Real Estate

Locked: Toronto, Vancouver house prices set for rise: CIBC report

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  • Nov 17th, 2017 10:37 pm
[OP]
Sr. Member
Jan 26, 2016
633 posts
497 upvotes
Toronto, ON

Toronto, Vancouver house prices set for rise: CIBC report

The housing markets in Toronto and Vancouver could resume their previous upward trajectories amid conditions of tight supply and burgeoning demand, according to a new report from CIBC World Markets.

The Canadian housing market, in general, is in an important transition period — especially Vancouver and Toronto, economist Benjamin Tal said in the report, which was released Tuesday.

He said activity is likely to stabilize and perhaps soften in the coming quarters as markets adjust to recent and upcoming regulatory changes, including tougher rules for getting a mortgage.



"But when the fog clears it will become evident that the long-term trajectory of the market will show even tighter conditions," Tal said. "The supply issues facing centres such as Toronto and Vancouver will worsen and demand is routinely understated."


"Short of a significant change in housing policies and preferences, there is nothing in the pipeline to alleviate the pressure,' he wrote.

As prices shot up dramatically in the Vancouver and Toronto areas, governments took steps to try to cool the markets.

Vancouver saw the August 2016 introduction of a 15 per cent tax on purchases by foreign buyers. Tal pointed that following a period of adjustment, a recovery in the Vancouver market is now underway.

In Toronto, the market is already showing a rebound following a slowdown in the wake of the introduction of the Ontario government's Fair Housing Plan. According to the Toronto Real Estate Board, 7,118 homes were sold in the area in October, up 12 per cent from September, but still down down 27 per cent from the same month last year.


In his report, Tal said the recently introduced tighter lending rules will only slow demand by five to seven per cent this year, owing to a combination of the "creative imagination" of borrowers, some exceptions to the rule and increased activity among alternative lenders.

At the same time, Tal said that actual demand in the housing market is stronger than official estimates. He pointed out that Canada's annual immigration quota is slated to rise from 250,000 to 300,000, and eventually 450,000. That comes amid a current tight land supply based on rules that don't capture the changes in the market, he said.

Also, official estimates of household formation in the Greater Toronto Area tend be 10,000 below the mark if adjustments are not made for immigrants and non-permanent residents, who Tal said tend to be younger than the general adult population.

"Actual demand is much stronger than official numbers often used to determine the extent to which we overbuild relative to household formation," Tal said
.

Finally, the growing percentage of young adults living at home translates into pent-up demand of roughly 9,000 household, including about 6,500 in the Greater Toronto Area.

"That army of potential buyers can be seen as an insurance against long-lasting significant price decline," said Tal.

http://www.cbc.ca/news/business/housing ... -1.4401743
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84 replies
Jr. Member
Sep 9, 2014
186 posts
137 upvotes
Vancouver
The idea that the demand is underestimated is interesting. Not saying that I necessarily agree with the idea (I kinda do but I'm no expert), just that it's definitely a different opinion than what we usually read. I mean, just in this forum, how often do we get comments about how it's simply a bubble?
Deal Addict
Feb 9, 2009
4485 posts
2215 upvotes
Even if just 20% of those immigrants have money brought from back home, it will continue to chug along the train. 80% of immigrants could be poor with nothing, but then they will need places to stay too.. which will create demand for rentals.

Interesting times ahead... RE is not done by a long shot...
Banned
Jan 18, 2012
21 posts
25 upvotes
Toronto
He pointed out that Canada's annual immigration quota is slated to rise from 250,000 to 300,000, and eventually 450,000.
Are you freaking kidding me? Even more immigration? We have houses that are too expensive, roads that are overly congested, and young people that are making low salaries. This is bad news for Canadians. What complete and utter nonsense. The GTA especially is turning into a cesspool. It saddens me to see the GTA become such a shitty place to live in such a short amount time. Sounds like Vancouver isn't doing much better either.
Deal Addict
Feb 29, 2008
4427 posts
662 upvotes
pdntspa wrote:
Nov 15th, 2017 2:54 am
Are you freaking kidding me? Even more immigration? We have houses that are too expensive, roads that are overly congested, and young people that are making low salaries. This is bad news for Canadians. What complete and utter nonsense. The GTA especially is turning into a cesspool. It saddens me to see the GTA become such a shitty place to live in such a short amount time. Sounds like Vancouver isn't doing much better either.
Yea immigration is the culprit! Another boogeyman. Just like those damn foreign investors in Toronto.
Deal Addict
User avatar
Dec 13, 2016
1009 posts
768 upvotes
This is what I don't understand. For a decade now the average rfd member has been earning 100k a year. If I was able to purchase a condo on my mid 40k salary back in 2010 then why are these high earner members complaining about the prices?

A couple making 200k a year can easily afford a 2bed in DT core. Your odds at buying real estate in Toronto are much better than anywhere else in the world except the certain part of USA.
JayLove06 wrote:
Nov 15th, 2017 6:46 am
Yea immigration is the culprit! Another boogeyman. Just like those damn foreign investors in Toronto.
Let's be fair. Immigration and foreign investment significantly puts the pressure on real estate. If that wasn't the case, Calgary and Montreal would also be on fire.

But that's life. Get used to it.....
Deal Addict
Oct 7, 2007
3016 posts
671 upvotes
pdntspa wrote:
Nov 15th, 2017 2:54 am
Are you freaking kidding me? Even more immigration? We have houses that are too expensive, roads that are overly congested, and young people that are making low salaries. This is bad news for Canadians. What complete and utter nonsense. The GTA especially is turning into a cesspool. It saddens me to see the GTA become such a shitty place to live in such a short amount time. Sounds like Vancouver isn't doing much better either.
I am curious to know why you think GTA is turning into a "cesspool". Can you please elaborate? You are definitely right about Vancouver not being a fun place to live. Everyone here is totally miserable.
Sr. Member
Sep 30, 2011
687 posts
169 upvotes
MISSISSAUGA
pdntspa wrote:
Nov 15th, 2017 2:54 am
Are you freaking kidding me? Even more immigration? We have houses that are too expensive, roads that are overly congested, and young people that are making low salaries. This is bad news for Canadians. What complete and utter nonsense. The GTA especially is turning into a cesspool. It saddens me to see the GTA become such a shitty place to live in such a short amount time. Sounds like Vancouver isn't doing much better either.
Are Montreal, Kingston, or Hamilton better or worse than cesspool? They don't have many immigrants to boost economy, they are just slum like any other place in Canada. And Buffalo in NY is even worse example of sinking demography and economy.
Better job without immigration? sure, why not move to nova scotia for better job?
Deal Addict
Feb 22, 2011
1780 posts
1608 upvotes
Toronto
pdntspa wrote:
Nov 15th, 2017 2:54 am
Are you freaking kidding me? Even more immigration? We have houses that are too expensive, roads that are overly congested, and young people that are making low salaries. This is bad news for Canadians. What complete and utter nonsense. The GTA especially is turning into a cesspool. It saddens me to see the GTA become such a shitty place to live in such a short amount time. Sounds like Vancouver isn't doing much better either.
My family immigrated from Germany, are we also turning Toronto into a cesspool or is it only other minorities you have an issue with?
Banned
Jan 18, 2012
21 posts
25 upvotes
Toronto
choclover wrote:
Nov 15th, 2017 10:28 am
I am curious to know why you think GTA is turning into a "cesspool". Can you please elaborate? You are definitely right about Vancouver not being a fun place to live. Everyone here is totally miserable.
It was all laid out for you. It's simply become a worse place to live. You have young people with crappy paying jobs who are unable to start families, while the country has increased the amount of immigrants pouring in. At the same time, the cost of housing and rentals units has gone up. The children of the baby boomers are not better off than their parents. The average young adult is having to move farther away from the city just to afford a place to live, and then they're wasting their lives away with long commutes on the worsening 401 and 403 highways. The GO train is no pancea; it's slow, inconvenient and expensive. These are all very clear signs that things have gotten worse in the GTA in recent years.
rjg4235 wrote:
Nov 15th, 2017 11:40 am
My family immigrated from Germany, are we also turning Toronto into a cesspool or is it only other minorities you have an issue with?
Congratulations on your move. It's interesting that you mention minorities when at no point did I mention the ethnicity of the immigrants in my post. Honestly, yes, you are contributing to the cesspool here, because you blindly go along with policies that make the country worse. I hope that answers your question.
Last edited by titaniumtux on Nov 15th, 2017 1:08 pm, edited 1 time in total.
Reason: Personal attack
Newbie
Aug 28, 2017
90 posts
140 upvotes
pdntspa wrote:
Nov 15th, 2017 2:54 am
Are you freaking kidding me? Even more immigration? We have houses that are too expensive, roads that are overly congested, and young people that are making low salaries. This is bad news for Canadians. What complete and utter nonsense. The GTA especially is turning into a cesspool. It saddens me to see the GTA become such a shitty place to live in such a short amount time. Sounds like Vancouver isn't doing much better either.
cool. then move out....lets us enjoy our cesspool
Member
User avatar
Nov 14, 2013
392 posts
113 upvotes
Brampton, Ontario
Lol everyone is an immigrant or descended from one, unless you are a native that is. I keep seeing this hate on RFD irregardless of whichever topic/forum it is.
Member
Jan 4, 2013
317 posts
59 upvotes
TORONTO
This is great news.

Currently Toronto housing price is too low for a global metropolitan.

I hope the average price can reach 2 million in the next 5 years.
Deal Addict
Feb 9, 2009
4485 posts
2215 upvotes
Too bad the downvote buttons are gone loll some bears loved that button for every little thing
Deal Addict
Jan 20, 2016
1360 posts
512 upvotes
Houston, TX
Funny observation in my hood in Burlington. The Aug sell price for 3bdr freehold TH was ~650k. Now it's 5 similar properties listed nearby. 3 for 689-699k, 1 for 670k and one...600k (bid wars bully??)
There were no sales of such properties in this hood in spring, but estimated it was 625k, so 4 are bulls and 1 is bear (or bid-war bull ;) )

I;m not overoptimistic about 20%+ yearly increase, but I do agree with demand is still on table with increased immigration and supply not increased in same proportion, many buyers and lenders could find their way around B20 (increased amortization, GDS/TDS numbers...)
Make the Trudeau drama teacher again!

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