Real estate in Calgary - another bubble?

[Winsor_Pilates]

Originally Posted by blankall

The condo real estate market in Vancouver is turning. Like I said earlier, from what I observed during my purchase was that houses got hit by massive demand in early January and since then the demand has been shifting down to towhouses, multi-bed condos, 2 bed condos, to single bed condos, as people get priced out of their more idea option.

There's still a lot of places sitting, in downtown especially. I own a unit downtown, and there are 8 units sitting. Typically units do not sit at all in my building. There's definitely a lot more available with condos, generally. The prices of condos, especially downtown, are not keeping pace with price of other inventory.

I think the "multiple offers" thing is a bit of a game. It seems like the real estate agents have just started purposely underpricing listings to encourage multiple offers. This a practice ubiquitous in Toronto and somewhat common in Vancouver in the past. Now, it's become the norm in Vancouver.

Depends on the product type, location and pricing.
There's a lot of people thinking the market is crazy so listing at unreasonable prices. A lot of sitting properties are those overconfident sellers.
Edit: ^^And if your building with sitting listings the one with a $1M water deductible and bursting pipes, there's your reason. That sucks.

Multiple offers are certainly a bit of a game or more so a strategy. But it only works if there's enough demand to do so.
If I'm listing something that I know will have 5-10+ buyers wanting it, it only makes sense to position the listing this way.
It doesn't work in a slow market.

[bizaro86]

Originally Posted by I-Hate-Hulse

Ahh... but your condo sounds like it has a clean claims history. Put 2-3 medium sized claims and that will sky rocket, if you can get coverage at all.

One of my old condos in Victoria Park (flood affected and had a few water leak claims since) struggles to get insurance leading to sky-high condo fees and deductibles. Economically, it's a utter disaster for owners, especially at current values.

The worst part of it all is how powerless you are in an apartment style condo. Each of those 38 people in your complex can put your complex into economic ruin. Sadly, as a Board member you really see how the lowest common denominator surfaces and how little you can prevent it.

Fair point. We have had a couple claims in the building over the 10 years I've owned, but none in the last couple.

We did pay out a water loss independently to avoid going through insurance last year (cost was only a couple thousand more than the deductible). Deductible is now $50k for water, which is why deductible buy down is definitely a necessity for every condo owner.

I thought no claims was apples to apples for my claims free personal house policy, but your point that any one resident who leaves a window open can raise your fees through carelessness is a good one.

[Flamenspiel]

Personally, based on history I agree it’s a (condo bubble) in Toronto, and probably Vancouver as well. To be clear if you buy now it does not mean you will lose money, but it may take 10 years to make your money back. Land is scarce, sky and air is not. There is a high rise project in Kelowna, that is the kind of thing that scares me. It sold out pretty quickly, that’s bubble type thinking.

I remember the 80s condo bubble in Toronto, I believe it was high interest rates that triggered the decline. I had two friends who bought at that time in the same pre build. One walked away and sacrificed his 10k deposit. The other held on and sold at profit after about 15 years. Perhaps profited even when you added all the interest payments and rentals that were not enough to cover.

There will also be political support for high interest rates because all the boomers, Xers, and older millenials will want the low risk interest income from higher rates. Of course I could be completely wrong, and there is that...

[blankall]

Originally Posted by Winsor_Pilates

Depends on the product type, location and pricing.
There's a lot of people thinking the market is crazy so listing at unreasonable prices. A lot of sitting properties are those overconfident sellers.
Edit: ^^And if your building with sitting listings the one with a $1M water deductible and bursting pipes, there's your reason. That sucks.

Multiple offers are certainly a bit of a game or more so a strategy. But it only works if there's enough demand to do so.
If I'm listing something that I know will have 5-10+ buyers wanting it, it only makes sense to position the listing this way.
It doesn't work in a slow market.

Just about every older building in Vancouver is seeing issues with pipes. The insurance companies do have a good reason for raising their rates, as claims, especially water claims, are plentiful. The building I own in has over 150 units. Any building that size over a few decades old is going to see a water claim once few years, minimum, and there's nothing special about the amount of claim there vs other buildings. In fact, the strata in my building is probably too over eager when it comes to managing issues, which makes renovations a PITA.

The other option major option for any strata is to rip out all the plumbing at once, which wouldn't necessarily stop all claims, as any major renovation is going to result in a few mistakes/issues along the way.

Deductibles are also very high in a lot of new buildings, as the insurance companies can just charge the high rates from the get go, and not have to worry about honoring existing policies and the newer buildings are often more expensive to repair.

At the end of the day, the extra insurance is still pretty minimal when in comparison to the actual price of the units. You're literally talking about an extra $500-1000 at most in insurance payments. It might account for a $5-10k drop in price, but not the larger drops with units still sitting. The much bigger issue is the lack of international travel and flee from the downtown core. Rents are way down and vacancy is up. Having a unit sit empty for many months is a much bigger issues than having to pay an extra $500 in insurance premiums.

[Hemi-Cuda]

Would something like this be an intentionally low listing to generate a bidding war?

https://www.realtor.ca/real-estate/2...panorama-hills

It went up yesterday, and if was a year ago I'd say the price was right. But right now that seems to be either willfully or ignorantly low

[Monahammer]

Originally Posted by Hemi-Cuda

Would something like this be an intentionally low listing to generate a bidding war?

https://www.realtor.ca/real-estate/2...panorama-hills

It went up yesterday, and if was a year ago I'd say the price was right. But right now that seems to be either willfully or ignorantly low

not huge, no real updates since built in 04, small lot, far suburb. Seems right to me...

[Weitz]

Yah that doesn't seem totally out to lunch to me.

[DoubleF]

Looks a little bit like a family home with kids. It's also possible they just need to get a fast sale so that they can finalize everything with another home they have purchased?

[Fuzz]

My friend sold one in Hidden Hills last year for around $420k that looked really similar. So that looks in line, unless prices have gone way up.

[MillerTime GFG]

Tbh, I think that property looks to be a little overpriced. 1767 square feet for 500k.

[MillerTime GFG]

BMO warns policymakers could 'swing the hammer' on hot housing

This is what I was eluding to earlier in this thread. I had concerns that the Feds could potentially do something drastic. I am biased of course, but I certainly hope they don't make mortgage qualifying more difficult than it already is.

“Canadians in some markets are now buying houses, rural properties and cottages like they were buying toilet paper a year ago. Some areas are seeing prices up by a third, not from pre-COVID levels, but from just late last year, with widespread belief that there’s nothing to stop the momentum—after all, we’ve been told repeatedly that interest rates aren’t moving,” Kavcic said.
“One wonders now, assuming that interest rates won’t budge, if and when Ottawa is going to swing the policy hammer, and what that might look like.”

Kavcic isn’t alone in speculating further action could be in the offing. In a note Wednesday, RBC Senior Economist Robert Hogue said policymakers should put every option on the table to curb rapid home-price appreciation, including “sacred cows” like a capital gains tax on the sale of a principal residence.

https://www.bnnbloomberg.ca/bmo-warn...in76zmtDj6NxPE

[Slava]

Originally Posted by MillerTime GFG

BMO warns policymakers could 'swing the hammer' on hot housing

This is what I was eluding to earlier in this thread. I had concerns that the Feds could potentially do something drastic. I am biased of course, but I certainly hope they don't make mortgage qualifying more difficult than it already is.




https://www.bnnbloomberg.ca/bmo-warn...in76zmtDj6NxPE

I guess what I think is that a lot of these measures talk about the Canadian market as though it’s the same in Toronto as it is in Calgary or Claresholm for that matter. It’s not great because while the market might need to be cooled off there, and probably should be left to heat a little on the prairies. That’s a piece of the reason I think they won’t bring the hammer down.

[MillerTime GFG]

Agreed, that's been my issue even with other policies introduced in the past, including the stress test. They were measures mainly implemented for Toronto and Vancouver markets.

Canada's real estate is unique in the sense that it can vary drastically across the country because of our size, but any policy implemented is done across all markets.

[blankall]

Originally Posted by MillerTime GFG

BMO warns policymakers could 'swing the hammer' on hot housing

This is what I was eluding to earlier in this thread. I had concerns that the Feds could potentially do something drastic. I am biased of course, but I certainly hope they don't make mortgage qualifying more difficult than it already is.




https://www.bnnbloomberg.ca/bmo-warn...in76zmtDj6NxPE

I really have mixed feelings on the mortgage qualification issue. Yes, it's obviously bad to have Canadians overextend themselves with mortgages. However, it's also already pretty tough to qualify for a mortgage at price points in many markets.

The last round of restrictions on mortgages also seemed to have no effect whatsoever on prices. The mortgage qualification restriction seemed to only target working people looking to buy their first place. People borrowing off existing equity and other investors aren't really affected by these restrictions. For example, if you're leveraging off a $1,000,000 detached home to put 50% down on a $400k condo, these restrictions don't really affect you.

[MillerTime GFG]

Originally Posted by blankall

I really have mixed feelings on the mortgage qualification issue. Yes, it's obviously bad to have Canadians overextend themselves with mortgages. However, it's also already pretty tough to qualify for a mortgage at price points in many markets.

The last round of restrictions on mortgages also seemed to have no effect whatsoever on prices. The mortgage qualification restriction seemed to only target working people looking to buy their first place. People borrowing off existing equity and other investors aren't really affected by these restrictions. For example, if you're leveraging off a $1,000,000 detached home to put 50% down on a $400k condo, these restrictions don't really affect you.

Are you referring to the stress test? The original stress test was for high ratio (insured) mortgages only, but they amended that to include conventional mortgages a year or so later, so it would be applicable in your scenario.

[blankall]

Originally Posted by MillerTime GFG

Are you referring to the stress test? The original stress test was for high ratio (insured) mortgages only, but they amended that to include conventional mortgages a year or so later, so it would be applicable in your scenario.

Yes, but the person with lots of equity purchasing a smaller investment property is likely to be able to easily pass the stress test. They drive up prices and the working family looking to buy their first home has a double whammy to deal with, of both increased pricing and a stress test.

[Regular_John]

So I’m probably jinxing it by posting, but our townhome in Canyon Meadows is conditionally sold after 6 days on the market Our complex went through an eye watering assessment a few years ago, and while it looks great now our units were essentially unsellable for 5-6 years stretch, so getting a reasonable offer inside of a week was unexpected to say the least.

We’re going on viewings tomorrow, but anyone have opinions on Tuxedo Park/Winston Heights-Mountview neighbourhoods?

[DoubleF]

Originally Posted by jaydorn

So I’m probably jinxing it by posting, but our townhome in Canyon Meadows is conditionally sold after 6 days on the market Our complex went through an eye watering assessment a few years ago, and while it looks great now our units were essentially unsellable for 5-6 years stretch, so getting

We’re going on viewings tomorrow, but anyone have opinions on Tuxedo Park/Winston Heights-Mountview neighbourhoods?

I lived in Tuxedo for 5 years. I like the area for its proximity to many places in the city and I only moved from my Townhouse there to get into a single detached home. There's more things that are walkable if living closer to Centre Street and 16th Ave than Edmonton Trail. I had a friend who lived in Winston Heights across from the school and really liked it, but also only moved to get into a more affordable single detached house.

There are a few things to keep in mind for long term. There are some really nice and newer places beside some kinda derelict places. Gentrification will happen sooner or later, but who knows how long that will be with the recession in Calgary. There's also ta few development ideas on 16th Ave which I am not sure what is going on there. The green line is supposed to happen soon.

Who knows what type of chaos that will create when those projects start though, but super long term, those projects likely may add to the vibe of that surrounding area.

[Mazrim]

Originally Posted by jaydorn

So I’m probably jinxing it by posting, but our townhome in Canyon Meadows is conditionally sold after 6 days on the market Our complex went through an eye watering assessment a few years ago, and while it looks great now our units were essentially unsellable for 5-6 years stretch, so getting a reasonable offer inside of a week was unexpected to say the least.

Congrats! No wonder it sold quickly though - you did a great job making it look great inside.

[Robotic]

Was hoping to share just the gif and not the link to reddit. But I don’t know how. Was interesting in housing prices compared to the rest of the world.

https://www.reddit.com/r/dataisbeaut...tm_name=iossmf