Canada's 'housing bubble' deemed close to bursting

[wave46]

Originally Posted by rousseau

I'm old enough to remember those stylistic flourishes from the 1970s, but that kitchen goes above and beyond anything I ever saw. I'd have thought that that shade of green would be a nausea hazard.

I think it gave me a mild seizure.

[drew]

The shocking thing to me is that the amount of effort over the years that have gone in to maintain that paint, furnishings and carpet, etc.

It's downright horrible - but you have to admit the condition is spectacular.

But yeah, think about how much pee is saturated into that carpet beside the toilet. Blech.

[SignalHillHiker]

Originally Posted by wave46

I didn't think the market was that strong in St. John's given the downturn. Or is the city still drawing people in from the rest of the province?

Big cities I get for being expensive. It's small cities with ample land around them that confuse me.

Almost all of our growth is from other regions of the province. But that house is still cheap - it's just far more expensive than it should be, and recently would've been, for its condition and neighbourhood. Typical suburban house here is closer to $400K.

[Marty_Mcfly]

Originally Posted by wave46

I didn't think the market was that strong in St. John's given the downturn. Or is the city still drawing people in from the rest of the province?

Big cities I get for being expensive. It's small cities with ample land around them that confuse me.

Home values dropped a lot since the oil crash. At their peak I think the average home cost was around $350-375k, right now I think the average home cost is sitting just above $300k. Those numbers are dragged down by a lot of centre-city/downtown attached rowhouses which are barely worth the land they sit on. If you want a newish suburban home on a postage stamp lot it'll likely run you $400k.

That Lemarchant Road property is mind blowing. It's an old house which has not been updated at all, on a busy centre city street in an undesirable neighbourhood. I'd pay 180 max for it, and to be honest that's even steep. For context, I just bought a home that is likely 40 years newer than that home, on a quiet street in a neighbourhood 10 minutes from downtown, on 3/4 of an acre, that has all updated plumbing and electrical, for 10k more than the list price on that house.

For the record, the city has that property valued at $185,000 as of 2018, so I honestly don't know who the seller and realtor are trying to kid with this one.

[megadude]

In regards to that carpeted bathroom, I've witnessed this once in a 1990s condo in Mississauga. Pretty nice condo my friend was renting at the time. The master bathroom was carpeted while the guest one was not.

I had never in my life imagined such a thing existed. It would be as bizarre as a carpeted kitchen to me. I was blown away when I saw it.

[whatnext]

Originally Posted by megadude

In regards to that carpeted bathroom, I've witnessed this once in a 1990s condo in Mississauga. Pretty nice condo my friend was renting at the time. The master bathroom was carpeted while the guest one was not.

I had never in my life imagined such a thing existed. It would be as bizarre as a carpeted kitchen to me. I was blown away when I saw it.

The English were/are big on carpeted bathrooms.

[urbandreamer]

Originally Posted by esquire

I get a kick out of those types of time capsule houses.

Here's one that caught my eye in Winnipeg recently, the theme is 'successful 1970s businessman and family'... owned by the same family since it was built in 1974. $689K takes it... although I suspect whoever buys it is probably bringing in the wrecking crews.












Sidenote: there are few things more gross than wall to wall carpeting in a bathroom

Wow I love this house! I'd renovate a few rooms but love the colourful wallpaper, kitchen and exterior! Where is it located?

[SignalHillHiker]

I kinda love the kitchen. I might have to ditch the wallpaper just because it's too much. If accent walls were still in, I'd totally keep it as an accent though. And the floor is objectively ugly. But the cabinets and other colours... love it. And books in an attached dining room? Linda, you're not that interesting.

[Nouvellecosse]

I think some people keep their collection of cookbooks in the kitchen.

Not sure how I feel about the interior tbh. It's certainly colourful, but I find it a bit inconsistent. It seems to be mixing mid-century modern, 70s funky, with some historic French style pieces thrown in for good measure. I don't mind the abundance of colour and texture which gives a vaguely Mario Buatta vibe but I wish there was more cohesion. It's ok to be eclectic and combine elements of varying origins but it has to be elements that have some sense of agreement. It has to be done carefully and thoughtfully; it isn't random.

[lio45]

An old couple, family friends, just sold their suburban Montreal house - they bought it in the 1960s when it was new-ish and did not change much in it since. My uncle remarked anyone buying it would have to put $100k in it... in the end, he was incorrect: a young couple bought it - at a reasonably low price: a bit over $200k - who loved the authentic "vintage" feel and intends to leave it as is That house was a true time capsule. (I'm a huge fan of time capsules and would also have left it as it was!)

(Having buyers who will keep it the way it is is the scenario that makes the most sense - the people who like it as is, rare as they may be, will inevitably be the ones able to offer the highest amounts, compared to their rivals who have to budget for changing everything. It's all but guaranteed the same thing will happen with that St. John's Lemarchant Rd house, and that Winnipeg one. The empty land is very unlikely to be worth anywhere near $600k plus demo costs... but that house, as is, to the right person, might be.)

[lio45]

Originally Posted by Nouvellecosse

I think some people keep their collection of cookbooks in the kitchen.

Not sure how I feel about the interior tbh. It's certainly colourful, but I find it a bit inconsistent. It seems to be mixing mid-century modern, 70s funky, with some historic French style pieces thrown in for good measure. I don't mind the abundance of colour and texture which gives a vaguely Mario Buatta vibe but I wish there was more cohesion. It's ok to be eclectic and combine elements of varying origins but it has to be elements that have some sense of agreement. It has to be done carefully and thoughtfully; it isn't random.

I agree, the decor inside is quite random.

The outside looks great though - a really nice example of the semi-futuristic trend of 1970s architecture.

[whatnext]

The real estate board releases June data, confirming Vancouver's continuing crash and burn:

After a brief jump in sales activity in May, June’s residential resale transactions across Metro Vancouver barely passed the 2,000 mark, according to statistics released July 3 by the Real Estate Board of Greater Vancouver (REBGV).

There were 2,077 home sales across the region in June, which is 14.4 per cent lower than June 2018 and a 21.3 per cent decrease from the previous month.

That figure is the lowest number of home sales for the month since June 2000, and 34.7 per cent below the 10-year June sales average...

https://biv.com/article/2019/07/benchmark-residential-price-metro-vancouver-slips-under-1m-rebgv

[Dr Awesomesauce]

I'll take the late mid-century garishness of the above ranch house over the taupey beigeness of our current colour palette any day.

It's time for designers to rediscover their inner Liberace...

[lio45]

Originally Posted by whatnext

The real estate board releases June data, confirming Vancouver's continuing crash and burn:

After a brief jump in sales activity in May, June’s residential resale transactions across Metro Vancouver barely passed the 2,000 mark, according to statistics released July 3 by the Real Estate Board of Greater Vancouver (REBGV).

There were 2,077 home sales across the region in June, which is 14.4 per cent lower than June 2018 and a 21.3 per cent decrease from the previous month.

That figure is the lowest number of home sales for the month since June 2000, and 34.7 per cent below the 10-year June sales average...

https://biv.com/article/2019/07/benchmark-residential-price-metro-vancouver-slips-under-1m-rebgv

Are prices falling too, or just volumes for the time being?

One characteristic of a speculative bubble backed by rich speculators is that they usually don't need to sell. So when the party's over, volume falls but prices may hold steady for a while. Vancouver real estate is like what bitcoin would be if the market was driven by rich investors... when people stop believing it in, what happens is that no one wants to buy anymore, so sales volume goes off a cliff, yet you don't see a crash (in prices) because no one needs to liquidate.

[kwoldtimer]

Originally Posted by lio45

Are prices falling too, or just volumes for the time being?

One characteristic of a speculative bubble backed by rich speculators is that they usually don't need to sell. So when the party's over, volume falls but prices may hold steady for a while. Vancouver real estate is like what bitcoin would be if the market was driven by rich investors... when people stop believing it in, what happens is that no one wants to buy anymore, so sales volume goes off a cliff, yet you don't see a crash (in prices) because no one needs to liquidate.

From today's Mop & Pail:

The residential benchmark price slipped to $998,700, down from a record high of $1.1-million in May, 2018, and the lowest since $992,500 in May, 2017, according to the board. The benchmark figure, an industry representation of the typical home sold in Greater Vancouver, has declined month over month for the 13th consecutive time.

https://www.theglobeandmail.com/business...-fall-to-19-year-low-as-benchmark-price/

[ssiguy]

Been keeping an eye on sales SFH in greater Vancouver for a while and what is selling is changing dramatically.

The funny thing about the market is that the cheap and smaller houses aren't selling at all. Metro Vancouver homes from about 2010 to 2018 is that often dumpy little places sold for as much as much larger and new homes. This is because no one in Vancouver could afford to buy them and hence they were built strictly by the Chinese to either launder money and/or tear down, build something palacial in it's place and then sell it and the smaller the house, the easier the tear down.

Seriously, how many people do you know can afford to buy a complete shack for $1.5 million and then tear it down and put up a new house? In short it was just the land and flipping fueled by dirty money. Now those dumpy homes have seen their asking prices plunge and yet aren't being bought because now , with the Chinese disappearing, they have to get buyers who will pay good money to actually LIVE in the house and they can't find any. As an example, 2 years ago the average price of a 2 bedroom, 1 bathroom pre-war house in NuWest and Langley were well over a million bucks but only 20% less than the average much newer 4 bedroom.

This is why these numbers are not MUCH worse............the most affordable one which have seen their asking prices plunge aren't relected in the HPI index because none of them are selling.

[whatnext]

Originally Posted by lio45

Are prices falling too, or just volumes for the time being?

One characteristic of a speculative bubble backed by rich speculators is that they usually don't need to sell. So when the party's over, volume falls but prices may hold steady for a while. Vancouver real estate is like what bitcoin would be if the market was driven by rich investors... when people stop believing it in, what happens is that no one wants to buy anymore, so sales volume goes off a cliff, yet you don't see a crash (in prices) because no one needs to liquidate.

Prices are falling. For example, two bed condos in an area I watch hit about $1,100,000 are now listed for $1,050,000 and then the prices are being cut to @$975k to make the sale.

You have to remember Vancouver's economy is still doing very well. So that's helping, people still need a place to live. Condo construction jobs will tail off but some big public project like the Millennium-Broadway Skytrain, Patullo Bridge replacement and new St. Paul's Hospital will absorb some of those workers. Many might just go back to Alberta as oil slowly recovers.
Won't be pretty if there's a full-blown recession though.

The areas hardest hit by sales drops are where foreign buyers were most active: West Side, West Van, Richmond and Burnaby. SFH builders are in a precarious position, though they can still rent them out to help cover their mortgages.

[zahav]

Prices will start to fall as many realtors are telling sellers they are crazy to think if they hold out, prices will go up. They would have to hold out a long time to get higher. But that is a good thing, if people need to sell they will lower the price. And if they don't need to sell in the short term, they would rent it out to get income, which will increase supply. Or they will continue to live in the house like a normal person and not play with the market lol, what a novel concept!

[esquire]

Originally Posted by urbandreamer

Wow I love this house! I'd renovate a few rooms but love the colourful wallpaper, kitchen and exterior! Where is it located?

Originally Posted by lio45

(Having buyers who will keep it the way it is is the scenario that makes the most sense - the people who like it as is, rare as they may be, will inevitably be the ones able to offer the highest amounts, compared to their rivals who have to budget for changing everything. It's all but guaranteed the same thing will happen with that St. John's Lemarchant Rd house, and that Winnipeg one. The empty land is very unlikely to be worth anywhere near $600k plus demo costs... but that house, as is, to the right person, might be.)

The house is in Tuxedo, which is a fairly posh older suburban area with big lots and lots of demolition/reconstruction infill activity. If there's one place in Winnipeg where a house that young (relatively) and that big is likely to be demolished and replaced, it's around there, although yeah, it would probably have to sell for under asking to make the economics work. Then again, a lot of the residents around there are millionaires who are perhaps not that concerned with paying a couple extra hundred Ks for a nice lot.

But that said, it's not so old and run down that demolition is guaranteed... it's certainly possible that someone could buy it and give it a makeover.

[Andy6]

Originally Posted by esquire

The house is in Tuxedo, which is a fairly posh older suburban area with big lots and lots of demolition/reconstruction infill activity. If there's one place in Winnipeg where a house that young (relatively) and that big is likely to be demolished and replaced, it's around there, although yeah, it would probably have to sell for under asking to make the economics work. Then again, a lot of the residents around there are millionaires who are perhaps not that concerned with paying a couple extra hundred Ks for a nice lot.

But that said, it's not so old and run down that demolition is guaranteed... it's certainly possible that someone could buy it and give it a makeover.

Tuxedo is a bit more than “fairly” posh, I’d say ... but that house is very attractive on the outside so hopefully it won’t be replaced with some new monstrosity.