Author Topic: Garth Turner - Real Estate in Canada  (Read 513089 times)

gary17

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Re: Garth Turner - Real Estate in Canada
« Reply #740 on: March 18, 2016, 12:45:11 PM »
Quote
The Immigrant Investor Program (IIP) aims to have experienced business people contribute to Canada’s growth and long-term prosperity by investing in Canada’s economy. Investors must:

show that they have business experience
have a net worth of at least C$1,600,000 that was gained legally and
invest C$800,000.
Citizenship and Immigration Canada (CIC) will divide your investment between participating provinces and territories. They will use it for projects to develop their economies and create jobs for five years.

Your investment is guaranteed. CIC will return it, without interest, about five years and three months after payment.

If we approve your application, you must make your investment before we issue a permanent resident visa. You must usually do this within 30 days. The visa office will send you a letter that explains what to do. Learn more about making your investment.




How much money do you think a Chinese immigrant net worth is - buying a $3M house + $800K for the government ?   
They probably also know they won't be able to earn the same kind of living in Canada -  their lifestyle in Asia is probably costing the family $100K ~ $200K / year. 

Do the math - they have to have well over $500K earnings and a lot of money saved up before committing to moving to another country for the next 10 or 15 years or whatever for the length of the children's study.


scorpioncapital

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Re: Garth Turner - Real Estate in Canada
« Reply #741 on: March 18, 2016, 12:55:32 PM »
I can buy a house in California with an even more moderate climate than Vancouver in a country with overall somewhat lower taxes and lower cost of fuel, food, etc..and finance it with a 30 year mortgage. I am not convinced Vancouver is so great as to justify such high prices based on geography alone.

Liberty

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Re: Garth Turner - Real Estate in Canada
« Reply #742 on: March 18, 2016, 01:05:09 PM »
Most foreigners have no income in BC or Canada - yet they are minting well over $500K at 15% tax rate in Asia.

Source?

don't need one - just look around in my own family, their friends, high school friends, university classmates and you can confirm what everybody knows here.

mom and dad are in a group of oversea chinese -  there are a few exceptions but most are extremely wealthy.  we are the poor ones...

i don't see asian taxi drivers , do you?

Anecdotal. Okay.
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wisdom

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Re: Garth Turner - Real Estate in Canada
« Reply #743 on: March 18, 2016, 01:15:46 PM »
I agree - I would be looking at Florida, Hawaii, California rather than Vancouver. Only individuals in Vancouver believe that every rich person in the world wants to move here.
« Last Edit: March 18, 2016, 01:32:16 PM by wisdom »

JBTC

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Re: Garth Turner - Real Estate in Canada
« Reply #744 on: March 18, 2016, 05:48:28 PM »
The rate it is moving at - this cannot be sustained for long. Feels like it is near the end but I am guilty of having thought that before too. It is going to catch a lot of people swimming naked when the tide goes out.

So didn't HK have a real estate crash before?  Didn't Londo , Paris , New York , etc do too?
But why do they continue to be the most expensive places on the planet?     


+1

Speculation is real, but fundamentals are also real.

We'll all learn more and analyze better if we are open-minded about all the possibilities.

JBTC

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Re: Garth Turner - Real Estate in Canada
« Reply #745 on: March 18, 2016, 05:57:15 PM »
So enough of the anecdotes. I was trying to look at population data, but Canadian census is done every five years and the last one was in 2011.

From 2006 to 2011, the metro population growth

Vancouver +9.3%
Toronto +9.0%
Montreal +5.2%
Calgary +11%

Looks like we don't any data for the last few years. Population growth is the first thing a property investor should look at. Every person moving into a city needs a roof.

mcliu

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Re: Garth Turner - Real Estate in Canada
« Reply #746 on: March 18, 2016, 07:33:22 PM »
So enough of the anecdotes. I was trying to look at population data, but Canadian census is done every five years and the last one was in 2011.

From 2006 to 2011, the metro population growth

Vancouver +9.3%
Toronto +9.0%
Montreal +5.2%
Calgary +11%

Looks like we don't any data for the last few years. Population growth is the first thing a property investor should look at. Every person moving into a city needs a roof.

Population growth alone can't explain the increase in prices because the number of houses is also increasing. Housing stock actually increased by 9.8% over the same period. Note that housing prices increased 39% from 2006 to 2011.

(It could be the case that there's a severe shortage of homes in 2006. Inventory was indeed at an all time low in 2006. However, inventory increased from 650 units in 2006 to 3,500 units in 2011. So in that period they've added more housing stock than the market absorbed. CMHC Data Portal)

"The 2011 Census shows the number of occupied dwellings to be
891,340. The 2011 Census figure of 891,340 occupied private
dwellings is an increase of 74,300 dwellings units over the 2006
Census. The region’s private housing stock grew by 9.8% since the
2006 Census, higher than the 8.4% (58,320 units) during the preceding
five years (2001‐2006)."

http://www.metrovancouver.org/services/regional-planning/PlanningPublications/MV_Housing_Data_Book.pdf#search="housing%20book"
The rate it is moving at - this cannot be sustained for long. Feels like it is near the end but I am guilty of having thought that before too. It is going to catch a lot of people swimming naked when the tide goes out.

So didn't HK have a real estate crash before?  Didn't Londo , Paris , New York , etc do too?
But why do they continue to be the most expensive places on the planet?     


+1

Speculation is real, but fundamentals are also real.

We'll all learn more and analyze better if we are open-minded about all the possibilities.


Which fundamentals metrics do you think are relevant?

Usually people look at Price-to-Income and Rental Yields.. I don't think I've see any P/CF based valuation metrics which shows Vancouver undervalued.

The only metrics that show Vancouver being under valued would be something like a comparable on a $/sq.ft. basis against New York/London/Shanghai/Hong Kong, etc..

JBTC

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Re: Garth Turner - Real Estate in Canada
« Reply #747 on: March 18, 2016, 08:31:19 PM »
mcliu,

Thanks for the data.

By fundamentals, I don't mean just valuation.

It's both the demand factors (population growth, household formation, tendency to own vs. rent, income growth, wealth growth, interest rates, mortgage and tax policy, climate and livability, quality of schools, and more) and the supply factors (new construction volume, land availability, land release policy, competition between builders, zoning policy, etc).

Without going through all the key items, it would be difficult to make a conclusion.

I haven't had a chance to go through the data book you sent. Just on p22, it seems ownership housing starts didn't increase much at all during 2011-14.

That's crazy, isn't it? You have home prices going through the roof, but new construction didn't increase. Why? I know nothing about the specific circumstance here, but the general reasons are:

1) there is no more land.
2) there is land but the government refuses to release (citing greenbelts, protecting the environment, all sorts of things).
3) there is land but the developers are hoarding it.
4) some other reasons that don't offer developers incentives to build.

Hope your guys who live in Vancouver can provide some insights.

Also in 2011, 65% of the households in Vancouver were owners, and the rest were renters.

Thanks about it, the vast majority of the residents are beneficiaries of the boom and happy. These people are rich, more powerful, and have greater representation in politics. So chances are the government policy is skewed towards protecting these people's interests.

This in my humble opinion is partly why housing is generally a good investment most of the time in most places.

mcliu

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Re: Garth Turner - Real Estate in Canada
« Reply #748 on: March 18, 2016, 10:11:45 PM »
This in my humble opinion is partly why housing is generally a good investment most of the time in most places.

That's fair and indeed in general it has been true but what about the times when it hasn't been true?

I mean, at what point does a good investment turn bad? For an extreme example, if prices hit $100 million for a house in Vancouver while population and incomes grow at 2%, does that signal a bubble or should we continue to justify prices?

$100 million is extreme but going down from there, there is still a point where you can safely declare that prices have far surpassed fundamentals. Maybe it's there already, maybe it'll take another 2x, 3x, 10x gain to convince people. (Although I guess, counterintuively, the higher prices go, the less people will be convinced that there is a bubble.) Based on the data that I've seen, the situation is pretty clear...

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gary17

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Re: Garth Turner - Real Estate in Canada
« Reply #749 on: March 18, 2016, 11:30:23 PM »
i know from this webiste we can look at statistics about inventory

http://www.rebgv.org/home-price-index

the 'active' listing is at all time low - very few "asking"; and many "bids"

if rich people don't spend money in vancouver real estate; what else should they do?  rich people like buying real estates together.  they also like 2nd citizenship (no diff than Conrad Black liked a British citizenship) -  for most in Asia  , Canada is the most easy to get; and close enough to the US but not in the US.