Canada's 'housing bubble' deemed close to bursting

[goodgrowth]

As someone who is thinking about moving to BC in the future and has recently been looking at different areas you start to get an idea why there is more upward pressure on prices compared to a lot of other places.

Most obvious one to me is land supply. BC is kind of deceiving in that regard until you use a topographical map. In terms of the places where most want to live (ie Southern BC/Van Island) it actually doesn't have a huge of amount of develop-able land. You only really have the Lower Mainland (which from what I can gather is slightly smaller than PEI in area), portions of the east coast of Van Island....and tiny river banks in the interior.

Then you add things like having the only mild climate in Canada and the agricultural land reserve(which admittedly I don't know a huge amount about but I'm guessing it impacts development speed) and it becomes compounding effect.

I think Southern BC's real estate will always be expensive relative to Canada. You have a supply-constrained desirable area within in one of the most developed countries in the world.

I suspect foreign money being parked into BC real estate is a side effect of that more so than a root cause.

[ssiguy]

This developer and politician narrative that Metro is running out of land makes me either want to laugh because it is so farcisal or cry because people actually beleive it. The reality is that the cities of Surrey, Langley, and White Rock are nearly the exact same size as the city of Toronto but the 3 cities combined only have 750,000 while Toronto has 3.1 million. Ditto for Montreal. So much for the "running out of land" crap.

As for the rental situation, the city and province can build rental housing en masse and it won't make a hoot of difference. Of course they should build housing for people on limited incomes but that won't rescue the city from it's housing & rental crisis. This is due exclusively by the Metro Vancouver's outrageous real estate prices. In the rest of the country you have a large working and middle class that are owners but Vancouver such people can't afford to buy even a condo..............hundreds of thousands of Vancouverites have been artificially kept in the rental market because buying isn't an option. The ONLY way to solve that problem is a huge housing collpase of at least 50% so those renters can afford to move into the real estate market and hence freeing up rentals for those who can't.

[misher]

Originally Posted by ssiguy

This developer and politician narrative that Metro is running out of land makes me either want to laugh because it is so farcisal or cry because people actually beleive it. The reality is that the cities of Surrey, Langley, and White Rock are nearly the exact same size as the city of Toronto but the 3 cities combined only have 750,000 while Toronto has 3.1 million. Ditto for Montreal. So much for the "running out of land" crap.

As for the rental situation, the city and province can build rental housing en masse and it won't make a hoot of difference. Of course they should build housing for people on limited incomes but that won't rescue the city from it's housing & rental crisis. This is due exclusively by the Metro Vancouver's outrageous real estate prices. In the rest of the country you have a large working and middle class that are owners but Vancouver such people can't afford to buy even a condo..............hundreds of thousands of Vancouverites have been artificially kept in the rental market because buying isn't an option. The ONLY way to solve that problem is a huge housing collpase of at least 50% so those renters can afford to move into the real estate market and hence freeing up rentals for those who can't.

Given that current homes only have about 1-2% in vacancies while rental vacancies are under 1% where will all the current homeowners go if forced to sell their homes? I know a lot of people say we have a ton of magical foreign owned homes sitting empty but stats have not backed this up....look at the below stats from the Vancouver Empty Home Tax, do you see a lot of empty homes people can buy? Is the strategy for the economy to collapse and for homeowners to commit suicide so renters can move in? If not, where are the homeowners with homes 50% cheaper going to go? Then look at the rental vacancy information below and you can see that Vancouver has only been pushing people into the suburbs for the past decade and unfortunately the suburbs are now full to bursting. I'll be honest, I think its very stupid to say this is anything but a supply issue. I hope you can either agree or tell me where I am mistaken.

Look at how many empty homes are currently seen as occupy-able and rentable in Vancouver (not under construction, currently part of an estate, under rennovation, etc). Basically there are no more homes for people to buy and live in without first kicking someone out.




We need to house another million people in metro Vancouver in 30 years. That works out to needing to house 33,000 a year. Assuming two people in each home thats 16500 homes we need a year in Metro Vancouver. Remember that for every 5 new homes built one is usually demolished. So that works out to us needing 19,800 homes a year built just to keep up with immigration. This doesn't count tourism, international students, and other housing that is needed. Our office vacancy rate leads the nation, our industrial vacancy rate leads the nation, our hotel vacancy rate leads the nation. We need to get ahead of our demand by building enough, instead we're reducing development and blocking projects. Vancouver's problems are self inflicted and we just don't learn or pay attention to the facts. Its obvious that building more housing would make housing cheaper both to own or rent. But instead you have the rich and poor of Vancouver doing their best to halt development in its tracks. The rich because they want property values to go up and to maintain their views, and the poor because they hate the idea of anyone making money especially through real estate.
https://www.vancouverisawesome.com/2019/01/11/population-growth-2050-metro-vancouver/

[zahav]

Originally Posted by ssiguy

This developer and politician narrative that Metro is running out of land makes me either want to laugh because it is so farcisal or cry because people actually beleive it. The reality is that the cities of Surrey, Langley, and White Rock are nearly the exact same size as the city of Toronto but the 3 cities combined only have 750,000 while Toronto has 3.1 million. Ditto for Montreal. So much for the "running out of land" crap.

As for the rental situation, the city and province can build rental housing en masse and it won't make a hoot of difference. Of course they should build housing for people on limited incomes but that won't rescue the city from it's housing & rental crisis. This is due exclusively by the Metro Vancouver's outrageous real estate prices. In the rest of the country you have a large working and middle class that are owners but Vancouver such people can't afford to buy even a condo..............hundreds of thousands of Vancouverites have been artificially kept in the rental market because buying isn't an option. The ONLY way to solve that problem is a huge housing collpase of at least 50% so those renters can afford to move into the real estate market and hence freeing up rentals for those who can't.

Supply is still an issue, although obviously not the only issue. The physical size of Langley and Surrey is big, but so much is restricted to the ALR, same with Richmond, so just comparing size doesn't tell the story of what is developable. And also, redevelopment of existing land is a different beast than just expanding outwards onto virgin land, it is not as easy and takes way more coordination. Vancouver is the most constrained physically and that is a factor (again, definitely not the only factor by any means, but it is a factor that physically unrestricted cities don't have to deal with)

[someone123]

Originally Posted by misher

We need to house another million people in metro Vancouver in 30 years.

Due to natural increase? Migration from other parts of Canada?

So far the answer is that we must protect NIMBY interests and we must allow lots of immigration. Livability and affordability are sacrificed.

I'm personally more on the side of higher immigration and good development but I don't think the immigration aspect should be ignored. And if it's politically intractable to overcome NIMBYism then I am not sure the right answer is to mindlessly promote having another million people move here while pushing out many existing residents (including the immigrants of yesteryear) in the process.

On a more local level we have a similar issue with rezoning for infill while people oppose new infrastructure. For example New West is pro-housing but anti-road and anti-bridge. North Van is pro-development-fees but the bridges there are a complete disaster, to the point where sometimes it's better to just give up on trying to get north of the city. If metro Vancouver is to have 3.5 million people then it needs more than its current infrastructure which is suited to about 1.5 million.

[misher]

Originally Posted by someone123

Due to natural increase? Migration from other parts of Canada?

So far the answer is that we must protect NIMBY interests and we must allow lots of immigration. Livability and affordability are sacrificed.

I'm personally more on the side of higher immigration and good development but I don't think the immigration aspect should be ignored. And if it's politically intractable to overcome NIMBYism then I am not sure the right answer is to mindlessly promote having another million people move here while pushing out many existing residents (including the immigrants of yesteryear) in the process.

On a more local level we have a similar issue with rezoning for infill while people oppose new infrastructure. For example New West is pro-housing but anti-road and anti-bridge. North Van is pro-development-fees but the bridges there are a complete disaster, to the point where sometimes it's better to just give up on trying to get north of the city. If metro Vancouver is to have 3.5 million people then it needs more than its current infrastructure which is suited to about 1.5 million.

I think projections point to half from immigration from abroad and the other half from Canadian immigration. Many people in the interior of BC and Canada itself move to Vancouver. Young people are moving away but more are moving here.

The Metro Vancouver 2040 plan is worth a read. http://www.metrovancouver.org/services/r...ngPublications/RGSAdoptedbyGVRDBoard.pdf

The mayors and cities of Metro Vancouver have generally agreed to confine density and growth to Metro cores and city centres. As they state, the #1 goal is:

Goal 1: Create a Compact Urban Area
The Metro 2040 Vision: Metro Vancouver’s population is concentrated in compact communities with access to a range of housing choices, employment, amenities and services. Compact, transit-oriented development patterns help to reduce greenhouse gas emissions and pollution, and support both the efficient use of land and an efficient transportation network.

For some reason this plan is not well known or discussed despite it being the overarching plan directing Metro Vancouver cities and councils. Commercial and residential high density development is to be confined to downtown and West Broadway with a smaller core for Surrey Central. Langley, Richmond, Burnaby, North Van, Maple Ridge, and New West will also have smaller regional city centres for medium density commercial/residential. Even smaller municipal town centres for low to mid rise density are projected for other cities, the oakridge area, Brentwood, etc.

Altogether Vancouver's Metro core is supposed to contain 8% of Metro Vancouver's overall dwellings and 18% of its jobs by 2041.

The metro core:

Region-Serving Centres, Metropolitan Core, The Region’s Downtown, Downtown Vancouver, and Central Broadway

• The Metropolitan Core is the principal business, employment, cultural and entertainment location for the region

According to the plan Metro Vancouver's current population is 2,356,000 in 2011 and is projected to rise to 3,443,000 in 2041. Its total housing is supposed to increase from 890,000 to 1,423,000



The Metro 2040 Plan is the cohesive document which all cities within Metro Vancouver have agreed upon and is likely the best guide to follow regarding our growth and development per the below:

ACCEPTED, BY RESOLUTION
• by the Village of Anmore on the 8th day of March, 2011
• by the Village of Belcarra on the 21st day of February, 2011
• by the City of Burnaby on the 7th day of March, 2011
• by the City of Coquitlam on the 25th day of July, 2011
• by the Corporation of Delta on the 7th day of February, 2011
• by the City of Langley on the 21st day of February, 2011
• by the Township of Langley on the 7th day of March, 2011
• by the Village of Lions Bay on the 24th day of January, 2011
• by the District of Maple Ridge on the 22nd day of March, 2011
• by the City of New Westminster on the 14th day of March, 2011
• by the City of North Vancouver on the 7th day of March, 2011
• by the District of North Vancouver on the 21st day of March, 2011
• by the City of Pitt Meadows on the 1st day of March, 2011
• by the City of Port Coquitlam on the 14th day of March, 2011
• by the City of Port Moody on the 8th day of April, 2011
• by the City of Richmond on the 28th day of February, 2011
• by the City of Surrey on the 28th day of February, 2011
• by the Tsawwassen First Nation on the 2nd day of March, 2011
• by the City of Vancouver on the 3rd day of March, 2011
• by the District of West Vancouver on the 7th day of March, 2011
• by the City of White Rock on the 7th day of March, 2011
• by the Fraser Valley Regional District on the 22nd day of February, 2011
• by the Squamish-Lillooet Regional District on the 28th day of February, 2011

People talk about upzoning detached housing but its clear that all the cities have agreed that its not happening. So while I was surprised that the 28 storey rental development on Broadway seems to have a chance of being approved and the 40 storey wooden tower is even being proposed, it does meet the plan so I'm not too surprised.

[SpongeG]

Hong Kongers are looking to buy properties in Toronto and Vancouver as protests rage

People scouting for properties in Canada and U.K. as unease surrounding Hong Kong's political future grows amid China's increasing influence

Bloomberg News
Natalie Wong
July 25, 2019

As protests continue to rock Hong Kong, real estate brokers in Canada and the U.K. are fielding a flood of inquiries from investors in the former British colony who are eager to get out.

Dan Scarrow, president of Macdonald Real Estate Group in Vancouver, said many of his Chinese agents saw an uptick in interest for both sales and rentals this month from Hong Kong. One of his agents is putting off her planned retirement this year to capitalize on the opportunity.

Before, it was usually a ratio of five mainland Chinese to one Hong Kong buyer coming to open-houses, he said. “It has completely flipped now,” said Scarrow. “Whether or not that actually translates into deals, that comes down to what continues to happen in Hong Kong.”

...

https://business.financialpost.com/real-...ies-in-canada-and-u-k-to-escape-protests

[goodgrowth]

Originally Posted by zahav

Supply is still an issue, although obviously not the only issue. The physical size of Langley and Surrey is big, but so much is restricted to the ALR, same with Richmond, so just comparing size doesn't tell the story of what is developable. And also, redevelopment of existing land is a different beast than just expanding outwards onto virgin land, it is not as easy and takes way more coordination. Vancouver is the most constrained physically and that is a factor (again, definitely not the only factor by any means, but it is a factor that physically unrestricted cities don't have to deal with)

This was basically the argument I was trying to make with regards to supply. Southern BC is actually pretty physically constrained in terms of developable land relative to most other places in Canada (and North America for that matter) The Lower Mainland also doesn't have the same pressure release options as a lot of cities/regions do (endless new sprawl, accessible nearby cities).

ALR seems to only compound and complicate this issue.

Assuming Canada continues to grow it's population at the same rates, Southern BC probably has ~75 years before the availability of new develop-able land becomes pretty scarce..

Prices will always be out of step with the Canadian average imo.

[misher]

Originally Posted by goodgrowth

This was basically the argument I was trying to make with regards to supply. Southern BC is actually pretty physically constrained in terms of developable land relative to most other places in Canada (and North America for that matter) The Lower Mainland also doesn't have the same pressure release options as a lot of cities/regions do (endless new sprawl, accessible nearby cities).

ALR seems to only compound and complicate this issue.

Assuming Canada continues to grow it's population at the same rates, Southern BC probably has ~75 years before the availability of new develop-able land becomes pretty scarce..

Prices will always be out of step with the Canadian average imo.

Not to mention that Vancouver has 3x the development fees per sqft as Toronto, requires much more expensive designs (balconies, trees, nature, flow, materials, etc) than the norm, has a much more expensive building code+fire code, etc. Prices are artificially constrained such that we cannot build for cheaper than things currently cost. Vancouver even requires a fire suppression sprinkler system in new houses. How many of you in Canada own a house and have a sprinkler system in your house?

Btw Hong Kong is shaping up to be a massive incident that the West has underestimated. There are riots and fights weekly. I strongly suspect China or another large organization is deliberately backing the opposition to give China a casus belli to step in. When you have constant fights around transit and major centres you know there is trouble brewing. Anyone that can afford to get out of HK will likely at the very least get their families out. I know every HK person in Canada is quite freaked out at whats happening and my HK friends in HK are sending me videos of the madness thats happening there. The city is falling apart at its seams and one showed me photos she took of white people giving students money to go protest. She seemed to think America is backing protests but I didn't believe that. No idea whats happening there but its bad news.

• Video Link

[SpongeG]

^^Yes, there was something big going in the Hong Kong Airport today. I saw an article that was saying they believe the Mafia backed by China is sending people in to stir things up

Some support form Richmond

A ‘Lennon Wall’ sprung up in Richmond to support Hong Kong protesters
Richmond News
JULY 25, 2019


A group of young students built their own Lennon Wall in Richmond to support protesters in Hong Kong.

Dozens of Richmondites have attached colourful sticky notes to what’s dubbed a Lennon Wall (a two-metre-tall piece of cardboard) set up at the Brighouse Canada Line Station.

Messages on the wall include “Hong Kong, add oil,” “Hong Kong will never be alone,” and other words of support and encouragement for the protesters in Hong Kong.

...

https://www.richmond-news.com/news/a-len...-support-hong-kong-protesters-1.23895926

[SignalHillHiker]

jeddy1989 and his man just finished the process of buying their new house - congrats, b'ys! A little under $400K (broken up into multiple units, so tenants will cover expenses) and as close to downtown as you can get.



And the view...

[lio45]

I'm considering making an offer on this duplex, which I still find too pricey for what it is (though, it could be turned into a triplex at low-ish cost, which is what interests me). Also, I like these Canadian-style houses (an architectural style that does not exist in Sherbrooke) and especially when they have an original brick siding. (btw, 1935 for "year built" in the listing is just incorrect by about ~70 years.)

https://www.realtor.ca/real-estate/20291...rville-desjardins-l%C3%A9vis-l%C3%A9vis?

$400k in a small city like St. John's, I would expect a sizable multiplex at that price. Also if The Rooms is visible from it (which it is), that's a loss in value in my book.

[SignalHillHiker]

Originally Posted by lio45

I'm considering making an offer on this duplex, which I still find too pricey for what it is (though, it could be turned into a triplex at low-ish cost, which is what interests me). Also, I like these Canadian-style houses (an architectural style that does not exist in Sherbrooke) and especially when they have an original brick siding. (btw, 1935 for "year built" in the listing is just incorrect by about ~70 years.)

https://www.realtor.ca/real-estate/20291...rville-desjardins-l%C3%A9vis-l%C3%A9vis?

$400k in a small city like St. John's, I would expect a sizable multiplex at that price. Also if The Rooms is visible from it (which it is), that's a loss in value in my book.

$400K is a bit of a bargain for that part of town. The exterior is lovely, but the interior is comparable to mine. The genuinely preserved, nice ones - even on that exact block, will be at least $600K, most more than $800K.

And this one is multiple units. I forget the exact number, but it's 3-4. The building is three floors on the front and, with the hill, four floors in the back. The basement is definitely a separate unit, entrance at the rear. The rest I'm not sure if the main unit is two floors (in which case it'd be a 3-unit building) or one (in which case the top two floors would make it a 4-unit building).

****

That building looks nice. I'd never guess "Canadian" for it, though? What makes it that?

EDIT: Here's a good example of a nicely-preserved one:

https://www.realtor.ca/real-estate/20430517/4-bedroom-single-family-house-3-gower-street-st-johns

(Note in that first pic that there's another house in the backyard. Since it doesn't have a backyard, it's cheaper than it would otherwise be).

[lio45]

Originally Posted by SignalHillHiker

$400K is a bit of a bargain for that part of town. The exterior is lovely, but the interior is comparable to mine. The genuinely preserved, nice ones - even on that exact block, will be at least $600K, most more than $800K.

That's crazy. Do you know what one can buy with $800k? I wouldn't satisfy myself with one St. John's house even if it had toilets of solid gold.

Though I find it quite exotic to think that that house you showed on Gower Street was built in Britain, and has barely been altered since then.

That building looks nice. I'd never guess "Canadian" for it, though? What makes it that?

The style. The main feature I'd say is the shape and slope of the roof (45 degrees then curving towards the bottom and extending over the front porch, with dormers and the upper story of the building not having a full ceiling). Extremely common mid-1800s style in the St. Lawrence River Valley.

Here's a lot more info on this exact style (not sure how well it'll Google Translate but we may be pleasantly surprised)

http://www.chaudiere.com/wm/pa_typologie/index.php?typo=11

[whatnext]

Originally Posted by SignalHillHiker

jeddy1989 and his man just finished the process of buying their new house - congrats, b'ys! A little under $400K (broken up into multiple units, so tenants will cover expenses) and as close to downtown as you can get.

Congrats to jeddy1989, looks like a great place in a great location!

[SignalHillHiker]

Originally Posted by lio45

That's crazy. Do you know what one can buy with $800k? I wouldn't satisfy myself with one St. John's house even if it had toilets of solid gold.

Fair - BUT, for us, this is our city. Our prices aren't really based on the likelihood of mainlanders to move here.

And thanks for the info RE: your potential property. Hehehe.

[lio45]

Originally Posted by SignalHillHiker

And thanks for the info RE: your potential property. Hehehe.

It is right next to the Shipbuilding Works so I could very well end up with Newfoundlanders as tenants in it you can walk to work if you work there:

https://www.google.com/maps/@46.8268997,...VQQ!2e0!5s20181001T000000!7i13312!8i6656

They probably wouldn't be complaining that it's too crooked or drafty though they have a bad reputation around here (always drunk, apparently).

[lio45]

Originally Posted by SignalHillHiker

Fair - BUT, for us, this is our city. Our prices aren't really based on the likelihood of mainlanders to move here.

That's what worries me about long-term St. John's investing... after everyone has moved to it and it's at 500,000 and the rest of the island at 0, I expect real estate prices to totally stagnate for the rest of time.

[SignalHillHiker]

Originally Posted by lio45

It is right next to the Shipbuilding Works so I could very well end up with Newfoundlanders as tenants in it you can walk to work if you work there:

https://www.google.com/maps/@46.8268997,...VQQ!2e0!5s20181001T000000!7i13312!8i6656

They probably wouldn't be complaining that it's too crooked or drafty though they have a bad reputation around here (always drunk, apparently).

That's a horrible stereotype.



****

Originally Posted by lio45

That's what worries me about long-term St. John's investing... after everyone has moved to it and it's at 500,000 and the rest of the island at 0, I expect real estate prices to totally stagnate for the rest of time.

Our population and real estate prices will stagnate long before 500K. I'm very aware that my life is near the end of a relatively, historically brief, but magnificent flourish of life in the city I love.

[Marty_Mcfly]

Originally Posted by lio45

That's crazy. Do you know what one can buy with $800k? I wouldn't satisfy myself with one St. John's house even if it had toilets of solid gold.

800K in the St. John's CMA is likely better spent buying a large new build in the suburbs near Conception Bay. But even still, you better be buying it knowing that you'll never be able to sell it since we're likely the last generation of people to be living here

Downtown I wouldn't spend over 250k on a house just knowing that finding home insurance will be a pain in the ass and insanely expensive. Downtown living either goes one of two ways: insanely cheap house that's actually a shithole, or an insanely expensive house that's almost too nice to live in. There's rarely any in-between.