The "Forever" Canadian Housing Bubble

[dcarrigg]

Re: The "Forever" Canadian Housing Bubble

MIDI has announced that Quebec Entrepreneur was accepting 60 new applications between the dates of August 15th, 2018 and March 31st, 2019. Stream one accepted 25 applications and stream two accepted 35 applications.

They're not offering huge numbers here. Quebec's just the hardest province to immigrate to as far as I'm aware.

[jk]

Re: The "Forever" Canadian Housing Bubble

no language requirement for these:

The Quebec Entrepreneur Program could be a great fit for you if you have experience owning a business. In order to apply, you must have a business idea into which you are willing to invest at least CAD $200,000, or you have your business idea financed by one of Quebec’s designated business accelerators or business incubators.
The Quebec Investor Program is for heavy-hitting investors. If you have a personal net worth of at least CAD $2 million and you’re willing to invest at least CAD $1.2 million into Quebec, then you can apply for permanent residency through this stream.

in the u.s. at least these business investment for a green card deals are just waiting for applicants with money. they're usually big real estate deals, an individual invests $500,000, voila- you're an entrepreneur. i assume there are similar structures in canada. CAD $200k isn't a lot for someone looking to move to a place with rule-of-law and international flavor. of course it's not as quick a trip to/from asia as vancouver.

[dcarrigg]

Re: The "Forever" Canadian Housing Bubble

Totally true. But the French language is a barrier to moving there, working there, and becoming a citizen if you know, say, Mandarin and English or Hindi and English or German and English, etc. I honestly think a good chunk of demand in English-speaking major metros comes because worldwide educated classes know English.

Montreal is absolutely fine to visit as an Anglophone. You'll have zero problems. It's different if you're trying to emigrate though.

[jk]

Re: The "Forever" Canadian Housing Bubble

montreal isn't quebec city. just about everyone is either an anglophone or bilingual.

closer, better located imo, just as cheap:

https://www.zillow.com/homedetails/3...29937920_zpid/

[dcarrigg]

Re: The "Forever" Canadian Housing Bubble

every time i see that graph i think about whether i want to buy an apartment in montreal. so far, no, but it sure looks to be a bargain, especially with a cheap loonie.

I go every year. Compared to Boston or NYC, it's almost unconscionable how cheap some places are, and right downtown. And I enjoy the city. So as a place to go, I too am tempted.

But as an investment, I don't know. The language barrier just makes the market fundamentally different. Everyone in the world learns English and bids up prices. It's a liability for the middle class of English-speaking cities with subways etc. I really do think it's the language barrier that saved Quebec from the run-away prices.

Incidentally, I was also considering an intermediate buy. Old towns on this side like Malone, NY are in striking distance and you can snatch up houses there for under $10k. You can find some in relatively good condition for $30k. If you really want to spring and get a little closer, you can drop $75k right on the border for something a bit fancier. Puts you about 55 miles from Montreal. And the border crossing at Trout River is easy and quick. Super reasonable to have a night out and go back to your couple acres in the sticks after.

[jk]

Re: The "Forever" Canadian Housing Bubble

every time i see that graph i think about whether i want to buy an apartment in montreal. so far, no, but it sure looks to be a bargain, especially with a cheap loonie.

[thriftyandboringinohio]

Re: The "Forever" Canadian Housing Bubble

GRG55 thanks so much for keeping this thread updated for over a year now.

[GRG55]

Re: The "Forever" Canadian Housing Bubble

June 2019:

[GRG55]

Re: The "Forever" Canadian Housing Bubble

May 2019 data. Mortgage rates have plunged in recent weeks due to the Bank of Canada no longer raising interest rates (BoC is following the Federal Reserve lead, but never caught up with it during the rate rising cycle. And GDP in Canada showed almost zero annualized growth in 1st Q). That seems to have breathed new life into the FOMO real estate market in Toronto, Calgary and Ottawa in particular. Vancouver, not so much.

[GRG55]

Re: The "Forever" Canadian Housing Bubble

March data. A confirmation of the downtrend seems to be forming slowly in the two most inflated markets

[Adeptus]

Re: The "Forever" Canadian Housing Bubble

For sure Vancouver residents have pumped up the bubble to unimaginable levels. I live nearby and had co-workers in Vancouver, and that's all they could talk about for the past 5 years - literally every single lunch conversation included vancouver real estate euphoria talk. They would discuss how much paper gains they have and how idiotic anyone is who doesn't sign up for multiple mortgages. Even now, anecdotally, I hear people talk about how their entire family (mom+dad+grandparents+uncles) are all combining their savings to buy even more real estate. At least half my co-workers owned 2 properties. One guy, had as many as 5!

"For those who think the Vancouver housing bubble was the sole creation of a bunch of money laundering Chinese dudes, read the linked Global News article and have a good look at the 2017/18 pop in the red line and the blue line on the chart. That's Canadians doing it to their little beaver selves. No assistance from foreigners needed whatsoever."

I don't think it was all pure speculation... $1B in Chinese laundered drug $$ probably helped things move along.

"Secret police study finds crime networks could have laundered over $1B through Vancouver homes in 2016" (Nov 2018 article)
https://globalnews.ca/news/4658157/f...-police-study/

[GRG55]

Re: The "Forever" Canadian Housing Bubble

Feb data:

[Mega]

Re: The "Forever" Canadian Housing Bubble

Yes, that's what I sensed......in the last half of the year the lie that has been told since 2011 is coiming to an end & suddenly EVERYONE can see it

[GRG55]

Re: The "Forever" Canadian Housing Bubble

December data in. Vancouver and Toronto grinding down. Calgary palpably weaker - I live near there and one could actually feel the economy take another knock in 4rth Q last year. Edmonton, Ottawa and even Montreal SFD flat.

[GRG55]

Re: The "Forever" Canadian Housing Bubble

Vancouver was certainly Goin' Up. Now? Not so much.
But the late stage pop in condo and townhouse prices is pretty obvious - by that point they were the only things that anyone could "afford". And the BC Provincial Government goosed this late stage market with an utterly stupid incentive policy (the helicopter cash drop noted on the chart). As predicted it just sent the price of lower cost housing screaming higher.

A refresher here:
https://globalnews.ca/news/3130685/t...ed-by-experts/

"...Their plan is supposed to make it easier for first-time home buyers to enter B.C.’s hot housing market by using government funds to match down payments up to $37,500, or five per cent of the purchase price, for a maximum property value of $750,000. Clark says it’s an interest-free, 25-year loan with no payments due for the first five years...

...“It’s a pretty bad idea. It is counter-productive and if you give people more purchasing power, they will be able to bid up the prices of the homes that they’re looking at, and that price increase will eat up any benefit from the subsidy. The same people who were going to compete for a home at $500,000 are still going to be competing for that same unit, but at a higher price. They’re just going to compete away the benefit. The only people who gain are existing homeowners or developers who benefit from these higher prices.

“This is not going to improve affordability anywhere in the market and if anything will make it worse, for sure in the lower end and possibly creeping up above that $750,000 [cut-off price]. Different parts of the government’s policies really don’t fit together. They claim to want to promote affordability but they want higher prices. Well, higher prices are the opposite of affordability, so it just doesn’t fit together at all...

From Brian Ripley http://www.chpc.biz/

Oh, and one other observation. For those who think the Vancouver housing bubble was the sole creation of a bunch of money laundering Chinese dudes, read the linked Global News article and have a good look at the 2017/18 pop in the red line and the blue line on the chart. That's Canadians doing it to their little beaver selves. No assistance from foreigners needed whatsoever.