Canada's 'housing bubble' deemed close to bursting

[thewave46]

I'm curious what is a representative sample for each province, mostly.

Is it population weighted? For example, does rent in Halifax mostly define rent for the province of Nova Scotia? Somebody in Sydney, NS is probably not paying $2500/mo. for rent.

If that's the case, I mostly see that GTHA and Vancouver are basically defining rent for their respective regions.

Admittedly, it might be a good time to think about rental construction in secondary cities of the country as interest rates rise. Condo developments have to be getting killed with rising interest rates and SFH limitations are making them hugely expensive to develop.

As for provinces that have cheap rent, I'm curious as to why. Is there just a glut of supply? Is SFH still so cheap as to cap the amount one can charge for rent? The Prairies are doing decently well too, so I don't think it is economic weakness. Is there more strict rent controls?

[Wigs]

Originally Posted by 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.

I'm aware, I just meant since you can't get anywhere near what you want right now as for sale market declining in most of Canada, but rental rates are still increasing it could generate income for the time being

As long as Canadians continue to move to larger cities like Edmonton in large numbers they'll need a place to rent so the rental rates will continue to rise

[Coldrsx]

Certainly an option and one becoming more attractive, but I want the cash for other uses.

[someone123]

Originally Posted by thewave46

Is it population weighted? For example, does rent in Halifax mostly define rent for the province of Nova Scotia? Somebody in Sydney, NS is probably not paying $2500/mo. for rent.

I would guess there is some error or strange methodology rather than a real phenomenon happening there.

Sometimes small towns and rural areas can have very limited rental pools and experience large price shocks. I think local factors, combined sometimes with national factors like interest rates or stimulus spending, have a bigger impact than the traditional SSP metrics like population size.

[Hali87]

Originally Posted by thewave46

I'm curious what is a representative sample for each province, mostly.

Is it population weighted? For example, does rent in Halifax mostly define rent for the province of Nova Scotia? Somebody in Sydney, NS is probably not paying $2500/mo. for rent.

I could make a few educated guesses here. I'm pretty sure that Halifax/HRM has a higher proportion of renters (vs homeowners) compared to the rest of the province -I would guess that >50% of the rental units in the province are within HRM - so in that way the data is likely "skewed" a bit towards HRM.

Those are also the average rents per province for all unit types, so this would include everything from tiny bachelor apartments to 6+ bedroom rental "intact" SFHs. On this note, bachelor apartments are not very common in NS. I'm not sure how Ontario compares in that regard, but that could be one major factor. Same with SROs (if those are included in the data) - they are a very uncommon housing arrangement here compared to some provinces. It also does not take into account whether/which utilities are included.

[travis3000]

Thats brutal. Renting is insanely expensive in ON and BC. My mortgage is 1350 per month. If I were renting my place would go for around 3000 per month plus utilities.

Even with me paying property taxes, insurance, heat, hydro, and water Im still saving 1200 per month by owning.

[Hali87]

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?

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.

Again, a couple educated guesses. Looking at Edmonton specifically, it seems that the construction process would generally be cheaper and quicker than average. The land is nearly always already flat and clear, it is easy to dig for things like basements/underground garages, taxes (on materials, etc) are the lowest in Canada, fuel and electricity prices are among the lowest in Canada, there is limited red tape. Contrast this with Halifax (for example) which has high taxes, high fuel and electricity prices, new developments typically involve clearing forest, blasting/grading, or dismantling and then reconstructing heritage buildings, and there are very stringent environmental/design restrictions on most new developments.

Edmonton's architecture also tends to be somewhat "plainer" on average than in most other large Canadian cities (which are "frilly" in comparison), which tends to further reduce materials and design costs. Since most everyday things in Edmonton tend to be good value for money, smaller landlords also might not feel that they need to charge as much, since their own expenses are probably a bit less difficult to cover than in many other parts of the country and it is easier to save up money.

I'm less familiar with SK but I get the impression that Saskatoon and Regina would have similar advantages to Edmonton (just a bit less removed from the Canadian average).

[Wigs]

Originally Posted by Coldrsx

Certainly an option and one becoming more attractive, but I want the cash for other uses.

Fair.

Just take some comfort in the fact that you're not alone. In most of Canada people are struggling to sell, even as rental prices have increased. There's 4x the listings locally as when my parents bought their house at the beginning of September 2019.

Their next door neighbours put their house up for sale about 10-11 weeks ago for $799k, no bites. Now they're asking $725k and no one seems to want to pay that price either. Market has cooled quite quickly. I'm not a realtor (just follow the market as a hobby) but the next year (or two) doesn't look great for selling.

[Wigs]

Originally Posted by travis3000

Thats brutal. Renting is insanely expensive in ON and BC. My mortgage is 1350 per month. If I were renting my place would go for around 3000 per month plus utilities.

Even with me paying property taxes, insurance, heat, hydro, and water Im still saving 1200 per month by owning.

How long ago did you buy your place?
Kind of disturbing that your mortgage is less than what basement apartments in a huge chunk of southern Ontario rent for!

[niwell]

Rents are high but in Toronto at least a mortgage on something purchased now will be significantly higher than what you could rent for. Small towns are a different story where you can actually ask more in rent than most mortgages.

Interestingly I still find our rents lower than what you could get in many make American cities. Not just New York but places like boston, LA and even nice parts of Chicago are very expensive.

[swimmer_spe]

Originally Posted by casper

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.

I hate to admit it, but it actually sounds like a good plan. Although I have never done much there, Saskatoon and Regina both feel like good cities to be in. Maybe others should follow suit.

Originally Posted by travis3000

Thats brutal. Renting is insanely expensive in ON and BC. My mortgage is 1350 per month. If I were renting my place would go for around 3000 per month plus utilities.

Even with me paying property taxes, insurance, heat, hydro, and water Im still saving 1200 per month by owning.

What is really brutal is the fact that my $400k waterfront house in rural Sudbury would be easily 10x that in the GTA.

[SignalHillHiker]

I've wanted to see inside this house for years, mostly because there are only a handful of old brick or stone homes in St. John's and they tend to have the very best timeless but contemporary renovations inside...



But holy shit this one was horrific. Burgundy, Queen Anne antique furniture, cheap wallpapers, servants' quarters still looking like it lol And a 1990s New Jersey kitchen to top it all off. Just wow. We have some heritage properties here that do what this homeowner was going for well, and this is decidedly different lol

[Wigs]

Originally Posted by niwell

Rents are high but in Toronto at least a mortgage on something purchased now will be significantly higher than what you could rent for. Small towns are a different story where you can actually ask more in rent than most mortgages.

Interestingly I still find our rents lower than what you could get in many make American cities. Not just New York but places like boston, LA and even nice parts of Chicago are very expensive.

niwell, you seem to be able find the best bang for the buck in inner city Toronto. I think a lot of people in Toronto/GTA are paying far more for lesser apartments in much less desirable areas than the ones you've been able to find.
You could start a side business apt finders fee

[Truenorth00]

"Canada is not like the US. We do proper checks here."


Uhhhh.....

• Video Link

Reminds me of this scene from the Big Short....

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The grossest part of all this is knowing that every level of government and law enforcement is turning a blind eye to this. We deserve what is coming.

[urbandreamer]

I'm paying $1300 including parking for a 1 bedroom in Toronto, steps from High Park.

I'm expecting to get renovicted, unless I vacate next year.

This is the most I've paid for rent. In KW I paid $650 for a large 2 bedroom 17 years ago; $600 for 1200 sqft loft in Montreal in 2002-03; in the Annex my rooming house was $300/month c.96-'00. I refuse to pay more than $1500/month to rent.

[whatnext]

Originally Posted by Truenorth00

"Canada is not like the US. We do proper checks here."


Uhhhh.....

• Video Link

Reminds me of this scene from the Big Short....


The grossest part of all this is knowing that every level of government and law enforcement is turning a blind eye to this. We deserve what is coming.

Coincidentally given the discussion of Patrick Brown’s mayoralty, these are colloquially known as “Brampton Loans” in the GTA.

[Truenorth00]

Originally Posted by whatnext

Coincidentally given the discussion of Patrick Brown’s mayoralty, these are colloquially known as “Brampton Loans” in the GTA.

I get where the phrase comes from. Kinda sad that instead of seeing many of these immigrants as victims of unscrupulous realtors and mortgage brokers, people are using it as an opportunity to portray all this, as only a problem in certain ethnic communities. It's clearly more widespread than that. Immigrants are just the easiest prey.

It's gross how every regulator and authority failed in these stories. Sadly, I don't think the majority of these people will lose their jobs, or that the majority of fraudsters will see any sort of sanction. I do hope to see lots of foreclosures. Only way to restore some moral hazard.

[GreaterMontréal]

Most of these people won't be able to make the monthly payments on those $1 million houses with the rates hike. It's one thing to create a fake salary but it's another thing to make the payments.

These things can create a local or regional recession.

[Truenorth00]

Originally Posted by GreaterMontréal

Most of these people won't be able to make the monthly payments on those $1 million houses with the rates hike. It's one thing to create a fake salary but it's another thing to make the payments.

That's why some of them are out protesting, conflating "home owners" with investors and demanding the government bail them out. It's fucking gross how they think they are victims.

https://twitter.com/RE_MarketWatch/status/1579325374408056832?t=6JchtyvEpsrjWxQIsNLYhQ&s=19

[GreaterMontréal]

Originally Posted by Truenorth00

That's why some of them are out protesting, conflating "home owners" with investors and demanding the government bail them out. It's fucking gross how they think they are victims.

https://twitter.com/RE_MarketWatch/status/1579325374408056832?t=6JchtyvEpsrjWxQIsNLYhQ&s=19

Even if they can make ''some'' monthly payments, the amount of money that will be out of the local economy will create a local-regional recession. Don't expect Trudeau to bail them out. Trudeau would help the boomers, but these people are not.

Boomers are an important group of people because their houses are paid off. What they own is real money, you need to protect that at all costs. People complaining about the boomers are targeting the wrong group of people.