“I’m in New York right now for an economics conference earlier this week hosted by Barry Ritholtz who, among other things, curates a great website: ritholtz.com, better known as The Big Picture. It was a fantastic event with many clashing views given equal voices.
During the final presentation, Doug Kass, president of Seabreeze Partners Management, mentioned that the Canadian real estate market is giving bigger warning signs than the U.S. market did before its real estate meltdown. So even Americans are starting to wonder aloud how long house prices can stay so high. This was one of the few views that went unchallenged. …
One of the conference attendees was as curious about housing prices in Canada as Mr. Kass, and looked at me as if I was crazy. As if somehow simply being Canadian meant I had a direct influence on it.
I still don’t know if, when or how a Canadian housing market correction will occur.”
- Preet Banerjee, G&M, 14 Oct 2011
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- “My folks find themselves at 65 still owing half the value of their home and recreation property to the bank. After almost 30 years of ownership in the BPOE and a number of boom markets, they have very little to show for it.”
- “Rent for $2,200 a month or buy and have a mortgage of $4,310 per month. Why would anyone buy?”
- “They were talking about two couples they knew who had recently bought a lot and planned to each build a house on it and live as neighbours.”
- Greater Vancouver Home Builders’ Association Annual First-Time Buyer Seminar Attendance Plummets
- Mom and Pop Get It Wrong In All Markets, Time And Again
- The average British Columbian homeowner is not going to pay off their mortgage by the time they retire.
- “He’s sold all his properties except his current one, which is now for sale. He explained that the market’s currently in crash mode, worst that he’s ever seen.”
- “One of my old high school buddies finally got her mother to sell the family home in Kitsilano – sold for over $1M, monies realized after debt paid off $185K.”
- “I know someone who just declared bankruptcy because her condo was assessed at $150k and she bought it presale north of $250k in 2005 or 2006.”
- Sturdy, With Views – “Calling Froogle Scott!… Is Dr. Scott ‘In The House’?” [Not In This One, Certainly]
- “She said the market was dead in Victoria and that it would remain so for a very long time. I asked how she knew. Her answer was fascinating and should scare the pants off the real estate crowd.”
- Kits Notes – “I’m pretty sure that this is the first 3+ bedroom property of any type that I’ve seen in the 5 years I’ve lived here that is priced below $700K.”
- “A beautiful Belfast home, in the equivalent of 1st Shaughnessy, bought at their RE peak in 2007 for £3.5 million, has now sold for £800K, almost 80%-off. The market didn’t suffer any significant economic shocks. Rates & unemployment didn’t skyrocket. They didn’t build more land. Sentiment just changed and the prices fell and fell.”
- “Two family members of hers are trapped, underwater, in condos on the East Side.”
- “Interprovincial migration is not saying good things about BC’s economy.”
- Vancouver RE: Not As Expensive Provided You Don’t Think – “It’s clear that our perception of affordability has been coloured by living on a continent where housing is unusually inexpensive.”
- More Undisclosed RE Industry Insiders Publicized As Clients – “In 1995, Allan and Karin Hoegg were mortgage-free. But no more. Today their Vancouver home is a valuable source of income as they plan for full retirement.”
- Rumor that some OV units will be reduced by 20%.
- Downside Weights On The Vancouver RE Market – “One of the older guys (over 60) mention to the guy beside him that he and his wife were thinking about selling their family home, and renting, in order to get some of the money that was locked up in the house.”
- “My buddy was looking to upgrade to a house in the Coquitlam area. With 200k extra for a home, that’s half of lifetime saving between him and his wife.”
- “I was walking in the Fraser neighborhood yesterday, I noticed that the population, on average, seem to be composed of workers. I belong to the top 5 percent in terms of income. Nevertheless, I cannot afford any of the houses for sale in that neighbourhood.”
- “Vancouver is an urban resort whose value mostly resides in its real estate and not much else.”
- “Rogers Communications is expanding into RE; aiming to relaunch website; providing critical data that can help potential buyers assess the value of a property from the comfort of their home computer.”
- I’m only 50 and I can just about retire if I want to, all because of a single simple decision – “When prices rebounded to their former highs, then rocketed another 30% higher to what I considered to be totally unsustainable levels, I decided that only a fool would pass up a second opportunity to harvest such a massive non-taxable capital gain, and in 2011 I sold my place.”
- The Vacant Lot of Versailles, Richmond.
- “I don’t think that most people think things are going to crash, just that there is going to be a slight correction, but it was amazing to me how sentiment has changed, and the fact Vancouver RE is too high was just understood.”
- “The ‘investor’ who purchased our house put it up for sale two months later, in January 1981, but the bubble had burst.”
- For A City To Have That Kind Of Vacancy, It’s Like Cancer – “Downtown, the vacant unit rate is so high that it’s as though there were 35 towers at 20 storeys apiece – all empty.”
- “What’s the worst that can happen? You can’t pay your mortgage, so sell your house! No fear.”
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Kass is someone to listen to. He called the credit meltdown in 07 and called the low in the stock market in 09 within days of the actual low (you can see the timestamped video on CNBC) — his timing isn’t always this good but ultimately his thesis usually comes to fruition.
amen…reading the entire article, he doesnt say there would be an American style collapse because of a few reasons (i.e. non-existent sub-prime mortgages, population with better salaries and CMHC)…
In my view price-rent and price-income are the measures to watch most closely. Debt to income is a measure that might indicate the speed of the correction — more debt means a faster pullback.
But if prices compared to incomes and rents are to remain high it means that Canadians are accepting poor returns compared to other asset classes and that’s not sustainable. It’s like saying that an electric utility can trade at a low P/E ratio compared to a water utility because people like electricity more than water.
“I still don’t know if, when or how a Canadian housing market correction will occur”
Translation: should I sell my pets.com or do they have a valid business case… I can see truth in both sides to this hotly debated topic…
Cognitive dissonance
It’s not Carrick, it’s PREET BANERJEE…
Peter Pan -> Thanks, we’d somehow got that wrong… now corrected.
you thought HAM was bad… soon well have a heathy dose of teen superstars flooding the west side
http://www.vancouversun.com/entertainment/Selena+Gomez+Vancouver+Honestly+will+move+here/5552738/story.html
Have you seen this website? Price data by town/city and dwelling type. Apartments have already topped badly in some places. We never see this in teranet because they monitor single family, and not by subregion.
https://www.landcor.com/market/housing_price_index.aspx
“I still don’t know if, when or how a Canadian housing market correction will occur”
Kass didn’t say this did he?
SR,
Where can I see the full article?