Category Archives: USA

Canadians are most likely non-resident speculators in the US

The National Association of Realtors (NAR) in the US has just released data on foreign buyers. Noticeably missing from the top five list is China, but at the very top of the top 5 US markets there’s one country: Canada.

That’s right, Canadians are the most likely foreign buyer in the US.

NAR stats show that Canadian and UK buyers are the most likely to buy property for occasional use. Going back to 2016, 80% of Canadian, and 61% of UK buyers were non-resident buyers. To contrast, only 39% of Chinese buyers were non-resident. This means Canadian and UK citizens are more likely to buy property and not move into it. Whereas 61% of Chinese buyers are likely to buy property for relocation.

To understand how impressive this statistic is, you have to look at the relative number of people. China has over 1.317 billion people, and Chinese citizens purchased 29,195 US homes in 2016. That results in 11,386 US homes sold to Chinese citizens for investment or occasional use. To contrast, Canada has 35.85 million people, and Canadian citizens bought 26,851 US homes in 2016. Since 80% of Canadians are non-resident, that’s 21,480 homes for investment or occasional use bought by Canadians just last year.

You should be ashamed of yourselves.

Read the full article here.

Have we seen this movie before? Canada surpasses US bubble peak

Even outside of ridiculous vancouver, this nation is real estate crazy. In many key metrics Canada has surpassed the US housing bubble at its peak.

As David Rosenberg, the chief economist at Gluskin Sheff told BNN Thursday, “This bubble is on par with what we had in the States back in ’05, ’06, ’07. We have to actually take a look at the situation. The housing market here is in a classic price bubble. If you don’t acknowledge that, you have your head in the sand.”

Read the full article over at Macleans.

Moving to Seattle

JustMe‘ posted this article from Bloomberg about wealthy buyers moving from Vancouver to Seattle after the foreign buyer tax was implemented.

“Just a few days after Vancouver announced a tax on foreign property investors, Seattle real estate broker Lili Shang received a WeChat message from a wealthy Chinese businessman who wanted to sell a home in Canada and buy in her area.

After a week of showings, he purchased a $1 million property in Bellevue, across Lake Washington from Seattle. He soon returned to buy two more, including a $2.2 million house in Clyde Hill paid for with a single cashier’s check.”

Read the full article here (warning autoplay video).

Capitulation time

Some people say there are three stages to a bubble: denial, concern and capitulation.  Have we reached the last stage yet?

This comment from YLTNboomerang:

I’m almost ready to call this bubble done, my evidence?…my historically poor timing! Family is getting flown down to TX next month for interviews and to check out RE/Lifestyle that Houston offers. If we finally pull the trigger and move South, even for tremendously more dough, I will post it and that will be the point that YVR becomes cheap cause as a bear since 2007 I can’t get this F*&$er timed right. BTW, I already stipulated a “Trump clause”, if through regime change foreign workers are kicked out, I get 3 years pay and no non-compete plus relocation costs.

Any one else hit the capitulation stage yet?

Canadian Banks could absorb losses in US-style housing crash

Good news for your monday morning!

If Canada saw a ‘US-style housing crisis‘ the big 6 banks could generate enough capital in a few quarters to cover losses.

If Canada were to experience a U.S.-style housing crisis, with house prices falling by up to 35 per cent, mortgage lenders including the country’s big six banks could lose nearly $12 billion, according to a new report from Moody’s Investors Service.

CMHC would also take a hit of about $6 billion if they challenge and reject claims, but if they decided not to they would take about half the loss as it would be more evenly split between the banks and CMHC.

You probably don’t have to worry about a US-style nationwide housing crash, because we have a different mortgage market that is explicitly backed by the government. The main concern would be rate increases and job losses as Canadian debt loads continue to increase:

There was almost $1.6 trillion in mortgage debt outstanding at the end of March, including home equity lines of credit, more than double the amount outstanding 10 years ago.

Read the full article over at the Financial Post.