Real estate in Calgary - another bubble?

[DownInFlames]

Originally Posted by Hemi-Cuda

I used to live in Chestermere, and it got real old whenever I told someone new that and they replied "Wow that's so far", especially if they lived deep SW. I had a shorter commute downtown from there than anyone in Shawnessy or Midnapore

That's because everyone from Chestermere drives like #######s.

[Winsor_Pilates]

Originally Posted by MillerTime GFG

Aside from the foreign buyers’ tax (which is useless), those aren’t Federal policies.

Which makes no difference to the tax payer AKA homeowner.
The point is there has been numerous taxes added to our market to increase cost of ownership and slow down pricing growth and none of it has worked significantly.

All of these, especially the foreign buyer's tax was widely applauded by people happy to make foreigners the problem, then flippers were the problem, then people with too many properties sitting empty.
Government has reacted to every boogy man and we're still in the the craziest market in many years with upwards of 50 people bidding on the same house.

None of these changes have created a large increase in supply, which is the solution we really need.
If you have some federal government intervention ideas to increase that, I'm with you.

[InTheSlot]

Originally Posted by Mazrim

For those of you who already own houses, I'm happy for all of you since you'll be making some value on your properties in the next few years at least. For people like me who are scrounging up a down payment for their first home, it's a little depressing to watch houses become even less affordable, potentially in a big hurry if the Toronto and Vancouver situation spill out to other Canadian cities.

I can't speak for what it's like in Canada, but here in the U.S. I would recommend and offer a bit of encouragement that deals and value can be found in older (and perhaps smaller) homes with a keen eye and an average amount of knowledge. Timing often plays an important role and you're right, it might be hard to get your "forever dream home" at the moment, but if you educate yourself on what to look for (i.e. something that won't be a Money Pit) and are willing/able to either do some work and renovations yourself, or at least save up for it to hire a contractor in the future, then I think you can definitely get something you'll end up liking.

I'm by no means a professional contractor and I'm not rich either, but over the last 10-12 years I've dabbled in various projects to get my homes into the condition that I want them. My first home I re-did my own bathroom with my father after buying tile at a discount from a friend - it wasn't perfect, but it turned out OK and was much better than that was there when we moved in. A few years later I bought pavers and stones and made my own patio and firepit in the backyard to enhance the outdoor living/entertaining space. Years after that, after saving and taking out a home equity loan, I got around to re-doing the kitchen through hiring some contractors - it was a bit late and I only enjoyed the new kitchen for a year or two before I sold the house, but the money I spent on the project I believe I got back in the eventual sale price of the house.

The home I'm in now I bought just under 3 years ago and thankfully I didn't have to do much to it, but I also re-did my bathroom again, converted my pool to saltwater, and adding sustainable rock landscaping around the home so that I don't have to replace it every year. There's also a ton of little things you can do that make a big difference and are inexpensive, but they make it feel like your own place and over time you start seeing it become your dream - for a hundred bucks or so I replaced all of my faucets, door handles and hinges, light fixtures, etc - when I moved in all of those things were either old and dingy, gaudy, broken, and so forth, and it may not seem like much, but you learn a little plumbing and electrical along the way through these DIY efforts and overtime it adds up, both in the value and condition of your home, and your own knowledge and experience (which will pay dividends later if and when you progress to a bigger/better/different home).

Anyway, didn't mean to ramble, but I hope that helps you remain positive - as someone who enjoys home ownership despite its ups and downs, I hope one day you get what you're looking for, sooner rather than later.

[#-3]

Originally Posted by Mazrim

For those of you who already own houses, I'm happy for all of you since you'll be making some value on your properties in the next few years at least. For people like me who are scrounging up a down payment for their first home, it's a little depressing to watch houses become even less affordable, potentially in a big hurry if the Toronto and Vancouver situation spill out to other Canadian cities.

Home affordability in Calgary has actually skyrocketed over the past 15 year.

Interest rates have fallen by more than half.
Minimum Wage has more than double.
Average wages have gone up 30%

And from a small anecdotal sample of properties owned by me and my siblings/parents... property values have gone up about 5% between 2008 and 2020. (they are a little bit higher a this moment, but it's hard to know if there is a bounce back coming, partially due to limited supply, extremely low interest rates, high building material prices, and the pending drop in support for the still high unemployed population).

I does suck for those who don't own property, but overall it's probably a healthy thing for Calgarys economy if we see a little bit of roi for home owners that have lingered for 10+ years.

[Hack&Lube]

Originally Posted by MarchHare

This week marks exactly one year since the COVID lockdown began for me. It recently occurred to me that I can count the number of times I've left the Beltline in the last year on one hand. I have literally every amenity I could possibly need within a ~10 minute waking radius of my front door.

Calgary would be a great walking city if not for the bitter winters. I would happily walk the 30-45 min on foot to work in the Core or the 20 minutes to the downtown grocery store (Co-op, Safeway, East Village Superstore).

[MarchHare]

Originally Posted by Hack&Lube

Calgary would be a great walking city if not for the bitter winters. I would happily walk the 30-45 min on foot to work in the Core or the 20 minutes to the downtown grocery store (Co-op, Safeway, East Village Superstore).

Pre-COVID, I would walk or cycle to my office downtown (~20-25 minutes door-to-door) year-round. The cold really didn't bother me much at all. Bundle up with a good winter coat, a hat, gloves, and a scarf, and you're fine.

[Mazrim]

Originally Posted by InTheSlot

Anyway, didn't mean to ramble, but I hope that helps you remain positive - as someone who enjoys home ownership despite its ups and downs, I hope one day you get what you're looking for, sooner rather than later.

Thanks for this. Your experience is roughly what my wife and I were already considering for our first house purchase, as something newer/renovated with the things we're looking for is most likely outside our purchasing power. I'll be learning how to do lots on my own, I'm sure.

Originally Posted by #-3

Home affordability in Calgary has actually skyrocketed over the past 15 year.

Interest rates have fallen by more than half.
Minimum Wage has more than double.
Average wages have gone up 30%

And from a small anecdotal sample of properties owned by me and my siblings/parents... property values have gone up about 5% between 2008 and 2020. (they are a little bit higher a this moment, but it's hard to know if there is a bounce back coming, partially due to limited supply, extremely low interest rates, high building material prices, and the pending drop in support for the still high unemployed population).

I does suck for those who don't own property, but overall it's probably a healthy thing for Calgarys economy if we see a little bit of roi for home owners that have lingered for 10+ years.

I don't really disagree with you. I have a few friends who will benefit from their purchases at the last peak recovering some value. It's just some frustration on my part that after clearing a bunch of debt and saving a ton for years to finally have something you can call a reasonable down payment, and then watch the market start to heat up at the same time you start to seriously consider buying.

I've been fortunate with my job too so I can only imagine how someone working in a below average salary job is supposed to feel like they can enter the market in anything but a tiny condo. It feels like my parents got a huge place with way less purchasing power, and my generation doesn't get anything like that.

This thread has been quite helpful though as it's helped reinforce the decision that we don't want to rush into buying, at least. I don't want to get caught in some hysteria or bidding war about housing, and if it means another year of saving like mad to get what we want, then so be it.

[keenan87]

With a bubble, prices for homes will increase. Does this mean it will trickle over to a better condo market once people can no longer afford to purchase houses? (I wonder if people will be priced out and instead will need to look at condos again).

[Vinny01]

Originally Posted by keenan87

With a bubble, prices for homes will increase. Does this mean it will trickle over to a better condo market once people can no longer afford to purchase houses? (I wonder if people will be priced out and instead will need to look at condos again).

I think it will likely be a full economic recovery before we see Condo prices rise. I think this current bubble is due to a general lack of inventory which is making it a bit of a sellers market. I think a lot of motivation for people as well is getting more space and getting a backyard. Interest rates are very low and while some people took it on the chin with Covid, others were able to keep working and saving money since they were unable to do anything last year and all of a sudden have a down payment ready to go

I think the condo market will come back when the pandemic is a thing of the past.

[Flamenspiel]

Most if this about low interest rates, that being said. It’s a cliche but it’s all about location.

Even in Calgary, unless you bought at the absolute peak, you are not going to lose money on a good location. Prices across the city do not all move in tandem and typically good locations cannot grow and have a fixed supply, you will also see a lot of renovations going on.

[MillerTime GFG]

Originally Posted by Winsor_Pilates

Which makes no difference to the tax payer AKA homeowner.
The point is there has been numerous taxes added to our market to increase cost of ownership and slow down pricing growth and none of it has worked significantly.

All of these, especially the foreign buyer's tax was widely applauded by people happy to make foreigners the problem, then flippers were the problem, then people with too many properties sitting empty.
Government has reacted to every boogy man and we're still in the the craziest market in many years with upwards of 50 people bidding on the same house.

None of these changes have created a large increase in supply, which is the solution we really need.
If you have some federal government intervention ideas to increase that, I'm with you.

That's not my point though. I was saying the Federal government will likely need to step in to do something, but the problem is whatever policy they do implement, will be across Canada, instead of locally, as per their track record. You replied to my comment, citing policies that were implemented from the municipal and provincial level. I guess I didn't specifically say the Federal Government, but I thought that was a given.

I don't have the solution. I'm just saying I wouldn't be surprised to see the Feds try something, and it will have negative impacts in other markets across the country.

[peter12]

Feds don’t have jurisdiction here really. As usual, they can just spend money. Unless you are talking interest rates or mortgage stress tests in which case, I also doubt it.

[bizaro86]

Originally Posted by peter12

Feds don’t have jurisdiction here really. As usual, they can just spend money. Unless you are talking interest rates or mortgage stress tests in which case, I also doubt it.

They've been pretty continuously changing the rules on mortgages for years now, up to and including CMHC tightening qualifying standards during the pandemic.

Their last ~5 rounds of tightening mortgage rules haven't stopped Toronto and Vancouver from going parabolic, and have almost certainly contributed to the long term downdraft here. The fact they've continued to go down that path doesn't suggest to me that they've figured out it isn't working.

[Winsor_Pilates]

Originally Posted by MillerTime GFG

That's not my point though. I was saying the Federal government will likely need to step in to do something, but the problem is whatever policy they do implement, will be across Canada, instead of locally, as per their track record. You replied to my comment, citing policies that were implemented from the municipal and provincial level. I guess I didn't specifically say the Federal Government, but I thought that was a given.

I don't have the solution. I'm just saying I wouldn't be surprised to see the Feds try something, and it will have negative impacts in other markets across the country.

Fair enough, I didn't read your first post as Federal government specific.
I'm in agreement that the Vancouver & Toronto markets are their own beasts and need their own strategies.
Any talk of the Canadian housing market always feels incorrect to me.

[MillerTime GFG]

Originally Posted by peter12

Feds don’t have jurisdiction here really. As usual, they can just spend money. Unless you are talking interest rates or mortgage stress tests in which case, I also doubt it.

Well I think that's part the problem. Any housing policy from the Feds isn't localized, when it really needs to be. Many of the changes over the last 5-6 years by OSFI were untimely to say the least in AB.

[blankall]

Originally Posted by Winsor_Pilates

Which makes no difference to the tax payer AKA homeowner.
The point is there has been numerous taxes added to our market to increase cost of ownership and slow down pricing growth and none of it has worked significantly.

All of these, especially the foreign buyer's tax was widely applauded by people happy to make foreigners the problem, then flippers were the problem, then people with too many properties sitting empty.
Government has reacted to every boogy man and we're still in the the craziest market in many years with upwards of 50 people bidding on the same house.

None of these changes have created a large increase in supply, which is the solution we really need.
If you have some federal government intervention ideas to increase that, I'm with you.

I can say with 100% certainty that what's driving prices in Vancouver right now is local buyers with cheap mortgage loans and help from their parents. I've mentioned my experience several time already in here, but went to many showings in Vancouver over the past few months, and each one had 30-50 local couples looking to buy.

In Vancouver the answer is clearly higher density. There are so many people in Vancouver who would be extremely happy with a 1500 3 bedroom townhouse. The demand for these is huge. There are many streets where it would be totally appropriate to do so.

The anti-density argument is essentially "we've already tried that and it didn't work". Vancouver's developments are always many steps behind demand. I believe this is purposeful. The city is bowing to the developers and existing property owners. The new units always trickle out in a way that never satisfies demand. Property prices stay high. Everyone who already has capital invested - the people with the most political clout - is happy.

I get that people are concerned about density, and it's effects. IMO that ship sailed long ago. Vancouver isn't a small town anymore, and it ethically needs to accommodate the people working and living there, who, in turn, support the city. Most of the property being developed isn't worth saving. It's literally blocks of rotting houses barely (or not at all) fit for humans to live in.

I just don't think the solution is some great mystery. It's obvious. Remove the red tape around re-development.

[Winsor_Pilates]

Originally Posted by blankall

I can say with 100% certainty that what's driving prices in Vancouver right now is local buyers with cheap mortgage loans and help from their parents. I've mentioned my experience several time already in here, but went to many showings in Vancouver over the past few months, and each one had 30-50 local couples looking to buy.

I've been to showings that had groups booked in every 15 minutes from 9am-9pm, both Saturday and Sunday and had to stop taking more bookings.

Never in my career before have I seen a market where showing appointments are literally getting full before the weekend.

I have to book my clients in around Monday-Wednesday, because if I wait until Thursday/Friday to make a weekend showing appointment we might not even get in.

Covid and having to separate all groups is contributing to this, but it's just crazy.

[Winsor_Pilates]

Anyway, don't want to take the thread off topic with Vancouver talk.

For Calgary, I can't believe people are talking "bubble". Hasn't the market been relatively flat for almost 10 years now?
How is that anything remotely resembling a bubble? I think some upside to the Calgary market is overdue.

[GoinAllTheWay]

Man alive.....I have always seem to have the worst timing....

Finally decide it's time to move and naturally, this happens. And all starts with selling a condo to boot, haha.

Our plan was to sell condo first, rent a place short term while we look for a home but now it's looking like we could be stuck in limbo for a while.

I'm not willing to overpay and waive things like home inspections just to buy a home, that's nuts.

ugh....what to do....

[Winsor_Pilates]

Originally Posted by GoinAllTheWay

Man alive.....I have always seem to have the worst timing....

Finally decide it's time to move and naturally, this happens. And all starts with selling a condo to boot, haha.

Our plan was to sell condo first, rent a place short term while we look for a home but now it's looking like we could be stuck in limbo for a while.

I'm not willing to overpay and waive things like home inspections just to buy a home, that's nuts.

ugh....what to do....

Not sure how this plays out in Calgary, but if you're in a competing situation you might be able to do the inspection prior to offers being reviewed.

That way you still get the protection but don't have to make it a condition of your offer. The downside is if you lose the bid, you've paid for an inspection anyway.