Canadian Real Estate Market—What Happened

[Dottore]

So a good friend of mine came to Vancouver last week from Hong Kong hoping to buy a cheap house, but couldn't find anything. I drove around the west side with him for a couple of days, and there are virtually no "for sale" signs to be seen. None. Nada.

Last time I drove a round town a couple of months ago there were nothing but "for sale" signs everywhere.

So what happened? Was I sleeping? Was there a recovery, and nobody told me?

[legion]

Did your government "bailout" underwater homeowners? If so, people might not need to sell anymore. Lots of governments at the local, state, and federal levels here in the U.S. have put "moratoriums" on foreclosures. (Delayed the problem for another day.) Did a similar thing happen there?

Another likely scenario is people have pulled their houses off of the market because they weren't selling.

[LakeCleElum]

Send your friend south of the border about 100 miles. I'll fix him up.......

[imcarthur]

Originally Posted by legion

Did your government "bailout" underwater homeowners?

No. We didn't have the same madness. Our banks are solid except for the bogus paper that they bought south of the border. Our real estate market didn't hyper-bubble except in specific markets. i.e. Calgary & oil money, condo market in Toronto due to continuing Asian influx (probably Vancouver too).

Toronto market is still inching up & I hear that it is either hot at the moment or RE agents are trying to make it that way. A house down the street just sold in 2 days. Listed for 440K (around market value) & sold through a bidding war for 480K.

Ian

[LakeCleElum]

You say your friend is from Hong Kong? Maybe Vancouver doesn't sell to Asians? Look at a recent ad in Australia clearly stating: "NO ASIANS"

http://www.videosift.com/video/No-Asians

[Zef]

Pretty good on our side...

http://www.chpc.biz/index.htm

[adrian jaye]

when he ment NO AGENTS

Originally Posted by LakeCleElum

You say your friend is from Hong Kong? Maybe Vancouver doesn't sell to Asians? Look at a recent ad in Australia clearly stating: "NO ASIANS"

http://www.videosift.com/video/No-Asians

[Hendog]

Originally Posted by LakeCleElum

You say your friend is from Hong Kong? Maybe Vancouver doesn't sell to Asians? Look at a recent ad in Australia clearly stating: "NO ASIANS"

http://www.videosift.com/video/No-Asians

That video is funny What someone says...and what someone else hears.

As for the housing market here; it has turned around since it never really bubbled and burst like it did in the States.

http://toronto.ctv.ca/servlet/an/local/CTVNews/20090713/real_estate_090713/20090713/?hub=TorontoNewHome

[Komenda Fan]

I think in general the Canadian real estate market has held up pretty good. Toronto still has bidding wars for homes, prices are still decently high. We just bought a home West of Toronto in Oakville, the agents seem to be doing ok here. Canadian banks were criticised during the US bubble for not being aggressive enough on getting mortgages out there, but they look brilliant now.

[The Gaijin]

Just back from the Great White North yesterday. Apparently they need at least 20% down. More skin in the game = less speculation in the run up and less foreclosures during a downturn. This is what I heard anyway..

[Zef]

Originally Posted by Komenda Fan

I think in general the Canadian real estate market has held up pretty good. Toronto still has bidding wars for homes, prices are still decently high. We just bought a home West of Toronto in Oakville, the agents seem to be doing ok here. Canadian banks were criticised during the US bubble for not being aggressive enough on getting mortgages out there, but they look brilliant now.

A bank...?...Brilliant...?...

[Dottore]

So my agent tells me 90% of the homes on Vancouver's west side are being snapped up by mainland Chinese buyers. Vancouver is seen as a safe haven for them. Since many of the homes in the $2million range, I'm thinking there's a fair bit of funny money involved as well.

[shinrai]

^ +1 but they're from HK, not mainland China.

[Cdnone1]

In Canada you can not just "walk away " from your mortgage.
Unlike the States you can't just hand the keys back. Everything you own is on the hook to cover your loan. You agreed to buy the house and the bank doesn't want it
Walking away from a house, loan and contract is just too easy here
Steve

[Dottore]

Originally Posted by shinrai

^ +1 but they're from HK, not mainland China.

Here, they're from the mainland. The HK wave was in the '80's and '90's. You hear far more Mandarin than Cantonese in town these days.

[shinrai]

Originally Posted by Dottore

Here, they're from the mainland. The HK wave was in the '80's and '90's. You hear far more Mandarin than Cantonese in town these days.

My bad. I guess the "funny money" and other corruption and washing techniques over here (mainly gov't) has made it's way into vancity. I always wondered how people in China who make $500USD/mo afford to drive a new Benz which costs twice and much as it does in North America. And now they're buying houses overseas.....

[imcarthur]

Originally Posted by Dottore

Here, they're from the mainland. The HK wave was in the '80's and '90's. You hear far more Mandarin than Cantonese in town these days.

Same in Toronto. My daughter-in-law is from Beijing. Just look at any new condo downtown or uptown in Don Mills & it is primarily mainland Chinese.

Ian

[Dottore]

Originally Posted by shinrai

I always wondered how people in China who make $500USD/mo afford to drive a new Benz which costs twice and much as it does in North America. And now they're buying houses overseas.....

Stop wondering.

With the population of China being what it is, you only need a very small wealthy percentage to fuel all kinds of overseas property markets. And Vancouver is at the top of the list for mainland Chinese.

Like you, my guess is that most of the money is dirty. But the Canadian authorities, bless their hearts, have never cared where incoming money comes from. They're like the Swiss that way. "As long as the money comes to us, it must be clean."

[Oracle]

Today in the Calgary Herald big news about real estate.
In Calgary is up 28% from last year (quite a rebound), I don't remember the other cities but they're all about the same... Real estate seems to be bouncing back!

[coldstart]

Today in the Calgary Herald big news about real estate.
In Calgary is up 28% from last year (quite a rebound), I don't remember the other cities but they're all about the same... Real estate seems to be bouncing back!

Yes and no. Interest rates are amazing right now so it makes it 'cheaper' to buy a house right now. At least for the next 5 years until people have to renew. The lower rates may or may not continue. Given the Bank of Canada interest rate is 0.25%, my bet would be that rates will go up in the future. When? Who knows.

My personal conspiracy theory is that the newspapers are in bed with their advertisers-- the real estate sellers. If you look at the stats, the newspapers flip-flop between using year-over-year numbers to month-to-month numbers. Always using the stats that look better for the RE market. Is '28% up' price or units sold? Condos or houses? The numbers are rarely broken down and are usually printed as given by the local real estate board. When the numbers were bad during the winter, excuses were given for the stats (ex. if you exclude the top 10% most expensive houses sold last year.....prices are only down 14%) Just food for thought.

Basically, the fundamentals are not sound. The average family on the average income cannot even come close to affording the average house-- at least in Toronto and especially not in Vancouver. Glad to hear that there is a lot of foreign money flowing into the system. Good for the Canadian economy!