Canada's 'housing bubble' deemed close to bursting

[casper]

Originally Posted by lio45

That's just a mere fraction of the actual phenomenon. whatnext is correct on that one.



The foreigners bringing money to Canada in order to invest in real estate / launder it are not typical working class / wage earners in their countries of origin. That should be pretty obvious...

I have a bunch of real estate in the U.S. as well, so I'm a good example of this phenomenon: I bought it all with "imported" Canadian money, and local wages in the places where I have properties were mostly irrelevant to me at buying time. (They were only indirectly relevant through local rents, i.e. cap rates.)





Yes, as well as multiple properties in the USA, where my Florida corporation doesn't officially count as a foreign buyer (the management of my portfolio is all local as well), despite all the money coming from outside the state and the country.

My flow of Canadian money contributed to slightly uncoupling my particular Florida market from local incomes. (I'm far from alone, the result being that FL has one of the greatest discrepancies between local incomes and real estate prices, not as bad as Vancouver though.)



In my case there's no hypocrisy at all, I've been consistently on record saying I love foreign buyers and BCMLs.

I can point out they're "bad" in some ways and "good" in others; but since they're an inevitable part of life, might as well profit from them.

I treat climate change the exact same way, for the record. (My out-of-range black walnut / red oak plantations are doing really well and likely will continue to; etc.) If it's going to happen anyway, then the smart thing to do is to take it into account when making plans, whether you like it or not.

It is good for Canadians to have a diversified portfolio of whatever they are invested in.

I think the discussion of foreign buyers is exaggerated. Yes, they are there, they are not a big deal.

[SignalHillHiker]

I cleaned today for a gathering. A lot. So a little house update with the new plants and things more settled lol

I love it here so effing much. $167K wtf

[casper]

Originally Posted by SignalHillHiker

I cleaned today for a gathering. A lot. So a little house update with the new plants and things more settled lol

I love it here so effing much. $167K wtf

I love the strong colours, it looks fantastic. I am not brave enough to do that, for me beige with a slight tine of green is about as far as I have gone.

[SignalHillHiker]

Thanks Casper!

*****

It was a good try lol

[thurmas]

BNN reports this morning Toronto house sales down 47% for July 2022 compared to same time last year

[kwoldtimer]

Originally Posted by thurmas

BNN reports this morning Toronto house sales down 47% for July 2022 compared to same time last year

Prices also continue to decline, one assumes?

[Truenorth00]

Originally Posted by thurmas

BNN reports this morning Toronto house sales down 47% for July 2022 compared to same time last year

Buyer FOMO to seller FONGO. "Fear of Not Getting an Offer".

Sales are down. But prices are so high. These sellers have to go through the grieving process for their mental models of house value. And they need to do it before another rate hike in the Fall.

[thurmas]

Originally Posted by kwoldtimer

Prices also continue to decline, one assumes?

Prices still managed a 1% increase over July 2021 at $1.074 million in Toronto

[kwoldtimer]

Originally Posted by thurmas

Prices still managed a 1% increase over July 2021 at $1.074 million in Toronto

So down substantially since February. I haven't seen a report yet, but I expect K-C-W will be down slightly July22 vs July21.

[travis3000]

There are some markets in the GTA that are up over their year over year, some are holding steady, and others have declined. A real decline in the market has to be measured against the market high though. This was the Feb/March period. In this respect all markets are down. Anywhere between 10 and 30%.

I am showing lots of homes in the Toronto market, and I have accounts across the GTA that Im working with. The market has absolutely dropped in Toronto proper. In the last three weeks Ive shown about 15 homes in the city of Toronto, all priced at 2 million+. Almost all homes have had price reductions, have been on the market 30+ days, most are sitting with reduced showings. Homes that would have sold for 2.9 million in the spring are now listed at 2.6 million with no activity. So trust me when I say that Toronto is feeling the pain as well, especially in the more expensive properties.

Condos are feeling less pain and actually haven't lost any value in Toronto at all. That may change as we head forward. But for now because they are the most affordable units, they are weathering the storm.

[p_xavier]

Originally Posted by casper

I love the strong colours, it looks fantastic. I am not brave enough to do that, for me beige with a slight tine of green is about as far as I have gone.

Maximalism is tough to pull out but he did indeed a great job. He would get crazy at my house, everything is either black or concrete. I have an entire black bathroom, including fixtures.

[SignalHillHiker]

Thanks, P. Yours sounds good, actually. I love concrete and black. I can appreciate a lot of styles for interior design. I think any variation of farmhouse is the only thing I despise. And humour can make anything acceptable. A “Live, Laugh, Love” in the bathroom that says “Poop, Wipe, Flush” or something is fine with me lol

Not a huge fan (conveniently) of super upper-class liminal space houses. Huge front foyers with white marble floor and walls and some oversized chandelier… no. Also those faux Italian kitchens and things that were huge with the Real Housewives and spread across the mainland… hate those.

But most other things are alright. My buddy’s only bit of colour in his house is a bright red wall clock and deep sage doors. But the decor is awesome. Looks great.

Also, didn’t realize I was maximalist haha. But I guess it fits. I hate clutter everywhere except on the walls haha.

[ssiguy]

This is a housing crash Canada {especially Ontario & BC} definitely needs. Housing prices have to come down to reflect local incomes to bring them back to being homes and not just investments to be swapped like a stock on the TSX. Anyone who has bought a 2nd homes in the last 5 years and is now seeing a loss gets absolutely no empathy from me.

There is no such thing as a controlled decline because that is based upon logic and our real estate sector is anything but. If they were based upon logic, Vancouver prices would be a quarter of what they are now. The mad rush and ideology of "buy now or you will never buy" has turned into a "sell now or you will never sell" and prices are going to collapse because of it. Our real estate frenzy has not been based upon sound economic and financial factors but rather fear and greed which is why controlling the decline is not a solution based upon reality.

I have said it before but I will say it again............ rising housing prices can take years to play out but complete collapses can take mere months for one very basic reason............ to push prices higher requires people to have ever increasing amounts of money will plunges require people to have none at all.

The real action is going tto take place in the Fall when people are back from vacation {save the ones having to use Pearson} and listings begin to soar. The fun is just getting started.

[SignalHillHiker]

at the Pearson dig.

I really hate the current setup and I hope it does crash. I don’t mind being underwater or whatever else on my mortgage. It’s a miracle I’m a homeowner at all. We need more people who want it to be able to get it. So many changes need to be made. I think down payments should be disregarded and in their place rental payment history should be tied with income as the most important thing banks consider when you apply for a mortgage. If you’ve been paying $1,400/month for two years, you can afford a lesser mortgage. The end.

I read a couple concerning articles recently. One was, IIRC, an Ontario couple who only made $500K on their house instead of $750K like their neighbours who sold a month previous. A sob story.

Another was about how private investment firms are starting to jump into the SFD market in Canada, as they have in the states (where it has dramatically increased rents and prevented normal buyers from getting homes because the firms can pay in cash over asking.

[lio45]

$850k in Gander?!?!? I’d rather endure crooked steps in Welland at the same price point.

[thurmas]

You can get a brand new single detached home here in la salle mb for $325,000 and its just a 10 minute drive to South Winnipeg and the University of Manitoba.

[lio45]

Originally Posted by SignalHillHiker

Thanks Casper!

*****

It was a good try lol

Am I the only one who, at that comment about some outsider buying all of Gander as a package, immediately thought of Schitt’s Creek?

[casper]

Originally Posted by ssiguy

This is a housing crash Canada {especially Ontario & BC} definitely needs. Housing prices have to come down to reflect local incomes to bring them back to being homes and not just investments to be swapped like a stock on the TSX. Anyone who has bought a 2nd homes in the last 5 years and is now seeing a loss gets absolutely no empathy from me.

There is no such thing as a controlled decline because that is based upon logic and our real estate sector is anything but. If they were based upon logic, Vancouver prices would be a quarter of what they are now. The mad rush and ideology of "buy now or you will never buy" has turned into a "sell now or you will never sell" and prices are going to collapse because of it. Our real estate frenzy has not been based upon sound economic and financial factors but rather fear and greed which is why controlling the decline is not a solution based upon reality.

I have said it before but I will say it again............ rising housing prices can take years to play out but complete collapses can take mere months for one very basic reason............ to push prices higher requires people to have ever increasing amounts of money will plunges require people to have none at all.

The real action is going tto take place in the Fall when people are back from vacation {save the ones having to use Pearson} and listings begin to soar. The fun is just getting started.

I have some elderly parents that have been on the verge of going into a care facility for three years. With COVID we figured the best thing was to keep them in their single family home as long as possible with home care. They went into a care home in June and we listed the house in July.

We listed the house in East Vancouver at assessed value and accepted an offer at just below assessed value. We needed to have a bidding war between several developers to get to that valuation. The fact inventory is so limited is still going to cause these bidding wars. On the positive side, we sold at below the COVID peek but above the valuation it would have had in 2019. That said it was disappointing we did not sell above asking. I would describe that as a mild correction.

Increasing the supply of housing is the only thing that will drive down cost.

[theman23]

Probably nothing to worry about:
https://www.castanet.net/news/Kelowna/37...for-the-Kelowna-RCMP-to-recruit-officers

[theman23]

Originally Posted by casper

I have some elderly parents that have been on the verge of going into a care facility for three years. With COVID we figured the best thing was to keep them in their single family home as long as possible with home care. They went into a care home in June and we listed the house in July.

We listed the house in East Vancouver at assessed value and accepted an offer at just below assessed value. We needed to have a bidding war between several developers to get to that valuation. The fact inventory is so limited is still going to cause these bidding wars. On the positive side, we sold at below the COVID peek but above the valuation it would have had in 2019. That said it was disappointing we did not sell above asking. I would describe that as a mild correction.

Increasing the supply of housing is the only thing that will drive down cost.

We just saw prices go down 20% with the overnight rate increasing. You try way too hard to obfuscate what’s plainly true.