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Baby, we got a bubble!?

Latest Teranet numbers:

Canada
June 2005: 100.00
April 2010: 134.55
April 2011: 140.47 (+4.40% yoy)

Vancouver
June 2005: 100.00
April 2010: 153.40
April 2011: 162.26 (+5.78% yoy)

Toronto
June 2005: 100.00
April 2010: 121.64
April 2011: 126.62 (+4.09% yoy)

Prices are up roughly 14% since I bought in summer 2007, and up about 80% since I bought in 1999.

No, I did not just mis-type the Vancouver numbers for Toronto.
 
One must say the Taranet numbers are certainly less alarming than the "averages" posted by MLS. I guess Realtors want to promote as positive numbers as they can to fuel the buyers.
 
i don't like the CREA methodology and i know Teranet's numbers are resales of the same units, however, I follow several dt core projects in C1/C2/C8 and know for fact that values have increased more than 27% over the last 6 years.


several projects from 2006 have increased at least 84 - 110%
 
cdr108 said:
i don't like the CREA methodology and i know Teranet's numbers are resales of the same units, however, I follow several dt core projects in C1/C2/C8 and know for fact that values have increased more than 27% over the last 6 years.


several projects from 2006 have increased at least 84 - 110%
Click to expand...
Which projects?
 
The reason Eug that CDR is showing 50% in the above post is that new from the initial launch price has been going up more quickly than resale. Certainly that is the case for Boutique. As well, having SL beside it at so much money/sq.ft. is pulling it up more.

That does not necessarily explain met but I think the initial price to completion "new" construction is up more than your numbers Eug.

As well, Teranet would not include these types of numbers as even though sold again it may not account for the initial buy from builder price although I could be wrong. Most teranet resales would be skewed by the number of resales and these numbers would likely be somewhat closer to Eug's numbers though I must admit I am a little suprised by how low Teranet's actual increases are. I think Teranet's numbers are closer for older resale homes and condos.

Eug, can you get Teranet for C01 district?
 
One other issue just for clarification:

In a lot of cases (and I realize you guys are not talking about it from this angle) the cost increases that people talk about are the increases on the downpayments. So a new project may be up 25% in total in say 3 years but may be up over 100% on the downpayment. I know that I got in very early in a project in King West in 2008 and presently are 22%-25% higher on total price. For this reason, I agree with CDR that the teranet numbers are not reflective of most newer condo construction in C01.
 
interested said:
Eug, can you get Teranet for C01 district?
Click to expand...
No, because I just use the publicly available file at www.housepriceindex.ca - It asks for an email address, but you can just put in a dummy address.

P.S. Report: Canada's housing bubble about to burst

“Housing valuations have lost all touch with fundamentals and household debt is at a record high,” economists at the research consultancy Capital Economics say in their most recent Canada Economic Outlook, issued Wednesday.

“Our fear is that, with the housing bubble now close to bursting and commodity prices retreating, Canada will go from leader to laggard.”

The report predicts a fall in house prices by as much as 25 per cent over the next three years.
 
Eug,
The Capital Economic Outlook guy has been interviewed on BNN the last few months and always says the same thing. This is not new but just repeating the same observation by Capital Economics.

Whether right or wrong, you know my feelings from previous posts.

Thanks anyhow about the info about teranet
 
Oh, I didn't realize it was the same guy.

I'm still curious as to why those building are jumping up in price so quickly. I can see them rising over time, but a ginormous increase in a matter of a few years seems stupid high.
 
Capital Economics Toronto is a new consultant attempting to generate free PR by posting these attention grabbing "collapse coming soon!" reports.

http://www.calgaryherald.com/business/House+price+collapse+coming+report+warns/5028451/story.html

Dan Sumner, economist with ATB Financial in Calgary, said the probability of a 25 per cent decline in housing prices is very low.

"Is it possible that housing prices could fall a long ways? Yes. But it would require major shocks like interest rates rising more than expected and commodity prices falling a lot, and not just temporarily," he said. "The only way for commodity prices to fall materially is if Asia went into a major recession -possible, but not likely."

Sumner said housing prices in Canada are at their upper limit and as rates rise they could fall very slowly and gradually between five to 10 per cent over the next five years. However, most of this decline would happen in the places that have seen the biggest rises over the past two years: Toronto, Montreal and Vancouver.
 
Thanks Johnr for another view.

I think that is the whole point. Extreme positions garnish a lot more press and make for good headlines. The extreme position may be correct eventually and the person will be then viewed as a "guru". Of course, I find often those making extreme prognostications are vindicated once and their other wrong calls are ignored. If one makes enough bets (eg. at the horse track on the 80:1 long shot, occasionally the 80:1 long shot will win... still doesn't make it a very sound bet).

that said, I believe my own feelings align more with those of Sumner. Or that is my wishful thinking.
 
Actually, it is not only listings but sales that are important. If sales are down 10% from last year (I realize they are not but am just using numbers to make a point) and listings are down 10%, proportionately things are not changing very much. I believe presently in May and June sales were actually up from last year (I could be wrong) so in fact that would mean there is less product and on that perameter, I would agree with ducati0000's conclusion.
 
interested said:
Actually, it is not only listings but sales that are important. If sales are down 10% from last year (I realize they are not but am just using numbers to make a point) and listings are down 10%, proportionately things are not changing very much. I believe presently in May and June sales were actually up from last year (I could be wrong) so in fact that would mean there is less product and on that perameter, I would agree with ducati0000's conclusion.
Click to expand...

http://www.remaxcondosplus.com/report-display.php?id=142&report_date=1309147200
 
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