BC, Canada, CMHC, data, debt, economy, predictions, presales, prices, supply

Coming apart at the seams

April 18, 2013 admin

73 Comments

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.

Sort by: newest | oldest | most voted

Guest

Anonymous2

3 years 5 months ago

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..

| -

Hide Replies ∧

Guest

ThatsAllYouveGot

3 years 5 months ago

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… Read more »

| -

Hide Replies ∧

Guest

Anonymous2

3 years 5 months ago

“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?

| -

Hide Replies ∧

Member

jesse

3 years 5 months ago

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.

| -

Hide Replies ∧

Guest

3 years 5 months ago

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… Read more »

| -

Hide Replies ∧

Guest

Anonymous

3 years 5 months ago

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?

| -

Hide Replies ∧

Member

patriotz

3 years 5 months ago

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.

| -

Hide Replies ∧

Guest

3 years 5 months ago

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… Read more »

| -

Hide Replies ∧

Guest

Many Franks

3 years 5 months ago

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… Read more »

| -

Hide Replies ∧

Guest

An Observer

3 years 5 months ago

“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!

| -

Hide Replies ∧

Member

specialfx3000

3 years 5 months ago

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.

| -

Hide Replies ∧

Guest

Anonymous

3 years 5 months ago

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.

| -

Hide Replies ∧

Member

mac

3 years 5 months ago

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?

| -

Hide Replies ∧

Member

jesse

3 years 5 months ago

” 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… Read more »

| -

Hide Replies ∧

Guest

bird-man

3 years 5 months ago

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

| -

Hide Replies ∧

Guest

bird-man

3 years 5 months ago

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

| -

Hide Replies ∧

Guest

Yellow Helicopter

3 years 5 months ago

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%… Read more »

| -

Hide Replies ∧

Guest

Many Franks

3 years 5 months ago

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… Read more »

| -

Hide Replies ∧

Guest

Anonymous

3 years 5 months ago

“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.

| -

Hide Replies ∧

Guest

suomynonA

3 years 5 months ago

@13 Mac: Is this the graph you’re looking for?

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

| -

Hide Replies ∧

Guest

Dumbest time in 31 years to buy RE

3 years 5 months ago

” 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.

| -

Hide Replies ∧

Member

chilled

3 years 5 months ago

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

| -

Hide Replies ∧

Guest

Anonymous

3 years 5 months ago

” Canada’s housing market drawing the big money crowd ”

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

| -

Hide Replies ∧

Guest

The Paul

3 years 5 months ago

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… Read more »

| -

Hide Replies ∧

Guest

Many Franks

3 years 5 months ago

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… Read more »

| -

Hide Replies ∧

Member

victoria

3 years 5 months ago

The smallest units will be 297 square feet–including the balcony and the price will be $109k. I was watching a “finding apartment show” the other day. A young lady was moving from Hong Kong to Australia. The main thing she wanted was space. She said she lived in a tiny apartment in Hong Kong and craved space. I can’t imagine Canadians who are pretty used to larger living conditions going for these condos. I lived in a small studio when I first moved to Paris. It drove me nuts but then again it was PARIS and I was never home… Read more »

| -

Hide Replies ∧

Guest

painted turtle

3 years 5 months ago

An investor from Europe surely knows that prices in Ireland are extremely low.
This one for example (250 000 euros):
http://www.remax-ireland.com/Country-Home-For-Sale-Cork-Cork_90391005-8

and that you can buy a castle with a pool and lots of land for a million dollars in the sunniest parts of France, where you can find some of the best food and wine of Europe, not to mention proximity to an ocean warm enough to swim…

and they want us to believe that investors arrive in droves to buy Van’s million $ shacks 🙂

| -

Hide Replies ∧

Member

chilled

3 years 5 months ago

Many Franks Says: April 18th, 2013 at 11:40 am 25 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… Read more »

| -

Hide Replies ∧

Member

mac

3 years 5 months ago

@suomynonA

Yes. Actually the one called mr. housing bubble. And, in fact, it does show that a lot but not all US cities simply went down without M-O-M increases, esp. 2 in a row. So Anonymous2 might be right. Too bad.

| -

Hide Replies ∧

Guest

3 years 5 months ago

Maybe I’ve been out of the loop, but it strikes me as ridiculous that the square footage on those micro condo units to be built in Whalley includes the balcony. Is it standard practice to include the balcony in the square footage of a condo? That would be like including the back yard in the square footage of a single family home. The balcony is outside so it should not be included in the square footage of the condo unit.

| -

Hide Replies ∧

Guest

Very Little Gravitas Indeed

3 years 5 months ago

@Anonymous2, @mac, @suomynonA http://vancouverpricedrop.files.wordpress.com/2013/03/chartfeb.png Have a look at the trajectories of San Francisco and San Diego. Then consider that a lot of sales were pulled forward into April due to HST. I also wonder if higher prices have been facilitated by the tax decrease. So I don’t think a couple months increase in a row in spring means no crash. You won’t get your head lopped off in a day like with gold or bitcoin, instead it’ll be a long slow trip through the meat grinder. PS: Observer, do you plan on releasing more price drop graphs? I didn’t notice… Read more »

| -

Hide Replies ∧

Guest

Short'em High

3 years 5 months ago

@jesse#14. Re: “Vancouver stickiness”

Regarding Vancouver vs Victoria, take a look at the highlights section for rate of rent increases [and relative vacancy rates] in the Rental Market Survey:

https://www03.cmhc-schl.gc.ca/catalog/productList.cfm?cat=117&lang=en&fr=1366306388975

Since 2009 an extra rent increase cushion may have been built into Vancouver vs Victoria property carrying costs. If so, the delusional prospect beliefs of a typical risk seeking “rent saver” in Vancouver should persist a bit longer than a similarly motivated market participant in Victoria.

| -

Hide Replies ∧

Guest

An Observer

3 years 5 months ago

Yeah, will be adding the March one today or tomorrow

| -

Hide Replies ∧

Guest

Vote Down The Facts

3 years 5 months ago

“Then consider that a lot of sales were pulled forward into April due to HST. ”

Surely the HST effect was the other way around? A buyer who completes after the end of the HST would pay less in transaction fees and possibly the purchase price depending on their circumstance.

| -

Hide Replies ∧

Guest

ex-kitsie

3 years 5 months ago

The balconies are usually considered to be part of the square footage of any apartment. This building standard dates back to a building boom in the 1970’s when permits were given for a building to be finished to a certain square footage (at the time, the buildings in question were almost all in the west-end) but then the builders would tack on balconies which, at the time weren’t included in the footprint of the building. Taxes were levied on allowable square footage so the balconies were considered “freebies”. City councils wanted every tax dollar available so a by-law was passed… Read more »

| -

Hide Replies ∧

Guest

KBro

3 years 5 months ago

RE: #24

“It’s too bad the NDP will wear the mess”

The mere fact that the Dix crowd is already starting to defend him and shift blame of the coming crash only confirms that the scare has already been planted.

Heck, I’m considering voting for him just to fan the flames of the crash.

| -

Hide Replies ∧

Guest

Very Little Gravitas Indeed

3 years 5 months ago

@34 VDTF: Oops, yeah, I should have wrote “pushed back into April”

| -

Hide Replies ∧

Guest

camper

3 years 5 months ago

The balcony is either considered common area or part of your square footage. So is every part of the building. It is either yours -living room, bathroom, etc or everybody’s – hallways, foyer, elevator, etc. Another building may have the balcony as common area, but this is unusual and not desireable because as an example, your strate counsel might want to hang a billboard off your place.

| -

Hide Replies ∧

Guest

3 years 5 months ago

@ex-kitsie:

Wow! Thanks for that detailed history on how balconies came to be included in the square footage of apartments. I had no idea about any of that.

| -

Hide Replies ∧

Guest

KBro

3 years 5 months ago

Re: #26

“Heck, I’m considering voting for the poor dork”

Lost my head there for a minute.

| -

Hide Replies ∧

Member

mac

3 years 5 months ago

ex-Kitsie,

Meaningless? No way. They’re the one of the main ways that water seeps in behind the walls and rots the envelope.

| -

Hide Replies ∧

Member

mac

3 years 5 months ago

I hear there’s lineups to see Ben. Just got a text. Will hear how it went but I wonder if the crowd there is super bought-in to the housing and investor-led condo market.

| -

Hide Replies ∧

Guest

SnapCracklePop

3 years 5 months ago

@camper – to the extent it matters, in addition to private and common property, I think there’s a third category of “limited common” property or area. There is where balconies and spaces like parking spots usually fit in (and even basements sometimes – as I noted once in the floor plan of a North Van townhouse!)

| -

Hide Replies ∧

Member

patriotz

3 years 5 months ago

“The mere fact that the Dix crowd is already starting to defend him and shift blame of the coming crash”

Where did you get that from? For obvious reasons the NDP is loath to admit that there is a bubble in the first place.

| -

Hide Replies ∧

Guest

painted turtle

3 years 5 months ago

Has China’s Economy Hit a ‘Dead End’?
http://www.cnbc.com/id/100640805

| -

Hide Replies ∧

Member

paulb

3 years 5 months ago

New Listings 239
Price Changes 102
Sold Listings 134
TI:17386

http://www.paulboenisch.com

| -

Hide Replies ∧

Guest

Anonymous

3 years 5 months ago

Re: Condo Balconies

Balconies are never part of the square footage for MLS or other official documents unless they are enclosed balconies. Only presale ‘sales’ literature include outdoor balconies sometimes. Most show both balcony and living area square footage.

Here is an example of a presale for Concord Pacific:

http://www.moveuptown.ca/floorplans.html

| -

Hide Replies ∧

Member

VMD

3 years 5 months ago

new (beta) MLS site based on Bing map search.
otherwise same old, no new info added.
http://beta.realtor.ca/

| -

Hide Replies ∧

Guest

George Soros

3 years 5 months ago

Will there ever be an 18K party or are we cresting?

| -

Hide Replies ∧

Guest

Short'em High

3 years 5 months ago

@Anonymous#47. Why are “measurements approximate, subject to buyer verification”? The developer’s lawyers are very careful about “approximate” dimensions and long numbers often persist into the rental listings and beyond. I’ve measured a few Canadian apartments in my time with both ultrasonic and fiberglass reel tape. Taking away interior room wall thickness by measuring between adjacent suite walls and from window pane to hallway door, every apartment I’ve ever measured comes up short out the window or short into the hallway, take your pick. What gives? Is the interior hallway outside the suite considered part of the suite even after the… Read more »

| -

Hide Replies ∧

Vancouver Condo Info

Coming apart at the seams

Bubble? What Bubble?