Oh, Canada...

[yonexsp]

@Spinnaker

BoyRace & yonexsp,

Looking at mls.ca certainly both Vancouver, BC and Toronto, ON are very bubblicious, right? What, in your opinion is the % over pricing in each of these two housing sectors. For example, take Toronto, you got a lot of new sub divisions, especially out east around Durham Region. Realty annual taxes are amongst the highest. You got GM at Oshawa and a lot of spin off associated businesses in Durham/Whitby/Ajax. What’s your take on the level of ‘fat’ built up on realty in these areas? What do you think will trigger a bubble burst? Lot’s of people working at the GM plant and a fair bunch of folks working at Hydro. Unless GM goes tits up out at Oshawa, I can’t see what will ignite a bubble burst rather than a gradual controlled cooling ‘a soft landing’ perhaps? What you think guys?

Well, I am in York region north of the city. To be honest it’s not very inflated around here. Most of the homes sell for about 14 - 15 times annual rent still. There is a shortage of houses to some degree in some areas like mine and the ones you mention. The greenbelt, and the Oakridge moraine where I live, constrain where they can build.

Families who live in the burbs, live there coz they don’t want to pay millions for their homes, so that also limits the prices they can charge. I don;t see a bubble in the burbs to be honest. $330,000 buys you a decent 3-4 bedroom 2100 - 2300 sq feet home. Well within the affordable range. Taxes are probably another $3000 - $3500 a year on a home like that in the burbs.

Though the prices did drop at the beginning of 2009 by about 10% during the worst of the credit crunch. Now though, the bubble is evident in selling times. They were literally days/hours in some cases.

But outside of Toronto, there are no bidding wars, or multiple bidders. If someone bids on a house, everyone else steps away. So you get fast sales, but never over asking price.

In Toronto, it is a different story, houses selling for 30x annual rent is not unheard off, total bubble country. Also, areas in Durham like Oakville are also way to expensive (white enclave).

The downside of where I live is the prices never go way high, but then they never drop way back either. I like it that way. Toronto and Vancouver can have their bubbles. For me, saving 30 mins on a drive into town is not worth 2-3x the price.

Basically, I have a 4 bedroom 4800 sq ft/445 sq. m home (inc basement), is worth about $540,000 (400k euro). It is only 4 years old, and suits my family of 3 kids, and 3 dogs very well. It’s as big as I would want to get, probably get a bit smaller next time and get more land.

But in Toronto, I could never afford a house like that, probably millions.

The reason for the Toronto bubble and not the burbs, is that Torontonians think you need a passport if you live further than 10 miles outside the city center (I’m not kidding). So most people from Toronto would never move outside. They would rather pay stupid prices for houses that are shit then live in a decent home with a normal mortgage.

I’m happy where I live, the price I paid etc. Talk of bubbles does not really worry me, but if I was in Vancouver, or downtown. Well I’d be worried

[BoyRacer]

Bank of Canada raises rates: Economists’ reaction → business.financialpost.com/2010/ … -reaction/

As expected, Bank of Canada Governor Mark Carney raised the benchmark interest rate 25 basis points to 0.5% Tuesday, a day after better-than-expected GDP growth figures had economists sounding more inflation alarms. The increase is the first since 2007 and also the first by a G7 bank. Here’s what economists are saying about the move:

Doug Porter, deputy chief economist, BMO Capital Markets

With the consensus and the markets generally expecting the move, almost as important was the tone of the press release: overall, the statement was unambiguously on the dovish side of expectations, with the Bank almost bending over backward to indicate that this is not necessarily the start of a relentless campaign to crank rates higher. Europe came up a number of times in the press release, as did the need for a more balanced global and domestic recovery. The watchword in the Statement was caution. Bottom Line: While the Bank has taken the first step to tighten policy, it is an incredibly tentative step. The Bank has left its options wide open even on the July rate decision; while we still expect a follow-up rate hike at that time, we continue to believe that the Bank will take a pause at some point this year, particularly with the Fed likely on hold until 2011.

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https://www.chpc.biz/images/APR10-6City.jpg

Vancouver, Toronto, Montreal & Ottawa at Peak Prices → chpc.biz/

n April 2010 Vancouver buyers added another 2.3% M/M of price increase to the average detached house value which is already staggering at beyond record levels.
The eagerness of the buyer is matched by the calculation of the seller. They both agree in a single moment of time that their respective action is the best one to take. They can only be both right if after the sale, prices never change.
The last time we saw low volatility and a period of unchanged real estate price levels was prior to the Dot Com blow out of 2000 (chart). Back in the 1990’s, Fundamentals were used to gauge values. Banks, appraisers and even governments used them. But today the rule in place is to find a credulous buyer who is willing to accept the seller’s version of value.
In Europe this month, buyers (borrowers) are being offered a Trillion Dollar bet that prices will continue to rise. Inflation is being sold as a solution to historic levels of debt and in Canada, the same bet is on; Toronto, Montreal and Ottawa also put in new record highs.

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[BoyRacer]

Is Canada’s housing bubble about to burst? → thecoast.ca/RealityBites/arc … t-to-burst

I know I’m nearly alone in my view that Canada’s housing market is in a huge bubble, which will soon burst, just like the American housing market did two years ago. I’ll leave the details of my argument to another time, but for the moment, let me point readers to a press release I recently received, from Greater Homes, the people selling the Glen Arbour subdivision in Hammond’s Plains, a suburb of Halifax.

People that tour our model homes at the Knolls of Glen Arbour pretty much always make the same comments... WOW, this is a lot bigger than it looks! Or... Who is your interior decorator! Or... I will buy one when I win the lottery!   

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[BoyRacer]

Home sales tumble → financialpost.com/news/Home+ … story.html

Housing sales were down 30% in July from a year ago, and the Canadian Real Estate Association is blaming the drop on the new harmonized sales tax in Ontario and British Columbia.

The Ottawa-based group, which represents 100 real estate boards across the country, said July sales plunged 6.8% on a seasonally adjusted basis from the previous month, a decline “almost entirely the result of fewer sales in British Columbia and Ontario,” where the HST went into effect on July 1.

The slowdown had been expected as consumers rushed to buy homes ahead of the July 1 implementation in those provinces. The HST only applies to services used in purchasing and selling an existing home, such as real estate commission, and not the actual sale price.

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[BoyRacer]

Canadian Banks are More Prudent on Mortgage Lending than US Banks; I Can Prove It → globaleconomicanalysis.blogspot. … nt-on.html

CIBC Up to 7% Cash Back Offer could be for you if you:

* Want to renovate, furnish or decorate your home
* Would like to take a dream vacation
* Want to prepare for any unexpected moving expenses
* Want to make an additional lump sum payment on your mortgage
* Need money for a special upcoming event such as an anniversary, wedding or child on the way
* Want to renew an existing mortgage early, or transfer your mortgage from another financial institution and have prepayment costs to pay
* Want to purchase investments, open an RESP or make an RRSP contribution

CIBC Up to 7% Cash Back Offer Key Benefits:

* You get up to 7% cash back based on your mortgage amount and term1, to spend however you choose
* This cash back amount is completely tax-free **
* There are no cash maximums - the larger your mortgage, the more cash back you receive

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[BoyRacer]

https://www.youtube.com/watch?v=GSYxlrE2rXI

[dubrenter]

canadabubble.com/bubble-article-list/1342-going-broke-canadas-debt-continues-to-mount.html

When most people speak of Canada’s national debt, they speak only of the federal component, which according to Canadian Taxpayers Federation debt clock, will stand at roughly $543,022,147,241.02 at 11 a.m. when MPs re-enter the House of Commons. Add in the debt of the provinces, territories and cities and the total government debt across Canada stands at $1.1 trillion US.Kevin Gaudet, federal director of the Canadian Taxpayers Federation, puts that figure in slightly more relatable terms: $32,506 US for every man, woman and child in this country according to the Economist Magazine’s Intelligence Unit.

“That puts us right behind Greece,” said Gaudet.

The Economist’s Intelligence Unit pegs the total government debt at $35,403 US for every Greek citizen. Other countries thought to be the basket cases of Europe perform better than Canada when you look at the amount owed per citizen. Ireland, thought to be teetering near collapse over the last year, has a per capita debt of $28,758 US, while Portugal sits at $18,959 US.

So by some measure, we less broke than Canada, but they do have a few small advantages which could help them get out of the hole: sitting on the worlds largest uranium deposits, being a net exporter of oil, and having a “knowledge economy” that’s based on more than a bunch of call centres and a corporate tax fiddle.

Nevertheless it seems that running big deficits is an endemic feature of western democracy. Politicians are faced with a decision: tax now to pay down the debt and lose the next election, or win the election and let the debt pile up.

[quozl]

So, Canada is in the middle of a property bubble. It still looks like a great place to emigrate to, especially if you’re restricted to the English speaking world.

On the plus side:
They have natural resources, large deposits of assorted useful minerals, some (expensive to remove) oil, gas, coal. I think natural resources, along with a well educated population, are going to be the key wealth a country can have over the next 50 years.
Massive amounts of arable land, even if it’s only about 5% of the surface area.
Good educational system
US as a neighbour

Negatives:
High national debt
Property bubble
5.8% (iirc) unemployment. Lower in places like Toronto, and significantly higher in places like Labrador.
US as a neighbour (this goes in both pluses and minuses for me.) I’m not 100% sure I’d trust the US not to go invading me if they needed some resources I had for their on-going economic prosperity.

I’m seriously considering emigrating, and Canada is the leading possibility now. Wife and I have what seem secure jobs, but while I can handle austerity and tax raises, and a drop in our standard of living without it upsetting me much (never was one for flashy anything), I don’t see anything changing through this crisis that would make me feel this is going to be the end of us doing this demented shite to ourselves every 25 years or so.

So, as nothing looks like changing, except us possibly becoming Germany’s bitch as well as Fianna Fails, then, emigrating now seems like a good plan while my twins are so young that they won’t even notice. I dislike the idea of hanging around for the next one of these and seeing my children have to emigrate instead of me.

Can anyone give me economic arguments against betting my families future on Canada? I’m resigned to renting over there, so a property bubble that hopefully seems to be starting to end isn’t a great worry unless I’m wrong in thinking it won’t tear their country apart like the mega-bubble we built.

[dubrenter]

@quozl

So, Canada is in the middle of a property bubble. It still looks like a great place to emigrate to, especially if you’re restricted to the English speaking world.

On the plus side:
They have natural resources, large deposits of assorted useful minerals, some (expensive to remove) oil, gas, coal. I think natural resources, along with a well educated population, are going to be the key wealth a country can have over the next 50 years.
Massive amounts of arable land, even if it’s only about 5% of the surface area.
Good educational system
US as a neighbour

Negatives:
High national debt
Property bubble
5.8% (iirc) unemployment. Lower in places like Toronto, and significantly higher in places like Labrador.
US as a neighbour (this goes in both pluses and minuses for me.) I’m not 100% sure I’d trust the US not to go invading me if they needed some resources I had for their on-going economic prosperity.

I’m seriously considering emigrating, and Canada is the leading possibility now. Wife and I have what seem secure jobs, but while I can handle austerity and tax raises, and a drop in our standard of living without it upsetting me much (never was one for flashy anything), I don’t see anything changing through this crisis that would make me feel this is going to be the end of us doing this demented shite to ourselves every 25 years or so.

So, as nothing looks like changing, except us possibly becoming Germany’s bitch as well as Fianna Fails, then, emigrating now seems like a good plan while my twins are so young that they won’t even notice. I dislike the idea of hanging around for the next one of these and seeing my children have to emigrate instead of me.

Can anyone give me economic arguments against betting my families future on Canada? I’m resigned to renting over there, so a property bubble that hopefully seems to be starting to end isn’t a great worry unless I’m wrong in thinking it won’t tear their country apart like the mega-bubble we built.

I lived in Ottawa for 10 years, moved back in 08. On the economic front, there’s nothing to argue about, Canada wins hands down. But leaving a secure job to go may not be the best idea. Not all qualifications will be recognised over there…

It’s not such an exciting place, but maybe you don’t want to live in exciting times.

Be careful where you live, weather conditions in some parts can be very extreme, with up to 5 months of snow cover.

Ottawa Snow Storm March 2008

That was my last winter there

[tattoo]

I grew up in Canada, great educational and social system, good governance, good banking sector, lots of opportunities.
Now, I’m home in Looney-Tunes-land.
What the hell did I do?

[Ardillaun]

@dubrenter

I lived in Ottawa for 10 years, moved back in 08. On the economic front, there’s nothing to argue about, Canada wins hands down. But leaving a secure job to go may not be the best idea. Not all qualifications will be recognised over there…

It’s not such an exciting place, but maybe you don’t want to live in exciting times.

Be careful where you live, weather conditions in some parts can be very extreme, with up to 5 months of snow cover.

This is a huge issue for non-European engineers and doctors but I think that most Irish qualifications are recognised.

The weather is one of the biggest negatives. Apart from the Lower Mainland of BC, you are looking at months of serious cold. In Newfoundland, Spring starts in May and it often stays cool until the end of June. Keeping the driveway clear of snow becomes a full-time occupation from January to March. Many older people escape to trailer parks in Florida for as much of it as possible.

[BoyRacer]

Code drives up house prices → winnipegfreepress.com/busine … 57604.html

The cost of super-insulating attics and doing away with a pilot light in gas fireplaces helped drive up Winnipeg new home prices at one of the fastest rates in the country in December.
The changes to the provincial building code took effect on Dec. 1, and the impact on prices was immediate, sending them up by 1.1 per cent, according to new Statistics Canada figures released Thursday.
That was 10 times the national average increase of 0.1 per cent, and eight-tenths of a percentage point higher than the next highest increase – Halifax’s 0.3 per cent.
And a second set of changes, which take effect on April 1, will drive up prices even higher. Those changes require builders to install heat recovery ventilators in all new homes as well as more energy-efficient furnaces.
Manitoba Home Builders Association president Mike Moore said while the changes will result in better quality homes, they also mean higher costs for homebuyers. “Every time there is a new regulation, the brunt of the cost is borne by the consumer,” Moore said, noting a house that cost $400,000 in November cost an extra $4,400 in December because of the changes.
StatsCan’s new housing price index numbers showed Winnipeg also had the second highest year-over-year price increase in December, at 5.9 per cent. While other factors could have contributed to that increase – things like higher costs for land, labour and building materials – December’s 1.1 per cent increase was a big part of it.

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[yonexsp]

Moving here is a No Brainer.

It amazes me why more people don’t do it. I left Ireland in 1997, watched in amazement at the bubble progressed. Went home a few times and did not like what it had become. The ‘Me’ generation my mum calls it.

Canada the whole time went up some as well, nothing like Ireland. It was pretty quiet, very conservative and almost boring. Now all I can say is, thank god for boring.

With 3 kids, dogs etc, I can’t imagine moving to Europe now, and living in a shoebox. As to the weather, it can snow a lot, gets very cold. But in reality, anyone who has gone through Irish and Canadian winters will tell you:

You will feel colder in Ireland due to the damp. I sure as hell don’t miss the damp. + You can go skiing

[korrupt]

Got a good laugh from this:

Vancouver Bubble Watch: 25-Person Bidding War
paul.kedrosky.com/archives/2011/ … bubbl.html

[MrT]

This is old news. 20 % of property buyers in canada are from the people republic of china (not inc hong kong)

theglobeandmail.com/report-o … le1998181/

[two_scoops1]

@MrT

This is old news. 20 % of property buyers in canada are from the people republic of china (not inc hong kong)

Where does that statistic come from? I highly doubt that’s true for all of Canada.

[BoyRacer]

Vancouver Canada Boiling Hot Real estate Market → patrick.net/forum/?p=697896

Every day the realestate price is going higher and higher never seen anything like it 1 year ago you could not sell the home for 1.3 Mil now it gets blown out for 2.2 and more in my area

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[BottomsUp]

Time to short Canadian banks?

[jammyBastard]

Lived in Vancouver for a spell in 2004. There was massive enthusiasm for over-priced real estate when I was there. It was all talk of a boom coming with the Winter Olympics. They’d seen it all before in Calgary so they were all getting ready to back a sure thing. I even a Brit who was over to look at investment properties because the market was too overpriced back home.

This is one city that actually decided to have a property boom. They spoke of a target date of 2010 until which everyone agreed property prices would increase, leaving a “permanently larger city and economy” a la Calgary in the late 80s. Now that date has passed, and they’re all in property heaven because there’s been 8 years (or more) of stupid increases.

[BoyRacer]

Speculators, foreign investors, betting on Toronto condo market → financialpost.com/Speculator … story.html

Who in their right mind would invest in something that loses money every month? The answer just might be future Toronto condominium buyers.

Toronto is the largest condominium market in North American with 18,000 suites selling annually over the past five years, according to research firm Urbanation Inc. The problem is rent for those units is not climbing much, stuck at $2.09 per square foot in the first quarter of 2011 versus $2.09 per square foot a year earlier.

Rental rates are relevant because Toronto’s condominium market has quickly become an investor market with Urbanation saying more than half of the units in the city are now being bought by people who have no plans to live in them.

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