While Canadian bank advocates and their skeptics exchange words, the formerly-white hot housing market is now in deep freeze. March sales in Vancouver collapsed by 31.4% year-over-year according to the local real estate board, the worst showing since 1986 and down 46% from the 10-year average for March. Prices also lurched lower, with the benchmark detached home price falling 10.5% year-over-year to C$1.44 million ($1.08 million). Things are more stable in Toronto, where March sales and benchmark prices were little changed from a year earlier, but those figures remain 40% and 14% below their respective levels from March 2017.
As the housing market sputters, the highly-leveraged Canadian consumer displays increasing signs of distress. According to the Bank for International Settlements, Canada’s household debt stands at 100.2% of GDP as of the end of September, by far the highest ratio among G7 economies (the U.K. is next at 86.5%), while the debt service ratio, or the percentage of disposable income allocated to principal and interest payments, rose to 14.9% in the fourth quarter per Statistics Canada, just shy of the 2007 peak.
That debt burden is starting to weigh on consumers. Auto loan delinquencies rose to 0.97% at year-end according to Equifax, Inc., the highest since 2009. At the same time, 36% of new auto loans in the fourth quarter were leases, the largest such share since 2007. Bill Johnston, vice president of data and analytics at Equifax Canada Co., noted that “we’re starting to see consumer behavior shift to keep the payments as low as possible.”
– excerpt from ‘”Psychologically, They’re Ill-Prepared” – Canadian Chaos Looms’, from Grant’s Interest Rate Observer, via Zero Hedge, 11 Apr 2019
Everybody is Yapping
About Sales Numbers
The Only Number I Care About
Is How Many Fish I’ve Caught
The Original “Sales Number”
Village by the Sea.
Hey Arnie, any new awesome listings?
Hi Arnie, I have a question for you because I enjoy your property insights.
2625 William Street, East Van – assessment value $1,271,500; list price $1,288,000; sold last week for $1,370,000. In the era of sales down and supposedly unprecedented inventory and supposedly properties selling below assessment, what is so special, in your opinion, about this 70-year old house that it sold $100,000 above assessment? Danke!
2625 William – almost identical to our neighbour’s house – just another claustrophobic square postwar beer bottle stucco box with a buried basement. Read Froogle Scott for insights into this genre.
Our neighbour’s house is assessed at $30K; this one over $70K; which suggests there was work done with permits. Whether that extends to the foundation is dubious. Without foundation work, at this age, the likelihood of a leaky basement is 100%.
So, the owners of 5 years took out a wall to give the box a stupid “open concept”. Guess it worked, since they sold for half a mil more than purchase.
Place is very artfully decorated – not moronically staged – would have pushed a lot of buttons. Keith Haring, Fiddler On the Roof, and a drum set. Wow.
South-facing quiet street; level lot; excellent area with a lot of character homes; convenient. Good.
No view; no Skytrain. Bad.
I would not have bought it.
Surprising for sure. There’s nothing special about this listing other than its great location. Something grandfathered in it?
2827 27th Ave E: assessed at $1.6M. Listed by a couple of no names at $2.86M. How did they get the listing? Probably an ethnic connection.
Buildings valued at $36K.
Old couple kept chickens and grew a ton of stuff; made wine. Portuguese or Italian. No matter. Everyone looks the same when they’re dead.
Choice location. Relatives wasted no time listing this puppy.
Finally, it’s a balanced market”
What happened? House burned down?:
704 1a Avenue, Delta
Apr 8: $695,000
Change: $-954,000.00 -58%
2987 27th Ave E: photos coming soon … not. No photos. No Open House. Sold. Choice location. Almost as good as ours.
3236 27th Ave E: with the same seller and rodents – and the crazy pictures – still available.
Damn…. Sure is bad: https://openhousing.ca/2019/04/12/vancouvers-commercial-airbnb-operators/
Before you jump on any conclusions, i am talking about fraser valley market not vancouver cheers.
Jashole the realturd.
Is this how you treat your Starbucks patrons?
If your “analysis” is restricted to kitchen layouts, proximity to the SkyTrain, and the other trivial points that Annie yaps about, you’ll miss the boat.
You need the big picture. And that is:
– Sales at multi-decade lows
– Prices falling
– Massive household indebtedness and deteriorating credit
– Rising interest rates
– Subprime lending
– Tightening standards
– Dried-up foreign capital
– Psychological shift from greed to fear
– Global RE reversal, from China to Australia and beyond
– The list goes on…
Ignore at your peril.
Big picture mindset.
Tsawwassen really hit hard. At that price, it’s cheaper than Surrey or Langley:
5432 7 Avenue, Delta
Apr 25: $899,000
Change: $-249,000.00 -22%
Canada’s subprime loans…
Here you go folks, 50% decline:
As a RE-fugee living in Alberta. All I can say is . AHHAHAHAHAHHAHA
1343 Lakewood: 1911 house bought 4 years ago for $1.1M.
More than a lipstick reno – assessed at $1.7M. Listed at $2M. Sold in 12 days for $2.25M.
Tiny 3,000 sq/ft lot. No lane. Dysfunctional kitchen. Head thumper lower level. The steel I-beam is a real head cracker. Duct above the laughing monks and the ridiculous price is what they are laughing about.
Very clever deco; high point location.
Emotion and rumspringa bought this place; along with daddy’s cash. Ridiculous. Money pit in the making.
That’s odd. Zolo says it’s commercial real estate and the listing has been pulled, not sold.
Sign of things to come?
“Carnage” in luxury Vancouver real estate, with price drops of 50%+:
If an “11 million dollar home” sells for 5 million, guess what happens to the “5 million dollar” home? It sells for 3. And the 3 for 2. All the way down the ladder, to low-level East Van and beyond.
P.S. Love the REBGV prediction that prices will continue to “soften”. Their linguistic gymnastics never disappoint.
For anyone on Twitter, this is a good follow:
Burnaby blowing up? That means East Van is too. Bring it on.
Condos in highgate have come down too. 5-10%
Curious…if Van RE crash/correct/adjust another, say, 30% downwards, what do you think will happen to the local and BC economy? Mass exodus, high unemployment, government intervention (i.e., bringing back all those stupid policies and willful neglect from the past decade)…?
The crash will be the iceberg to the local economy’s Titanic.
It might not be all bad. After the crash, people will have more disposable income and won’t be mortgage/rent slaves like now. Yes the FIRE industry will implode, but other sectors will thrive.
Canned goods sales will spike.
City of parks