Baby, we got a bubble!?

[interested]

Agree Wooba.
Alot of this is noise though I have to say when the market went in 1/2 and one watches their stock market savings cut in 1/2, that is problematic.
Dividends are essentially like rent with the appreciation of the market and the real estate over time only relevant if one is selling.
If one is flipping/speculating on stocks for capital appreciation, one should have a longer timre frame.

Also CG, just because we were lucky (and I believe we were lucky) to have escaped the US debactle with real estate, does not mean we are equipped to continue to grow. In fact, I would suggest we are far less well prepared to weather a downturn now. Our real estate market is quite high and it may well remain or go higher, but the fact that there has been no correction just increases the risk in my view.

That said, we were talking again that the paradyme has changed, foreign money perhaps here to stay for longer and hence the influence more permanent. Worries me because this is "things are different this time or here" argument which often proves wrong.

 

[Migos]

6 years later

s&p/tsx 13,852.95 -342.78 -2.41%

s&p 500

 

[interested]

s&p 500

View attachment 39156

Migos, in fairness, show 2007 to 2009 and then to present. Does not look anywhere near as good.
Much like showing real estate growing from 1996 onwards with the small downturn in 2008-2009. If one shows 1989 onwards, graph does not look anywhere near as good.

With government printing presses going, who know what will happen. However, the US is trying to take out liquidity and I suspect real estate/stocks/bonds etc. all will suffer as the air is let out of the balloon....the rising tide affecting all ships and a falling one the same thing argument.

 

[KA1]

Migos, in fairness, show 2007 to 2009 and then to present. Does not look anywhere near as good.

There was a news item that you guys --especially Interested -- seem to be ignoring. Re-introduction of 'investor visa' program.

Earlier, Federal government had scrapped investor visa program. In Vancouver area, individuals, who had purchased real estate with the intention of moving in when visitor visa became available,sold their properties. That caused a temporary decline in values.

Guess what? Other countries opened their doors to these individuals -- mainly of Chinese origin from Hong Kong and mainland China.

Newspaper reports indicate that, in order to not to miss these enterprising individuals, government is planning to re-introduce investor visa program -- invest $ 1.5 m in an approved venture fund and you will get your immigration visa.
Money for investment in real estate -- be it in Vancouver or Toronto or somewhere else in Canada -- will follow. That should avoid any expected downturn in real estate values.

 

[interested]

There was a news item that you guys --especially Interested -- seem to be ignoring. Re-introduction of 'investor visa' program.

Earlier, Federal government had scrapped investor visa program. In Vancouver area, individuals, who had purchased real estate with the intention of moving in when visitor visa became available,sold their properties. That caused a temporary decline in values.

Guess what? Other countries opened their doors to these individuals -- mainly of Chinese origin from Hong Kong and mainland China.

Newspaper reports indicate that, in order to not to miss these enterprising individuals, government is planning to re-introduce investor visa program -- invest $ 1.5 m in an approved venture fund and you will get your immigration visa.
Money for investment in real estate -- be it in Vancouver or Toronto or somewhere else in Canada -- will follow. That should avoid any expected downturn in real estate values.

I don't know Ka1 if that will avoid the expected downturn though it may mitigate it to a degree. The answer is....who knows.
Meanwhile today the Bank of Canada seemed to acknowledge as much as a 30% overvaluation of real estate.

Finally, if people have assets in both the stock market and the real estate market, and the stock market continues to wane, will that not make them feel less secure, less wealthy, and perhaps not pull the trigger on further real estate?

 

[Condo George]

Agree Wooba.
Alot of this is noise though I have to say when the market went in 1/2 and one watches their stock market savings cut in 1/2, that is problematic.
Dividends are essentially like rent with the appreciation of the market and the real estate over time only relevant if one is selling.
If one is flipping/speculating on stocks for capital appreciation, one should have a longer timre frame.

Also CG, just because we were lucky (and I believe we were lucky) to have escaped the US debactle with real estate, does not mean we are equipped to continue to grow. In fact, I would suggest we are far less well prepared to weather a downturn now. Our real estate market is quite high and it may well remain or go higher, but the fact that there has been no correction just increases the risk in my view.

That said, we were talking again that the paradyme has changed, foreign money perhaps here to stay for longer and hence the influence more permanent. Worries me because this is "things are different this time or here" argument which often proves wrong.

I agree

 

[Condo George]

Mainland China was dominating in the core market in 13 and 14 not Hong Kong, 15 will show this money drying and as a result lackluster sales numbers for pre con sales in 15, resales will continue upward as end users play a major role in this market not mainly investor as in pre con. Just my opinion.

 

[interested]

Mainland China was dominating in the core market in 13 and 14 not Hong Kong, 15 will show this money drying and as a result lackluster sales numbers for pre con sales in 15, resales will continue upward as end users play a major role in this market not mainly investor as in pre con. Just my opinion.

I agree with the thought of end users. The question is...at least in Toronto...can the end users afford to bid up prices any further or for that matter, even muster the downpayments to invest?
I know a lot can but a lot I would think can't.

 

[Condo George]

http://www.thestar.com/business/real_estate/2014/12/11/stuck_on_the_sidelines.html

 

[Migos]

Anybody actually believe this?

CMHC recognizes that there is demand to fill information gaps with respect to Canada’s housing markets. To address this need CMHC has, for the first time, asked property managers to provide information on the total number of condominium apartment units owned by people whose permanent residence is outside of Canada as part of its survey. The condominium foreign investment information was collected in 11 Census Metropolitan Areas (CMA) in Canada. They include: Vancouver, Victoria, Calgary, Edmonton, Regina, Saskatoon, Winnipeg, Toronto, Ottawa, Montréal and Québec.

The results of this additional question indicate that the percentage of foreign investment in condominiums in Victoria is 1.1 per cent, Vancouver 2.3 per cent, Calgary 0.2 per cent, Edmonton 0.1 per cent, Saskatoon 0.3 per cent, Regina 0.1 per cent, Winnipeg 0.1 per cent, Toronto 2.4 per cent, Ottawa 0.7 per cent, Montréal 1.5 per cent and Québec 0.6 per cent. With respect to location, the city core in Canada’s largest rental markets (Montréal, Toronto and Vancouver) experienced larger foreign condominium ownership. (More details can be found on page 5 of the report).

http://www.cmhc-schl.gc.ca/en/corp/nero/nere/2014/2014-12-16-0816.cfm?WT.cg_n=TWT_MAC

 

[cdr108]

it's all a matter of the details.

how many property managers of how many condominium apartments filled out the questionnaire?
if the owner of a unit was a ### company that's registered in Canada, did the property manager dig deeper to find out who the actual owners are?

the survey could include all units built within the past 25 years assuming it has anything to do with CMHC.
thus the next question, is there a break down in the age or specific buildings?

older buildings have more owner occupied and less investor rental units.

pre-construction and newer buildings (<5 years old) are heavily marketed and pushed by developers and R/E agents to specuvestors (foreign and local) so higher % than older buildings.

Anybody actually believe this?



http://www.cmhc-schl.gc.ca/en/corp/nero/nere/2014/2014-12-16-0816.cfm?WT.cg_n=TWT_MAC

 

[PinkLucy]

I'm sure some investors have set up a Canadian mailing address, so since they were only identifying foreign investors by address, this group would have been missed.

Really, not terribly reliable results since there are so many possibilites

 

[Migos]

The Federal Reserve on Wednesday offered a strong signal that it was on track to raise interest rates sometime next year, dropping a pledge to keep them near zero for a “considerable time†in a show of confidence in the U.S. economy.

Closing out a two-day meeting against a backdrop of solid domestic growth but trouble overseas, the U.S. central bank ditched its long-standing vow and instead said it would take a “patient†approach in deciding when to bump borrowing costs higher.

http://www.theglobeandmail.com/repo...pens-door-wider-to-rate-hike/article22120666/

Look out below. Lot of headwinds for Canadian housing right now. I'm calling a meltdown starting Spring or Summer 2015 for the Toronto condo market. The impacts will spill over to the rest of the market as well. I don't have much invested in the Canadian stock market but I also see it struggling mightily with the banks in particular set to follow the recent trend of oil & gas.

Now I can officially say I told you so... (or you can all laugh me out of here next year if I'm wrong).

 

[TheKingEast]

http://www.theglobeandmail.com/repo...pens-door-wider-to-rate-hike/article22120666/

Look out below. Lot of headwinds for Canadian housing right now. I'm calling a meltdown starting Spring or Summer 2015 for the Toronto condo market. The impacts will spill over to the rest of the market as well. I don't have much invested in the Canadian stock market but I also see it struggling mightily with the banks in particular set to follow the recent trend of oil & gas.

Now I can officially say I told you so... (or you can all laugh me out of here next year if I'm wrong).

Told us what? That rates would eventually go up? Well no shit, sherlock. I just hope you will have the stones to show up a year from now when the market doesn't tank.

 

[Migos]

Told us what? That rates would eventually go up? Well no shit, sherlock. I just hope you will have the stones to show up a year from now when the market doesn't tank.

I'm saying my prediction is now written down in a rather concrete way, so I MAY be able to say "I told you so" IF I am correct. No need to get agitated big fella.