Author Topic: Garth Turner - Real Estate in Canada  (Read 501409 times)

Liberty

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Re: Garth Turner - Real Estate in Canada
« Reply #550 on: July 15, 2015, 06:43:32 PM »
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The average SFH in Toronto costs $1.1 million, while in Chicago the average listing price is $335,984. In Vancouver a urban detached house now goes for $2.2 million. In Seattle the average list is $627,889. A 30-year mortgage in the US costs 4.3% and a five-year adjustable is 3.1%. Both have been rising this year. In Canada you can now borrow a five-year variable-rate mortgage for 1.98% even before being nipped for todays central bank folly.

http://www.greaterfool.ca/2015/07/15/a-tale-of-two-nations/
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alertmeipp

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Re: Garth Turner - Real Estate in Canada
« Reply #551 on: July 15, 2015, 08:00:15 PM »
Canada House up 10% year over year.
If u take out Van and Toronto, only 3.4%.

Rate cut and lowering loonie will almost guarantee more upward movement.

But then what.... rate is not far away from zero.

But loonie going down means more Chinese buyers.

Schwab711

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Re: Garth Turner - Real Estate in Canada
« Reply #552 on: July 15, 2015, 09:51:05 PM »
How is the housing market still going up!? Thanks for getting back to me wisdom. I've read about some of your 5 points and it does seem likely that high LTV mortgages are being under-reported by a meaningful amount. Do you know any small investment companies with large exposure to development loans? Is anyone trying to short this?


Canada House up 10% year over year.
If u take out Van and Toronto, only 3.4%.

Rate cut and lowering loonie will almost guarantee more upward movement.

But then what.... rate is not far away from zero.

But loonie going down means more Chinese buyers.

How can they cut rates into a housing market that's increasing across the baord!? I agree with everything you say though. It does seem like foreign investors are the only reason the market is up so much between Chinese and American investors [speculators].

gary17

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Re: Garth Turner - Real Estate in Canada
« Reply #553 on: July 15, 2015, 10:00:10 PM »
rate cut will help stimulate export
and also the already hot real estate industry -

aside from the foreign buyers... those in their 30's , if own a home, will be spending most of their income in housing.. which does not contribute to the economy....  we need consumer spending to get the economy going.

the other sad part is most of the price tag of a house is in the land...   we were looking at a $1m house in north van... they had 25 offers and end up 250K over asking....  the house is almost a taredown...  so the money most goes into the land....  unless the seller spends the proceeds back into the economy... i see very little overall contribution (no construction worker, no materials, etc)....  bad..... 

the US recession came suddenly and the government reaction was swift.

feels like Canada may be looking at low oil, low commodity, and slow growth for a while... I hope I am wrong !

Aberhound

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Re: Garth Turner - Real Estate in Canada
« Reply #554 on: July 17, 2015, 09:07:46 AM »
rate cut will help stimulate export
and also the already hot real estate industry -

aside from the foreign buyers... those in their 30's , if own a home, will be spending most of their income in housing.. which does not contribute to the economy....  we need consumer spending to get the economy going.

the other sad part is most of the price tag of a house is in the land...   we were looking at a $1m house in north van... they had 25 offers and end up 250K over asking....  the house is almost a taredown...  so the money most goes into the land....  unless the seller spends the proceeds back into the economy... i see very little overall contribution (no construction worker, no materials, etc)....  bad..... 

the US recession came suddenly and the government reaction was swift.

feels like Canada may be looking at low oil, low commodity, and slow growth for a while... I hope I am wrong !

I found out where some of the money goes this weekend when I go to a party up in Kelowna, a small city 4 hours inland from Vancouver. It was like going back in a time warp. Almost everyone at the party had sold and moved from Vancouver over the past 25 years and moved to new homes in Kelowna. The later they moved the bigger the house. Most owned recreational properties as well and all looked exceptionally fit from an active outdoor life culture. Then I visited friends in Oliver, a few hours south in the "Golden Mile", so named because the soil is incredibly mineral rich. Massive monies has gone into wineries while the fruit farms have mostly gone due to low returns. All land owners have had incredible rates of return from rising land values. I can't see why the trend won't continue as higher prices in Vancouver and more immigrants from low trust societies drive those used to a high trust society inland allowing an exchange of wealth and discomfort for wealth, comfort and an improved, more healthy lifestyle. We basically live in a country club economy and we should embrace it and start charging an entrance fee commensurate with the quality of the land and resources. When water starts to back currencies like oil has since the early 1970s BC will be incredibly wealthy so BC seems likely to become the new Alberta.

Now I want to convince my spouse to move to Kelowna as well.

gary17

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Re: Garth Turner - Real Estate in Canada
« Reply #555 on: July 17, 2015, 09:15:51 AM »
I heard an interesting idea - 

The government of Canada has recently scrapped the 'investment immigration' program where a typical Chinese family invests $800K in Canada in exchange for a landed immigrant status -  so instead of scrapping that, we should increase the investment from $800K to say $5M CAD, and instead of it being an investment, make it a permanent contribution to the local economy - goes towards improvement of transit, healthcare etc.   Now that the $5M for the luxury house west van is gone, perhaps we see a slower growth in real estate, and for whomever we attract, they are now even more certain to be the top 0.1%. LOL

gary17

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Re: Garth Turner - Real Estate in Canada
« Reply #556 on: July 17, 2015, 09:46:01 PM »
$10m house sold last week. Hope this will motivate us all to work hard lol

http://youtu.be/05sgT9dL7zA

The Falcon

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Re: Garth Turner - Real Estate in Canada
« Reply #557 on: July 18, 2015, 04:02:36 PM »
rate cut will help stimulate export
and also the already hot real estate industry -

aside from the foreign buyers... those in their 30's , if own a home, will be spending most of their income in housing.. which does not contribute to the economy....  we need consumer spending to get the economy going.

the other sad part is most of the price tag of a house is in the land...   we were looking at a $1m house in north van... they had 25 offers and end up 250K over asking....  the house is almost a taredown...  so the money most goes into the land....  unless the seller spends the proceeds back into the economy... i see very little overall contribution (no construction worker, no materials, etc)....  bad..... 

the US recession came suddenly and the government reaction was swift.

feels like Canada may be looking at low oil, low commodity, and slow growth for a while... I hope I am wrong !

This story rings a bell, replace Vancouver with Sydney and Toronto with Melbourne  and we have a very similar set of circumstances unfolding down here.
« Last Edit: July 18, 2015, 04:05:38 PM by The Falcon »

mrholty

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Re: Garth Turner - Real Estate in Canada
« Reply #558 on: July 31, 2015, 02:33:17 PM »
Just wanted to add some antecdotal information to this thread.

I watched this for a few years and felt there was a bubble atleast in BC.  Earlier this summer spent a week in BC on vacation and spent a few nights with locals.  Much of the stereotypes or comments I've read in this thread were there. 
Buying a second home in AZ - check. 
Sister is a house flipper - sold her business as a Chiro but not ready to retire.  now a yoga instructor and house flipper - check
etc, etc, etc.

Well work took me for the last two weeks to SE Asia + China.  These two weeks were with customers who run manufacturing and distribution companies to a part of the energy economy.  In general these guys are all in their 50s and looking to sell out their business in the near future.  I'd say that 50% of these guys already had a home in the US/Canada and the majority of those were in Vancouver.  These guys want the Vancouver weather, they schools and they want some safety of their assets.  They all paid 100% cash.  That said these guys are just a couple hundred in the entire country of China that serves a several billion dollar industry.  Their employees aren't doing what these guys are doing.  In a lull between drinking Baiju one older guy smiled and asked me why I was so interested in what these guys did with their wealth.  Clearly he was wary of my questions.  (In reality I had simply brought up that I had just been vacationing in Vancouver and the rest of them told stories about them buying property there) and setting up their kids in college there and their kids were becoming landlords, starting businesses, etc.  He told me that he's got his money in Canadian Banks and he's waiting for the bubble to burst to buy the others guys houses.

There is no investment advice in this but much of the stories and anecdotes were confirmed for me in a few weeks of my travels this summer. 

Liberty

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Re: Garth Turner - Real Estate in Canada
« Reply #559 on: September 03, 2015, 09:16:35 AM »
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

"Most haystacks don't even have a needle." |  I'm on Twitter  | This podcast episode is a must-listen