Author Topic: Garth Turner - Real Estate in Canada  (Read 513072 times)

Cigarbutt

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Re: Garth Turner - Real Estate in Canada
« Reply #1890 on: April 04, 2019, 04:24:30 AM »
Cigar, i am not a real estate expert but it looks like Greater Vancouver is experiencing a correction in housing prices, with prices down 7-8% year over year. Inventory is up 40-50% depending on the area and type of residence.

If inventory continues to grow and prices continue to come down the risk is does it start to impact consumer confidence and consumer spending amd the broader economy? Or do bargain hunters jump in and we see prices stabilize? I have been so wrong on real estate for so many years (bubble) i have little confidence in my ability to provide a reasonable assessment of where we are going in 2019 and 2020 :-)
I appreciate the balanced response.
Vancouver is a nice place and warrants a premium :) but, if I were to move there, would probably wait a while before buying.

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I don't mind investing in stocks that have negative equity, as long as future cashflows warrant it.


Aberhound

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Re: Garth Turner - Real Estate in Canada
« Reply #1891 on: April 16, 2019, 03:51:19 PM »


Interestingly Armstrong's model shows rises in the Vancouver market in 2020 and 2022 similar to the fall in 2018 and gives the green light for purchases in those years. I wonder what the model is picking up? Capital flight from the financial crises elsewhere? Much colder winters in eastern Canada with continuing improvement in our winters? It has rarely been as sunny and pleasant as last winter (I'm Vancouver born) and my garden and grass is loving it. As I see the chart isn't it a prediction of the influx of wealth being generated in Asia because of the Silk Road offset by stupid policies light the 20% foreign buyers tax etc.? Vancouver is an Asian friendly city with the attraction of clean air and water and abundant nature so will continue to be a magnet so long as the governments do not get too greedy or too stupid.

Viking

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Re: Garth Turner - Real Estate in Canada
« Reply #1892 on: April 16, 2019, 04:22:12 PM »
Aberhound, perhaps it is crazy low interest rates in the coming years. With the Fed indicating it is done tightening and likely to stop negative QE and to cut rates as a next move we llok to be returning to the free money paradigm. This likely means asset prices will resume their upward path. Good for stocks and real estate.

Aberhound

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Re: Garth Turner - Real Estate in Canada
« Reply #1893 on: April 17, 2019, 02:04:54 PM »
Aberhound, perhaps it is crazy low interest rates in the coming years. With the Fed indicating it is done tightening and likely to stop negative QE and to cut rates as a next move we llok to be returning to the free money paradigm. This likely means asset prices will resume their upward path. Good for stocks and real estate.

And maybe the hellholes reported in LA, San Francisco and Seattle in this article will divert some demand back to Vancouver:

https://www.zerohedge.com/news/2019-04-17/san-francisco-los-angeles-seattle-3-formerly-beautiful-west-coast-cities-have

Pauly

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Re: Garth Turner - Real Estate in Canada
« Reply #1894 on: April 17, 2019, 02:56:23 PM »
Aberhound, perhaps it is crazy low interest rates in the coming years. With the Fed indicating it is done tightening and likely to stop negative QE and to cut rates as a next move we llok to be returning to the free money paradigm. This likely means asset prices will resume their upward path. Good for stocks and real estate.

And maybe the hellholes reported in LA, San Francisco and Seattle in this article will divert some demand back to Vancouver:

https://www.zerohedge.com/news/2019-04-17/san-francisco-los-angeles-seattle-3-formerly-beautiful-west-coast-cities-have

Jeez, I know it's foolish to read the comments below an article, but it looks like Zerohedge has really become a cesspool.

alpha

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Re: Garth Turner - Real Estate in Canada
« Reply #1895 on: May 06, 2019, 04:07:26 PM »

Poloz is now asking the banks to come up with more creative ways to allow people to take on more housing debt, which he justified s by warning them not to repeat the cdo/mbs mess in the 2008 US market.

Quote
He said there's some momentum in Canada towards the creation of a private market for mortgage-backed securities. Poloz said it would provide a more-flexible source of longer-term funding for uninsured mortgages, which are becoming more popular.

They would have to be designed carefully, he said, because mortgage-backed securities were central to the "sub-prime debacle" ahead of the financial crisis more than a decade ago.

https://www.bnnbloomberg.ca/poloz-issues-call-to-arms-for-mortgage-market-innovations-1.1254406


rukawa

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Re: Garth Turner - Real Estate in Canada
« Reply #1896 on: August 19, 2019, 08:45:25 AM »

The housing market in Canada is becoming really bizarre, there is such a housing shortage now in West Vancouver they are renting out multi million dollar mansions to groups of students. My friends daughter just rented a 12 million dollar home on the west coast from a Chinese investor, when he told me about it I thought he was joking but apparently there is hundreds of these homes now listed on the market because of the new vacancy tax.

https://bc.ctvnews.ca/is-this-real-hundreds-of-vancouver-mansions-for-rent-for-cheap-1.4329826

There is nothing bizarre about the housing market. What is truly bizarre is that people seem to have literally zero concern for housing supply on this forum and in general. There are many moves to reduce demand which have had limited effect because as it turns out people actually need to live somewhere. There are a multitude of rules put in place to reduce supply. Zero discussion anywhere about this and zero concern. THAT IS BIZARRE. What is even more bizarre is the number of people who claim to understand economics and don't get that supply is an issue.

Its so invisible its crazy. You have these community associations populated by 80 year olds that are actively trying to reduce supply with municipal politicians fighting as hard as they can:
https://www.thestar.com/news/city_hall/2019/05/27/residents-pack-city-hall-as-return-of-omb-looms.html

And crickets....that is all I hear. The one person doing something about supply is Doug Ford and no one is paying attention. Its the weirdest thing. But everyone loves to talk about mortgages and interest rates. Threaten to increase supply and you have municipal politicians screaming about affordable housing, sustainable communities, planning process and giveways to wealthy developers.

This is what I find bizarre.

wisdom

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Re: Garth Turner - Real Estate in Canada
« Reply #1897 on: August 19, 2019, 09:08:11 AM »
Not all the demand is real in a bubble. Once the demand corrects there will be plenty of supply. Those who thought they needed to own 5 homes will add to the supply when prices drop and the asset has negative cashflow. Just a matter of time.

Rod

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Re: Garth Turner - Real Estate in Canada
« Reply #1898 on: August 19, 2019, 09:16:16 AM »
Not all the demand is real in a bubble. Once the demand corrects there will be plenty of supply. Those who thought they needed to own 5 homes will add to the supply when prices drop and the asset has negative cashflow. Just a matter of time.

Also don't discount the supply side. The people who own the development land may be reluctant to sell as long as they believe prices will continue to rise. So you can have speculation on the supply side restricting supply as well as speculation on the demand side. If/when the speculative mentality breaks, I wouldn't be surprised to see all kinds of land coming on stream.

cwericb

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Re: Garth Turner - Real Estate in Canada
« Reply #1899 on: August 19, 2019, 10:34:41 AM »
FWIW

I have said in the past that you can't judge all of Canada by one or two cities and think that applies nationally.

In the city where I live housing prices have have increased by nearly 40% in the past three years. Apartment/condo vacancy rate is still about 0% 

I don't see this changing any time soon.
Politicians and diapers must be changed often, and for the same reason. - Mark Twain