Calgary Real Estate predictions?

[nik-]

Originally Posted by lorenavedon

%100 economically driven. Nobody moves to Calgary "just to live here". People move to Vancouver, Manhattan, San Francisco, London, Paris, just to live there because those places are safe and will continue to have people wanting to move there regardless of how many jobs are in those cities. If Calgary economy crashes and there are no jobs here it will be like rats fleeing a sinking ship.

There was like one 3 month period of decreasing population in the last downturn and I think it was less than 10000 people. The rest of the time there was still growth.

[lorenavedon]

Originally Posted by nik-

There was like one 3 month period of decreasing population in the last downturn and I think it was less than 10000 people. The rest of the time there was still growth.

the last downturn in Calgary was the 90s. 2008 2009 was totally different because the entire world's economies were toast. There was nowhere to go. Leave Calgary and go where? People still needed jobs and Calgary still had more jobs in 2009 than anywhere else in Canada. that's why they stayed. like I said. Economically driven. If the unemployment rate in Calgary was currently %10 you think people wouldn't leave?

[troutman]

Originally Posted by lorenavedon

the last downturn in Calgary was the 90s. 2008 2009 was totally different because the entire world's economies were toast. There was nowhere to go. Leave Calgary and go where? People still needed jobs and Calgary still had more jobs in 2009 than anywhere else in Canada. that's why they stayed. like I said. Economically driven. If the unemployment rate in Calgary was currently %10 you think people wouldn't leave?

You answer your own question. Leave Calgary and go where?

Certainly Alberta should work hard on diversifying the economy, and try to become the leader in Green
Energy.

http://www.energy.alberta.ca/Initiatives/1509.asp

Tackling the environmental and other challenges facing energy is seen by some as a “price we have to pay” to continue to grow. We accept the concept of cost. Introducing cleaner ways to produce energy will require strategic investment, some of which has already begun. However, this is not all about emptying our pocket books. The future also represents a significant economic proposition to Alberta. There will be plenty of opportunities for revenue generation and, more broadly, sustained wealth creation for Albertans. We believe the extra opportunities will more than offset the investments that will be required.

Alberta can take a number of steps to derive greater wealth over the longer term and in a more sustainable way through its energy industry. They includes optimizing the recovery of our energy resources - tapping more of what we are currently leaving in the ground, developing our substantial unconventional gas (coalbed methane, shale gas, tight sands) and reaching our oil sands resource potential. They include broadening the markets for our energy resources. They include the development and effective export of energy “know-how” - profitably sharing our solutions with the rest of the world. They also encompass the concept of “value-added” - taking our commodities farther along the value chain than we currently do.

[Slava]

Originally Posted by lorenavedon

the last downturn in Calgary was the 90s. 2008 2009 was totally different because the entire world's economies were toast. There was nowhere to go. Leave Calgary and go where? People still needed jobs and Calgary still had more jobs in 2009 than anywhere else in Canada. that's why they stayed. like I said. Economically driven. If the unemployment rate in Calgary was currently %10 you think people wouldn't leave?

So can we assume that you have sold your house here because of the impending collapse?

[CaptainYooh]

lorenavedon's logic and posts are quite uncompromising and black&white. This little exchange here reminded me of another argument he was trying to advance recently in the discussion regarding depositing cash. Perhaps, the young age thing.

[ranchlandsselling]

Originally Posted by lorenavedon

billionaire Chinese investors can't wait to get their money out of HK or the mainland. They will buy anything in any quantity regardless of the price because they're not investors. They're fleeing to safe assets. Even if they lose %20-%30 during a downturn it's still better than having their cash where it is now. This has already been document in articles in the NY Times and the wall street journal. This is why the Chinese have over taken the Russians in buying up apartments in Manhattan. They're buying anything that moves. Bob the $100,000/year engineer, his stay at home wife and 2 kids are not the ones buying up 20 units at a time in these developments. Condos are being treated like investment vehicles and commodities. This isn't about housing at all. When people understand this they will realize that when they buy to live, they're competing with people that have so much money the price is irrelevant. It's a bubble, it's completely inflated and not based on any type of real-estate or housing fundamentals. It's basic supply and demand. That is why in Toronto they're building complete garbage condos that are falling apart after 5 years because Chinese buyers will buy this stuff sight unseen and not care at all about that. It only hurts the people that need a place to live. Calgary hasn't gotten that bad yet but it's getting there fast. The biggest housing bubble in the history of humanity is currently in china, now that it's maxed out those that caused it are moving it over to hot markets around the world with stable governments. They did a number on Manhattan, London, Paris, Vancouver, Toronto, now it's moving to smaller but well off markets like Calgary.

Originally Posted by lorenavedon

plenty of people in Calgary from all over Canada that have no intention of making this city their home. They're here to churn it and burn it. make the money and GTFO when the pig sinks. Why? Because you can't get a job anywhere else in Canada. The economy is completely dead outside of alberta. These people are willing to pay a premium to rent and be able to bail out at any time. That is why rents are so high and about equal to purchasing. Everyone on planet earth knows Alberta is a boom/bust economy. The only people delusional enough to deny it is Albertans lol. They think this time it's different. It's not. The second oil and gas slows down the pig is toast. Everything depends on oil and gas. The home builders, the blue collar workers, IT companies, software companies, government workers, the girl at the mall selling you a pair of shoes. It's all because of oil and gas trickling down to other industries. When oil and gas slows, everything will shrivel up like a dying plant.

Originally Posted by lorenavedon

%100 economically driven. Nobody moves to Calgary "just to live here". People move to Vancouver, Manhattan, San Francisco, London, Paris, just to live there because those places are safe and will continue to have people wanting to move there regardless of how many jobs are in those cities. If Calgary economy crashes and there are no jobs here it will be like rats fleeing a sinking ship.

Good thing you're not one of those extremely opinionated housing guys, if you were I'm not sure anyone could take these vague generalized posts very seriously.

Oh no, look out for the "Chinese Billionaires" who want to buy $350k condo's and are pricing out the local engineers.

http://www.huffingtonpost.ca/2014/08...n_5718705.html

A recent study by Chinese real estate website Juwai concluded that Canadais the third-most attractive marketfor Chinese investors, after the U.S. and Australia.

Chinese investors spent $22 billion on American real estate in 2013, and $17.2 billion on Australian real estate. The U.S. National Association of Realtors recently released a report saying, like in Australia, China is the biggest sourceof foreign investment.

Given both Australia and US are bigger markets for Chinese Investment than Canada, if Canada was half of Aussie investment lets say $8.5 billion and we're also talking about investment in multi-million dollar houses and condos etc. in Vancouver and Toronto. That pie's not big enough to start making major waves in Calgary especially given it doesn't differentiate between commercial and residential real estate. The pie for Calgary residential real estate gets a lot smaller if we're also talking about commercial investment.

The fact is there's no hard data suggesting that what you claim is the least bit accurate.

Here's a good blog by the ever constant housing bear Garth Turner:
http://www.greaterfool.ca/2014/07/16/the-gullible/

He actually provides numbers for Victoria which could be extrapolated for Vancouver something you're doing in Calgary based on NOT having numbers for Vancouver or Toronto.

Actually we do have some numbers. No, they are not for Vancouver but instead the city of Victoria, which is a few puddles away. Turns out the Victoria Real Estate Board does keep track of who’s buying what where, and isn’t shy about sharing the results.
So here you go. In all of 2013, 5,862 properties changed hands (about a quarter of metro Vancouver’s volume).

Buyers who lived locally already: 74.92%
Buyers from elsewhere in BC: 13.77%
Buyers from elsewhere in Canada: 9.67%
Total buyers who live in Canada: 98.36%
Total buyers from outside Canada: 1.64%

You did hear the stories coming out of Vancouver about developers hiring local Asians to line up for condos outside their developments as well as the news stunt where they had a marketing crew take out a helicopter full of Asians "portraying" to be HAM. It's pretty old news and barely relevant a year or three later. But speaks to the sillyness of the whole discussion.

[darklord700]

Generally, the Asia housing market is far more speculative than the one in Canada. Prices can easily double in a short period of time there so why would an Asian flipper choose to flip in Canada instead of Asia is something I don't get.

The other HAM argument is for people to get money out of China to a safe haven. If they have the money to buy condos in Canada, they already had gotten their money out. And it's much less work to deposit the cash in a secret Caymen Island bank than buying condos.

[bizkitgto]

Originally Posted by ranchlandsselling

http://www.greaterfool.ca/2014/07/16/the-gullible/

He actually provides numbers for Victoria which could be extrapolated for Vancouver something you're doing in Calgary based on NOT having numbers for Vancouver or Toronto.

You did hear the stories coming out of Vancouver about developers hiring local Asians to line up for condos outside their developments as well as the news stunt where they had a marketing crew take out a helicopter full of Asians "portraying" to be HAM. It's pretty old news and barely relevant a year or three later. But speaks to the sillyness of the whole discussion.

I don't think comparing Vancouver to Victoria is relevant....just walk through coal harbour any night and you'll see how one of the densest neighborhoods in the country has almost no foot traffic or business. Locals either individually buy on behalf of foreigner's or set up small companies to purchase real estate, which is why it's so difficult to track foreign ownership in this country - there's always a loop hole!

The Toronto condo boom has been proven to be over-run by foreign money, companies set up in Canada (mostly by Canadians by the way) searching for investor's in Dubai, Moscow, Shanghai etc - these guys are buying up blocks of 50 - 100 condo units at a time. This issue has been well documented all over the news. This has spurred a massive condo boom (I think TO has the most building construction planned in North America right now), and resulted in many average Joe's caught in the middle with over-priced units that are unfortunately built very poorly..... I don't think we can apply what's going on in Toronto to Calgary.

http://www.reuters.com/article/2014/...0S70CP20141013

http://marketbusinessnews.com/condo-...projects/35604

[ranchlandsselling]

Originally Posted by bizkitgto

I don't think comparing Vancouver to Victoria is relevant....just walk through coal harbour any night and you'll see how one of the densest neighborhoods in the country has almost no foot traffic or business. Locals either individually buy on behalf of foreigner's or set up small companies to purchase real estate, which is why it's so difficult to track foreign ownership in this country - there's always a loop hole!

The Toronto condo boom has been proven to be over-run by foreign money, companies set up in Canada (mostly by Canadians by the way) searching for investor's in Dubai, Moscow, Shanghai etc - these guys are buying up blocks of 50 - 100 condo units at a time. This issue has been well documented all over the news. This has spurred a massive condo boom (I think TO has the most building construction planned in North America right now), and resulted in many average Joe's caught in the middle with over-priced units that are unfortunately built very poorly..... I don't think we can apply what's going on in Toronto to Calgary.

http://www.reuters.com/article/2014/...0S70CP20141013

http://marketbusinessnews.com/condo-...projects/35604

Same story different poster.

We're not talking about construction quality as that has nothing to do with it. Calgary had the same crappy issues with a condo boom in the 90's and tons of new houses built in the most recent boom by any hammer jockey some builders could find to build their houses.

Your articles mention "no one really knows about foreign investment, could be 5% could be 50%". So until anyone proves otherwise it's a sexy story that's getting old and not sexy.

Comparing ACTUAL numbers of Victoria sales to Vancouver sales makes 100x more sense than comparing made up or unknown numbers for Vancouver and Toronto and applying them to Calgary. Do you not follow that point? There is no numbers for Vancouver and Toronto. So you have nothing to compare.

The people claiming foreign money buying Canadian real estate don't care about quality, don't live in the units/homes and only are buying for a cash safe haven. So then applying information about Victoria and saying Asian buyers wouldn't buy there isn't supportive of the argument that Asians without a care in the world are buying real estate across Canada without discrimination "sight unseen". Either they care or they don't. Not they care and wouldn't buy in Victoria because the stats suggest otherwise but they don't care elsewhere.... No wait; it's the stable and boring banking system they care about. So why would Victoria, the closest major city to Vancouver and even closer to ASIA be so unattractive.

Finally, what's the matter if it even is happening? The rental stock in Calgary is pathetic. The downtown core was pathetic (slowly improving). Money flocking in and buying condo's creates a demand for condos. If they overbuild condo's as a result and they end up rented out that's good for the rental market that we're lacking. Ditto for Toronto with a vacancy of 1% (quoted in one of your articles). And if they flip in 5-10 years and the market was overbuilt or over bought, guess what? Prices will go down.

Home ownership in Canada was at 69% in 2011. Calgary has historically been higher than other cities in Canada and was at 74% the same year. Given how much Calgary has boomed over the years 75% of those people have been buying houses. That’s what’s been driving prices along with low interest rates and good incomes. The condo market is pretty small compared to SFH's in Calgary, so it's mostly been hitting the SFH market, and that's why prices are where they are.
From the CREA

The housing market’s strength is significant enough that it prompted CREA to boost its forecast for sales this year. It now expects 475,000 existing homes will sell in 2014, up 3.8 per cent from last year (457,000). In June, it expected that number to be 463,400

CMHC shows 300,000 new completions in 2013 (house & multi)

That’s 757,000 sales in Canada in 2013.

And here’s a stat from Altus

The Altus Group report estimates that there were about 300,000 first-time buyers in Canada per year on average in 2009-2013. About half of them were in the 25-34 year age group with the median age of 34. Single-person households accounted for about one in five first-time buyer sales.

So, we’ve accounted for 40% of home sales (300,000 approximately) going to first time home buyers and we’ve got 457,000 remaining homes to account for which is about the same amount of existing homes sold. All those people obviously had to move somewhere. Some probably left, some probably rented, but given home ownership rates in Canada AT LEAST 75% of them probably bought a house accounting for at least 48.75% of the houses sold in 2013. That leaves a very conservative 11.25% unaccounted for (probably much less). There’s plenty of Canadian investors, US investors, as well as Asian buyers (because no one is denying they exist). But what’s left over isn’t going to be statistically significant enough to drive home prices out of reach of average Canadians. If anything is going to do that it’s Canadians that are putting too much faith in the value of housing.

[bizkitgto]

Originally Posted by ranchlandsselling

Comparing ACTUAL numbers of Victoria sales to Vancouver sales makes 100x more sense than comparing made up or unknown numbers for Vancouver and Toronto and applying them to Calgary. Do you not follow that point? There is no numbers for Vancouver and Toronto. So you have nothing to compare.

You make a lot of good points in your post, but this I don't agree with - you can't compare real estate in Vancouver to Victoria, you can't compare it to anywhere else in Canada...comparing apples to oranges isn't better than comparing apples to suspension bridges.....Vancouver is in it's own league.

[Johnny199r]

Calgary home prices will continue to go up as Calgary and Edmonton are the economic engine of this country right now. There are more people moving here than there are houses, therefore demand = higher prices.

[Mr.Coffee]

Originally Posted by Johnny199r

Calgary home prices will continue to go up as Calgary and Edmonton are the economic engine of this country right now. There are more people moving here than there are houses, therefore demand = higher prices.

I do agree with lorenavedon's general theme, not the posts altogether however, but the theme in his posts that Alberta won't be the economic engine forever.

Things just don't go up and stay hot forever. That just has never happened at any point in history, and all "empires" will fall one day.

Ontario at one time was the economic engine too. Oil and gas are non-renewable commodities. Our world is changing, and eventually we will need a substitute economic driver if we want to remain as a healthy economy.

I don't actually know how you could argue with this point, to be honest.

[DoubleF]

Calgary is attempting to diversify from relying completely on Oil and Gas. It's smaller by far, but logistics and finance is growing fast (arguably, many of these companies pop up and can survive due to oil and gas in the first place).

Calgary is supposed to be a logistics hub, airport will expand to be international and finance is expanding rapidly too. Whether this is truth or just an arm of Oil and Gas, I'm not sure, but it's attracting people and seems to be keeping people here when oil and gas slows down.

http://en.wikipedia.org/wiki/Global_..._Centres_Index

Calgary is currently ranked 26th. Look at the other cities that surround us and are below us.

I believe Calgary real estate will continue to grow slowly. 1-3% increase per year due to actual people here to live and not purely due to speculation. I also believe that inner city will continue to gentrify and push suburban development.

I really hope to see Alberta continue to be an energy power in the future by using oil and gas revenues to diversify into renewable energies and research.

[lorenavedon]

Originally Posted by DoubleF

Calgary is attempting to diversify from relying completely on Oil and Gas. It's smaller by far, but logistics and finance is growing fast (arguably, many of these companies pop up and can survive due to oil and gas in the first place).

Calgary is supposed to be a logistics hub, airport will expand to be international and finance is expanding rapidly too. Whether this is truth or just an arm of Oil and Gas, I'm not sure, but it's attracting people and seems to be keeping people here when oil and gas slows down.

http://en.wikipedia.org/wiki/Global_..._Centres_Index

Calgary is currently ranked 26th. Look at the other cities that surround us and are below us.

I believe Calgary real estate will continue to grow slowly. 1-3% increase per year due to actual people here to live and not purely due to speculation. I also believe that inner city will continue to gentrify and push suburban development.

I really hope to see Alberta continue to be an energy power in the future by using oil and gas revenues to diversify into renewable energies and research.

like you originally speculated. Any diversification you see is just a byproduct of oil and gas. Finance, software, hardware, services are all there to service the oil and gas industry. Tech company in Calgary? Sure, it makes products and software for oil and gas. You want real diversity? Sure, if EA Games relocates its main design office to Calgary for game design then that's diversification. If Tesla moves to Calgary that's diversification. If Blackberry gets bought out and moves it's office to Calgary that's diversification. A random software company making software for oil and gas specific companies is not diversification. A waitress at a restaurant serving beer to oil and gas engineers/executives is not diversification. An accountant doing finance for an oil and gas company is not diversification. Calgary is a house of cards. Everything relies on oil and gas. If that ####s the bed the entire economy ####s the bed with it.

[darklord700]

How many pretty girls diversified to becoming a brainy girl? If one thing is working for you, you milk it till it's dry. That's the reality. It's nice and sweet to talk about diversification but it's not gonna happen until it's too late.

[DoubleF]

Originally Posted by lorenavedon

Calgary is a house of cards. Everything relies on oil and gas. If that ####s the bed the entire economy ####s the bed with it.

True, but I don't see Alberta crapping the bed overnight. Even if we found a replacement for oil and gas tomorrow, people's habits will still keep us in the game for a few years while we retool. We can abandon ship when that happens.

I know most of the diversification is due to O&G. But even if O&G fails, at least we have the tools and skills in place to begin attempts to truly move away from it. That's more that can be said about 2006. It's not much, but it's something.

[#-3]

I think one thing that Calgary has going for it if the O&G industry busts, is the economic infrastructure is vary useful to any industry. Calgary has Offices, Warehouses, Hotels... If Oil moves out all of the infrastructure and labour will go down in cost, other industries will find it useful and move in.

I think its far scarier for places like Fort Mc & Edmonton, where its well services and processing, An Investment Firm or a Tech company could use cheap and plentiful office space available in Calgary but they don't need the Mine or Rig Manufacturing Yard. The biggest problem for Calgary is 4 or 5 million people (when oil goes bust) is such a small economy the far, far worse problems in the north will drag us down with them.

[Bill Bumface]

^ Agree completely.

That's why all investments into making our city a great place now will pay off one day. We want to be a Pittsburgh, not a Buffalo.

[gladaki]

I am thinking of starting a thread ...House hold income vs House you bought.. but i guess it not good to ask house hold income of forum members

[ranchlandsselling]

Originally Posted by gladaki

I am thinking of starting a thread ...House hold income vs House you bought.. but i guess it not good to ask house hold income of forum members

Just ask the ratio