Canada's 'housing bubble' deemed close to bursting

[p_xavier]

Average condo prices in Montréal are now above 400k$. 250k$ In Laval. Mostrly due to purchases by foreigners.

https://journalmetro.com/actualites/mont...s-prix-les-acheteurs-etrangers-en-cause/

[megadude]

How many people do you know who have condos or houses in their city of employment and go back to their city of residence on weekends? What used to be an affordable option seems pretty much unattainable now in a certain few cities.

I know of three people who were doing this. They bought their condos between 10 and 20 years ago. One did it for about 6 years before retiring. One still does it after more than 10 years and the other I have no idea about anymore and he's probably retired now anyway.

The guy from London to Mississauga had two grown kids at home so it didn't matter as much.

The guy from Kingston to Toronto had a 17 year old and 12 year old at the time he started. That 17 year old is now 23 and rents that condo from his dad at below market value because his job is a 3 minute walk from there.

And the guy I worked with at my last job has three young kids has been going from Stratford to Toronto for over 10 years now.

[Martin Mtl]

Originally Posted by d_jeffrey

Average condo prices in Montréal are now above 400k$. 250k$ In Laval. Mostrly due to purchases by foreigners.

https://journalmetro.com/actualites/mont...s-prix-les-acheteurs-etrangers-en-cause/

The article says that foreign buyers represent 3,6% of all purchases. It’s not a spectacular number.

[whatnext]

Originally Posted by lio45

Really? I always figured our mere mortals' laws were beneath Him.

HeHe

[Nite]

Toronto set for record apartment surge after rent control lifted
Natalie Wong, Bloomberg News

....The vacancy rate rose to 1.5 per cent in the second quarter, the highest since 2015, when research firm Urbanation began tracking the data. Rent increases eased to 7.6 per cent from 10.3 per cent last year, bringing the cost of an average-sized unit of 794 square feet to $2,475 ($1,894).....

https://www.bnnbloomberg.ca/toronto-set-...urge-after-rent-control-lifted-1.1286320

[someone123]

Originally Posted by Martin Mtl

The article says that foreign buyers represent 3,6% of all purchases. It’s not a spectacular number.

My understanding is that these numbers don't usually count indirect ownership. So if you are a non-Canadian and you purchase real estate through a corporation it does not count.

Likewise if you participate in an investor-class immigration program and you don't live in Canada (you're supposed to but in the past not everybody did), you count as a domestic buyer. You can be Chinese-born, live in China, you have never lived in Canada, and you count as a Canadian with a primary residence here for the purposes of these statistics.

Another strategy is to pass money on to Canadians to buy the properties and nominally list them as primary residences. In Vancouver there are officially Canadian buyers of multi-miillion dollar properties who are students with $0 income and moved here from another country only a few years ago.

All of this means that there could be a huge difference between the impact suggested by the official foreign buyer number and the actual impact of foreign real estate investors or speculators.

[whatnext]

Not out of the housing woods yet:

...Just when we thought our housing market was out of the woods, a new report warns that Canada and New Zealand are the two countries in the world most vulnerable to a house price correction. Bloomberg’s housing bubble dashboard finds that in these two countries the cost of housing compared with wages is the highest in the world. Tighter mortgage rules and foreign buyer taxes have cooled the markets somewhat, but there are risks that the current trend towards looser monetary policy could fuel new bubbles....

https://business.financialpost.com/execu...t-it-was-out-of-the-housing-bubble-woods

[ssiguy]

Originally Posted by Martin Mtl

The article says that foreign buyers represent 3,6% of all purchases. It’s not a spectacular number.

This is the perpetual lie that developers and politicians said about Vancouver. Like the Greeks, beware Chinese bearing gifts. There is time for Montreal to avoid Vancouver's fate of becoming completely unlivable for all but the top 5% of wage earners but don't wait unfortunately money talks and it is essential that Montrealer's demand an end to it now.

[Martin Mtl]

Originally Posted by someone123

My understanding is that these numbers don't usually count indirect ownership. So if you are a non-Canadian and you purchase real estate through a corporation it does not count.

Likewise if you participate in an investor-class immigration program and you don't live in Canada (you're supposed to but in the past not everybody did), you count as a domestic buyer. You can be Chinese-born, live in China, you have never lived in Canada, and you count as a Canadian with a primary residence here for the purposes of these statistics.

Another strategy is to pass money on to Canadians to buy the properties and nominally list them as primary residences. In Vancouver there are officially Canadian buyers of multi-miillion dollar properties who are students with $0 income and moved here from another country only a few years ago.

All of this means that there could be a huge difference between the impact suggested by the official foreign buyer number and the actual impact of foreign real estate investors or speculators.

Hum, ok. Thanks for the info.

[zahav]

Originally Posted by ssiguy

This is the perpetual lie that developers and politicians said about Vancouver. Like the Greeks, beware Chinese bearing gifts. There is time for Montreal to avoid Vancouver's fate of becoming completely unlivable for all but the top 5% of wage earners but don't wait unfortunately money talks and it is essential that Montrealer's demand an end to it now.

I have been saying this for years and get the same reply that "it isn't an issue and prices are still low" blah blah blah. Amazing how people are easily fooled

[Pinus]

Originally Posted by whatnext

Not out of the housing woods yet:

...Just when we thought our housing market was out of the woods, a new report warns that Canada and New Zealand are the two countries in the world most vulnerable to a house price correction. Bloomberg’s housing bubble dashboard finds that in these two countries the cost of housing compared with wages is the highest in the world. Tighter mortgage rules and foreign buyer taxes have cooled the markets somewhat, but there are risks that the current trend towards looser monetary policy could fuel new bubbles....

https://business.financialpost.com/execu...t-it-was-out-of-the-housing-bubble-woods

I would think Australia would included in this as well. These three markets have been heavily influenced and impacted by Chinese foreign ownership. It's a harsh lesson to learn for a country, but I guess some of us need to learn the hard way not to treat real estate as an international commodity up for purchase on the global market.

[Pinus]

Originally Posted by zahav

I have been saying this for years and get the same reply that "it isn't an issue and prices are still low" blah blah blah. Amazing how people are easily fooled

Amazing how people are just stupid and short-sighted. Full stop.

[Martin Mtl]

Originally Posted by Pinus

Amazing how people are just stupid and short-sighted. Full stop.

Relax.

[Pinus]

Originally Posted by Martin Mtl

Relax.

Hey it's your city and real estate. You can do whatever your heart pleases. Just don't come crying to us about how unaffordable your housing market has become should you choose not to deal with the Chinese foreign ownership issue before it gets out of hand.

[GreaterMontréal]

Originally Posted by Pinus

Hey it's your city and real estate. You can do whatever your heart pleases. Just don't come crying to us about how unaffordable your housing market has become should you choose not to deal with the Chinese foreign ownership issue before it gets out of hand.

Downtown Montréal will become more and more unaffordable. The problem with the real estate market in Montréal is that the construction industry can't keep up with the population growth. The Greater Montreal Extended Area added more than 75k people, Q2 2018 to Q2 2019.

[lio45]

Originally Posted by Pinus

Hey it's your city and real estate. You can do whatever your heart pleases. Just don't come crying to us about how unaffordable your housing market has become should you choose not to deal with the Chinese foreign ownership issue before it gets out of hand.

I don't intend to be crying if that happens rather, laughing ("all the way to the bank", I believe is the saying)

[lio45]

Originally Posted by zahav

I have been saying this for years and get the same reply that "it isn't an issue and prices are still low" blah blah blah. Amazing how people are easily fooled

Originally Posted by Pinus

Amazing how people are just stupid and short-sighted. Full stop.

Fact #1: Most people in this province are homeowners. Fact #2: Most people don't object to getting richer, whenever that's possible.

You guys are expecting extremely unnatural behavior; it's pretty obvious that it's the opposite (people cheering because they're getting richer as their homes rise in value) that's going to happen. Things would have to be a hell of a lot more problematic (reaching near-Vancouver levels) before people would start to think that maybe the positives of rising real estate values don't greatly outweigh the negatives anymore.

[Pinus]

Originally Posted by lio45

Fact #1: Most people in this province are homeowners. Fact #2: Most people don't object to getting richer, whenever that's possible.

You guys are expecting extremely unnatural behavior; it's pretty obvious that it's the opposite (people cheering because they're getting richer as their homes rise in value) that's going to happen. Things would have to be a hell of a lot more problematic (reaching near-Vancouver levels) before people would start to think that maybe the positives of rising real estate values don't greatly outweigh the negatives anymore.

Give it 20-30 years and your grandchildren will be of a completely different mindset then yours.

[zahav]

No one is trying to put Montreal down, again I have said this so many times. It's just you seem to think circumstances are different with you in Montreal and it isn't. The population growth rate is lower than Vancouver and Toronto still, and employment and GDP growth is still lower than Vancouver. Also remember, it wasn't that long ago that average prices even for single family were under a million in Vancouver. But things got out of control pretty quick (let's say 2014-2016) so it could happen to Montreal too. I'm not saying it will, but don't claim it isn't. And laughing all the way to the bank is laughable, that's an outrageous thing to say. One of the things that Montreal had going for it was that housing wasn't a mass traded commodity, it was actually jusy housing for people living there. Now there is a very noticeable (and even more behind the scenes) influence of outside money, that isn't something to be happy about even for existing homeowners.

And lastly, before you get too high on it, the only reason investment has gone there is because Vancouver and Toronto intententionally turned it away. Not really something to be proud of as a 3rd choice, and then turning around and claiming it's because the City is on fire when it's not

[theman23]

Originally Posted by lio45

Fact #1: Most people in this province are homeowners. Fact #2: Most people don't object to getting richer, whenever that's possible.

You guys are expecting extremely unnatural behavior; it's pretty obvious that it's the opposite (people cheering because they're getting richer as their homes rise in value) that's going to happen. Things would have to be a hell of a lot more problematic (reaching near-Vancouver levels) before people would start to think that maybe the positives of rising real estate values don't greatly outweigh the negatives anymore.

I think the issue is that young adult type that tends to post on SSP (and old geezers like you) can still afford property in Montreal. Many already have purchased, so of course they'd cheer as their investments go up in value. The same age group in Vancouver and Toronto can't, so are of a totally different mindset.

Enjoy it, but your children and younger siblings will resent you.