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Eddie_George

Canada’S Housing Market Teeters Precariously

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David Madani, economist at Capital Economics, believes the nation is on the verge “of what will prove to be a prolonged correction”.

“Canada’s housing market exhibits many of the symptoms that preceded disruptive housing downturns in other developed economies, namely overbuilding, overvaluation and excessive household debt,” he adds.

All Carney's fault.

Linky

Edited by Eddie_George

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At least we don't have to trouble ourselves with the over building bit. :D

We can have all the troubles of Canada, but without the £ucking houses to show for it! :angry:

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Perhaps...

I haven't been able to read the article, but from my own experience I live in a large 4 bedroomed house 65 miles from downtown Toronto which is worth about $300,000 (about 200,000 pounds). I find houses to be reasonably affordable and certainly nothing like UK levels. Wages are higher here too.

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2008:

East Sheen UK, yours for £1,085,000

eastsheen.jpg

For the same money: West Vancouver, most expensive residential area in Canada (which has had a property boom) + Porsche 911 + £80,000 change:

vancouver.jpg

http://www.housepricecrash.co.uk/forum/index.php?showtopic=83159

2013:

East Sheen UK, yours for £1,400,000

eastsheen2.jpg

For the same money: West Vancouver, most expensive residential area in Canada (which has had an even bigger property boom) + £36,000 change:

vancouver2.jpg

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In my view, a lot of the reasons that such examples are so glaring is that the pound is massively over valued in most currencies, due to our place as a financial centre and the wave of safe haven cash that has kept it high.

On the fundamentals, I'd expect the pound to be about half it's value against most currencies. No idea how long that will take though.

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Perhaps...

I haven't been able to read the article, but from my own experience I live in a large 4 bedroomed house 65 miles from downtown Toronto which is worth about $300,000 (about 200,000 pounds). I find houses to be reasonably affordable and certainly nothing like UK levels. Wages are higher here too.

Is 65 miles considered commutable from Toronto? I'm sure there are plenty of 4 bed properties 65miles from the centre of London for under £200k !

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2008:

http://www.housepricecrash.co.uk/forum/index.php?showtopic=83159

2013:

East Sheen UK, yours for £1,400,000

For the same money: West Vancouver, most expensive residential area in Canada (which has had an even bigger property boom) + £36,000 change:

Interesting idea for a post but are these a fair comparison? Vancouver is a much smaller (and I think nicer) city than London. A quick check shows that Bayridge would take 1-1.30 to commute on public transport. But East sheen is 22 mins from Waterloo. If you took your 1M out in the home countries with a 1hr commute, I'm sure you could find a comparable property to the Bay Ridge one.

I suppose it tells me that gap between UK and Canada house prices are a lot closer than I thought.

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Is 65 miles considered commutable from Toronto? I'm sure there are plenty of 4 bed properties 65miles from the centre of London for under £200k !

You can even have a pitcuresque garden.

Rightmove

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I don't think that the comparable are so valid either because the UK has such a repressive planning regime that does not allow for properties of a comparable size to be built, furthermore the residential land per person in the UK is less - thus a higher residual land price forcing people to spend materiall less per property. Thats why you have tiny poorly built houses in the UK.

I could point out many examples here in Ireland, but I would not say either are sustainable.

What makes the prices sustainable are the ability to pay back the debt, governments have many tools for making this part more affordable. Another major factor is that when debts cant be serviced, the ability to foreclose on the property.

In the UK the government + BOE have continually made servicing mortgages cheaper thus keep prices high. They done this via low interest rates, funding for lending, shared ownership etc..

Can they do this in Canada? If so, for how long?

Under supply in the UK markets is also a huge factor.

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Last boomers we rented off had a house with a lot of land in Canada too. They could only stay 6 months a year because of visa.

They've had UK house up for sale for 4+ years now (going to downsize) but won't drop price below what it's worth.

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Last boomers we rented off had a house with a lot of land in Canada too. They could only stay 6 months a year because of visa.

They've had UK house up for sale for 4+ years now (going to downsize) but won't drop price below what it's worth.

A house is worth 10% more than the highest price ever achieved for a similar house in the area ;).

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A house is worth 10% more than the highest price ever achieved for a similar house in the area ;).

Well, you don't want to give it away.

Edited by fluffy666

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Interesting idea for a post but are these a fair comparison? Vancouver is a much smaller (and I think nicer) city than London. A quick check shows that Bayridge would take 1-1.30 to commute on public transport. But East sheen is 22 mins from Waterloo. If you took your 1M out in the home countries with a 1hr commute, I'm sure you could find a comparable property to the Bay Ridge one.

I suppose it tells me that gap between UK and Canada house prices are a lot closer than I thought.

Of course they're not comparable for a multitude of reasons. It's just a bit of fun, but it serves to make a point don't you think?

But as for your objection... jeeze, talk about clutching at straws and biasing your argument. Have you ever been to Vancouver and done that journey?

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Of course they're not comparable for a multitude of reasons. It's just a bit of fun, but it serves to make a point don't you think?

But as for your objection... jeeze, talk about clutching at straws and biasing your argument. Have you ever been to Vancouver and done that journey?

We have given up waiting for reality to return in the UK and are moving back to Canada next summer. Our new home is being built at the moment. Canada's housing is much cheaper in absolute terms on a like for like basis than the UK so I will have a much smaller dollar amount at risk in Canada than the UK even if the percentage risk is higher.

The quality of the housing stock in Canada in terms of square footage and plot size is much higher. The quality of the construction and materials was much higher in the UK than in Canada until about 10 years ago when Canada started to catch up quickly.

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We have given up waiting for reality to return in the UK and are moving back to Canada next summer. Our new home is being built at the moment. Canada's housing is much cheaper in absolute terms on a like for like basis than the UK so I will have a much smaller dollar amount at risk in Canada than the UK even if the percentage risk is higher.

The quality of the housing stock in Canada in terms of square footage and plot size is much higher. The quality of the construction and materials was much higher in the UK than in Canada until about 10 years ago when Canada started to catch up quickly.

What are you trying to say ?

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What are you trying to say ?

Canada is overpriced. The UK is even more overpriced. We have to live somewhere and prefer to buy than to rent despite the relatively low current opportunity cost of capital and even lower rental yields. We have chosen to move back to Canada from Surrey for financial as well as family reasons. We would have preferred to stay in the UK and spend more on airfares had house prices made sense to us. The house that we have bought in Canada is much less than we can afford because I think that the market is expensive.

We timed an upgrade of our home in California pretty well during the California crash. Central bankers are telling us, as explicitly as they can, that they are going to dilute the store of value function of money. I am listening to them.

I have no idea whether this will turn out to be a good idea in the long run but it the least worst option available to me in my opinion.

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We have given up waiting for reality to return in the UK and are moving back to Canada next summer. Our new home is being built at the moment. Canada's housing is much cheaper in absolute terms on a like for like basis than the UK so I will have a much smaller dollar amount at risk in Canada than the UK even if the percentage risk is higher.

The quality of the housing stock in Canada in terms of square footage and plot size is much higher. The quality of the construction and materials was much higher in the UK than in Canada until about 10 years ago when Canada started to catch up quickly.

Where in Canada? Is it a new build on some kind of estate or are you having it built bespoke?

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Where in Canada? Is it a new build on some kind of estate or are you having it built bespoke?

Vancouver Island.

It is a small, ungated estate of about 40 detached, semi-detached and terraced houses in the 2,200 to 2,600 sq ft range. We are buying into the last phase. The product is pretty homogeneous so it is very easy to work out that prices have been pretty flat since 2009 on a price per square foot basis. The tax assessed values are transparent to real estate agents and we know that we are buying at very close to tax assessed value on a price per square foot basis.

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Vancouver Island.

It is a small, ungated estate of about 40 detached, semi-detached and terraced houses in the 2,200 to 2,600 sq ft range. We are buying into the last phase. The product is pretty homogeneous so it is very easy to work out that prices have been pretty flat since 2009 on a price per square foot basis. The tax assessed values are transparent to real estate agents and we know that we are buying at very close to tax assessed value on a price per square foot basis.

Well, you have kept the faith for long enough - perhaps too long. I can't see the UK HPI madness ending until something forces it to end. Almost the entire nation is a ramper and perhaps being an EA is the road to riches for doing s*d all as they keep getting away with the ramping.

Any free plots left on your estate?

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Well, you have kept the faith for long enough - perhaps too long. I can't see the UK HPI madness ending until something forces it to end. Almost the entire nation is a ramper and perhaps being an EA is the road to riches for doing s*d all as they keep getting away with the ramping.

Any free plots left on your estate?

We have waited 5 years and have run out of patience. The madness will end but probably in a much more damaging and widespread ways than places like California where prices dropped by 50%, inventory passed to stronger hands and prices are now up 20% so still 40% below peak.

If prices fall back to unramped levels and the UK re-asserts its sovereignty and redefines its relationship with Europe, we will be back in a flash.

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