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Thread: How are bears betting against the Canadian housing market?

  1. #1

    How are bears betting against the Canadian housing market?

    What financial instruments and methodologies are you using to bet against the Canadian housing market?

    Obviously the market is going to tank at some point. Detached gave out last year and all that remains is a hyper-inflated condo segment.

    How are you planning to make money from the pending crash/correction?


    Think of the children -> http://www.numberofabortions.com/
    I want you to point your finger at me. I want you to call me names.

  2. #2
    If you want to bet against the housing market short the bank stocks. Good Luck

  3. #3
    I have to have a laugh at people that talk about the Canadian housing market and then proceed to talk about the Toronto market. But I guess that goes along with the idea that Toronto is Canada...the rest of the country doesn't matter.

    Detached homes in most of Canada are stable to rising. Condos are the only housing that is affordable in a couple of Canadian markets...so I don't know about it being hyper inflated. And if you want to make money from a crash...and you are right...just short Canadian banks and other lenders. Best of luck with that.

    I'm not shorting banks right now...I think the Toronto market is probably going to go like Vancouver...a short pause then some growth. But if I wanted to invest it would be other parts of Canada...not Toronto or Vancouver.

  4. #4
    Short CAD.

  5. #5
    Registered User
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    Quote Originally Posted by yomero5 View Post
    Short CAD.
    Just buy USD denominated real estate or bond fund.
    Excuse the spellings, typing from mobile

  6. #6
    This is just a hobby !
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    Quote Originally Posted by Smallcock View Post
    What financial instruments and methodologies are you using to bet against the Canadian housing market?

    Obviously the market is going to tank at some point. Detached gave out last year and all that remains is a hyper-inflated condo segment.

    How are you planning to make money from the pending crash/correction?
    Going to tank? Housing market has fallen over 30% the last year!! If that is not 'tanked' then I don't know what it will look like !?!
    people don't remember what you said or what you did. they remember how you made them feel !

  7. #7
    Quote Originally Posted by faveone View Post
    Going to tank? Housing market has fallen over 30% the last year!! If that is not 'tanked' then I don't know what it will look like !?!
    Not in Toronto. Transactions have dropped but I wish prices dropped by 30%... I would seize the opportunity to buy more real estate. Toronto is still undervalued!!!

  8. #8
    Quote Originally Posted by HOLLYWOODG View Post
    Not in Toronto. Transactions have dropped but I wish prices dropped by 30%... I would seize the opportunity to buy more real estate. Toronto is still undervalued!!!
    Sales always drop long before prices. If sales drop and inventory grows, prices typically decline. Even if we're in the beginning stages of a crash/correction it could take years to hit bottom. The crash in 1990 bottomed in 1996.

    Condos are keeping prices up.... for now...


    Think of the children -> http://www.numberofabortions.com/
    I want you to point your finger at me. I want you to call me names.

  9. #9
    Quote Originally Posted by faveone View Post
    Going to tank? Housing market has fallen over 30% the last year!! If that is not 'tanked' then I don't know what it will look like !?!
    Doesn't seem like it when I see the listings for detached homes in my area (only 5-10% below the peak) - when they sell I will know for sure where the market is at.

    Aria Alexander

  10. #10
    There is no good way to short the Canadian residential housing market. Even if there were, the Canadian securities market is so illiquid that just the transactional risk in terms of bid/ask would make this trade ill-advised because you'll get raped when you want to reverse.

    IF you are a homeowner with an incredibly bearish view of the market - sell and then take the proceeds and rent a place and wait for the drop. Or if you can try to find a buyer who will lease the house to you after the sale. If you don't already own a home - simply wait for an opportunity to buy.

    The GTA has pockets that have not dropped and in some cases have held steady or even risen ver slightly. Anecdotally, I can use my own neighbourhood (Wanless Park area) as an example of a pocket that still sees a lot of demand. In fact, in April my neighbour sold his house for what is a record price for my block and it was by way of a bully-bid before the first Open House. I've seen more than a handful of houses come on market in the past month and all have had the same story - sold signs within days.

    Note: I have no doubt that the days of rising prices are gone, and there is pressure to the downside. But with everything comes opportunity - even if you own a home that has declined. Eg: Even if your home has dropped in price - so have other homes. So if you wanted to upsize or even downsize - you can look for opportunities to do this with a smaller spread (if you are upsizing) or a bigger takeout (if you are downsizing). I'll be looking to downsize towards the fall - so looking for potential candidate neighbourhoods where I can start monitoring the takeout (or if I can find a decent sized home/condo I might even rent for a year or two).

    But IF you are really, really bearish - then put your home up for sale, and bank/invest the proceeds and rent until the market reaches a point where you want to get back in. Just remember that houses are not a liquid asset and you pay for that lack of liquidity.

  11. #11
    I would advise people not to try and time the market with your primary and only property. My brother did a few years ago to disastrous results. Investment property is fine because you're just cashing in.

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