Canada's 'housing bubble' deemed close to bursting

[TorontoDrew]

Originally Posted by ssiguy

Most of Canada is still reasonably affordable except the GGH and all of BC.

Ontario prices have soared in the last 2 years but huge amounts of the province are still within easy reach of most incomes like Eastern, SWO, and especially the North. Outside of that, most of Canada is still affordable.

All of B.C is not unaffordable. Away from urban centre's and tourist hot spots it's a pretty affordable province. Places that rely on ferry service are much cheaper then other places to name a few. Then many small mountain towns are cheap due lack of services and travel times.

[lio45]

You can find better deals than that in Vancouver, but it's not that bad.

[someone123]

Originally Posted by SignalHillHiker

Why do people sell those? Isn’t that the end game for property investors, having stable rental units/income? Why do these ever come up on the market?

It can happen after a death or divorce when somebody ends up with the property but doesn't want to be a landlord. Another reason would be if you want the cash instead of the long-term cashflow.

[someone123]

Originally Posted by lio45

You can find better deals than that in Vancouver, but it's not that bad.

I saw it and was a little surprised how cheap it was for its square footage and location.

You can find much smaller places farther out that are still $1.1M, or similar houses closer in that are $2M+.

[TorontoDrew]

Here is a 3 bedroom home 20 mins as the crow flies from Vancouver for $1.3 million in Gibsons. https://www.therobinsongroup.co/listing/r2621403-892-ruffum-road-gibsons-bc-v0n-1v1/

[lio45]

Originally Posted by someone123

It can happen after a death or divorce when somebody ends up with the property but doesn't want to be a landlord. Another reason would be if you want the cash instead of the long-term cashflow.

That's what I say all the time to the floods of inquiries from people who absolutely want to buy my properties: not for sale, but, you never know, I could hit a moose on the freeway tomorrow and then my parents and gf would certainly want to liquidate nearly everything in both portfolios.

(Friendly tip to anyone reading this: don't buy anything I sell, at the price I'm selling it. That's my advice.)

[lio45]

Originally Posted by TorontoDrew

Here is a 3 bedroom home 20 mins as the crow flies from Vancouver for $1.3 million in Gibsons.

No doubt a great buy for a family of crows, but I'd want to know how many minutes it takes for humans to go to Vancouver from there?

[ssiguy]

Nothing is going to pop the real estate bubble and especially because Trudeau keeps upping the immigration rate EXCEPT for one thing..............high interest rates.

I don't see interest rates rising very much despite our ever increasing inflation rate. Even if inflation hits 10% I really don't see the BoC raising rates very significantly. They will simply have to wait for a major recession to bring the inflation rate down even if it hits 20%. Canadian governments and even more so households are so indebted that we have backed ourselves into a inflation corner that we can't get out of.

This is made even worse by the fact that a highly disproportionate of our economic growth since the 2008 Financial Crisis has been based upon real estate. Crashing {or even taming} the housing market by Ottawa in much of Canada would now be like Windsor deciding to close down some of it's auto-plants.

[SignalHillHiker]

Originally Posted by someone123

It can happen after a death or divorce when somebody ends up with the property but doesn't want to be a landlord. Another reason would be if you want the cash instead of the long-term cashflow.

Ahh! Yes. Thank you. I guess also retirement etc. Never came to mind.

[jonny24]

Originally Posted by SignalHillHiker

Ahh! Yes. Thank you. I guess also retirement etc. Never came to mind.

I think also, with general high prices everywhere, it may just be the opportune time to cash out. Buy low sell high, and this seems to be a pretty good "high". Things will maybe cool off post Covid/supply chain issues/inflation, and if prices were to plateau now, then money now is worth more than the same oney later.

[esquire]

Originally Posted by SignalHillHiker

Ahh! Yes. Thank you. I guess also retirement etc. Never came to mind.

Some may just not feel like landlording anymore. It does take time, money and effort, and like with any business the returns may not justify continuing on.

[MonkeyRonin]

Originally Posted by TorontoDrew

All of B.C is not unaffordable. Away from urban centre's and tourist hot spots it's a pretty affordable province. Places that rely on ferry service are much cheaper then other places to name a few. Then many small mountain towns are cheap due lack of services and travel times.

If you have to go to remote islands or isolated mountain towns with no real economic base to find housing affordable to the middle class, can the province really be described as affordable?

[whatnext]

BoC warning that investors rushing into housing have fuelled prices and risk a correction:

Bank of Canada Says Investor Rush Into Housing Risks Correction
By Shelly Hagan +Follow
November 23, 2021

The Bank of Canada is warning a rush of investors into the country’s housing market this year has fueled prices and heightened the risk of a correction.

In a virtual speech Tuesday to discuss financial stability issues, Deputy Governor Paul Beaudry said risks around the housing market have intensified following a boom in prices that appear to be driven by speculative activity. The number of new mortgages held by investors has doubled over the past year, while those taken on by repeat homebuyers is up by more than 60%, according to a chart in prepared remarks provided to reporters.

“A sudden influx of investors in the housing market likely contributed to the rapid price increases we saw earlier this year,” Beaudry said in a speech to the Ontario Securities Commission. “That can expose the market to a higher chance of a correction.”...

https://www.bloomberg.com/news/articles/...ection?srnd=premium-canada&sref=x4rjnz06

[Nite]

Housing shortage 'becoming more and more of a crisis'
Watch: Realtors say Canada's housing inventory is lowest they've seen

[Nite]

Originally Posted by whatnext

BoC warning that investors rushing into housing have fuelled prices and risk a correction:

Bank of Canada Says Investor Rush Into Housing Risks Correction
By Shelly Hagan +Follow
November 23, 2021

The Bank of Canada is warning a rush of investors into the country’s housing market this year has fueled prices and heightened the risk of a correction.

In a virtual speech Tuesday to discuss financial stability issues, Deputy Governor Paul Beaudry said risks around the housing market have intensified following a boom in prices that appear to be driven by speculative activity. The number of new mortgages held by investors has doubled over the past year, while those taken on by repeat homebuyers is up by more than 60%, according to a chart in prepared remarks provided to reporters.

“A sudden influx of investors in the housing market likely contributed to the rapid price increases we saw earlier this year,” Beaudry said in a speech to the Ontario Securities Commission. “That can expose the market to a higher chance of a correction.”...

https://www.bloomberg.com/news/articles/...ection?srnd=premium-canada&sref=x4rjnz06

Since housing supply is dwindling and every city in the country is fighting to stop more housing being built, you are crazy not to invest in housing.

[JHikka]

Toronto planning report signals real changes coming to open the door to new neighbours in house-centric areas
Alex Bozikovic
November 24, 2021

A wave of change is sweeping through the profession of city planning, and it’s washing away a bad old idea: that residential neighbourhoods should be for houses only. In the past five years, governments across North America – and, recently, the government of New Zealand – have all made similar reforms to legalize apartments in larger areas of their cities. That way, people who can’t afford a house may still be able to find a home.

Now Toronto is poised to join this movement. A staff report going before council’s Planning and Housing Committee on Thursday signals real changes coming to the city’s house-centric neighbourhoods.

The report is the boldest and most progressive planning policy to emerge from City Hall since the amalgamation of Toronto in 1998. It suggests “multiplexes” – buildings with two, three, four or more apartments – on the leafy streets where they are currently forbidden. And the report asks clear questions: “Toronto is evolving as it grows. What kind of city do we want? How can we make room for housing to create the kind of city that we want?”

These are not the questions that city planning in Toronto – or in general – has been asking over the past half-century. Planning has been obsessed with protecting “neighbourhood character.” Toronto’s Neighbourhoods (they get a capital N in city policy documents) are reserved mostly for houses.

This is known as “exclusionary zoning,” and in 2021 it locks down much of the city for multimillionaires. And it is exactly the kind of policy that New Zealand, Vancouver and the states of California and Oregon are aiming to change. Toronto is also considering reform through a planning effort called Expanding Housing Options in Neighborhoods.

https://www.theglobeandmail.com/canada/t...ls-real-changes-coming-to-open-the-door/

[thebasketballgeek]

So essentially they are trying to get rid of single-family zoning?

This seems like exactly what Toronto needs. There is no need to restrict housing in the majority of the city to single-family detached houses. Eliminating that artificial restriction should equal more supply in housing where people want to live. Hopefully they also eliminate parking minimums, incorporate parking maximums, and relax setback requirements and lot sizes while they’re at it. Also, Euclidean zoning that separated commercial and residential is completely outdated and should be abolished everywhere. The amount of land those big box power centres and shopping malls waste is ludicrous.

[MonkeyRonin]

Sounds promising. Though, knowing Toronto council it'll probably take another 5 years before we ultimately end up a with a watered-down, over-regulated version that prevents any real, substantive change.

The good news at least, is that the conventional urban planning wisdom of the post-war era finally seems to be turning a corner in a meaningful way.

[JHikka]

Originally Posted by MonkeyRonin

The good news at least, is that the conventional urban planning wisdom of the post-war era finally seems to be turning a corner in a meaningful way.

Yeah, council will definitely be a hurdle, but at least it sounds like city planning is turning a corner and is finally understanding the issues that affect housing in the city and how best to tackle them. Maybe council elections next year will give us some better councillors with better understanding of what's going on on the ground.

[ssiguy]

Minneapolis and Portland are the latest US cities to ban any form of SFH construction in the entire cities including replacement homes.

To create more medium density housing in older more established neighbourhoods there should, however, be strict design elements such as a maximum 4 stories and the use of brick or wood instead of some concrete bunker that sticks out like a sore thumb.

I don't expect to see this kind of thing in supposed density-loving Vancouver. The city tried to make even modest proposals a couple years back even though the city has the highest level of SFH restrictions in the country where 81% of the residential areas are zoned as exclusively SFH. The most they managed to get is duplexes only allowed in small select areas.