A Noticeable Slowdown In The Frantic Bidding Wars
The Financial Post reports from Canada. “Torontonians who can barely wrap their minds around a housing market where $1-million is the average price for a detached home might want to take notice of a new fast-approaching benchmark. ‘What you are seeing is $2-million is the new $1-million,’ says Drew Laszlo, an architect in the city who has been involved in several infill projects that have fallen into the new threshold.”
“BlueShore Financial conducted an online survey of 650 of its members asking whether they’ve had a ‘family-financed’ mortgage. The credit union got 356 responses with 41% of those responding saying they received financial assistance from parents or family members in either the form of a loan or a gift. David Batori, a 25-year veteran of the industry, says family money continues to be a factor in the market, especially for young couples buying in the $1-million range. ‘Thank God for the parents and the grandparents,’ he says, with a laugh.”
The Hamilton Spectator. “Canada’s housing market emerged from its deep freeze late this year, thanks to the winter that refused to end, leading to a rash of pent-up buying and selling in April and May that is now largely over, according to the Canadian Real Estate Board. Their warnings of a ‘transient’ summer for sales supports what realtors are seeing in the GTA market as well — a noticeable slowdown in the frantic bidding wars that largely defined this year’s spring market as buyers take a breather and sellers start to feel just a little less cocky.”
“Realtors are now seeing more buyers taking a survival-of-the-fittest approach to Toronto’s pricey home market — simply walking away from multiple bid situations, or holding off seeing properties at all unless they’ve been on the market more than a week and the deadline for offers has passed.”
The Star Phoenix. “May was a phenomenal month for existing homes sales across the country, but the jump in activity may say more about the harsh winter than the state of the market. The Canadian Real Estate Association said there was a ‘delayed start’ to the spring buying season as people deferred putting their homes on the market until the end of a harsh winter. With summer just about here, the group doesn’t think the pace of the last month can be maintained. That’s a view held by many in the market.”
“‘One reason policy-makers might be a bit hesitant to act again soon is that strong price gains are confined to a few select markets, or even submarkets, while a wide swath of the country (at least geographically) is seeing downright dreary conditions,” Robert Kavcic, an economist with Bank of Montreal said.”
“Real estate sales in Hamilton and Burlington broke records in May, the local realtors association announced. But as sales sped up, prices went down. The average sale price of freehold homes, or homes where the owner also owns the land, decreased 2.3 per cent to $435,440. Association CEO Ross Godsoe attributed the lower sale prices to a flood of new listings in May, 213 more than May 2013. ‘It wasn’t record-setting, but new listings were higher than the 10-year average for the month,’ he said. ‘That may account for the slight decrease in average sale price compared to May of last year.’”
24 Hrs. Vancouver. “The latest Statistics Canada data shows a year-to-year 41.2% drop in Metro Vancouver building permits in April and it’s the softening demand for housing in the region that’s likely to blame. Lee Loftus, president of the B.C. Building Trades Council, said the numbers are a head-scratcher since construction typically spikes during warmer months. ‘Traditionally, when we see a decline in building starts it’s due to the economy and I don’t think the economy is off that much to generate those numbers,’ he said. Loftus said he knows construction workers are finding it increasingly tough to find work over the past few years.”
“‘The labour is available, but there’s no work,’ he said.”
Business in Vancouver. “Home prices in Vancouver dipped 0.03% in May compared with April, according to the Teranet-National Bank National Composite House Price Index released. This is the first decrease after 12 consecutive monthly increases. Statistics Canada New Housing Price Index showed that Vancouver has once again had Canada’s biggest decrease in new home prices in the twelve months to April. New homes cost 1.5% less than they did in April 2013. On a month-to-month basis, new home prices in Vancouver fell 0.3%. This was due to builders reporting lower selling prices and decreased list prices.”
From CBC News. “In the first major survey of the Canadian economy in two years, the Organization for Economic Co-Operation and Development takes aim at risks in the housing market. The report criticizes Canada for the increasing unaffordability of housing in big cities like Vancouver, Toronto and Calgary, saying high household debt leaves families vulnerable to interest rate hikes.”
“‘Almost 40 per cent of the country’s population lives in a city where house prices are seriously or severely unaffordable,’ it states. ‘A shock to even one segment could have spillover effects to the broader economy if banks respond by tightening credit significantly or if negative wealth effects depress consumption.’”
“Given such risks, the OECD wonders why the government allows Canada Mortgage and Housing Corp. to insure 100 per cent of high-leverage mortgages when most other countries limit potential losses to 10 to 30 per cent of outstanding balances. ‘Imposing a deductible on mortgage insurance, as is common in other lines of insurance, would help promote stability by better aligning the interests of the lenders and those of the insurer, thereby reducing moral hazard,’ it recommends.”
Drive the Canadians out of Phoenix. Take our land back!
you cant afford your land.
Make the Canadians move to federally owned reservations.
Ask waiters and waitresses, or anybody who relies upon tips, what they think of Canadians. Those cheapskates don’t tip!
‘The city’s jobless rate has inched up for the third consecutive month. Guelph’s unemployment rate for the end of May was calculated at 7.6 per cent by Statistics Canada. That’s up from 7.2 per cent at the end of April and 6.9 per cent at the end of March. The city’s jobless rate is now above that of both the national average of seven per cent and the provincial average of 7.3 percent.’
‘The figures were logged amid a period where Canada’s labour market staged a modest comeback. But, nationally, the good news was tempered by the fact all 25,800 net new jobs were part-time and many likely temporary as the first wave of students entered the summer job market.’
‘Despite the net increase in jobs, the official unemployment rate edged back to seven per cent after several months at 6.9, an unusual outcome caused by more Canadians entering the work force.’
‘But the real news in the key monthly report from Statistics Canada is that full-time employment fell by 29,100, the second big drop in two months. As well, since 48,600 young workers found employment, the assumption is that many were university students finding summer jobs — a welcome development on one level but no solace to the long-term unemployed in the country. In fact, employment among men aged 25 to 54 fell by 23,000.’
‘The weakness was also reflected in hours worked, up 1.1 per cent but not enough to reverse April’s 1.9 per cent fall-off — and the 1.4 per cent year-over-year gain in wages was the slowest in three years and below the inflation rate.’
“It was tough to find much positive other than the nice headline,” said Bank of Montreal economist Doug Porter. “It’s probably one of the starker cases of the headline telling one story and the details telling quite another,” he said.’
‘Among sectors that lost jobs, the natural resources industry declined by about 23,000 and there were about 21,000 fewer workers in finance, insurance, real estate and leasing. Manufacturing was also down by 12,200 and construction was largely flat.’
‘Economists say the numbers are representative of an economy in transition. The days when housing and to a lesser extent retail spending could sustain growth have come to an end, yet the rotation to export-based manufacturing and business investment has yet to take hold.’
I’m guessing Canadah pays people pretty well not to work -like US
I think Canada might pay them a little more for a little longer. On the other hand, in the US, unemployment insurance does not pay enough to live. You have to have supplemental resources or go couch surfing. I suspect Canada might have the same basic deal.
‘Judging from the promotional signs, downtown Ottawa is about to get a little piece of Manhattan.’
‘Maybe that really is the plan when the condominium tower, to be called the Bowery, at Gloucester and Bay streets, is finally erected by Richcraft Homes. But right now, the property — a huge hole partially filled with icky, discoloured water and supported by beams and boards, and littered with garbage around the perimeter — looks more like a little piece of Detroit.’
“Condominium living with a distinctly New York vibe,” says one sign. “It’s about people. It’s about synergy. Bout time,” says another.’
‘It’s about time Richcraft began building the Bowery, say its would-be neighbours, who have had to endure that “cesspool” or “cesspit” since late 2012, when the property was excavated. They are not a happy bunch, especially as the warmest months of the year approach. They say the water — residents wonder how deep it is — is a breeding ground for mosquitoes. It also stinks, says Christina Lanno, whose second-floor apartment overlooks the hole. She says she won’t open her windows because of the stench.’
‘A story in our Homes section last fall said Richcraft was forced to redesign the project, dubbed the Edge when it was introduced in 2012, due to disappointing sales. The planned 18-storey, 248-unit Bowery Condos and Lofts, apparently borrows designs from Bowery Street on Manhattan’s Lower East side.’
“We’re marketing the project, hoping that sales continue and we can proceed with construction,” Richcraft planner Kevin Yemm said this week. “But until we get the right number of sales, we won’t proceed. That’s as much as I can tell you. We’re hopeful to move forward with the project when we reach our target.”
‘”Someone paid a quarter-mil more than asking for this Riverdale semi,” screams the headline on The Globe and Mail website. Click on the video link and the seller’s ecstatic real estate agent guides you through the fully renovated 2,000-square-foot, four-bedroom Victorian home in the leafy inner-city Toronto neighbourhood.’
‘Treating the $990,000 asking price as a mere suggestion, the buyers would eventually pay $1.3-million for the house – a 53-per-cent premium over what it sold for just three years ago. This is part of the new reality in frothy markets, such as Toronto and Vancouver, where an average home will set you back more than $1-million.’
‘In Toronto, owning a home now swallows 56 per cent of household pretax income, according to the Royal Bank of Canada’s first-quarter housing affordability index. In Vancouver, it’s an astonishing 82 per cent. Across Ontario, the index has reached a 24-year high of 51 per cent.’
‘Canada Mortgage and Housing Corp. defines affordability as spending a maximum of 30 per cent of household income on shelter.’
‘A boom in condominium construction is relieving some of the pressure. Roughly a quarter of new condos are bought as investments and rented out as apartments.’
‘But now there is a growing glut of new condos in Toronto and elsewhere, and a dearth of new single-family homes. That’s adding upward pressure to prices, causing some buyers to “let their emotions get the better of them” and to overbid “on the house, or odd shack, of their dreams,” Bank of Montreal economist Sal Guatieri remarked in a recent report.’
If you see a faded sign by the side of the road that says
‘15 miles to the odd shack’, odd shack, buy, buy.
I’m headin’ down the Canada highway
Lookin’ for the rent getaway, heading for the rent getaway.
I got me a mortgage, it’s as big as a whale,
And we’re headin’ on down to the odd shack.
I got me a Chrysler, it seats about 20
So hurry up and bring your parents’ money.
The odd shack is a little old place
Where we can rot together
Odd shack, baby
(A crap shack, baby)
Shabby shack, baby, small shack
Rotten shack, baby, icky shack
Price shack, baby, spec shack
(Debt baby, that’s where it’s at)
Donkey shack, baby, donk shack
(Fighting baby, that’s where it’s at)
Sign says, ‘Come on in, fools’
‘Cause dummies rule at the love shack.
Well, it’s set way back in the banking field
Just a funky old shack and I gotta get on track.
Glitter on the mattress,
Glitter on the highway,
Glitter on the front porch,
Glitter ain’t gold!
The odd shack is a little old place
Where we can rot together
Odd shack, baby
(A crap shack, baby)
Shabby shack, baby, small shack
Rotten shack, baby, icky shack
Price shack, baby, spec shack
(Debt baby, that’s where it’s at)
Donkey shack, baby, donk shack
(Fighting baby, that’s where it’s at)
Fightin’ and a hissin’, fumin’ and worrying,
Wearin’ next to nothing, ’cause we can’t afford clothes.
The whole shack is suspicious, the shack stinks to high heaven.
The foundation shimmies
When everybody’s movin’ around,
And around and around and around.
Everybody’s movin’, everybody’s groovin’, baby
Folks linin’ up outside just to give a down payment.
Everybody’s movin’, everybody’s groovin’, baby
Stinky little shack, nasty little shack.
Check out my payment, it’s as big as a whale
And it’s about to set sail!
I got me a car, it seats about twenty
So come on and bring your rich uncle’s money.
The odd shack is a little old place
Where we can rot together
Odd shack, baby
(A crap shack, baby)
Shabby shack, baby, small shack
Rotten shack, baby, icky shack
Price shack, baby, spec shack
(Debt baby, that’s where it’s at)
Donkey shack, baby, donk shack
(Fighting baby, that’s where it’s at)
Bang, bang, bang, on the door, banker
(Knock a little louder baby)
Bang bang bang,on the door, banker
(I can’t hear you)
Bang bang bang, on the door, banker
(Knock a little louder mister)
Bang bang bang, on the door, banker
(I can’t hear you)
Bang, bang, bang, on the door, baby
(Knock a little louder )
Bang, bang, bang,on the door, banker
Bang, bang
(On the door, banker)
Bang, bang
(On the door)
Bang, bang
(On the door, banker)
Bang, bang, your what? Foreclosed and rusted!
Bad shack, baby, bad shack
Termite shack, baby, rat shack
(Debt baby that’s where it’s at, yeah)
Odd shack, baby, odd shack
(BK baby that’s where it’s at)
Underwater baby, drowning shack
(Fussin’ and a hissin’)
(Fightin’ and a divorce at the odd shack)
Read more: B-52s - Love Shack Lyrics | MetroLyrics
Nice!
‘The average detached house price on the West Side of Vancouver will reach more than $7 million within ten years, suggests Altus Group, one of Canada’s premier appraisal and valuation firms.’
“If [the current] trend continues, in the year 2024 the average price for older [detached housing] stock could be greater than $2 million on the Eastside and $7 million on the Westside of Vancouver. We are not saying this will happen, we are simply applying the math from the past decade and extrapolating forward to the next decade,” said Pedro Tavares, Altus Group’s director of research, valuation and advisory.’
‘An Altus study released this week looking at Vancouver house prices notes that 10 years ago the average older detached house on the Eastside sold for $416,674. Today the average price is $942,555.’
‘In 2004, the average Westside older detached house sold for $835,101. This March the average price was $2.48 million. New house prices have seen a similar price increases.’
‘We are not saying this will happen’
Wait a minute. Why wouldn’t this happen, and then happen again in the next ten years? Are you letting in some question that these price increases might be a one time thing?
Because if you are, what explains this? Vancouver has always been expensive. (Well, not really. Palo Alto and Atherton weren’t expensive not so long ago either).
I don’t know Pedro. This hinting about price increases being temporary is mighty dangerous talk. Next thing you know somebody could be saying prices will fall.
‘The average detached house price on the West Side of Vancouver will reach more than $7 million within ten years, suggests Altus Group, one of Canada’s premier appraisal and valuation firms.’
In other news, Canadian maple trees are forecast to grow to the sky.
“we are simply applying the math…”
No you aren’t. You are applying a straightedge and drawing a line to the moon.
To the moon, Alice!
….. as demand blows a hole through the floor on it’s way to hell.
If I continue aging at my current rate, then I will be 238 years old in 200 years.
“David Batori, a 25-year veteran of the industry, says family money continues to be a factor in the market, especially for young couples buying in the $1-million range. ‘Thank God for the parents and the grandparents,’ he says, with a laugh.”
It’s pretty sad to see multiple generations of family wealth get poured down the real estate ownership rathole.
‘Ten days after a New Yorker Magazine article examined Vancouver’s astronomical home prices and the affordability gap facing average city residents, Ian Young, of the South China Morning Post, has weighed in on the issue, accusing Vancouver’s property developers of stifling debate by raising issues of racism.’
“The fact these millionaires (buying real estate in Vancouver) are mainly Chinese is not relevant to the debate, and that is why I am a bit distressed that this is being characterized as a racist discussion,” says Ian Young, the Vancouver correspondent for the South China Morning Post.’
‘Stating his opinion in The Vancouver Sun last week, former real estate developer Bob Ransford says any talk of who is buying what, where they are from and whether or not anyone is living in these homes is “innuendo” and “arm chair estimates”. Ransford says talk of restrictions on foreign ownership “begin to tread very close to past policies for which we are today apologizing. The head tax on Chinese immigrants is one that comes to mind.” Ransford says what’s really needed is reliable data.’
‘But Young disagrees. He says that the fact that the issue is sensitive doesn’t mean it shouldn’t be openly debated. “It’s a very sensitive discussion, and for that reason I am perturbed that this discussion has been appropriated by people who profit from the industry. I think it’s ridiculous. Of all the people to leap to the defence of the huddled masses of Chinese millionaires, surprise, surprise: it’s rich property developers.”
‘Vancouver real estate may finally be headed towards a seller’s market, as the Real Estate Board of Greater Vancouver announces a 14 per cent rise in sales this May over the same month last year.’
‘Realtor Wayne Hamill, who sells homes on the west side of Vancouver, says there is also a greater sense of competitiveness among buyers. “They don’t mind competing. They don’t mind being one of many offers,” he said. “They certainly don’t mind paying over asking, if that’s what it takes to get the property. That has been a big change over the last year.”
‘Hamill said a home he put on the market on Monday for an asking price of $2.8 million has already had two offers. “There seems to be this non-stop supply of people from different parts of the world and I guess compared to other parts of the world, we are still good value.”
It isn’t their race that matters. It is their place of residency. If you see a lot of people buying houses in a place where they don’t live, and they are paying prices far above the locally affordable rate, then they are causing a distortion in the market. Market distortions should be noted and understood. Otherwise, locals won’t know how to make their own purchase decisions.
It’s pretty unrealistic if you think about it. Let’s say the grandparents had 3 kids (normal at that time). Each of those three had 2 kids (normal). You now have one set of grandparents helping to purchase 6 houses, with each set of parents helping to purchase 2 households, in addition to their own mortgages.
How many “families” really have that kind of dough to pass along? How many people would actually fork it over? If the only kids buying $1MM houses are getting money from their family, then it must ALSO be true that the rest of the kids aren’t buying anything because they can’t.
How many condos and houses are there in Canada again? I wonder if the number of units available is bigger than the number of trust-fund babies.
‘There’s a new kid in town ready to save Canada’s housing market and maybe even the economy - at least for a few more years. A new report says that Canadian residential real estate has been getting a huge boost from so-called echo boomers, those in the 20-to-38 age bracket.’
“The Canadian housing market keeps soldiering on and, while much focus is cast on brash calls of overvaluation, mortgage rate wars and mortgage rules, demographics are playing a less-publicized yet important role,” Bank of Montreal economist Robert Kavcic said in the report. “The baby boom generation grabs most of the attention on this front, but their children, the echo boomers, pack a heavy economic punch as well.”
“For the next couple of years, there is enough population to support the retiring population, but when you look out past 2018, the bulk of the baby boomers are approaching 65 and behind the echo boom there is a significant dip in the population,” he said.’
‘The problem is what comes next. He said there are a few more expansion years in the housing market based on this age cohort, but there will be some stagnation starting in 2018. “From a strictly demographic perspective, that would place us around the seventh inning of the secular bull market in Canadian housing, before conditions become unfavourable around the turn of the decade,” wrote Kavcic. “The tide is going to turn.”
‘He said policy-makers should be concerned about full-time employment compared with the over-65 population. “It’s holding up OK for now. But it’s going to roll over.”
‘Question for all the young adults buying condos these days: What are you thinking? Rent that little box in the sky and save your money for a house later on. Don’t buy something you’re going to grow out of in a few years.’
“When you run the numbers, renting is probably a bit cheaper,” said David Fleming, a Realtor with Bosley Real Estate and writer of the Toronto Realty Blog. “But [young adults] think the market is going to go up, they want to pay down principal, they want pride of ownership. I’ve probably sold seven or eight condos this year to kids under 25.”
‘Mr. Fleming said some young buyers get help from parents to buy their condos, and then manage the monthly carrying costs of the mortgage and condo fees by finding a roommate to pay rent. Yet because young buyers tend to stay in their condos for only a short while, renting is still the better choice.’
“I would say buyers in their 20s probably won’t live in that condo for five years,” Mr. Fleming said. “They’re going to either outgrow it, or find a mate and want a bigger, better or different place.”
‘Moving from a condo you own to a house will cost you a lot. If you used a real estate agent to sell the place, you might pay a $15,000 commission plus HST to sell a $300,000 condo. “It’s expensive to move,” Mr. Fleming said. “Hopefully you purchased that condo for $250,000.”
Isn’t pride is one of the seven deadly sins?
‘China’s average home prices fell for the first time in two years in May and price weakness spread to more major cities, adding to signs of cooling in the property market which are posing a growing risk to the broader economy.’
“The high inventories in some cities and developers’ recent promotions, together with unclear market expectations that kept buyers staying on the sidelines, led the prices to fall,” said Liu Jianwei, a senior statistician at the National Bureau of Statistics (NBS).’
‘A recent private survey showing China’s vacancy rates were around 22 percent suggest a considerable overhang of inventory, which could undermine property as an investment class and add momentum to price declines. With its stock markets in a prolonged slump, property has been one of the few investments in China to offer attractive returns.’
“We are not concerned about the likelihood of housing price collapse in China as the current turn is just a rational market adjustment,” said He Qi, deputy secretary-general of China Real Estate Association. “Housing demand remains solid in China as most Chinese still view property as one of the best investment options.”
“He Qi, deputy secretary-general of China Real Estate Association.”
Lawrence needs to get himself a title like this one.
He Qi > Lawrence Yun > http://barbaracorcoran.com/ “Real Estate Mogul” > Amy Hoax.
How much “duh” can a Candian buck buy;
If a Canadian buck buys “duh”?
blame canadah-southpark
Talk to our (friends?) to our north last week. They bragged how much they got for their rather awful dated house, complete with long north facing driveway for those beautiful winters they have?
Now they said, we start the hunt in the sunbelt to steal a home with pool, resort backyard and buy a convertible they never could drive in Canada.
Needless to say, my wife and I were close to telling them what really thought, but on the other hand judging by what really is on the market in many locations they just may overpay for that pool and resort backyard. I told him wait on the convertible you may have a long hunt for your stealing of a dream house, a conv. park at Days Inn for six months is not a good idea.
house near me w a pool 4 sale- I figure it’s a net deduction.
Pools and resort back yards aren’t that expensive to put in.
I have a family member who recently put in a pool in Texas. $30k.
are the above ground pools to ghetto these days?
Pools and resort back yards aren’t that expensive to put in?
Okay, we are not talking doughboy here, a pool-spa 90 sq ft with all the features remote, self cleaning etc, with total deck package, pebble tech, built in Barbeque, 5-6ft walls or view fencing, plants, drip system, etc about 130k min.
I take it you don’t live in the sun belt?
“Dream house”?
Your’e more foolish than a debt donkey.
So, is everyone going to become an illegal immigrant then? All the Central Americans, South Americans, and Canadians will move to the United States. All the Chinese people with move to Canada, Australia, New Zealand, and the United States. After that, all the US citizens will be living in a slum, so they will go packing somewhere else.
Do we actually have open borders all over the world now?
in Japan-did they say it would get better every year?
Smellin says slow w better 2015
Berkeley. 830K for small (about 1200 sq feet) 2/1 in my neighborhood. Sold 2 days after offers due. Owners didn’t bother to update or stage it. About the same time, a 2/2 condo (converted apt in building I’m familiar with), different but nice neighborhood, sold for about 550K. For the extra 300K the house buyers get a small yard and own washer/dryer. Utterly baffled.
Remember…. todays sale at a grossly inflated price is tomorrows default.
Canada’s housing implosion is going to be glorious to watch!
*puts on sunglasses, gets out the lawn chair*