Author Topic: Garth Turner - Real Estate in Canada  (Read 493792 times)

permabear

  • Jr. Member
  • **
  • Posts: 93
Re: Garth Turner - Real Estate in Canada
« Reply #560 on: September 03, 2015, 01:56:57 PM »
Thought this was good:

Quote
When 99.9% of folks in Canada talk abt a "historically low debt service ratio," they're using the wrong # #cdnecon

https://twitter.com/ljkawa/status/639470003998355456


Can you believe stats can reported debt service ratio as interest only until now? What a useless/misleading metric


rb

  • Hero Member
  • *****
  • Posts: 2922
Re: Garth Turner - Real Estate in Canada
« Reply #561 on: September 03, 2015, 03:03:44 PM »
Can you believe stats can reported debt service ratio as interest only until now? What a useless/misleading metric
I am highly disappointed and ashamed by stats can. They don't track a lot of stuff, their interface is total crap, and a lot of data you have to pay for. I think Canada may have the worst statistical service of the developed countries!

gary17

  • Hero Member
  • *****
  • Posts: 1183
Re: Garth Turner - Real Estate in Canada
« Reply #562 on: October 23, 2015, 09:10:06 AM »
just to give everyone a sense of how crazy real estate is ...

I made an offer on a small house a month ago.  didn't get it. 

a month later a similar property came on the market on the same street. but house was in worse condition and needed to spend more money to have an income suite.  so I passed.  well, it just got sold for 400k more than the much nicer house I didn't get a month ago...

nodnub

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 535
Re: Garth Turner - Real Estate in Canada
« Reply #563 on: October 23, 2015, 10:14:17 AM »
Can you believe stats can reported debt service ratio as interest only until now? What a useless/misleading metric
I am highly disappointed and ashamed by stats can. They don't track a lot of stuff, their interface is total crap, and a lot of data you have to pay for. I think Canada may have the worst statistical service of the developed countries!
I wonder if the quality of the service is related to the staff cuts made in the last few years?

Estimated Job Losses 2012-2016 (Reports on Plans and Priorities)
Statistics Canada: 2,230 or 35% of full-time positions

via:
http://news.nationalpost.com/news/canada/canadian-politics/conservatives-have-wiped-37000-off-the-public-service-payroll-cutting-jobs-faster-than-expected

Statscanís budget has fallen by $29.3-million in the past two years, and its staffing has fallen by 767 people, or 18.5 per cent, in the same period, excluding the census and surveys paid for by outside clients.
via:
http://www.theglobeandmail.com/report-on-business/economy/lack-of-funds-keeps-statscan-study-from-public/article18088971/


rb

  • Hero Member
  • *****
  • Posts: 2922
Re: Garth Turner - Real Estate in Canada
« Reply #565 on: October 27, 2015, 10:34:09 AM »
https://www.change.org/p/justin-trudeau-keep-the-annual-tfsa-contribution-limit-at-10-000
I'm confused about what this has to do with real estate. Also why people this the limit would not be rolled back. It was a proeminent part of the platform.

wisdom

  • Hero Member
  • *****
  • Posts: 741
Re: Garth Turner - Real Estate in Canada
« Reply #566 on: November 02, 2015, 09:58:22 AM »
http://www.vancouversun.com/business/bank+mortgages+bags+cash+behind+chinese+home+buys+vancouver/11485324/story.html?__lsa=5235-1262

Study confirms what I have stated several times. 82% of the so called houses bought by new rich Chinese investors are done using financing rather than cash.

As a newcomer in Canada one needs no job, no income or credit to borrow. The so called rich immigrants have been playing with other peoples money and loving it.

gary17

  • Hero Member
  • *****
  • Posts: 1183
Re: Garth Turner - Real Estate in Canada
« Reply #567 on: November 02, 2015, 10:36:49 AM »
hi Wisdom
this is consistent with what i have been learning in the last few months - 
my wife's family recently sold their house and used a Chinese agent for her connection with the Chinese buyers -  the deal was good , but I did learn from her that most of her clients are buying with Canadian mortgages.   I also spoke to people I know at TD and RBC and were told that the banks will give them loans provided they can show their incomes in China.

Aside from the Chinese buyers; there are also real estate agents and developers in this game - who are bidding up the lot prices.  Take for example a North Van lot recently sold for $1.8M...  and you could get a brand new 5000 sf house in the same neighbourhood for $2.3M -  okay, both are overpriced; but the point is the lot price is way out of proportion than a newly completed house where we know the cost is likely about $150 ~ $200/sf. 

We will then have suckers like myself, who have a relatively 'good' income in Canada and can likely mortgage our way to buy a $1.5M house in Vancouver , with a bit of parent's help and a basement suite as income helper.  I also learn the bank will give you mortgage based on the basement suite rental income - something I was told not possible a few years ago.

I am wondering how this game will end - and what it'll do to Canada's economy. 


ADD:  My thought process is that if a few years ago we decided not to trust the accounting of most Chinese RTOs ....  why do our banks trust the immigrant's income in China ?
« Last Edit: November 02, 2015, 11:17:59 AM by gary17 »

wisdom

  • Hero Member
  • *****
  • Posts: 741
Re: Garth Turner - Real Estate in Canada
« Reply #568 on: November 02, 2015, 10:57:01 AM »
To add to that many Canadians are now builders/developers providing a large secondary income. One of their requirements is having an inventory to demolish and re-build as they build anywhere from 1-10 houses a year. In greater Vancouver even if we assume 100 builders hold an inventory of 10 houses each = 1,000 houses are owned by these builders. My best anecdotal evidence says the real numbers would be higher. Thus, a lot of the demand or shortage of housing you see in GVRD is artificial. It will be interesting when the music stops, because the large secondary incomes will disappear and that inventory could come back on the market when no one else can afford it.

My best guess - When Canadian RE goes we will have a recession as our natural resources are already hit and housing seems to be the last pillar. RE is struggling in all cities other than Toronto and Vancouver

Similar to Japan and US - our interest rates will drop as housing gets cheaper because the BoC will need to stimulate.

This is how I see it playing out. Lower housing prices and lower rates going forward.

rb

  • Hero Member
  • *****
  • Posts: 2922
Re: Garth Turner - Real Estate in Canada
« Reply #569 on: November 02, 2015, 11:09:12 AM »
You guys are pretty spot on. Our RE situation scares the crap out of me. It seems like we've learned nothing from the near miss in 2008 and the disaster south of the border.

Oh and the icing on the cake, today RBC removed its $1.25 million loan limit for newcomers with no credit history. I mean what could go wrong with that?