Real Estate

Vancouver housing bubble?

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  • May 21st, 2019 6:43 pm
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Deal Addict
Mar 10, 2010
1763 posts
456 upvotes
RCGA wrote:
May 9th, 2013 12:57 pm
Below market sale, below market price, below market value....which one is it?

I keep stating below market value, and you're all over the map
Careful, he'll update the wikipedia entry for each so they match
Deal Addict
Jun 9, 2006
1599 posts
87 upvotes
Toronto
Mark77 wrote:
Jun 23rd, 2012 7:50 pm
Rents would be rising if that were the case (ie: Asians flocking to Canada to be here temporarily), and that's definitely not happening.
I was under the impression rents WERE/ARE rising?
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Feb 15, 2008
26318 posts
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Calgary
Kaiu wrote:
May 9th, 2013 3:27 pm
I was under the impression rents WERE/ARE rising?
Its been pretty flat... Certainly nothing to justify a doubling, if not a tripling of house prices over the past decade. Something else must have caused that, probably relating to conditions in the financing market, and the emission of nearly $1T in subprime credit through CMHC mortgage guarantees.
TodayHello wrote:
Oct 16th, 2012 9:06 pm
...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
Deal Addict
Jun 9, 2006
1599 posts
87 upvotes
Toronto
Mark77 wrote:
May 9th, 2013 3:28 pm
Its been pretty flat... Certainly nothing to justify a doubling, if not a tripling of house prices over the past decade. Something else must have caused that, probably relating to conditions in the financing market, and the emission of nearly $1T in subprime credit through CMHC mortgage guarantees.
I remember there are complaints about rental bidding wars lately?

Some old report...
http://www.toronto.ca/housing/pdf/renta ... s-2006.pdf

"Affordability remains a major concern for many tenant households. Wage increases have not matched rent increases.
Rents have also increased at a faster rate than inflation.
Between 1996 and 2005, the average rent for a two-bedroom apartment in Toronto increased by 30%, while the average rent for a one-bedroom apartment increased by 32%. The overall rate of inflation for that same period was 21%.6"

I'm pretty sure if not for regulatory controls, the rent increase must be MUCH more drastic.
http://www.ontariotenants.ca/research/r ... ease.phtml

If only they stopped regulating rent increases...
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Jun 28, 2007
3859 posts
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Mark77 wrote:
May 9th, 2013 3:28 pm
Its been pretty flat... Certainly nothing to justify a doubling, if not a tripling of house prices over the past decade. Something else must have caused that, probably relating to conditions in the financing market, and the emission of nearly $1T in subprime credit through CMHC mortgage guarantees.
You never provide any statistics to back up your claims (and when you do you tend to make them up), so its probably no use refuting what you are suggesting here. nevertheless, the reality is that when people such as yourself cite the "flat rent growth" story as justification for a housing bubble they are often comparing apples and oranges. These rents almost alway refer to old purpose built apartments that are the basis for CMHC's rent survey. Many of these old, tired apartments are under rent controls that prevent rents from rising more than inflation.

On the other hand, much of the big appreciation in house prices (both in Vancouver and Toronto) has actually been in the single family home segment. Nobody has produced a credible rent series for that, but some of my colleagues have spent some time renting executive homes in both cities over the past several years and I can tell you that these rents have been growing much more than inflation (and in many cases, the rents have more than covered the cost of owning such a home). So if anything, these rents fully justify a "doubling" of prices over the past decade.
Deal Addict
Feb 7, 2006
2603 posts
1103 upvotes
bcbgboy13 wrote:
May 7th, 2013 1:32 pm
"Changes coming fast atop shrinking CMHC"

From the annual report - "This year, we said farewell to Dino Chiesa, Chairperson of the Board of Directors since 2004 and a Board member since 2001."

"The Board also wishes to recognize the strong management team without which it could not fulfill its responsibilities. This team, headed by Karen Kinsley, President and Chief Executive Officer for the past ten years, has provided solid leadership and professional advice to the Board. With her appointment as President ending in June 2013, we thank her for her dedicated service."

And the results will be even more visible - very soon....

Total insured volume (units):
2008 - 798,309
2009 - 1,048,736
2010 - 643,991
2011 - 630,957
2012 (planned) - 550,335
2012 (actual) - 386,222
2013 (planned) - 355,597

If you have purchased a new property and have not sold the previous one for various reasons make sure to price it aggressively and sell ASAP or when the music stops you will be surprised of how little chairs will be out there...
bcbgboy13 wrote:
May 7th, 2013 1:53 pm
One great example is visible here in this post - home-reno-road-20-increase-value-1309601/

If someone is to spend $20k and expect to make $75k after all is said and done do you think that when the going gets tough he will scale back the expectations and will be content to make 50k then 40k then 30k and there is going to be a time that he will be glad to be just out without any profit but just do get rid of the expenses.
This is the problem when the amateurs and latecomers chase down the market.
Wow, almost three years of posting stats and no crash. The only great example is the time wasted spent posting these stats. Just think you could have spent all this time earning a few bucks to buy a house.
Maybe a fixer-upper like RCGA is doing. But I am guessing the concept might be a little beyond your comprehension or skill level based on your understanding of what he is trying to accomplish.
Deal Addict
Feb 7, 2006
2603 posts
1103 upvotes
Mark77 wrote:
May 7th, 2013 7:28 pm
Yup, and even prices on the inputs to housing will come down significantly as demand falters. Overtime will disappear. $35/hour drywallers will, after some time on EI, accept $20/hour. And so on and so forth. Rising interest rates will force more land out of the hands of hoarders due to opportunity costs.

Activity in the sector probably will even end up accelerating due to lower prices.

If anyone wants an example of this, just look at the gold mining sector. The worldwide gold mining industry basically doubled its production between 1980 and 2000, despite prices falling by 50% from the 1980 peak (even without adjusting for inflation). The people who say "developers will simply stop developing if they can't earn good profit" simply don't know what they're talking about.
Mark remember back in Feb when you stated the price of wood dropped and you gave a silly link showing that wood(brd foot) is going up.
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Feb 15, 2008
26318 posts
3197 upvotes
Calgary
Kaiu wrote:
May 9th, 2013 3:51 pm
I remember there are complaints about rental bidding wars lately?

Some old report...
http://www.toronto.ca/housing/pdf/renta ... s-2006.pdf

"Affordability remains a major concern for many tenant households. Wage increases have not matched rent increases.
Rents have also increased at a faster rate than inflation.
Between 1996 and 2005, the average rent for a two-bedroom apartment in Toronto increased by 30%, while the average rent for a one-bedroom apartment increased by 32%. The overall rate of inflation for that same period was 21%.6"

I'm pretty sure if not for regulatory controls, the rent increase must be MUCH more drastic.
http://www.ontariotenants.ca/research/r ... ease.phtml

If only they stopped regulating rent increases...
When comparing raw numbers like that, one has to obviously adjust for quality and quantity. There's probably also been some real wage increases which have skewed the demand for quality higher.

Still, even if rents were a percent or two above inflation once you adjust everything out, that doesn't justify what we've seen in terms of P/E multiple expansion, nor price gains. Multiple expansion of any asset class tends to be cyclical, not secular.
TodayHello wrote:
Oct 16th, 2012 9:06 pm
...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
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Feb 15, 2008
26318 posts
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Calgary
MMMM wrote:
May 9th, 2013 5:42 pm
Mark remember back in Feb when you stated the price of wood dropped and you gave a silly link showing that wood(brd foot) is going up.
Go back and re-read the post in question. I'm not going to waste more time with your ridiculous trolls.
TodayHello wrote:
Oct 16th, 2012 9:06 pm
...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
Deal Addict
Nov 29, 2005
1290 posts
184 upvotes
Winnipeg
Canada's Housing Market: The Next Big Short?
http://www.cnbc.com/id/100726168

[QUOTE]Steve Eisman, the hedge fund manager who famously bet against mortgages in the United States in the run up to the 2008 financial crash, has recommended investors now bet against Canada's mortgage lenders and banks. [/QUOTE]
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Dec 12, 2005
3300 posts
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Greater Toronto Area
Ho hum another year and another potential housing crash......you can call crash every year and sooner or later you can be right but not this year..try again next year.
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Jun 28, 2007
3859 posts
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Bunkhouse wrote:
May 10th, 2013 7:58 am
Canada's Housing Market: The Next Big Short?
http://www.cnbc.com/id/100726168
Actually Eisman didn't really flag the big banks - he's more weary about Home Capital Group - who are effectively one of Canada's only major subprime lenders. Its kind of an obvious bet to turn negative on this type of company if you are extremely bearish on the housing market. But if anything, the stock of this company has already been beaten up recently which may actually provide a good short term buying opportunity (especially since it has one of the best profitability records in Canada's financial services sector (even beating the big banks).

Another very interesting quote in this article is from David Rosenberg (biggest bear out there):
But not everyone agrees that a bubble is brewing. "The correction in the domestic residential real estate market is completely overhyped outside of the imploding Vancouver and Toronto condo markets," David Rosenberg, chief economist and strategist at Canadian wealth firm Gluskin Sheff said in a research note
Guess Rosenberg hasn't been reading enough Mark77 bcbgboy13 posts to truly appreciate that imminent devastation Canada's whole housing market is 'about' to experience :lol:

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