Another obscene thing is that they pay much lower rates of property taxes.

Freeing up the ALR would mean nothing as it would simply be bought by the Chinese and soon flipped. I dare any of you to go the twitter page of CorruptGregor and skim thru all the flippers........ the number of houses that were bought in 2017 and now already being sold at obscene price increases is truly horrifying.

This is why only a complete ban on foreign ownership will do any good...........there are so many Chinese money launders that have bought thousands of homes with cash that the regular supply and demand no longer works. When normal people need to sell their house they have yto respond to the market but when these crooks don't get their prefferred amount they just take them off the market until they get the price they want from another Chinese money launderer.

[someone123]

Originally Posted by Pinion

The ALR is huge, and if it was rezoned it would be majority 20+ storey condos, almost all of it would go to Chinese buyers, and we'd be back where we started with no local farmland and even worse traffic because of course no highways/skytrain lines would be built to accomodate the area.

Agreed. There is a deeper issue of long-term sustainability and quality of life that we need to deal with and aren't. Do we actually care about Canadians having a place to live and a secure food supply? If we only care about profits and the free market, why do we have the ALR in the first place? If we care about a local food supply, why don't we care that people are getting priced out of the city? What is the point of preserving a local food supply for empty houses owned by people who live in another country?

I don't have a problem with the ALR per se but a province and city that has something like the ALR clearly doesn't also have much of a commitment to laissez-faire free market economics when it comes to land and development. Vancouver's zoning controls are also proof that we don't have a laissez-fair system. Why do we have laissez-faire policies only when it comes to foreign capital coming in, including criminal laundered money?

[GlassCity]

Originally Posted by Pinion

The ALR is huge, and if it was rezoned it would be majority 20+ storey condos, almost all of it would go to Chinese buyers, and we'd be back where we started with no local farmland and even worse traffic because of course no highways/skytrain lines would be built to accomodate the area.

The only time we don't get towers in metro Vancouver is when local wealthy NIMBYs have some sway over city council. Even in pockets of the north shore - NIMBY central - where the developable areas don't block anyone's views (due to steep valleys to the north) tall towers are being built (i.e. Lions Gate Village and Lynn Creek).

Originally Posted by someone123

Agreed. There is a deeper issue of long-term sustainability and quality of life that we need to deal with and aren't. Do we actually care about Canadians having a place to live and a secure food supply? If we only care about profits and the free market, why do we have the ALR in the first place? If we care about a local food supply, why don't we care that people are getting priced out of the city? What is the point of preserving a local food supply for empty houses owned by people who live in another country?

I don't have a problem with the ALR per se but a province and city that has something like the ALR clearly doesn't also have much of a commitment to laissez-faire free market economics when it comes to land and development. Vancouver's zoning controls are also proof that we don't have a laissez-fair system. Why do we have laissez-faire policies only when it comes to foreign capital coming in, including criminal laundered money?

Nothing to add but great posts.

[dleung]

Originally Posted by geotag277

There is a "elements" style development which is 6 floors in the Vancouver example more appropriate for suburban development and a "Kensington" style development which is 10 stories which is more appropriate for higher density potential areas.

You totally lost the plot here.

[geotag277]

That's a humorous but disingenuous summation of the conversation. I was making assumptions about lot size, and until you reveal your source on the elements lot size, so are you.

By the way, the numbers have been changing as I've been determining different costs in different areas. The original contention was that it was 200k per unit for land for these types of developments, so even bringing the numbers down under 100k shows a way forward to offer better affordability.

Don't quit your day job.

[logan5]

Humorous? That is hilarious.

To the supply/demand deniers, if Vancouver had the same supply of land as Calgary, would we still have sky high real estate prices? People seem to be suggesting that no amount of freed up land would change things, the Chinese would just buy it all up.

[dleung]

Originally Posted by geotag277

That's a humorous but disingenuous summation of the conversation. I was making assumptions about lot size, and until you reveal your source on the elements lot size, so are you.

By the way, the numbers have been changing as I've been determining different costs in different areas...

LOL you don't say?

Yes, we can have every household pay only $100k for land... if we make them live in 10-storey highrises wall-to-wall in SFH neighbourhoods beyond walking distance to transit. Nothing genius there.

Property can easily be measured in Google Earth if not GIS. Your brand of psuedo-math fixates on # of lots but ignores the size of a lot. If it's still the feudal system and buying a woman costs 3 slaves, you'd be the guy trying to trade in 3 children.

[lio45]

Originally Posted by logan5

Humorous? That is hilarious.

To the supply/demand deniers, if Vancouver had the same supply of land as Calgary, would we still have sky high real estate prices? People seem to be suggesting that no amount of freed up land would change things, the Chinese would just buy it all up.

They'd probably be slightly less sky high, but still extremely sky high.

If it were instead Ireland that had 1.3 billion people and millions of millionaires and was a communist country from which most people would wish to take their money out and into the laundering haven that is Canada which is one of the few if not only Western countries freely letting in questionable capital no questions asked, right now you can bet it would be St. John's that would have a completely out-of-whack real estate market, whether or not it can sprawl.

[lio45]

Originally Posted by logan5

People seem to be suggesting that no amount of freed up land would change things, the Chinese would just buy it all up.

If I may suggest an analogy: you can create an unlimited amount of new cryptocurrencies, yet the Chinese are still buying it all up and the "original" "highest quality" one, bitcoin, is still considered more desirable than the others; creating brand new lesser land out of thin air probably wouldn't really make much of a difference to the Chinese speculators who will likely continue to prefer the perceived highest quality investments (Point Grey, West End, areas of Richmond, etc.) they're already familiar with.

[logan5]

Originally Posted by lio45

They'd probably be slightly less sky high, but still extremely sky high.

If it were instead Ireland that had 1.3 billion people and millions of millionaires and was a communist country from which most people would wish to take their money out and into the laundering haven that is Canada which is one of the few if not only Western countries freely letting in questionable capital no questions asked, right now you can bet it would be St. John's that would have a completely out-of-whack real estate market, whether or not it can sprawl.

Then why don't Chinese investors start buying up Calgary then? Real estate is super cheap there.

[whatnext]

Originally Posted by dleung

Cool illustration of the issue. Thanks.

[GreaterMontréal]

Originally Posted by logan5

Then why don't Chinese investors start buying up Calgary then? Real estate is super cheap there.

I'm pretty sure nobody in Calgary would let that happen. I don't think Nenshi would like it. An economy should not depend on real estate alone. Albertans want to live in SDHs, not condos.
http://www12.statcan.gc.ca/census-recens...016005-eng.cfm?=undefined&wbdisable=true

[SF Thomas]

Apparently the cost of housing in Vancouver have gone up so much even municipal politicians there are now have a tough time affording homes....The Beaverton: Vancouver mayor won’t run for re-election because he can no longer afford to live in Vancouver

(For the record this is a satire piece)

[geotag277]

Originally Posted by dleung

LOL you don't say?

Yes, we can have every household pay only $100k for land... if we make them live in 10-storey highrises wall-to-wall in SFH neighbourhoods beyond walking distance to transit. Nothing genius there.

Property can easily be measured in Google Earth if not GIS. Your brand of psuedo-math fixates on # of lots but ignores the size of a lot. If it's still the feudal system and buying a woman costs 3 slaves, you'd be the guy trying to trade in 3 children.

Yes, the numbers are changing, as we are having a casual conversation online, you seem to think you are writing a PhD thesis or something. I am not applying much rigor to the conversation, just throwing out ideas. I can freely admit that. At the same time I am somewhat taking some of your assumptions at face value and you are acting like a 🞵🞵🞵🞵🞵 with some of my assumptions. Regardless, can you screen shot your calculation of the Elements lot size in GIS, because I still think you are talking out of your behind over-exaggerating the size of the lot.

In any case, I would agree that 80-100k per unit is still too high, which is why I suggested the myriad of things that can be done to drag down those land values almost overnight. Most of them focus on rental units and limiting speculation.

[casper]

Originally Posted by GreaterMontréal

I'm pretty sure nobody in Calgary would let that happen. I don't think Nenshi would like it. An economy should not depend on real estate alone. Albertans want to live in SDHs, not condos.
http://www12.statcan.gc.ca/census-recens...016005-eng.cfm?=undefined&wbdisable=true

Saskatoon has very similar dynamics to Calgary. The city runs out space some farm and is moved from the rural municipality into the city proper. It is then subdivided.

I was trying to buy a town house in Saskatoon during the peek. Very little inventory sales were by budding war and a large number of properties were owned by numbered companies for six months to a year and then flipped.

I was on a condo board in a new development. About half of the units were owned by investors. Some were nbe red companies others it was clear who the owner was.

This all sounds familiar being in Vancouver just the dollar values are different.

[lio45]

Originally Posted by logan5

Then why don't Chinese investors start buying up Calgary then? Real estate is super cheap there.

Because right now Vancouver works better for a few reasons. Closer geographically; culturally more Chinese; higher values so you can launder an amount of a few million in one stroke and with less taxes by passing the property as a principal residence; much higher profile in China.

You don't need the best cap rates or the best deals, it's not a priority at all. The main priority is to take your millions and bring them into a first world country that will let your money in without too much scrutiny (Canada), where your top criterion will be selecting a market that's reliable and familiar (Vancouver).

I said a few pages ago that if Vancouver wanted to do something for affordability, it could choose to take very concrete actions such as paying for / subsidizing high-frequency Beijing-Calgary and Shanghai-Calgary and Hong Kong-Calgary flights, paying realtors fluent in Mandarin to relocate to Calgary, and paying to advertise Calgary as a Canadian market in China.

[geotag277]

I do think foreign buyers are having a material impact on the Calgary market. Part of this I believe is shown through the fact that our market didn't go down nearly as much as I think it should have during the recession. Canada should just ban foreign investment in real estate like New Zealand did.

http://www.nzherald.co.nz/property/news/article.cfm?c_id=8&objectid=11974077

[GreaterMontréal]

Originally Posted by casper

Saskatoon has very similar dynamics to Calgary. The city runs out space some farm and is moved from the rural municipality into the city proper. It is then subdivided.

I was trying to buy a town house in Saskatoon during the peek. Very little inventory sales were by budding war and a large number of properties were owned by numbered companies for six months to a year and then flipped.

I was on a condo board in a new development. About half of the units were owned by investors. Some were nbe red companies others it was clear who the owner was.

This all sounds familiar being in Vancouver just the dollar values are different.

Saskatoon is about the size of Gatineau. unlike Vancouver, at least in Saskatoon, the average house price is down 4% yoy. now under $300k, Regina $315k. in Regina the price went from $131k in 2006 to $244k in 2009. very stable at the moment.

[logan5]

Sometimes this forum sounds like some faith based 🞵🞵🞵🞵🞵🞵🞵🞵.

[casper]

Originally Posted by GreaterMontréal

Saskatoon is about the size of Gatineau. unlike Vancouver, at least in Saskatoon, the average house price is down 4% yoy. now under $300k, like it should.

Saskatoon has the number of residential lots controlled by the city. AbouT 6 years ago prices were hight and property sold wI thin days of being listed. The city created more residential lots and addressed demand prices dropped. You can't do that in Vancouver for sfh.