Canada's 'housing bubble' deemed close to bursting

[Truenorth00]

Originally Posted by WarrenC12

I'm riding an adjustable variable rate mortgage. My booze budget is decreasing just when I need it the most!

I've never understood people who didn't lock in when it was that low. It's not like COVID rates were going to be permanent.

[Truenorth00]

Originally Posted by MolsonExport

Christ, I never got offered a 1.6 fixed rate...I think the lowest I got for variable was 1.9.

I should have shopped around.

I'm at 1.61. Anybody who shopped around in the second half of 2020 got rates like that. I know people who got 1.3% in the Fall of 2020. Started going up after that. I renewed in December. There were a lot of dumbass brokers who were still advising variable then. Couldn't believe. I told my broker, I didn't even want to discuss variable. My only mistake was not locking in a 10 yr that was available for 2.1% in December 2020. I was offered something close to that too.

https://twitter.com/jesse_kleine/status/1544053433107243008?t=jMWJvGFs2z3ody07z2rqbw&s=19

[WarrenC12]

Originally Posted by Truenorth00

I've never understood people who didn't lock in when it was that low. It's not like COVID rates were going to be permanent.

Locking in fixed is always going to be higher. I saved tons of money during that time (and before).

Variable rates are almost always a better bet. We're in a situation where they haven't been, but it's likely to be short term.

If you can tolerate the fluctuations, variable is better.

[Truenorth00]

Originally Posted by WarrenC12

Locking in fixed is always going to be higher. I saved tons of money during that time (and before).
.

Usually true. Was saving 25 basis points really worthwhile when we were that low and the likelihood of rates going up was high?

[WarrenC12]

Originally Posted by Truenorth00

Usually true. Was saving 25 basis points really worthwhile when we were that low and the likelihood of rates going up was high?

Maybe. I'd have to do a retrospective look at the math after 5 years.

Hindsight is 20/20. The BoC governor said rates weren't going up until at least 2023.

[travis3000]

Originally Posted by Truenorth00

I'm at 1.61. Anybody who shopped around in the second half of 2020 got rates like that. I know people who got 1.3% in the Fall of 2020. Started going up after that. I renewed in December. There were a lot of dumbass brokers who were still advising variable then. Couldn't believe. I told my broker, I didn't even want to discuss variable. My only mistake was not locking in a 10 yr that was available for 2.1% in December 2020. I was offered something close to that too.

https://twitter.com/jesse_kleine/status/1544053433107243008?t=jMWJvGFs2z3ody07z2rqbw&s=19

Yep and the beauty thing about locking in at low rates, even if life throws you a curveball and you have to sell before the maturity, the penalties are much less if the going rates are higher. Its much cheaper breaking a mortgage of 1.6% when the going rates are 5%, opposed to breaking a 5% mortgage for a 1.6% current rate. The difference in penalties can be 20K VS 2K.

I was paying 3.8% and ended up breaking that rate at a cost of 10K. But the new rate I got was 1.8% , and I ended up saving $500/month on my mortgage. Basically after 20 months its all profits for me for the remaining 40 months. Im glad I did it. Literally a week after I got my rate they started rising. That was back in April 2021.

[swimmer_spe]

Originally Posted by Truenorth00

I've never understood people who didn't lock in when it was that low. It's not like COVID rates were going to be permanent.

The rates were low prior to covid. In fact, there was talks of the BOC or US Treasury Board having a negative interest rate.
From 2020:
https://www.forbes.com/sites/amiyatoshpu...tting-ready-for-negative-interest-rates/

[GeneralLea]

Originally Posted by swimmer_spe

The rates were low prior to covid. In fact, there was talks of the BOC or US Treasury Board having a negative interest rate.
From 2020:
https://www.forbes.com/sites/amiyatoshpu...tting-ready-for-negative-interest-rates/

There was a ton of controversy around those negative rates, I recall it well. It sounds silly in retrospect, but I still wonder if it might happen someday.

[swimmer_spe]

Originally Posted by GeneralLeeTPHLS

There was a ton of controversy around those negative rates, I recall it well. It sounds silly in retrospect, but I still wonder if it might happen someday.

If we want houses to be affordable, I don't think we will see that anytime soon.
https://www150.statcan.gc.ca/n1/pub/11-210-x/2010000/t098-eng.htm

[swimmer_spe]

Our world has changed many times, and with that change we saw things labeled as "Post"whatever, like post war, post 9-11, and now, post pandemic.

If we look at housing post war, and we use that as a guide, we can solve the housing problems. We could also use how we settled Southern Quebec, Southern Ontario and the Prairies as guide

There are lots of existing towns and villages throughout Canada that are not surrounded by farmland and are also not surrounded by land that is hard to develop. We also have a larger number of people that will only need an internet connection to be able to work.

I will use town near where I live - Cartier ON.
It is surrounded by bush. It has a major highway and railway. It is surrounded by crown land. So, if the province were to work with the town to take sections of 1 sq km of land and build a simple subdivision, not the cul du sac ones, but the ones that have straight roads. have the lots be half acre sized and have power and high speed internet to the properties. Also have the roads paved. Sell the lots for $5000 with the stipulation that in 5 years a permanent dwelling must be built. No mobile homes, tiny homes or RVs. Modular and kit homes can be permitted. These 1 sq km sections could be easily laid out and be developed quickly.

Another thing that could be done is to sell off land owned by the city to be developed. Using Sudbury for example, much of this land is unsuitable for single family developments, but it would be worth it for high rises.So, do the same thing, sell it for cheap with the stipulation that it must be developed within 5 years.

These2 things would drop the pricing of housing in the smaller places, and grow places that are struggling.

[jonny24]

No offense to the people of Cartier... but what would entice people to move there? Land/housing in the north is already cheaper than down south. So the only differentiator here is "how much cheaper". You need the other side of the equation - jobs, amenities, etc, that make people want to live in a place.

[thewave46]

Originally Posted by jonny24

No offense to the people of Cartier... but what would entice people to move there? Land/housing in the north is already cheaper than down south. So the only differentiator here is "how much cheaper". You need the other side of the equation - jobs, amenities, etc, that make people want to live in a place.

This is the weird cheap fetish thing coming out again.

The rallying cry: The land is cheap! Just plop people there! Like the USSR!

The reality: The land is cheap because nobody wants to live there and it has minimal productive use. Free will and all that. There is ungodly amounts of cheap land in this country. Untold millions of square kilometres with all the appeal of stepping barefoot into a cat hairball.

Is it good writ large to live in Cartier? Even with an internet connection? No, because you have to drive a half hour to get anything beyond basic groceries. If your employer requires you to go into a workplace, you now are commuting long distance. Unless one is a retired hermit or something, it isn’t a good place to live.

“But it’s cheap!”

But it sucks more than the benefit cheap provides. Dog food is cheap. I’ll spend the money on regular people food, thanks. So will most other people.

[goodgrowth]

61% of Vancouver residents considering leaving region due to housing affordability

https://dailyhive.com/vancouver/metro-va...g-affordability-relocation-consideration

Unaffordable housing costs and quality of life concerns are forcing more Metro Vancouver residents into the crossroads of deciding whether to move out of this region.

Over half (52%) of residents across the region have considered moving away from the region due to these concerns, according to a new survey by Mustel Group. This is up from 46% in a similar survey conducted in 2018.

Those who are most likely to think about leaving Canada’s third most populated urban region are those between the ages of 18 to 34 (71%) and residents of the City of Vancouver (61%).

The group least likely to consider moving are residents in the southwest sub-region (30%) of Metro Vancouver, which entails the areas of Richmond, South Delta, and Tsawwassen.

[someone123]

The land that matters isn't the stuff in far-flung northern towns, it's the areas near existing cities where development is banned or which could be developed given infrastructure that is not built for political reasons. Then there's the question of zoned buildable space which is basically equivalent to the land supply.

Our crappy long-distance travel system (terrible trains, bogged down and expensive air travel, mediocre highways with huge congestion around cities) also impacts how much people want to move out of region.

[swimmer_spe]

Originally Posted by jonny24

No offense to the people of Cartier... but what would entice people to move there? Land/housing in the north is already cheaper than down south. So the only differentiator here is "how much cheaper". You need the other side of the equation - jobs, amenities, etc, that make people want to live in a place.

Originally Posted by thewave46

This is the weird cheap fetish thing coming out again.

The rallying cry: The land is cheap! Just plop people there! Like the USSR!

The reality: The land is cheap because nobody wants to live there and it has minimal productive use. Free will and all that. There is ungodly amounts of cheap land in this country. Untold millions of square kilometres with all the appeal of stepping barefoot into a cat hairball.

Is it good writ large to live in Cartier? Even with an internet connection? No, because you have to drive a half hour to get anything beyond basic groceries. If your employer requires you to go into a workplace, you now are commuting long distance. Unless one is a retired hermit or something, it isn’t a good place to live.

“But it’s cheap!”

But it sucks more than the benefit cheap provides. Dog food is cheap. I’ll spend the money on regular people food, thanks. So will most other people.

I know of people who lived in a downtown Toronto condo. They moved to middle of nowhere NB.They are not even from that province. There are likely lots more that would move to the "middle of nowhere." This would allow that to happen.

[thewave46]

Originally Posted by swimmer_spe

I know of people who lived in a downtown Toronto condo. They moved to middle of nowhere NB.They are not even from that province. There are likely lots more that would move to the "middle of nowhere." This would allow that to happen.

…and yet they don’t.

Weird, huh?

[Wigs]

The bubble is deflating in Niagara. Huge inventory accumulating, fewer and fewer sales.

Wait 6 months to a year and find a much cheaper house

The number of homes sold through the MLS® System of the Niagara Association of REALTORS® (NAR) totaled 516 units in August 2022. This was down sharply by 35.7% from August 2021.

Home sales were 32% below the five-year average and 28.7% below the 10-year average for the month of August.

In August, the Niagara Association of REALTORS® listed 1095 residential properties compared to 872 in August
2021. The average days it took to sell a home in August 2022 was 31 days, compared to 20 days in August 2021.

The benchmark price, typical 3 bed/2 bath home age 51-99 years is down $29,000 from July to August to $687,500.

[goodgrowth]

[1overcosc]

Originally Posted by thewave46

…and yet they don’t.

Weird, huh?

There has been a trickle of people moving to pretty rural areas. The remote pockets of Eastern Ontario (which are actually a lot more isolated than you'd think) are currently having a much more active real estate market than ever before and there's been an unprecedented boom in building permits being issued in places like Plevna and Kaladar. Many of these municipalities recorded double digit growth in the 2021 census after decades of decline.

It seems a big trend in this region is modern day homesteading, of all things. Which seems to be a peculiar mix of people on both the hard left and the hard right.

I don't think its a big trend, really more of a trickle, but there is definitely an appetite for very rural living.

There was a similar wave in the 1970s, the "back to the land movement" it was called, which was a significant thing in the Kingston region. There's a bunch of small scale farms that you see at farmers markets in Kingston which were founded around that time.

[niwell]

I've been to Cartier (through work). There are very good reasons that people wouldn't want to move there, and that it's no longer even a town but rather an unincorporated part of the province. Rural parts of Eastern Ontario are far, far less remote.