Author Topic: Garth Turner - Real Estate in Canada  (Read 486602 times)

Liberty

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Re: Garth Turner - Real Estate in Canada
« Reply #700 on: March 15, 2016, 05:06:26 PM »
So how do we explain the phenomenon that many listings in Vancouver are now getting multiple offers - so for each one accepted offer there are 4 or 5 or even more groups that have not found a "home".  I made an offer for a duplex a few weeks ago - I went $100k over asking but was the bottom 3 of 12 offers - the accepted offer was $221k over asking.  I am and many of those making The offer are not developers speculating.  we are simply trying to find a place to live !

I wonder if there is data from census or whatever that would allow us to look at the demand side of the market more scientifically.

What do you mean? Why does it have to be explained any more than the fact that people were willing to bid things up in any other bubble (Nortel shares, Las Vegas houses, tulip bulbs, whatever).

Nobody's saying that the market isn't hot or that there isn't real demand. The problem is that people are overpaying and many people who probably shouldn't be buying are buying because of FOMO/now-or-never/social pressure/cashback mortgages/family giving them a downpayment/the belief that nowhere else is worth putting money into/whatever.
« Last Edit: March 15, 2016, 05:08:08 PM by Liberty »
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scorpioncapital

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Re: Garth Turner - Real Estate in Canada
« Reply #701 on: March 15, 2016, 05:33:14 PM »
So we have:

migration (30%?) - are the migrants coming in with lots of money as opposed to purchases from domestic wages and business?

low interest rates (20%?) - are monthly mortgage costs low?

limited space in a desirable location (40%?) - bylaws do not allow building up so even domestic and international buyers are competing for limited houses.

bubble  - mania above & beyond the above. Doesn't seem that it's more than 10-20% here unless we adjust the above say migration 20%, low interest rates 10%, good location 30%. Then speculation is still only about 40%. Maybe that's worthy of being called a bubble. As Buffett recently said in those regulatory filings, a bubble usually has a sound premise - in this case sound 50-60% or so, it's the other 40% with leverage that could be lethal. But I'm not convinced a bubble shouldn't be defined as something like 90% speculative, 10% fundamental. I mean is it a bubble when locals have the choice to emigrate from the region who can't afford it, thus leaving say a city with many upper middle class and everyone else moving to smaller cities or distant suburbs?

« Last Edit: March 15, 2016, 05:38:24 PM by scorpioncapital »

gary17

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Re: Garth Turner - Real Estate in Canada
« Reply #702 on: March 16, 2016, 12:06:04 PM »
another thought I had was why haven't we heard the real estate meltdown in Calgary and Edminton amid the worst oil crisis in recent history - if Edmonton is down 5% is jt something we should expect to see in Vancouver when we see the eventual correction ?

wisdom

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Re: Garth Turner - Real Estate in Canada
« Reply #703 on: March 16, 2016, 12:25:09 PM »
A lot of places in Vancouver and around are up 100% in the last 18 months. As Gary stated you are only in the game if you bid just $100,000 over asking if you want a house an hour out of the city i.e. the valley.

Closer to the city I am seeing offers anywhere from $200k to $500k over being accepted. This is why the prices have risen $100k to $1mil in the first 3 months of the year so far.

It is very cool to watch the frenzy.

wisdom

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Re: Garth Turner - Real Estate in Canada
« Reply #704 on: March 16, 2016, 12:28:45 PM »
It reminds me a lot of late 1999 in the stock markets - the euphoria and FOMO is over powering.

wachtwoord

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Re: Garth Turner - Real Estate in Canada
« Reply #705 on: March 16, 2016, 12:45:06 PM »
It reminds me a lot of late 1999 in the stock markets - the euphoria and FOMO is over powering.

Any idea how to profit from this?
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wisdom

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Re: Garth Turner - Real Estate in Canada
« Reply #706 on: March 16, 2016, 12:55:01 PM »
If you are in the market - sell! LOL

No idea.

wachtwoord

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Re: Garth Turner - Real Estate in Canada
« Reply #707 on: March 16, 2016, 02:42:36 PM »
If you are in the market - sell! LOL

No idea.

Can't sell what I don't have. Even if I did the market can stay irrational longer (and more extreme!) than I can stay solvent ...
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Liberty

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wisdom

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Re: Garth Turner - Real Estate in Canada
« Reply #709 on: March 16, 2016, 07:31:18 PM »
Liberty not sure if they can make it retroactive. It is already too late in the game to have much of an impact - i.e deductibles.
« Last Edit: March 16, 2016, 08:26:59 PM by wisdom »