Zen10

All housing in Canada has doubled pretty much since the mid 1990s and is now historically high relative to income and will crash at some point, and this in regard it is no different to any of the other countries that have seen their land inflated so much so as to require heavy financing to purchase.

Where I think Canada differs from the other places is that it has only one area that is highly desirable to older people and retirees - SW BC. With so many people hitting retirement all at once soon I think this should help keep BC prices propped up while other areas crash. But so hard to predict.

jericho

Have you seen the price of property in Florida? Given the choice, I'm sure most would rather retire there, or Phoenix, for example.

Zen10

But they can't retire there because it is a foreign country which they can access only by extension of visas, and other problems like healthcare insurance mean extra problems. I know a Canadian couple who used B2 to spend a few months in Florida every year in their retirement but had to stop when they got too old for the journey, which rather defeats the purpose of a retirement home. They ended up seeing out their days on VI, the ultimate fate of all well-heeled Canadians.

MikeUK

The fun part of the Canadian housing market, is the wealthy want to retire to Vancouver thus continuing to push/prop up a market to the point the ordinary just can't afford to buy, and everybody hopes for the crash that just never quite comes..
Toronto (GTA) is pushed and propped by its influx of immigrants, a population with some coming for jobs from within Canada (a third of Newfoundland works here) but many more from outside Canada and arriving with enough cash for a deposit on a expensive bigger house they can just afford, but still they pay...
These economic drivers allow other regions to pretend that the overall economy is still go up and then they borrow to the point they make Americans look responsible..

Corrections will happen and bubbles will burst where there is no more internal pressure to keep them inflated, but in those odd regions that get pressure from the outside don't expect the bubble to burst dramatically, maybe just deflate a little and wrinkle around the edges a bit...
Others, well they'll need more from the federal coffers and so the equalization payments will blur reality again...

so net result, soft bubbles and more taxes

London Mike

Well, although Cdns have a good proportion of equity in their homes I can't imagine the BOC will have an interest in vast amounts of further people extending that 150% of personal debt statistic any further. So, although inflation is pretty low/stable right now I can see rates rising next year in line with some other measures taken (e.g. annulling the 30 yr mortgage) to keep this in check a bit.

But I'm no economist so could be wrong. That's my thinking though.

Boy d

thought it timely to post an update....

Well, indications are that the vancouver housing market is in full retreat. Prices on the west side are already down 12 percent (higher if one includes the over offers).

Sales are at their lowest in a decade and inventory is rising.

Fundamentals are way out of wack with something like 12 x income required for an average west side home.

Following is a great summary of the nature of the re here and why it is folly to not believe we are facing down a bubble:

http://www.theeconomicanalyst.com/co...canadian-banks

el_richo

Thanks for the link, boy d. Very interesting!

JonboyE

We once again urge clients to consider how best to position themselves to strategically position their portfolio in light of the high potential of a significant housing correction in Canada, particularly in BC. We’re always happy to discuss potential long, short, and derivative trades with clients.

It is a sales pitch.

Boy d

There,s a lot of external data that is used to make a very compelling argument.

airbornesapper

There always is......

ExKiwilass

On the other hand Solo, a new highrise in Burnaby had 2000 people lined up to see new showroom and sold out in
2 days.

el_richo

Suckers

JonboyE

There is a lot of external data and I am not disputing any of it. However, he uses it carelessly. For example, he mixes up statistics between metro and city Vancouver to support his conclusion. This in itself means I find it hard to take the rest of it seriously. The excessive use of bolding reinforces my belief this is a sales pitch rather than a serious analysis.

He seems intent on creating fear an uncertainty in the reader's mind. Fear and uncertainty he can assuage with the products he is selling.

That said, if I had bought a $5m home on the Westside last year I would have a twitching sphincter by now.

alidew

we're just beginning to look at where we might want to move to, and I have to say the house prices surprised me. $1m CAD for somewhere in Calgary 'burbs ! Also for what it's worth, friends of mine who live in Edmonton go on holiday in NS and they love it ! I also have cousins in Halifax who love it there too :-)

Boy d

vancouver real estate continues to soften....there were only a total of 66 sales in all of vancouver yesterday. Inventory is on the rise and prices are falling:

http://vancouverpricedrop.wordpress.com/