Canada's 'housing bubble' deemed close to bursting

[lio45]

“Real Estate Mongols”: savage unprincipled hordes of foreign investors from Asia who come here to pillage and grab all our real estate (and leave devastation and a much lower quality of life in their wake)

It’s kinda…… accurate, in many ways. :p

[lio45]

(“Golden Horde”: the tribe of Real Estate Mongols who own most of the properties in the Golden Horseshoe.)

[swimmer_spe]

https://www.cbc.ca/news/canada/hamilton/niagara-landlord-unpaid-rent-1.6869973


I read this article and it highlights the problems within the rental market.

Here are my takes from it:

1) You buy something, fix it up and then have problems..... Maybe do your homework as to why it was up for sale. Maybe the last owners were tying to get out of it for the same reason.

2) $1400 for rent? In a semi detached? In Niagara Falls? Yep, this is part of the problem.

3) They have not paid since February, but since you owned it for the last 2 years, they have done this multiple times? And you are surprised? Should have done something about it before this point. They tested you and found your weak point.

Maybe it is time that houses cannot be rented out. Maybe it should only be purpose built rental buildings that can be rented out. It certainly would fix the density problem.

[esquire]

^ Sounds to me like it is the latest chapter in the well documented breakdown of the Ontario LTB. Residences are probably one of the only things out there where even if you don't pay, the provider doesn't necessarily have the option of withholding the goods or services in question.

I'm not sure that putting landlords at such a disadvantage is going to do much for the long term supply of housing though, and I think a lot of people on the margins are going to find a whole lot tougher to rent out a place. After all, if you're a landlord, you're better off waiting for a grade A tenant even if it means sitting on vacancies for months on end, instead of renting to someone who turns out to be a deadbeat and ends up staying for two years until the LTB hears your case.

On the other hand, this might be a good opportunity for organized crime to get into the housing game, with its own "alternative dispute resolution" mechanisms that don't rely on the LTB...

[swimmer_spe]

Originally Posted by esquire

^ Sounds to me like it is the latest chapter in the well documented breakdown of the Ontario LTB. Residences are probably one of the only things out there where even if you don't pay, the provider doesn't necessarily have the option of withholding the goods or services in question.

I'm not sure that putting landlords at such a disadvantage is going to do much for the long term supply of housing though, and I think a lot of people on the margins are going to find a whole lot tougher to rent out a place. After all, if you're a landlord, you're better off waiting for a grade A tenant even if it means sitting on vacancies for months on end, instead of renting to someone who turns out to be a deadbeat and ends up staying for two years until the LTB hears your case.

On the other hand, this might be a good opportunity for organized crime to get into the housing game, with its own "alternative dispute resolution" mechanisms that don't rely on the LTB...

The problem is, they may have been grade A tenants.
The bigger problem is people are strapped for cash and are looking for all sorts of ways to make some money on the side. Maybe if wages kept up to inflation, that would be a solution.

[Nite]

[casper]

Originally Posted by swimmer_spe

The problem is, they may have been grade A tenants.
The bigger problem is people are strapped for cash and are looking for all sorts of ways to make some money on the side. Maybe if wages kept up to inflation, that would be a solution.

They are not Grade A tenants.

Grade A tenants would be talking to the landlord, offering an apology and trying to make up what is owed even if it just a token amount.

[casper]

Originally Posted by Nite

You don't say. The title of this thread is true. There was a bubble and it has burst relative to the rest of the world.

Key question is this the bottom and will start to go up from here. I think the best outcome is housing prices just stay flat for a few years as inflation eats away at the value of homes.

[swimmer_spe]

Originally Posted by casper

They are not Grade A tenants.

Grade A tenants would be talking to the landlord, offering an apology and trying to make up what is owed even if it just a token amount.

Were you the same person you were years ago? People change. We were better or worse than we are now, and that will change in the future too. They may have been good tenants, but through other issues, they have not been as good anymore. Even worse, we do not know if this landlord was a good one, or a slum lord.

[Wigs]

Originally Posted by swimmer_spe

2) $1400 for rent? In a semi detached? In Niagara Falls? Yep, this is part of the problem.

swimmer, are you not aware that Niagara Falls and the entire Niagara region is growing quickly? There's huge demand for housing here and rental vacancy is quite low.

Median rent for 1 bedroom is ~$1600. 2 bedroom is $1900
https://www.zumper.com/blog/rental-price-data-canada/



I sorted this for Niagara Falls proper, 3 bed, 2 bath (the real estate standard in Canada) or more homes.
Not much available under $600k or even $650k
https://www.realtor.ca/map#ZoomLevel=12&...e=2-0&PropertyTypeGroupID=1&Currency=CAD

[MonkeyRonin]

Originally Posted by casper

You don't say. The title of this thread is true. There was a bubble and it has burst relative to the rest of the world.

Key question is this the bottom and will start to go up from here. I think the best outcome is housing prices just stay flat for a few years as inflation eats away at the value of homes.

Lol. -9.8% from peak pandemic pricing isn't a "bubble burst", especially when any reductions in price were more than offset by higher interest payments.

In any case, that data is basically useless now as prices have only risen since Q4 2022 and have more or less erased most of 2022's losses. Factor in record-high rental price growth and still-raising interest rates and housing affordability in Canada has literally never been worse.

[swimmer_spe]

Originally Posted by Wigs

swimmer, are you not aware that Niagara Falls and the entire Niagara region is growing quickly? There's huge demand for housing here and rental vacancy is quite low.

Median rent for 1 bedroom is ~$1600. 2 bedroom is $1900
https://www.zumper.com/blog/rental-price-data-canada/


I sorted this for Niagara Falls proper, 3 bed, 2 bath or more homes.
Not much available under $600k or even $650k
https://www.realtor.ca/map#ZoomLevel=12&...e=2-0&PropertyTypeGroupID=1&Currency=CAD

I am aware of what the pricing is. The reality is they are not worth that rate. Rental units have been inflated.

[Wigs]

Originally Posted by swimmer_spe

I am aware of what the pricing is. The reality is they are not worth that rate. Rental units have been inflated.

We really do have a supply problem in this country and southern Ontario is ground zero.

[swimmer_spe]

Originally Posted by Wigs

We really do have a supply problem in this country and southern Ontario is ground zero.

Yes, and part of that problem is that rents are inflated. Imagine that rent controls set the rates of rent for different units with different amenities and that rate was not based on the "market", but based on the idea that people need to be able to afford rent. All of a sudden, those rents would be slashed in half.

[casper]

Originally Posted by swimmer_spe

Were you the same person you were years ago? People change. We were better or worse than we are now, and that will change in the future too. They may have been good tenants, but through other issues, they have not been as good anymore. Even worse, we do not know if this landlord was a good one, or a slum lord.

True.

We don't know what kind of landlord they are.

I have never been a landlord. I was tempted when money was cheap but never bit. It sounded to much like work and I already have a full time job. I can easily see these "part time" or armature landlords easily getting into trouble.

[swimmer_spe]

Originally Posted by casper

True.

We don't know what kind of landlord they are.

I have never been a landlord. I was tempted when money was cheap but never bit. It sounded to much like work and I already have a full time job. I can easily see these "part time" or armature landlords easily getting into trouble.

I was tempted to do that and to be a flipper. I am glad I did not get sucked in.

[theman23]

Originally Posted by casper

You don't say. The title of this thread is true. There was a bubble and it has burst relative to the rest of the world.

Key question is this the bottom and will start to go up from here. I think the best outcome is housing prices just stay flat for a few years as inflation eats away at the value of homes.

Huh? Prices have already gone up. If you include Q1 and early Q2 2023 numbers in those figures, we are back at all time highs.

[Innsertnamehere]

Originally Posted by theman23

Huh? Prices have already gone up. If you include Q1 and early Q2 2023 numbers in those figures, we are back at all time highs.

Definitely not back to all time high here. Prices are still down 15-20% from the February 2022 peak.

[lio45]

Originally Posted by MonkeyRonin

Lol. -9.8% from peak pandemic pricing isn't a "bubble burst", especially when any reductions in price were more than offset by higher interest payments.

In any case, that data is basically useless now as prices have only risen since Q4 2022 and have more or less erased most of 2022's losses. Factor in record-high rental price growth and still-raising interest rates and housing affordability in Canada has literally never been worse.

Plus, “housing prices” is just stupid — does that mean rents or real estate values? They’re two entirely different things.

The cost of having a roof over one’s head in Canada definitely did not become more affordable by ~10% this year; the article is lying/misinformation.

[Wigs]

Originally Posted by swimmer_spe

Yes, and part of that problem is that rents are inflated. Imagine that rent controls set the rates of rent for different units with different amenities and that rate was not based on the "market", but based on the idea that people need to be able to afford rent. All of a sudden, those rents would be slashed in half.

Dougie Ford got rid of rent controls for any building first occupied after November 15, 2018