quote:

Overly optimistic developers and frigid weather appear to have put a bit of a dent in Regina’s housing market.



Regina is the only major city where prices have fallen since the end of last year, according to theCanadian Real Estate Association’s home price index. Ottawa prices have fallen slightly on the index over the past 12 months.

“In the last six to eight months we’re certainly starting to see a little bit of a downward trend in pricing,� says Mike Duggleby, a local realtor with Royal LePage. “The house you sold last year for this price is probably going to be a little bit less this year.�

His hypothesis? “The builders may have gotten ahead of themselves a little bit.�

Regina’s economy has been one of the healthiest in the country. A few years ago low vacancies and strong in-migration were driving house prices up. Developers took notice. And they might have built a little too much, too fast.

“We’ve got several new neighbourhoods going right now, and all of them went out of the gates hard and were developing very quickly,� Mr. Duggleby says.

“In my 33 years of real estate I’ve never seen so many new builders in Regina,� says Re/Max realtor Rob Nisbett.

Local developers have seen the error of their ways and housing starts have begun to fall. But in the aftermath of the construction boom, listings of existing homes have risen. According to Re/Max, Regina became a buyer’s market this winter, with total inventory in January and February rising 11 per cent from a year earlier to 1,137 (up from 953).

“We’ve got what for us is a fairly high inventory of resale homes right now,� says Mr. Duggleby. “Buyers have got a lot of choice. And those that are properly priced – aggressively priced – are selling quickly. Those that are trying for that extra $10,000 or $15,000 are sitting.�

An abundance of supply isn’t the only issue. “This year we had weeks on end of minus 25 degrees with a 30 mile an hour wind that would put the wind chill up at minus 50,� Mr. Nisbett says. “People just go ‘I’m sorry, after I’m done work or on my Saturday, I don’t want to go out in this.’�

“We had a miserable winter,� echoes Mr. Duggleby.

Sales were down in January and February.

The average price at which homes sold in the city during March was $328,781, up 4.8 per cent from $313,849 last year. But averages can be skewed higher by a larger number of expensive homes selling. The home price index seeks to account for that to give a better measure of the underlying change in the value of homes. Regina prices have fallen 1.93 per cent over the last year, according to CREA’s index.

“Before there was a stigma that once your house price got too high in Regina you’d never be able to sell it, but that stigma is gone,� says Mr. Nisbett. “We’re now selling million-dollar-plus properties… “We’re having people move into town that are engineers and architects and draftsmen,� he adds. “Because you’re a pipe fitter or a welder doesn’t mean you’re living in an average-priced home.�

In a recent report, Re/Max said “skilled tradesmen from other provinces and immigrants from China and Ireland flocked to Regina this winter to fill jobs in the resource, manufacturing and agricultural industries.�

But the number of newcomers isn’t what it used to be. “We were experiencing very strong in-migration into the province, and that has slowed down a little bit,� says Mr. Duggleby. “We’ve still got a big help-wanted sign out there, we’ve got tens of thousands of job openings, we’re just having trouble getting people to come in and fill them. Once we get that rolling, a lot of this excess inventory will get soaked right up.�

After decades of selling real estate, Mr. Nisbett remains optimistic.

“If you want a true perspective on how good the economy’s doing, you go to menswear clothing,� he says. “If menswear clothing is doing very well, the economy’s doing well, because unfortunately dad’s the last one to get a new pair of pants. The kids are the first to get new clothes, and then mom. And our menswear clothiers are doing very well.�

quote:

The Canada Mortgage and Housing Corp.’s decision to cut back its mortgage default insurance coverage was likely directed by the department of finance as part of an ongoing plan to lighten the risk load at the Crown corporation, sources told the Financial Post.

Canada Mortgage and Housing Corp., the Crown corporation that controls the vast majority of mortgage default insurance in the country, says it plans to get out of the market for second homes and is adding restrictions for self-employed Canadians.

“This is all coming from finance,” an industry source said, indicating that one of Ottawa’s goals is to offload a greater slice of mortgage insurance business on private insurers.

CMHC, which controls a majority of the market with just two other private players making up the rest, said a week ago it would get out of the business of insuring second homes and require self-employed Canadians to have third-party income validation.

Canadians with less than a 20% down payment on a house and borrowing from a federally regulated bank must get the insurance to cover their loan. CMHC’s insurance is 100% backstopped by the federal government while private insurers Genworth Canada and Canada Guaranty are only 90% backed.

“The mandate of CMHC is to get smaller,” said the source, who noted the department of finance took tighter control of CMHC in 2012 when it put the agency under the direct supervision of Office of the Superintendent of Financial Institutions.

HookShot posted:

Ugggghhhh honestly while that stuff isn't bad, as a self employed person, I loving HATE when places the need to have third party income verification. Here's my loving CRA notice saying how much I claimed as income, I don't have an accountant, deal with it.

Lead out in cuffs posted:

Well, there's "places" that are giving you small loans like a credit card or a cellphone contract, and then there's getting a mortgage, something you should probably only be doing once or twice in your life. I can understand getting frustrated about the former, but mortgages should be meticulously documented.

Also, although it's hella illegal, the kind of person who's likely to lie about their income to get a mortgage is also the kind of person likely to lie to the CRA.

quote:

Reliable Mortgages
@reliablmortgage
Best 5 years fixed rate offered 2.98% and 5 years variable 2.35% for Residential Mortgage. 80% LTV Home Equity Line of Credit.

Cultural Imperial posted:

https://twitter.com/reliablmortgage/status/462756544409374720

ductonius posted:

Is it inaccurate to summarize "Mortgage + HELOC" as "pay the bank interest to store your money then pay the bank interest to access it"?

more friedman units posted:

The obvious question is the average square footage per room.

rrrrrrrrrrrt posted:

That's kind of a ridiculous graph on its own. Is there more analysis to it?

Kraftwerk posted:

My immediate circle of friends is a little different from the other posters here in that they recognize there is a bubble but they believe there are specific projects that won't be affected by it.

Cultural Imperial posted:

Lets get one thing straight here. If mortgage rates weren't so cheap and lending standards weren't so lax, we would probably not have a bubble. Canada totally jumped the shark when The Best Financial Minister of All Time Jim Flaherty PBUH increased amortization to 40 years, greenlighted 5% down, and a host of other retarded nonsense in order to 'rescue' Canada from the 2008 implosion. There isn't anything else going on to drive this mania to ~*build EqUiTy*~.

Last month's REBGV numbers indicate a major pick up in sales activity mid way through April. BMO's reintroduction of 2.99% mortgages coincided with that increase. Is it coincidence?

If you think your luxury equity building in the middle of downtown Toronto is going to be immune to any market implosion, then I'd love to hear why. That'd be like standing in the middle of lac-megantic wearing a flame proof suit.

Wasting posted:

It's amazing how people ignore the effects of that 5% down, 40 year mortgage boost. RE was crashing in Canada, around the same time as the US, and Flaherty goosed the market.

Cultural Imperial posted:

etalian posted:

Housing bubble is making Vancouver just like Japan

Rime posted:

In case you ever wondered why real estate in the remote and inhospitable North Coast ticked up through the roof.

There's thousands of these huge estates hidden away up there, hundreds of islands privately owned by offshore millionaires. It's insane, you could probably make a pretty penny as a pirate in the wintertime if you had a boat and knew which ones are caretakerless.

Cultural Imperial posted:

That's a pretty sweet house. I wonder how you power it.


e: lol well water. fml

e2: https://www.google.com/maps/place/Subtle+Islands/@50.1194533,-125.081675,8z/data=!4m2!3m1!1s0x547d52cf8d747549:0x69b723d405e81a10

you can be diana krall's neighbour i guess

Cultural Imperial posted:

Here's an article by Frances Bula lamenting the high cost of housing in Vancouver. Be forewarned, this is a link to vanmag. http://www.vanmag.com/News_and_Features/Will+Vancouver+Ever+Be++Affordable%3F?page=0%2C0

I can't decide if Bula is another shithead baby boomer worried about preserving her equity like Barbara Yaffe.

quote:

In March 2014, just a few weeks after the Canadian government announced it was shutting down the Immigrant Investor Programme, average house prices in greater Vancouver suffered their biggest month-on-month fall on record, plunging more than 11 per cent. This came amid a three-year period of price volatility so severe that it has never been matched in the history of the city’s real estate market.

Wait, let me try that again. In March 2014, just a few weeks after the Canadian government announced it was shutting down the Immigrant Investor Programme, the Home Price Index (HPI) for greater Vancouver continued to rise to near-record levels, amid what real estate board chief Ray Harris called “steady and stable market conditions”.

Which of the preceding paragraphs is accurate?

Both of them. And therein lies a problem for anyone trying to get a handle on Vancouver’s property market, and whether the cancellation of the Chinese-dominated Immigrant Investor Programme (IIP) is a game-changer or of utter irrelevance.

The apparent disconnect between average prices and the Real Estate Board of Greater Vancouver’s (REBGV) preferred price metric, the HPI, has been noted on plenty of occasions. In contrast to the average-price calculation (total sales value divided by total sales), the HPI employs a sophisticated formula to track the price of a typical or benchmark property, creating a “like-for-like” price comparison. The 26-page explanation of its formulation describes it as “a reliable, consistent, and timely way of gauging changes in home prices”.

Critics have dubbed it the “Franken-number”. That’s a little unfair, since the reason for devising an alternative indicator to average prices makes perfect sense: Average prices do not take into account month-to-month variance in the type or location of homes being sold.

The net effect of the HPI formula is to flatten out the peaks and valleys that can beset average price charts. REBGV chief economist Cameron Muir told me the HPI is a “much more robust” pricing measure than average prices, in part because it “takes that volatility out of the equation. It gives us a better handle on where pricing trends and directions are going.”

But what if the volatility itself, as opposed to the price point in any given month, is telling an important story?

Lest there be any misunderstanding, I have no doubt the HPI is a superior measure of prices in Vancouver compared to other gauges, including average prices. But the fact that the HPI has obscured the extreme and unusual volatility in average detached home prices may itself be a problem. Few home buyers or sellers are likely aware that it is even occurring. It certainly hasn’t been widely reported.

Since early 2011, average house prices have changed direction by a factor of 10 per cent or more five times. Such volatility had never happened before, and the swings are getting wilder. Between June 2013 and February 2014, average prices soared 22 per cent, hitting a record C$1.36million. As noted earlier, this was followed by a one-month price drop of more than 11 per cent (to C$ 1.21 million), the greatest plunge in a single month on record.

Yet not a single report on the March stats highlighted this fact. During the 2008-2009 global financial crisis, 10 per cent swings occurred twice. Before that, you have to go back to 1996, when pre-handover immigration from Hong Kong dried up, to find a 10 per cent swing downwards (in that case it took eight years before an upswing made up the lost ground).

So the 2011-2014 average-price swings have been very unusual. This is beyond dispute.

It’s still too early to tell whether the announced cancellation of the 28-year-old IIP is having any effect on the market. However, the current spate of price volatility roughly coincides with a period of widespread doubt over the fate of the IIP, a scheme which made Vancouver the world’s most popular destination for millionaire immigrants. In 2010, its benchmarks were doubled. In 2012, new applications were frozen and rumours that the scheme would be shut down swept the Chinese immigration industry.

Although the federal government announced in February that the IIP would indeed be cancelled, this decision only goes into effect in June, when the federal budget is passed. That is when more than 60,000 rich would-be immigrants will be informed that their bids to move to Canada have been scrapped. About 40,000 of these applicants, representing 12,000-15,000 households, had hoped to move to Vancouver.

How many of these had already bought homes in the city? And how many will be seeking to sell, when their dreams of living in Vancouver are officially dashed?

El Scotch posted:

I just wanted to drop by to check if things have crashed yet?

El Scotch posted:

I just wanted to drop by to check if things have crashed yet?

Cultural Imperial posted:

http://www.scmp.com/comment/blogs/article/1506426/vancouver-house-prices-took-record-fall-so-market-really-steady-and

El Scotch posted:

I just wanted to drop by to check if things have crashed yet?