Canada: the worlds biggest housing bubble?

Are we the home of the worlds biggest housing bubble?

That’s what they’re saying over at the Atlantic.

How real is Canada’s housing bubble anyway? More real than any other country’s.

 

As realtors like to remind us, every market’s different, but there are three big takeaways here.
1) Rich Chinese buyers tend to make for overheated markets. Some of the priciest housing markets in the world have one thing in common, besides low-interest rates (which prevail most everywhere): Chinese expats. Vancouver, Hong Kong, Singapore, and Sydney are among the most popular destinations for wealthy Chinese looking to hedge their bets, and this exit-strategy buying has helped push prices in these locales into the stratosphere.
2) Housing busts can take awhile. After a decade of boom and bust, prices are back to fair value, below it actually, in the U.S. and Ireland, but still have a way to come down in Spain and Britain. Zombie banks tend to be reluctant to realize losses on bad loans, propping up prices in the process, but eventually reality has its day. The sooner that happens, the sooner housing, and construction, can come back.
3) Housing recoveries can take even longer. It was just 20 years ago that the land below the Imperial Palace in Tokyo was supposed to be worth more than all of the land in California combined. But beware the enduring costs of bad macro policy. Too tight money for too long has kept housing prices in hibernation decades on.
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logic
Guest
logic

What on earth has it got to do with the children?

RealityCheck
Guest
RealityCheck

For the downvoters: yeah, continue to live in a fantasy world…you’re really helping out your kids. They will thank you for it.

Look around. Observe. That is reality.

N
Guest
N

@seth

I get the feeling that you are frustrated by not being a real estate owner. Why don’t you buy something else for now? Buy some stocks, or invest directly in a business. It’s not like houses are the only assets out there. And if houses become a good deal here again, you can buy one then.

seth
Guest
seth

I’m starting to see bidding warsvin van east and west. This is truly frustrating as every year since 2006 I heard that prices were suppose to come down. This is bullshit and I’m stuck a renter for frikkin life. Urghhhh!!!!!

Romeo Jordan
Guest
Romeo Jordan

still waiting for a significant/sustained surge in listings.

it will come…but thus far it has been elusive….

Keeping An Eye On The Pimps
Guest
Keeping An Eye On The Pimps

@RealityCheck

Wow, Canada is a whimsical place, and quite extraordinary.

We have Ogopogo and many rich foreigners.

That house that was sold and wasn’t even listed…. Please, won’t you tell us more.

Anonymous
Guest
Anonymous

RealityCheck:

You sound scared shtless. That east van dump will be worth 20 cents on the dollar in a few years. Some third world immigrant is not going to bail you out.

Groundhog
Guest
Groundhog

@RealityCheck

The Russians are coming, the Russians are coming!

RealityCheck
Guest
RealityCheck

Oh, and that house was NOT listed on MLS.

RealityCheck
Guest
RealityCheck

Foreign Buyers. Oh yeah, India has just doubled the amount of $money$ allowed to leave the country tax free. Dad, who visited from India, just bought his son (International student) I know a house in Surrey for cash.

http://www.theglobeandmail.com/report-on-business/the-foreign-hands-that-help-to-shape-canadian-home-prices/article7935464/

@jesse
Guest
@jesse

“nothing would surprise me any more”

years of being wrong have the effect of shaking one’s self confidence.

jesse
Member

And last chance for the price prediction contest! Please get your entries in by the end of tonight!

See this thread for the rules

You only need enter for the categories you want, the other ones you can ignore if it’s not of interest to you.

jesse
Member
January looks to be coming in at about 1320 sales inventory of 13.3K or so (REBGV reported). Taking the average of the ratio of sales/workingday between Feb and Jan (2005-2012) produces 1.65. That would equate to 99.5 sales/workingday in February 2013, or 1891 total sales. Likewise, daily inventory growth in February (from January month-end) is an average of 0.4%/day. That would equate to reported inventory of 14335 at the end of February 2013. That produces an MOI of 7.58. March and February MOIs are generally quite close together, with the exception of 2009 that saw MOI in March down 36% from February. Taking the average MOI change from Feb-Mar equals -14%, which would equate to a March 2013 MOI of 6.50. In past years, save 2009, March is the bottom for MOI for the year. If trends continue as most… Read more »
Anonymous
Guest
Anonymous

Big sales day! Sales over 100!

mclovin
Member
mclovin

14K party will have to wait another day.

From Garth’s blog:

“FYI: Todays’s stats from the Fraser Valley Real Estate Board show year over year sales down a wopping 30% …
—————————————————————-

FVREB STATS – as of January 28, 2013
18 of 22 Working Days
JANUARY 2013 Listings 2155 Sales 459
DECEMBER 2012 Listings 871 Sales 662
JANUARY 2012 Listings 2427 Sales 654”

Ludvig von Mises
Guest
Ludvig von Mises

Sales in the triple digits! Is that the first time this year?

paulb
Member

New Listings 281
Price Changes 100
Sold Listings 102
TI:13997

http://www.paulboenisch.com

patriotz
Member

“The outcome would have been different only if the Fed and others had reacted back in 2004, 2005, 2006” to curtail subprime mortgage lending, Mr. Poole, now a senior fellow at the libertarian Cato Institute, said on Friday in an interview on CNBC.

As we saw just a few threads ago, this is the same Cato Institute that was denying there was a housing bubble in the first place in 2005, so it’s comical to see them blaming anyone for not doing anything about it.

Devore
Member
Devore

http://www.vancouversun.com/business/rental+units+rise+Vancouver/7880342/story.html

New rental units are on the rise in Vancouver
City approves 1,021 such developments for construction, up from zero in 2009

New numbers from the city of Vancouver show 1,021 rental units were approved for development in 2012, more than three times that of 2010 and 2011, when an average of 328 units were approved. No new rental units were approved in 2008 or 2009.

ReadyToPop
Guest
ReadyToPop

“The outcome would have been different only if the Fed and others had reacted back in 2004, 2005, 2006” to curtail subprime mortgage lending, Mr. Poole, now a senior fellow at the libertarian Cato Institute, said on Friday in an interview on CNBC.

The transcripts show that the Fed entered 2007 still deeply complacent about the housing market. Officials knew that people were losing their homes. They knew that subprime lenders were blinking out of business with each passing week. But they did not understand the implications for the rest of the nation.

Days Before Housing Bust, Fed Doubted Need to Act

Interesting reading…and I probably don’t have to tell anyone around here why…..RTP

gokou3
Guest
gokou3

Re #42 mac:

“http://tarashave.com/v973429-804-123-w-1st-av

The agent took an ad on craiglslist claiming the owner paid something like 1.1M original price. And is now selling at 33% off. All the way down to 729K asking. We saw it when it was 849K asking. Well, now the owner or resident has packed up and left. There is no one in the unit. What gives? Maybe it was a rental. Maybe the owner went back home to wherever.”

This building is fugly. And $671 maintenance fee for a 1004SF place? WTF? The swimming pool+sauna+jacuzzi probably costs each unit $200+/month to maintain since it’s not a very tall building.

patriotz
Member

And from someone who actually believes in free enterprise:

Iceland Wins! “Icesave” Lawsuit Dismissed, Court Orders EC and EFTA to Pay Costs

patriotz
Member

Icesave: Icelandic government wins compensation ruling

The court says that Iceland did not have to compensate Icesave customers in the UK because the relevant European directive did not oblige the government to set a minimum amount for compensation, nor did it force the state to pick up the tab if banks themselves could not pay.

That is, if you lend money to a business (i.e. make a bank deposit) and there’s no government guarantee, you’re not entitled to get your money back. What a concept.

Anyone who still thinks that K. O’Leary isn’t full of it should listen to his comment on Beauty and the Beast tonight.

Landbaron
Guest
Landbaron

@bubbly

Co-signing parents who are going to take the brunt of the downturn and ruin their retirement.

The banks don’t care as long as someone else with ‘equity’ signs the documents.

I’ve seen a lot of this in my age group and it amazes me as I’m 35!!

Chabar
Guest
Chabar

@Anonymous

What is the “Lululemon culture”? Does that mean we like walking outside looking like we just rolled out of bed?

This is the “Lululemon culture”: http://travel.ca.msn.com/photogallery.aspx?cp-documentid=30567563&page=8