Real estate in Calgary - another bubble?

[Leondros]

Originally Posted by topfiverecords

We just closed on our old place. Vancouver buyers. All cash.

What community? Did you get ask?

[topfiverecords]

Originally Posted by Leondros

What community? Did you get ask?

Lake Bonavista. Well over ask, because of the bunker and Sliver is next door.

[greyshep]

Originally Posted by topfiverecords

We just closed on our old place. Vancouver buyers. All cash.

Yep there is no doubt that Vancouver/Toronto buyers are artificially keeping prices up here. Frustrating.

[Winsor_Pilates]

Why is that "artificial"?
Canadians moving across country is pretty standard stuff.

[Sliver]

Originally Posted by topfiverecords

Lake Bonavista. Well over ask, because of the bunker and Sliver is next door.

Dang, we could have been hanging out all these years. Missed our opportunity to make a buddy movie.

[you&me]

We're casually looking, admittedly with the hope of scoring a 'deal', but nothing's caught our eye yet.

Since someone mentioned Honest Door - the funny thing about wanting a deal, or to see prices retract now (and yes, I'm guilty)... a lot of the places we're looked at still haven't recovered to their ~2012-14 price level. The time for a deal isn't now; it was 6 years ago.

If (when?) the rate increases do cause a material decline in prices, it could eventually mean that the broader Calgary market essentially lost two decades of value growth.

[greyshep]

Originally Posted by Winsor_Pilates

Why is that "artificial"?
Canadians moving across country is pretty standard stuff.

I dont proclaim to be any expert on the topic but I guess I view folks moving from areas with inflated home values partially caused by foreign investment and money laundering and then bringing those windfalls to other areas to be a bit artificial inflation of our local market.

Just my anecdotal opinion maybe.

[blankall]

Originally Posted by greyshep

I dont proclaim to be any expert on the topic but I guess I view folks moving from areas with inflated home values partially caused by foreign investment and money laundering and then bringing those windfalls to other areas to be a bit artificial inflation of our local market.

Just my anecdotal opinion maybe.

Foreign investment/money laundering aren't really the major drivers in Canada anymore. The lack of supply is. There's already a shortage and 500,000 new Canadians moving in this year. Calgary is going to be a primary destination for many but also a spill over destination from Vancouver.

The M.O. in Vancouver has certainly changed. There was definitely a time when mysterious buyers were showing up with huge amounts of cash from undetermined sources. Now by far the most common buy is 30-45 year old with huge down payment from parents. Also as lot of boomers buying secondary places for investment still.

For anyone with lots of cash, there are some opportunities in Vancouver. I have a friend who's parents just bought a relatively new build with coach house in Point Grey for $3.1 million. They are renting it out for $10-12k/month (3 legal suites), and then plan to sell to a developer or flip it in 5+ years.

As long as there is a shortage of housing this trend will continue.

[MillerTime GFG]

Originally Posted by blankall

I think that's a bit of a myth. There are always landlords that will charge as much as possible, and that will then dictate the market.

Rent is going to, because there's more cash out there to pay for rent, and there's a general lack of housing supply. People are being forced into higher rents and worse quality of rentals. Not a good time to not already own your housing.

Not really a myth, especially for those that have a variable rate mortgage on a rental, which is quite common given their flexibility. Mortgage payments will have now gone up hundreds of dollars, so many landlords will be cashflow negative.

There's the added issue now for landlords coming up for mortgage renewal on their primary or rental...given they are cashflow negative, this needs to be entered as a liability on their application, which makes it harder to qualify. In many cases, landlords need to raise rents.

[sketchyt]

Originally Posted by Sliver

Dang, we could have been hanging out all these years. Missed our opportunity to make a buddy movie.

Turner and Hooch?

[btimbit]

Originally Posted by Sliver

Dang, we could have been hanging out all these years. Missed our opportunity to make a buddy movie.

Speaking of which, I'm planning on moving again in a year or two and LB is on my list.

I'm not sure CP is ready for that crossover event, buckle up folks

[Sliver]

Originally Posted by btimbit

Speaking of which, I'm planning on moving again in a year or two and LB is on my list.

I'm not sure CP is ready for that crossover event, buckle up folks

Best of luck in the interview process...it can be a real bear.

[blankall]

Originally Posted by MillerTime GFG

Not really a myth, especially for those that have a variable rate mortgage on a rental, which is quite common given their flexibility. Mortgage payments will have now gone up hundreds of dollars, so many landlords will be cashflow negative.

There's the added issue now for landlords coming up for mortgage renewal on their primary or rental...given they are cashflow negative, this needs to be entered as a liability on their application, which makes it harder to qualify. In many cases, landlords need to raise rents.

The primary driver of rents is always going to be how much tenants can pay. For sure, there are some landlords who consider their own costs and take it easy on tenants, but this scenario is likely only common in situations where landlords want to keep a tenant they like. When putting a new rental on the market, the landlords will almost always price the unit at or very near to the maximum rent the market will bear.

On the flipside, tenants don't really care how much the landlord is paying. They will pay what the market dictates, up to their own desire/willingness to pay.

[btimbit]

Originally Posted by Sliver

Best of luck in the interview process...it can be a real bear.

Any tips? If it's a wife swap test I have lukewarm feelings about that and might just stay in Evergreen if that's the case

[topfiverecords]

Originally Posted by Sliver

Best of luck in the interview process...it can be a real bear.

The bidet test in front of the committee was the worst part.

[Roughneck]

Originally Posted by btimbit

Any tips? If it's a wife swap test I have lukewarm feelings about that and might just stay in Evergreen if that's the case

Dogs? Bad.



Underground bunkers? Good.



You'll be a shoe-in.

[Sliver]

Originally Posted by topfiverecords

The bidet test in front of the committee was the worst part.

Well, we have to get you clean for what comes next.

[Shazam]

Originally Posted by blankall

Foreign investment/money laundering aren't really the major drivers in Canada anymore. The lack of supply is. There's already a shortage and 500,000 new Canadians moving in this year. Calgary is going to be a primary destination for many but also a spill over destination from Vancouver.

The M.O. in Vancouver has certainly changed. There was definitely a time when mysterious buyers were showing up with huge amounts of cash from undetermined sources. Now by far the most common buy is 30-45 year old with huge down payment from parents. Also as lot of boomers buying secondary places for investment still.

For anyone with lots of cash, there are some opportunities in Vancouver. I have a friend who's parents just bought a relatively new build with coach house in Point Grey for $3.1 million. They are renting it out for $10-12k/month (3 legal suites), and then plan to sell to a developer or flip it in 5+ years.

As long as there is a shortage of housing this trend will continue.

Not even a 5% return. An awful, terrible use of cash. This isn't an opportunity.

[bizaro86]

Originally Posted by Shazam

Not even a 5% return. An awful, terrible use of cash. This isn't an opportunity.

Yeah, not even 5% if you assume zero operating expenses.

Narrator: and there were operating expenses.

[blankall]

Originally Posted by Shazam

Not even a 5% return. An awful, terrible use of cash. This isn't an opportunity.

As soon as the market recovers they'll make a tidy profit. They are looking at the gain from the property as the major form of return. At some point in the future, there will likely be yet another 20%+ increase in value.

Making 5% return along the way is just icing on the cake. The DJ also had negative return this year. A 5% return would've looked pretty good to a lot of people.

My friend's father has been investing in real estate for 50 years and made about $50 million along the way. He used his first pay cheque as the downpayment to buy the strip mall his office was in... It would take be twenty years of savings to do the same... Things were different fifty years ago.