Canada's 'housing bubble' deemed close to bursting

[misher]

Am a little worried at the rise in alternative lending. Its less controlled than a mortgage through a bank and its much riskier. We have a lot less control over alternative lenders than banks.

One weakness of the stress test was that it only applies to banks, driving Canadians to less stable alternative lenders. It should have applied across the board and included credit unions.

Why non-bank mortgage lending has exploded in growth
Ballooning of non-bank consumer mortgage values by around 10 times far outstrips rise in home values in same period, finds Statistics Canada study

https://www.vancourier.com/why-non-bank-mortgage-lending-has-exploded-in-growth-1.24063173

[misher]

Toronto's NIMBY left wing city government at work. This is the government that Ford had to force to densify around transit stations.
PS: Horgan has given a similar ultimatum to Vancouver that they must do so or he will force them. Now that I think about it Horgan and Ford have made a lot of similar moves, sustainable energy, density around transit, the teacher strike, etc.

Tight Toronto housing market pushes prices to record highs with biggest gains in three years
'Expect further acceleration in 2020 if there is no relief on the supply front'

Home sales dropped in Toronto in December, but prices continued to rise as demand outstripped a dwindling supply of units available for purchase.

The number of homes sold in Canada’s largest city fell 3 per cent from November, the biggest decline since February, the Toronto Real Estate Board said Tuesday. Still, benchmark prices kept climbing, rising 0.5 per cent last month to record highs and bringing gains to 7.3 per cent from the previous year, the fastest pace of year-over-year growth since 2017.

Toronto’s housing market has tightened considerably over the past year as buyers took advantage of lower interest rates and adjusted to mortgage stress tests, but there are fewer homes to be bought. In December, the sales to new listings ratio — a measure of market balance — reached 1.25, pointing to a market tilted heavily in favor of sellers.

https://business.financialpost.com/real-...-market-pushes-prices-up-most-since-2017

[whatnext]

LOL, sure I'll put sweat equity into your home while paying you $5,650 a month for the privilege!

Old & original Kitsilano 7 bedroom house for rent available March 1st. 7 bedrooms, 2 bathrooms on three levels with approx 2500 sq.ft. of living area on a large corner lot. Includes 3 bedrooms in basement with separate bathroom, 2 bedrooms on main with laundry, bathroom & kitchen, and 2 small attic bedrooms. This home is in rough shape and needs painting, and TLC. Looking for long term tenant willing to put labour in while landlord covers all material costs. Lots of on-street parking and great garden space. Home is located in prime kits location only blocks to West Broadway shopping strip and walk to Trafalgar & Carnarvon Elementary schools and Kits High School. Only serious enquiries please.

https://vancouver.craigslist.org/van/apa/d/vancouver-7-bedroom-kitsilano-house/7053894865.html

[misher]

Originally Posted by whatnext

LOL, sure I'll put sweat equity into your home while paying you $5,650 a month for the privilege!

Old & original Kitsilano 7 bedroom house for rent available March 1st. 7 bedrooms, 2 bathrooms on three levels with approx 2500 sq.ft. of living area on a large corner lot. Includes 3 bedrooms in basement with separate bathroom, 2 bedrooms on main with laundry, bathroom & kitchen, and 2 small attic bedrooms. This home is in rough shape and needs painting, and TLC. Looking for long term tenant willing to put labour in while landlord covers all material costs. Lots of on-street parking and great garden space. Home is located in prime kits location only blocks to West Broadway shopping strip and walk to Trafalgar & Carnarvon Elementary schools and Kits High School. Only serious enquiries please.

https://vancouver.craigslist.org/van/apa/d/vancouver-7-bedroom-kitsilano-house/7053894865.html

Did you not take economics? This wouldn’t even cover the mortgage. Though yes it is dumb to try to find a tenant to repair it.

[misher]

https://betterdwelling.com/canadas-first...m_term=0_bde8feedee-3b5e5c2738-308635385

Canada’s First-Time Home Buyer Incentive Receives Cold Reception

The FTHBI Only Delivered $51.3 Million In Funds
The FTHBI incentive is off to a slow start, except in Quebec. The program delivered just $51.3 million in funds from September 2 to December 9, 2019. Quebec represented the largest segment, borrowing $18.74 million over the period. Alberta followed with $16.30 million, and Ontario was a distant third with just $7 million borrowed.

https://www.globenewswire.com/news-relea...-Resurging-Toronto-Vancouver-Demand.html

Canada’s Top-Tier Real Estate Market Recovers with Resurging Toronto, Vancouver Demand
Toronto leads Canadian luxury real estate market as Vancouver recovery steadies; Montreal posts new records while Calgary slowdown lingers

Toronto, Ontario, Jan. 15, 2020 (GLOBE NEWSWIRE) -- According to a report released today by Sotheby’s International Realty Canada (sothebysrealty.ca), Canada’s two largest top-tier metropolitan real estate markets rallied in 2019, gaining steady traction throughout the year. After a tentative start to 2019, the Greater Toronto Area (GTA) led the country in top-tier real estate performance with consistent and confident increases in sales activity and pricing, bolstered by the region’s strong population gains, healthy economic growth and robust labour market. Vancouver overcame several years of uncertainty fostered by ongoing government and regulatory interventions to see revitalized confidence and activity in the $1 million-plus real estate market by the last half of 2019. Montreal’s luxury real estate market achieved notable milestones in its condominium sector in 2019, as the city set new records in top-tier market performance. Despite improvements in the market for real estate under $500,000, Calgary’s uneven economic performance and political turbulence dampened a top-tier market already burdened with supply; as a result, recovery continued to lag.

The Greater Toronto Area’s (Durham, Halton, Peel, Toronto and York) top-tier real estate market thrived in 2019. In contrast to the market contraction experienced in 2018 following the implementation of tighter mortgage lending policies shortly after the 2017 introduction of the Ontario Fair Housing plan, residential real estate sales over $1 million (condominiums, attached and single family homes) increased 23% year-over-year. The City of Toronto continued to see $1 million-plus activity escalate in 2019, with sales over $1 million increasing 20%. The migration of luxury real estate sales away from Multiple Listings Service (MLS) to exclusive sales and marketing platforms offering consumer privacy continued to skew sales data. As a result, GTA and City of Toronto sales over $4 million on MLS reflected a 3% decline and subtle 5% increase in spite of healthy activity through 2019.

Following several years of lackluster performance, the City of Vancouver’s top-tier real estate market recovered in the latter half of 2019. Activity resumed as prospective buyers and sellers returned from the sidelines to engage in the market with a willingness to calibrate prices to match current conditions. Overall $1 million-plus residential real estate sales in Vancouver were down 6% in 2019 from 2018 levels, while sales over $4 million declined 25%. However, activity in the last half of 2019 reflected a strengthening top-tier market as sales over $1 million increased 37% year-over-year, led by notable gains in the city’s single family and attached home segments. With prices moderating, top-tier real estate consumers reassessed single family homes with increasing favour relative to condominium and attached home options, driving new activity. As a result, $1 million-plus single family home sales, which had fallen 16%, 20% and 35% from 2015 – 2016, 2016 – 2017 and 2017 – 2018 respectively, increased 5% from 2018 to 2019. Market recovery was most evident in the latter half of 2019, when sales over $1 million rose 39% from the same period in 2018, while $4 million-plus luxury sales contracted a mild 12%.

Strong economic fundamentals and consumer confidence, as well as record-setting provincial population gains, fostered healthy demand for top-tier real estate in the City of Montreal. Residential sales over $1 million saw a 13% increase from 2018 levels, while $4 million-plus luxury sales soared 64% year-over-year. In 2019, Montreal’s luxury condominium market surpassed previous year’s records as the construction and completion of high-end high-rises reshaped the skyline. For the first time in the city’s history, top-tier condominiums comprised over 20% of residential real estate sales volume over $1 million. As the city continued to raise its profile as a major Canadian luxury condominium market, sales of condominiums over $1 million set a new record with a 39% year-over-year gain.

[misher]

Residential mortgage credit growth on a 3 month annualized basis accelerated to 6.72% in December. Growing faster than before the mortgage stress test.



I know I usually am seen as "pro-real estate" but I personally am concerned about the level of debt Canadian households have. As much as everyone blames foreigners, its Canadians that are taking out massive loans and its likely Canadians doing the buying.

PS: I felt this describes Vancouver and Toronto:

"Overly stringent regulation, often pushed by residents who want to keep out newcomers and protect their property values, can make #housing unaffordable for most people,

https://www.imf.org/external/pubs/ft/fan...?utm_medium=email&utm_source=govdelivery

[vid]

I found this while looking at the cheapest houses available for sale in Winnipeg on realtor.ca, someone posted this as a selling point.



That number on the bottom right is the reason a lot of lower middle class people who could otherwise buy a house, get stuck renting, preventing other renters from moving up the ladder. It basically acts as a roadblock. And that profit certainly isn't getting any smaller as the monthly rent gets higher.

This is the house they're renting for $1,100/month, utilities extra, in Winnipeg's crime infested north end:







As you can see, the slumlord is maximizing their ROI by doing absolutely no maintenance to the building whatsoever. The tenant is likely paying over $1,600 a month in rent and utilities (average household income in this part of Winnipeg is $2,900/month after tax) it doesn't leave much room for food and telecommunications let alone saving up to buy the — hole next door to save yourself $500/month in rent...

And there is a lot of this. Almost every house going for under $200,000 in Thunder Bay isn't marketed as "a great opportunity for a first time buyer", it's pushed as an "investment opportunity" to "expand your portfolio". We're literally treating people's homes like stocks. It's no wonder so many people are homeless and more still are living in substandard housing.

[Andy6]

Vid, we prefer the term "vibrant" -- "crime infested" is so old-fashioned and judgemental.

[vid]

Originally Posted by Andy6

Vid, we prefer the term "vibrant" -- "crime infested" is so old-fashioned and judgemental.

Check this one out:



"Grab an energy drink and get to work!" I can see some slumlord here throwing in some windows, painting over the smoke damage (it was burned out by squatters last summer) and renting it out for $1,000/month plus utilities. This is on the best part of the worst street in my neighbourhood, there are at least 4 flophouses on this street, including an apartment building that has been abandoned for years after a gruesome murder. Another house caught fire a few doors down from here in November, no cause was determined but the owner of the house was a hoarder and it was so full of junk firefighters struggled to put the fire out.

If you want to see more, click here.

[lio45]

I wouldn't pay anywhere near $75k for such a tiny and basic property, unless I'm convinced that $1,100 is a very reasonable monthly rent for it due to its location, which I'm definitely not.

[misher]

Originally Posted by Andy6

Vid, we prefer the term "vibrant" -- "crime infested" is so old-fashioned and judgemental.

Or like people everyone in Surrey says, I live in the “good neighborhood” all the bad stuff happens elsewhere. I’ve never seen someone from Surrey say I live in the bad area.

[vid]

Originally Posted by lio45

I wouldn't pay anywhere near $75k for such a tiny and basic property, unless I'm convinced that $1,100 is a very reasonable monthly rent for it due to its location, which I'm definitely not.

It is, they will pay it because they have no choice. That's the situation in Thunder Bay, too. They can either live with 6 other people, put half their income into this —, or be homeless.

And this is Thunder Bay. It's as if the hourly flights to downtown Toronto make us the new Etobicoke or something? Some — from Brampton who watches too much HGTV gets up here and he's all "I left home at noon and it's now 3pm and I'm buying a house in Thunder Bay, I guess the rent should be $2,400 a month???? "

Originally Posted by misher

Or like people everyone in Surrey says, I live in the “good neighborhood” all the bad stuff happens elsewhere. I’ve never seen someone from Surrey say I live in the bad area.

My aunt in — Newton after her neighbour was murdered. "Oh, but it's such a quiet street!!" It's actually deceptive because it does look decent in most places, but there's a lot of shady — going on and everything is so dark. After that big shooting near Surrey Central a few years ago, she called us all excited—she had just left the area 10 minutes before.

[lio45]

Originally Posted by vid

It is, they will pay it because they have no choice. That's the situation in Thunder Bay, too. They can either live with 6 other people, put half their income into this —, or be homeless.

Interesting!...

Do you have free time to spare these days? How about a win-win deal, we partner, I buy this 312 Bethune Street plus a crate of energy drinks for you, you get to work in there (i.e. put a coat of paint...) and we split the $1k monthly rent some loser will pay us to live in that shithole.

[GlassCity]

Originally Posted by vid

It is, they will pay it because they have no choice. That's the situation in Thunder Bay, too. They can either live with 6 other people, put half their income into this —, or be homeless.

And this is Thunder Bay. It's as if the hourly flights to downtown Toronto make us the new Etobicoke or something? Some — from Brampton who watches too much HGTV gets up here and he's all "I left home at noon and it's now 3pm and I'm buying a house in Thunder Bay, I guess the rent should be $2,400 a month???? "



My aunt in — Newton after her neighbour was murdered. "Oh, but it's such a quiet street!!" It's actually deceptive because it does look decent in most places, but there's a lot of shady — going on and everything is so dark. After that big shooting near Surrey Central a few years ago, she called us all excited—she had just left the area 10 minutes before.

Out-of-towners are always shocked when I tell them that the Downtown Eastside is generally a much safer place to be than Newton, which really looks like any other no-name suburban area.

[vid]

Originally Posted by lio45

Interesting!...

Do you have free time to spare these days? How about a win-win deal, we partner, I buy this 312 Bethune Street plus a crate of energy drinks for you, you get to work in there (i.e. put a coat of paint...) and we split the $1k monthly rent some loser will pay us to live in that shithole.

I may be exaggerating a bit, but there are some unfinished units being actively marketed for rent here. A couple years ago my coworker looked at a place that had unfinished walls, he was offered a discount on rent if he finished them for the landlord. My own apartment wasn't cleaned out of the previous tenant's stuff when we moved in in 2007; we had to do that ourselves. We kept some of it; I still have a dresser and a bed frame that they were using. The landlord himself admitted that the only things he owns in here are the appliances. I have to buy and maintain my own smoke detectors even though that's entirely his responsibility, by law. I could actually — him over if I reported it, but there's a chance I'll end up homeless if I do, so now we're also got this nice loophole where both sides get punished for trying to report a violation but only one side really gets hurt by it and it isn't the one breaking the law. That said, a smoke detector is $15 and lasts a decade. I don't mind doing it. I'm the only tenant in here so far who hasn't set the place on fire at least once, I still have mild PTSD from the first time it happened.

[ssiguy]

All of Surrey is basically a high crime area save South Surrey due to being a very well-off and tony area. Cloverdale, although decidedly working class, also has a crime rate well below the Surrey average probably due to the large number of seniors and a strong local and historic community and being very pedestrian friendly. Outside of those 2 areas, Surrey is an urban wasteland and a damn ugly and dangerous one to boot.

[zahav]

Originally Posted by ssiguy

All of Surrey is basically a high crime area save South Surrey due to being a very well-off and tony area. Cloverdale, although decidedly working class, also has a crime rate well below the Surrey average probably due to the large number of seniors and a strong local and historic community and being very pedestrian friendly. Outside of those 2 areas, Surrey is an urban wasteland and a damn ugly and dangerous one to boot.

I totally disagree, Surrey is none of thosen things overall. There are pockets that are ugly and/or dangerous and/or a wasted space, but the City overall certainly is not. There are a lot of decent areas and they are doing great with their downtown, it's a work in progress but I certainly wouldn't call the city ugly and dangerous. Their mayor sure is both of those things lol

[lio45]

Originally Posted by vid

I may be exaggerating a bit, but there are some unfinished units being actively marketed for rent here. A couple years ago my coworker looked at a place that had unfinished walls, he was offered a discount on rent if he finished them for the landlord. My own apartment wasn't cleaned out of the previous tenant's stuff when we moved in in 2007; we had to do that ourselves. We kept some of it; I still have a dresser and a bed frame that they were using. The landlord himself admitted that the only things he owns in here are the appliances. I have to buy and maintain my own smoke detectors even though that's entirely his responsibility, by law. I could actually — him over if I reported it, but there's a chance I'll end up homeless if I do, so now we're also got this nice loophole where both sides get punished for trying to report a violation but only one side really gets hurt by it and it isn't the one breaking the law. That said, a smoke detector is $15 and lasts a decade. I don't mind doing it. I'm the only tenant in here so far who hasn't set the place on fire at least once, I still have mild PTSD from the first time it happened.

I'm paranoid about fires too, my (Quebec) buildings are all full of detectors, fire extinguishers, and in several cases even full alarm systems with bells on every story. One of the reasons I love FL real estate is that you don't have to worry about this (or water damage), as the buildings have concrete walls and floors.

I'm somewhat seriously considering a partnership with some organization in Thunder Bay (given the lower and lower cap rates in the markets I'm in), I might send you a PM about it eventually or else discuss it in here even.

It's worked very well for the past few years in Florida for me - there's a local nonprofit that helped me put grateful tenants in half-finished properties in exchange for greatly lowered rents and me paying all the materials to finish the job to high standards. Wouldn't be anything new to me.

[SpongeG]

Originally Posted by ssiguy

All of Surrey is basically a high crime area save South Surrey due to being a very well-off and tony area. Cloverdale, although decidedly working class, also has a crime rate well below the Surrey average probably due to the large number of seniors and a strong local and historic community and being very pedestrian friendly. Outside of those 2 areas, Surrey is an urban wasteland and a damn ugly and dangerous one to boot.

Newton is said to be the worst for shootings. Im gonna be living in Whalley, not too sure about that yet lol, but its not that bad but not pleasant.

[misher]

Anyone have any idea how much different the stress test will be now? I’m hearing estimates of 40-50 bps which is huge!

Apparently OFSI is also announcing this change to uninsured mortgages.