Canada's 'housing bubble' deemed close to bursting

[lio45]

Originally Posted by thewave46

It makes Hanna, Ab look like New York City.

swimmer is disconnected from reality.

$5000 for land in Cartier even with no strings attached (let alone an obligation to build - imagine the cost of bringing labor and materials there!) is highway robbery. I’d rather flush $5000 down the toilet - if I’m lucky (Laval mayor’s sister / Trump’s documents) I might actually get a fraction of it back as it gets stuck

And the (dead serious!) post about remoteness was hilarious; “it’s not remote, you’re only an hour’s drive away from an airport where you can then take a flight to the city”

[thewave46]

Originally Posted by lio45

swimmer is disconnected from reality.

$5000 for land in Cartier even with no strings attached (let alone an obligation to build - imagine the cost of bringing labor and materials there!) is highway robbery.

And the (dead serious!) post about remoteness was hilarious; “it’s not remote, you’re only an hour’s drive away from an airport where you can then take a flight to the city”

I live in the Sudbury area, and there's just so many better spots to buy, even if one wants the space. Some of these places will have niceties like municipal water/sewer, accessible schools and municipal facilities, closer to major employers, various stores, and whatnot. They are somewhat more expensive, but not that much more expensive.

Second, the City of Greater Sudbury isn't growing that much. Sure, it's adding about 2-3% population between censuses (the population bottomed out in the late 1990s), but it's not booming to the point that land availability is even remotely a concern in the region. Yes, housing prices shot up (though much less than Ontario writ large) because of the rock-bottom interest rates and people leaving more expensive centres (often to retire/come back to family) but the biggest limitation to cost of building a new home is the labour/materials, not the lot.

So, that leaves the fringe audience. People who don't mind commuting long distances, or can work remotely and are not bothered by no schools/stores/facilities that is provided by Cartier, but don't want lakefront property on the many lakes nearby.

[thurmas]

https://financialpost.com/real-estate/mo...t-in-major-canadian-centres-report-finds

Housing inventory may reach crisis point in major Canadian centres, report finds
Chronic housing shortages in large urban centres have resulted in 'mini boom and bust cycles'

Inventory levels in major Canadian housing markets have been dwindling over the past decade, with active listings in July running below the 10-year average in most cases, according to a report released Monday by RE/MAX Canada.

The organization’s Housing Inventory Report report, based on Canadian Real Estate Association data and insights from the RE/MAX network, examined active listings in July from 2013 to 2022 in eight Canadian centres and found inventory levels have fallen short of the 10-year average in seven of them in 2022.
Double-digit declines were noted in Halifax-Dartmouth (65.5 per cent below the 10-year average); Ottawa (almost 42 per cent); Montreal (40 per cent, from a nine-year average); Calgary (26 per cent); Winnipeg (23 per cent); and Greater Vancouver (16 per cent). The housing inventory shortage was less-pronounced in the Greater Toronto Area, where it was down almost seven per cent from the 10-year average. Hamilton-Burlington was the only market to buck the trend, landing at 3.2-per-cent above average.

Christopher Alexander, president of RE/MAX Canada, said population growth has played a significant role in depleting inventory levels from coast to coast over the past decade, triggering chronic housing shortages in large urban centres that have resulted in “mini boom and bust cycles.”

“If we don’t move now to build more housing in the current lull, it’s expected that this same scenario will continue to resurface over and over again,” Alexander said in the report.

A crisis is looming, but the outcome is not cast in stone

CHRISTOPHER ALEXANDER
Canada experienced double-digit population growth between 2006 and 2021, a trend that is expected to continue given Ottawa’s commitment to welcome 1.2 million newcomers into the country between 2021 and 2023 as part of an immigration strategy aimed at propelling economic growth and reducing labour shortages. However, in the context of the housing stock shortage, the rising numbers of new Canadians combined with an increase in household formation overall, are expected to intensify the inventory shortfall further.

A recent report from the Canada Mortgage and Housing Corporation (CMHC) concluded that the country would need to build 3.5 million new homes by 2030 to improve affordability, yet Canada is averaging only 200,000 to 300,000 new units per year.

“During this window of softer demand, building efforts should be ramped up, not down. The offshoot effect is straining rental markets and contributing to ever-rising levels of homelessness throughout the country,” Alexander said.

Meanwhile, CMHC noted a decrease in the seasonally adjusted annual rate of housing starts in Canada’s urban areas in July 2022, driven by lower starts in the single-detached category. Stronger declines in multi-unit residential starts were registered in Vancouver, while a substantial slow-down occurred in both multi-unit and detached residential starts in Montreal.

Yet, the trend is perhaps most pronounced in the country’s largest housing market — the Greater Toronto Area. According to a second quarter Condominium Market Survey by real estate research firm Urbanation Inc., approximately 35,000 new condo units were originally expected to launch for pre-construction sale in the GTA in 2022. While close to 16,000 units were launched in the first half of the year, fewer than 10,000 units are now expected during the remainder of 2022, suggesting that 10,000 units have been shelved.
Falling real estate prices may be adding to the current pressure on inventories, creating a disincentive for new construction.

TD Bank economist Rishi Sondhi predicts that “the average price of a home in Canada could fall between 20 and 25 per cent from its peak seen earlier this year” by early 2023, but that there is a likely a floor on how low they can go.

“Several factors … will help cushion housing demand and prices — the fastest rate-hike cycle in decades, growing consumer incomes and excess savings and low inventories in the new and resale markets,” Sondhi wrote in a recent report.

Other Industry watchers have cited a number of factors emerging to create a perfect storm that will keep housing scarce now and in the future, including inflation and rising interest rates, increased global supply-chain interruptions, swelling construction costs and a serious shortage of labour in the skilled trades, as well as high land acquisition costs and slow municipal approval processes.

“The trouble is that housing development is a slow process, and experience tells us the only thing slower might be government processes,” Alexander said. “Removing barriers and cutting red tape is necessary. A crisis is looming, but the outcome is not cast in stone. There is a short runway to reverse course before the impacts become very real for Canadian home buyers and renters.

[lio45]

Originally Posted by thewave46

I live in the Sudbury area, and there's just so many better spots to buy, even if one wants the space. Some of these places will have niceties like municipal water/sewer, accessible schools and municipal facilities, closer to major employers, various stores, and whatnot. They are somewhat more expensive, but not that much more expensive.

Second, the City of Greater Sudbury isn't growing that much. Sure, it's adding about 2-3% population between censuses (the population bottomed out in the late 1990s), but it's not booming to the point that land availability is even remotely a concern in the region. Yes, housing prices shot up (though much less than Ontario writ large) because of the rock-bottom interest rates and people leaving more expensive centres (often to retire/come back to family) but the biggest limitation to cost of building a new home is the labour/materials, not the lot.

So, that leaves the fringe audience. People who don't mind commuting long distances, or can work remotely and are not bothered by no schools/stores/facilities that is provided by Cartier, but don't want lakefront property on the many lakes nearby.

You can get things around $100k right outside a city of 200k+ and where the Cartier-Sudbury drive takes you to almost Montreal.

Examples:

https://www.centris.ca/fr/duplex~a-vendre~waterville/12475463?view=Summary&uc=3

or

https://www.centris.ca/fr/maison~a-vendre~east-angus/19988516?view=Summary&uc=5

[swimmer_spe]

Originally Posted by thewave46

Oh, I see. Cartier is just not thriving because nobody knows about it. Of course. Obviously the locals shun it for the same reasons. They don't know about it.

It's not because it's a tiny village abutting a lightly used highway with a grand total of two stores 30-50km north of a city that many consider 'in the boonies' already. Or that it lacks any major employer, school, or amenities.

It's the lack of national recognition, obviously. If I was moving to the Sudbury area and wanted a little extra space on my lot, I'd ignore the Valley, Azilda, Chelmsford, Garson, Coniston, Dowling, Azilda, most of the city itself and head up to Cartier.

Imagine if something like BlogTO said "Build your dream home on a lot that only costs $5000!" Just like the problems they caused with natural wonders in the province, this would cause thousands of people trying to get in.

Of course, most on here are quite happy in the meat grinder all their life.

Originally Posted by lio45

swimmer is disconnected from reality.

$5000 for land in Cartier even with no strings attached (let alone an obligation to build - imagine the cost of bringing labor and materials there!) is highway robbery. I’d rather flush $5000 down the toilet - if I’m lucky (Laval mayor’s sister / Trump’s documents) I might actually get a fraction of it back as it gets stuck

And the (dead serious!) post about remoteness was hilarious; “it’s not remote, you’re only an hour’s drive away from an airport where you can then take a flight to the city”

Barrie to Pearson is just under an hour away. By your metric, that makes Barrie remote.

Labour and materials are not much different than the GTA.

Obviously someone like you could never survive if a subway doesn't go to it....

[lio45]

If you’re in Barrie and drive an hour, you’re in Toronto;
if you’re in Cartier and drive an hour, you’re in Sudbury.

I think it’s pretty clear which one is remote and which one is not.

[lio45]

Lots in the middle of nowhere have zero value. “Build your dream home on a free lot” isn’t an appealing proposition. The finished house will be worth less than the cost of materials and labor (which is, unsurprisingly, precisely why empty lots in the middle of nowhere aren’t worth anything).

[thewave46]

Originally Posted by swimmer_spe

Imagine if something like BlogTO said "Build your dream home on a lot that only costs $5000!" Just like the problems they caused with natural wonders in the province, this would cause thousands of people trying to get in.

Except many places in Northern Ontario - all those declining resource towns and regions - has that potential. Collectively, it's hundreds of thousands of people in these regions - many who've moved southwards - so it's not some giant secret.

I have lived in some of those places. No southerners flooding Smooth Rock Falls, ON despite houses selling for the equivalent of my yearly salary. Hey, it was only an hour away from the Timmins airport! A flight to Toronto in a hour and a half!

So, the question is Why do people not move there? I've given my opinion as to why, so what's yours?

[ssiguy]

That report exemplifies how, in some ways, our housing shortage is completely manufactured by developers in order to maintain tight housing supply and hence higher prices.

When times are good and prices skyrocket our developers {and the politicians they bribe} say that it is a supply & demand issue but when the housing market declines and they have a chance to rebalance the market, they withdraw.

They also rightly accuse cumbersome and slow municipal approval and regulation processes that slow construction down. From an anemic bureaucracy to some truly ridiculous regulations, they share a lot of the blame. They also mandate parking requirements which adds tens of thousands to the cost of units and take up a lot of construction time.

Thankfully some cities are getting away from these needless parking minimums with London being the most recent. It has gotten rid of all parking minimums in the city near transit corridors & centres and has reduced parking minimum city-wide by 40% which includes not just residential but also commercial.

[swimmer_spe]

Originally Posted by thewave46

Except many places in Northern Ontario - all those declining resource towns and regions - has that potential. Collectively, it's hundreds of thousands of people in these regions - many who've moved southwards - so it's not some giant secret.

I have lived in some of those places. No southerners flooding Smooth Rock Falls, ON despite houses selling for the equivalent of my yearly salary. Hey, it was only an hour away from the Timmins airport! A flight to Toronto in a hour and a half!

So, the question is Why do people not move there? I've given my opinion as to why, so what's yours?

You were saying.....

https://www.smoothrockfalls.ca/media/smooth-rock-falls-reviving-offering-500-lots/

[thewave46]

Originally Posted by swimmer_spe

You were saying.....

https://www.smoothrockfalls.ca/media/smooth-rock-falls-reviving-offering-500-lots/

Wonderful for them. The town still declined from 1,330 to 1,200 in the past 5 years, according to the 2021 Census.

Sudbury attracted thousands of new people in the past few years and didn't have to give away lots to do it.

Tens of thousands pour into the GTA yearly, in spite of high prices.

[swimmer_spe]

Originally Posted by thewave46

Wonderful for them. The town still declined from 1,330 to 1,200 in the past 5 years, according to the 2021 Census.

Sudbury attracted thousands of new people in the past few years and didn't have to give away lots to do it.

Tens of thousands pour into the GTA yearly, in spite of high prices.

Point is, you said it would not work, yet they were able to sell them. If you do the math, they still are buying them up, and they are moving there: "Since October 2017, 24 new families have moved to Smooth Rock Falls and one family has returned."

Losing 130 is bad, however, if the goal is population growth vs empty homes/properties, I would like to see what the vacancy rate is, and if it is stabilizing/lowering, I would say it was a success.

[thewave46]

Originally Posted by swimmer_spe

Point is, you said it would not work, yet they were able to sell them. If you do the math, they still are buying them up, and they are moving there: "Since October 2017, 24 new families have moved to Smooth Rock Falls and one family has returned."

Losing 130 is bad, however, if the goal is population growth vs empty homes/properties, I would like to see what the vacancy rate is, and if it is stabilizing/lowering, I would say it was a success.

I would speculate that the town will continue to decline, based on the fact that 35% of the town's population is aged 65+ and the median age is 58.

My overall conclusion is that aside from the handful of people taking Smooth Rock Falls up on the offer of the extremely attractive lot pricing, that people writ large avoid moving to places that offer limited opportunities despite land costs being exceedingly cheap.

Hence the use of the terms "fringe" and "handful of people" in my previous posts.

But I digress on the matter, because I am certain somebody will come up with arguments for the use of square wheels on cars on the internet.

[swimmer_spe]

Originally Posted by thewave46

I would speculate that the town will continue to decline, based on the fact that 35% of the town's population is aged 65+ and the median age is 58.

My overall conclusion is that aside from the handful of people taking Smooth Rock Falls up on the offer of the extremely attractive lot pricing, that people writ large avoid moving to places that offer limited opportunities despite land costs being exceedingly cheap.

Hence the use of the terms "fringe" and "handful of people" in my previous posts.

But I digress on the matter, because I am certain somebody will come up with arguments for the use of square wheels on cars on the internet.

If you say fringe, do you mean 1%, 0.01%, or even 0.0001% of the population of Toronto?

Toronto's Population is; 2,794,356
1% of that is: 27,943
0.1% of that is: 2,794
0.01% of that is: 279
0.0001% of that is: 2....

Now, if we want to play with numbers... the top metros over 1 million are:

Toronto Ontario CMA 6,202,225
Montreal Quebec CMA 4,291,732
Vancouver British Columbia CMA 2,642,825
Ottawa–Gatineau Ontario/Quebec CMA 1,488,307
Calgary Alberta CMA 1,481,806
Edmonton Alberta CMA 1,418,118

That totals: 17,525,013
Canada's population is: 38,654,738.The top 6 metros make up 45% of the entire population. If even 1% were to want to leave them, that is 175,250, or about the same as the city of Oshawa leaving. Lets say that is too optimistic, and it is 0.01%. That's still more than Smooth Rock Falls. Just like the 50s started the move to the cities, with how people are wanting to work from home if they can, we may see the opposite happen. So, why shouldn't governments work together to capitalize on it like the postwar boom of the 50s?

[theman23]

Man, this is fucking stupid. No one wants to WFH from a fucking swamp in Northern Ontario.

[casper]

Originally Posted by theman23

Man, this is fucking stupid. No one wants to WFH from a fucking swamp in Northern Ontario.

Well, you do know it is a fantastic deal. If you want swamp land in Florida or desert in Arizona it will you $5,000 US for a plot of land. Ontario swamp land sells at a 30% discount. No alligators to evict.

Realistically we are talking about a place that is going to declare success if they attract 4-5 families to locate there. This is not going to solve the housing problem in Canada.

What is more interesting is the trend of people moving into these smaller towns. It is starting to cause a reversal from slow decline into very slow growth. Even then your talking about a round off error for the population of Ontario.

Would I move there? No. Would most of Toronto? No.

I think it is fantastic that Smooth Rock Falls (and the towns like it are) stabilizing and starting to grow slightly. That is critical for their long term viability. That said, the number are not material to a place like Toronto.

[le calmar]

Originally Posted by theman23

Man, this is fucking stupid. No one wants to WFH from a fucking swamp in Northern Ontario.

I took a look at the place on Google Maps. Man it has to be one of the most depressed places I’ve ever seen. I’m actually tempted to buy a property in the country side one day, but that place? No thanks.

[Truenorth00]

Originally Posted by thewave46

I have lived in some of those places. No southerners flooding Smooth Rock Falls, ON despite houses selling for the equivalent of my yearly salary. Hey, it was only an hour away from the Timmins airport! A flight to Toronto in a hour and a half!

So, the question is Why do people not move there? I've given my opinion as to why, so what's yours?

It's pretty funny. Folks like him hate city dwellers. And then swear up and down that city folks will and should leave the city to move to the middle of nowhere.

He reminds me of friends and family who buy big houses far out and then are always begging people to come and stay for the weekend. Turns out no amount of land and structure is worth being away from social contact. The novelty of isolation always wears off.

End of the day people vote with their dollars and feet and there's a direct correlation between distance from urban cores and residence. That's why a square foot in downtown Toronto costs 2-3x that of a square foot in Barrie.

Will add that this is why GO RER is a big deal. Cut the travel time of going from Barrie to downtown Toronto and Barrie becomes substantially more attractive. GO RER will substantially flatten the gradient of the real estate values across the GTA. There's no need to move to Cartier or Smooth Rock Falls.

[Truenorth00]

Originally Posted by theman23

Man, this is fucking stupid. No one wants to WFH from a fucking swamp in Northern Ontario.

There's always somebody. By that I mean literally one person. In this case, it's Swimmer.

But if you ask most people where they would WFH, if they had a choice of anywhere, chances are it's a place that's warmer and livelier. Not many folks looking to WFH in a place where you don't even have to scroll to see all the Uber Eats options in town.

[niwell]

Elliott Lake, ON has been trying to market itself as a cheap retirement location for years now with the closure of uranium mining in the area. And to be fair has had some success - even growing by about 600 people between 2016 and 2022 (still well below it's peak). However, the main selling points of cheap housing and access to outdoor recreation has limited appeal beyond those who already want to be in the North, often from somewhere more remote. The difficulty in travel is a big one, and would result in an immediate veto for people such as my parents who don't want to have to drive, take a regional flight and then an international one to get anywhere.

And Elliot Lake at least has over 10,000 people with the local services that come along with that. Cartier isn't even incorporated and the Local Services Board doesn't have the capacity to provide treated water or garbage collection!

I've met people who own cottages on the shore of Lake Superior North of the Soo, who have mentioned that in some cases they can be at their kids place in Toronto in less time than it can sometimes take to drive to Muskoka for Torontonians. This is technically true. But if going back and forth between the two you are reliant on air schedules (and ever increasing prices), need to figure out long term parking for your car and have less flexibility to leave on the drop of a dime if something goes wrong. My wife and I purchased a house that we intend to use part time 2 hrs hours east of Toronto at a small fraction of what it would cost to buy here. It can be an annoying drive but if I need to be there ASAP it's not that hard, plus it's only 30 minutes from downtown Kingston.