Housing Bust 2017

Leveraging, renting vs owning, making an investment or buying a home?
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Mordko
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Re: Housing Bust 2017

Post by Mordko » 05 Aug 2017 21:57

Can't predict short term changes. Over 10/20 years, the probability is high that prices will revert to the trend. Right now we are way above the trend.

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Re: Housing Bust 2017

Post by FI40 » 18 Aug 2017 16:27

SkaSka wrote:
04 Aug 2017 19:07
I'm surprised that as real estate sales start to slow down in Toronto and, to a smaller extent, Vancouver, that there is little discussion in this thread?

Is the bust finally unfolding?
It certainly looks ominous for anyone thinking of selling in Toronto right now. I also assumed there would be some more discussion here. Maybe everything that needed to be said has already been said, and people are just waiting to see if it's the start of a bust or just a hiccup on the way higher. Agree with the other posters that predictions are pointless - the last several years could serve as a lesson to that effect.

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Re: Housing Bust 2017

Post by nisser » 18 Aug 2017 16:36

There's been some unpublished data posted at the http://www.greaterfool.ca/ blog.
Essentially, it sounds like there's been a 20-30% drop in sale price since the peak early this spring. If really true, once becomes public and unspinnable in a positive way by TREB, the carnage will truly start

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Re: Housing Bust 2017

Post by hamor » 19 Aug 2017 09:45

I heard in northern GTA the drop is around 15%
As long as Chinese continue to bring money here 'by the suitcase', the madness will continue.
I have no clue what is going on in China and what are the underlying conditions, so I can't even hazard a guess wrt the future ... If I had to, I'd say the prices will go higher, may be now, may be few years down the road, but they will.

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Re: Housing Bust 2017

Post by CROCKD » 25 Aug 2017 10:15

A Reuters report about the Toronto housing market.
Price slump, tight cash
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Re: Housing Bust 2017

Post by big easy » 07 Dec 2017 20:36

Interesting article in the G&M about money laundering in BC Casinos and speculation that it has helped fuel the real estate boom.

https://www.theglobeandmail.com/opinion ... e37252702/
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Re: Housing Bust 2017

Post by randomwalker » 09 Dec 2017 17:56

big easy wrote:
07 Dec 2017 20:36
Interesting article in the G&M about money laundering in BC Casinos and speculation that it has helped fuel the real estate boom.

https://www.theglobeandmail.com/opinion ... e37252702/
Here in Kitchener I've just seen the house two doors down sell for twice the purchase price of six years ago. No foreign money nor money laundering involved. Completely inexplicable from where I stand.

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Re: Housing Bust 2017

Post by Mordko » 10 Dec 2017 18:59

Foreign money is involved though. Prices in Kitchener went up as a result of spillover from GTA. The question is how much of the rise is due to foreign money. There is no statistics to prove the case one way or another but my wild guess - foreign money played a huge role. And its a good thing.

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Re: Housing Bust 2017

Post by ig17 » 10 Dec 2017 20:26

Mordko wrote:
10 Dec 2017 18:59
Foreign money is involved though. Prices in Kitchener went up as a result of spillover from GTA. The question is how much of the rise is due to foreign money. There is no statistics to prove the case one way or another but my wild guess - foreign money played a huge role. And its a good thing.
It's a good thing? Would you tell that to the face of the 20/30-something Canadians who are stuck in mom's/pop's basements? Or are stuck paying rent in crappy apartments?

Young Canadians are forced to compete for housing with foreign millionaires. You will never convince me that this is a sensible public policy.

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Re: Housing Bust 2017

Post by CROCKD » 10 Dec 2017 20:45

Mordko wrote: And its a good thing.
?????

Try telling that to one of my children who is trying to establish a place for himself and his young family in the GTA.
Meanwhile the other one is already well settled in the Kitchener area.
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Re: Housing Bust 2017

Post by AltaRed » 10 Dec 2017 20:55

IMO, housing use should be limited to shelter, not speculative investment. We would all be better off as a society.
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Re: Housing Bust 2017

Post by adrian2 » 10 Dec 2017 21:19

AltaRed wrote:
10 Dec 2017 20:55
IMO, housing use should be limited to shelter, not speculative investment. We would all be better off as a society.
And who, pray tell, would provide rental units? The benevolent state, who knows best?
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Re: Housing Bust 2017

Post by Mordko » 10 Dec 2017 21:25

"Would you tell that to the face of the 20/30-something Canadians who are stuck in mom's/pop's basements?"

No I wouldn't. 20/30-something Canadians living in mom/pop's basements tend to be too doped up to have a meaningful conversation.

However I certainly support us stopping export of oil to make gas cheaper for poor 20/30 basement dwellers. And in general anything that brings money into Canada is a bad thing because it makes Canadian things more expensive for lazy so-and-sos who can't be bothered to get their backside off and get a proper education and/or a job.

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Re: Housing Bust 2017

Post by AltaRed » 10 Dec 2017 21:28

adrian2 wrote:
10 Dec 2017 21:19
AltaRed wrote:
10 Dec 2017 20:55
IMO, housing use should be limited to shelter, not speculative investment. We would all be better off as a society.
And who, pray tell, would provide rental units? The benevolent state, who knows best?
The private market, with the appropriate cap rate. Nothing stops anyone from being a landlord given the right capital/rent ratios. The problem is that it seems too many people think there has to be rampant capital appreciation above and beyond CPI to be a successful landlord.

There are many places in Canada where housing price appreciation is subdued meeting rental market needs and it works perfectly well.
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Re: Housing Bust 2017

Post by Mordko » 10 Dec 2017 21:32

adrian2 wrote:
10 Dec 2017 21:19
AltaRed wrote:
10 Dec 2017 20:55
IMO, housing use should be limited to shelter, not speculative investment. We would all be better off as a society.
And who, pray tell, would provide rental units? The benevolent state, who knows best?
Indeed. There have been quite a few places without "speculative investment". And those states did provide accommodation. Society is so much better off when the state looks after people who are either equally poor or in the GULag.

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Re: Housing Bust 2017

Post by ig17 » 10 Dec 2017 21:48

Yes, these are the only two policy choices we have:

State-owned housing
OR
Let foreign money in without any restrictions

There are no other options available in between.

Can't afford a house in your own country? Too bad, you must be a pothead. There is no other explanation.

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Re: Housing Bust 2017

Post by deaddog » 10 Dec 2017 22:32

CROCKD wrote:
10 Dec 2017 20:45

Try telling that to one of my children who is trying to establish a place for himself and his young family in the GTA.
Meanwhile the other one is already well settled in the Kitchener area.
What in your opinion is the difference? Is it just the location or do things like education, job opportunities and life style choices come into play.
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Re: Housing Bust 2017

Post by Mordko » 10 Dec 2017 22:33

There is no "right" to own a house in downtown Toronto or Vancouver or anywhere else for anyone. Just like there is no right to own a Lexus or a helicopter. These are life choices, the things you earn if you put in the effort. Of course, people born in Canada, already have a huge advantage over an average person but sometimes it makes them lazy and then they support protectionism.

As for bans on foreigners buying houses; it has been tried in lots of places and has been a bad policy in every single one of them. Money finds the way in anyway but everyone loses in the process.

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Re: Housing Bust 2017

Post by AltaRed » 10 Dec 2017 23:03

Mordko wrote:
10 Dec 2017 21:32
adrian2 wrote:
10 Dec 2017 21:19
AltaRed wrote:
10 Dec 2017 20:55
IMO, housing use should be limited to shelter, not speculative investment. We would all be better off as a society.
And who, pray tell, would provide rental units? The benevolent state, who knows best?
Indeed. There have been quite a few places without "speculative investment". And those states did provide accommodation. Society is so much better off when the state looks after people who are either equally poor or in the GULag.
Small town Canada almost everywhere has had an adequate supply of rental housing stock (provided by private enterprise) without RE prices exceeding CPI. My old home town has done quite well for the past 50 years in this area. There does not need to be 'real' housing capital appreciation (above inflation) to make rental housing a profitable investment for the investor. If a landlord cannot make that model work, it is my view they don't have what it takes to be in investment real estate.
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Re: Housing Bust 2017

Post by Shakespeare » 10 Dec 2017 23:18

Small town Canada almost everywhere has had an adequate supply of rental housing stock
But not of jobs, particularly highly educated ones.
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Re: Housing Bust 2017

Post by ig17 » 10 Dec 2017 23:19

Mordko wrote:
10 Dec 2017 22:33
There is no "right" to own a house in downtown Toronto or Vancouver or anywhere else for anyone. Just like there is no right to own a Lexus or a helicopter. These are life choices, the things you earn if you put in the effort. Of course, people born in Canada, already have a huge advantage over an average person but sometimes it makes them lazy and then they support protectionism.
There is also no "right" to bring millions of dollars into Canada, no questions asked. We have laws in place to prevent money laundering. They are not being enforced. At all. That would be a good place to start.

Mordko wrote:
10 Dec 2017 22:33
As for bans on foreigners buying houses; it has been tried in lots of places and has been a bad policy in every single one of them. Money finds the way in anyway but everyone loses in the process.
Your claim is debatable but it's a straw man anyway. No one is talking about an outright ban on foreign ownership (except you). A lot can be done through taxation, enforcement of existing rules, and closing a few loopholes. Ontario introduced 15% tax on foreign buyers, but deliberately left an inexcusable loophole for foreign students.

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Re: Housing Bust 2017

Post by Mordko » 10 Dec 2017 23:31

AltaRed wrote:
10 Dec 2017 23:03
Mordko wrote:
10 Dec 2017 21:32
adrian2 wrote:
10 Dec 2017 21:19


And who, pray tell, would provide rental units? The benevolent state, who knows best?
Indeed. There have been quite a few places without "speculative investment". And those states did provide accommodation. Society is so much better off when the state looks after people who are either equally poor or in the GULag.
Small town Canada almost everywhere has had an adequate supply of rental housing stock (provided by private enterprise) without RE prices exceeding CPI. My old home town has done quite well for the past 50 years in this area. There does not need to be 'real' housing capital appreciation (above inflation) to make rental housing a profitable investment for the investor. If a landlord cannot make that model work, it is my view they don't have what it takes to be in investment real estate.
So? This is what some people call "market forces". And one can grumble all he likes. Also about gravity.

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Re: Housing Bust 2017

Post by Mordko » 10 Dec 2017 23:40

ig17 wrote:
10 Dec 2017 23:19
Mordko wrote:
10 Dec 2017 22:33
There is no "right" to own a house in downtown Toronto or Vancouver or anywhere else for anyone. Just like there is no right to own a Lexus or a helicopter. These are life choices, the things you earn if you put in the effort. Of course, people born in Canada, already have a huge advantage over an average person but sometimes it makes them lazy and then they support protectionism.
There is also no "right" to bring millions of dollars into Canada, no questions asked. We have laws in place to prevent money laundering. They are not being enforced. At all. That would be a good place to start.

Mordko wrote:
10 Dec 2017 22:33
As for bans on foreigners buying houses; it has been tried in lots of places and has been a bad policy in every single one of them. Money finds the way in anyway but everyone loses in the process.
Your claim is debatable but it's a straw man anyway. No one is talking about an outright ban on foreign ownership (except you). A lot can be done through taxation, enforcement of existing rules, and closing a few loopholes. Ontario introduced 15% tax on foreign buyers, but deliberately left an inexcusable loophole for foreign students.
Let me explain the inexplainable and excuse the inexcusable... After the oil price collapse, the Canadian economy has held up only thanks to the boom in the Vancouver/GTA housing market. Now they are taxing Chinese in Toronto, it's Montreal. Stopping the flow of foreign money into the country is worse than inexcusable. It's dumb. And taxation on foreigners buying property is, among other things, discriminatory and therefore unfair.

I agree that there is a problem when foreign millionaires buy a house here and then send their families who don't work but get free schooling and healthcare, etc... But that has nothing to do with housing.

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Re: Housing Bust 2017

Post by ig17 » 11 Dec 2017 00:11

Mordko wrote:
10 Dec 2017 23:40
Let me explain the inexplainable and excuse the inexcusable... After the oil price collapse, the Canadian economy has held up only thanks to the boom in the Vancouver/GTA housing market.
a. Citation needed. This is the first time I hear this claim.
b. Canadian economy is over-reliant on housing. We need to diversify away from housing, just like Alberta needs to diversify away from oil.

Mordko wrote:
10 Dec 2017 23:40
Now they are taxing Chinese in Toronto, it's Montreal. Stopping the flow of foreign money into the country is worse than inexcusable. It's dumb.
Repeating the same claim over and over and over again doesn't explain the inexplainable and excuse the inexcusable.

Mordko wrote:
10 Dec 2017 23:40
And taxation on foreigners buying property is, among other things, discriminatory and therefore unfair.
BC and Ontario introduced taxes on foreign buyers. They are lawful and highly popular. You think they are discriminatory and unfair? Most people in BC and Ontario don't seem to agree with you.

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Re: Housing Bust 2017

Post by Mordko » 11 Dec 2017 00:23

Sorry, didn't realize you need help with Googling. Here: http://www.huffingtonpost.ca/2017/04/28 ... 10158.html.

"Popular" and "legal" isn't the same as "fair" or "good for the economy". Often its the exact opposite.

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