Canada's 'housing bubble' deemed close to bursting

[lio45]

Originally Posted by 1overcosc

Does Quebec allow property owners to evict tenants if the property owner intends to move into the property him/her self and use it as their primary residence?

Not in the case of indivise condos. This setup is like 30 separate owners co-owning the property (rather than one physical building split into 30 separate properties).

The one and only way is to wait for the tenant to die. The realtor was basically stating this in the first line of the listing (he must have been tired of explaining it to prospective buyers who were excited by the low price).

It’s basically gambling on the tenant’s health. Literally.

[whatnext]

And people say Canada isn't world class:

Toronto now has the highest housing bubble risk in the world, international report finds
The UBS Global Real Estate Bubble Index ranked 25 major world cities based on the risk of housing market collapse and warned that Toronto shows highly elevated risks. “The index has been flashing warning signals in the last couple of years.”
Fares Alghoul
Wed., Oct. 12, 2022

Toronto has the highest housing bubble risk in the world — even higher than cities such as Frankfurt and Hong Kong — according to a new report from Swiss bank UBS.

The UBS Global Real Estate Bubble Index ranked 25 major world cities based on the risk of a market collapse, warning that Toronto, followed by Frankfurt, shows highly elevated risks due to imbalances in global metropolitan housing markets.

A bubble occurs when local housing prices rise rapidly due to high demand and speculation, to the point where they are unsupported by underlying economics. In Canada’s case, record-low interest rates during the pandemic helped fuel a massive surge and fears are growing the bubble may burst as the Bank of Canada continues to raise interest rates to slow inflation.

The annual UBS report assigned an index score to the housing markets in 25 cities, with a score higher than 1.5 indicating that a city was likely experiencing a housing bubble. Toronto received a score of 2.24 and Vancouver 1.70, making them the two most at-risk cities in North America. The U.S. cities on the index were “overvalued,” but below the bubble risk level....

https://www.thestar.com/business/2022/10...he-world-international-report-finds.html

[whatnext]

And people wonder how it is that Canada got to have such a frothy real estate market:

Real estate agents caught on hidden camera facilitating mortgage fraud for a fee
Fake employment records, bank statements and T4’s offered to would-be homebuyers
Tiffany Foxcroft, David Common, Matthew Pierce · CBC News · Posted: Oct 14, 2022

As interest rates rise, qualifying for a mortgage is getting harder for buyers, but that isn't stopping some real estate agents from making a sale. An undercover investigation by CBC Marketplace has exposed some networks of real estate agents, mortgage brokers and bank employees facilitating mortgage fraud for a fee.

They are recorded on hidden camera offering to connect buyers with fabricated documents showing fake employment, salaries and tax filings, so buyers can obtain loans they would not otherwise qualify for.

Have a question or comment about mortgage fraud? Email: [email protected] or join us live in the comments now.
It's a lucrative business. Real estate agents say the teams charge one per cent of the mortgage amount for the fabricated mortgage application. This is in addition to other commissions that can be earned once the sale is finalized....

...."Income is not an issue," said one real estate agent while showing documents he was working on for other clients. "This is what we turn into their income. Even if you are making zero dollars, even if you are a housewife, we can make the income. The only thing we cannot make is credit."

"You know, by books, you will not qualify," said another agent, who went on to describe how his contacts could help. "They will do some documentation showing that you guys are making more and they will get you what you want. But they cannot openly say it out in public because that's not true."...

https://www.cbc.ca/news/business/marketplace-mortgage-fraud-1.6614132?__vfz=medium%3Dsharebar

[casper]

Originally Posted by lio45

Not in the case of indivise condos. This setup is like 30 separate owners co-owning the property (rather than one physical building split into 30 separate properties).

The one and only way is to wait for the tenant to die. The realtor was basically stating this in the first line of the listing (he must have been tired of explaining it to prospective buyers who were excited by the low price).

It’s basically gambling on the tenant’s health. Literally.

So the "indivise condos" in Quebec sound a lot like the "share co-ops" in BC.

In BC I don't believe "Share co-ops" are legal for new buildings. The structure is grandfathered in for pre-existing building that were originally setup that way.

Do they still build new "indivise condos" in Quebec?

Normal housing co-ops in BC are a completely different beast.

[Wigs]

Originally Posted by lio45

Was shopping for a Montreal place to live last year and there was this interesting downtown 3br 1920s condo at about half price ($200k) because it was in a ~30 unit indivise condo building and it was rented; therefore the tenant was un-evictable. The monthly rent was almost exactly the cost of modern property taxes and condo fees (the guy must have been there a while).

Market value of that property totally hinges on the health and age of the tenant!

If you can manage to put something in his tea, instant value creation

ohh lio

[Wigs]

1960s executive 2-storey centre-hall Colonial. 2,700 sq ft
Rare find: backyard large enough for both a tennis court and inground pool

With quality updates it could be a great house. Deserves real wood floors not crap laminate flooring. Price is too high with a market that's cooling down quickly. I'd modernize while trying to keep some quirky 60s vibe. Maybe add a conversation pit

...In-Ground 20 x 40 concrete pool, a full sized tennis court, large deck with gazebo all on a 1/2 acre private park-like setting in one of the most sought after Port Colborne neighborhoods. This beautiful 5 (3+2) bedroom 4.5 bath home sits on a huge pie shaped lot, has a dbl. car garage and is on a quiet cul-de-sac.

https://www.realtor.ca/real-estate/24956420/36-runnymede-road-port-colborne

[q12]

https://rentals.ca/national-rent-report


Nova Scotia's average rent is now more than Ontario...

[Drybrain]

Originally Posted by q12

https://rentals.ca/national-rent-report


Nova Scotia's average rent is now more than Ontario...

Yet if you click through and look at the comparison of individual cities, Halifax is only the 20th most expensive, with average rents hundreds of dollars cheaper than the provincial average. What to make of that?

[lio45]

^ Likely, that Halifax rents are midway between Southern Ontario rents and Northern middle-of-nowhere Ontario rents. Which would be logical.

Province-wide rent figures make little sense.

[thebasketballgeek]

Edmonton and Saskatoon are easily the most undervalued cities in the country. Afaik they are also experiencing pretty good population growth as well so what makes them so successful in retaining their affordability?

And yikes Manitoba having higher rents then Alberta. We needed to build new rentals outside of Winnipeg for atleast a decade but the NIMBYs in rural and small town Manitoba are too strong.

[casper]

Originally Posted by thebasketballgeek

Edmonton and Saskatoon are easily the most undervalued cities in the country. Afaik they are also experiencing pretty good population growth as well so what makes them so successful in retaining their affordability?

I don't know about Edmonton.

Saskatoon has the land bank. The way development works in Saskatoon is when the city wants to grow it buys up farm land just beyond the city boundary. This land is the land bank. It then moves that land from the rural municipality to the city property. Develops an urban plan for the land and builds the sub-division infrastructure up to the serviceable lot stage but does not actually build any houses. It then does a sealed bid process to sell of the lots as demand warrants.

Highly managed process.

End result is generally smaller lots, sidewalks, etc. Typically parks and 4 story mid-rises with some mixed use in the center and then gradually declining density as you move out from the center of the subdivision.

[Coldrsx]

Unleash the hounds! er... developers!

ByAri Altstedter
October 12, 2022

Tucked between snow-capped mountains and the sparkling Pacific, with a mild climate and thriving cultural scene, Vancouver is a perennial contender for North America’s best place to live. It’s also the least affordable.

For 13 years straight, urban consultancy Demographia has named it the continent’s most expensive place for housing. The cost of owning a home in Vancouver, including interest payments on a mortgage, now sits at a staggering 90% of the city’s median income, according to the Royal Bank of Canada. Yet officials and experts couldn’t agree on the cause, let alone a solution.

https://www.bloomberg.com/news/articles/...ousing-is-poised-to-bust-the-zoning-lock

[niwell]

Turns out I pay less than the average rent in Ontario by quite a bit… and our apartment in central Toronto is 1100 square ft in a very nice area. Got it during COVID but if you aren’t determined to rent a condo or in a brand new purpose built rental you can find nice stuff well below that. For only a bit more you can get a family sized place, which several people I know do.

The shocking thing to me is that rent in smaller towns isn’t really all that less than Toronto. You just get more space. Was doing some research on what we could rent out our napanee place for if we needed to (we don’t but curious) and was surprised how high asking rates are. It would more than cover mortgage payments.

[goodgrowth]

Originally Posted by thebasketballgeek

Edmonton and Saskatoon are easily the most undervalued cities in the country. Afaik they are also experiencing pretty good population growth as well so what makes them so successful in retaining their affordability?

Optimal layouts + easily developable land in every direction.

[MolsonExport]

Nah, its that good ol' "Can Do" attitude that lifted the province to lofty heights when the East was reeling during the financial crisis.

[Coldrsx]

Originally Posted by q12

In Canmore the average 1bdrm is ~$1600 and a 2bdrm is $1900.

[lio45]

Those numbers are compatible with my experience of Quebec having the best cap rates by far. Real estate is cheaper here than in most other provinces; we likely have the best rents:prices ratio (though most American cities are even better).

[WarrenC12]

I assume these average rents are from listings not actual rents being paid by tenants. You can see the impact of the NDP here freezing rents and allowing increases that are far below inflation.

New tenants getting it without lube.

[Wigs]

Originally Posted by Coldrsx

In Canmore the average 1bdrm is ~$1600 and a 2bdrm is $1900.

I can remember when Calgary, Canmore seemed hella expensive compared to Niagara just 8 short years ago, and when I lived in Alberta (2009-2014)

Now in St. Catharines for apartments: MEDIAN price for 1 bed is $1,640 and 2 bed is $2,040!
https://www.zumper.com/blog/rental-price-data-canada/

At least for purchase homes are declining.
The avg price of Niagara homes sold in September was $705,403
The overall MLS® HPI composite benchmark price was $661,900
Benchmark home is aged 50-99 years, 3 bedroom/2 bath
https://creastats.crea.ca/board/stca

I see Edmonton rentals are up too. Were you guys able to rent out your Edmonton condo?

[Coldrsx]

Don't want to rent it, want to sell it and the $299 then $289 was then determined to be now $239-249 and so we pulled it.