Canada's 'housing bubble' deemed close to bursting

[Truenorth00]

Toronto Life makes me laugh sometimes. It's so out of touch with even all the immigrant families who live 8 to a house in the 416.

The worst part is how opposed these old neighbourhoods are to any redevelopment. They go out of their way to oppose affordable developments.

[megadude]

I've only started reading this thread a couple of days ago. Funny enough, I just mentioned three days ago in the villages thread about how I bought amazing tarts that come from Burford, a place I had never heard of before. Amazing tarts, yes. Amazing olive oil, maybe not.

The story reminds me of my BIL, who by the way bought artisanal olive oil once for $12 from a sample lady at Monastery Bakery in Oakville when I was in the store with him. He sold his mortgage free house in Oakville a few years ago and moved up north, near the cottage, with his family. He can do that lifestyle. The oldest kid was not a fan. The youngest was young enough to not care and he liked having a 21 foot boat to go fishing on. His wife liked it at first, having a big house on three acres, but soon couldn't take it anymore. It was four months before they said we're coming back.

They bought straight away, though he did mention they were thinking of renting first to try the lifestyle, but at the same time, they didn't want to do with this couple did and pay THAT much to rent. So they saw a house for sale for what seemed a good deal and pulled the trigger.

There are lots of examples of people not really doing research or just really taking the time to think about it. Then again, some people take that plunge without thought and come to realize they are satisfied and if they really had thought about it, they might have talked themselves out of it. Part of it is luck. But it really is a balancing act between rational thinking and impulse.

I have talked to a few realtors over the years who tell me about clients who regretted moves that were even just 25 minutes away to get bigger houses and missing what their previous city or area had to offer and realizing it's not all about bigger this or bigger that. Mind you, stories like that tend to be more interesting than the stories where people were happy with the move, so it tends to skew one way.

But yeah, no idea why you'd want to go full-on rural in that situation. Maybe for a few months renting to try it out if you can get that short term of a lease. And after that, then consider Brantford proper. Just some gorgeous homes in leafy neighbourhoods off Brant St. Of course, downtown ain't all that nice, but it is a real downtown..

[rofina]

Originally Posted by thewave46

He does embody a certain uppity-ness that absolutely grates on the nerves. The embodiment of the stereotypical big-city type, except not as a caricature but the real, living version. Regales us with tales of fancy city life living high on windfall of unearned cash flowing in. Must be nice. Specialty olive oil stores gets a mention. That's gotta be on the bingo card somewhere.

Calls himself a cheapskate, borrows $900k against house. Whines about all the — that he still has to buy, as if the rest of us schlubs are free of those burdens and that he didn't just fall —-backwards into seven figures worth of cash. Mopes about having to consider being locked out of Toronto's housing market completely unironically.

Also amused by 'west of Brantford' as if it's the end of the world. It's not like Toronto's in another province. Also, maybe not going full rural might be an idea.

Oh my god, does he ever inadvertently capture the city/rural divide well, reading this is just a wonder;

To retire from the city, the struggle, from the hubbub, to go off and hide on one’s own farm—that’s not life, it is selfishness, it is sloth, it is a kind of monasticism, but it is monasticism without works.”

And I’m pretty sure a lot of my friends and contemporaries look at me the same way. Well, I know they do. One friend, knowing I was fixing to write a book out here, said in his own less-than-Chekhovian terms: “Okay Dave, take a year in the country. Write your book. But if you spend any more time out there, you’re a chump. You’re out of the game. You’re out of the show. What are you going to do if you need to take a meeting?”

[rofina]

Originally Posted by suburbanite

We were born 6-8 years too late...

I make a good income, but my coworkers who are in their early/mid 30's (and whose career trajectory I am following) will likely always be significantly wealthier than me. Two bought houses when they were aged 26-27 in the same Queen West/Trinity Bellwoods area for ~$600k. Both are easily worth $1.5 million now and they've leveraged that growth into additional property.

My only plan now is to enjoy my new opportunity in NYC, stash away a good portion of my USD income and reevaluate Toronto in a few years. If nothing has changed, and a decent inner city house is going to go for close to $2 million, then I might as well live in the larger of the two unaffordable cities.

This is an unpopular opinion among proud Canadians, and I speak as a first generation immigrant myself; Canada is not the place to get ahead anymore.

A motivated, capable, and financially literate person, given the opportunity to work and live in US or Canada, in any industry that pays well, would be insane to immigrate to Canada.

[Truenorth00]

Originally Posted by rofina

This is an unpopular opinion among proud Canadians, and I speak as a first generation immigrant myself; Canada is not the place to get ahead anymore.

A motivated, capable, and financially literate person, given the opportunity to work and live in US or Canada, in any industry that pays well, would be insane to immigrate to Canada.

Canada has always been the second choice to the US for a long time. What we should be more worried about is becoming second choice to many other places.

[thebasketballgeek]

Originally Posted by Truenorth00

Canada has always been the second choice to the US for a long time. What we should be more worried about is becoming second choice to many other places.

With the climate crisis Canada will not have a problem finding whatever number of immigrants they so desire for the next 50-100 years.

[JHikka]

Originally Posted by thebasketballgeek

With the climate crisis Canada will not have a problem finding whatever number of immigrants they so desire for the next 50-100 years.

Those people will be called refugees - not immigrants. Not the same.

[suburbanite]

Originally Posted by rofina

This is an unpopular opinion among proud Canadians, and I speak as a first generation immigrant myself; Canada is not the place to get ahead anymore.

A motivated, capable, and financially literate person, given the opportunity to work and live in US or Canada, in any industry that pays well, would be insane to immigrate to Canada.

It can be disheartening when you start to think that the success or wealth that you see around you isn't actually facilitated by the city or country that you live in. When I'm in New York, and I see an expensive sports car driving down the street, I assume it's some rich banker, executive, or even a trust fund kid (but one who's inter-generational wealth was earned on the same streets he's driving down now). I see the same thing in Toronto and my mind automatically goes to mainland Chinese money looking to escape the CCP and park capital in a safe environment. Not to say that I resent Chinese nationals (I would do the exact same thing in their shoes) or that there aren't people in Toronto who earned their money in our economy, but it is undoubtedly a lower proportion than in New York, or San Francisco, or other places that sit on a system of actual economic productivity and not just real estate appreciation.

I sound jaded, but I've been having numerous discussions with coworkers and friends on our concerns with the Canadian economy essentially becoming a Ponzi scheme of immigration and real estate. The house of cards is building so high that the feds won't be able to take any real drastic change without plunging a huge number of people into financial catastrophe.

[thewave46]

Originally Posted by rofina

Millennials can be annoyed all they want, but do something about it in the real world.

Millennials aren't one homogeneous mass though. The oldest is pushing 40, the youngest 25. Depending on where one falls on that spectrum and where one lives, a Millennial may have more in common with older generations, not younger.

Some already own houses. Some own places in more affordable locations than Toronto.

While they are technically the biggest cohort, the established Boomers and Gen X are larger in number combined. That still drives a lot of policy.

[whatnext]

More detail's from BC's Cullen inquiry showing the effect of offshore money on housing:

Man making $40k/year bought $32m in Vancouver real estate via CCP-linked offshore accounts
Commission of Inquiry into Money Laundering in B.C examined one instance in which a low-income man and his family bought $32 million worth of housing in Vancouver after transferring $114 million from largely obscure offshore accounts
By Graeme Wood | October 27, 2021

...The anonymized study describes a family affair of suspected money laundering. The ‘Man’ utilized his ‘Wife,’ ‘Child’ and ‘Mother’ to move funds from Hong Kong-based depositors, or so-called “money changers,” and into luxury homes in Vancouver as well as at least one Bahamas-based shell company.

The Man came to Canada in 2006 with total declared family assets of $1.25 million but became subject of a deportation hearing under the Immigration and Refugee Protection Act in 2016. A number of reports to the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), the national financial intelligence agency of Canada, seemed at odds with his declarations. Documents in the study also show the Man was listed by Interpol as being wanted for bribery. The immigration proceedings are now sealed, according to commission counsel...

https://biv.com/article/2021/10/man-maki...real-estate-ccp-linked-offshore-accounts

[urbandreamer]

Damn is that Pam Seatle's husband? (I haven't watched her on CityTV since 2001 ... kind of shocked how we're all getting so much older.) Anyway I can kind of relate - 1)I used to lived around the corner on Queen St West across from Trinity Bellwoods in the late 90s to early 00s - and probably attended many of the same art and book launches. I used to see Pam walking by my store - maybe she bought something? and found her kind of attractive then .. I even remember meeting the Olive Oil gal when that biz launched near Queen and Niagara! and 2) my parents did something daft like that only in their 40s - moved to the sticks and eventually lost connection with their educated urban elitist set - writing was a failure ha. (I often feel my father was 40 years ahead of the times, with his back to the rural routes aesthetic.)

I've recently been hanging out in these small towns and rural routes I grew up in, and while many of the landscapes are bleak farmer's fields, I do miss it. In some ways they've changed just as much as Toronto has - acres of farmers fields taken over by suburban tract housing, big box stores, a turnover from mostly WASPs to a mix of Mennonites and newish immigrants.

A year ago I stopped in Burford on my way to Port Dover - got ripped off on rhubarb!

[megadude]

Pam Seatle stopped me once in front of First Canadian Place on live TV. I can't specifically remember what she asked but it was something about the market. I was walking just outside the TSX afterall. But I said sorry, I don't work in investment banking. I smiled, she smiled and I walked away, but being the professional she is, she made a seamless transition back to the camera to keep talking about whatever it was.

[ssiguy]

I think that a lot of these people fleeing the city for the country do so with a gleam in their eye because they have never lived in one.

They may indeed love knowing their neighbours but then seem surprised that knowing your few neighbours in your little town means the entire town knowing everything about you. One may escape the "rush" of urban life but the reality is that there is no rush in small towns because there is nothing to do and hence no where to actually rush to.

The people that want to leave the big city but have actually put some real critical thought into the decision do not move to the country or small town but to the mid-size cities. The cities in Canada that are growing the fastest are not little ones but the mid-size ones like London/Victoria/Halifax/Windsor. I would include KW but it is rather unique due to it's high-tech boom and close proximity to Toronto making it more of an extended suburb much like Abbotsford.

These cities offer the escape from the big urban ones but still offer the amenities of urban life which escapees know they cannot live without. Restaurants, theatre, shopping, transit, post-secondary, healthcare, entertainment, bars, events, mutli-cultural communities, good transportation links, varied housing and neighbourhood options, government service, parks, festivals, social services...........you name, these cities offer it.

The reality is that these mid-size cities offer almost 99% of what Tor/Mon/Van do but simply in less abundance and why they are the ones attracting fleeing big-city urbanites.

[jonny24]

The nearest town-like concentration of humanity, Burford, isn’t even all that near; and isn’t even really much of a town, no offence. It’s like: gas-station-hardware-store-liquor-store-supermarket-pizza-place.

What the —? Burford is one to most complete small towns out there - it has all of the above, PLUS a restaurant, a somewhat widely renowned bakery, a few banks, a post office, AND an arena WITH a hockey team!

[jonny24]

Originally Posted by rofina

Would you expect a life long farmer to adjust to living in a 500sq/ft condo overnight?

This made me laugh thinking about it. I'm amazed my dad doesn't burst into flames when he spends more than an hour at my house in Hamilton (which he has only done twice). I can just about see his skin crawling during our annual visits to my godmother in Bloordale.

The man planted his potatoes at the corner of the property half a kilometre away because "behind the barn was a bit too close to get away from the house". He stands up to watch TV because otherwise he gets too antsy to stay inside. He had 500 chickens when he had 4 kids to help look after them, downsized to 100 when we all moved out, then got bored and is back up to 300 ("not counting the meat birds - you know those are different!").

But what's really funny is that he has his own Toronto-Expat neighbour. I guess whenever he wants to buy something local, he comes down to my dad to ask where to go. So dad is really enjoying being the "guy"-guy - the guy you go to when you "need a guy". Sides of beef, plumber, local veggeis, etc. Mr. Toronto will come to my dad for the local hookup.

[lio45]

Originally Posted by thewave46

Millennials aren't one homogeneous mass though. The oldest is pushing 40, the youngest 25. Depending on where one falls on that spectrum and where one lives, a Millennial may have more in common with older generations, not younger.

Some already own houses. Some own places in more affordable locations than Toronto.

While they are technically the biggest cohort, the established Boomers and Gen X are larger in number combined. That still drives a lot of policy.

True. The cutoff birth time for “born early enough to able to amass large quantities of urban Canadian real estate without needing to have been born rich” is somewhere in the mid/late 1980s.

[MonkeyRonin]

Originally Posted by lio45

True. The cutoff birth time for “born early enough to able to amass large quantities of urban Canadian real estate without needing to have been born rich” is somewhere in the mid/late 1980s.

Though in practice, being born in the mid to late 80s would have meant coming of age during the Great Recession, and having to contend with reduced employment prospects for the first few years of your career - so most people in that demographic also wouldn't have been able to save up for a down payment before the market blew up.

[someone123]

Originally Posted by lio45

True. The cutoff birth time for “born early enough to able to amass large quantities of urban Canadian real estate without needing to have been born rich” is somewhere in the mid/late 1980s.

I would argue that it also matters if something was merely possible or was the default path, and how risky it was at the time. Yet this is often left out of the conversation.

With investment you can usually look back with hindsight and identify a high-risk choice that paid off. That doesn't mean there was a big windfall available to everybody or that such an investment represented a sound decision at the time.

The older Baby Boomer aged folks who happened to be living around Vancouver or now Toronto got a real windfall, millions just from living a normal life in the right place at the right time, without any special risk or foresight (no need to live on rice and beans, leverage to the hilt, getting a 0.1% income, learn how to renovate extreme buildings, or whatever). Once you get toward older Millennials it becomes more and more of a stretch. The whiny article guy exemplifies the case where somebody made somewhat bad decisions and got wealthy despite that.

Inflation arguments often have the same feel. People say that we should just shop around better or switch from steak to tofu or whatever. But the point is the environment changed and the behaviours required for success became more specific and demanding, even though it is possible to duplicate the same outcome in some narrow sense.

[niwell]

Originally Posted by lio45

True. The cutoff birth time for “born early enough to able to amass large quantities of urban Canadian real estate without needing to have been born rich” is somewhere in the mid/late 1980s.

Even if you were born in the early to mid-80s you would need to have all your — together and a coherent goal early on in order to do so. Staying in school a bit long and/or doing a Master's for instance makes it a lot more of a stretch. Some people got lucky and ending up buying in the right area at the time time, too.

If we want to talk about hindsight I'd probably be in a much better financial position had I stuck to the summer construction type jobs I did and saved it all to buy real estate. Lots of reasons that wouldn't happen, even if I did have the knowledge at the time.

[1overcosc]

Originally Posted by jonny24

What the —? Burford is one to most complete small towns out there - it has all of the above, PLUS a restaurant, a somewhat widely renowned bakery, a few banks, a post office, AND an arena WITH a hockey team!

Yeah this comment made me laugh. Burford is a pretty sizeable town and it's barely outside the GTA.

I know someone who just moved from Kingston to Ompah. Ompah has a population of about 100 people, and has no services other than a fire hall and a church. The nearest place to buy food is in the "neighbouring" village of Plevna, which is 14km away, and that's just a small food mart. The nearest full size grocery store is in Northbrook, 54km away. The nearest community of 1,000 people or more (ie. nearest "population centre"), is Perth, 65km away, which is also the location of the nearest hospital. The nearest actual cities are Kingston and Ottawa, both around 120km away. Ompah is probably the most isolated/rural place you can move to without leaving Southern Ontario.

Burford is a friggen metropolis compared to Ompah.