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Thread: House Prices - due to tumble?

  1. #501

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    It seems to me that houses in the Edmonton area are on the market longer than usually.
    Gone............................and very quickly forgotten may I add.

  2. #502

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    Sellers offer trips, freebies as Calgary condos sit empty - Calgary - CBC News


    'We aren’t even half-way through this because of the fact that they haven’t quit building yet'


    http://www.cbc.ca/beta/news/canada/c...ives-1.4100985

  3. #503
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    I cannot argue with...

    "We're in for a long ride in Calgary and Edmonton. And I just think that speculators are really being shown to not have a Plan B, and investors are doing incredibly well, because they've had a plan B – i.e. rent it out."

    Or...

    "It's an inevitable cycle. We get the boom-bust. We all know it. We've got the bumper stickers to prove it. But this is a pretty major cycle and it's going to take some time to resolve."

    However, as to what part of the stagnation/price increase/correction/stagnation cycle we'll see next is up for debate. I suspect that if the current economic trend continues we'll see a period of no growth. Of course if a number of condo owners blink and lowered asking prices that could start a correction; on the other hand, if OPEC members blink and raise oil prices that economic stimulus could trigger renewed activity in the real estate market.

    For the sake of clarification I distinguish a difference between a price drop and a loss in value brought about by inflation over a period of time.

    I agree that no one can predict the future, but it's not too hard to interpret the historical cycles connected to oil prices. People can make decisions based on their interpretations and as long as oil remains a key player in the energy market those interpretations shouldn't be too far off the mark.
    ˙
    ...From this ragged handful of tents and cabins one day will rise a city...

  4. #504

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    I think a risk approach might be useful. Apply different scenarios, plausible and implausible. Then I feel people would automatically make adjustments for the most plausible situations in their mind. The implausible scenarios are useful for helping recognize high risk issues as they approach (the implausible starts to become plausible).*

    If you buy a condo or house can you maintain ownership if it's price falls? Is a 5% real price drop ok? How about a 10%, or 25% or 50-75% drop? Some people will dump their property even though they have the cash flow to retain it. They were in in just for the capital gains.

    Can you restrain ownership I'd you are single and you loose your job or have a disabling accident? As a couple? A divorce occurs? Or some family issues arises and say a child or relative somehow forces a sale?

    What if interest rates rise by the mortgage reset date? To 5%, 10%, 20%?

    *eg. Some event occurs that brings forward a reality and extreme severity of near imminent life extinguishing global warming. Unless most oil and coal production is halted within the decade... or a wonderful new and dirt cheap battery technology appears out of the blue... or war... plague...
    Last edited by KC; 13-05-2017 at 03:48 PM.

  5. #505

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    A lot of people paid top dollar for some shady construction .

  6. #506

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    In Home Capital’s Mortgage Mess, Blame the ‘Unlucky’ Brokers - Bloomberg

    Excerpt:
    “You will always be behind as a regulator," said Thorsten Koeppl, an associate professor in the economics department at Queen’s University in Kingston, Ontario. “You’re being outsmarted by the marketplace. We can’t avoid a crisis. But what we’ve learned from 2008 in the U.S. is how to deal with the crisis. And that’s what we can take away."...

    "As part of his research, he speaks almost daily with brokers.

    “One thing that always surprises my U.S. clients is how prevalent these broker fraud examples are in Canada because it wasn’t until the crash when all the fraud was revealed in the U.S., and we’re not there yet in Canada," Rabidoux said by phone. ..."

    https://www.bloomberg.com/news/artic...nlucky-brokers
    Last edited by KC; 23-05-2017 at 10:05 AM.

  7. #507

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    Toronto Homeowners Are Suddenly in a Rush to Sell - Bloomberg
    Excerpt"
    "Home Capital may be achieving what so many policy measures failed to do: cool down a housing market that soared as much as 33 percent in March from a year earlier. "


    https://www.bloomberg.com/news/artic...s-market-slows

  8. #508

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    Some more Toronto house price trivia.

    Toronto Home Prices Suffer Worst Monthly Decline in 17 Years - Bloomberg

    In March, sales were up 18 percent and the average home price soared 33 percent from the prior year to C$916,567. That began to turn the following month when listings jumped 34 percent. Average prices started cooling in May, rising 15 percent, and then up only 6 percent in June.

    https://www.bloomberg.com/news/artic...s-sales-plunge

    Canadians should be worried about real estate slowdown, says expert - Home | The Current with Anna Maria Tremonti | CBC Radio

    "I think house prices going down doesn't mean that we're going to see a rash of defaults. But I'm worried about the household finances of the nation. People are devoting huge chunks of their cash flow to their mortgage. How are people saving?"

    http://www.cbc.ca/radio/thecurrent/t...pert-1.4211831
    Last edited by KC; 03-08-2017 at 05:45 AM.

  9. #509
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    Canada's Housing Bubble Has Vanished Without a 'Crash Landing," say economists...

    http://www.edmontonjournal.com/canada+housing+bubble+vanished+without+crash+landi ng+economists/14216329/story.html


    Quoted from Article:

    "He [David Rosenberg] believes that if the GTA's declines match what occurred in Vancouver, the correction will probably last little more than a year, "and prove to be a healthy environment (outside of those who bought at to close to the peak.)

    Rosenberg also noted that sales activity is up in non-bubbly areas such as Ottawa, Quebec City, Winnipeg, Edmonton, Regina and Hamilton."


    Imagine that!
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  10. #510
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    I don't know if I'd agree that the bubble has "vanished". A few months of stabilization in prices in the two hottest markets doesn't mean that they aren't still massively over valued or that they've suddenly become affordable to the average person. But that doesn't mean there inevitably has to be a crash, either.

    As usual with real estate market reporting, the media is far too fast and loose mixing up statements about quantities of sales vs. average sale prices. Maybe the reporter understands that difference, but the majority of their readership likely doesn't. And I suspect the media knows that, or at least is aware that a headline of "SALES DOWN 30% IN VANCOUVER LAST MONTH" will get them a lot of hits because many readers will assume that's average prices, and not number of sales.

  11. #511
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    I'd agree about the hyperbolic headline, but what I take from the article is the prediction of a little more moderation and cautious activity in the hotter markets like Toronto and Vancouver.

    I was more interested in the comments of the "non-bubbly" markets, specifically Edmonton, that are showing an increase in activity, considering that this seven year old thread was started to discuss the possibility of tumbling prices in the Edmonton "bubble." We are still in a time of soft oil prices yet our housing market, although somewhat cooler, remains fairly healthy.
    ˙
    ...From this ragged handful of tents and cabins one day will rise a city...

  12. #512

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    It'll be interesting to see how our house prices react now that unemployment is ratcheting up.
    Giving less of a damn than ever… Can't laugh at the ignorant if you ignore them!

  13. #513

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    Quote Originally Posted by BoyleStreetBoy View Post
    Canada's Housing Bubble Has Vanished Without a 'Crash Landing," say economists...

    http://www.edmontonjournal.com/canada+housing+bubble+vanished+without+crash+landi ng+economists/14216329/story.html


    Quoted from Article:

    "He [David Rosenberg] believes that if the GTA's declines match what occurred in Vancouver, the correction will probably last little more than a year, "and prove to be a healthy environment (outside of those who bought at to close to the peak.)

    Rosenberg also noted that sales activity is up in non-bubbly areas such as Ottawa, Quebec City, Winnipeg, Edmonton, Regina and Hamilton."


    Imagine that!
    This reminds me of what the "experts" in the US were saying around 2007 - don't worry, there will be a modest decline to remove some of the speculative excess and then after a brief pause the party will resume, perhaps on a more subdued basis. There will be no crash, because this time it is different - don't worry your pretty little head, sleep tight. Actually, it isn't different this time.

    Inventory is going up a lot in Toronto now, which means an end to panic buying and the bidding wars that were driving up prices. Sooner or later some sellers (those that are more motivated, ie. need to sell) will start to lower their prices. Interest rates are likely to go up, which will make prices more unaffordable for buyers and this time foreign buyers will not be there to quickly rescue sellers, because of the foreign buyers taxes.

    Over a number of years prices have gone up in some markets at a much faster rate than incomes, this is not sustainable in the long run. Mortgage rules have now been tightened, foreign buyers discouraged and interest rates are likely to increase. It took quite a while for the momentum of steadily rising prices to come to an end or be brought to an end, but now that it has the trends favor things going in a different direction for some time.

  14. #514
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    Quote Originally Posted by Dave
    Over a number of years prices have gone up in some markets at a much faster rate than incomes, this is not sustainable in the long run.


    In an era of falling rates, in which we have been up until the last year, it is entirely sustainable. Metrics that focus only on the absolute debt amount vs. income, and not the cost of servicing that debt, are pretty much useless because of that.

    Quote Originally Posted by Dave
    It took quite a while for the momentum of steadily rising prices to come to an end or be brought to an end, but now that it has the trends favor things going in a different direction for some time.


    I don't disagree with you. I think it's likely we'll see a long period of stagnation in home prices as interest rates rise and incomes catch up with debt servicing. But that's not what Hilliard MacBeth and most of our national media have been calling for, for 5+ years now. They've been calling for an outright bust, with prices declining by 20-30% or more almost overnight. But most quotes I've seen of his (I haven't read his book), he seems to completely ignore the economic and financial factors behind the US financial collapse in 2007/8. I mean, we call it a "financial collapse", not a "house price collapse" for a reason. Yes, the US housing market was hugely overpriced, but that's about where the similarities end between our housing market, greater economy and financial system.

  15. #515

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    Quote Originally Posted by Marcel Petrin View Post
    Quote Originally Posted by Dave
    Over a number of years prices have gone up in some markets at a much faster rate than incomes, this is not sustainable in the long run.


    In an era of falling rates, in which we have been up until the last year, it is entirely sustainable. Metrics that focus only on the absolute debt amount vs. income, and not the cost of servicing that debt, are pretty much useless because of that.

    Quote Originally Posted by Dave
    It took quite a while for the momentum of steadily rising prices to come to an end or be brought to an end, but now that it has the trends favor things going in a different direction for some time.


    I don't disagree with you. I think it's likely we'll see a long period of stagnation in home prices as interest rates rise and incomes catch up with debt servicing. But that's not what Hilliard MacBeth and most of our national media have been calling for, for 5+ years now. They've been calling for an outright bust, with prices declining by 20-30% or more almost overnight. But most quotes I've seen of his (I haven't read his book), he seems to completely ignore the economic and financial factors behind the US financial collapse in 2007/8. I mean, we call it a "financial collapse", not a "house price collapse" for a reason. Yes, the US housing market was hugely overpriced, but that's about where the similarities end between our housing market, greater economy and financial system.
    Well the rot starts at the bottom. If home prices are over valued, whether it is due to low interest rates or too easy lending, once those conditions change the asset value will decline and mortgages are financial assets based on the value of the underlying assets (ie. houses). If the value of the underlying asset goes down then it may cause a financial collapse. In the US asset values declined before the financial collapse, so it wasn't just some financial problem detached from reality, one actually led to the other.

    I would argue Canada's financial system is more robust than the one in the US was around 2008, so I don't think a decline in housing prices will likely lead to a financial collapse, but that does not mean house prices won't decline perhaps significantly.

  16. #516
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    Quote Originally Posted by Dave
    If the value of the underlying asset goes down then it may cause a financial collapse. In the US asset values declined before the financial collapse, so it wasn't just some financial problem detached from reality, one actually led to the other.


    In hindsight, the entire US financial system was primed for an implosion. It was just looking for a trigger, which ended up being house prices (which started declining almost 2 years before the actual financial crisis, by the way). No one can reasonably make the same claim about Canada's financial system in general, or the home financing sector in particular. It's night and day. We've already seen one sub-prime lender stumble, sorry I mean "alternative mortgage provider", and the financial system just kind of shrugged.

    Quote Originally Posted by Dave
    I would argue Canada's financial system is more robust than the one in the US was around 2008, so I don't think a decline in housing prices will likely lead to a financial collapse, but that does not mean house prices won't decline perhaps significantly.


    I'm not saying it won't happen, I just don't see it as inevitable as a lot of financial commentators have made it out to be. And comparisons to the US collapse are almost always made without any caveats about how the financial and mortgage systems between the two countries could not be much more different from each other. They just gloss that over like it's irrelevant, when in fact it's central.

  17. #517

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    Quote Originally Posted by Marcel Petrin View Post
    Quote Originally Posted by Dave
    If the value of the underlying asset goes down then it may cause a financial collapse. In the US asset values declined before the financial collapse, so it wasn't just some financial problem detached from reality, one actually led to the other.


    In hindsight, the entire US financial system was primed for an implosion. It was just looking for a trigger, which ended up being house prices (which started declining almost 2 years before the actual financial crisis, by the way). No one can reasonably make the same claim about Canada's financial system in general, or the home financing sector in particular. It's night and day. We've already seen one sub-prime lender stumble, sorry I mean "alternative mortgage provider", and the financial system just kind of shrugged.

    Quote Originally Posted by Dave
    I would argue Canada's financial system is more robust than the one in the US was around 2008, so I don't think a decline in housing prices will likely lead to a financial collapse, but that does not mean house prices won't decline perhaps significantly.


    I'm not saying it won't happen, I just don't see it as inevitable as a lot of financial commentators have made it out to be. And comparisons to the US collapse are almost always made without any caveats about how the financial and mortgage systems between the two countries could not be much more different from each other. They just gloss that over like it's irrelevant, when in fact it's central.
    Housing prices go through cycles and most significant cyclical declines do not lead necessarily lead to a financial crisis. The US in 2007 - 08 was an exception and the financial crisis made the decline in housing prices even worse with an onslaught of foreclosures. In some places prices went down by over 50%.

    However housing prices can still decline significantly (say 15% to 30%) without such a financial crisis. Just because the financial system is fairly robust does not mean housing prices can not go down.

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    My dad keeps remarking on about how Edmonton didn't crater like it did in the 80's. True we didn't see interest rate increases like we did then, but I can see two factors why two things were stagnant instead of disastrous.

    1) Immigration and refugee claims - there's only so many major cities in Canada and Edmonton is one of them and the government is piling them in. Not all of them go to Vancouver and Toronto.

    2) Airbnb - right now there are 1,148 active listings. That's 1,148 less listings on kijiji/rental sites, and it softened the blow to the long term rental market and probably kept some people out of foreclosure/listing on MLS. Sure there were incentives and rental decreases - but it would have been worse here. In booming markets it is wide publicized that these services create a vacancy emergency and governments act accordingly. But, in a soft market, the silver lining is it can help stabilize a shaky market.

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    As an example, the Capilano subdivision has 1,100 dwellings in it - that's like a whole neighborhood (in some cases) in Edmonton off the market in one way or the other.

  20. #520

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    Quote Originally Posted by Downtown View Post
    My dad keeps remarking on about how Edmonton didn't crater like it did in the 80's. True we didn't see interest rate increases like we did then, but I can see two factors why two things were stagnant instead of disastrous.

    1) Immigration and refugee claims - there's only so many major cities in Canada and Edmonton is one of them and the government is piling them in. Not all of them go to Vancouver and Toronto.

    2) Airbnb - right now there are 1,148 active listings. That's 1,148 less listings on kijiji/rental sites, and it softened the blow to the long term rental market and probably kept some people out of foreclosure/listing on MLS. Sure there were incentives and rental decreases - but it would have been worse here. In booming markets it is wide publicized that these services create a vacancy emergency and governments act accordingly. But, in a soft market, the silver lining is it can help stabilize a shaky market.
    Yes, I think the fact interest rates were still going down at the time the economy here slowed down provided most of the cushion. Also, I don't think as many people left Alberta as in the 80's, certainly not homeowners. After all if you sell your home here, you probably can't afford to buy anything comparable in Toronto or Vancouver where the economy was better, so perhaps some people decided to hunker down and wait out the downturn and perhaps supplement their income with Airbnb. Edmonton is not as over priced as Toronto or Vancouver, so I don't think there will be as much of a correction here anyways.

  21. #521
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    Quote Originally Posted by noodle View Post
    It'll be interesting to see how our house prices react now that unemployment is ratcheting up.
    Is it?

    From what I am reading the unemployment rates were affected by a loss of part time jobs, but the full time jobs are on the rise.

    http://edmontonjournal.com/business/...sees-job-gains

    Added to that Edmonton's labour force has increased by 16,000 over the past year...

    http://www.statcan.gc.ca/tables-tabl...fss04k-eng.htm

    And unless those newcomers are taking jobs away from homeowners with mortgages, the impact shouldn't be that severe on house prices.

    I admit I could be misinformed. Can you provide some links that refute what I've read?
    ˙
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  22. #522

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    Quote Originally Posted by BoyleStreetBoy View Post
    Added to that Edmonton's labour force has increased by 16,000 over the past year...

    http://www.statcan.gc.ca/tables-tabl...fss04k-eng.htm

    I admit I could be misinformed. Can you provide some links that refute what I've read?
    Are we reading the same table?



    Population is up 16,000, not the labour force. Labour force is up 5,600 from a year ago, while there's 2,200 fewer jobs, leading to 7,700 more unemployed people in the workforce versus a year ago.
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  23. #523
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    [QUOTE=noodle;843637]
    Quote Originally Posted by BoyleStreetBoy View Post
    Added to that Edmonton's labour force has increased by 16,000 over the past year...

    Population is up 16,000, not the labour force. Labour force is up 5,600 from a year ago, while there's 2,200 fewer jobs, leading to 7,700 more unemployed people in the workforce versus a year ago.
    Okay, I misquoted the population vs labour force. Well spotted! But pointing out my misquote doesn't make you right.

    A 0.9 percent increase in unemployment (according to the links I posted mostly part time jobs) is an indication to you that unemployment is "ratcheting up" in Edmonton?

    That's not what folks like Sharlene Massey, John Rose, or Joe Ceci are saying in the articles I posted. Provide some information that refutes what they're saying.
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    Quote Originally Posted by Downtown View Post
    As an example, the Capilano subdivision has 1,100 dwellings in it - that's like a whole neighborhood (in some cases) in Edmonton off the market in one way or the other.
    That's assuming that all of those are full time air bnbs. Some people do still use them for renting out their homes while they're on vacation, work trips, etc. Recently used one in Calgary where that was the case.

  25. #525

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    Quote Originally Posted by seamusmcduffs View Post
    Quote Originally Posted by Downtown View Post
    As an example, the Capilano subdivision has 1,100 dwellings in it - that's like a whole neighborhood (in some cases) in Edmonton off the market in one way or the other.
    That's assuming that all of those are full time air bnbs. Some people do still use them for renting out their homes while they're on vacation, work trips, etc. Recently used one in Calgary where that was the case.
    I think the unemployment rate here was way higher here in the late 80's and the early to mid 1990's, so while the current rate seems high compared to a couple of years ago it's certainly not at depression levels. There does seem to still be some modest increase in the local population, unlike in the early 80's or early 90's when people were moving away due to the poor economy.

    I would also take the word "full time job" to mean what it says. I think Stats Canada differentiates between employed and self employed. I suppose one could be employed full time if they actually worked for the Airbnb company as an employee, but otherwise I don't think it would be categorized that way.

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    This must be some of that folks like Sharlene Massey, John Rose, and Joe Ceci are using to forecast that employment growth is "ratcheting up" as opposed to taking a downward trend.

    https://www.edmonton.ca/business_eco...ce-survey.aspx

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  27. #527

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    Quote Originally Posted by BoyleStreetBoy View Post
    This must be some of that folks like Sharlene Massey, John Rose, and Joe Ceci are using to forecast that employment growth is "ratcheting up" as opposed to taking a downward trend.

    https://www.edmonton.ca/business_eco...ce-survey.aspx

    There are seasonal and monthly fluctuations, so I am not sure comparing one month to the immediately preceding one is really that meaningful. However, if you compare July 2017 to July 2016, there are approximately 4,000 more people employed in Edmonton.

    I think Mr. Ceci's is probably referring to employment growth across Alberta as he is in the Provincial government, rather than just in Edmonton where it has recently been more modest than elsewhere.

  28. #528

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    Quote Originally Posted by Dave View Post
    However, if you compare July 2017 to July 2016, there are approximately 4,000 more people employed in Edmonton.
    764,300 employed people July 2016
    762,100 employed people July 2017
    --------------
    2,200 less people employed in July 2017 than July 2016.

    Source: The chart BSB linked & I pasted.


    I think Mr. Ceci's is probably referring to employment growth across Alberta as he is in the Provincial government, rather than just in Edmonton where it has recently been more modest than elsewhere.
    Yeah, this.
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  29. #529

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    Quote Originally Posted by noodle View Post
    Quote Originally Posted by Dave View Post
    However, if you compare July 2017 to July 2016, there are approximately 4,000 more people employed in Edmonton.
    764,300 employed people July 2016
    762,100 employed people July 2017
    --------------
    2,200 less people employed in July 2017 than July 2016.

    Source: The chart BSB linked & I pasted.


    I think Mr. Ceci's is probably referring to employment growth across Alberta as he is in the Provincial government, rather than just in Edmonton where it has recently been more modest than elsewhere.
    Yeah, this.
    I was looking at the seasonally adjusted numbers 758.5 vs. 758.1. I realize it rounds to the thousands so 4,000 is not exact, but it is still an increase. I can't cut and paste the actual chart, but it is a link in the document referred to previously.

    https://www.edmonton.ca/business_eco...ugust_2017.pdf

  30. #530

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    In all deference to the City Economist, I'll take the numbers straight from Stats Can over the tweaked set. Let's agree it's basically a wash either way, as the ~6K point spread is negligible when compared to the ~758K total?

    From that report though:

    However, the unemployment rate isunlikely to move much lower than July’s 8.5% value as the local labour force continues to expandand individuals, discouraged by very difficult employment conditions in the second half of 2016,return to the active labour force.
    I don't think it's doom & gloom for house prices or anything, I'm just legitimately curious how they'll react to an unemployment rate that's higher than the national average for a little while, even as jobs are created.
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  31. #531

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    Canada's housing market 'highly vulnerable,' CMHC warns
    Overvaluation detected in some markets, overbuilding in others
    CBC News Posted: Oct 26, 2017

    "Other cities, including Calgary, Edmonton, Regina and St. John's, are also showing evidence ..."

    http://www.cbc.ca/news/business/cmhc...look-1.4373251

  32. #532

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    ^The overbuilding story for Calgary and Edmonton is a bit consistent with what is happening to Reidbuilt homes:



    In Edmonton I think its more a suburb house issue, whereas in Calgary there is an overbuild in condo's in the downtown / East Village.

    https://globalnews.ca/news/3823550/l...y-contractors/

    Numerous contractors and homeowners that opted to work with Edmonton-area builder ReidBuilt Homes are finding themselves in a tough spot financially, with liens being placed against houses in and around Edmonton.

    Richard and Eileen Sherburne moved into their new ReidBuilt home just over a month ago, on Sept. 15.

    They were enjoying their new house when all of a sudden, they started finding pink lien letters in their mailbox.

    “We opened that and said, ‘What?’ And then a couple of days later, four more came and we contacted a lawyer,” Richard said.

    So far, 11 liens have been placed against their home, totalling more than $50,000.
    Last edited by moahunter; 26-10-2017 at 01:33 PM.

  33. #533
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    I like Reid-Built's letter to its subs. "Jeez, sorry we didn't pay you for your previous work, but we're basically out of money and you won't be getting paid for that ever in all likelihood. At best you'll spend as much or more attempting to recover it, and it'll take years. However, if you come finish some other work, we swear we'll pay you for that right away!"

    It's always unfortunate when a company goes broke, but as a trade contractor myself, that letter stinks of bad faith and mismanagement. The number of liens placed against Reid-Built in the last week has been staggering. I haven't bothered totaling them, but it's got to be in the millions. They're taking a lot of other people's money with them as they go down. And asking others to dig with them.

  34. #534

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    Quote Originally Posted by moahunter View Post
    ^The overbuilding story for Calgary and Edmonton is a bit consistent with what is happening to Reidbuilt homes:



    In Edmonton I think its more a suburb house issue, whereas in Calgary there is an overbuild in condo's in the downtown / East Village.

    https://globalnews.ca/news/3823550/l...y-contractors/

    Numerous contractors and homeowners that opted to work with Edmonton-area builder ReidBuilt Homes are finding themselves in a tough spot financially, with liens being placed against houses in and around Edmonton.

    Richard and Eileen Sherburne moved into their new ReidBuilt home just over a month ago, on Sept. 15.

    They were enjoying their new house when all of a sudden, they started finding pink lien letters in their mailbox.

    “We opened that and said, ‘What?’ And then a couple of days later, four more came and we contacted a lawyer,” Richard said.

    So far, 11 liens have been placed against their home, totalling more than $50,000.
    I am thinking the over building in Calgary and Edmonton might be more of a short term cyclical issue related to the economy. It will be resolved by either the economy improving, builders slowing down or some combination of both. The affordability issues in Toronto and Vancouver seem more intractable. I think eventually younger people in the GTA and Vancouver will get tired of living in small apartments and basements and leave. The quailty of life isn't there any more unless you are rich.

  35. #535

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    On the previous page (post 408/409) China’s ghost cities were mentioned.


    Land reclamation etc discussed here. And ‘separating the rich from the poor’:

    Inside Malaysia's Empty New Cities - YouTube

    https://m.youtube.com/watch?v=4Q5BGAksVhk


    JUN 30, 2017 @ 03:01 AM22,000
    China's Most Infamous 'Ghost City' Is Rising From The Desert

    Wade Shepard , CONTRIBUTOR
    https://www.forbes.com/sites/wadeshe.../#2efad3ea6877

  36. #536
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    Quote Originally Posted by Marcel Petrin View Post
    Heh, went back and saw these quotes from myself and Paul over a year ago. Keep cheerleading for impending doom, media!

    Quote Originally Posted by Paul Turnbull View Post
    Quote Originally Posted by Marcel Petrin View Post
    Anyone else get the feeling that most major Canadian media outlets are downright cheerleading for a housing downturn or outright collapse?
    Given the how they opened the year, it'd be pretty embarrassing for them if it didn't crash.

    And we're still waiting 4+ years later.

    I thought this article was a good read about home prices, foreign ownership, and the like: http://www.cbc.ca/news/business/real...ends-1.4460775

  37. #537
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    Quote Originally Posted by Marcel Petrin View Post
    And we're still waiting 4+ years later.
    It seems that the housing market has managed to stay reasonably healthy over the almost eight years since this thread began. It survived all the doom and gloom of the crash four years ago, and survived the ratcheting up of unemployment over the past Summer months.

    What's going on?

    What do we need to precipitate the forecasted drop that's so long overdue? A Zombie Apocalypse?
    ˙
    ...From this ragged handful of tents and cabins one day will rise a city...

  38. #538

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    Apparently property assessment notices are being sent out this week. Should be interesting to see how things are in the scheme of things.

    If you want to know what the property around you is coming in at check here:

    http://maps.edmonton.ca/map.aspx?loo...s\By%20Address
    Gone............................and very quickly forgotten may I add.

  39. #539

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    Quote Originally Posted by Dave View Post
    Quote Originally Posted by moahunter View Post
    ^The overbuilding story for Calgary and Edmonton is a bit consistent with what is happening to Reidbuilt homes:



    In Edmonton I think its more a suburb house issue, whereas in Calgary there is an overbuild in condo's in the downtown / East Village.

    https://globalnews.ca/news/3823550/l...y-contractors/

    Numerous contractors and homeowners that opted to work with Edmonton-area builder ReidBuilt Homes are finding themselves in a tough spot financially, with liens being placed against houses in and around Edmonton.

    Richard and Eileen Sherburne moved into their new ReidBuilt home just over a month ago, on Sept. 15.

    They were enjoying their new house when all of a sudden, they started finding pink lien letters in their mailbox.

    “We opened that and said, ‘What?’ And then a couple of days later, four more came and we contacted a lawyer,” Richard said.

    So far, 11 liens have been placed against their home, totalling more than $50,000.
    I am thinking the over building in Calgary and Edmonton might be more of a short term cyclical issue related to the economy. It will be resolved by either the economy improving, builders slowing down or some combination of both. The affordability issues in Toronto and Vancouver seem more intractable. I think eventually younger people in the GTA and Vancouver will get tired of living in small apartments and basements and leave. The quailty of life isn't there any more unless you are rich.
    Annual immigration is enough to create a new good sized city somewhere in Canada each and every year, year in and year out. And the population growth will never be uniformly distributed so this can sure support or restore rising prices in some cities as long as they can incur or attract some of that population growth.





    Annual Demographic Estimates: Canada, Provinces and Territories: Section 1: Total population
    National portrait
    Population and growth

    On July 1, 2012, Canada's population was estimated at 34,880,500, up 396,500 compared with the same date the previous year. This represents a 1.1 % increase for the year ended June 30, 2012 (2011/2012). This increase was slightly larger than the one observed in the previous year (+1.0 %) and similar to the average increase for the last 30 years (+1.1 %) (see Chart 1.1). Except for the period between 1986 and 1990, when rates exceeded 1.3% including the peak reached in 1988/1989 (+1.8%), this rate has shown little variation in 30 years, ranging between 0.8% and 1.2%.



    ...
    In the last 30 years, the population of the Western provinces—the Prairie provinces and British Columbia—has grown substantially (+49.0%), while the Atlantic provinces have seen their population increase only slightly (+4.4%). By comparison, Canada's population increased by 38.9% during this period. Since 1982, the demographic weight of the Western provinces has increased by 2.1 percentage points, reaching 31.1% on July 1, 2012, compared with a decrease of 2.2 percentage points for the Atlantic provinces (6.8%). In turn, the population of Ontario grew twice as rapidly (+51.4%) as that of Quebec (+22.4%) during this period. Among the provinces, Alberta has recorded the strongest growth since 1982 with an increase of 63.5%.
    ...

    International migration is gaining in importance as an engine of Canada's population growth, and since 1993 it has consistently been the main source of that growth 2 (see Chart 1.3). In 2011/2012, net international migration was responsible for two-thirds of population growth in Canada. By comparison, net international migration 3 accounted on average for 39.2% of population growth between 1982/1983 and 1992/1993. For the year ended June 30, 2012, net international migration was estimated at 267,200, more than double the figure for natural increase (+129,400). ...





    http://www.statcan.gc.ca/pub/91-215-...artie1-eng.htm

  40. #540

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    Quote Originally Posted by BoyleStreetBoy View Post
    Quote Originally Posted by Marcel Petrin View Post
    And we're still waiting 4+ years later.
    It seems that the housing market has managed to stay reasonably healthy over the almost eight years since this thread began. It survived all the doom and gloom of the crash four years ago, and survived the ratcheting up of unemployment over the past Summer months.

    What's going on?

    What do we need to precipitate the forecasted drop that's so long overdue? A Zombie Apocalypse?
    In the 1980s, Alberta was hit with a combined oil price collapse and a rising interest rate environment. People losing their jobs were simultaneously facing rate resets at record high interest rates. Similarly 10 years ago in the US the teaser rates had the same effect to bring forward unsustainable demand and then to crash prices as jobs were lost.

    In the last 10 years we’ve seen interest rates forced down to record lows. Mortgage renewals have redistributed a lot of cashflow from savers to borrowers. There’s been a huge penalty for being a fiscally conservative saver and a huge reward for being the opposite. Low interest rates represent huge spending leverage as long as they can last so they've likely brought forward a lot of leveraged spending that the global collapse would otherwise have scared off and which otherwise may have led to a global depression. Since it’s essentially a managed rate reduction, I’d guess that they’ve essentially just kicked another can down the road in the hopes that growth will outstrip the costs.

    Maybe is just a case of central banks and the Fed throwing a lot of ‘free’ meat at the feet of the zombies to keep them from eating the rest of us and so holding off that apocalypse.






    https://snbchf.com/wp-content/upload...heet-total.jpg




    How Will the Fed Reduce its Balance Sheet? | Investopedia

    “As the Federal Reserve gradually begins tightening monetary policy, its next task is addressing the $4.5 trillion elephant in the room: its swollen balance sheet.

    Beginning in late 2008, the Fed began large-scale purchases of assets such as U.S. treasuries and government-supported mortgage-backed securities (MBS) to stave off a complete collapse of the financial system. For six years, the Fed embarked on this asset purchase program — known as quantitative easing — which kept interest rates at record-low levels in the hope that increased bank lending would spur growth. The effectiveness of the program will never really be known (a counterfactual scenario in which there never was QE cannot be tested), but the financial system in the U.S. did survive a scare of historic proportions. Some will argue QE went on for too long leading to overinflated asset prices, but we leave that debate for another day. (See also: Understanding the Fed's Balance Sheet.)

    ...
    And finally, confirmation. On September 20, 2017, the Fed officially announced lift-off. The unwinding of the balance sheet was underway. The $50 billion per month taper would begin in October, and at this rate, the balance sheet would drop below $3 trillion in 2020 at which point the next discussion will be how big should the Fed's balance sheet remain once tapering is over.

    ...

    https://www.investopedia.com/insight...balance-sheet/
    Last edited by KC; 02-01-2018 at 07:02 PM.

  41. #541
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    They keep saying this, and that condos are hard to sell, yadda yadda blah blah. Ours sold in a week!

  42. #542
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    Quote Originally Posted by KC View Post
    Maybe is just a case of central banks and the Fed throwing a lot of ‘free’ meat at the feet of the zombies to keep them from eating the rest of us and so holding off that apocalypse.
    Whether they're of the apocalyptic or housing market variety, I don't believe in Zombies. Hell, I don't even like The Walking Dead: I find its doom and gloom sensibilities tiresome.

    Stress tests, foreign buyers and higher rates likely to impact housing market in 2018 (A repost of Marcel P's link above)

    http://www.cbc.ca/news/business/real...ends-1.4460775

    My favourite quote from the article: "Canada's housing market has defied the incessant talk of its imminent demise for years" -- Doug Porter, economist BMO.
    Last edited by BoyleStreetBoy; 02-01-2018 at 10:16 PM.
    ˙
    ...From this ragged handful of tents and cabins one day will rise a city...

  43. #543

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    Hmmm

    How over 46,000 wealthy immigrants took a back door into Vancouver and Toronto’s housing markets | Globalnews.ca
    https://globalnews.ca/news/3886743/q...ram-vancouver/

  44. #544

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    Housing market still overvalued in Toronto, Vancouver, despite slowdown in price growth: CMHC | Financial Post

    http://business.financialpost.com/re...ce-growth-cmhc

  45. #545
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    Quote Originally Posted by harrington65 View Post
    Money does not make the world go around, CREDIT does. The Junk bond index JNK (link below) is about to roll over, as it does at the end of the credit cycle. General Electric just found $21 Billion in liabilities it did not realize it had. That stuff starts to happen at this point in the cycle. (Think Enron)
    Lenders will actually start to have standards again, this affects everyone.

    http://stockcharts.com/h-sc/ui?s=JNK...d=p17733999084
    i think you’re making a differentiation that doesn’t exist. credit is money and money is credit. both are a promise by one party to pay some other party an agreed upon “value/amount” of barter equivalency.
    "If you did not want much, there was plenty." Harper Lee

  46. #546
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    ^

    purposely trying to annoy you? i don’t even know you.

    please accept my apologies for letting philosophical facts get in the way of your economic musings to the masses.

    carry on...
    "If you did not want much, there was plenty." Harper Lee

  47. #547

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    Quote Originally Posted by harrington65 View Post
    Excuse me kcantor, are you purposely trying to annoy me. The whole purpose of the credit markets is to transfer money from savers to borrowers. I studied economics, I realize the cash in my pocket is technically a liability, that is why I own a ton of gold and cash (at home)and will short the banks when the time comes. I did not want to get into a philosophical discussion about money. Next time take my point for what it is, instead of giving a lecture.

    I post assuming that most people are not interested in economics and certainly do not WANT TO APPEAR THAT I AM TALKING DOWN TO ANYONE. Ahemm
    That was a lecture?

  48. #548
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    Dear Diary,

    Today people got mad online. An undergrad economics student became very upset when a prominent community member, of whom has been involved in hundreds of millions of dollars worth of development and acquisitions, tried to open a debate and discussion to challenge his thoughts.

    I am conflicted on which opinion to lean towards...
    There was no need to change that plaque. We are the City of Champions.

  49. #549

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    Quote Originally Posted by Stevey_G View Post
    Dear Diary,

    Today people got mad online. An undergrad economics student became very upset when a prominent community member, of whom has been involved in hundreds of millions of dollars worth of development and acquisitions, tried to open a debate and discussion to challenge his thoughts.

    I am conflicted on which opinion to lean towards...
    Love it !!! Best post in ages!!

    However we don’t know the backgrounds of other posters here.

  50. #550

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    I suspect that Canada’s housing market and the high levels of consumer debt won’t cause much of a crisis if things turn down. No one will be surprised and so no big money losses will create a tsunami of panic. Everyone has seen what happened in the global financial crisis ten years ago and everyone has seen how housing markets can collapse. ...and just like the oil price collapse in Alberta a couple years ago, everyone simply adjusted to the reality that bubbles bust.

    Buffett did a great job of explaining risks well before the financial crisis. I’d say that yes once again we are overdo for another reset of reason, but that no major player failure will cause another ‘08/09 panic. The smart money is preparing for what they see as just another slow motion train wreck.



    “...
    History teaches us that a crisis often causes problems to correlate in a manner undreamed of in more tranquil times.

    In banking, the recognition of a “linkage” problem was one of the reasons for the formation of the Federal Reserve System. Before the Fed was established, the failure of weak banks would sometimes put sudden and unanticipated liquidity demands on previously-strong banks, causing them to fail in turn. The Fed now insulates the strong from the troubles of the weak. But there is no central bank assigned to the job of preventing the dominoes toppling in insurance or derivatives. In these industries, firms that are fundamentally solid can become troubled simply because of the travails of other firms further down the chain.

    When a “chain reaction” threat exists within an industry, it pays to minimize links of any kind. That’s how we conduct our reinsurance business, and it’s one reason we are exiting derivatives.

    Many people argue that derivatives reduce systemic problems, in that participants who can’t bear certain risks are able to transfer them to stronger hands. These people believe that derivatives act to stabilize the economy, facilitate trade, and eliminate bumps for individual participants. And, on a micro level, what they say is often true. Indeed, at Berkshire, I sometimes engage in large-scale derivatives transactions in order to facilitate certain investment strategies.

    Charlie and I believe, however, that the macro picture is dangerous and getting more so. Large amounts of risk, particularly credit risk, have become concentrated in the hands of relatively few derivatives dealers, who in addition trade extensively with one other. The troubles of one could quickly infect the others.

    On top of that, these dealers are owed huge amounts by non-dealer counterparties. Some of these counterparties, as I’ve mentioned, are linked in ways that could cause them to contemporaneously run into a problem because of a single event (such as the implosion of the telecom industry or the precipitous decline in the value of merchant power projects). Linkage, when it suddenly surfaces, can trigger serious systemic problems.

    ...” - Warren Buffett


    Last edited by KC; 03-02-2018 at 08:39 AM.

  51. #551
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    Still waiting on that massive housing correction!

    http://www.cbc.ca/news/business/inte...mers-1.4536744

    Haven't heard much from Hilliard MacBeth recently. I guess even the media got tired of publishing more cries of "wolf!" Anyone in Toronto or Vancouver who followed his advice to stay out of the housing market has been absolutely clobbered by continued increases in prices, although they've finally started to moderate. So what does he have to say for himself?

    http://news.buzzbuzzhome.com/2018/02...-rewarded.html

    “For those few people who have waited for house bargains, 2018 could be the year,” he writes in a recent note. “Patience will finally be rewarded.”
    Patience rewarded? That "patience" has resulted in potential home buyers now having to buy in to a market where prices have gone up 25-50% or more in the last 3-5 years since he started crying wolf, and on top of that interest rates have also gone up by a significant amount along with further stress tests. Has he no shame? Anyone who listened to his advice is far, far worse off for having done so.

  52. #552

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    Quote Originally Posted by Marcel Petrin View Post
    Still waiting on that massive housing correction!

    http://www.cbc.ca/news/business/inte...mers-1.4536744

    Haven't heard much from Hilliard MacBeth recently. I guess even the media got tired of publishing more cries of "wolf!" Anyone in Toronto or Vancouver who followed his advice to stay out of the housing market has been absolutely clobbered by continued increases in prices, although they've finally started to moderate. So what does he have to say for himself?

    http://news.buzzbuzzhome.com/2018/02...-rewarded.html

    “For those few people who have waited for house bargains, 2018 could be the year,” he writes in a recent note. “Patience will finally be rewarded.”
    Patience rewarded? That "patience" has resulted in potential home buyers now having to buy in to a market where prices have gone up 25-50% or more in the last 3-5 years since he started crying wolf, and on top of that interest rates have also gone up by a significant amount along with further stress tests. Has he no shame? Anyone who listened to his advice is far, far worse off for having done so.
    Probably someone on the Titanic said it's all good, no worries, just after it hit the iceberg too. Here is some of the most recent news on housing prices.

    House Prices Falling In Majority Of Canadian Cities As New Rules Kick In

    http://www.huffingtonpost.ca/2018/02...in_a_23361508/

  53. #553
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    Weird that you didn't quote and bold the sub-headline: But Vancouver is back to its old tricks, and Toronto is seeing a temporary bounce.

    But that aside, MacBeth hasn't been calling for a slight decline or stagnation in prices. He has been shouting to the rooftops for close to 5 years now that prices are going to crash by 30-50%. There's a wee bit of a difference there.

  54. #554

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    Quote Originally Posted by Marcel Petrin View Post
    Still waiting on that massive housing correction!

    http://www.cbc.ca/news/business/inte...mers-1.4536744

    Haven't heard much from Hilliard MacBeth recently. I guess even the media got tired of publishing more cries of "wolf!" Anyone in Toronto or Vancouver who followed his advice to stay out of the housing market has been absolutely clobbered by continued increases in prices, although they've finally started to moderate. So what does he have to say for himself?

    http://news.buzzbuzzhome.com/2018/02...-rewarded.html

    “For those few people who have waited for house bargains, 2018 could be the year,” he writes in a recent note. “Patience will finally be rewarded.”
    Patience rewarded? That "patience" has resulted in potential home buyers now having to buy in to a market where prices have gone up 25-50% or more in the last 3-5 years since he started crying wolf, and on top of that interest rates have also gone up by a significant amount along with further stress tests. Has he no shame? Anyone who listened to his advice is far, far worse off for having done so.
    Speaking of the Devil’s advocate, it can take 2 to 3 years for a crash to crash. 2018 looks pretty stable in comparison. If he’s saying 2018 is a good time to buy, he’s basically renouncing on his fears and forecasts of collapse.

    Moreover yes, failure to buy even with potential added savings accumulated over the past few years has been very costly for those that feared any bubble would pop. It’s been like the high inflation 1970s in terms of house price inflation. It’s very much like the stock market.

    Nonetheless I’m rather financially conservative in the extreme so I’d likely rather have tried to build up a larger down payment than take on a lot of debt on a market that seems to be in a bubble. Same with the stock market - I tend to increase cash to provide downside protection and not care whether or not I match any equity benchmark and keep up with short term returns. I’ve done this all my life despite knowing, all my life, that I could with pretty good certainty, be borrowing heavily and doing a couple multiples better than I have. Eg my house was a “pay as you go” purchase when I could have used mu savings as just a down payment on a much bigger or more expensive house. I avoid debt with open eyes knowing that taking on a lot of debt is a very successful method to building wealth.


    That said, maybe every parent should buy a house for every child. The sooner a purchase is made the higher the return - just that small issue of not being diversified and foregoing higher returns in equity markets.
    Last edited by KC; 15-02-2018 at 01:36 PM.

  55. #555

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    Quote Originally Posted by Marcel Petrin View Post
    Weird that you didn't quote and bold the sub-headline: But Vancouver is back to its old tricks, and Toronto is seeing a temporary bounce.

    But that aside, MacBeth hasn't been calling for a slight decline or stagnation in prices. He has been shouting to the rooftops for close to 5 years now that prices are going to crash by 30-50%. There's a wee bit of a difference there.
    Yes, that was a judgement call on my part. The word Majority caught my attention and we are talking about Canada, not just Vancouver which is its own special place. Toronto is more important, but its increase was very modest in the graph, so the bounce is not that big. I'm not sure I would even call it a bounce.

    I realize the correction is quite overdue if you go by MacBeth. His timing may not be good, but that does not mean it will not happen. I would be skeptical about the 50% too, but even a prolonged decline of 25% would be brutal for a lot of people. Of course, that is an average too, so like the US experience I would expect there would be some variation from city to city, some could be 15%, others 35%.

  56. #556
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    Toronto's "bounce" was of the same magnitude as the declines in 4 of the other 7 cities. Again, that seems incredibly selective to highlight the declines and try to wave off the increase. And in any case, those statistics were month to month, not year over year. I don't believe any major Canadian city has seen a year over year decline of more than a couple percent in the past year, but I stand to be corrected.

    As far as a decline of 25% being "brutal" for people, I'd refer to Ken's previous comments in this thread. If the house still suits your needs and you are able to continue making the payments, what difference does it make what the potential sale price of your home is, if you're not actively selling it?

    Quote Originally Posted by Dave
    His timing may not be good, but that does not mean it will not happen.


    It will rain at some point in the next year. Bow down to my forecasting expertise!

  57. #557

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    Quote Originally Posted by Marcel Petrin View Post
    Toronto's "bounce" was of the same magnitude as the declines in 4 of the other 7 cities. Again, that seems incredibly selective to highlight the declines and try to wave off the increase. And in any case, those statistics were month to month, not year over year. I don't believe any major Canadian city has seen a year over year decline of more than a couple percent in the past year, but I stand to be corrected.

    As far as a decline of 25% being "brutal" for people, I'd refer to Ken's previous comments in this thread. If the house still suits your needs and you are able to continue making the payments, what difference does it make what the potential sale price of your home is, if you're not actively selling it?

    Quote Originally Posted by Dave
    His timing may not be good, but that does not mean it will not happen.


    It will rain at some point in the next year. Bow down to my forecasting expertise!
    That was my point many years ago in creating looming disaster threads. If you can afford to keep the house, the price movement doesn’t matter a hoot. Over time it will rise higher and higher. Young couples however buying because the herd including the media only talks about the great housing market. In boom and bust Alberta houses may not move much but that can still Budd the carnage occurring among young couples losing their houses and everything - all because they got sucked into buying without having the wherewithal to handle our busts.

  58. #558

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    Quote Originally Posted by Marcel Petrin View Post
    Toronto's "bounce" was of the same magnitude as the declines in 4 of the other 7 cities. Again, that seems incredibly selective to highlight the declines and try to wave off the increase. And in any case, those statistics were month to month, not year over year. I don't believe any major Canadian city has seen a year over year decline of more than a couple percent in the past year, but I stand to be corrected.

    As far as a decline of 25% being "brutal" for people, I'd refer to Ken's previous comments in this thread. If the house still suits your needs and you are able to continue making the payments, what difference does it make what the potential sale price of your home is, if you're not actively selling it?

    Quote Originally Posted by Dave
    His timing may not be good, but that does not mean it will not happen.


    It will rain at some point in the next year. Bow down to my forecasting expertise!
    Well, the headline didn't say huge declines did it? It did say in the Majority of cities, so 7 is a majority. Toronto is important, but it already had a big decline so one month of what the writer felt to be a "temporary" bounce is really not a great comfort. My point isn't that a crash is beginning now (we would only really know that in hindsight after it happens), but that house prices are no longer rising in a majority of Canadian cities and that is significant to note.

    Few people get the timing of things exactly right, otherwise we would be millionaires on the stock market. However, I think a general rule is the longer a trend continues, it becomes more likely it will end. There is a reversion to the mean, so great booms often gets followed by big declines. The housing price boom in Canada is getting very long in the tooth and it will not continue on indefinitely. I think Toronto before had FOMO (fear of missing out), which now seems to be replaced by people sitting on the sidelines more than usual as prices went down. Perhaps that has stabilized now, I don't know, but just as people rush to buy things they think will go up, they hesitate if they think they will go down.

    Yes, obviously if your home meets your needs and you can afford it (although rising interest rates could change this for some people), why should you do anything. The debate about prices is really important mainly for people who expect to or may be buyers or sellers. I's probably more academic in Edmonton, because we don't have the affordability issues that Vancouver and Toronto do. Most people here don't have a problem with affordability.

  59. #559

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    Quote Originally Posted by KC View Post
    Quote Originally Posted by Marcel Petrin View Post
    Toronto's "bounce" was of the same magnitude as the declines in 4 of the other 7 cities. Again, that seems incredibly selective to highlight the declines and try to wave off the increase. And in any case, those statistics were month to month, not year over year. I don't believe any major Canadian city has seen a year over year decline of more than a couple percent in the past year, but I stand to be corrected.

    As far as a decline of 25% being "brutal" for people, I'd refer to Ken's previous comments in this thread. If the house still suits your needs and you are able to continue making the payments, what difference does it make what the potential sale price of your home is, if you're not actively selling it?

    Quote Originally Posted by Dave
    His timing may not be good, but that does not mean it will not happen.


    It will rain at some point in the next year. Bow down to my forecasting expertise!
    That was my point many years ago in creating looming disaster threads. If you can afford to keep the house, the price movement doesn’t matter a hoot. Over time it will rise higher and higher. Young couples however buying because the herd including the media only talks about the great housing market. In boom and bust Alberta houses may not move much but that can still Budd the carnage occurring among young couples losing their houses and everything - all because they got sucked into buying without having the wherewithal to handle our busts.
    Well, I suppose like any investment housing is best for the long term. I thought Alberta had pronounced booms and busts, but I saw something several months ago (don't remember exactly where now) that Toronto's were surprising quite pronounced too. I think the housing price cycle can be 5, 10 or 15 years, so someone should not rush in just because prices are rising, especially if they can't afford it. Our prices have been fairly stable in recent years, but I think there was a lot of that in Toronto before their prices started to decline. A lot of the "national" discussion about housing prices is coloured by what happens in Toronto. Some things like mortgage rules and interest rates are applicable everywhere, but other things like affordability are more issues in certain other places.

  60. #560

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    Wow! ^ I better stop posting from a tiny screen while on the go. “Budd the carnage”? Sorry folks, I have no idea what I’d meant to write.

    However I was trying to say that young couples buying in a bubble can set themselves back years. So far though as was pointed out, in Toronto and Vancouver those young couples that did buy and have seen massive gains since, look like geniuses and conservative old ‘pay as you go’ me looks like an *****. That may be the harsh reality that I just have to accept.


    This is my idea of a bad scenario for a young couple:

    The Wall Street Journal
    My 10-Year Odyssey Through America’s Housing Crisis
    By Ryan Dezember | Jan 26, 2018

    https://www.realtor.com/news/trends/...ousing-crisis/
    Last edited by KC; 05-03-2018 at 10:57 AM.

  61. #561

    Default

    Quote Originally Posted by KC View Post
    Quote Originally Posted by Dave View Post
    Quote Originally Posted by moahunter View Post
    ^The overbuilding story for Calgary and Edmonton is a bit consistent with what is happening to Reidbuilt homes:



    In Edmonton I think its more a suburb house issue, whereas in Calgary there is an overbuild in condo's in the downtown / East Village.

    https://globalnews.ca/news/3823550/l...y-contractors/

    Numerous contractors and homeowners that opted to work with Edmonton-area builder ReidBuilt Homes are finding themselves in a tough spot financially, with liens being placed against houses in and around Edmonton.

    Richard and Eileen Sherburne moved into their new ReidBuilt home just over a month ago, on Sept. 15.

    They were enjoying their new house when all of a sudden, they started finding pink lien letters in their mailbox.

    “We opened that and said, ‘What?’ And then a couple of days later, four more came and we contacted a lawyer,” Richard said.

    So far, 11 liens have been placed against their home, totalling more than $50,000.
    I am thinking the over building in Calgary and Edmonton might be more of a short term cyclical issue related to the economy. It will be resolved by either the economy improving, builders slowing down or some combination of both. The affordability issues in Toronto and Vancouver seem more intractable. I think eventually younger people in the GTA and Vancouver will get tired of living in small apartments and basements and leave. The quailty of life isn't there any more unless you are rich.
    Annual immigration is enough to create a new good sized city somewhere in Canada each and every year, year in and year out. And the population growth will never be uniformly distributed so this can sure support or restore rising prices in some cities as long as they can incur or attract some of that population growth.





    Annual Demographic Estimates: Canada, Provinces and Territories: Section 1: Total population
    National portrait
    Population and growth

    On July 1, 2012, Canada's population was estimated at 34,880,500, up 396,500 compared with the same date the previous year. This represents a 1.1 % increase for the year ended June 30, 2012 (2011/2012). This increase was slightly larger than the one observed in the previous year (+1.0 %) and similar to the average increase for the last 30 years (+1.1 %) (see Chart 1.1). Except for the period between 1986 and 1990, when rates exceeded 1.3% including the peak reached in 1988/1989 (+1.8%), this rate has shown little variation in 30 years, ranging between 0.8% and 1.2%.



    ...
    In the last 30 years, the population of the Western provinces—the Prairie provinces and British Columbia—has grown substantially (+49.0%), while the Atlantic provinces have seen their population increase only slightly (+4.4%). By comparison, Canada's population increased by 38.9% during this period. Since 1982, the demographic weight of the Western provinces has increased by 2.1 percentage points, reaching 31.1% on July 1, 2012, compared with a decrease of 2.2 percentage points for the Atlantic provinces (6.8%). In turn, the population of Ontario grew twice as rapidly (+51.4%) as that of Quebec (+22.4%) during this period. Among the provinces, Alberta has recorded the strongest growth since 1982 with an increase of 63.5%.
    ...

    International migration is gaining in importance as an engine of Canada's population growth, and since 1993 it has consistently been the main source of that growth 2 (see Chart 1.3). In 2011/2012, net international migration was responsible for two-thirds of population growth in Canada. By comparison, net international migration 3 accounted on average for 39.2% of population growth between 1982/1983 and 1992/1993. For the year ended June 30, 2012, net international migration was estimated at 267,200, more than double the figure for natural increase (+129,400). ...





    http://www.statcan.gc.ca/pub/91-215-...artie1-eng.htm
    Developers snatch up assets of failed Alberta homebuilder ReidBuilt at discounted prices | CBC News

    http://www.cbc.ca/news/canada/calgar...ship-1.4630073

  62. #562

    Default

    Someone recently mentioned on c2e that they’d read about a 40% price drop in house prices.

    Seems they were right. Price drops here of 43 percent and 30 percent.

    GTA real estate sales have plummeted. Is this a crash in the making?

    “But the average home price in Aurora, Markham and Vaughan has plummeted more than 30 per cent since last April, whereas sales fell more than 60 per cent. Prices in Richmond Hill, meanwhile, have dropped a whopping 43 per cent from...”

    http://www.macleans.ca/economy/reale...sales-falling/

  63. #563

    Default

    Someone recently mentioned on c2e that they’d read about a 40% price drop in house prices.

    Seems they were right. Price drops here of 43 percent and 30 percent.

    GTA real estate sales have plummeted. Is this a crash in the making?

    “But the average home price in Aurora, Markham and Vaughan has plummeted more than 30 per cent since last April, whereas sales fell more than 60 per cent. Prices in Richmond Hill, meanwhile, have dropped a whopping 43 per cent from...”

    http://www.macleans.ca/economy/reale...sales-falling/


    Toronto home prices see biggest drop in almost 30 years | Financial Post
    April 2018

    “Sales of detached homes in and around Canada’s biggest city fell 46 per cent in March from the same month a year ago, while the average price fell 17 per cent to $1.01 million, according to data released Wednesday by the Toronto Real Estate Board. That dragged down the average selling prices for all housing types by 14 per cent from a year earlier to $784,558, the biggest drop since 1991.”

    http://business.financialpost.com/re...rs-record-pace

  64. #564
    C2E SME
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    Downtown Edmonton
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    Default

    Sure, if you cherry pick those three suburbs and that particular month's sales data like MacLean's did in the first link, there's a 40% drop in the average sales price. However, your second link doesn't do so, and shows a 14% decline in the entire GTA. But naturally they use the 40% decline in the number of sales in the byline, because again, that makes for more readership.

    From the FP article:



    I don't see a "crash" there, and the decline is certainly not 40%.

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