Real estate in Calgary - another bubble?

[Slava]

Originally Posted by Weitz

Yep and in this market there is some growth in that equity (for now anyway).

Tax free growth, which has to be considered.

[Matata]

Originally Posted by Matata

The house next to me just went on the market and is getting showings at 30% higher than what I paid for mine.

Update: They only got a few showings before taking it off the market, they aimed for the stars and only got a little interest. They put it up for $30k higher than mine and are getting tons of interest, we think it'll be gone soon if not already. For comparison, my place is bigger but there's is more developed.

[GoinAllTheWay]

Originally Posted by Matata

Update: They only got a few showings before taking it off the market, they aimed for the stars and only got a little interest. They put it up for $30k higher than mine and are getting tons of interest, we think it'll be gone soon if not already. For comparison, my place is bigger but there's is more developed.

Lots of that going on and it's driving me nuts.

[Mazrim]

Originally Posted by GoinAllTheWay

Lots of that going on and it's driving me nuts.

There's a few houses I've been keeping an eye on that did the same thing. They need tons of work but priced like they're ready to move in. They're at least 50-100k over what it should be, no takers in a couple weeks. One of them terminated the listing but a couple are just staying put, no drops in asking price or anything. Very strange with how quickly things are moving otherwise.

[calgarygeologist]

Originally Posted by Slava

Tax free growth, which has to be considered.

For now. Who knows what changes will happen in the future as the government looks to find new revenue.

[Slava]

Originally Posted by calgarygeologist

For now. Who knows what changes will happen in the future as the government looks to find new revenue.

Sure, but I don't think that making these kinds of decisions based on things that "could" happen is very prudent. If you sold everything and crystallized gains because people thought that capital gains inclusion rates were rising over the past few years (seemingly every year), you've paid a lot of tax that could still be deferred.

[blankall]

Originally Posted by Hemi-Cuda

Plus if their goal was to sell high and buy low when the market cools down I think they're going to be very disappointed in a few years when prices continue to go up. The only way I see selling your primary residence for profit as a good move right now is if you're at or near retirement and have zero interest in trying to get back into the market at a later date

It might make sense to downsize too. For example, going from a detached home to a condo. Condos haven't seen as sharp a rise in prices yet. The ability to potentially live mortgage/rent free (still paying strata fees obviously) and increase cash flow/decrease bills would be pretty great.

[GoinAllTheWay]

Originally Posted by Mazrim

They need tons of work but priced like they're ready to move in. They're at least 50-100k over what it should be, no takers in a couple weeks.

Good. Market is frustrating enough as is without people sitting on substandard properties trying to cash in like this.

I've seen several with "price decreases" too. Usually only like $10k though.

I don't mind doing some work but lots out there that require a complete update asking the same price of people who have already done them.

That being said, I have seen a few houses go up that are reasonably priced.

Also shocked at the number of townhouses in my complex that are now up for sale. Keeping a very close eye on those prices. They're all over the place.

[Winsor_Pilates]

Originally Posted by calculoso

Two examples:

https://betterdwelling.com/this-week...te-in-ontario/

What percentage is that of Canadian homes?
Does that include things like cabins and lake houses? vacation properties in Banff or Whistler?
Those sitting empty aren't driving up the prices in Calgary, Vancouver and Toronto.

Yes, this second quote doesn’t say that the multiple property owners are leaving them vacant, but the number sure shows that they aren’t there for their own home ownership

Well that's rental properties which is a totally different thing than what you stated. Rental properties aren't empty.

https://www.ctvnews.ca/canada/tens-o...port-1.4621000

8.7% of the market and this article is from before Vancouver started their vacant homes tax and BC's Speculation Tax.

The vacant homes rate in BC is now around 5%; 7% in Vancouver, and with that we still have the lowest supply of homes for sale in 30 years.

"only a fraction will have people live in them" was quite the exaggeration.
That fraction is 92-95%.

[calculoso]

Originally Posted by Winsor_Pilates

8.7% of the market and this article is from before Vancouver started their vacant homes tax and BC's Speculation Tax.

The vacant homes rate in BC is now around 5%; 7% in Vancouver, and with that we still have the lowest supply of homes for sale in 30 years.

"only a fraction will have people live in them" was quite the exaggeration.
That fraction is 92-95%.

Did you miss where I specifically said purchases for investments?

Your numbers above and action by the BC government clearly show that it is an issue. Similar actions need to be taken either country wide or at least in other high-dollar value locations.

A cabin in the woods or at the lake left “vacant” isn’t a problem. A vacant house or condo in Toronto or Vancouver is a problem.

[Winsor_Pilates]

Originally Posted by calculoso

Did you miss where I specifically said purchases for investments?

We're not in disagreement that people invest in real estate.
I specifically quoted the part of your post where you stated only a fraction of homes will be occupied, because that's the part I wanted evidence for and the part I'm calling out as nonsense.

Your numbers above and action by the BC government clearly show that it is an issue. Similar actions need to be taken either country wide or at least in other high-dollar value locations.

A cabin in the woods or at the lake left “vacant” isn’t a problem. A vacant house or condo in Toronto or Vancouver is a problem.

And the impact of those changes clearly show it's not the driving issue and that wasn't the solution needed.
It didn't solve affordability in BC and it won't in Ontario.

I'm not saying they shouldn't do anything about empty homes, but that's a tiny part of the supply issue in these cities.

Unfortunately many people like yourself cling on to those headlines about empty homes, foreign buyers etc as the driving issue.
Then politicians react to those not in order fix the problems, but the appease voters and show optics that they're doing something about it.

The problems continue to get worse but they can say they did something in reaction to your concerns.

[blankall]

The investors only exist because there is artificial scarcity created by archaic zoning. The combo of vastly growing population and massive building restrictions, in terms of both new locations and density, do not jive.

Owning real estate is a huge pain. People only invest when they see the massive profits they are seeing now.

[you&me]

Originally Posted by blankall

The investors only exist because there is artificial scarcity created by archaic zoning. The combo of vastly growing population and massive building restrictions, in terms of both new locations and density, do not jive.

Owning real estate is a huge pain. People only invest when they see the massive profits they are seeing now.

While there's not much you can do about it, investment is also driven by the fact that real estate is the most accessible form of leverage for the majority of people.

[CliffFletcher]

So any theories why home prices have increased much more dramatically in Canada in the last decade than in any other G7 country? Do we really build far fewer houses relative to the U.S., UK, Germany, etc?

[you&me]

Originally Posted by CliffFletcher

So any theories why home prices have increased much more dramatically in Canada than in any other G7 country? Do we really build far fewer houses relative to the U.S., UK, Germany, etc?

Easy lending
Foreign flight of capital / money laundering
Two of our largest, most attractive cities / immigrant hubs are geographically restricted
Restrictive zoning
"Snowball effect"?

Don't we have far higher home ownership rates than Germany? That plays into the snowball effect - more homeowners, accuring more equity have more money to "reinvest" in second / third / fourth properties, or help with down payments for their children, etc etc... Combine all that with a deeply entrenched "wealth" that all but insures no one will rock the boat too much.

It isn't any one of these factors (and many more), but on the aggregate, they all contribute...

Looking at it another way, there's been very little reason or effort put into not dramatically increasing housing prices in Canada.

[Jason14h]

Why does any bubble grow. Its a self fullfilling proficy. Until it isn't

Most Canadians don't remember or haven't lived through a housing crash. its been 25 years.

We avoided the crash (mostly) that occurred in the US.

Oh and money laundering. Canada is really good at supporting fraud and money laundering in real estate

I believe the reason Alberta didn't follow suite as quickly as most of the country is we have experience real estate downturns/stagnation due to oil prices in the past, and are more risk averse when dealing with real estate then the rest of Canada since we have seen years without growth in the past.

[AltaGuy]

Originally Posted by Jason14h

I believe the reason Alberta didn't follow suite as quickly as most of the country is we have experience real estate downturns/stagnation due to oil prices in the past, and are more risk averse when dealing with real estate then the rest of Canada since we have seen years without growth in the past.

Not sure - Quebec should be even more risk-averse than Alberta as they had horrendous growth for decades, and the threat of separatism and its related nationalistic ideals is always there. But since around 2015 Montreal has been in a definite boom.

I think the 2015 crash in oil prices just came after a lot of building in Alberta, and a lot of mortgages and would-be investors were a bit under water. I know that I'm unlucky enough to be sitting on a mortgage in Calgary from 2014 where the downpayment value still hasn't recovered - and isn't close to doing so.

I think Alberta will be going into the same hyper market as elsewhere if the overall Canadian market stays the same. But obviously, that depends heavily on what happens with rates and whether cooling actually happens. If there isn't cooling in the overall market, I think Alberta will be in for a wild ride.

As an aside, I don't believe we will see any significant raises in rates or cooling of this Canadian market. Housing prices are Canada's golden goose, and for the people who matter to politicians (who vote and who have money), this is the one most important issue. I think we will see governments go to exceptional - and quite risky - lengths to keep this gravy-train flowing.

[Yoho]

https://twitter.com/user/status/1509505093741121541

[Slava]

What’s happening? I might be slow, but is the comment that those houses are older so they can’t be worth that much?

[Yoho]

Originally Posted by Slava

What’s happening? I might be slow, but is the comment that those houses are older so they can’t be worth that much?

I think the price is catching the eye of this market analyst who traditionally sees Calgary real estate market as a foot mat to Vancouver and Toronto.