Canada's 'housing bubble' deemed close to bursting

[Coldrsx]

It is one metric or comparison, that's all; I would agree that monthly starts and monthly occupancies/sales are more useful overall.

[goodgrowth]

Annual numbers compared over time give you a better sense of trends.

I would also say completions is a better metric than starts.

[rbt]

Originally Posted by goodgrowth

Annual numbers compared over time give you a better sense of trends.

I posted the last 6 months worth of annualized numbers. I'd appreciate help in deriving out a 2022 trend from them because to me they don't present a pattern (error or uncertainty bars are massive).

I would also say completions is a better metric than starts.

Agreed.

[goodgrowth]

Originally Posted by rbt

I posted the last 6 months worth of annualized numbers. I'd appreciate help in deriving out a 2022 trend from them because to me they don't present a pattern (error or uncertainty bars are massive).

I meant annual numbers compared over years.

[whatnext]

Potentially more bad news for affordability in Canada. And no, I don't want rich Russians snapping up houses here either.

Rich Chinese Worth $48 Billion Want to Leave — But Will Xi Let Them?
Some 10,000 wealthy Chinese are looking to leave in the wake of punishing lockdowns and an economic slowdown. The question is whether they’ll be able to.
Bloomberg News
July 18, 2022 at 5:00 PM PDT

Like thousands of wealthy people across China, Shanghai restaurateur Harry Hu is planning to do something he once considered unthinkable: move himself and his money out of the country.

Scarred by Shanghai’s chaotic lockdown under the Covid-Zero policy that has made China a global outlier, Hu is joining what investment migration consultancy Henley & Partners estimates is a cohort of 10,000 high-net-worth residents seeking to pull $48 billion from China this year — the second-largest predicted wealth and people outflow for a country after Russia...

....Popular destinations include the US, Singapore, Australia, Canada and places in Europe. Some of these countries have made migration processes more strict, or pulled back on investor visa schemes. Places where investment requirements are relatively low — such as Spain, Portugal or Ireland — could also become more popular, one private banker said...

https://www.bloomberg.com/canada?sref=x4rjnz06

[lio45]

Originally Posted by whatnext

... a cohort of 10,000 high-net-worth residents seeking to pull $48 billion from China this year ...

You know what's crazy? If they each buy one Vancouver house to move into -- nothing more than that! -- there goes THEIR ENTIRE WEALTH. (~$4.8M per house.) Nothing left to invest or launder.

Think about it.

Bunch of high net worth people;
Each one buys a house (in Canada's third city);
No one has any money left after that.

[casper]

Originally Posted by lio45

You know what's crazy? If they each buy one Vancouver house to move into -- nothing more than that! -- there goes THEIR ENTIRE WEALTH. (~$4.8M per house.) Nothing left to invest or launder.

Think about it.

Bunch of high net worth people;
Each one buys a house (in Canada's third city);
No one has any money left after that.

Maybe they will have to make do with the $1M condo. The other $3.8M can go into a balanced investment fund and they are good for the rest of their life.

[Truenorth00]

So it turns out that I'm not the only one who thinks Boomers having a surplus of bedrooms is an issue. On the weekend the Globe and Mail published a piece by Oliver Moore, about Mississauga being the only large city that is losing population. This despite a mad building boom of condos in its "downtown". Turns out the neighbourhoods full of single family homes are losing population. And as they lose population it's getting hard to sustain services and amenities in those areas from schools to stores, risking a spiral of decline. Highlights from the article are in this Twitter thread:

Mississauga was the only major city in Canada to shrink in the last census, a decline that is being blamed on the pandemic but reflects years-long population drops in dozens of its neighbourhoods.

While that high-rise district gives the appearance of a booming city, less visible is the hollowing out of neighbourhoods, which makes it harder to run nearby businesses, fill schools or justify money for local civic priorities.

Many of Canada’s biggest cities are dotted with neighbourhoods that steadily lose people. It’s a growing urban challenge that struggles for attention amid overall population growth and stock media images of crane-dotted skylines.

Their populations are shrinking because of deliberate municipal policies. For decades, city planners have pushed most density to a handful of spots in order to shield established areas from development pressure.


For many years, Mississauga embraced sprawl and only recently started to allow serious density. But most of the city remains single-family homes, which have gradually emptied out as children moved away and new owners had smaller families.

In many established neighbourhoods across Canada, enough residents fight change – under the banner of protecting local character – that adding the density that could help the population rebound remains politically toxic.

This is happening even though Canada has the fewest housing units per capita among G7 countries. In this year’s federal budget, Ottawa said the country needs to double its annual output of housing units.

Mississauga’s head of planning defends its policy of continuing to concentrate most of the city’s growth in certain areas, while acknowledging that predecessors may have focused too much on protecting low-density parts of the city.

Mississauga Mayor Bonnie Crombie said that at the core of the issue in her city is aging people who are effectively “overhoused” but unwilling to move or unable to find a suitable new home.

Mississauga has been trying to broaden beyond its history as a city of almost entirely suburban detached homes. Planners are starting to embrace what’s sometimes called “gentle density.”

Mississauga had no choice but to change its approach. The city is currently developing its last piece of untouched land. Will recent changes be enough to attract younger residents?

https://twitter.com/globeandmail/status/1548359655566413825?t=sVzrQ1pvvZ4NUGu8YV2erw&s=19

[Truenorth00]

Originally Posted by whatnext

There’s the difference between Canadians and Americans - Canadian will just meekly lap up the pap spewed by planners and other so-called experts on how they should live . Americans won’t.

No civilization was ever considered to be advancing by cramming it residents into smaller and smaller living spaces. Quite the contrary, that was always a sign of declining living standards.

Mostly you're right. But most of human civilization didn't have people living tens of kilometers from their workplaces and a lifestyle that is wholly contingent on mechanical transport.

Also, our ancestors didn't do dumb 🞵🞵🞵🞵 like build McMansions in the desert in the middle of a drought, risking loss of water supply. You should ask people in Arizona how their utter disdain for planning is working out:

https://www.newyorker.com/news/letter-from-the-southwest/the-water-wars-come-to-the-suburbs

Our biggest issue with zoning today is that it is far too restrictive. For most of history, running a small business out of the front or bottom of your house was acceptable. Be that a barber, a mechanic, grocer, butcher or a baker. Cities didn't regulate multiple families living on one property. So small duplexes or triplexes were common. This created lively and moderately dense neighbourhoods with lots of amenities. Today we have the absurdity of disallowing duplexes and triplexes while so many SFH owners rent out their basements to pay their mortgages. And our neighborhoods are mostly devoid of amenities.

We don't need high rises. We just need to be allowed to build the same neighbourhoods our grandparents and great grandparents had before 1940. The kinda neighbourhoods that everybody today will pay a premium to get into.

What's so bad about Riverdale in Toronto or the Glebe in Ottawa or the Plateau in Montreal?

• Video Link

[le calmar]

My mother-in-law and most of her circle of friends are widows. They each live in their own 4-bedroom SFH. Some are in their 80’s and complain about being alone most of the time. For the record they all live comfortably and could afford moving to a retirement home. One of them fell down the stairs and broke her leg and stayed on the basement floor screaming for hours before a neighbour found her, but she still won’t contemplate moving out.

An anecdote, I know, but we are talking about 7 houses right there in a city that barely builds new housing (Kingston). It certainly contributes to the problem.

[Acajack]

Originally Posted by Truenorth00

So it turns out that I'm not the only one who thinks Boomers having a surplus of bedrooms is an issue. On the weekend the Globe and Mail published a piece by Oliver Moore, about Mississauga being the only large city that is losing population. This despite a mad building boom of condos in its "downtown". Turns out the neighbourhoods full of single family homes are losing population. And as they lose population it's getting hard to sustain services and amenities in those areas from schools to stores, risking a spiral of decline. Highlights from the article are in this Twitter thread:



https://twitter.com/globeandmail/status/1548359655566413825?t=sVzrQ1pvvZ4NUGu8YV2erw&s=19

The article almost makes it sound like the boomers living in those oversized houses drank some magic potion and are going to live forever.

These areas are going through a transitional period, that is all. My parents' old neighbourhood did the same 20-30 years ago when they and their neighbours stuck around for a while after the kids left.

With a bit of time they end up moving or pass away.

Now the area is full of young families again.

I understand the goal of densification and repurposing older areas but people talk as if no one is going to be interested in nice SFHs ever again.

[Truenorth00]

Originally Posted by Acajack

The article almost makes it sound like the boomers living in those oversized houses drank some magic potion and are going to live forever.

These areas are going through a transitional period, that is all. My parents' old neighbourhood did the same 20-30 years ago when they and their neighbours stuck around for a while after the kids left.

With a bit of time they end up moving or pass away.

Now the area is full of young families again.

Millennials can't wait till they're 60 to start families. So naturally they leave. This means, without zoning changes, these areas won't have a population recovery for a decade or more. And in that time, services and amenities collapse. For example, schools in an area can't get enough enrollment and are closed and the land sold off. Strip malls struggle to get tenants. Grocery stores are further away. Etc. Ironically, a lot of these strip malls and old school plots are sold to developers to build more housing without amenities.

It's also not just an issue of overhoused Boomers. Many of these folks actively fight the mildest densification. We aren't talking condo towers. We're talking about fighting triplexes and quadplexes (incidentally very popular in Quebec!). Provinces are starting to reach the point of frustration and threatening to impose universal zoning that allows quadplexes. It's a case where local desires and preferences are damaging provincial and national interests.

[goodgrowth]

I think the question is the housing market offering enough downsizing options that older people would live in?

Like I can't imagine many older people want to move into a tower in a DT area. They probably want a small apartment building in a more suburban area.

Of course that requires the very types of broad upzoning that many people are advocating for but municipalities are slow to move on.

[Acajack]

Originally Posted by Truenorth00

Millennials can't wait till they're 60 to start families. So naturally they leave. This means, without zoning changes, these areas won't have a population recovery for a decade or more. And in that time, services and amenities collapse. For example, schools in an area can't get enough enrollment and are closed and the land sold off. Strip malls struggle to get tenants. Grocery stores are further away. Etc. Ironically, a lot of these strip malls and old school plots are sold to developers to build more housing without amenities.

It's also not just an issue of overhoused Boomers. Many of these folks actively fight the mildest densification. We aren't talking condo towers. We're talking about fighting triplexes and quadplexes (incidentally very popular in Quebec!). Provinces are starting to reach the point of frustration and threatening to impose universal zoning that allows quadplexes. It's a case where local desires and preferences are damaging provincial and national interests.

I am definitely not a fan of NIMBYism and certainly feel that zoning should be liberalized, but the idea of having something like minimum occupancy for an SFH is not appealling to me at all. (Not saying you are suggesting this, BTW.)

Especially not when as I've said, there are so many units sitting completely empty, either because people are waiting for the right time to capitalize most on their investment, or they're uber-rich and simply like having a pied-à-terre in all sorts of cities, just in case.

And even cracking down on the latter is only semi-appealling to me, and I'm not even a free market ideologue or libertarian.

Ultimately, there is still a ton of unused, disused or sub-optimally used land in our cities and metro areas that could be optimized to alleviate the housing crunch before priority number one becomes forcing old people who've worked their entire lives to pay off their homes out of the places they like to live.

I'm wondering again why this is all of a sudden the main focus.

(And no I am not an empty-nest boomer living alone in a paid off SFH.)

[suburbanite]

Originally Posted by Acajack

I am definitely not a fan of NIMBYism and certainly feel that zoning should be liberalized, but the idea of having something like minimum occupancy for an SFH is not appealling to me at all. (Not saying you are suggesting this, BTW.)

Especially not when as I've said, there are so many units sitting completely empty, either because people are waiting for the right time to capitalize most on their investment, or they're uber-rich and simply like having a pied-à-terre in all sorts of cities, just in case.

And even cracking down on the latter is only semi-appealling to me, and I'm not even a free market ideologue or libertarian.

Ultimately, there is still a ton of unused, disused or sub-optimally used land in our cities and metro areas that could be optimized to alleviate the housing crunch before priority number one becomes forcing old people who've worked their entire lives to pay off their homes out of the places they like to live.

I'm wondering again why this is all of a sudden the main focus.

(And no I am not an empty-nest boomer living alone in a paid off SFH.)

This is always a big talking point, but we have very little evidence of this actually occuring on a large scale in Canada (maybe in central Vancouver if anywhere). Foreign capital definitely crowds out local homebuyers, but we don't have a phenomenon like in London where massive swaths of prime real estate are sitting completely unused as vacation homes for a few weeks a year. I see it as the difference between being an attractive destination for the global .01%, vs. the global 1%. The former will park $30 million into an unproductive real estate asset just because they can. The latter is buying product in the $1-$2 million range and still wants some sort of return and so their housing units largely fill our under-serviced rental market.

[Innsertnamehere]

Originally Posted by Acajack

The article almost makes it sound like the boomers living in those oversized houses drank some magic potion and are going to live forever.

These areas are going through a transitional period, that is all. My parents' old neighbourhood did the same 20-30 years ago when they and their neighbours stuck around for a while after the kids left.

With a bit of time they end up moving or pass away.

Now the area is full of young families again.

I understand the goal of densification and repurposing older areas but people talk as if no one is going to be interested in nice SFHs ever again.

This is indeed a natural transition that happens in new neighbourhoods - they have a natural population peak shortly after construction then settle down as the neighbourhood becomes more diverse in it's population and people age.

That said - the emptying out of neighbourhoods is a trend across canada, including in areas which are quite old and should be well past that initial population settling.

The reality is in our society that young families can't afford detached in large numbers and most boomers / Gen X already have a house with kids that are now moving out. That typical cycle of "old people move out, young people move in" has switched to "kids move out, old people age and die leaving widows, and now the entire neighbourhood is full of large houses with 1-2 people living in each house while young families stuff themselves into small condos"

I live on a street built in the 1970's - it passed that initial population drop long ago. of the 20 or so houses around me, two have school-aged children, maybe 2 more have university age kids who come and go occasionally, one is a duplex, and the rest are all 1-2 person retiree households. That's not normal for a street that is lined with relatively modest (most are around 1,500sf) 3-bedroom homes, perfect for families. This street has maybe 45 people living on which probably had 60-70 people living here in the 1980's.

Coincidentally, my CT is one of the only to lose population in Hamilton in the 2021 census. That's the trend we are seeing in Mississauga and elsewhere in Canada, not a "maturing" of neighbourhoods, but rather the slow death of them.

[Truenorth00]

This whole thing wouldn't be such an issue if the same people staying in these houses weren't also actually fighting development.

Ironically, the kind of development they fight are the exact ones that provide options for older residents to remain in their neighborhoods.

And this is a spiral that is hard to get out of without zoning changes. As amenities are lost, the neighbourhoods become less attractive and only makes it less attractive for other businesses to setup.

[WarrenC12]

Originally Posted by goodgrowth

I think the question is the housing market offering enough downsizing options that older people would live in?

Like I can't imagine many older people want to move into a tower in a DT area. They probably want a small apartment building in a more suburban area.

Of course that requires the very types of broad upzoning that many people are advocating for but municipalities are slow to move on.

I know they all don't, but when I was in Vancouver's Yaletown I was shocked at the number of retirees that had downsized into condos. Everything is close by, they have a pile of extra money from the move, and they are close to services they need.

Parents of friends did it many years ago as well and love it. They take last minute vacations all the time.

[Acajack]

Originally Posted by Innsertnamehere

This is indeed a natural transition that happens in new neighbourhoods - they have a natural population peak shortly after construction then settle down as the neighbourhood becomes more diverse in it's population and people age.

That said - the emptying out of neighbourhoods is a trend across canada, including in areas which are quite old and should be well past that initial population settling.

The reality is in our society that young families can't afford detached in large numbers and most boomers / Gen X already have a house with kids that are now moving out. That typical cycle of "old people move out, young people move in" has switched to "kids move out, old people age and die leaving widows, and now the entire neighbourhood is full of large houses with 1-2 people living in each house while young families stuff themselves into small condos"

I live on a street built in the 1970's - it passed that initial population drop long ago. of the 20 or so houses around me, two have school-aged children, maybe 2 more have university age kids who come and go occasionally, one is a duplex, and the rest are all 1-2 person retiree households. That's not normal for a street that is lined with relatively modest (most are around 1,500sf) 3-bedroom homes, perfect for families. This street has maybe 45 people living on which probably had 60-70 people living here in the 1980's.

Coincidentally, my CT is one of the only to lose population in Hamilton in the 2021 census. That's the trend we are seeing in Mississauga and elsewhere in Canada, not a "maturing" of neighbourhoods, but rather the slow death of them.

They're not "dying", though. Just not transitioning as quickly or in the way that people would like.

[Truenorth00]

Originally Posted by Acajack

They're not "dying", though. Just not transitioning as quickly or in the way that people would like.

The mayors who have to pay for infrastructure in these neighborhoods and protect the economy of the city at large, seem to think otherwise.

Again, this is easily solved by just opening up zoning. Don't want to move? Don't. But don't stop your neighbour from putting up a quadplex.