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Canadian housing crash looming
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TECO

Joined: 20 Jan 2003

Posted: Mon May 23, 2011 8:09 pm Post subject:

Captain Corea wrote:

Compared to what?

IMO, Winnipeg is the armpit of Canada. Sure, there seems to be nice parts to it, but overall, I've never liked the place.

From a quick search, it looks like you'll be looking for houses from 320K and up.

What do you mean, "compared to what?"? I'm talking about apartments mainly, since I'm considering looking for a rental property. In which cities have your bought homes? Any recommendations?

Yeah, Winnipeg is really cold in the winter and pretty rough downtown - murder capital of the nation in 2010.

supernick

Joined: 24 Jan 2003
Location: Seoul

Posted: Tue May 24, 2011 11:08 pm Post subject:

2.5 years later since misses posting this story, and still no crash. Vancouver is still likely to be hit to some degree. As for a looming crash, it just hasn't happened.

TheUrbanMyth

Joined: 28 Jan 2003
Location: Retired

Posted: Wed May 25, 2011 1:44 am Post subject:

supernick wrote:

2.5 years later since misses posting this story, and still no crash. Vancouver is still likely to be hit to some degree. As for a looming crash, it just hasn't happened.

Eventually though it will crash. That's not much of a prediction... markets always crash and boom if they continue long enough. Trying to predict exactly when though is a bit of a fool's game.

Captain Corea

Joined: 28 Feb 2005
Location: Seoul

Posted: Wed May 25, 2011 4:45 am Post subject:

TECO wrote:

Captain Corea wrote:

I was wondering if you were wanting it compared to other Canadian cities, or US ones.

As far as buying a rental property, I think that Windsor would give you the most bang for your buck.

TECO

Joined: 20 Jan 2003

Posted: Thu May 26, 2011 1:21 am Post subject:

Captain Corea wrote:

TECO wrote:

Captain Corea wrote:

I was wondering if you were wanting it compared to other Canadian cities, or US ones.

As far as buying a rental property, I think that Windsor would give you the most bang for your buck.

Thanks, most bang for my buck is what I need. It's going to be a rental property for passive income, I'm not looking to live in it. I'm interested in maybe buying something early next year. However, I'm in the dark when it comes to this kind of stuff so have to do a lot more research. People who have mentioned buying a property in the U.S. has interested me.

TECO

Joined: 20 Jan 2003

Posted: Fri Jun 03, 2011 12:53 pm Post subject:

Captain Corea wrote:

TECO wrote:

Captain Corea wrote:

I was wondering if you were wanting it compared to other Canadian cities, or US ones.

As far as buying a rental property, I think that Windsor would give you the most bang for your buck.

If you have invested in rental property, I'd be very interested in hearing about your experience - and the experiences of others on this forum. I'm hoping to make such an investment in the next year or so myself. A lot of the information out there seems convoluted, so I'd like to hear about the personal experiences of other EFL instructors who have gone this route.

Captain Corea

Joined: 28 Feb 2005
Location: Seoul

Posted: Wed Jun 08, 2011 4:46 am Post subject:

http://www.theglobeandmail.com/report-on-business/economy/housing/

Quote:

Vancouver primed for housing correction: BMOVancouver�s housing market looks primed for a correction, according to a report from BMO Nesbitt Burns, with the average house now costing �an astounding� 11.2 times a family�s average income -- more than double the national average.

But senior economist Sal Guatieri said there�s hope that any drop in prices could be less severe than previous corrections -- �if interest rates stay low and wealthy immigrants continue to pour into the city, prices could stabilize sooner than in past downturns.�

The city has seen four corrections in the last 30 years -- in 1981-82 (-30 per cent), 1990-91 (-14 per cent), 1995-96 (-20 per cent) and 2008-09 (21 per cent). Even so, the average house has gained 21 per cent in the last year, or a whopping 188 per cent in the last decade and was worth $815,000 at the end of April.

�Riding a wave of wealthy immigrants, Vancouver�s house prices have nearly tripled in the past decade, spiralling beyond the reach of most first-time buyers or non-lottery winners,� he said. �While land-use restrictions and high quality-of-life rankings can justify elevated prices, current steep valuations could prove unsustainable if foreign investment ebbs or interest rates climb.�

He issued a report Tuesday that compared the markets in Vancouver, Calgary and Toronto. Here�s what he had to say about the other two cities.

Toronto: �Greater Toronto house prices have nearly doubled in the past decade, and now stand at a high 6.7-times family income, compared with 4.3-times in 2001. This is comparable to valuations in the late 1980s that were subsequently followed by a 25 per cent slide in prices. But the key difference now is that mortgage rates are under 4 per cent instead of near 14 per cent, which underpins affordability. That said, while high valuations might be sustainable in an ultra-low rate climate, they could come under pressure in a more normal rate environment. Given our outlook for a moderate increase in rates in the next two years, prices could soften or at least stabilize for a while. A possible overhang of condos could aggravate the weakness.�

Calgary: "Energy-rich Alberta was the country�s housing hot spot five years ago. Soaring oil prices and rapid in-migration led to a doubling in Calgary�s house prices within four years. But lofty valuations, a pullback in oil and the recession spurred a 17 per cent correction between mid-2007 and early 2009. Although the market has recovered more than half its losses, Calgary is still one of the few Canadian cities (Edmonton is another) that have yet to reclaim pre-recession peaks, reflecting payback from overbuilding and a glut of unsold condos. However, valuations have improved since 2007, with prices at 4.2-times income, less than the national norm. Barring a sharp pullback in energy prices, Calgary�s house prices stand a reasonable chance of growing alongside incomes in coming years

Wildbore

Joined: 17 Jun 2009

Posted: Sun Jun 12, 2011 7:09 am Post subject:

TheUrbanMyth wrote:

supernick wrote:

2.5 years later since misses posting this story, and still no crash. Vancouver is still likely to be hit to some degree. As for a looming crash, it just hasn't happened.

Eventually though it will crash. That's not much of a prediction... markets always crash and boom if they continue long enough. Trying to predict exactly when though is a bit of a fool's game.

There won't be a crash. There will be a gradual correction as interest rates rise.

Certain markets would obviously see a deeper correction.

Captain Corea

Joined: 28 Feb 2005
Location: Seoul

Posted: Sun Jun 12, 2011 4:22 pm Post subject:

What's the actual difference between a crash and a correction?

TheUrbanMyth

Joined: 28 Jan 2003
Location: Retired

Posted: Tue Jun 14, 2011 3:42 pm Post subject:

Captain Corea wrote:

What's the actual difference between a crash and a correction?

Overly simplified....

A correction is a downward dip in prices from their current height amounting to anywhere between 5- 20% off. Typically these are short lived trends and are not enough to start a lasting bear market.

A crash on the other hand has a greater downward dip usually enough to start a bear market.

Captain Corea

Joined: 28 Feb 2005
Location: Seoul

Posted: Thu Jul 14, 2011 2:47 am Post subject:

Home prices to fall, TD warns

Quote:

The average price of a resale home in Canada will fall by more than 10 per cent over the next couple of years, an analysis by TD Economics predicted Wednesday.

Calling it a "moderate correction," the report's authors also say sales will decline by more than 15 per cent over the same period.

"A combination of more subdued job and household income growth, rising interest rates, the recent tightening in borrowing rules for insured mortgages and fewer first time home buyers are expected to be the chief culprits behind the slowdown," the report said.

TD economists profiled 12 urban markets across the country. They highlighted Vancouver and Toronto � currently the two most expensive housing markets in Canada � as the cities most vulnerable to a larger-than-average decline, "reflecting in part their exposure to the condominium segment, which appears particularly ripe for a correction."

No city will experience a housing boom in the near-term, the authors say. But price drops in Regina, Saint John, N.B., Halifax, Calgary and Edmonton will be less than the average � what the report calls "a soft landing."

On a national basis, the report's prediction of an average 10.2 per cent price decline translates into an average resale price of $329,000 in 2013, down $38,000 from its 2011 peak.

tigershark

Joined: 13 Aug 2009

Posted: Fri Jul 15, 2011 5:40 am Post subject:

Windsor is a good idea if you want to have renters squat and force you to get the police involved to get them out.

hack

Joined: 24 Jan 2003

Posted: Thu Jul 21, 2011 9:19 pm Post subject:

bucheon bum wrote:

hack wrote:

ROTFLMAO

This thread is a joke. Well, at least the part about Van anyway. I moved back to Van 5 years ago and my condo has doubled in value. You can't get a thing downtown now under 500k and that's 600 sq ft and parking if you're lucky. The Chinese are flocking here and buying Van and Richmond out like money is is as plentiful as rice. They say things like "oh good price-only 140"-which means $1,400,000. BMWs and Mercs are their badge of honour and they are everywhere here.

I'm not sure why this thread even exists unless it is a bunch of Canucks who have abandoned their homeland because they can't cope here and are hoping things turn to shyte.

There was a report on TV the other night that Sask is the new hot spot in Canada because real estate is stilll affordable there.

Figure it out-God ain't making anymore land and compared to the rest of the world, Canada's got plenty and for most Asians it is THE IN PLACE to live.

So get back to Canada while the getting is good. You should be able to afford a down payment on a nice 2 br in Prince Albert on what you have saved in Korea the last 10 years.

Umm you are aware of the property bubble bursting EVERYWHERE in the USA right? Even in those places that fit your description such as NYC and SF? And you are aware that people like you were saying exactly what you just said only to see the market crash soon afterward?

Dude, are you really that dumb? My goodness. Wow, people never fail to surprise me.

Well here we are a year later and prices keep going up in Vancouver and we all know about the crash in the US. I'm dumb? ROTFLMAO yeah well I own property here that is about 4x what I paid for it. I guess that's what should surprise you.

supernick

Joined: 24 Jan 2003
Location: Seoul

Posted: Sat Jul 23, 2011 10:24 pm Post subject:

\it is a year later, and still \vancouver is doing well, but there is no doubt there will be a correction soon. You have done well on your invetment. People who bought 2 or 3 years ago will be fine, but for those who have bought recently are going to hurt. There is a great amount of debt in Canada these days, and this is keeping many out of the housing market. Housing prices will fall in Vancouver, maybe by as much as 20% by the end of this year. It is not really that bad as prices have actually increased by around 17% for 2011. Calgary, Edmonton and Toronto will also be in line for a correction in the downward direction, though some of these cities have already seen lower prices.

hack

Joined: 24 Jan 2003

Posted: Sat Jul 30, 2011 10:42 am Post subject:

supernick wrote:

\it is a year later, and still \vancouver is doing well, but there is no doubt there will be a correction soon.

You have done well on your invetment. People who bought 2 or 3 years ago will be fine, but for those who have bought recently are going to hurt.

There is a great amount of debt in Canada these days, and this is keeping many out of the housing market.

Housing prices will fall in Vancouver, maybe by as much as 20% by the end of this year. It is not really that bad as prices have actually increased by around 17% for 2011. Calgary, Edmonton and Toronto will also be in line for a correction in the downward direction, though some of these cities have already seen lower prices.

I agree the other cities may correct but the demand in Vancouver is almost frenetic because of the number of wealthy Chinese immigrants. There are few condos in D/T Van under $500k now and those are usually less than 600 sq ft. There is virtually nothing in a single family under $1mil now within 5 k of downtown. As long as the Chinese keep moving here I only see prices going up because they are unaffected by recession and Vancouver is the desired goal of Chinese immigrants. Until that changes, there will be no price correction in Vancouver.

But anyone who read this thread 3 years ago when it started and was hoping for house prices to go down before they bought is looking at between 20-200% increases depending on the city. But I doubt anyone took it to heart.

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