To all you inner city folks moving to our suburbs, be a good neighbor.
Shovel your ####, mow your ####, and most importantly, pick up your dog's ####. Then we can have beers in our massive front attached garages together while our kids play on uber quiet and safe streets.
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You would have a glut of condos, many sitting empty, while bidding wars continued on houses.
The great majority of homes bought by first time buyers today are heavily subsidized by parents. All of that boomer wealth is starting to be transferred to their children. If an extra $100k in downpayment is enough to ensure the grandkids won’t be raised in a condo, the bank of mom and dad will happily oblige.
And recent efforts to stem foreign buyers from using Canadian real estate as a way to stash wealth are half-hearted and difficult to enforce. Taxes are imposed on properties sitting empty? Let a nephew or family acquaintance live rent-free in a $3 million property while they go to school. Problem solved.
If Canadian governments were really serious about cutting off foreign money in Canada’s real estate market, they would impose New Zealand’s restrictions on foreign ownership. But they won’t, because they aren’t.
Firstly, a lot of the glut of condos is due to specific economic factors, many associated with Covid. In Calgary, you had a massive buildup followed by a prolonged oil industry slow down. In Vancouver, Covid has shut the border. Typically, international short-medium term residents and tourists form a large part of the downtown demand. Also, many people are working from home. This is all very temporary. Even then, in Vancouver, condo sales are already picking up. I actually watched it happen in real time as I was looking at places through December-March and putting in bids. First the houses went, then the townhouses, and then the bidders turned to condos.
A lot of people with families would choose to move to townhouses if they were still available. I'm not talking about a run down townhouse complex in the bad parts of Queensland. I'm talking about centrally located higher end units with 3-4 bedrooms. These are really perfect for most modern families. Many people don't want to spend their weekend dealing with the yard, and choose to have 0-2 kids. In a dual income family with children, time is at a premium. The priorities become time saved from commuting, and ease of access to facilities.
What Peter12 said about development is really correct for most markets in Canada. The municipalities control the permits and limit density. This creates artificial limits in supply. The quality units that are on the market skyrocket. Then the detached homes, due to their development potential, themselves skyrocket, no matter how run down.
There definitely downsides to density, but there are many to not having density. In fact, the main reason I won't move back to Calgary is the endless suburban sprawl. I appreciate the advantages of having your own yard, but for me, the disadvantages of that are profound. You're basically stuck with a commuting and car culture.
Also, based on my recent buying experience, foreign investment was a non-factor. Every showing I went to in Vancouver had between 30-50 showings, all local people in their 30-40s. Many had older parents with them, but I didn't see any lack of local demand.
I do 100% agree that we are seeing parents help out adult children, and it's typically a lot more than $100k.
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You're going to screw up some pretty nice neighborhoods doing that. Have you seen what the parking looks like where infills are built?
Next thing you'll want to start selling off green areas, golf courses, etc. and the whole inner core turns to sh**.
What about all those empty building downtown? Why are we not thinking of turning a portion of them into apartments?
I disagree with this. The people are going to move to whatever city regardless. They can either live in a place with high density, that is close to transit and jobs. Or they can all commute in from the suburbs. The commuting is far more damaging.
Converting office buildings to residential is a good idea, but, once again, this requires a loosening of the zoning restrictions.
All the while, keeping housing affordable. I would be ok with that. Density doesn't have to be 20 story condo buildings offering sub 1000 sqft apartments.
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I could be in the minority, but if we could destroy a few of these:
All the while, keeping housing affordable. I would be ok with that. Density doesn't have to be 20 story condo buildings offering sub 1000 sqft apartments.
Maybe if Hawkwood had 500-1000 years of history to be built on.
Bulldozing all the detached homes in Vancouver and turning then into condos will just drive more families out of the city and drive up prices in the suburbs. There are only so many 25-35 year old singles and childless couples looking to buy 760 sq ft homes.
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Originally Posted by fotze
If this day gets you riled up, you obviously aren't numb to the disappointment yet to be a real fan.
All the while, keeping housing affordable. I would be ok with that. Density doesn't have to be 20 story condo buildings offering sub 1000 sqft apartments.
Hilarious that you picked a point literally a block away from my first family's first house as an example of what's undesirable. Growing up in these burbs was pretty great age 5-11, or so, but it then became a prison from ages 12 and up. As soon as my priorities changed from playing with the sprinkler in the backyard, I realized just how challenging doing anything became when a major commute was involved. My father also sacrificed a lot of time with his family, as he had to work 10-12 hours/day and commute 2-3 hours on top of that.
Bulldozing all the detached homes in Vancouver and turning then into condos will just drive more families out of the city and drive up prices in the suburbs. There are only so many 25-35 year old singles and childless couples looking to buy 760 sq ft homes.
No one is saying you have to go to that large of an extreme. If there were more townhouses available then the price would drop, and the same would apply to condos. It's also not just detached homes that could be torn down, it's also industrial and commercial space. For example, there's entire blocks along terminal that are empty.
A lot this "detached housing" is also in a state of total decay. These places don't have families living in them. Most are sub-obtimized and, if rented at all, to single people without families. A massive proportion of the detached houses in Vancouver are total tear downs. A large proportion are then slums that absentee landlords won't put a dime into.
All the while, keeping housing affordable. I would be ok with that. Density doesn't have to be 20 story condo buildings offering sub 1000 sqft apartments.
Who exactly would be buying those? Any of those houses in Hawkwood would likely sell within a month right now (fairly priced), whereas a townhouse might sell in 2-3 months if you're lucky. And any savings you might get by buying a condo or townhouse are nullified with ridiculous condo fees. Then you have to potentially deal with noisy/####ty neighbors, bad building management, parking issues, restrictions on pets/visitors, etc. Right now the market is overwhelmed with buyers coming from condos who want to get away from that, building more of what they're moving away from won't help anything
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Hilarious that you picked a point literally a block away from my first family's first house as an example of what's undesirable. Growing up in these burbs was pretty great age 5-11, or so, but it then became a prison from ages 12 and up. As soon as my priorities changed from playing with the sprinkler in the backyard, I realized just how challenging doing anything became when a major commute was involved. My father also sacrificed a lot of time with his family, as he had to work 10-12 hours/day and commute 2-3 hours on top of that.
HAHA, i lived roughly in both neighborhoods from where those google street views were taken so it is not directed at anyone but my own experience
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Who exactly would be buying those? Any of those houses in Hawkwood would likely sell within a month right now (fairly priced), whereas a townhouse might sell in 2-3 months if you're lucky. And any savings you might get by buying a condo or townhouse are nullified with ridiculous condo fees. Then you have to potentially deal with noisy/####ty neighbors, bad building management, parking issues, restrictions on pets/visitors, etc. Right now the market is overwhelmed with buyers coming from condos who want to get away from that, building more of what they're moving away from won't help anything
Your assumption is those are all 1-2 bedroom condos. They aren't. there is an assortment of housing styles in that area, ranging from small apartments, walk-ups, semi-detached homes, and large/multilevel condos.
I don't see what is happening now being the death-knell of condo/inner-city living at all. It's a reaction to a series of events that, once subsided, will see a correction to an extent.
And i would disagree that this type of neighbourhood wouldnt be desireable compared to:
Who exactly would be buying those? Any of those houses in Hawkwood would likely sell within a month right now (fairly priced), whereas a townhouse might sell in 2-3 months if you're lucky. And any savings you might get by buying a condo or townhouse are nullified with ridiculous condo fees. Then you have to potentially deal with noisy/####ty neighbors, bad building management, parking issues, restrictions on pets/visitors, etc. Right now the market is overwhelmed with buyers coming from condos who want to get away from that, building more of what they're moving away from won't help anything
Townhouses in the nice parts of the downtown core sell extremely well.
Maybe if Hawkwood had 500-1000 years of history to be built on.
You don't need 500 year old buildings to increase density and make a neighborhood more attractive to residents. The majority of the buildings in that photo were built within the last 70 years.
No one is saying you have to go to that large of an extreme. If there were more townhouses available then the price would drop, and the same would apply to condos. It's also not just detached homes that could be torn down, it's also industrial and commercial space. For example, there's entire blocks along terminal that are empty.
A lot this "detached housing" is also in a state of total decay. These places don't have families living in them. Most are sub-obtimized and, if rented at all, to single people without families. A massive proportion of the detached houses in Vancouver are total tear downs. A large proportion are then slums that absentee landlords won't put a dime into.
Exactly, zoning changes don't equate to "bulldozing" entire neighbourhoods, but if they did, that would obviously mean there was a greater demand to live in a more central environment (even if it was a smaller space) than in a single family home.
Cliff doesn't understand that demand to live in central Vancouver has far outstripped the land's capacity to supply living units as single family homes. Speculation is occurring because the land those units occupy is so valuable.
We could also do a much better job of blending different types of zoning together instead of our current boutique and discrete model of zoning one land block on a case by case basis. We should follow the 12 zone model like they have in Japan where dense residential can mix with single family homes, commercial and certain types of light industrial (like breweries).
I really don't like a lot of the relatively new developed areas in Calgary, where you have these huge houses, all pretty similar in design, spaced a few feet apart. When one catches on fire, the adjoining houses are automatically threatened. Also the tree growth seems to be quite sparse.
For me. I prefer the older areas with smaller houses on bigger lots, with sizeable backyards, and abundant tree growth. Also the variety of design and quality of materials and workmanship seems to be much greater.
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All the while, keeping housing affordable. I would be ok with that. Density doesn't have to be 20 story condo buildings offering sub 1000 sqft apartments.
I would love to see a lot of the older, 60s-70s, attached up and down duplexes replaced with newer row style homes. This is near my house and I think the location and lots sizes would be perfect for redevelopment.
Hilarious that you picked a point literally a block away from my first family's first house as an example of what's undesirable. Growing up in these burbs was pretty great age 5-11, or so, but it then became a prison from ages 12 and up. As soon as my priorities changed from playing with the sprinkler in the backyard, I realized just how challenging doing anything became when a major commute was involved. My father also sacrificed a lot of time with his family, as he had to work 10-12 hours/day and commute 2-3 hours on top of that.
I live less than 100 m from that Google map point in a single family detached house. My kids are still in your first age range, and love things like the backyard ice rink/sprinkler and roads empty enough to ride their bike on.
I think its reasonably likely walking distance amenities will remain interesting as they get older (library, movie theater, YMCA, etc). What did you find yourself travelling to as an older kid that you couldn't access locally? Genuinely curious here - my kids love our location now but moving isn't off the table if it would be better for them.
I work from home (even pre-covid) and my wife works part time in the north so commuting time is a non-issue for us.
Here's a question. Don't you think the decision is different right now? You can buy a nice place in the burbs for $600k, with 20% down, that's a mortgage of $1,723 at 1.79%. Now let's look at how an uptick in the economic market might affect rents. Your landlord evicts you, you are forced to pay $3,000 for rent. The math changes again.
I fully agree with you about the current market. I recently almost pulled the trigger on a house that cost $575k because at that price for an equivalent house, my rent looks expensive.
That's why the thesis of my post was that the rent vs. buy argument is always a nuanced one because the math is constantly changing. There isn't a 'general rule of thumb' or 'more often than not' argument that applies because when one sits down and models the decision correctly (includes all costs of home ownership and rent costs (property taxes, condo fees, maintenance, insurance, moving a couple of times if you need to switch rentals etc) it's highly sensitive to a number of assumptions that, again if you're being honest with yourself you cannot accurately predict (market returns, price appreciation assumptions, rent inflation assumptions etc.)
With regards to the purpose of the thread, Calgary and Edmonton are not anywhere close to a housing bubble. They've been beat up so badly over the last 10 years while the rest of the country has bubbled that these are some of the only markets with high affordability relative to incomes. The issue in these markets is maybe the terminal value argument ie. Does it really make sense long term that an inner-city duplex should cost $850k- $1 million in a small prairie city whose major industry is in long term decline. If you're a 20 or 30 something couple are you going to get your money back with a decent return in 25 / 30 years that it makes sense compromising retirement savings to squeeze into the house you want to live in?
Last edited by Cowboy89; 03-15-2021 at 11:18 AM.
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My little spreadsheet... simplistic but enough to give ya'll an idea on quantifying your respective "investment" perspectives. I chose a 15yr time period for a $600k house versus $2k/mo rental, and in order for the rent versus buy to be equal, the home equity must increase by almost 60% whilst investments stay at 7% (or lower) consistently.
dagnabbit... I had copied/pasted but I guess it doesn't work too well...
I can't see your sheet to verify the assumptions/math, but 60% over 15 years is less than a 3.2% compound growth rate. I think its pretty likely Calgary single family homes do better than that over the next 15 years from their current starting point.
I also think the stock market might do less than 7% over the next quarter years. The current market levels are pretty high, especially in the US. Thats generally the best predictor of future returns.
Edited to add: I think your pricing assumptions are a bit off as well. My house (location discussed above) wouldn't be worth $600k I don't think, probably ~10% less than that. But based on a rentfaster search the only things close to comparable (but not as nice) rent for ~10% more than that. Even small differences (which will obviously vary based on location/personal circumstances) will make a big difference to your results.
I really don't like a lot of the relatively new developed areas in Calgary, where you have these huge houses, all pretty similar in design, spaced a few feet apart. When one catches on fire, the adjoining houses are automatically threatened. Also the tree growth seems to be quite sparse.
For me. I prefer the older areas with smaller houses on bigger lots, with sizeable backyards, and abundant tree growth. Also the variety of design and quality of materials and workmanship seems to be much greater.
That’s my preference as well. I’m willing to accept the tradeoff of less square footage indoors, a linoleum kitchen, and 30 year old bathrooms for a private yard, trees, and schools in walking distance.
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Originally Posted by fotze
If this day gets you riled up, you obviously aren't numb to the disappointment yet to be a real fan.
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