Author Topic: Garth Turner - Real Estate in Canada  (Read 488764 times)

wisdom

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Re: Garth Turner - Real Estate in Canada
« Reply #160 on: August 28, 2014, 07:22:59 AM »
If everyone is paying cash in Vancouver, then why do people in Vancouver have the highest debt levels in Canada.

Where are the stats to show that all houses are being bought by Chinese immigrants with cash? Or are these anecdotes based on a few sales?

Reality does not support the view that people are buying a majority of houses for cash. It is possible that 1% or so of the sales might fall into that category.

Bob Rennie (local realtor - highest sales) in a speech had stated that he was not worried about the cancellation of the program for rich immigrants because 69% of all sales in the last 5 years had been to locals buying 2nd property. His statement contradicts the statement that rich immigrants are buying everything for cash.

All you have to do is title searches on houses and you will know if banks have a charge against houses. Try a few and see what shows up.
« Last Edit: August 28, 2014, 07:26:22 AM by wisdom »


A_Hamilton

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Re: Garth Turner - Real Estate in Canada
« Reply #161 on: August 28, 2014, 07:29:09 AM »
Are there any thoughts from Canadians on this board in regards to Calgary/Edmonton? In a slowdown what happens to Canada's basic materials economy? I've thought about Houston in the early 80's a good amount and wonder why the same bust won't come to these cities. Would 25% vacancy rates really be that hard to believe if you had oil prices fall 30-40% and stay down for a few years (this is something everyone tells me cannot happen...which in my mind means the inevitable next step is that it will happen)?

« Last Edit: August 28, 2014, 07:50:50 AM by A_Hamilton »

gary17

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Re: Garth Turner - Real Estate in Canada
« Reply #162 on: August 28, 2014, 07:32:53 AM »
i suppose the higher debt level is because there are more working class people here who are trying to afford a condo or an entry-level home.   

i've been waiting for a few years now to buy a house with no luck... and the prices keep on rising faster than income !  perhaps i'm one of those that has changed my view on RE in Vancouver.     

wisdom

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Re: Garth Turner - Real Estate in Canada
« Reply #163 on: August 28, 2014, 09:44:07 AM »
Gary, you seem to be agreeing with me that the locals have taken on a lot of debt to keep up with the high prices - whatever the reason for the high prices. Isn't that a bubble when people do something because others are doing it and it has worked for the last 10 years?

I would ask you to consider what portion of housing sales are made to new immigrants and the percentage of sales to residents. I would assume immigrants buy well under 5% of the properties. Most immigrants are not wealthy and cannot afford to buy within the first 5 to 10 years. This is why a lot of imigrants migrate.

Check out the historical housing affordibility for Vancouver from the RBC study. It shows an average person now has to use 81% of their pre-tax income to buy a bungalow v 50% before this run up started.
http://www.rbc.com/newsroom/_assets-custom/pdf/20140828-HA.pdf

If you were a betting man, how would you bet on this? Is it more likely that a house will get more expensive relative to income or cheaper.
 

Liberty

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Re: Garth Turner - Real Estate in Canada
« Reply #164 on: August 28, 2014, 09:56:02 AM »
i suppose the higher debt level is because there are more working class people here who are trying to afford a condo or an entry-level home.   

i've been waiting for a few years now to buy a house with no luck... and the prices keep on rising faster than income !  perhaps i'm one of those that has changed my view on RE in Vancouver.   

Timing is always hard. A lot of people thought there was a tech bubble in the mid 90s and had to wait for years before it burst. Some even changed their minds, capitulated, and bought near the top.

What we have to remember is that the market doesn't have to do anything on a schedule that is convenient for us, but the laws of economics haven't been repealed either.
"Most haystacks don't even have a needle." |  I'm on Twitter  | This podcast episode is a must-listen

SharperDingaan

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Re: Garth Turner - Real Estate in Canada
« Reply #165 on: August 28, 2014, 10:25:43 AM »
A large part of Vancouver RE is Asian owned investment property, & is mortgage free; get over it. If condo prices fell in any major way, those investors would simply club with their friends & buy the 2nd condo cheap - in anticipation of a later sale 1-3 yrs later. If they needed cash in the interim, they would simply mortgage the condo, & rent it out cheap to pay the P&I.

If the Vancouver condo market were a slum, we would call this process gentrification, & have no trouble pushing out the poor living there - making them homeless. If you want to live in a nice place, either outbid everyone else in the world who would like to live there, or accept the fact that you cannot afford to live there anymore. You would not listen to that poor persons angst, so why would you expect anyone to listen to yours.

No different to parts of London, Paris, Geneva, Toronto, etc.

SD
« Last Edit: August 28, 2014, 04:49:45 PM by SharperDingaan »

A_Hamilton

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Re: Garth Turner - Real Estate in Canada
« Reply #166 on: August 28, 2014, 10:30:44 AM »
A separate question. If one believes that Canada's housing market will have significant delinquencies in the future are you better off shorting the Canadian banks or shorting the Canadian dollar given the large linkages the banks have to the central government via CMHC?

Otsog

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Re: Garth Turner - Real Estate in Canada
« Reply #167 on: August 28, 2014, 10:34:47 AM »
No opinion on anything, just thought this was an interesting data point.  I read about Canada's population growth in a book recently and grabbed this data from the UN (http://esa.un.org/unpd/wpp/Excel-Data/population.htm)



5th fastest growing G20 country, kind of surprised me some of the countries we were ahead of.  Also, a bit surprising just how much faster Can + USA are projected to grow over Europe. 
If I have seen further it is by standing on the shoulders of giants.

50centdollars

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Re: Garth Turner - Real Estate in Canada
« Reply #168 on: August 28, 2014, 11:22:37 AM »
No opinion on anything, just thought this was an interesting data point.  I read about Canada's population growth in a book recently and grabbed this data from the UN (http://esa.un.org/unpd/wpp/Excel-Data/population.htm)



5th fastest growing G20 country, kind of surprised me some of the countries we were ahead of.  Also, a bit surprising just how much faster Can + USA are projected to grow over Europe. 

Annualized, thats growth of less than 1%/year. My house has gone up in value 35% over the last 2 years. That doesn't make sense to me. How many rich people in this world want to come and live in canada?
50centdollars

ASTA

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Re: Garth Turner - Real Estate in Canada
« Reply #169 on: August 28, 2014, 11:51:04 AM »
I am not rich but whould like to come to Toronto :) tired off Europe. Have been thinking Singapore or Toronto lately lucky enough my wife is born in Toronto so it's easier to convince here to move there :)
From what I read and see in Europe my very personal opinion is that to many low wage people getting in too Europe and they are why smarter then gullible swedes for an example. But my family has lived in four different continents the last 40 years. So I am used to moving.
« Last Edit: August 28, 2014, 11:54:45 AM by ASTA »