Author Topic: Garth Turner - Real Estate in Canada  (Read 548321 times)

cwericb

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Re: Garth Turner - Real Estate in Canada
« Reply #1930 on: September 16, 2020, 09:02:33 AM »
Average Canadian house prices increased 18% in the past year.

It is now 8 years since Garth Turner made the prediction that the Canadian housing bubble was about to burst.

Prices in the past 12 months increased from a low of 5.3% in Alberta (which is struggling with low oil prices) to a high of 31% in P.E.I.

Last month set a record for the most home sales ever,  33 per cent more homes changed hands in August 2020 than the same month last year.

Glad that I ignored Mr. Turner’s warnings as prices in our area have been increasing by about 15% yearly and double that this past year.

Our situation is somewhat unique as we experienced strong immigration for several years and now combined with that, we have been able to control Covid-19. No hospitalizations, no community spread and no deaths.

People from other parts of Canada and elsewhere are buying and building here, sight unseen and realtors can barely keep up with the traffic. A realtor will walk through a listing videoing the home for the customer who makes an offer at the end of the tour. One side effect of this influx of people is that we have had a couple of relatively massive budget surpluses that I believe is probably due to wealthy people becoming residents.   
Politicians and diapers must be changed often, and for the same reason. - Mark Twain


Viking

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Re: Garth Turner - Real Estate in Canada
« Reply #1931 on: September 16, 2020, 10:23:06 AM »
Average Canadian house prices increased 18% in the past year.

It is now 8 years since Garth Turner made the prediction that the Canadian housing bubble was about to burst.

Prices in the past 12 months increased from a low of 5.3% in Alberta (which is struggling with low oil prices) to a high of 31% in P.E.I.

Last month set a record for the most home sales ever,  33 per cent more homes changed hands in August 2020 than the same month last year.

Glad that I ignored Mr. Turner’s warnings as prices in our area have been increasing by about 15% yearly and double that this past year.

Our situation is somewhat unique as we experienced strong immigration for several years and now combined with that, we have been able to control Covid-19. No hospitalizations, no community spread and no deaths.

People from other parts of Canada and elsewhere are buying and building here, sight unseen and realtors can barely keep up with the traffic. A realtor will walk through a listing videoing the home for the customer who makes an offer at the end of the tour. One side effect of this influx of people is that we have had a couple of relatively massive budget surpluses that I believe is probably due to wealthy people becoming residents.   

It is exceptionally difficult to get both the call (of the bubble) and the timing (of the burst) right.

For people who own real estate the run up in prices is a life changing event.
For those who do not own...

If the virus is still around next year the spring of 2021 could be another big step up for single family home prices. Crazy times.

cwericb

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Re: Garth Turner - Real Estate in Canada
« Reply #1932 on: September 16, 2020, 11:43:03 AM »
If the virus is still around next year the spring of 2021 could be another big step up for single family home prices. Crazy times.

Crazy indeed. Shows how the devil is in the details. At first glance, one would have assumed that Covid would have a serious detrimental effect on residential real estate and construction. But now we see people scrambling to get out of condos, apartments and city centers and looking for less densely populated areas. With an infectious disease on the loose, who wants to live in a building with perhaps several hundred other people?

Also, the movement towards ‘work from home’ has quickly accelerated changing attitudes towards residential neighbourhoods. Many now no longer need to live within major cities or indeed even the suburbs. Many are looking at Covid-19 as a warning that this pandemic may not be an isolated incident or that a cure may not be just around the corner. Because of this, many are looking for single family homes or duplexes and smaller communities are becoming very attractive.

This movement is in part to blame for the explosion in the price of materials. In the spring, manufacturers and suppliers felt that the market would be slow this year when the opposite has happened thereby leading to serious lumber and other shortages. Priced a 2x4 or 2x6  lately?
Politicians and diapers must be changed often, and for the same reason. - Mark Twain

Gregmal

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Re: Garth Turner - Real Estate in Canada
« Reply #1933 on: September 16, 2020, 11:47:56 AM »
If the virus is still around next year the spring of 2021 could be another big step up for single family home prices. Crazy times.

Crazy indeed. Shows how the devil is in the details. At first glance, one would have assumed that Covid would have a serious detrimental effect on residential real estate and construction. But now we see people scrambling to get out of condos, apartments and city centers and looking for less densely populated areas. With an infectious disease on the loose, who wants to live in a building with perhaps several hundred other people?

Also, the movement towards ‘work from home’ has quickly accelerated changing attitudes towards residential neighbourhoods. Many now no longer need to live within major cities or indeed even the suburbs. Many are looking at Covid-19 as a warning that this pandemic may not be an isolated incident or that a cure may not be just around the corner. Because of this, many are looking for single family homes or duplexes and smaller communities are becoming very attractive.

This movement is in part to blame for the explosion in the price of materials. In the spring, manufacturers and suppliers felt that the market would be slow this year when the opposite has happened thereby leading to serious lumber and other shortages. Priced a 2x4 or 2x6  lately?

There was even quite a few threads started right after COVID basically screaming about the housing market being fucked. Well located suburban RE, is more or less teflon.

KCLarkin

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Re: Garth Turner - Real Estate in Canada
« Reply #1934 on: September 16, 2020, 12:27:37 PM »
Average Canadian house prices increased 18% in the past year.

It is now 8 years since Garth Turner made the prediction that the Canadian housing bubble was about to burst.

Prices in the past 12 months increased from a low of 5.3% in Alberta (which is struggling with low oil prices) to a high of 31% in P.E.I.

Last month set a record for the most home sales ever,  33 per cent more homes changed hands in August 2020 than the same month last year.

Glad that I ignored Mr. Turner’s warnings as prices in our area have been increasing by about 15% yearly and double that this past year.

Our situation is somewhat unique as we experienced strong immigration for several years and now combined with that, we have been able to control Covid-19. No hospitalizations, no community spread and no deaths.

People from other parts of Canada and elsewhere are buying and building here, sight unseen and realtors can barely keep up with the traffic. A realtor will walk through a listing videoing the home for the customer who makes an offer at the end of the tour. One side effect of this influx of people is that we have had a couple of relatively massive budget surpluses that I believe is probably due to wealthy people becoming residents.   

Glad I ignored this too. We bought our house it Toronto at an insane price in 2010, expecting a 30% drop. I felt sick when we won the bidding war. It would probably sell for ~ 2x now*. Friends who bought starter homes in the area are messed up, since they can't afford the upgrade. Suburbs or bust.

* Most of the stocks I follow would be up even more, so the opportunity cost was high.

TorontoRaptorsFan

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Re: Garth Turner - Real Estate in Canada
« Reply #1935 on: September 16, 2020, 01:22:05 PM »
Garth Turner is Chicken Little...

One day things will go south and he'll brag about how he was right even after years upon years of warnings...

cwericb

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Re: Garth Turner - Real Estate in Canada
« Reply #1936 on: September 16, 2020, 02:23:40 PM »
When you stop and think about it, 18% average increase in one year - over the whole country -  is fairly substantial. Anyone know average price increase since Turner made his prognostication in 2012?
Politicians and diapers must be changed often, and for the same reason. - Mark Twain

Gregmal

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Re: Garth Turner - Real Estate in Canada
« Reply #1937 on: September 16, 2020, 02:27:37 PM »
On market crashes and "calling them"...anyone have any data on the average amount of time the "crash caller" ends up waiting for the collapse? And also the gains forfeited by doing so? Versus the tiny number of people who happen to be going all in at exactly the wrong moment and how long on average it takes to get back to even?

cwericb

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Re: Garth Turner - Real Estate in Canada
« Reply #1938 on: September 16, 2020, 04:17:17 PM »
I have always thought that I buy shares and they drop 50%, then I have nothing to show for the 50% I lost.

If I buy a house and the value drops by 50%, I still have a place to live, just as I did before the price drop. And real estate usually appreciates in value over time.

Just my way of thinking.
Politicians and diapers must be changed often, and for the same reason. - Mark Twain

Viking

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Re: Garth Turner - Real Estate in Canada
« Reply #1939 on: September 16, 2020, 04:39:03 PM »
I think a key with real estate is the incredible amount of leverage usually employed. Life changing (in a good way) when prices are going higher (which is what Has been happening the past 20 years in Canada). In a bust, like what the US had in 2008, my guess is leverage hurt lots of families.

Another key is time horizon... if you love where you live and you know you are there long term then timing becomes less of an issue.