Canada's 'housing bubble' deemed close to bursting

[goodgrowth]

Even if you ignore Ukrainian refugees the baseline immigration quota is now ~500K and by all accounts the new normal.

[WarrenC12]

Originally Posted by Truenorth00

And rents have a practical ceiling: income. Stagnant wage growth limits how much rents can go up too. As a practical matter, I think it's a stretch to believe they these rates of immigration can be sustained for long. I find it hard to imagine that rents going up 20% per year won't result in a substantial backlash at the polls in 2025, that sees massive cuts to immigration thereafter. I suspect the Liberals overshot their targets and will be moderating over the next 1-2 years.

I do think they are unsustainable as well, but the Liberals want an average of 500k/yr. Combined with slowing building, it's recipe for continued strength in the rental market.

In Vancouver, RE prices have been way above rent multiples for a long time, but they are going in opposite directions and will meet in the middle at some point.

[Truenorth00]

Originally Posted by goodgrowth

Even if you ignore Ukrainian refugees the baseline immigration quota is now ~500K and by all accounts the new normal.

1) It's total population growth that drives housing prices. And a huge part of the recent growth are students. It's not just permanent residents. This is why total population growth was over 860k, despite the fact that PR intake was 432k in 2022.



https://studying-in-canada.org/canada-international-student-statistics/

2) What is normal is very much a political decision subject to change.

[whatnext]

I wonder if any of the Opposition parties will ever develop the guts to call the Liberals out on an immigration strategy which is creating such unaffordability in the housing market.

Probably none.

[WarrenC12]

Originally Posted by whatnext

I wonder if any of the Opposition parties will ever develop the guts to call the Liberals out on an immigration strategy which is creating such unaffordability in the housing market.

Probably none.

Well, PP says Canada is broken and Trudeau is personally to blame for everything. Does that qualify?

[goodgrowth]

If anything this is more convincing that the numbers we have seen recently are sort of a new normal....

Unless you think they are going to cut student visas or the ~500K immigration quota

Originally Posted by Truenorth00

1) It's total population growth that drives housing prices. And a huge part of the recent growth are students. It's not just permanent residents. This is why total population growth was over 860k, despite the fact that PR intake was 432k in 2022.

[someone123]

This group is exempt from the foreign home buyer policy. And their spouse or common-law partner qualifies for work permits. People keep saying this is a highly skilled group but it includes first-year students in any degree program as far as I can tell and as I pointed out this results in 2x work permits with 1 having perhaps no educational requirements at all.

On the university side it's a big cash cow so they have an incentive to try to increase these numbers.

[WarrenC12]

Originally Posted by someone123

This group is exempt from the foreign home buyer policy. And their spouse or common-law partner qualifies for work permits. People keep saying this is a highly skilled group but it includes first-year students in any degree program as far as I can tell and as I pointed out this results in 2x work permits with 1 having perhaps no educational requirements at all.

On the university side it's a big cash cow so they have an incentive to try to grow this program.

Anecdotally I've heard applications are down to Canadian universities from foreign students. But the main reason is huge delays in immigration and visa paperwork.

[Truenorth00]

Originally Posted by goodgrowth

If anything this is more convincing that the numbers we have seen recently are sort of a new normal....

Unless you think they are going to cut student visas or the ~500K immigration quota

I think if this keeps up and rents keep rising (most of our immigration ends up in the rental market) while wages stay stagnant, Chrystia Freeland will be 2025's Kim Campbell.

But also when it comes to the resale market, there's not that many students buying houses. The student mix has changed substantially since 2015. The days of rich Chinese students are gone. It's now mostly middle class and poorer Indian kids living 10 to a house.

[goodgrowth]

lol no one would really want to know what domestic tuition rates would be without those foreign students...

[kwoldtimer]

Originally Posted by WarrenC12

Well, PP says Canada is broken and Trudeau is personally to blame for everything. Does that qualify?

Has PP ever suggested that immigration is "broken"? I don't think so, but I could see it in future, if it starts looking like a winner.

[kwoldtimer]

Originally Posted by WarrenC12

Anecdotally I've heard applications are down to Canadian universities from foreign students. But the main reason is huge delays in immigration and visa paperwork.

Hard to understand when civil servants' productivity has gotten so much higher since they've been working from home ....

[lio45]

If they can pay $500 in rent each, then that’s $60k in gross rent per year for that house, which places a solid value floor at around half a million for it. Markets like Southern Quebec and Greater Halifax can likely still go up from their current levels…

On the other hand, that very modest 1950s bungalow I posted last year for $5M in Vancouver’s West End would have to rent for like fifty grand a month — for a tiny, 🞵🞵🞵🞵🞵🞵 house. The income-potential-based floor is waaaay below peak values in this case. Most of the “value” is land prices speculation, with no basis in reality. Might as well be bitcoin.

[Truenorth00]

Originally Posted by goodgrowth

lol no one would really want to know what domestic tuition rates would be without those foreign students...

They'd be back to 2015 levels, before the number of foreign students doubled?

Also, you seem to forget that the cost of an education includes housing for a lot of students. This doesn't seem to be a net benefit to the average Canadian student. But it's definitely a benefit to the education sector and those employed in it. I won't dispute that.

[theman23]

Originally Posted by goodgrowth

lol no one would really want to know what domestic tuition rates would be without those foreign students...

Perhaps, but a lot of these institutions wouldn't exist if it weren't for foreign students. Canadians have no interest in attending institutions like Yorkeville University.

Being a foreign student in Canada is a pathway to PR status at this point. These students are not coming here with a plan to go home - they're coming here to work at Tim Hortons (even if they don't know it yet). The reality is that a lot of these students will not be able to transition to PR with the limited work experience they acquire, and the ones that do will likely not be in a great financial position. A social underclass is developing as we speak.

[Drybrain]

Originally Posted by someone123

In Halifax there was a "mania" period of a few months when housing went up by ~25% then down by a similar amount. But I am pretty sure it remains far above the 2019 baseline. A lot of construction there is already rental, and rents have shot way up. It's possible the rate of construction won't go down much there, but it's also hard to see it keeping up with population growth.

Yes, average residential sale prices in Halifax fell from a monthly peak of about $604,000 last April to about $474,000last December--almost exactly on par with August/September 2021. So basically about a year and a half of gains erased.

Prices are still well above pre-pandemic levels though: in February 2020, the average residential sale price was only $329,000.

[swimmer_spe]

Originally Posted by Truenorth00

1) It's total population growth that drives housing prices. And a huge part of the recent growth are students. It's not just permanent residents. This is why total population growth was over 860k, despite the fact that PR intake was 432k in 2022.



https://studying-in-canada.org/canada-international-student-statistics/

2) What is normal is very much a political decision subject to change.

And this speaks to the reasons that a university declared bankruptcy when the pandemic hit. they need those students paying the higher tuition rates.

Originally Posted by whatnext

I wonder if any of the Opposition parties will ever develop the guts to call the Liberals out on an immigration strategy which is creating such unaffordability in the housing market.

Probably none.

The fact we are seeing low unemployment and everywhere is hiring says that the problem will not go away if we were to cut immigration. You would only be trading one problem for another.

I feel the 2 problems are people looking at housing as an investment and developers building "luxury" homes on postage stamp lots.

[SignalHillHiker]

Exceptionally rare listing came up here this week:





Reminds me of...

[whatnext]

Originally Posted by SignalHillHiker

Exceptionally rare listing came up here this week:

I love the name Pippy Park. Only in NL!

[SignalHillHiker]

Originally Posted by whatnext

I love the name Pippy Park. Only in NL!

I've no idea the origin, but I do know most Newfoundlanders don't know the (Scottish?) meaning of that word lol I was an adult, probably even on SSP, before I learned it haha.

Here the closest we have is being "on the pip" (skipping school), or "senior pip day" (one of the last days of school in Grade 12 when the graduates just do whatever else and don't go to class, and usually play an elaborate prank on your school).