real estate prices in Canada sustainable?
 

Not sure of the source really, but interesting topic to think about as housing prices in a good chunk of Canada are expensive, and compared to the US grew at a much greater rate during the time frame the article uses.

Is this sustainable in the long term?

For us personally we have given up ever owning a house, its not realistic as prices are far too high and really nowhere I have ever found where a house would be realistic for us, in part due to highish rent preventing any way to really save so there is the down payment issue, and the stress test and other mortgages rules in Canada also pretty much prevent us from ever having a house.

I just wonder if this type of growth is sustainable over the long term, wages don't seem to be keeping up, so not sure how anyone actually buys a house in many areas these days.

Just something to ponder.

https://betterdwelling.com/canadian-...home-prices/#_

Re: real estate prices in Canada sustainable?
 

Last year didn't look too bad. Kamloops was at #23 and Salmon Arm (which is 110km away) is at #1

https://www.macleans.ca/economy/real...l-estate-2019/

Re: real estate prices in Canada sustainable?
 

Goodness Salmon Arm is still expensive. Lol

Realistically I dont think for us anything over 175k is feasible based on possible future income projections based on plan for school.

Re: real estate prices in Canada sustainable?
 

Kirkland Lake is still cheap .. https://www.realtor.ca/on/kirkland-lake/real-estate
You might be able to get help with the mortgage.... https://www.placetocallhome.ca/fthbi...uyer-incentive
Finding work there might be an issue though! :D

Re: real estate prices in Canada sustainable?
 

That is always the issue where the houses are affordable there tends to be low employment options. Lol

Re: real estate prices in Canada sustainable?
 

Lots of reasons why it's this way
- Interest rates are very low, 1.89%/1.99% mortgages are available now, that makes the interest on a house actually close to or lower than inflation in real-money terms
- Shortage of land allowed to develop on, lots of protected land (e.g. ALR) and crown land.
- Slow approval process for new developments
- Lack of density in some areas
- Canada is desirable on a global scale - safe, univeral healthcare, easy access to US markets
- BC is desirable within Canada - Vancouver is one of the largest cities with growing tech sector, best climate in the country
- The internet has made people much more aware of what the best places in the world to live are.

I was part of a housing collapse group on facebook for about 6 months but despite all the doom and gloom, I just don't see a crash coming. We just bought our first detached house last month.

Re: real estate prices in Canada sustainable?
 

Hi
I have been here now ( vancouver) about 14yrs

if i had a dollar for everytime i heard someone say the housing market will crash, i would be very happy

usually something comes along to prevent it,

low interest rates (as now)

maybe in the near future people from Hong Kong may keep the market up

or shortage of sellers (as now)

but i suppose a crash is not totally impossible

cheers J

Re: real estate prices in Canada sustainable?
 

Unless house prices decrease and wages increase there will be many that can no longer afford to buy I suspect. In my city house prices have more than doubled in the last 4 years, due mainly to Toronto prices being at a point where they are no longer affordable for the majority of low to middle pay workers.. (nor Mississauga / Oakville) and so people are moving here where prices were reasonable and in doing so have pushed the prices up. Rental prices have also increased in a similar manner - :( This blue collar steel city is starting to become more gentrified!

Re: real estate prices in Canada sustainable?
 

Guess I should have phrased it is it sustainable longer term for those working in Canada and earning CAD$.

Not necessarily a market crash but only so many jobs to go around that pay enough to afford 500k plus homes.

Re: real estate prices in Canada sustainable?
 

I am strongly thinking that the Canadian property market is in general the product of a mixture of immigration, and immigrants bringing money with themselves, having jobs, or creating jobs, if they start their own business, plus the economic growth the country has seen. Especially if immigrants, people who are obviously "new" to the market are introducing their own capital, and supply is low, then prices ultimately shoot up. The likes of skilled immigrants tend to have also a bit of savings to bring with them. Often these savings are way higher than the government requirement is.

Nobody knows whether there's going to be a crash or not. I don't think that Corona is going to do that, maybe only put a dent into the market, for a brief period.

Re: real estate prices in Canada sustainable?
 

Your probably right.

My end goal would be to have a house somewhere but the hurdle is what jobs and kinds can someone like me try for that pays a high enough salary to have a house somewhere.

Re: real estate prices in Canada sustainable?
 

Probably, yes, maybe. I am not really a property market analyst. However I think that immigration and property prices and supply and demand are closely interlinked in Canada.

And also, since Canada is requiring immigrants to have some kind of either professional or university background and or a certain amount of finances and language skills, Canada and Canadian legislation is drawing on getting the skilled and the brain into the country. Often immigrants are attracted to Canada from those countries in Asia ( India or China ) where there is a massive population or a strong difference between haves and have nots. Thus the financial background is also a matter when it comes to the demand question, when immigrants and new arrivals to Canada buy property. This demand is naturally fuelled with skilled labour and capital, and often by individuals with university degrees and technical knowledge, both of us can't even imagine.....

In general I feel that in Toronto the market is overblown and is bound for a correction. Whether that's Corona or not, I don't know. Even Vancouver seems more realistic, factoring in all the natural beauties the countryside around Vancouver offers and Toronto clearly lacks.

Re: real estate prices in Canada sustainable?
 

I wonder if it will become more like the the UK - the average wage and average house price has meant affording doesn't mean you can afford to buy the house - you buy a piece of it.

Aside from the rental trap, you have another big portion trapped in shared ownership homes (you own 25/50/75% and rent the other portion) then a chunk more who are on help2buy schemes (you get 25% of the house as an interest free loan for 5 years, you then accrue interest - but its for 25% of the value of the house, so if the house goes up, so does the loan, realise you don't end up losing out when you come to sell, but does mean in theory if house prices jump 10% in 2 years, that last 25% has cost you 27.5% in actual pound notes if you wanted to buy the 25%) - granted you can of course save up to buy the additional portion of your home, and the partial rental partial mortgage is typically no dearer than a normal rental.

Canada still seems cheaper and more affordable than the UK, dependant on area - but you seem to be catching up quick.

Re: real estate prices in Canada sustainable?
 

Where I'm currently seeing the biggest impact to the market is not the buy/sell, but lease market. There are less sellers/buyers so that balances things out pretty much and here in Ontario there are still lots of multiple offer situations.

But it's the tenants I feel for. As less buyers are entering the market they still have to have somewhere to live so they are renting. This is putting some very qualified tenants out there and so your average tenant who would have been welcomed with open arms this time last year doesn't stand a chance this year!

Re: real estate prices in Canada sustainable?
 

Renting in parts of Canada can be super stressful, especially if not in a dedicated rental, never know when you unit/house your renting might be sold, and rental market so tight may not even find a new place of the same quality, especially in places like Vancouver where vacancy rate is low.

What is a lease market?

Re: real estate prices in Canada sustainable?
 

In ON realtors do leases too. So lease market as opposed to buy/sell.

Re: real estate prices in Canada sustainable?
 

It's another word for rental.

Re: real estate prices in Canada sustainable?
 

Ive seen quite a number of sold signs up locally and we are told that GTA people are moving out of the city. Maybe tgat will have the effect of lowering city prices and raising rural prices. Maybe. I know nothing.

Re: real estate prices in Canada sustainable?
 

Whilst you have a constant stream of migrants with money coming in the market will be propped up
and given the comparison with other high value markets, you have a lot of headroom for the prices to rise before it becomes a real issue
like many other places peoples dreams of moving up into bigger properties, its just that, a dream!
without a significant change in income the only way of increase the property size is to move to a lower priced area, and fuel the market...

in some countries many houses are multi generational and the mortgage isn't paid off in one life time, but gets passed down as part of the inheritance ...

Re: real estate prices in Canada sustainable?
 

The market in Halifax seems to be a bit nuts just now... people queueing up for viewings (at least pre lockdown) and gazumping eachother. I guess it is not helped by the insane increase in rental costs - it is now even more sensible to pay for a mortgage. taxes and maintenance than it is is to rent.

I have also noted the huge new estates being built. Seemingly there are cars on the drive as soon as a house is complete, or cars in the car park as soon as the condo building has gone up. Something doesn't stack up in terms of the amount of people that one would think are coming here and the population (even the net immigration) figures. And, to be clear, these people need to have money - most of these new unimaginative sheds are easily going for upwards of $500k! Will be interested to see how this pans out - it has the feel of when the market went nuts in Northern Ireland for about 5 years, and then came back down to earth with a resounding thud.

Re: real estate prices in Canada sustainable?
 

I used to live in Brampton in the GTA.. that was normal (back in 2004), the car was on the drive before the tarmac was down
there used to be field at the top of our road, now its houses to the regional boundary my estimate is ~32sq kms of houses added in ~16yrs

Re: real estate prices in Canada sustainable?
 

I don't know if, when in the GTA, you ever had reason to go to such places as Dundalk or Grand Valley. Ten years ago they were one tractor towns. Now there are mile upon mile of $500,000 townhouses and $800,000 barely detached houses there and massive new developments in progress. The demographics are changed completely. I recall being weirdly ethnic in Grand Valley, now there are people from all over.

Re: real estate prices in Canada sustainable?
 

I certainly remember the boom that took place in Orangeville and then Shelburne, (both now look more like Brampton/Mississauga), but on the trips out to Owen sound and Tobermory, all I remember was tiny little rows of houses on the highway that somehow had been given names, I'd have said many were a bit less than one tractor towns
But I'm not surprised the GTA moved up highway 10 after the 410 was extended and highway 10 improved

we'd move up from Brampton into Caledon into the village of Cheltenham ~ 2007 and watched the next village over [Inglewood] have a great big GTA style housing estate built in it.. just as we left somebody had brought up a huge chuck of land in Cheltenham ~2014 and started to develop it, only to have the planning targets set high enough to stop construction, rumours of wealthy friends in high places

Re: real estate prices in Canada sustainable?
 

I commuted from north of Shelburne to Church and Gerrard when highway 10 was three lanes from Shelburne to Orangeville, it's four now but infeasibly slow, presumably because all the people in those new houses work in Brampton/Mississauga/Toronto.

Re: real estate prices in Canada sustainable?
 

It's not just moving into bigger property, more and more places even getting into a 1 bedroom condo is beyond the reach of typical incomes, and then rent is high so people get locked into high rent cycle making saving for the down payment near impossible.

Re: real estate prices in Canada sustainable?
 

I understand, it drives the market up, the high property prices mean those with income and property to secure against can buy rentals, and guarantee them being filled and with a good return on their investment, and the lower section of the market is secured in to the rental market rather than with first time buyers..

its not fair, but then what is ??

The bulk of the population that votes is sensitive to the perceived value of their property and don't want a down turn, so successive governments do what they can to prop up markets or limit the effect of correction when they can.. they'll only react when they have a shortage of affordable accommodation, not when its about if you own or rent ... they leave that to the market ... and that like any market is controlled by who has the dollars to influence it ...

so your stuck with a short commute and high rent, or long commute and low rent/ own ??
or if you have lots of money desirable out of town property in scenic location and long commute, but offset by knowing your rentals are paying for your commute and new big house
a similar problem the world over with the big cities ...

Re: real estate prices in Canada sustainable?
 

Or in the case of BC, high rent no matter where you go really, only places with cheap rent tend to have no employment anymore, reason the rent is cheap...lol

Re: real estate prices in Canada sustainable?
 

I guess that at least has some reason behind it given that a large volume of people want to be in the GTA. What I don't get is how it is happening in Halifax and how Halifax has suddenly gone from a buyer's market in most areas to a sellers market. There aren't throngs of people arriving from Toronto or Vancouver, or even Alberta; nor are they arriving moneyed up from rural Nova Scotia. As far as I recall, the net immigration figures were about the 2,200 mark last year, so we are not, as some locals suggest, being invaded by the Chinese.

The only source of people I can see who may be buying are those who have had enough of rent going up. The same apartment I am in, with new workstops, cupboard doors and a silver fridge is $350 more per month than what I am paying. Of course, as Jsmith pointed out, how some of them get the deposit together is another matter.

I can't see how it is sustainable here.

Re: real estate prices in Canada sustainable?
 

This did take me somewhat by suprise, wanting to settle in BC I'd researched property prices - but had never really looked into rentals until COVID hit - as my initial thoughts had simply been to air bnb and then buy fairly soon after. I was a little taken aback compared to rental prices in Saskatoon, compared to say Kelowna/Kamloops -and when you got to smaller towns it was even worse.

Re: real estate prices in Canada sustainable?
 

Back about 10 years when the prices in Vancouver suddenly surged, people were accusing "immigrants" for causing the huge demand, especially those coming from Asia. That's when we suddenly became "paper millionaires" because our tiny 70 year old house increased incredibly in value of the land (house worth almost zero). I hasten to add that we are no longer "paper millionaires" as the land values have dropped dramatically in the last 4 years.

However, when a formal study was done of new home buyers ............ the "immigrants proved to be largely from "back east", ie Ontario, escaping from the winters.

I know Halifax fairly well, and I would question your comment that there are not throngs of people arriving from other areas of Canada. I don't see what you base that statement on. But I would postulate that many of these incomers are from other parts of Canada, or people who have saved for years, possibly managed to sell their starter home for more than they paid for it, and thus have a decent down payment.

Remember also that Maritimers are very close knit families, much closer than anything I've ever known in any other community, and people help out their families in all sorts of way.

As for cars appearing on the drive as soon as the house is ready ........... if Halifax is the same as here (and I think it probably is), most developments will have been at least 50% pre-sold before the ground was broken. Here, pre-sold can occur up to 5 years before the first housing is available for move-in. A couple could put down a very low down payment on a house to be ready in 4 years time, for example, and have ample time to gather together all the money they need, including money from family.

This is where developers here are having problems at the moment .......... they are not selling sufficient pre-sold units or houses to enable them to get the loans they need to do the actual development. One industry person said that many developers needed to pre-sell well over 50% before they could even begin to apply for the massive loan(s) they required to proceed. There are a number of apartment and office building developments that are currently on the back burner.

Depending on when you arrived in Haliofax ........... those houses would have been advertising and selling before you arrived.

I do know for a fact that architects were busier 3-6 years ago than they were at the end of 2019 (I'm ignoring 2020!!).

Re: real estate prices in Canada sustainable?
 

Eventually the federal government and provincial government in BC are going to have to deal with housing problem.

Re: real estate prices in Canada sustainable?
 

Gotcha. I thought it was something like leasehold land.

I know some realtors do rentals in BC, but doesn't seem super common, at least at our rent range.


The basic collapse of the Airbnb market in Vancouver seems to have a led to a flood of short term rental listings for furnished apartments, some of which the people renting out don't understand the tenancy laws and asking for things like 6 months rent upfront, or first and last month rent, neither of which are allowed in BC, not that there is a super huge demand for furnished places to begin with, interesting times.

Re: real estate prices in Canada sustainable?
 

Could be useful for anyone arriving from overseas that need to self isolate / quarantine for 2 weeks :D

Re: real estate prices in Canada sustainable?
 

I would hazard a guess that foreign buyers account for some of that. With the Non Resident Tax that foreign buyers have to pay in the GTA its very expensive for them to buy. But in NS they can still invest and get a return in their money.

Re: real estate prices in Canada sustainable?
 

Our old apartment isn't listed yet, but there are 2 other units in the same building currently listed for 2,400 a month and 2,900 per month, so I figured our old place will rent somewhere in that range. We were paying 1,750 per month.

Rent's climb so quickly in Vancouver, having a tenant stay more than a year ends up costing the landlord a fair bit of money, they can't raise rent on existing tenants to market rent as rent increases are capped.

Re: real estate prices in Canada sustainable?
 

I suppose this plays a role as well as well.

https://financialpost.com/pmn/busine...gh-real-estate

" $5 billion was laundered through British Columbia’s real estate market in 2018 comes as no surprise to experts, as Canada’s weak money-laundering laws make it an attractive spot to park ill-gotten cash."

Compared to the US, Canada is money laundering heaven for criminals.

Re: real estate prices in Canada sustainable?
 

not just criminals, even when i was in Canada the Vancouver real-estate market was seen by many as stable with a long term growth trend, so it had become a home for overseas investors who were based in less stable countries, putting there cash into BC bricks and mortar rather than there domestic banks..
but then again before it was illegal, the local BC weed economy was supposed to be generating an income similar to that of Telus... that too is a lot of money that silently slipped into the economy under the books

Re: real estate prices in Canada sustainable?
 

Another property boom?

https://cimg9.ibsrv.net/gimg/british...b7a7410f2.jpeg

Re: real estate prices in Canada sustainable?
 

There goes the neighbourhood. I say hard no, pump the brakes on that right away. We already have too many nazis.

Re: real estate prices in Canada sustainable?
 

California centric, but they face similar housing issues there as BC faces and I thought was fairly interesting. This was from 2015 so likely is even worse now vs 5 years ago as costs have continued to rise at rates higher than wages.

https://cimg6.ibsrv.net/gimg/british...b1f081099.jpeg
"40 percent of those born in 1960 owned a home at age 30 where only 27% of those born in 1980 owned a home at age 30."


"a household headed by a 30 year old born in 1960 spent, on average, 33 percent of its income on housing, compared to 37 percent for a household headed by a 30 year old born in 1980."

https://cimg9.ibsrv.net/gimg/british...1aca4266e.jpeg




https://lao.ca.gov/LAOEconTax/Article/Detail/120


From what some realtors say, seems a good chunk of younger buyers have significant help from parents/family, which makes sense, we know a few people who worked for everything blah blah, but mommy and daddy bought their house for them, or provided a huge down payment.....:lol: