Canada's housing bubble?

[red]

The reason that any correction has been put off is because the precarious position families have been in for years has been supported by low interest rate and easy access to credit. The second one or both of these is no longer the case, the domino effect will be devastating.

Those that deny we are in a bubble because it has not corrected yet are merely cherry-picking facts. Taken as a whole, nobody can walk away unconcerned. That's why every single public and private unbiased institution that analyzes real estate in Canada is at the very least somewhat concerned. The only ones that aren't generally have a dog in the fight (ie. Real Estate Boards etc.). I often refer to a favourite movie of mine, Dante's Peak. The arguments in favour of "no worrying" are strikingly similar.

Interesting Fact: All those regions you mention experienced a correction in the double-digits in the early 90s. Fact: Because of this historical fact, any statement that in Canada "bubbles never burst" has been negated. Whether anyone thinks a correction is coming or not is pure speculation on either part of the argument, even from analysts. But what can't be denied is that there HAVE been corrections.

Tell me what is a burst? Is it a decline over. Six or seven years or decrease of 20 percent over night?

 

[Serpent]

The reason that any correction has been put off is because the precarious position families have been in for years has been supported by low interest rate and easy access to credit. The second one or both of these is no longer the case, the domino effect will be devastating.

Those that deny we are in a bubble because it has not corrected yet are merely cherry-picking facts. Taken as a whole, nobody can walk away unconcerned. That's why every single public and private unbiased institution that analyzes real estate in Canada is at the very least somewhat concerned. The only ones that aren't generally have a dog in the fight (ie. Real Estate Boards etc.). I often refer to a favourite movie of mine, Dante's Peak. The arguments in favour of "no worrying" are strikingly similar.

Interesting Fact: All those regions you mention experienced a correction in the double-digits in the early 90s. Fact: Because of this historical fact, any statement that in Canada "bubbles never burst" has been negated. Whether anyone thinks a correction is coming or not is pure speculation on either part of the argument, even from analysts. But what can't be denied is that there HAVE been corrections.

This is unsustainable. House poor people cannot save for retirement, leading to dependence on CPP and government. Taken as a whole, this is going to cause systemic problems.

 

[Barca]

Tell me what is a burst? Is it a decline over. Six or seven years or decrease of 20 percent over night?

Since "bubble" and "burst" are not technical terms, they can be used by each writer in whatever way they like. So it's subjective. However, a correction in general terms usually refers to a decline of 10% or more specifically a definition can be found here:

http://www.investopedia.com/terms/c/correction.asp

In my opinion, a correction is likely but a "soft landing" like you describe (a slow decline over a period of time) isn't a long shot. If the economy is handled properly, that's what we can hope for.

 

[Barca]

That vibe you feel is your oncoming bout with cancer due to pollution

Jokes aside I can not fathom why anyone would want to live in a hole like Toronto
You can not even compare a city like NY to here

I've lived in both New York and London and I can see why Toronto is rated higher by every study out there, even though I do love those cities. If you call Toronto a hole I'd have to assume some sort of bias because I have no idea what standard you'd be using to hate it like that.

 

[Serpent]

I've lived in both New York and London and I can see why Toronto is rated higher by every study out there, even though I do love those cities. If you call Toronto a hole I'd have to assume some sort of bias because I have no idea what standard you'd be using to hate it like that.

ummm....Toronto is not in the same league as NYC. The sheer scale, the wealth, the global trends across media/fashion/art/haute cuisine/ etc that stem from that city are incomparable. Toronto is nowhere close.

I'd even put Chicago and SF and possibly LA ahead of Toronto in the great cities of N.America. The GDP of the GTA is more comparable to Boston or Philly than to SF or NYC:

http://www.greatertoronto.org/why-greater-toronto/top-ten-reasons

http://www.theatlantic.com/business...y-gdp-and-how-theyve-grown-since-2009/279833/

And in USD to CAD terms, GTA would be smaller than even Boston or Atlanta.

 

[Barca]

ummm....Toronto is not in the same league as NYC. The sheer scale, the wealth, the global trends across media/fashion/art/haute cuisine/ etc that stem from that city are incomparable. Toronto is nowhere close.

I'd even put Chicago and SF and possibly LA ahead of Toronto in the great cities of N.America. The GDP of the GTA is more comparable to Boston or Philly than to SF or NYC:

http://www.greatertoronto.org/why-greater-toronto/top-ten-reasons

http://www.theatlantic.com/business...y-gdp-and-how-theyve-grown-since-2009/279833/

And in USD to CAD terms, GTA would be smaller than even Boston or Atlanta.

That's why these quality of life studies do more than look at size and wealth. Otherwise Mexico City would be up there. Ever been there? Now that's a hole.

Norway and Denmark don't have cities anywhere near the size of NY or even Toronto and yet they always rank in the top tier of "most livable".

NY and London smoke Toronto in history, culture, entertainment, sport etc. But when it comes to daily, non-touristy stuff, the playing field evens out substantially.

 

[Serpent]

I will respectfully disagree.

 

[Barca]

I will respectfully disagree.

I may have some home bias as well... lol

 

[Occasionally]

NY and London smoke Toronto in history, culture, entertainment, sport etc. But when it comes to daily, non-touristy stuff, the playing field evens out substantially.

Toronto is fine and all, but that's one thing I find about the big Canadian cities. They are boring as heck. Lots of major cities in the world have awesome art, architecture, and style. Toronto looks like it's made by the most bland construction companies where the architects care more about placement of fire hydrants than stylish buildings. Yeah, yeah, Toronto is pretty new and it's not like it was around 1,000 years ago so you're not going to get castles and ancient structures, but geez.

Things are always all functional and have all the utilities and such working fine, but man..... can any development company put more than two cents of the budget to making some nice stuff? Most of the schools look like prisons.

At least Quebec City is nice. And Vancouver has a very clean and green vibe to it. Still, not the most stylish, but at least it has a fresh kind of feel to it, especially when you hit the parks.

With the current trend of new construction in the past 10 years, I guess 100 years from now Toronto will be all sci-fi glass buildings. All the condo and new offices have that boxy all-glass look to them.

Another thing about Toronot that is lacking is public transportation. Every other major city has busy downtowns too, but the key is that some reason Toronto has garbage transit and subway systems, while other cities have excellent public transportation. Major US cities go beyond bus and subway and include major train networks too, which makes GO Train look like Fisher Price toys.

 

[icespot]

I have read about this...... let me think......let me think.

Almost have it.....Some one did this before..... Oh yeah, country called Greece part of the European Union. Kept borrowing money as long as intrest was cheap they had no worries. Now they are in deep shit.

The market should have corrected years ago, but Harper didn't let it happen. Instead they gave billions to banks. Took over potentially bad loans and ensured banks, so that if the buble burst, banks are in the clear and we the tax payers will be left with the bill.

When it will happen or how bad it will be no one knows.

However, use your critical mind and don't reasure yourselves so that you blind yourselves to reality. There is no reasonable or logical evidence that can explain the housing market in Toronto growing by 15% from last year.

 

[red]

Burst?

The so called experts have been predicting that since the mid 2000's. The prices did take a 20% dive in 2008, but rebounded within months. That was probably your opportunity.

Real Estate in Toronto has never been cheap. Not ever. It fluctuates, by as much as 30 or 40 percent even. But it never bursts.

There are only 2 things that will cause the price of real estate in Toronto to drop by 40 percent. 1. An increase in interest rates in excess of 3 percent, or a major economic meltdown. Both of which are possible, but neither is desirable since you won't be able to afford the increased interest payments, or you won't have a job to pay the mortgage. Take your pick.

If you think that the market in Toronto will "burst" because it is over built, it will not. The only thing that may be over built in Toronto would be condos and all that happens then if the market slows down due to too much supply is that they stop building them. They aren't building any new subdivsions in Toronto as far as I'm aware (maybe the odd brown field development, but land for single family homes is very scarce.)

You can disagree whether we're in a housing bubble, that's opinion. But whether there's been painful corrections before in Canada, there have been (the last one being in the early 90s, which is why some argue we're overdue). So your statement is factually untrue.

Tell me what is a burst? Is it a decline over. Six or seven years or decrease of 20 percent over night?

Since "bubble" and "burst" are not technical terms, they can be used by each writer in whatever way they like. So it's subjective. However, a correction in general terms usually refers to a decline of 10% or more specifically a definition can be found here:

http://www.investopedia.com/terms/c/correction.asp

In my opinion, a correction is likely but a "soft landing" like you describe (a slow decline over a period of time) isn't a long shot. If the economy is handled properly, that's what we can hope for.

That's my point. Most posters are saying a correction over a number years is possible but that aa sudden decline or burst is unlikely.

Jtk said values could fluctuate 40 percent (fluctuate means up or down) but you said he was incorrect?

The last great correction saw declines over a seven year period. There wasn't a sudden drop. Interest rates were much higher then, as was inflation and thhe economy was in decline. Toronto is also more of a well known and multiethnic city which attracts capital from around the world.

Can there be a correction? Yes but no sharp decline absent some real absurd interest rate policies.

 

[red]

That's why these quality of life studies do more than look at size and wealth. Otherwise Mexico City would be up there. Ever been there? Now that's a hole.

Norway and Denmark don't have cities anywhere near the size of NY or even Toronto and yet they always rank in the top tier of "most livable".

NY and London smoke Toronto in history, culture, entertainment, sport etc. But when it comes to daily, non-touristy stuff, the playing field evens out substantially.

Exactly.

 

[Smallcock]

A Profile of Home Buying in Canada (June 2015)

http://caamp.org/meloncms/media/Spring 2015 Survey Report.pdf

 

[Ceiling Cat]

The housing market bubble that will come eventually will be because of trends that are taking place now. There is tremendous over building of condos and the family unit is shrinking which will mean less demand for houses. There is also the fact that the baby boom have housing already and there will be less demand because the people that are 30 today are a much smaller group than the people in their 50s.

It is not IF the housing bubble will come, it is WHEN it will come.