BC, Canada, data, opinion

Where is everybody moving to?

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102 Comments

For all the talk about urban density, it seems what’s really growing across Canada is the Suburbs.

The Vancouver Sun has an article about the growth of the suburbs that includes an interactive map showing population growth. Seems we’re moving away from the centre.

Indeed, a new national study suggests that despite the boom in construction of condo towers in Vancouver and Toronto, five times as many Canadians are opting for single-family homes, townhouses or apartments on “the suburban edges” of those cities rather than downtown condo living.

This has resulted, the study suggests, in even more auto-dependent suburbs and “exurbs,” areas of large rural properties with single-family homes, across the country. And if the trend continues, it warns, Canada will become even more suburban in the future.

“We have vastly overestimated the number of people who live in the downtown or inner city versus the number of people in the overall suburbs,” said David Gordon, a professor in the School of Urban and Regional Planning at Queen’s University who co-published the new paper, Urban Nation?: Estimating the size of Canada’s suburban population.

“Two-thirds of Canada’s total population live in the suburbs,” Gordon said. “We’re not an urban nation at all, not even close.”

Read the full article here.

In unrelated news, the local real estate focused Sauder School of Business at UBC does NOT encourage chants about assaulting underage girls.

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Natcho

Hey builder, your games to try to cut out GST may not be the smartest move. It’s good for the buyer not to have to pay the tax, but when the CRA determines that youre a builder you’ll have to pay the GST that the buyer saved, plus the income tax AND penalties.

You have seen those articles lately about the CRA targeting ‘flippers’ right? What do you think that means?

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Aggregator

@Devore The divergence between these two markets is telegraphing something, but what? Future price expectations. If speculators expected prices to rise in a few years, more money would flow into new homes (forward market) where they can obtain the most leverage for little down, as it did in 2009. That trend has ben reversing as money flees new homes and goes to resales (spot). Together, these markets make up the entire RE market, not resales alone! So what happens if…? I think it’s best explained in this one statement mentioned by a developer in the video I posted on #80. “The main reason is maintaing the bloodline of the company — the cash flow. The cash flow mustn’t break. If it breaks, it wouldn’t just affect one project, it will affect the entire economy. With buying curbs and loan restrictions… Read more »

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N

” individuals are FREE to CHOOSE how they live and what they spend money on”

Sure, but you are missing the point. We are not discussing whether or not it is allowed, but whether it is a good idea.

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condoland

first, i did’t cause the bubble. if my house cost less, if houses cost less, i wouldn’t have needed as big a down payment and i would have bought sooner.

second, why so judgmental? i am free to spend my money as i wish, and i am free to live as i wish. as are you.

i wanted a house, so i did what it takes to buy one and have it paid off quickly. i still enjoyed my life. and now, after 5 years, i am mortage free and have rental income.

if you don’t want to make sacrifices to get what you want you can just rent. that’s your choice.

that’s why canada is a great country. individuals are FREE to CHOOSE how they live and what they spend money on.

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Melba

……. This says to the CRA that the place is occupied. In 18 months, I won’t need to charge GST to the new owner when i sell……

Wow, what a deal for the buyer! Not only no GST, but when the 20% drop in prices is factored in, it’s a real deal! Of course, if the buyer waits 36 months, they’ll see an additional 20% drop. Thanks.

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Devore

“Are they seeing something the public doesn’t?”

Well, the public are the ones doing the buying (or not buying, as the case may be), so they see it, even if they are not connecting the dots.

The pre-construction market is dominated by speculators, investors and credit-sensitive marginal first-time buyers. “Traditional” end users don’t buy something that may or may not be ready for 3-5 years, and may or may not suit their changing needs or lifestyle when it is finally delivered. If someone is buying a house or a condo, it is because their current housing wants and needs are not being satisfied NOW, not in 5 years.

It is a market that makes decisions and behaves very differently from what we typically see house buyers as.

The divergence between these two markets is telegraphing something, but what?

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robert james

I know that Garth is not that popular with some but his blog is quite interesting today with the triple listing of a house , then a triple sale is reported jacking up the sales.. Is that possible?? http://www.greaterfool.ca/

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Burnabonian

Hey Condoland, are you saying that if you and your wife live as paupers in your own basement, eating rice and dressing in rags, you can pay off your mortgage quicker?

And that’s why we are not in a bubble?

Very articulate sir.

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Aggregator

@jesse Victoria and Quebec City may be noisy, but those are still annual resale and new average prices derived from total dollar volume divided by sales. For Van, that isn’t a small sample size based on annual transactions. Either way, as long as two data sets are consistent, a premium/discount, spread or basis can be measured between them to indicate market conditions, forward expectations or other valuable early indicators. I’ve been reading plenty of working papers on China’s housing market, learning new ways to analyze Canada’s housing market. Believe me, regulators, realtors and analysts here have the wrong framework by excluding presale data. They’ll never see it coming by only looking at one market. Just look at what lending experts are now noticing… CAAMP’s CEO Jim Murphy tweets the other day: “@caampceo What the analysts + media miss when commenting… Read more »

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Builder

Post 77

“Death of the “single family home” is true for many reasons”

Really?? Then why are prices at record levels as compared percentage wise to condos and townhomes?

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Builder

Post 77 Jesse,

There you go with your theories again.

I’m a builder and in my partially completed home have put a phone line in. This says to the CRA that the place is occupied. In 18 months, I won’t need to charge GST to the new owner when i sell…Oh, and in 17 months I will put that new carpet and blinds in to finish the house. They keep changing the details on us!

Sorry, go on with your theories. I enjoy them.

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rate shock

a chart for HAMs of all kinds

Unusual Spikes in Investment Grade Paper
http://s11.postimg.org/add831kur/unusualspike_yields.png

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HAM Solo

I’ve just been looking at the impact of the 100bps rate shock (at the 5 yr tenor) across the Canadian market. I have to say, it is really strange to see the MIC, HCG, CWB all trending at or near highs. If Low interest rates are good for housing, shouldn’t high interest rates be bad? Yes, the actual effect of higher rates impacting home transactions might be lagged to a degree because people have 90-day lock-ins etc, but the stock market should be discounting something. On the other hand, if you look at the REITS sector (for example XRE on Toronto)it is down 17% from the April highs. Admittedly, these stocks were due for a crack: overpriced, overlevered, promising too much in the way of dividends and basically dependent for rents on an economy which is driven by Mr/Mrs Zero-Down.… Read more »

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OMG!!!

Jesse!! thank you for your research into u/construction. i am convinced that u/construction is the last piece in the puzzle that spells doom for vancouver real estate. u/construction along with, rate increases, and china bust complete the trifecta and signal a perfect storm that is brewing for the market! we haven’t seen anything like this in the 8 years of this blog! i know that we all think we have, but the reality is that we haven’t, because this time it’s for real! IT’S ON LIKE DONKEY KONG and other internet catch phrases!!! the day is coming when renters can hold their heads up high! we no longer have to bow down to the owners and their assumed sense of superiority! it’s time for us to take back our dignity! so what if we can’t save enough for a down… Read more »

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crabman

@debt_is_half,

Don’t believe the hype. Canadian *federal* debt isn’t that bad, but when you add in Provincial debts, it’s much worse. Most other countries don’t have nearly as much state/provincial debt.

http://opinion.financialpost.com/2011/01/15/canadas-profligate-provinces/

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jesse

Aggregator, new home prices in Vancouver are noisy because they draw from small sample size. They may have changed their methodology but before they used to only include larger multi-SFH builds from larger builders, not the infill stuff more prevalent in Vancouver. Other cities have a lot more multi-SFH development projects so the sample size is larger, though even there they won’t include infill where land costs are higher.

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debt is half of G7

http://www.calgaryherald.com/opinion/editorials/Editorial+leaders+would+well+heed+Canada+advice/8889852/story.html

in this editorial, Canada is said to have half the debt of the G7 average (G7 includes Japan and Italy, where debt is so screeching high, it’s nose bleed territory)

the take away from this is obvious. Albertan’s, especially Calgarians, get in your Hummers NOW,, truck on over to BC and buy up More Houses!!

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Aggregator

Rising completed inventory is an interesting case considering Vancouver, Victoria and Quebec City are the only cities in Canada where resales sell at a premium to new home prices.

(2009 Prices)
GV New Home Average Price $646,547
GV Resale Average Price $592,474 -8.36% discount

(2010 Prices)
GV New Home Average Price $667,719
GV Resale Average Price $675,853 +1.22 premium

(2011 Prices)
GV New Home Average Price $665,695
GV Resale Average Price $779,777 +17.1% premium

(2012 Prices)
GV New Home Average Price $662,097
GV Resale Average Price $730,063 +10.2% premium

This implies over the last few years there was immediate demand for resales over new homes for whatever reason, and/or, the presale market isn’t doing well.

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Lysenko drives a hummer

“China’s plan to urbanize hundred of millions of people to its cities is nothing but a pipedream.”

I am more than a little curious how the right shoulder of global population rate-of-change will work out, since the Left Shoulder is the Forced collectivization 1958-1961, (the Head is Gulf War 1), and now, here we are 54 years later, peak age of the gambler/speculator…

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award winning quote

“buildings seem created to rip a person off.”

they don’t call bankers ‘banksters’ (a colloquialism for gangster), for nothing!

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Vulture Fun

Looks like Observer is posting again at Vancouver Price Drop after a much-deserved yet agonizing (for me) break. Of the thirty listings, the condos stand out the most for me. I’d almost be tempted if it weren’t for the usual reasons to avoid, which Absinthe has already highlighted in post 7.

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Aggregator

Video documentary on China’s housing bubble: Living in a bubble http://www.youtube.com/watch?v=-a9Xuyw9l3Y

Watch it all to confirm again what we already know, that China’s plan to urbanize hundred of millions of people to its cities is nothing but a pipedream.

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Son of Ponzi

I also noted that the new builds in my neighborhood take forever to complete.
It seems once the outside is finished, everything slows to a crawl.

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fixie guy

Market cough Says: “Canada one trick pony economy – commodities, with a heavy weight to oil.”

By ‘action plan’, real estate related activities are now 25% of the economy. That untenable and artificial inflation alone will bring it down. A commodities crash would only add gas to the fire.

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