Excess of rental units in Toronto and Vancouver?

A new report from CIBC is warning of an excess of rental units in Toronto and Vancouver.

They are basing this outlook on the large number of condos being built in both cities and predict a less than half point rise in vacancy rates, so ‘warning’ sounds a bit strong.

The concern is that increased competition for good renters could drive owners to sell their condos, leading to a further downturn in the condo resales market.

Economists and policy makers have worried that an “increased supply of rental units will flood the market and will lead to a wave of sales by disappointed investors with no bargaining power,” Mr. Tal writes in the report. The Bank of Canada highlighted concerns about the condo market in December when it outlined the key risks to the economy.

“A sharp correction in the condominium market could spread to other segments of the housing market with stretched valuations, as buyers and sellers adjust their expectations of the future path of house prices,” the central bank warned. “Such a correction could also have significant repercussions on the real economy, since the construction sector is an important component of economic activity.”

Read the full article here.

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UBC in crisis mode
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UBC in crisis mode
HAMpstead Caucasionfellow
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HAMpstead Caucasionfellow

The finance minster announcing the budget: https://i.imgur.com/Zvet0.gif

space889
Member
space889
@um, yeah – that house was build in the late 90s by everyone’s beloved Commonwealth ideals loving HKer so I don’t know how does that translate to mainlanders have bad taste. Second, beauty/crassiness is in the eye of the beholder. You may not like it but again you aren’t the ultimate judge on style. Personally the pink colour might not be my choice but frankly I don’t really find anything grotesque about it. It’s different from other houses around it, it’s not one the popular styles but it isn’t a monstrousity either. Frankly if you think that’s bad then obviously never really travelled around the world and basically have the same mentality regarding architecture as those who claim Vancouver is the bes place on Earth even though they never really travelled. Yahoo had a good article about some of the… Read more »
Jaydub
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Jaydub

Question for the VCI folks re: sourcing rentals. When anyone brings up Craigslist, the general response appears to be: “Craigslist sucks”, “Clueless landlords” etc. So, if not Craigslist, where do folks find “quality” rental listings? Thx.

Many Franks
Member

Select quotes from the CBC article about CIBC’s predictions:

A record number of condominiums are scheduled to go on the market in Toronto in 2013 and 2014, but[…]

There is excess supply in both Vancouver and Toronto, Tal said in a report released Thursday, but[…]

That could outpace household formation, which is slowing as fewer new immigrants move to the city and young Canadians continue to delay moving out of their parents’ homes. But[…]

He disagrees with the Bank of Canada, which issued a report last June worrying that a falling condo market could destabilize the Canadian economy. “But[…]”

“The market will be tested by higher interest rates. But[…]”

That’s a lot of “but” considering none of them are at all worried in the slightest not even a little bit.

Aggregator
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Aggregator

@Jaydub

FYI, about 50% of Craigslist and Kijiji listings are syndicated from MLS.

For those wondering how close Craigslist data is to RE board stats, I compared Toronto data to TREB and got these results. Chart

Rent prices tend to dip in Q1, but later increase into Q2 and Q3. I have data for Van, I just need to format it. I'll post it soon.

hmnhrmmm
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hmnhrmmm

I was reading Vancouver Price Drop yesterday and these two caught my eye (both court ordered sales in the same new development):

http://www.realtylink.org/prop_search/Detail.cfm?MLS=V1040758

http://www.realtylink.org/prop_search/Detail.cfm?MLS=V1040963

I checked the location on google – when you zoom to street view, you can see that they were just being constructed when the google cars drove by:

https://maps.google.ca/maps?q=1456+BEWICKE+AVE,+Hamilton,+North+Vancouver&ie=UTF-8&ei=XDT9UvDTB8b0oATv84CIDA&ved=0CAcQ_AUoAQ

Obviously these numbskulls bought them as pre-sales thinking they’d turn them around on completion for a tidy profit (doesn’t everyone think that?). Good luck dipshits!

gokou3
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gokou3

Uh oh, this will reduce rental supply and increase home prices!

Surrey looking online to crack down on illegal suites
http://www.news1130.com/2014/02/13/surrey-looking-online-to-crack-down-on-illegal-suites/

— Permanently optimistic dumb bull

mls watch
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mls watch

There are no laws on foreign ownership of residential real estate and, when asked, Mr. Flaherty has said he has no plans to put any in place.

http://business.financialpost.com/2014/02/12/how-canadas-new-immigration-rules-could-slow-high-end-real-estate-sales/

Royce McCutcheon
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Royce McCutcheon

@Jaydub. Advent, VLR, SunStar Realty are some rental site options. There may be others. Rentersguide.com fronts various Hollyburn properties. Would be happy to see other suggestions though.

BWilson
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BWilson
The Vancouver Sun predictably said the whole investor migrant thing is no big deal, people want to live here, BPOE, etc. etc. etc. http://www.vancouversun.com/opinion/columnists/Cayo+Many+factors+besides+immigrants+drive+house/9500775/story.html My favorite comment: Christopher Taylor · Top Commenter · Carleton University Oh Don, what did the real estate cartels pay you to print this? Real estate has become disconnected from fundamentals, it has become an emotional purchase. If the high end falters, the low end loses confidence, as people who bought in at the low end aspire to higher prices. We’re already seeing this as condo prices flatten. The only confidence left has been SFHs increasing in price, mostly drive up by high end homes distorting the averages. Take these away and confidence will be lost, as even the SFH falls victim to flat prices. Then it is a downward spiral from there, either a long… Read more »
um, yeah
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um, yeah
>that house was build in the late 90s by everyone’s beloved Commonwealth ideals loving HKer so I don’t know how does that translate to mainlanders have bad taste. i didn’t single out mainlanders, and i don’t have preferences when it comes to different asian groups as you are suggesting. you see, i’m not asian, so i don’t have an irrational and deep seated hatred against other asians. HKers have been building garbage for decades. they’ve also been abusing the canadian immigration and not paying their taxes. same goes for Taiwanese and Singaporeans. a hideous and garish aesthetic must be related to a parasitic sense of entitlement and selfish desire to exploit the host. who is going to buy all these blighted properties? >Second, beauty/crassiness is in the eye of the beholder. keep telling yourself that, lmao. >You know what this… Read more »
Melba
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Melba

…They are basing this outlook on the large number of condos being built in both cities and predict a less than half point rise in vacancy rates, so ‘warning’ sounds a bit strong…..

Just wait for all those ‘shadow landlords’ hoping to ride the capital appreciation bandwagon to financial success without having to bother with tenants realize they’ve bought turkeys and they’ll have to find renters after all. Then watch the vacancy rate skyrocket and rents plummet.

Best Place on Earth? Na, it’s the worst place on earth to own a Condo. I love the smell of idiots in the morning.

patriotz
Member

@7: “There are no laws on foreign ownership of residential real estate and, when asked, Mr. Flaherty has said he has no plans to put any in place.”

I believe him. Property rights are a provincial jurisdiction under the constitution and some provincial governments would likely put up a legal fight if the Federal government tried to restrict RE ownership. Remember PEI already restricts non-resident RE ownership. On the other side of the coin, there are some provinces that have no restrictions and want to keep it that way (hi Crusty).

Also the land titles are maintained by the provinces and it would be difficult for the Feds to implement anything without provincial cooperation even if the former were able to overcome constitutional challenges.

kabloona
Member
kabloona

Here’s everybody’s favourite “entitled Bazoomer” columnist from the Vancouver Sun:

Pete McMartin: Selling citizenship OK, as long as they buy my house.

http://www.vancouversun.com/news/Pete+McMartin+Selling+citizenship+right+price/9501326/story.html#ixzz2tFfFexhO

Okay, he didn’t actually say that last bit…I just added it for the sake of accuracy.

😉

mac
Member
mac

We’ve got some good headlines going. Having said that, I still see people walking around the OV with MLS sheets.

chilled
Member
chilled

In a country with 10’s of thousands people homeless or marginally housed, many people living check to check, basement dwellers, etc, I fail to see how more and cheaper rentals is a bad thing.

I’m starting to associate the title of ‘Economist’ with selfish, myopic, misinformed cunt. Maybe it will pass.

paulb
Member

New Listings 242
Price Changes 61
Sold Listings 149
TI:13967

http://www.paulboenisch.com

oneangryslav2
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oneangryslav2

Will we crack that elusive 14,000 TI number tomorrow? Y or N?

I say Y!

Softy
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Softy

So nine months ago it was the rate hold buyer theory and now it is the end of HAM theory. What will be the hope nine months from now?

Heard Herd selling
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Heard Herd selling

No more 2 mill plus homes selling to newcomers, so the RE agents say will obo affect the high enders, but wait weren’tthose monster houses once older tear downs? So bunk to that theory, it affects all ends of the market.

would-be buyer
Guest
would-be buyer

Any guesses on average and median prices by the end of the year? I’m shoring up a bet.

Bo Xilai
Member
Bo Xilai

SCMP does another article on Vancouver Real Estate…

Vancouver’s high property prices not linked to Chinese investor migrants, says minister
Canada’s Immigration Minister says his government has ‘absolutely no concern’ about the impact of the Immigrant Investor Programme on Vancouver property prices

http://www.scmp.com/news/world/article/1427669/vancouvers-high-property-prices-not-linked-chinese-investor-migrants-says

Newcomer
Member
Newcomer

What a bizarre world it is when people say things like:
Economists and policy makers have worried that an “increased supply of rental units will flood the market and will lead to a wave of sales by disappointed investors with no bargaining power,”

The prospect of investors not being able to squeeze high rents out of the middle class is seen as something to fear.

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