Canada's 'housing bubble' deemed close to bursting

[whatnext]

Coming soon to a city near you:

CRA agents execute search warrants at 2 Vancouver homes for alleged tax evasion

Two Vancouver homes were visited Wednesday by Canadian Revenue Agency (CRA) agents executing search warrants in a tax evasion investigation.

According to the agency, the searches were conducted as part of an ongoing CRA investigation into roughly $3 million in unreported income “in an alleged attempt to evade payment of tax.”

The investigators were searching for evidence in the Vancouver homes related to alleged offences against the Income Tax Act, the Excise Tax Act, and the Criminal Code, the agency said.

The locations of the homes that were searched, and their owners, have not yet been disclosed.

In its statement, the CRA said it has placed “a significant focus” on the Lower Mainland and other urban centres with high numbers of real estate transactions....(bold mine)

https://globalnews.ca/news/4897032/bc-casinos-money-laundering/

[theman23]

Originally Posted by misher

What proof do you have? I just posted a photo showing that the highest incomes in Vancouver live in the most expensive neighbourhoods. Does that mean the Chinese and drug criminals pay the most taxes? Or are you saying the renters in those areas are so rich that it doesn't matter that every homeowner doesn't pay income taxes?

https://www.ratespy.com/we-may-again-see-mortgage-insurance-for-properties-over-1-million-121611374

The price for an average (read:median) house in this city is 1.2 million. Median income is $65,000. It boggles my mind how you can sit there with a straight face and argue that an average family can afford this.

That graph you posted doesn’t prove your point. Those “poor” areas you posted have housing prices exceeding $1 million.

[misher]

Originally Posted by theman23

The price for an average (read:median) house in this city is 1.2 million. Median income is $65,000. It boggles my mind how you can sit there with a straight face and argue that an average family can afford this.

That graph you posted doesn’t prove your point. Those “poor” areas you posted have housing prices exceeding $1 million.

So your just assuming then despite evidence to the contrary? Vancouver has about 250,000 homes. In total around ~10,000 are sold a year. Many of those sales are new units or the same units being sold multiple times within the decade. So that means most people bought BEFORE PRICES ROSE.

Also people regularly buy condos under a million, using a single detached house's price to judge a major city is stupid. Do you expect to be able to afford a house in New York?

Whats also been happening is that you have multiple families living in each house so rather than look at a single person's income you have 4+ people paying for it. Many East Van homes have mortgage helper suites.

The research shows people with higher incomes live in the neighborhoods that rumor associate with empty asian owned homes or satellite families. This research would show the opposite if the rumor was true because people who don't pay the taxes bring the average down. So you can continue to deny the research and believe in propaganda like a racist moron or you can listen to the research your own government puts out.

Btw West Van where homes are 3 mil+ is 70%+ white. While Richmond that has the highest proportion of Asians has the cheapest homes. East Van has a higher proportion of minorities and is cheaper while Vancouver West has a higher proportion of caucasians. So it seems like prices go up when there are more white people in the area? That kind of knocks your whole white people can't afford homes here theory out of the park?

How can you say Chinese are responsible for home prices when the place with 2x more Chinese proportionally across the bridge is much cheaper? Vancouver is 25% East Asian while Richmond is over 50%. Yet if you say white people are rich and drive up prices this holds true, Vancouver has more white people than Richmond and West Van has more white people than Vancouver. So maybe white people are the money launderers? /s

[someone123]

The "you wouldn't expect to buy a home in New York!" argument is funny. Go check out the city on Realtor.com. Average people cannot afford brownstones in nice parts of Brooklyn but you'll find stuff within NYC proper that is much more affordable than metro Vancouver. The suburbs there have arguably have much better transportation access as well; a lot of far-out places have decent commuter rail connections.

I wouldn't be surprised if Chilliwack is more expensive relative to incomes than Staten Island. Nothing to see here folks!

[theman23]

You don’t have to guess, you’re right:
https://www.vancourier.com/real-estate/v...an-housing-market-infographic-1.23775227

Misher, no one is talking about prices before they rose. I’ve already addressed everything you said. The words “cheap” and Vancouver real estate do not belong together. End of story.

P.S.: multiple families living in the same house does not help your argument.

[theman23]

Average detached housing price in Vancouver: $2million
Average detached housing price in "poor" Richmond: $1.7 million
"poor" Burnaby: $1.7 million
Coquitlam: $1.4 million
Port Moody: $1.4 million
New West: $1.2 million
White Rock: $1.3 million
Surrey: $1.1 million
Port Coquitlam: 930K
Delta BC: $1 million
Langley: $1 million
Abbotsford (this isn't even in the greater vancouver area): $894K

But hey, if you move 100 KM outside of the city you can live in Chilliwack - where $588K gets you an average SFH that you can just barely afford on your 60k/year family income, and be entirely dependent on a 2 lane highway (that gets cut down to a single lane highway multiple times a day) for all your transportation needs!

[misher]

Originally Posted by theman23

Average detached housing price in Vancouver: $2million
Average detached housing price in "poor" Richmond: $1.7 million
"poor" Burnaby: $1.7 million
Coquitlam: $1.4 million
Port Moody: $1.4 million
New West: $1.2 million
White Rock: $1.3 million
Surrey: $1.1 million
Port Coquitlam: 930K
Delta BC: $1 million
Langley: $1 million
Abbotsford (this isn't even in the greater vancouver area): $894K

But hey, if you move 100 KM outside of the city you can live in Chilliwack - where $588K gets you an average SFH that you can just barely afford on your 60k/year family income, and be entirely dependent on a 2 lane highway (that gets cut down to a single lane highway multiple times a day) for all your transportation needs!

It costs a lot to build a detached house these days. Do you even know how much it costs to build a Vancouver special in Vancouver? Looking at detached housing prices to justify your arguments is dumb.

[rousseau]

From a different thread:

Originally Posted by Innsertnamehere

Ontario would be the 3rd fastest growing state in terms of sheer numerical growth, adding 254,000 people in the last year. This puts it ahead of California (157,000), and behind only Florida (322,000) and Texas (379,000).

From this I deduce that you can't really go wrong investing in real estate in Ontario. After all, they keep making people, but they're not making any more land.

[someone123]

Originally Posted by rousseau

From this I deduce that you can't really go wrong investing in real estate in Ontario. After all, they keep making people, but they're not making any more land.

These two things don't follow because there are a bunch of other factors at play. Canada has been through huge real estate crashes before even though the population keeps growing. For buyers in 1989, things did go badly wrong.

The multi-unit supply is constrained by the amount of zoned land available, not the overall land supply. Zoning changes could massively change the supply at any time.

If we set that aside and just talk about land, there are still other factors. A change in the supply of credit could cause prices to drop a lot even if the population doesn't go down.

In Vancouver a lot of the current pricing is due to the history of past gains in land prices. If it becomes clear that the future returns will not be as strong prices could fall by a lot, even if the population doesn't drop. And if this happens it will take a lot time for prices to correct because sellers will hesitate to accept the lower prices. The drops really happen once you see more "need-based selling", i.e. a significant number of sellers have no good alternative but to eat a loss (overextended financially, housing needs changed, someone inherited a house and needs the cash, etc.).

Also note that if you're investing you need to look at your opportunity cost, your next-best alternative, not if a house will sell in 2030 for a bigger dollar figure than it did in 2019. You need to account for carrying and transaction costs, inflation, and other potential investments you could have made. A lot of people have made atrocious real estate investments even in recent years when the market's been strong. They median amateur landlord in Vancouver is probably losing money right now.

[rousseau]

That was a slap dash comment informed by my own personal situation. Clearly I don't know enough about real estate to add much to the conversation.

Though I daresay I can say this: owning your own house for a long period of time in Ontario is still an excellent investment, and has been for decades (as long as you stay put during the dips).

[lio45]

Originally Posted by rousseau

From a different thread:



From this I deduce that you can't really go wrong investing in real estate in Ontario. After all, they keep making people, but they're not making any more land.

Your second sentence isn't true - most civilized societies are below minimum replacement fertility rates.

[lio45]

Originally Posted by rousseau

That was a slap dash comment informed by my own personal situation. Clearly I don't know enough about real estate to add much to the conversation.

Though I daresay I can say this: owning your own house for a long period of time in Ontario is still an excellent investment, and has been for decades (as long as you stay put during the dips).

You're likely incorrect, compared to other possibilities. Of course it all depends on how you define "excellent".

[lio45]

Originally Posted by rousseau

From a different thread:



From this I deduce that you can't really go wrong investing in real estate in Ontario. After all, they keep making people, but they're not making any more land.

Also, you're agreeing that investing in Florida or Texas is better than investing in Ontario...? Just curious

[misher]

With massive immigration it seems like you can't go wrong? We have made a huge error by planning city expansion for Canadians only. International students, tourists, etc. take up homes and we haven't accounted for these in our growth projections. For our population to grow 0.6% in 3 months is insane, especially when its concentrated in 2 cities. Vancouver has around 280k homes and requires a minimum of 3080 (2800+10% to account for demolishing) homes to be built annually assuming that its population grows 1% annually. At this rate its 2.4% annually...likely as much as 5% given that most immigration is centered in Vancouver and Toronto, your looking at a demand of 15,400 units needed annually to house our immigration. We build half that at about 7700 annually.

https://www.bnnbloomberg.ca/immigration-...n-population-growth-since-1971-1.1365025

An influx of immigrants and non-permanent residents boosted Canada's population by 0.6 per cent in the third quarter, the biggest increase in records dating back almost five decades.

The country's population grew by 208,234 in the July to September period, with some 83 per cent of that increase due to international migration, according to estimates from Statistics Canada released Thursday in Ottawa. Growth of this magnitude from international migration “had never been seen before in a single quarter,” the agency said.

Immigration has become one of the main drivers supporting Canada's economic expansion over the past several years, driving robust gains in the housing and labor markets. The inflows have countered some of the effects of an otherwise aging demographic.

New immigrants totaled 103,751 in the quarter, while the number of non-permanent residents rose by 82,438.

British Columbia saw the fastest population growth, while Newfoundland's was the lowest.

[giallo]

Originally Posted by theman23

Average detached housing price in Vancouver: $2million
Average detached housing price in "poor" Richmond: $1.7 million
"poor" Burnaby: $1.7 million
Coquitlam: $1.4 million
Port Moody: $1.4 million
New West: $1.2 million
White Rock: $1.3 million
Surrey: $1.1 million
Port Coquitlam: 930K
Delta BC: $1 million
Langley: $1 million
Abbotsford (this isn't even in the greater vancouver area): $894K

But hey, if you move 100 KM outside of the city you can live in Chilliwack - where $588K gets you an average SFH that you can just barely afford on your 60k/year family income, and be entirely dependent on a 2 lane highway (that gets cut down to a single lane highway multiple times a day) for all your transportation needs!

It'd be hilarious if it wasn't so true.

[GreaterMontréal]

For our population to grow 0.6% in 3 months is insane, especially when its concentrated in 2 cities.

I don't get why people seems to always forget about Montréal.
Greater Montréal is growing faster than Greater Vancouver.

2017-2018 : Montréal ± 66k , Vancouver ± 39k

2018-2019 will probably be just as good if not better for Montréal.

[misher]

Originally Posted by GreaterMontréal

I don't get why people seems to always forget about Montréal.
Greater Montréal is growing faster than Greater Vancouver.

2017-2018 : Montréal ± 66k , Vancouver ± 39k

2018-2019 will probably be just as good if not better for Montréal.

True Montreal seems like a great place to invest in. But honestly Metro Vancouver has 2.4 million people while Metro Montreal has 4.1 million. So % wise Vancouver is growing faster. Plus I'm not sure if those numbers include the increase in international students.

[GreaterMontréal]

Originally Posted by misher

True Montreal seems like a great place to invest in. But honestly Metro Vancouver has 2.4 million people while Metro Montreal has 4.1 million. So % wise Vancouver is growing faster. Plus I'm not sure if those numbers include the increase in international students.

Montréal was growing faster the last 2 years. In 2019 Montréal is already above 4.3M.

https://www150.statcan.gc.ca/n1/daily-quotidien/180213/cg-a001-eng.htm
https://www150.statcan.gc.ca/n1/daily-quotidien/190328/cg-b001-eng.htm

[whatnext]

Originally Posted by GreaterMontréal

Montréal was growing faster the last 2 years. In 2019 Montréal is already above 4.3M.

https://www150.statcan.gc.ca/n1/daily-quotidien/180213/cg-a001-eng.htm
https://www150.statcan.gc.ca/n1/daily-quotidien/190328/cg-b001-eng.htm

No offence, but it’s not as if the Province of Quebec is exactly welcoming new immigrants with open arms. On a percentage basis Montreal is likely to fall farther behind as long as CAQ is in power.

[GreaterMontréal]

Originally Posted by whatnext

No offence, but it’s not as if the Province of Quebec is exactly welcoming new immigrants with open arms. On a percentage basis Montreal is likely to fall farther behind as long as CAQ is in power.

Despite the change in tones from the CAQ regarding immigration, Quebec received more non-permanent immigrants than in the past.

Q1 : 10,969
Q2 : 23,890
Q3 : 21,367

It jumped from 458 - Q4 (2018) , to 10,969 - Q1 (2019)

Non-permanent residents increased by 34,700 in 2018, exceeding the previous record set in 2017 (30,000). On July 1, 2019, temporary workers accounted for half of all non-permanent residents. The share of foreign students was 26% and that of asylum seekers 23%.

The CAQ intends to increase the number of economic migrants by 2022, in the 50,000 - 60,000 range. If Quebec keeps the level of non-permanent residents high, we could see growth of 120,000 per year in a few years, as long as the world economy remains at the same level. The real estate market will be even more competitive.