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Coming apart at the seams

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It’s not just Vancouver.

Across Canada the condo market is looking a little peaked.

If this is a party the keg has run dry.

Toronto and Montreal are slamming the last of the jager and slurring. Vancouver is puking in the corner.

The last time we saw Whistler they were snorting white powder on the roof and screaming they could fly.

The hang-over for this one is gonna be a bitch.

It’s evident that the condo markets in Canada’s largest cities are in the midst of some sort of correction. That final chapter on this has not yet been written.

Here’s some advice. For investors, now that the condo party appears to be over, it’s worth wondering if anyone will be left with a hangover. If history is any guide, a hard landing in the condo market tends to hit those holding the financing on condo projects first and foremost.

That’s from this Globe and Mail article by Ben Rabidoux.

If you’re flustered by the Paywall at that site and you have some time downtown in the afternoon you may be able to hear it from the author himself.

Ben is doing a talk from 4 – 5pm at Canada place today on the future of the Canadian real estate market. Free pre-registration is required and we haven’t heard if there are still tickets left, but it’s worth a try if you’re interested in this subject.

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Anonymous2
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I dunno about coming apart at the seems… the HPI for both Vancouver and Toronto are positive M/M (Toronto is positive Y/Y)

Vancouver has had positive M/M for two months in a row now. I’m not saying, buy now, but hardly a crash..

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5 years 11 months ago
ThatsAllYouveGot
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Seriously the industry cooked HPI is all you have to go to. You might as well reference leprochauns and bigfoot. All 3 are about as equally based in reality. And even look at true stats in all of the big crash cities down south the was the occasional up month. Even in the big 3 of Vegas, Phoenix and Miami. This is a crash baby! It continually amazes me the ridiculous amount of control the RE industry lobby holds in Canada. Sadly the average Joe listening to MSM still gets most of his facts from quoted ‘industry experts’. Not even thinking for a moment that it is the direct equivalent of asking a car salesmen if it’s a good time to buy a car. The HPI seems to be just an institutionalist tool for the RE pushers to all get… Read more »
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5 years 11 months ago
Anonymous2
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“And even look at true stats in all of the big crash cities down south the was the occasional up month. Even in the big 3 of Vegas, Phoenix and Miami.”

Really? 2 months in a row? Link?

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5 years 11 months ago
jesse
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Agree, this was hardly a year for a crash. If prices are to fall 20% or whatevs you can figure out how much worse it could get for sales. Last year was already on average meager for transactions, 2013 is starting out worse. For some people (not saying who) this is starting to matter.

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5 years 11 months ago
Q
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Canada’s smallest-ever condos are going to be built in Whalley. The smallest units will be 297 square feet–including the balcony and the price will be $109k. The location will be on 108th Ave. near Gateway Skytrain station. Let me just say, Whalley has a bad reputation that is sometimes over exaggerated because there are some nice-ish parts of Whalley. BUT GATEWAY STATION is the WORST part of Whalley–absolutely one of the most ghetto areas of Canada. I predict this building will be a future slum. According to the article, this is “what the next generation wants.” I can’t stop shaking my head!

http://www.theprovince.com/homes/Surrey+micro+suites+intended+those+dream+owning+home/8256935/story.html

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5 years 10 months ago
Anonymous
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Q: “Whalley has a bad reputation that is sometimes over exaggerated because there are some nice-ish parts of Whalley.”

Which parts would those be?

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5 years 10 months ago
patriotz
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Teranet posted a -3.18% m/m decline for Victoria in March. That’s the biggest monthly decline they’ve posted for any city.

However their index had been lagging the REB stats and this is probably just catching up. Victoria is a small market and their sales are currently very low compared to past years, so one would expect some noise in the index in the short run.

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5 years 10 months ago
Q
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I think the Whalley street of Queen Mary Boulevard (in the area bounded by 128 Street, Prince Charles Blvd, 92 Ave, 132 Street, 88 Ave) is an absolutely beautiful street. The trees on that street are beautiful. I don’t know how to post links to Google Street View images but if you look it up on Google Street View you will see what I mean. Also, the area around Holland Park/King George Skytrain are becoming nicer. There is actually a huge difference between King George Skytrain and Gateway Skytrain. Gateway Skytrain is a hell hole. I am seriously scared for my safety at 108th and King George. But go a bit further south on King George and things get much better (until they get worse again at Newton area around 72nd).

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5 years 10 months ago
Many Franks
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Canada’s consumer debt problem looking more and more like a pale made-for-TV retelling of the American story and apparently nobody has learned a thing. Ontario to crack down on debt-settlement agencies [A] trustee in bankruptcy at Sands & Associates in Vancouver said British Columbia badly needs similar legislation, where he has watched the problem escalate particularly in the last six months as desperate consumers turn to him for advice. “We used to see one case every few weeks – now it’s one to two cases a week,” he said. One of those cases is Erica, 28, who despite working two jobs, racked up $18,000 in credit card debt just by trying to keep up with the cost of living in the country’s most expensive city. She turned to a debt settlement company based on an ad she saw on Facebook… Read more »
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5 years 10 months ago
An Observer
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“Even in the big 3 of Vegas, Phoenix and Miami.”

Vegas and Phoenix didn’t have any months where the Schiller index was up in the first year, Miami had 1. San Diego had 4

But… the greater vancouver area after 10 months from peak has dropped faster than Phoenix, Las Vegas and San Diego in their first 10 months from peak!

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5 years 10 months ago
specialfx3000
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Why does Vancouver always pretend to be what it’s not?

So the Canucks will host a Winter Classic next year in BC Place.

If I’m not mistaken, the intent of the Winter Classic is to showcase a hockey game with an outdoor feel in sub-zero conditions and possibility of snow falling.

I vision this game being played in a closed bc place stadium due to rain outside — but I guess they could always blow fake snow like they did for our Winter Olympics.

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5 years 10 months ago
Anonymous
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are we crashed yet are we crashed yet? no, you little bears, go back to your little mama caves!

let see what bunch of bears have anything to bitch about today.

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5 years 10 months ago
mac
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Wouldn’t BBaxter’s graph settle this argument of whether or not cities in the US had more than one month increase during the spring (on the way down)? Where can we find it again?

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5 years 10 months ago
jesse
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” Even in the big 3 of Vegas, Phoenix and Miami.” I don’t know what you mean by “true stats” but by Corelogic, Case-Shiller, average, medain, and NAR measures I don’t think this is correct. Unless of course you are using another truthier measure I’m not aware of. I’ll be upfront with you all, the latest Teranet HPI is stronger than I would have expected given the sales and inventory numbers, however this is simply based on previous empirical relationships. That doesn’t mean they are correct — either the model is wrong, the data have noise, or there are other systematic errors that are temporarily altering same-sales pairs. According to Teranet prices are the same as they were in the fall. I took the Teranet HPI % change Oct-Mar from 1995-present: year Vancouver HPI %chg Oct-Mar 1995 -0.15% 1996 -0.59%… Read more »
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5 years 10 months ago
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EXPERTS UNCLEAR HOW CHINA BIRD FLU INFECTS HUMANS

http://hosted.ap.org/dynamic/stories/A/AS_CHINA_BIRD_FLU?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2013-04-18-07-56-23

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5 years 10 months ago
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Bird flu puts spotlight on age-old traditions in China

http://i2.cdn.turner.com/cnn/dam/assets/130418045351-china-markets-story-top.jpg
A vendor’s child is placed between poultry cages in Wuhan, China

http://www.cnn.com/2013/04/18/world/asia/china-bird-flu-food-culture/index.html?hpt=hp_bn2

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5 years 10 months ago
Yellow Helicopter
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Agree with Jesse; prices are sticking, but I’m starting to wonder how much longer for:

Courtesy of poster Patiently Waiting on Garth’s blog:

“Sales of single family homes (combined Vancouver & Fraser Valley Real Estate Boards) for the last 30 day period are down 58% from 2012, down 66% from 2011, down 64% from 2010, and even down 54% from 2009 following the financial crisis …

2013 886
2012 2114
2011 2651
2010 2440
2009 1934

———————————————————–

Sales in former HAM heaven White Rock are even worse … down 53% from 2012, down a wopping 80% from 2011, down 65% from 2010, and even down 48% from 2009 …

2013 53
2012 113
2011 270
2010 152
2009 102

————————————————————–

pw”

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5 years 10 months ago
Many Franks
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Paraphrased from Canada’s housing market drawing the big-money crowd: Sotheby’s International Realty is seeing a surge in demand from wealthy Syrians, Egyptians and Europeans looking for a safe and relatively stable place to park their millions, but you won’t be able to verify any of that in the MLS statistics because, uh, privacy, noted Sotheby’s Canada CEO Ross McCredie. “What I’m insinuating is that there are very wealthy high-net worth individuals who see the Canadian real estate market as undervalued, in spite of pretty much any form of analysis,” added McCredie, suggesting that the wealthy are unaware of much more affordable cities like Paris (a municipality in continental Europe) or New York (a port city in North America’s second-largest country). Wealthy Canadians, of course, remain the dominant players in this niche market, totally upending McCredie’s weirdly unbalanced statements which he… Read more »
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5 years 10 months ago
Anonymous
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“Patiently Waiting ” this guy even made it to his master blog eh.
I wonder if people still pee or throw sh@t on his front door.

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5 years 10 months ago
suomynonA
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@13 Mac: Is this the graph you’re looking for?

http://vancouverpeak.com/Thread-Crash-Curve-Graph?pid=389#pid389

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5 years 10 months ago
Dumbest time in 31 years to buy RE
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” Canada’s housing market drawing the big money crowd ”

But without verification…LOL.
What a frigging joke!

The IMF has just downgraded Canada’s economic forecast to perform the absolute worst of the G8. So why would financially mamed and bloodied Europeans want to invest in a place that is just starting to tank when they can sift through the ashes for bargains in any number of post crash countries in their own back yard.

But wait. Syrians and Egyptians will bail us out.
That’s even more ludicrous. They’re far too busy killing each other in the name of Allah.

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5 years 10 months ago
chilled
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There’s a rational explanation for Whistler, doncha’know; the condos were made of gold!! (Or so it seemed, pre-Olympics)

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5 years 10 months ago
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” Canada’s housing market drawing the big money crowd ”

Yep, nothing keeps the wealthy, wealthy, like the purchase of declining value assets.

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5 years 10 months ago
The Paul
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stats have turned back to shit now that the spring bounce is over. some sales were probably pulled forward into march because of the stupid home buyer free money or whatever program. is it possible that some of those sales didn’t make it into the system until early april? whatever, doesn’t matter. it’s all back to shit now. looking forward to seeing the sob stories from young people who can’t move out of their shit boxes, old farts who are seeing the potential of their home ownership lottery winnings fade away, and the gambling asian speculators crying in their shark fin soup. it’s too bad the NDP will wear this mess. the public are going to need someone to blame, and joe average and johnny gung hei fat choi don’t know any better. oh well. i hope the news casts… Read more »
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5 years 10 months ago
Many Franks
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Mark Carney strikes again: Carney warns of quicker rate hike if household debt not tempered Right, now that you’re done laughing at the headline: Asked if there was a Canadian housing bubble, and whether this could burst, he said: “We see valuations in the housing market as being quite firm and very firm in some markets. We are seeing an adjustment in those prices and we are now seeing household debt levels stabilize, albeit at high levels. But things are moving in the right direction, including on the new build side, on the housing starts side.” The governor said it was best if the adjustment took place over a couple of years, and added that business investment and exports would now need to pick up to fill in the gap from housing if overall economic growth were to move higher.… Read more »
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