The invincible canadian real estate market
The Canadian Real Estate Association is predicting the Canada resale housing market will remain ‘at or near record levels’ this year.
“The statistics again show just how different the housing markets are in Canada and the United States. Canadian realtors know that Canadian mortgage lenders correctly see that home prices will continue rising.”
The association sees three factors that it believes will save Canada’s housing markets from the woes engulfing the sector in the United States: consumer confidence, employment and affordable interest rates.
CREA economist Gregory Klump said the market will pull back from the “breakneck pace” of 2007, but this is still forecast to be the second-busiest year on record in almost all provinces.
Average prices are forecast to continue rising in record territory, but the increase is likely to become slower, to 5.5 per cent nationwide.
“Slower job growth, not massive layoffs, are forecast for Canada in 2008,” Klump said.
What I’d like to know is which parts of canada will rise as forecast? Are there any overpriced Canadian markets that risk a drop in prices or will we see a steady rise across the board?
note: For a comprehensive look at why all might not go perfectly for the Vancouver market check out Mohicans Bubble Uberpost over at Financial Planning and Personal Sanity.
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February 20th, 2008 at 2:35 am
As a West Toronto Realtor I can only say, that the prices in Canada will rise slightly, but we don´t have to be afraid of U.S. real estate crisis.
To your question, there are some cities, in which, the prices were increasing faster, then in others, like: Edmonton, Vancouver, Saskatoon and so on.
January 28th, 2008 at 7:30 am
It’s Time……Just look to Calgary to see that even with high oil prices and fantastic employment prices can drop considerably.
I have developed property in Vancouver for the last 20 years. I bought my last properties about 9 months ago and I am NOT buying anything else.
Part of the problem is that people think they can buy some real estate for little down and when it comes time to take possession just dump it for easy money. That coupled with the fact that a lot of younger people have never seen a real estate downturn, as well as the fact that EVERYONE seems to be a real estate mogul or speculator in Vancouver and around BC right now.
I have news for these people. At 1000+ per square feet our prices compare to dense world centers like Paris and NY. This is not sustainable, nor will the prices keep going up. Prices now are over valued and more and more higher end properties are being rented because they cannot be sold.
People here will soon see what we have seen all over the world and even in Vancouver in the 80′s and 90′s , housing prices flattening and even declining. Once prices start to come down watch the max exodus to get out of the market and try to cash in. The US market, the world financial markets, the lending and subprime markets in the US, the cap people of put on paying these rediculous prices, and the unaffordability in general will drive prices down.
Forget what you have heard beforemat 1000+ per square feet for nothing condos, terrible layouts and zero space, no reasonable market specialist can honestly tell you these prices are sustainable or cannot or will not fall. Take it from a developer, we all want to keep prices jacked up but it will bite us later if they do, the city wants property taxes so they want prices up. The Olympics have been prices in twice over and a market ceiling is here.
Long term real estate is never a bad idea, but watch for a market correction in the short term. Don’t beleive me, it is happening now in North Vancouver and other parts and all those with blinders on trying to sell you a 900 square foot 2 bed/2bath downtown for 1 Million have been laughing until now, including me.
I hope thise market can correct before the entire landscape of the city is ruined and all single families have been forced out of Vancouver leaving a place that many cities have been and wish they never were. Lastly if you are thinking about speculating on Pre Sales, this is the first market to see a downturn.
January 25th, 2008 at 4:26 pm
Doh! RVYC= Royal Vancouver Yacht Club.
January 25th, 2008 at 4:25 pm
By the way “RYVC” means Royal Vancouver Yacht Club.
January 25th, 2008 at 4:24 pm
“sorry out of time I think there nothing much left to explain.”
OWNED!
January 25th, 2008 at 11:48 am
A krrish1. “Recession is a fear if that wont let you sleep you should buy full pack insurence which cover all clauses from job loss to anything else.” Actually a pretty decent argument on the whole, one question though..insurance only really works if few claim against it. It’s a statistical question. What is your honest opinion of where insurance would go if a couple of thousand people in Metro Vancouver claimed?(Thats not many really but let’s do a thought experiment, 3000 people claim for lost work, what do you think would happen?) What do you think your premiums would be next year if the major insurance companies were receiving more claims then they could handle financially? Honest answer now! By the way best nonsensical post I’ve seen from you!
January 25th, 2008 at 11:47 am
I rest my case
January 25th, 2008 at 11:15 am
Q.The point is buying real estate today is a bad idea. There are endless statistics to back this up.
A.This situation is similar to a work place if all worker go on strike for ever that bussiness will be dead.
Q.Are these still a great investment Krisshh?
A.Yes,I had explained the building get feuled with upto date construction cost,similar to renovate interior.
you can measure the fear if whole of the building is listed in mls only few people like to sell so catch them before they run.
Q.Correct me if I’m wrong but it seems your position is that we should all go out and buy today at these all time highs because consumer confidence is good today and that means that the prices will go up forever.
A.You have to think of your best if price go up further you affordability will errode by much bigger appreciation.
The best solution is if you can afford monthly payment choose a home a best neighbourhood you like you will be better than those who are just good or very good,if you look to make money rather than peace of mind, I do not advice to anybody in that category.
Q.Do you understand what happens to consumer confidence when there is a recession?
A.Recession is a fear if that wont let you sleep you should buy full pack insurence which cover all clauses from job loss to anything else.
seems like you have a confusion about wisemens
Foolish people make homes(developer,engineers,architects,buyers and genral labourers)
wisemen live in them(renter or tenent)
sorry out of time I think there nothing much left to explain.
January 25th, 2008 at 10:43 am
Having read and re read my own posts and Krissh’s responses. I can’t see him answering any of my questions.
Certainly some of the questions were relevant.
I see he countered that there is a 2-5-10 new home warranty, which is great except the leaky windows shows up afterward the warranty. Note the high rise that’s about 14 years old, I think it’s 11C Drake, is about to or has already been tarped and there is another one of a similar vintage building on Richards (1400 block).
Are these still a great investment Krisshh? Are the “wiseman” lining up to buy them?
If no, does that mean only new units appreciate?
If only new units appreciate, won’t these new units be ten years old in ten years? Are you saying that we should only be buying new units?
It seems to me you asked for questions and when i served them up you spat out some regurgitated realtor speak and tried to bring up consumer confidence as a distraction.
Whether I own or rent is irrelevant. I may have a considerably higher net worth than you due to a fluke like inheriting more money than I could ever spend or caught a lucky break by being a contrarian when everyone else was running away from the market ten years ago OR I could be the guy panhandling outside your building and living in an SRO in the downtown eastside.
I could also be a realtor. You really have no idea what my situation is nor do you have any idea how the basic principals of economics works.
To you supply and demand means nothing because past performance has been good, which everyone but you seems to understand is intrinsically flawed logic.
The point is buying real estate today is a bad idea. There are endless statistics to back this up.
All you’ve been able to do is write rambling responses talking about fictional wise men buying now because they are better than me, or something…
Correct me if I’m wrong but it seems your position is that we should all go out and buy today at these all time highs because consumer confidence is good today and that means that the prices will go up forever.
Have you ever seen what happens in a recession?
Go and ask a boat dealer for a 2000 model power boat, he’ll explain to you that they don’t have year 2000 models but they have a lot of 1999′s.
Go to the RVYC and ask the first person you see in the parking lot. They’ll explain that they had to have membership drives that year and the membership price was halved while boat sales were almost non existent because the economy was down. For the most part the members of the RYVC are educated and worldy and most of them at least playing the part of being “wise men” so I trust you’ll believe their responses.
Please explain Krissh, how did consumer confidence go down between 1999 and 2000?
Could it be because there was a recession?
Do you understand what happens to consumer confidence when there is a recession?
January 25th, 2008 at 10:06 am
Most people will just view this as racist.
January 24th, 2008 at 9:42 pm
And the latest slice of baloney is served up by RBC:
G&M Story
“In Alberta, resale house-price gains are expected to slow dramatically, from 30 per cent in 2007 to the 9 per cent range this year. Gains in Saskatchewan should cool from the 30 per cent range to about 15 per cent, according to RBC.”
Earth to RBC: prices in Alberta are down 10-15% from the peak in mid-2007.
Remember folks: “house-price gains are expected to slow dramatically” is analyst-speak for “I know prices are falling but my bosses won’t let me say that”.
January 24th, 2008 at 9:31 pm
MR
check out “The Long Emergency” book by
J. Kunstler
it’s over! tits up! baby!
January 24th, 2008 at 9:24 pm
Anybody hear that caller on the Bill Good show on CKNW this morning tear a strip off Cameron Muir? The caller questioned why we need growth at all resulting in all the extra expense that goes with it. Bill said ‘oh then you would be in favor of closing the door” to which the caller said “yes, it has to end somewhere (unbridled uncontrolled growth) and now is the time to do it. He argued that all of the problems that we have here weren’t here 20 years ago and this proves its overpopulation that is ruining the quality of life in Vancouver and he challenged Bill to have a poll of the area residents who are stuck in traffic day to day whose lifestyle is suffering because of the few who are profiting from this growth and accused Muir of being one of them. The caller contended that Vancouver is now a lost paradise. While he sounded mildly agitated or irritated at Muir at least he was able to express what a lot of people are thinking. Muir was most unhappy with the accusation that somehow he is one that somehow profits from the destruction of our once great city because of too much growth in population.
January 24th, 2008 at 9:12 pm
total panick mode if he can’t make 25% each year to break even!
exactly! he sees it coming!
the market is a remorseless beast bearing no animosity to any given individual.
but leveraged assets have a way of biting you in the ass at the most inopportune moment.
iliquidity is a bitch!
January 24th, 2008 at 8:45 pm
blueskies: “i would suggest satv/krrrish is a realtor selling to specific ethnic community” Possibly but my guess is an amateur investor with possibly 2 or three places, all his eggs in one basket, highly leaveraged and owns nothing as in clear title, (which mr krrrsish I happen to have in a recreational property and 3 bedroom cabin, small boat, great shop(place where you work krrrsh not a mall) and have had for 23 years now, and where I will retire debt and tax free). krrrssish strikes me as a barely educated (probably paid for it and his drivers license through bribes) type! And he’s probably in total panick mode if he can’t make 25% each year to break even!
January 24th, 2008 at 8:28 pm
i would suggest satv/krrrish is a realtor selling to specific ethnic community where referrals and word of mouth are critical. possibly even the manager in a multi broker office.
the news coming in is all bad. everything hinges on consumer confidence and he sees this waning
a little too strident to be just “dicking” around……
January 24th, 2008 at 8:27 pm
sorry!
equating you with Aaron was an egregious error on my part….
a coupla beers later!
January 24th, 2008 at 8:24 pm
whew!! you scared the crap outa me mistaken for a realitor was distressing as hell!
January 24th, 2008 at 8:18 pm
sorry i meant that satv was a scared realtor
your posts are lucid informative and pleasingly bearish