Canada's 'housing bubble' deemed close to bursting

[casper]

Originally Posted by Wigs

okay, let's keep both

Agreed. Both are in the agricultural land reserve.

[Wigs]

Originally Posted by Truenorth00

Some of these folks just can't get over their jealousy for the big metros. They'd rather see Canada fail than Toronto and Vancouver succeed. It's bizarre. In an increasingly urbanized world, our success as a country is very much dependent on our larger cities being globally competitive. If you think Sudbury or Regina has it tough now. Just wait till Toronto, Vancouver and Calgary become even less globally relevant.

my first thought was, like Russia! (pre Ukraine invasion)
Yekaterinburg is kind of like the Russian equivalent to Calgary/Edmonton, but not many in the world have heard of it.

[WarrenC12]

Originally Posted by vanman

There's an elementary school under construction in Coal Harbour and another planned in Olympic Village because the demand is so high. The other two existing schools downtown are at capacity.

Olympic Village is way overdue. The catchment school for that area is currently Simon Fraser Elementary and it gets about 4x more kindergarten applications than it can handle every year.

That OV/Mt. Pleasant area could probably fill 2 more elementary schools tomorrow.

[Acajack]

Originally Posted by Wigs

my first thought was, like Russia! (pre Ukraine invasion)
Yekaterinburg is kind of like the Russian equivalent to Calgary/Edmonton, but not many in the world have heard of it.

It was also known as Sverdlovsk for much of the 20th century.

Back-and-forth name changes aren't good for a city's global renown.

[goodgrowth]

A local feudal lord has spoken...


Hamilton’s sky-high house prices are a success story

https://www.thespec.com/opinion/contribu...gh-house-prices-are-a-success-story.html

[Truenorth00]

Originally Posted by goodgrowth

A local feudal lord has spoken...

Hamilton’s sky-high house prices are a success story

https://www.thespec.com/opinion/contribu...gh-house-prices-are-a-success-story.html

Literally arguing for exclusionary zoning to protect his property value. Gross.

[Wigs]

Originally Posted by goodgrowth

A local feudal lord has spoken...


Hamilton’s sky-high house prices are a success story

https://www.thespec.com/opinion/contribu...gh-house-prices-are-a-success-story.html

Between Feb 2022 and June 2022 the HPI benchmark price for a SFH (3bed/2bath) in the Hamilton-Burlington market has dropped $113k, so the author should have sold his stake.

Thankfully a cooling down period has begun.

[Truenorth00]

Posthaste: Canada's housing market headed for 'historic correction,' says RBC

Downturn will be worse than any seen in the past 40 years

Canada’s largest bank has downgraded its outlook for the housing market and now forecasts a “historic correction,” worse than any national decline seen in this country in the past 40 years.

Soaring inflation has put the Bank of Canada on a course of aggressive hikes that will take its policy rate to restrictive levels by the fall, wrote RBC assistant chief economist Robert Hogue in the report that came out Friday.

“This will send more buyers to the sidelines, especially in British Columbia and Ontario where affordability is extremely stretched,” he said.

RBC now expects home sales to fall nearly 23% this year and 15% next year, and national benchmark prices to drop more than 12% from peak to trough by the second quarter of 2023.

The 42% drop in home sales from the peak in early 2021 will exceed the declines seen in the past four national downturns, Hogue said. In 1981-82 and again in 1989-1990 sales fell 33%; they fell 38% in 2008-09 and 20% in 2016-2018.

The 12% decline in prices by early 2023 will be the steepest correction in the past five housing downturns, he said.

https://financialpost.com/executive/exec...-headed-for-historic-correction-says-rbc

This should be fun.

[someone123]

I don't think a 12% price decline rolls back much of the recent appreciation. The banks, as mortgage lenders, are not the most impartial source of predictions on the housing markets. It will take a long time for higher interest rates to play out and nobody knows how the rates will change.

There are a lot of "lowest sales since date X" statistics floating around but the dates are so far back now that the places have grown significantly and it's not an apples-to-apples comparison. "Lowest sales in the GTA since 2002", as a made-up example, means the market is much worse than it was in 2002.

It's a tangent but this long time scale is why it will take 5-10 years to figure out the costs and benefits of federal covid and related policy. I think it's already looking pretty bad.

[Truenorth00]

We're barely into this and they are already saying it's going to be the worst housing decline in 40 years. All based on a prediction of only another 75 basis points increase before the end of the year.

I expect they'll revise when the predicted 75 bps turns into 100 bps in reality.

[whatnext]

Originally Posted by someone123

I don't think a 12% price decline rolls back much of the recent appreciation. The banks, as mortgage lenders, are not the most impartial source of predictions on the housing markets. It will take a long time for higher interest rates to play out and nobody knows how the rates will change.

There are a lot of "lowest sales since date X" statistics floating around but the dates are so far back now that the places have grown significantly and it's not an apples-to-apples comparison. "Lowest sales in the GTA since 2002", as a made-up example, means the market is much worse than it was in 2002.

It's a tangent but this long time scale is why it will take 5-10 years to figure out the costs and benefits of federal covid and related policy. I think it's already looking pretty bad.

Yeah, 12% is hardly scary (or what is needed). Maybe if you bought from Oct 2021-March 2022 but otherwise it is just rolling back paper gains.

[Wigs]

Originally Posted by Truenorth00

We're barely into this and they are already saying it's going to be the worst housing decline in 40 years. All based on a prediction of only another 75 basis points increase before the end of the year.

I expect they'll revise when the predicted 75 bps turns into 100 bps in reality.

I pity the bastards that paid $900k-$1M for houses in Welland, Thorold, Niagara Falls, Brantford, London, etc
Their homes are already worth $60k-100k+ less than their mortgage value.

[Truenorth00]

Originally Posted by whatnext

Yeah, 12% is hardly scary (or what is needed). Maybe if you bought from Oct 2021-March 2022 but otherwise it is just rolling back paper gains.

First keep in mind that a month ago they said something like 5%. Let's see what that they say in another few months.

Next, 12% nationally is not an even decline. Those exurbs that saw spectacular increases are doing to see spectacular declines.

[Truenorth00]

Originally Posted by Wigs

I pity the bastards that paid $900k-$1M for houses in Welland, Thorold, Niagara Falls, Brantford, London, etc
Their homes are already worth $60k-100k+ less than their mortgage value.

I don't pity them. A fool and their money....

My only worry is that the government will bail out many of these folks. Especially a lot of the speculators now stuck with homes they can't flip and assignments they can't sell.

[Wigs]

Originally Posted by Truenorth00

First keep in mind that a month ago they said something like 5%. Let's see what that they say in another few months.

Next, 12% nationally is not an even decline. Those exurbs that saw spectacular increases are doing to see spectacular declines.

I read recently that someone in the GTA (can't recall exactly) paid like $1.4M for a house about 4-5 months ago and already the market value is down to $1.1M.
Wow

[suburbanite]

The speculators are already sweating. Seen four requests for assignment in the last week at a subdivision in Oshawa where people bought townhomes for $1.1-$1.2 million and current offers are coming in at $900k. They know when the bank comes to appraise their new purchase it's not going to be pretty.

[swimmer_spe]

Originally Posted by someone123

I don't think a 12% price decline rolls back much of the recent appreciation. The banks, as mortgage lenders, are not the most impartial source of predictions on the housing markets. It will take a long time for higher interest rates to play out and nobody knows how the rates will change.

There are a lot of "lowest sales since date X" statistics floating around but the dates are so far back now that the places have grown significantly and it's not an apples-to-apples comparison. "Lowest sales in the GTA since 2002", as a made-up example, means the market is much worse than it was in 2002.

It's a tangent but this long time scale is why it will take 5-10 years to figure out the costs and benefits of federal covid and related policy. I think it's already looking pretty bad.

I bought a house in 2015 and sold it in 2020. In that time it nearly doubled. hat is crazy that it did that, but it did my family good. The 42% correction would stick it back around what I paid for it, but up what would be expected after 5 years. Thankfully for my family, we plan on never moving, at least till we end up either in a nursing home or in the ground.

Who this will hurt are the people who changes houses often, especially the ones who use their houses as a way to gain wealth. This correction might see people holing on to their houses longer to keep from selling at a loss.

[lio45]

Originally Posted by Wigs

I read recently that someone in the GTA (can't recall exactly) paid like $1.4M for a house about 4-5 months ago and already the market value is down to $1.1M.
Wow

Some people paid $84,000 CAD per bitcoin last year (and likely didn't buy just one).

GTA real estate would have been the best choice of the two

[Wigs]

Originally Posted by lio45

Some people paid $84,000 CAD per bitcoin last year (and likely didn't buy just one).

GTA real estate would have been the best choice of the two

lio, what's up with your crypto fetish? Are you like PP?
You keep bringing it up.

[swimmer_spe]

Originally Posted by Wigs

lio, what's up with your crypto fetish? Are you like PP?
You keep bringing it up.

Maybe he is PP....