Jumpingmanjim posted:

http://www.macrobusiness.com.au/2015/10/chinese-property-investors-turn-sub-prime/

Cultural Imperial posted:

This just in, the cmhc is forecasting the bubble pop in 2016.

http://business.financialpost.com/personal-finance/mortgages-real-estate/canadas-real-estate-boom-will-come-to-an-end-in-2016-cmhc-says

Tighclops posted:

Yes



do it


DO IT

quote:

Economist says Bank of Canada and investors shorting Canadian housing should look closer at numbers

It was just four Toronto condominium developers and questionable statistical reporting that led to news earlier this year about a glut of high-rise units in Canada’s largest market, says a new report.

Canadian Imperial Bank of Commerce deputy chief economist Benjamin Tal says in a report out Monday that even the Bank of Canada has been fooled by the raw numbers about unabsorbed or unsold units that once broken down appear to be a bit deceiving.

“The big question is to what extent the condo markets in (Vancouver and Toronto) are overshooting. The answer, of course, is multi-dimensional, but a good starting point is to assess the trajectory of recently completed and unabsorbed units,” said Tal, in his report. “An increase here suggests that developers are finding it increasingly hard to sell completed units — usually a first sign of troubles ahead.”

In Vancouver, the number of unabsorbed units fell over the past year from just over 2,000 to the current 1,100 indicating an improving situation, he writes.

But Tal says towards the end of 2014 and early 2015 there was a notable increase in the number of completed condominiums in the greater Toronto area. In a record housing year in 2012, the GTA saw just under 50,000 housing starts, 30,000 of them condos.

So what happened? Canada Mortgage and Housing Corp. decided to register 10,000 condos in the month of January. Tal says that according to CMHC, the GTA has seen no less than 26,000 condo completions in the first half of this year — three times more than the level seen in previous years.

“Registering a completion is more art than science, as different data providers use different criteria,” said Tal, noting other data providers such as RealNet have chosen to distribute their completion count more evenly — a fact that resulted in a less volatile count of unabsorbed units.

What happened using the CMHC data is that between December 2014 and May of this year, the number of unabsorbed units rose in Toronto from less than 1,000 to close to 3,000 — a level that is even higher than those seen in the early 1990s.

“This meteoric ascent was not only highlighted by the Bank of Canada as a sign of vulnerability but also by various short-Canada investors — using that surge as the ultimate illustration of the bubbly Toronto condo market,” said Tal, noting that since the numbers first came out completed and unabsorbed units fell over 800 in a month.

Now that the CMHC’s completed units have leveled off, it says there about 2,000 unabsorbed units in the GTA which is the same numbers that RealNet is now reporting— still a high level but not nearly as dramatic as 3,000.

So where did CMHC’s original numbers go awry? About half of the completed and unabsorbed units are in city of Toronto, but more importantly one third of all unabsorbed units, were constructed by four developers. And five projects coming on at once accounts for about one quarter of the unabsorbed units on the market today.

“To be sure, the GTA’s condo market will be tested as interest rates start rising in the coming years, and increased resale activity from domestic condo investors will result in excess supply and some downward pressure on prices,” says Tal. “But for now, those who look at the rise in unabsorbed units as a sign of increased vulnerability are barking up the wrong tree.”

Cultural Imperial posted:

Haha

That's loving London levels of expensive.

The Butcher posted:

ductonius posted:

Sandwiched between a rail yard, a detox center and a brewery.


edit:

Condo owners: The trains are making too much noise!
CN: Get hosed.
Condo owners: You can't just dismiss us!
Federal Government: Yes they can.
Condo owners: City! Do something!
Vancouver city: Could you please make less noise?
CN: Get hosed.

PT6A posted:

Just lol if your housing market is more overvalued than the bay area.

etalian posted:

Vancouver is funny since it's sky housing prices but there are no sky high tech compensation packages to make up for it.

etalian posted:

Vancouver is funny since it's sky housing prices but there are no sky high tech compensation packages to make up for it.

Bip Roberts posted:

At least San Fransisco has insane wealth inequality to back up the insane prices.

Bip Roberts posted:

At least San Fransisco has insane wealth inequality to back up the insane prices.

etalian posted:

Vancouver is funny since it's sky housing prices but there are no sky high tech compensation packages to make up for it.

quote:

House prices overvalued in 11 of Canada's 15 biggest cities, CMHC says
Overvaluation may not be a problem in just Toronto and Vancouver

Canada's national housing agency is warning of "problematic housing market conditions" in most of the country's major housing markets.

The Canada Mortgage and Housing Corporation said in its Housing Market Assessment report on Thursday that many housing markets are showing troubling signs in four criteria:

Overheated home sales.
Too many homes being built.
Prices increasing too quickly.
High prices.
When all four factors are taken together, the agency singled out four cities for being particularly troubling: Saskatoon, Regina, Winnipeg and Toronto.

Read the report
"In Toronto, strong evidence of problematic conditions reflects a combination of price acceleration and overvaluation," the CMHC said. "Strong evidence of problematic conditions in Winnipeg, Saskatoon, and Regina reflects detection of overvaluation and overbuilding."

Overvaluation concerns

While those four cities gave the housing agency the most concern overall, overvaluation was called widespread.

It was cited as either a "moderate" or a "strong" problem in 11 of the 15 cities the CMHC includes in its assessment.

The cities include:

Vancouver.
Victoria.
Calgary.
Edmonton.
Regina.
Saskatoon.
Winnipeg.
Toronto.
Hamilton.
Ottawa.
Montreal.
Quebec.
Moncton.
St. John's.
Halifax.
"The most prevalent issue detected in 11 of the 15 centres covered by the HMA is overvaluation," CMHC's chief economist Bob Dugan said. "The evidence of overvaluation has increased since the previous assessment in Toronto, Vancouver, Montreal, Edmonton and Saskatoon as price levels are not fully supported by economic and demographic factors."

The four cities where the CMHC said overvaluation isn't a problem are Victoria, Hamilton, Moncton and St. John's.

Earlier this month, the Canadian Real Estate Association reported that the average Canadian home sold in September went for $433,649, a figure that has risen by six per cent in the previous 12 months.

But the Realtor group said most of the gains in the national figure are coming from Toronto and Vancouver. Outside of those two cities, house prices have appreciated by less than three per cent in the past year, the association said.

The CMHC's report Thursday suggests the problem may be more widespread than possible local bubbles in those two cities.

quote:

This quarterly release1
of the Housing Market Assessment (HMA) provides updated results2
that evaluate the
extent to which there is evidence of problematic housing market conditions in 15 Census Metropolitan Areas
(CMAs).
„ The HMA3
analytical framework considers four factors to assess the evidence of problematic housing market
conditions: overheating; acceleration in the growth of house prices; overvaluation; and, overbuilding. The
appendix of the first release, published in November 2014 in a special edition of Housing Now, contains a
detailed description of the framework. A brief summary of it is presented on page 3 of this report.
„ The analytical framework detects strong evidence of problematic conditions in Toronto, Winnipeg, Saskatoon,
and Regina.
„ The overall level of evidence of problematic conditions detected by our framework for Toronto remains strong
due to the detection of price acceleration and overvaluation.
„ Since the previous assessment, the overall level of evidence of problematic conditions detected by our
framework has moved from moderate to strong for Saskatoon due to the detection of overvaluation and
overbuilding.
„ In Winnipeg and Regina, there remains strong evidence of problematic conditions, reflecting detection of
overvaluation and overbuilding.
„ The analytical framework detects moderate evidence of problematic conditions in Montréal, Ottawa and
Québec.
„ Nationally, there remains moderate evidence of overvaluation4
, reflective of a variety of price conditions
across the country with some CMAs showing more signs of overvaluation than others. Notably, evidence of
overvaluation is now detected in Toronto, Vancouver, Montréal, Edmonton, and Saskatoon. CMHC’s framework
also detects evidence of other problematic conditions such as overheating, acceleration in house prices, and
overbuilding of varying degrees across CMAs.

quote:

Vancouver: Weak
evidence of problematic
conditions
There is weak evidence of
problematic conditions in Vancouver.
The indicator for overheating is below
its threshold in the second quarter
despite resale market conditions
favoring sellers. An increase in the
number of listings, as well as the
number of homes under construction,
has helped to meet rising buyer
demand. There is moderate evidence
of overvaluation in the second
quarter due to continued strong price
growth.

quote:

Oil-Sands Exodus Seen Curbing Canada Economic Growth After 2020

A global crude price slump that’s crimping Canada’s economy is poised to continue having a damping effect for years to come as more oil-sands projects are shelved.

Royal Dutch Shell Plc’s decision to put on ice its Carmon Creek drilling project, announced Tuesday, lengthens the list of oil-sands developments that companies have scrapped or deferred in the market downturn to 18, according to ARC Financial Corp. The slowdown is part of a worldwide reduction in spending by energy producers trying to withstand a price rout that has dragged on for 16 months.

The pullback in northern Alberta ends a period of rampant activity in the oil sands that started around 2010 and brings the sector’s expansion back to the more moderate levels of a decade ago, according to ATB Financial. Given that much of the construction for new projects was scheduled for the coming years, the decreased work is expected to crimp Canada’s gross domestic product growth past 2020.

“A lot of that slowdown in the growth profile of the oil sands is not happening until later, the end of this decade and beyond,” Mike Burt, director of industrial economic trends at the Conference Board of Canada in Ottawa, said in a phone interview. “Going forward, the industry’s definitely not going to be the same growth driver of the Canadian economy as it has in recent years.”

Sluggish Economy

Already, oil’s crash from its peak in June 2014 has weighed on Canada’s economic growth as companies reduce drilling. The downturn triggered the nation’s recession in the first half of the year and ended energy’s eight-year run as Canada’s biggest export, with autos overtaking petroleum products in July. The Canadian dollar, a so-called petro currency, has also weakened relative to the U.S. greenback.

Job cuts have amounted to more than 36,000 in the oil and gas sector alone, according to an estimate this month by the Canadian Association of Petroleum Producers. About C$20 billion ($15 billion) less investment in energy this year than in 2014 has probably meant 150,000 job losses in other industries including construction and manufacturing, according to the Conference Board of Canada. Shell had predicted Carmon Creek would require 1,000 workers at peak construction.

Oil-sands projects that are already under construction will probably continue, such as Suncor Energy Inc.’s Fort Hills mine and Cenovus Energy Inc.’s expansions at its Foster Creek and Christina Lake drilling sites, according to Kyle Preston, an analyst at National Bank Financial in Calgary. Developments that hadn’t yet been started will be put off, he said.

Back Burner

“The general commentary from companies has been that any projects that have not yet been sanctioned have clearly been put on the back burner in this environment,” Preston said. Oil-sands companies need to see West Texas Intermediate crude prices rising to between $60 and $80 a barrel before they’ll move ahead with new ventures, he said.

The U.S. benchmark is sitting just above $45 a barrel, down 57 percent from its high last year. Futures contract prices aren’t currently trading higher than $60 until 2021.

Lost Years

“Even if prices recover much more than people expect, we’re going to lose a few years of investment,” Burt said.

The Conference Board of Canada lowered its forecast for Canadian oil production in 2030 by 1 million barrels a day, to about 5.5 million, because of the reduced spending tied to the oil crash. Bitumen production in the oil sands grew by 46 percent from 2010 to 2014, compared with a more modest growth rate of about 18 percent between 2004 and 2008, according to data from the Canadian Association of Petroleum Producers.

“It’s back to the future -- we’ve returned to an environment like the mid-2000s,” said Todd Hirsch, chief economist at ATB. The upside is that the reduced activity will allow energy companies to rein in cost inflation and emerge from the downturn more profitable, he said. “It is a correcting of the industry that had become overheated.”

Jumpingmanjim posted:

Wrap it up Canadailures cryingdoubledecktram.gif

Jumpingmanjim posted:

Wrap it up Canadailures cryingdoubledecktram.gif

Jumpingmanjim posted:

Wrap it up Canadailures cryingdoubledecktram.gif

vyelkin posted:

brb gonna go buy a house in Chicago.

Jumpingmanjim posted:

Wrap it up Canadailures cryingdoubledecktram.gif

EvilJoven posted:

Illinois is so broke theyre giving lotto winners IOUs.

vyelkin posted:

brb gonna go buy a house in Chicago.

Jumpingmanjim posted:

what would :hongkong: be? Crying Umbrella?

Isentropy posted:

Sydney and Vancouver stick out on this list like a sore thumb.

From what I know the only jobs that pay well in Vancouver are working for an American company until your visa gets approved. And a bunch of tech startups who'll "pay" you in "shares".

PT6A posted:

SF has every reason to be overvalued: it's got a drat decent climate, great culture, strong economy (for the time being), etc. That's exactly where I'd expect a massive property bubble to occur, because there's just so many reasons why it's desirable to live in that area. Vancouver, on the other hand, has: "well, our weather's not quite so bad as the rest of Canada, so long as you prefer warm and rainy to cold and sunny."

blah_blah posted:

Two years into living in SF, I'd still much rather live in Vancouver than SF if career-related things were equal, or even somewhere close to being equal. I still haven't warmed up that much to living in SF and the South Bay is really boring.

Isentropy posted:

Sydney and Vancouver stick out on this list like a sore thumb.

From what I know the only jobs that pay well in Vancouver are working for an American company until your visa gets approved. And a bunch of tech startups who'll "pay" you in "shares".

Jumpingmanjim posted:

Wrap it up Canadailures cryingdoubledecktram.gif