Canada's 'housing bubble' deemed close to bursting

[geotag277]

Originally Posted by TorontoDrew

And lio45 the Sunbelt and the Golden Horseshoe have almost nothing in common when it comes to real-estate and economics. So I don't know whet your getting at.

What do you mean? Don't you know that Toronto and Phoenix and Las Vegas all share the exact same economic conditions?

[geotag277]

Originally Posted by Drybrain

CMHC says that Toronto's employment growth and incomes aren't sufficient to support the huge increases in prices and construction. Which is probably true, but Vancouver has only very slightly higher incomes, and slower employment growth, than Toronto (overall they're very similar).

So what's Vancouver's X factor? I guess people will say foreign investment, but is that not a thing in Toronto too?

Why are people pretending that the article didn't answer the question?

The risk to Toronto is overbuilding and that isn't a factor in vancouver as it has low vacancy rates. Further more, here is a direct quote from the article:

Despite having the highest home prices in Canada, Vancouver was only at moderate risk of overvaluation of real estate prices, CMHC said. It pointed to the city's low vacancy rates and the predominance of high net worth buyers, saying demand will remain strong.

Personally if I was buying a 9 figure detached single family home in Canada the only place I'd consider would be Toronto or Vancouver. Housing stock in those cities is at a premium for a reason - scarcity - much more so in Vancouver.

Incidentally these are probably also the last two places I would buy a town-home or condo, which while they are generally more affordable carry significantly more risk of a correction.

[Berklon]

Originally Posted by TorontoDrew

Again, this thread is the most comedic read on the forum.

Naw, I give that honour to the economy thread.

Reading about people in denial about Canada's economy while oil and the CAD keep plunging always gives me a laugh.

[dleung]

2015 report from Sothebys. Always find it interesting the relatively-high proportion of condos among multi-million dollar properties in Vancouver. Also there's almost 3x as many $4M plus sales in Vancouver as the entire country combined.

[geotag277]

Wonder if Trump impacted those numbers specifically for 2015?

[vanman]

Evidence of the shrinking supply of single family homes in Vancouver:

Originally Posted by vanman

Pretty interesting to see an entire block of doomed single family homes awaiting the inevitable. Oak + Park, 41 townhomes is what will be taking their place.

[Innsertnamehere]

towns are better anyway.. they give people freehold units on a denser level..

Toronto is nowhere close to overbuilding. The city needs around 50,000 units annually to fit the growth in the metro area.. usually around 30k condo units and 20k lowrise units meets that. 20k units in the city of toronto, 10k units in the 905, and most of the lowrise goes to the 905.

[eternallyme]

Originally Posted by Innsertnamehere

towns are better anyway.. they give people freehold units on a denser level..

Toronto is nowhere close to overbuilding. The city needs around 50,000 units annually to fit the growth in the metro area.. usually around 30k condo units and 20k lowrise units meets that. 20k units in the city of toronto, 10k units in the 905, and most of the lowrise goes to the 905.

Many people want their own home though...

[lio45]

Originally Posted by geotag277

What do you mean? Don't you know that Toronto and Phoenix and Las Vegas all share the exact same economic conditions?

But there are shared factors, namely, a rapid growth of property prices based on speculation, i.e. completely outpacing demand for housing (a.k.a. rents), wages, inflation.

There's no telling how many years a bubble will last. But there are pretty obvious indicators.

The Van boom is built on Chinese cash and lax Canadian laws (that one is THE difference with other PNW cities like Seattle). I'd be curious to see the effect of closing the door to that, for example, a legal framework that would bring its attractiveness to Chinese buyers to a level matching the PNW south of the 49th.

If it's not a bubble, and based on solid housing fundamentals, not speculation, then this should not have any effect on the market...

[geotag277]

Originally Posted by lio45

But there are shared factors, namely, a rapid growth of property prices based on speculation, i.e. completely outpacing demand for housing (a.k.a. rents), wages, inflation.

There's no telling how many years a bubble will last. But there are pretty obvious indicators.

The Van boom is built on Chinese cash and lax Canadian laws (that one is THE difference with other PNW cities like Seattle). I'd be curious to see the effect of closing the door to that, for example, a legal framework that would bring its attractiveness to Chinese buyers to a level matching the PNW south of the 49th.

If it's not a bubble, and based on solid housing fundamentals, not speculation, then this should not have any effect on the market...

This is starting to get into "if I repeat it enough times it must be true" territory.

Regardless, it's telling that you think the single solitary ONE difference between Seattle and Vancouver is that one is in Canada and one is in the United States. Seattle has a myriad of suburban areas supplying single family detached homes to meet demand from commuting Seattle residents. It's called Issaquah, Sammamish, Everett, Renton, Bainbridge Island. The list goes on.

Again, SFH housing stock is decreasing in Vancouver proper and metro Vancouver, and has been for years. Vancouver from a development perspective looks much closer to San Francisco than Seattle.

[whatnext]

If you want a good idea of the shady shit that goes down in Vancouver's real estate market, read this article from the local paper:
http://www.theprovince.com/business/Foll...r+real+estate+market/11683456/story.html

[geotag277]

Unfortunately money laundering happens all over the country. Here's a case in Montreal involving a mansion in St-Hilaire.

http://montrealgazette.com/news/local-ne...llion-in-drug-money-could-reach-13-years

I don't know why people keep talking about the limit Chinese residents have on moving their own money out of the country. That law seems archaic, draconian, and plain stupid. As if Canadians would heed the government telling them they can't move their own of their money out of the country. We'd probably laugh.

The relevant law to Canada is reporting under the CBSA requirement to declare cash on hand when entering the country over the 10k limit. There is no evidence they didn't do that here.

[whatnext]

Originally Posted by geotag277

Unfortunately money laundering happens all over the country. Here's a case in Montreal involving a mansion in St-Hilaire.

http://montrealgazette.com/news/local-ne...llion-in-drug-money-could-reach-13-years

I don't know why people keep talking about the limit Chinese residents have on moving their own money out of the country. That law seems archaic, draconian, and plain stupid. As if Canadians would heed the government telling them they can't move their own of their money out of the country. We'd probably laugh.

The relevant law to Canada is reporting under the CBSA requirement to declare cash on hand when entering the country over the 10k limit. There is no evidence they didn't do that here.

Ah yes, and here he is again the mysterious Mr Geotag posting within minutes with the denialists' plea of "nothing to see here folks".

If you read the article at all you would have noted that Canadian laws were broken:

In late December 2014 Vancouver realtor Liang Ming Wei walked into the frenetic dining hall of Floata in Chinatown.With hundreds of diners and waiters racing around with steaming plates of dim sum, the Keefer Street restaurant was perfect for an obscure transfer.

Wei had arranged for three million yuan to be deposited in a Chinese bank and transferred to a Richmond currency exchange. Exchange owner Tony Xu called Wei and told the realtor his client’s cash had arrived and it was converted to $521,470 Canadian.

It was 10 times the legal amount individuals are allowed to transfer from China. And it was 50 times over the $10,000 limit that must be reported under Canada’s anti-money-laundering laws..

...Wei’s client Zhongyun Zhang, a Chinese transportation professional, had come to Vancouver in August 2014 and set up a Bank of Montreal account with Wei’s help.

She had listed his Burnaby home address as her own. And on the title deed of Wei’s home she claimed to be a homemaker. Bank documents said she was a Canadian resident. None of it was true.,...

http://www.theprovince.com/business/Foll...r+real+estate+market/11683456/story.html

[whatnext]

Two adjacent properties taking up a prime, full city block on Alberni between Nicola and Broughton streets in the West End have been sold for almost twice what they went for less than two years ago.

Alberni Street Nominee Ltd., which paid $83.4 million for the buildings at 1444 Alberni and 740 Nicola in March 2014, is under contract to sell them (which means the deal hasn’t been finalized), said local developer Bruno Wall, who is a partner in the company along with Peter Wall and others.

Wall declined to reveal the price and buyer.

The deal is estimated by real estate industry sources to be in the range of $160 million. The buyers are Hong Kong-based Asia Standard International Group Ltd. and Landa Global Properties, a relatively new, Vancouver-based developer headed by 27-year-old Kevin Cheung and Scott Wang, 31...

Read more: http://www.vancouversun.com/business/wes...+years/11683652/story.html#ixzz3yqSwMEOz

No bubble, really there's not.

[geotag277]

Stay classy whatnext. Everyone with an Asian last name is now the enemy, and even in this thread you accused a Canadian who was simply living in Shanghai of being completely untrustworthy because of his Chinese overlords.

Keep fighting the good fight.

[whatnext]

Originally Posted by geotag277

Stay classy whatnext. Everyone with an Asian last name is now the enemy, and even in this thread you accused a Canadian who was simply living in Shanghai of being completely untrustworthy because of his Chinese overlords.

Keep fighting the good fight.

Sure Byron. Next thing you'll be saying is Hong Kong isn't really China.

[whatnext]

I forgot to add that it always suits people like Geotag to paint anyone who questions the wisdom of all the Chinese money flooding into Canada as a racist. It's a convenient and lazy way of shutting down debate. I love Chinese people. Literally, some are my family. And I worry that they will get swept up in the building wave of resentment.

As a child of immigrants I'm all for immigration. But what's happening now isn't multicultural, who can afford Vancouver as a genuine immigrant looking to start a new life in a new country? There are plenty of immigrants from China to come to Canada with a real desire to start a new and better life here. They struggle with the same issues all new immigrants do: learning a language, finding a job, establishing a network of friends. They don't parachute in with suitcases of cash, snapping up several properties while daddy works back in China.

[geotag277]

Originally Posted by whatnext

I forgot to add that it always suits people like Geotag to paint anyone who questions the wisdom of all the Chinese money flooding into Canada as a racist. It's a convenient and lazy way of shutting down debate. I love Chinese people. Literally, some are my family. And I worry that they will get swept up in the building wave of resentment.

As a child of immigrants I'm all for immigration. But what's happening now isn't multicultural, who can afford Vancouver as a genuine immigrant looking to start a new life in a new country? There are plenty of immigrants from China to come to Canada with a real desire to start a new and better life here. They struggle with the same issues all new immigrants do: learning a language, finding a job, establishing a network of friends. They don't parachute in with suitcases of cash, snapping up several properties while daddy works back in China.

Yes, and as Trump repeatedly claims, he has many Muslim friends.

The fact is you bolded and wanted to indict two individuals whose only crime was having Asian sounding last names. Everyone with half a brain can see that is bigotry and contributing to a seriously unhealthy environment of discourse in Vancouver, but hey, I'm sure it plays well to your audience, just like Trump's campaign speeches, so no big deal.

[lio45]

Originally Posted by geotag277

This is starting to get into "if I repeat it enough times it must be true" territory.

Regardless, it's telling that you think the single solitary ONE difference between Seattle and Vancouver is that one is in Canada and one is in the United States. Seattle has a myriad of suburban areas supplying single family detached homes to meet demand from commuting Seattle residents. It's called Issaquah, Sammamish, Everett, Renton, Bainbridge Island. The list goes on.

Again, SFH housing stock is decreasing in Vancouver proper and metro Vancouver, and has been for years.

SFH housing stock is decreasing with time in every single downtown I know. Nothing unusual there.

And you're saying Vancouver doesn't have its own places like Surrey, Langley, Coquitlam, Maple Ridge, etc. where commuters can own a SFH?

Vancouver from a development perspective looks much closer to San Francisco than Seattle.

Okay, then if that's the case, "normal" Vancouver property prices can be obtained based on current Vancouver rents, using the same ratio as San Francisco prices compared to San Francisco rents.

The conclusion: current Vancouver prices are out of whack with San Francisco. There is something else at play in Vancouver that is driving prices up and which has nothing to do with demand for housing (which is reflected in rents).

[geotag277]

It's kind of interesting to consider what a guy like whatnext stands to gain from curbing foreign investment in Vancouver single family detached homes. While dwelling types like condos and townhouses can be had at generally affordable prices across metro Vancouver, single family detached homes haven't been affordable for Vancouver residents since the early nineties.

By curbing a portion of foreign investment in these properties, maybe a small fraction of the wealthiest and highest earners in Vancouver could enter the single family detached housing market in Vancouver, and thus give some slight advantages to the top 1% in Vancouver versus the top 1% globally. In reality, the vast majority of Vancouver residents simply do not have enough income to enter the single family housing markets of Vancouver, meanwhile in many neighbourhoods, condos and townhomes are actually stagnating and even losing value some years.

The end goal seems to be take the focus off the fact that Vancouver should be breaking up every single solitary single family detached housing lot which is expensive into multifamily - either townhomes or condos - and put the focus on some overseas boogeymen so that some incredibly rich but not as rich individuals in Vancouver can play in the single family detached housing market.

It is the politics of division and distraction, and the comparison to Trump is fairly accurate.