Housing Bust 2012

[Nemo2]

Definitely not fair.

What means this word "fair"? Please to be providing life examples.

[Bylo Selhi]

I agree the lower limit would be good in most places in Canada. Probably a vote 'loss' though of first time buyers in GTA and Metro Vancouver.

In GTA or GVA $1M might be reasonable. In some rural backwater where the average is $100k, not so much. So base the limit on a percentage of the average sale price in a city or region, e.g. 150% of the average. This also self-regulates as house prices fluctuate through boom, bubbles, busts and bargoons.

[blonde]

Why is there such a thrust to mess-about with the Formal-Policy* dictated by any politician, regardless of their stripe? Do not be surprised to learn that an aim is to not only confuse the sheeple more than ever before but also drive some spook into 'ems...it is humanly and physically impossible to 'educate' the sheeple...visit Regina to observe the Best-in-Class breed of sheeple in action reaction, eh?

There is a lot more to gain with applying resources toward the Informal-Policy...that is where the Real-Work gets done in the shortest cycle time...tossing the most Money to the 10%ers.

Adjust and Adapt...remove most of the Money off the table ASAP. Needless to say, the Vultures are circling 24/7. When a Vulture says 'Buy'...'ems are 'Selling'...and vise versa.

as an aside...Any tinkering to the Formal-Policy will trigger a Real-Opportunity, ALWAYS.

In this day and age...more than ever before...Money Talks. Greed is Very-Good. Creativity is an Art. Don't Trust Anyone.

* all politicians design Formal-Policies to deal with the EFFECTS.

Life-is-Good...VERY Good.

[Bylo Selhi]

Another sign of a bubble about to burst... Willowdale tear-down goes for $38,000 over asking

240 PARKVIEW AVE., TORONTO
ASKING PRICE $795,000
SELLING PRICE $833,000
PREVIOUS SELLING PRICE $232,500 (1992)
... two-bedroom and one-bathroom bungalow... 30-by-158-foot... close to reputable schools, Yonge Street subway, shops and arts centre[lot]

Granted it's a mature neighbourhood, but "close to subway" is still ~2km and a 20 minute walk. Driveway but no garage on a 30 foot wide lot.

"Interested infill builders looked to tear down the existing home and build new on spec" means that the buyer will have to spend another few $100,000s on a new house, etc. before they can move in.

Madness.

[Taggart]

Wynn Quon who used to post here on FWF, has an excellent article in the June edition of Canadian MoneySaver with the title "Lessons From The Superbubbles: Hemingway's Rule." It was a real eye opener on the housing bubble in the major cities across Canada, and we're not just talking Vancouver and Toronto.

[adrian2]

Wynn Quon who used to post here on FWF, has an excellent article in the June edition of Canadian MoneySaver with the title "Lessons From The Superbubbles: Hemingway's Rule." It was a real eye opener on the housing bubble in the major cities across Canada, and we're not just talking Vancouver and Toronto.

Hemingway's Rule.

[Shine]

In some parts of Vancouver it is not the house that is for sale, it is the lot, depending on zoning regulations and the location. Recently some home offers for sale have not even gone to market. Rather bids are solicited from a specific list of clients of by the realtors and sell immediately with no showing or open house.

The home itself is then razed and a larger square footage home built. Simple home lots, with agreeable developmental zoning now sell in some areas for $1.5M to $1.8M despite the cost of demolition and removal of the older home occupying the lot. And oddly, there is no sign of life in the new expanded domicile on the original lot. Price of the new empty home anywhere from $1.8 Million to $6.5 Million.

The entire character of some of our neighborhoods are being destroyed - turned into empty neighborhoods bereft of community, no kids playing in the yard, or playing road hockey on the street, empty areas of unaffordable homes with automatic sprinklers and annoying contract gardeners and their leaf blowers and weed whackers...and not a neighbor to be found. And no residents supporting the local economy. A city of ghosts.

The issue does irritate me because our society/economy is graduating so many younger post secondary individuals with a crippling student loan and little chance of purchasing a home and raising a family.

Sorry - end of rant.

Viva Espana!

[CROCKD]

The issue does irritate me because our society/economy is graduating so many younger post secondary individuals with a crippling student loan and little chance of purchasing a home and raising a family.

+1

[patriot1]

Priced to the nines in Vancouver

[steves]

Priced to the nines in Vancouver

Sardis is in Vancouver? Who knew?

[randomwalker]

Credit unions escape new mortgage rules
by John Greenwood the National Post, July 12, 2012

Tough new mortgage guidelines announced last month by the federal banking regulator are aimed at letting some of the air out of Canada’s over-inflated housing market. The trouble is, some of the rules don’t affect credit unions...That’s because credit unions, as provincially regulated institutions, are not part of the jurisdiction of the Office of the Superintendent of Financial Institutions."

http://business.financialpost.com/2012/ ... age-rules/

[CROCKD]

Re: Credit unions escape new mortgage rules

From another thread on interest rates.

Credit unions poised for cross-country expansion

The industry will have 30 days to comment on the proposed regulations, which were first contemplated in the 2010 federal budget. The changes involve putting credit unions under the oversight of the Office of the Superintendent of Financial Institutions.

[CROCKD]

Toronto condo market loses steam as investors bolt

Urbanation, which tracks the Toronto market, reported today that the number of unsold new units hit a record at the end of the second quarter, at more than 18,100 units or about 20 per cent.

That's because investors are dropping out, said Derek Holt and Dov Zigler of Bank of Nova Scotia.

"The not-for-occupancy investor that has been driving 45 per cent to 60 per cent of Toronto condo sales in recent years disappeared as the monthly net cash flow to financing and paying condo fees and then renting it out remains negative while rental rates and prices flatten out," they said.

[MaxwellMcGee]

Interesting detailed article about shoddy construction and other issues with recently built Toronto condos.

Faulty towers: who’s to blame for condoland’s falling glass, leaky walls and multi-million-dollar lawsuits

Balcony glass is not the only building component that’s failing in Toronto’s new condominium towers. As more and more people move into their brand-new units, they are discovering that their idealized urban homes are far from perfect, with flaws that run from the typical (unpainted lobbies and unfinished fitness rooms) to the severe (leaky window walls and cracking foundations). And as condo owners discover the problems, the paranoia sets in: fearful of losing their investment, and of defamation suits from developers, they don’t dare speak out.

Every condo building in Toronto has a secret. The only thing that separates crappy balconies from crappy soundproofing, plumbing, drainage, elevators, heating, air conditioning and mechanical equipment is that anybody can see the balconies falling apart. The rest is hidden from public view, as are the boardroom confrontations and the quietly launched civil lawsuits that follow, when condo owners with no other recourse take their developers to court. In March, a group of unit owners at the Festival and Murano towers filed class action lawsuits against their respective developers and architects, and the balcony installer at both locations, Toro Aluminum Railings. Even though the developers are replacing the glass at their own expense, the lawsuits claim that residents have been denied access to a significant portion of their living space for too long, through no fault of their own. They believe someone is negligent, and someone should pay. Each suit claims a total of $20 million in damages.

Such lawsuits are increasingly common, with damage claims for shoddy construction running from the tens of thousands to the tens of millions, naming developers, architects, concrete-waterproofing subcontractors and everyone in between. As the repair bills and legal fees mount, the courts try to figure out who will pay for the fixes. Meanwhile, with hundreds of cranes poking out of the city skyline and developers scrambling to build still more towers, we’re presented with the real possibility that many more of these condo boom buildings will bust.

[twocentsworth]

Hmmmmmmmm......

http://www.doctorhousingbubble.com/cana ... al-estate/

[Beezy]

" The number of home sales in B.C. declined to 5,337 last month, a year-over-year drop of 18 per cent. "

" The average price paid for a home in B.C. this August was $491,145, nine per cent lower than a year earlier. Nationally, the average price for homes sold in August 2012 was $350,192, up by three-tenths of one per cent from the same month last year. "


http://www.vancouversun.com/business/re ... story.html

[randomwalker]

As housing market slows, industry scrambles to paint positive picture
Garry Marr, The National Pos, | Oct 3, 2012

Organized real estate is unable, it seems, to admit the glory days may be behind it.

"Sales plummet in major markets and the industry comes up with a new explanation for the decline, draping its comments with a sense that everything is just fine. The excuses are piling up..."

http://business.financialpost.com/2012/ ... e-picture/

[HardWorker]

^ I heard a pretty good one the radio today. "Now is the perfect time to buy, you have less competition and you won't overspend in bidding wars. Ah well, you gotta give 'em credit though.

[dusty2]

That's really dumb advice - borrow money at 4.5% and invest in something that's dropped by 9%.

[adrian2]

That's really dumb advice - borrow money at 4.5% and invest in something that's dropped by 9%.

What's really dumb is projecting the rear view mirror into the future: to think that an asset, such as real estate, which has for several years been growing above its sustainable potential, will continue do so indefinitely. Trees don't grow to the sky.

Anything has a price that is cheap enough to make it attractive; if anything, the fact that something has dropped 9% in recent times makes it more attractive compared to paying 10% more than the current price. If it drops more, it will be even more attractive, not dumb, as a buy.

As for 4.5% interest rates, you can find 3% or less rates, which can be cut further if it's tax deductible.

[CROCKD]

A condo by any other name.

Can the promise of lifestyle perks help developers sell Toronto's glut of condos?

offering buyers the opportunity to live in a “sculpture,”

[Brix]

A condo by any other name.

Can the promise of lifestyle perks help developers sell Toronto's glut of condos?

offering buyers the opportunity to live in a “sculpture,”

Maybe Frank Gehry will sign the entry door to one's suite for an additional fee, reassuring one's visitors on the question of specific provenance.

[CROCKD]

Lenders opposed crackdown on home equity borrowing

[adrian2]

Lenders opposed crackdown on home equity borrowing

A snippet from the article:

Finance Minister Jim Flaherty took steps to rein in the growth of home equity lines of credit early last year, saying that the government would no longer guarantee mortgage insurance on them. Prior to that, such lines of credit and mortgage refinancings surged to $64-billion in 2010 from $8-billion in 2001.

[Bylo Selhi]

Would this be the same Jim Flaherty who, in 2006, allowed CMHC to offer 40-year amortization and 100% financing on fully insured mortgages?

Presumably Jimbo's move in 2006 helped to stoke that "surge" in "such lines of credit and mortgage refinancings... to $64-billion in 2010 from $8-billion in 2001" that he's now being lauded for quenching