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  • CanadaGoinUp...

    Why should Vancouver be the only budding housing bubble in the country...time to spread the fun to the rest of the country, which seems to be almost single-handedly bucking the real estate trend in the rest of the world...:eek:

    Ohhhhhh Canada...
    Canada’s Currency Strengthens on ‘Very Strong’ Housing Report

    Dec. 7 (Bloomberg) -- Canada’s dollar rose for the first time in four days, reversing an earlier loss, after a government report showed building permits jumped by 18 percent, more than economists projected...

    ...The total value of building permits issued by Canadian municipalities increased to C$6.12 billion ($5.76 billion), Statistics Canada said today in Ottawa, the highest level since September 2008. Economists in a Bloomberg survey predicted a 1 percent gain...

    ...Bank of Canada Governor Mark Carney’s pledge to freeze record-low borrowing costs through June may be raising the chances of a bubble in home prices even as it helps the economy recover from its first recession in 17 years.

    Sales of existing houses rose 74 percent in October from the January low, with prices up 21 percent from a year ago to a record C$341,079, partly because of Carney’s promise -- the only date-specific commitment from a Group of 20 central banker...




    Housing sales across Canada are set to reach new highs
    Last Updated: Thursday, December 03, 2009 | 08:02 PM EST

    Financial Post

    TORONTO - November housing sales across the country are set to reach new highs based on fresh data from the country’s two most expensive markets.

    The national numbers from the Ottawa-based Canadian Real Estate Association are not due out until mid-December but the Toronto Real Estate Board said yesterday it had its best November on record.

    Toronto’s news came on the heals of a Wednesday release from the Real Estate Board of Greater Vancouver that said sales activity in the city rocketed up 252.7% in November from a year ago.

    What the latest numbers will likely mean is an improvement in the national average sale price, which was up 20% in October from a year ago — the largest such increase in two decades. The two cities tend to skew the national average price up or down, based on levels of sales activity...




    X marks the spot for condomania's return

    With just a handful of units left in its stylish X condominium now under construction downtown, Great Gulf Homes and Lifetime Developments has decided to release a second phase for the infill development tomorrow.

    This will add roughly 478 suites to the community – situated at Jarvis and Charles streets, just south of Bloor Street [Toronto]. The new 42-storey tower will stand just south of its sister tower, X, The Condominium...

    ...It seems Mr. Brown isn't the only one excited about X2. Earlier this week, scuffles broke out among competing lines of real estate agents and brokers, some of whom had been lined up on the sidewalk since Nov. 15 for a chance to get first crack at the condos...


  • #2
    Re: CanadaGoinUp...

    GRG55 -

    I am curious as to what is fueling the RE boom in Canada. Admittedly, borrowing costs are low as compared to previous times in history, but AFAIK, the lending standards of the Canadian banks are not as lax as they were in the US during our boom. Hence, lending would still be restricted by income and I don't think income levels have gone up in the past few years (maybe in Alberta and the oil/gas boom towns).

    Are there option-ARMS, NINJAs etc. up there?

    Comment


    • #3
      Re: CanadaGoinUp...

      Originally posted by ViC78 View Post
      GRG55 -

      I am curious as to what is fueling the RE boom in Canada. Admittedly, borrowing costs are low as compared to previous times in history, but AFAIK, the lending standards of the Canadian banks are not as lax as they were in the US during our boom. Hence, lending would still be restricted by income and I don't think income levels have gone up in the past few years (maybe in Alberta and the oil/gas boom towns).

      Are there option-ARMS, NINJAs etc. up there?
      I am speculating here, but there's a real mystique about home ownership in many parts of Canada.

      Maybe it has something to do with the fact that so many Canadians are immigrants [or children of immigrants], and home ownership represents security. Maybe it's the dirt cheap interest rates on variable rate mortgages [now less than 3%]. Maybe it's because capital gains on the sale of a principal residence are completely tax free. Maybe it's the fact that returns from savings accounts are zero, and expected returns from other investment alternatives may be negative, so housing looks good in comparison. I suspect that the large numbers of current property purchases are not speculative; buyers are planning to live in them.

      Finally, we don't have the neighbourhood devastating default and foreclosure rates that some parts of the USA are experiencing...the average Canadian urban residential neighbourhood looks pretty stable by comparison so it doesn't scare off everyone but the most determined speculators.

      Regardless of the confluence of possible causes, it sure looks like we have a potential bubble in the making, with the government, our Central Bank, and the Big-5 bank economists all dutifully doing their part to promote it by looking the other way, promoting rock bottom interest rates, and rationalizing the rapidly escalating home prices as a "good thing and not a bubble", respectively.

      Comment


      • #4
        Re: CanadaGoinUp...

        well, they aren't building more land, you know. And house prices Always Go Up. It's a great Hedge Against Inflation. Houses are a Great Investment.

        Comment


        • #5
          Re: CanadaGoinUp...

          Originally posted by ViC78 View Post
          GRG55 -

          I am curious as to what is fueling the RE boom in Canada. Admittedly, borrowing costs are low as compared to previous times in history, but AFAIK, the lending standards of the Canadian banks are not as lax as they were in the US during our boom. Hence, lending would still be restricted by income and I don't think income levels have gone up in the past few years (maybe in Alberta and the oil/gas boom towns).

          Are there option-ARMS, NINJAs etc. up there?
          The article posted below does a good job of contrasting the U.S and Canadian housing markets.

          http://www.clevelandfed.org/research.../2009/0909.cfm

          Comment


          • #6
            Re: CanadaGoinUp...

            Originally posted by GRG55 View Post
            Why should Vancouver be the only budding housing bubble in the country...time to spread the fun to the rest of the country, which seems to be almost single-handedly bucking the real estate trend in the rest of the world...:eek:

            Ohhhhhh Canada...
            Flaherty bombs on housing bomb

            He has already missed the opportunity to defuse the real estate bomb at an early stage


            Ian McGugan, Financial Post
            Published: Monday, December 21, 2009

            Think of Canada's housing market as a ticking time bomb. Think of Finance Minister Jim Flaherty as the unlucky bomb disposal expert called in to deal with the problem.

            Flaherty is moving slowly - oh, so slowly - to snip a wire here and there in an attempt to defuse the mess. Problem is, the ticking is getting louder by the minute...

            ...But to make Flaherty's challenge even more difficult, he still has to convince most people the bomb even exists. At the moment, he's being cautious in how he describes the problem. He's being even more cautious in how he deals with it. Perhaps too cautious...

            ...In July 2008, he made his first tentative move to defuse the housing sector by requiring homebuyers to put down at least 5% of the purchase price of a home.

            At the same time, Flaherty reduced the maximum amortization period on home mortgages to 35 years from the previous limit of 40 years.

            His cautious strategy accomplished absolutely nothing. The Canadian Real Estate Association reported the resale price of an average Canadian home hit $337,231 in November, up a stunning 19% from a year earlier.

            If a red-hot real estate market during the brutal recession of the past year doesn't meet Flaherty's definition of an "irrational" market, it's difficult to know what would...

            ...Canada's population growth has been nothing extraordinary. Wage increases have crawled. The supply of new homes has surged and the level of home ownership stands at a four-decade high. Meanwhile, Canadians are aging, which suggests the pace of household formation should be slowing down.

            So why are homes still being bid higher? It seems to come down to the widespread conviction that a house is a great investment...



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            • #7
              Re: CanadaGoinUp...

              What's the property tax situation in Canada like? Just curious where Canada falls in the Hudson view of things...

              Comment


              • #8
                Re: CanadaGoinUp...

                Originally posted by c1ue View Post
                What's the property tax situation in Canada like? Just curious where Canada falls in the Hudson view of things...
                Property taxes in Canada are generally higher than in the US.

                Streetlights, sidewalks seem to be a lot more common in Canadian residential areas in most cities and towns.

                Rates can vary widely depending on what area of the country. A 2300 square foot house on a cul-de-sac might have $5K tax in one town and $3K tax in another.

                Comment


                • #9
                  Re: CanadaGoinUp...

                  Originally posted by stanley2008 View Post
                  Property taxes in Canada are generally higher than in the US.

                  Streetlights, sidewalks seem to be a lot more common in Canadian residential areas in most cities and towns.

                  Rates can vary widely depending on what area of the country. A 2300 square foot house on a cul-de-sac might have $5K tax in one town and $3K tax in another.
                  stanley2008 is correct. We have fairly high levels of municipal services and, at least in the part of the country I live in, the civic infrastructure is more comprehensive than what I usually see in US urban areas, and it is maintained quite well. In most parts of the country, property taxes are levied on the market value of the property and improvements [home and other structures] and these assessment valuations are updated fairly frequently, so we do not have the crazy California situation.

                  Generally education taxes are also levied on the basis of property values. Where I live, the province pools all the taxes from every ratepayer and reallocates to the schools [based largely on student population I believe]. This causes much knashing of teeth from the residents of wealthier enclaves because they inevitably end up paying more in taxes than their local shool receives, but it also ensures that students from poorer jurisdictions get access to the same basic level of public education resources as the children of wealthier families.

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