Housing Bust 2014

Leveraging, renting vs owning, making an investment or buying a home?
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Beezy
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Housing Bust 2014

Post by Beezy »

Well, there has been a housing bust thread dating back to 2009.

Will 2014 be the year?


"Condominium apartments on both sides of Vancouver saw their assessments slip. A two-bedroom downtown apartment saw its 2014 assessment slide to $543,000 in 2014 from $567,000 in 2013, a two-bedroom east-side apartment dropped to $364,000 in 2014 from $383,000 in 2013 and a west-side two-bedroom declined to $571,000 in 2014 from $599,000 in 2013."

Read more: http://www.vancouversun.com/business/Ki ... z2pYqIKXRv
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Re: Housing Bust 2014

Post by gsp_ »

Is the Canadian Miracle a Postponed Reckoning?
The Canadian economy seems to be rolling over. The big question is whether this will prove to be a controlled softening. Or does the Canadian miracle of the past few years merely represent a postponed reckoning with severe imbalances set to be painfully put right
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Re: Housing Bust 2014

Post by kcowan »

A rent versus buy scenario from the Khan Academy:
Why rent?

This is US where mortgage is deductible so even more compelling in Canada.
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Re: Housing Bust 2014

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Re: Housing Bust 2014

Post by mr_l »

I'm in Vancouver, and for what it's worth, things don't feel like we're on the verge of a burst. Lots of new construction or renos everywhere I go, sale signs go up and sold sticker slapped on a few weeks later. It's not the manic no-condition multiple offer market from a couple years ago, but definitely a sense of optimism has returned. I rent, would love to own a 3 bed 2 bath detached house with yard in Kitsilano for $400,000 but apparently that's unrealistic by about $1M.
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Re: Housing Bust 2014

Post by sydney2 »

Our Daughter's condo has been up for sale since early Dec. her agent says things are slow in Burlington we are hoping it sells soon. Location is near the lake (Burlington) well cared for Building and is 1080 sq. ft.....a bargain compared to out West or Toronto.
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Re: Housing Bust 2014

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poedin
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Re: Housing Bust 2014

Post by poedin »

Anecdotal - on my street (Kleinburg area) four homes went on sale the week following Labour Day 2013. None sold until asking prices dropped 6-8% and some changed realtors (& others probably relisted their contracts) - first one sold after 2.5 months and the last one sold last week. Fairly typical since last spring (there's one around the corner still on sale since last June), but the area still reports DOMs 25 to 30 days according to a local agent who advertises these numbers (according to TREB) every month.
Two families moved because they can no longer afford to live here (debts, property taxes, lifestyles), another now empty-nesters, fourth early retirement and moving to the Niagara area (and "away from the grittiness of the GTA"). Still many homes are being renovated and other demolished for new mansions dwarfing existing homes and styles. Typically these are the neighbours you never see - drive into their garages and disappear. :(
Otherwise in the GTA - don't know, but there's always new subdivisions (two now in Nashville-Kleinburg, anothers in Nobleton and King City) and lots of condo towers popping up down in Vaughan on the border with north Toronto. So much for preserving the Greenbelt/Oak Ridge Morraine. :cry: :cry:
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Re: Housing Bust 2014

Post by CROCKD »

When developers don't get what they want at first cut they go running to the OMB which invariably over rules any local bylaws or community interests. This abomination of an appointed body should be abolished. (Just as should the monopoly beer store owned by the world's three largest beer conglomerates) But don't expect the Ont. Liberal Government to do anything about it.
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Re: Housing Bust 2014

Post by randomwalker »

“Give me a one-handed economist,” Harry S. Truman

Worth watching,

"...if we look at current interest rates... house prices are 6% undervalued. Our 10% overvaluation does depend on interest rates increasing over the next few years." Diana Petramala TD Economics

http://watch.bnn.ca/#clip1067543
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poedin
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Re: Housing Bust 2014

Post by poedin »

CROCKD wrote:When developers don't get what they want at first cut they go running to the OMB which invariably over rules any local bylaws or community interests. This abomination of an appointed body should be abolished. (Just as should the monopoly beer store owned by the world's three largest beer conglomerates) But don't expect the Ont. Liberal Government to do anything about it.
RANT: Our "community" falls under the jurisdiction of Vaughan, where our city council and staff will not offer any support to existing residential ratepayers groups in conflict with developers and their clique - who, in turn, know full well that they can rely on the one-sided decisions of the development-at-all-costs minded OMB. Most of our council members (including the local MPP and MP) political campaigns are largely funded by this clique. Neverending amendments to the official city /regional / Greenbelt plans and acts.
Residents may constantly complain about the growing pains and results associated with rampant development, yet ultimately it does comes down to the mis/informed (and too often ignorant) voter.
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Re: Housing Bust 2014

Post by CROCKD »

Here's a question worth considering. Who will buy your high price property when you are ready to sell? Or who can afford to buy it? This has been asked before but is worth asking again. Not only are we talking about a demographic which is shrinking in numbers but also who do not have the economic means to buy. This will particularly impact single family dwellings in desirable locations being the more high priced real estate.
Rob Carrick:
Think Gen Y will prop up Canada’s housing market? Think again
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Re: Housing Bust 2014

Post by Glen »

CROCKD wrote:Here's a question worth considering. Who will buy your high price property when you are ready to sell? Or who can afford to buy it?
I enjoy reading Garth Turner's blog: http://www.greaterfool.ca I don't buy into everything he writes (I do, after all, own a condo in Toronto) but his comparisons of renting vs. buying are certainly thought-provoking. I do believe his accounts of the real estate industry misstating stats and hyping real estate in general.
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Re: Housing Bust 2014

Post by squid »

An elderly family member sold their property, invested and rented. There are several tax problems with the maneuver that people should consider. The home and its' imputed rent was not included in assessing availability of government programmes (GIS, MSP, Transit pass, Pharmacare, etc.) while the investment income is. Home ownership is definitely encouraged in the various government programmes in its' ability to 'hide' assets and income (home value and imputed rent).

As well, GT in the blog is disingenuous. How can he on one hand correctly point out that the gross rent in definitely not the net rent income, but then conveniently tax the income fully without offsetting the expenses he himself identifies? Some tax expert...
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Re: Housing Bust 2014

Post by SkaSka »

GTA home prices tell tale of 2 cities: condos vs. family homes

Too many condos, not enough single-family detached homes.

And because of the condo oversupply in Toronto...

Condo prices in GTA likely to fall about 8% over next 2 years: report
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Re: Housing Bust 2014

Post by Flaccidsteele »

There have been "studies" forecasting the decline in price of Toronto condos for half a decade now. We'll see if they get it right this time.

They should save their money instead of wasting it on these "reports". I guess somebody needs a job writing these things.
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Re: Housing Bust 2014

Post by randomwalker »

SkaSka wrote:GTA home prices tell tale of 2 cities: condos vs. family homes

Too many condos, not enough single-family detached homes.

And because of the condo oversupply in Toronto...

Condo prices in GTA likely to fall about 8% over next 2 years: report
Opinions from economists who are employed by companies, in this case TD-Canada Trust, that are up to their eyeballs in the residential real estate and mortgage business are not worth the time it takes to read them due to the obvious inherent conflicts of interest. I think for a big five bank economist to speak with total freedom they would have to pull a "Jeff Rubin."
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Re: Housing Bust 2014

Post by Flaccidsteele »

Canada's Home Prices Jump Most In 20 Months
OTTAWA — Canadian housing prices rose by 0.3% in January, the biggest jump for 20 months, on strong gains in the western Prairie region, Statistics Canada said on Thursday. The increase — greater than the 0.1% advance forecast by market analysts — was the largest since the 0.3% gain seen in May 2012. Prices in the metropolitan region of Calgary, the capital of Canada’s oil industry, jumped by 1.3% from December on higher material and labor costs as well as market conditions.
http://business.financialpost.com/2014/ ... 20-months/
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Re: Housing Bust 2014

Post by patriot1 »

Terrible headline and writing. It's only halfway through the article that it's explained that the StatsCan index is actually for new detached houses only.
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Re: Housing Bust 2014

Post by parvus »

Flaccidsteele wrote:There have been "studies" forecasting the decline in price of Toronto condos for half a decade now. We'll see if they get it right this time.

They should save their money instead of wasting it on these "reports". I guess somebody needs a job writing these things.
Or explaining how condos, what with maintenance costs, are not a sensible alternative to renting.

Condos are to homes as (most) mutual funds are to ETFs, with ongoing trailer fees.
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Re: Housing Bust 2014

Post by Flaccidsteele »

parvus wrote:
Flaccidsteele wrote:There have been "studies" forecasting the decline in price of Toronto condos for half a decade now. We'll see if they get it right this time.

They should save their money instead of wasting it on these "reports". I guess somebody needs a job writing these things.
Or explaining how condos, what with maintenance costs, are not a sensible alternative to renting.
Depends on how an individual defines 'sensible'. Some some point to the net worth of homeowners being, in general, far greater than those of renters as being 'sensible'.
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Re: Housing Bust 2014

Post by randomwalker »

Flaccidsteele wrote:
Depends on how an individual defines 'sensible'. .
Given that the price of houses is rising far faster than incomes or rents one must ask what is a "sensible" percentage of one's income that should be used to house one's self and family? As long as people are willing to spend an increasing number of hours, days, weeks and years of their life to purchase a house then prices will continue to rise. Perhaps we can push prices to the point where multi generational mortgages are required I just don't know. When talking about the purchase of equities in the stock market we like to talk about price to earnings ratios so we can gauge weather a stock is cheap or expensive, a buy or a sell. For me the most valuable commodity we have as humans is time have therefore I think we need to talk about an earnings to price ratio as in how much of your earnings and therefore your time are required to purchase or own a particular home. Each person I suppose will answer that question differently as for me it's as little as possible. "Time as they say waits for no man." What value to be house rich but time and cash poor?
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Re: Housing Bust 2014

Post by adrian2 »

randomwalker wrote:Perhaps we can push prices to the point where multi generational mortgages are required I just don't know.
Like 100 year mortgages in Japan and Europe?
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Re: Housing Bust 2014

Post by patriot1 »

Flaccidsteele wrote: Some some point to the net worth of homeowners being, in general, far greater than those of renters as being 'sensible'.
The net worth of stock holders is also far greater in general than that of non stock holders.

Nobody on this forum would take that as a "sensible" argument for buying any given stock at its current market price.
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Re: Housing Bust 2014

Post by Flaccidsteele »

patriot1 wrote:
Flaccidsteele wrote: Some some point to the net worth of homeowners being, in general, far greater than those of renters as being 'sensible'.
The net worth of stock holders is also far greater in general than that of non stock holders.

Nobody on this forum would take that as a "sensible" argument for buying any given stock at its current market price.
Nobody buying real estate would say that they are buying any given property.

If the volume on the various stock exchanges can be believed it appears that at least a small handful of people believe that it is "sensible" to be "buying any given stock at its current market price".
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