Canada's 'housing bubble' deemed close to bursting

[hipster duck]

Originally Posted by lio45

Lol... you just realized that?? It always went without saying.

Ordinary residential real estate markets have always been driven by what people can afford in terms of monthly payment. ("Ordinary" keyword to exclude the rare cases where there's a infinite pool of Chinese billionaires who've taken a fancy to your market as an alternative to bitcoins.)

To me, it's akin to saying you "just realized" that when gas prices are skyhigh, people tend to drive less, and vice versa when gas prices go down to being particularly low.

In my inexperienced observations, I see at least 4 submarkets in Toronto and Vancouver:

Submarket 1: Luxury products unaffected by interest/lending rules; catering to rich foreign buyers who pay cash; [relatively] unlimited demand. Perfectly inelastic supply. Prices still rising.

Examples: City of Vancouver SFH market; parts of Toronto's central "wealth" corridor (e.g. east and west of Yonge street).

Submarket 2: Semi-detached and detached former working class neighbourhoods affected by interest/lending rules; catering to shrinking pool of upper middle class professionals who cannot afford these products with new mortgage requirements. Perfectly inelastic supply. Prices stable.

Examples: Inner city Bay and Gable Toronto outside of the traditionally upper middle class areas; East Van and the inner Vancouver [working class] suburbs

Submarket 3: Condos affected by interest/lending rules; catering to growing pool of upper middle class professionals priced out of Market 2 with few space requirements. Demand still growing, but elastic supply (for 1BR). Prices stable or rising.

Submarket 4: Less attractive suburban, former starter home areas very much affected by interest/mortgage rules. Catering to middle classes who are mortgage vulnerable and would probably have to rent otherwise. Inelastic supply but shrinking demand (and large supply to begin with). Prices stable or falling.

Examples: bungalow Scarborough (south of 401), portions of Mississauga, Etobicoke, Durham.

I don't think Vancouver has any of this kind of "slack" left.

[1overcosc]

Originally Posted by lio45

Lol... you just realized that?? It always went without saying.

Ordinary residential real estate markets have always been driven by what people can afford in terms of monthly payment. ("Ordinary" keyword to exclude the rare cases where there's a infinite pool of Chinese billionaires who've taken a fancy to your market as an alternative to bitcoins.)

To me, it's akin to saying you "just realized" that when gas prices are skyhigh, people tend to drive less, and vice versa when gas prices go down to being particularly low.

Its more than I didn't realize interest changes have been that dramatic.

[someone123]

The submarkets are important because people often get confused about what can be built or what should be affordable.

There isn't much that can be done to increase the supply for submarkets 1 and 2 in Vancouver (maybe infrastructure development could help a bit; slow commutes effectively make neighbourhoods less central) but the constraints on the supply of submarket 3 are artificial, and the condo and apartment situation in Vancouver is a huge train wreck.

If the trade-off in Vancouver for young professionals were that you had to live in a nice 3 BR instead of a small house in a similar neighbourhood that wouldn't be a big deal. But instead because of development controls a shoebox costs an arm and a leg. Renting isn't an attractive alternative either in a city with low vacancy rates and poor tenant protections.

Eventually Canadian cities will need to accept that they will have to do more than develop the uncontroversial low hanging fruit in old pre-war commercial areas, and tweak 1980's infrastructure to compensate. Or we'll all just need to accept a lower standard of living, since our most productive land will be used extremely poorly.

[sunsetmountainland]

Originally Posted by someone123

The submarkets are important because people often get confused about what can be built or what should be affordable.

There isn't much that can be done to increase the supply for submarkets 1 and 2 in Vancouver (maybe infrastructure development could help a bit; slow commutes effectively make neighbourhoods less central) but the constraints on the supply of submarket 3 are artificial, and the condo and apartment situation in Vancouver is a huge train wreck.

If the trade-off in Vancouver for young professionals were that you had to live in a nice 3 BR instead of a small house in a similar neighbourhood that wouldn't be a big deal. But instead because of development controls a shoebox costs an arm and a leg. Renting isn't an attractive alternative either in a city with low vacancy rates and poor tenant protections.

Eventually Canadian cities will need to accept that they will have to do more than develop the uncontroversial low hanging fruit in old pre-war commercial areas, and tweak 1980's infrastructure to compensate. Or we'll all just need to accept a lower standard of living, since our most productive land will be used extremely poorly.

Global cities have a different situation than some small Canadian market like Halifax. I think of you as a small city personality because of your debates as well as your arguments.

Your reality is so much different than someone from Hong Kong, Shanghai, Sydney, Toronto, Singapore, New York, the list goes on....

Globalization, has a different meaning for different people, someone from Halifax or say from Prague from the Czech republic will have a different understanding then say someone from Hong Kong, London, New York or Vancouver.

It might even be confusing to those without a world view or a understanding of globalization.

I am just suggesting those that cannot look outside the box might not understand or be correct?

It is not an insult just a learning curb.

[MolsonExport]

It is not an insult just a learning curb.

[dreambrother808]

Originally Posted by sunsetmountainland

Global cities have a different situation than some small Canadian market like Halifax. I think of you as a small city personality because of your debates as well as your arguments.

Your reality is so much different than someone from Hong Kong, Shanghai, Sydney, Toronto, Singapore, New York, the list goes on....

Globalization, has a different meaning for different people, someone from Halifax or say from Prague from the Czech republic will have a different understanding then say someone from Hong Kong, London, New York or Vancouver.

It might even be confusing to those without a world view or a understanding of globalization.

I am just suggesting those that cannot look outside the box might not understand or be correct?

It is not an insult just a learning curb.

Translation: You’re from a small city and I have nothing intelligible to add to the conversation.

[sunsetmountainland]

Originally Posted by dreambrother808

Translation: You’re from a small city and I have nothing intelligible to add to the conversation.

Thank you for showing up to the party no matter how late!

According to a new report from the International Monetary Fund, this is exactly what's happening. House price trends from London and Tokyo to Sydney and Toronto are becoming increasingly synchronized, the IMF's research has found. The "global factor" now accounts for more than a third of the price composition of housing in advanced economies, the report found.

https://www.huffingtonpost.ca/2018/04/17/housing-markets-globalization-imf_a_23412706/

I would also like to add thank you for adding nothing intelligible to the conversation!

[someone123]

Originally Posted by dreambrother808

Translation: You’re from a small city and I have nothing intelligible to add to the conversation.

Funny thing is I've lived longer in Vancouver than anywhere else at this point. I have also lived in Toronto and I grew up in a few different provinces. It's not true at all that I spent all my time in Halifax, moved to Vancouver, and then got disillusioned because I can't handle life in a city of this (moderate) size. Either way my boring life story has nothing to do with Vancouver's housing market.

Sometimes I get the impression that sunsetmountainland is some sort of bot trained on real estate ads and Donald Trump's twitter feed.

[SpongeG]

a learning curb?

isn't that Learning curve?

[mistercorporate]

I've met some dumb sociopaths in my time, but the levels of pathological narcissism on this thread are world class

What are the mods doing? Sociopaths are toxic to communities, even online communities, ban this fool.

[north 42]

Originally Posted by SpongeG

a learning curb?

isn't that Learning curve?

Does not compute does not compute does not compute

[mistercorporate]

[GreaterMontréal]

Doug Ford plans to open up the Greenbelt to housing development.

[north 42]

Of coarse he does!

[Gresto]

^That was intentional, wasn't it?

[mistercorporate]

Originally Posted by GreaterMontréal

Doug Ford plans to open up the Greenbelt to housing development.

Such a shame, he just lost my vote.

[Acajack]

Originally Posted by someone123

Funny thing is I've lived longer in Vancouver than anywhere else at this point. I have also lived in Toronto and I grew up in a few different provinces. It's not true at all that I spent all my time in Halifax, moved to Vancouver, and then got disillusioned because I can't handle life in a city of this (moderate) size. Either way my boring life story has nothing to do with Vancouver's housing market.

Sometimes I get the impression that sunsetmountainland is some sort of bot trained on real estate ads and Donald Trump's twitter feed.

... or maybe to feed the propaganda machine in support of keeping the good times rolling in the BC housing bubble!

[vid]

OMG ewe guise, leaf hymn uh loan!

[1overcosc]

Ford has now backtracked and said he will not touch the greenbelt.

[MolsonExport]

Typical uninformed, "throw jello at the wall" approach of DoFo.