matts Posted April 16, 2020 Share Posted April 16, 2020 I have a considerably smaller sample size, but I got 100% of my rents for April. And one tenant who hasn't paid on time for a year paid on the 1st. For tenants who have lost their jobs, the CERB is $2000/month for 4 months. For a family with 2 adults, that's $4k/month. Someone working full time 40 hours/wk at minimum wage ($15/hr) only has a gross of $2500/month. So between taxes and payroll deductions and missing a shift many/most renters are as good or better off financially than they were. Even tenants in higher end professions seem to be mostly working from home, getting full pay, and saving money on commuting, lunches out, etc. The piper will have to be paid for this eventually, but for now it seems OK. I think next spring when folks realize they need to pay income tax on their CERB could be tough, as one example. (No tax was withheld) The market for property sales has slowed considerably, and both pricing and transaction volumes are way down. I'm not sure about the leasing market, I haven't had a vacancy since this started. I suspect it's quite bad. Much appreciated Link to comment Share on other sites More sharing options...
alpha Posted August 16, 2020 Share Posted August 16, 2020 The condo insurance rate issue is discussed here: https://www.insurancebusinessmag.com/ca/news/breaking-news/experts-react-to-skyrocketing-condo-insurance-rates-208826.aspx So, basically three (four?) conceptual reasons that happen to move in the same direction: -reasons specific for the condo market in Western Canada (rising 'actuarial' costs, past, present and future) -hardening market at large -social inflation development (business interruption with threat of retroactive coverage change) -? changing perception about the price of risk ? Price adjustments came come slowly or suddenly and deviations from 'true' value can occur, sometimes wildly so. And it can work both ways. Does anyone know if these increases are going to affect "bare land stratas" in BC? or the increases only affecting condo stratas? Anyone know how to independently verify the financial health of a strata in BC? Thanks Link to comment Share on other sites More sharing options...
bizaro86 Posted August 17, 2020 Share Posted August 17, 2020 The condo insurance rate issue is discussed here: https://www.insurancebusinessmag.com/ca/news/breaking-news/experts-react-to-skyrocketing-condo-insurance-rates-208826.aspx So, basically three (four?) conceptual reasons that happen to move in the same direction: -reasons specific for the condo market in Western Canada (rising 'actuarial' costs, past, present and future) -hardening market at large -social inflation development (business interruption with threat of retroactive coverage change) -? changing perception about the price of risk ? Price adjustments came come slowly or suddenly and deviations from 'true' value can occur, sometimes wildly so. And it can work both ways. Does anyone know if these increases are going to affect "bare land stratas" in BC? or the increases only affecting condo stratas? Anyone know how to independently verify the financial health of a strata in BC? Thanks I would expect the percentage change to the cost of insurance to be the same, but the portion of your fees that is composed of insurance is likely much lower in a bare land condo, as there isn't much to insure. I'm in Alberta not BC, but here condominium corporations publish audited financial statements that you can purchase from the management company. They charge an unreasonable amount for them (imo) but its a must-have before buying a condo. I like to check how the actuals compared to the budget (if they came way over the fees are likely not sustainable). Also, check the reserve fund. If contributions are lower than called for in the report OR if the balance in the fund is lower than called for then fees will likely go up and/or a special assessment. The one exception is if a big project has been completed early. I own a couple of units in a building where we did the windows 2 years early. So instead of having the $250k that the reserve fund study calls for us to have saved for windows, we have $250k worth of new windows. Link to comment Share on other sites More sharing options...
scorpioncapital Posted August 17, 2020 Share Posted August 17, 2020 I have a considerably smaller sample size, but I got 100% of my rents for April. And one tenant who hasn't paid on time for a year paid on the 1st. For tenants who have lost their jobs, the CERB is $2000/month for 4 months. For a family with 2 adults, that's $4k/month. Someone working full time 40 hours/wk at minimum wage ($15/hr) only has a gross of $2500/month. So between taxes and payroll deductions and missing a shift many/most renters are as good or better off financially than they were. Even tenants in higher end professions seem to be mostly working from home, getting full pay, and saving money on commuting, lunches out, etc. The piper will have to be paid for this eventually, but for now it seems OK. I think next spring when folks realize they need to pay income tax on their CERB could be tough, as one example. (No tax was withheld) The market for property sales has slowed considerably, and both pricing and transaction volumes are way down. I'm not sure about the leasing market, I haven't had a vacancy since this started. I suspect it's quite bad. I believe it's now 12,000. But even so, there will be very little tax to pay because if you take 6 months of this, and have then a regular salary (whatever that means these days) for the other 6 months, there is no way you are pushing more than 40k and so tax will be very low. Link to comment Share on other sites More sharing options...
bizaro86 Posted August 17, 2020 Share Posted August 17, 2020 Yeah, they added another 2 months since my last post, so the max is now 12k. I think the tax thing will be an issue for lower income types. Say 20% tax is owed on the 12k, (under 40k in Ontario) that's $2400. I think the number of low wage folks that will have that money saved by next spring is very, very low. I get it doesn't seem like an objectively large amount of money for probably anyone on this board, but for the types who struggle to pay their rent every month it will absolutely be an issue. Link to comment Share on other sites More sharing options...
cwericb Posted September 16, 2020 Share Posted September 16, 2020 Average Canadian house prices increased 18% in the past year. It is now 8 years since Garth Turner made the prediction that the Canadian housing bubble was about to burst. Prices in the past 12 months increased from a low of 5.3% in Alberta (which is struggling with low oil prices) to a high of 31% in P.E.I. Last month set a record for the most home sales ever, 33 per cent more homes changed hands in August 2020 than the same month last year. Glad that I ignored Mr. Turner’s warnings as prices in our area have been increasing by about 15% yearly and double that this past year. Our situation is somewhat unique as we experienced strong immigration for several years and now combined with that, we have been able to control Covid-19. No hospitalizations, no community spread and no deaths. People from other parts of Canada and elsewhere are buying and building here, sight unseen and realtors can barely keep up with the traffic. A realtor will walk through a listing videoing the home for the customer who makes an offer at the end of the tour. One side effect of this influx of people is that we have had a couple of relatively massive budget surpluses that I believe is probably due to wealthy people becoming residents. Link to comment Share on other sites More sharing options...
Viking Posted September 16, 2020 Share Posted September 16, 2020 Average Canadian house prices increased 18% in the past year. It is now 8 years since Garth Turner made the prediction that the Canadian housing bubble was about to burst. Prices in the past 12 months increased from a low of 5.3% in Alberta (which is struggling with low oil prices) to a high of 31% in P.E.I. Last month set a record for the most home sales ever, 33 per cent more homes changed hands in August 2020 than the same month last year. Glad that I ignored Mr. Turner’s warnings as prices in our area have been increasing by about 15% yearly and double that this past year. Our situation is somewhat unique as we experienced strong immigration for several years and now combined with that, we have been able to control Covid-19. No hospitalizations, no community spread and no deaths. People from other parts of Canada and elsewhere are buying and building here, sight unseen and realtors can barely keep up with the traffic. A realtor will walk through a listing videoing the home for the customer who makes an offer at the end of the tour. One side effect of this influx of people is that we have had a couple of relatively massive budget surpluses that I believe is probably due to wealthy people becoming residents. It is exceptionally difficult to get both the call (of the bubble) and the timing (of the burst) right. For people who own real estate the run up in prices is a life changing event. For those who do not own... If the virus is still around next year the spring of 2021 could be another big step up for single family home prices. Crazy times. Link to comment Share on other sites More sharing options...
cwericb Posted September 16, 2020 Share Posted September 16, 2020 If the virus is still around next year the spring of 2021 could be another big step up for single family home prices. Crazy times. Crazy indeed. Shows how the devil is in the details. At first glance, one would have assumed that Covid would have a serious detrimental effect on residential real estate and construction. But now we see people scrambling to get out of condos, apartments and city centers and looking for less densely populated areas. With an infectious disease on the loose, who wants to live in a building with perhaps several hundred other people? Also, the movement towards ‘work from home’ has quickly accelerated changing attitudes towards residential neighbourhoods. Many now no longer need to live within major cities or indeed even the suburbs. Many are looking at Covid-19 as a warning that this pandemic may not be an isolated incident or that a cure may not be just around the corner. Because of this, many are looking for single family homes or duplexes and smaller communities are becoming very attractive. This movement is in part to blame for the explosion in the price of materials. In the spring, manufacturers and suppliers felt that the market would be slow this year when the opposite has happened thereby leading to serious lumber and other shortages. Priced a 2x4 or 2x6 lately? Link to comment Share on other sites More sharing options...
Gregmal Posted September 16, 2020 Share Posted September 16, 2020 If the virus is still around next year the spring of 2021 could be another big step up for single family home prices. Crazy times. Crazy indeed. Shows how the devil is in the details. At first glance, one would have assumed that Covid would have a serious detrimental effect on residential real estate and construction. But now we see people scrambling to get out of condos, apartments and city centers and looking for less densely populated areas. With an infectious disease on the loose, who wants to live in a building with perhaps several hundred other people? Also, the movement towards ‘work from home’ has quickly accelerated changing attitudes towards residential neighbourhoods. Many now no longer need to live within major cities or indeed even the suburbs. Many are looking at Covid-19 as a warning that this pandemic may not be an isolated incident or that a cure may not be just around the corner. Because of this, many are looking for single family homes or duplexes and smaller communities are becoming very attractive. This movement is in part to blame for the explosion in the price of materials. In the spring, manufacturers and suppliers felt that the market would be slow this year when the opposite has happened thereby leading to serious lumber and other shortages. Priced a 2x4 or 2x6 lately? There was even quite a few threads started right after COVID basically screaming about the housing market being fucked. Well located suburban RE, is more or less teflon. Link to comment Share on other sites More sharing options...
KCLarkin Posted September 16, 2020 Share Posted September 16, 2020 Average Canadian house prices increased 18% in the past year. It is now 8 years since Garth Turner made the prediction that the Canadian housing bubble was about to burst. Prices in the past 12 months increased from a low of 5.3% in Alberta (which is struggling with low oil prices) to a high of 31% in P.E.I. Last month set a record for the most home sales ever, 33 per cent more homes changed hands in August 2020 than the same month last year. Glad that I ignored Mr. Turner’s warnings as prices in our area have been increasing by about 15% yearly and double that this past year. Our situation is somewhat unique as we experienced strong immigration for several years and now combined with that, we have been able to control Covid-19. No hospitalizations, no community spread and no deaths. People from other parts of Canada and elsewhere are buying and building here, sight unseen and realtors can barely keep up with the traffic. A realtor will walk through a listing videoing the home for the customer who makes an offer at the end of the tour. One side effect of this influx of people is that we have had a couple of relatively massive budget surpluses that I believe is probably due to wealthy people becoming residents. Glad I ignored this too. We bought our house it Toronto at an insane price in 2010, expecting a 30% drop. I felt sick when we won the bidding war. It would probably sell for ~ 2x now*. Friends who bought starter homes in the area are messed up, since they can't afford the upgrade. Suburbs or bust. * Most of the stocks I follow would be up even more, so the opportunity cost was high. Link to comment Share on other sites More sharing options...
TorontoRaptorsFan Posted September 16, 2020 Share Posted September 16, 2020 Garth Turner is Chicken Little... One day things will go south and he'll brag about how he was right even after years upon years of warnings... Link to comment Share on other sites More sharing options...
cwericb Posted September 16, 2020 Share Posted September 16, 2020 When you stop and think about it, 18% average increase in one year - over the whole country - is fairly substantial. Anyone know average price increase since Turner made his prognostication in 2012? Link to comment Share on other sites More sharing options...
Gregmal Posted September 16, 2020 Share Posted September 16, 2020 On market crashes and "calling them"...anyone have any data on the average amount of time the "crash caller" ends up waiting for the collapse? And also the gains forfeited by doing so? Versus the tiny number of people who happen to be going all in at exactly the wrong moment and how long on average it takes to get back to even? Link to comment Share on other sites More sharing options...
cwericb Posted September 16, 2020 Share Posted September 16, 2020 I have always thought that I buy shares and they drop 50%, then I have nothing to show for the 50% I lost. If I buy a house and the value drops by 50%, I still have a place to live, just as I did before the price drop. And real estate usually appreciates in value over time. Just my way of thinking. Link to comment Share on other sites More sharing options...
Viking Posted September 16, 2020 Share Posted September 16, 2020 I think a key with real estate is the incredible amount of leverage usually employed. Life changing (in a good way) when prices are going higher (which is what Has been happening the past 20 years in Canada). In a bust, like what the US had in 2008, my guess is leverage hurt lots of families. Another key is time horizon... if you love where you live and you know you are there long term then timing becomes less of an issue. Link to comment Share on other sites More sharing options...
gary17 Posted September 16, 2020 Share Posted September 16, 2020 the most beautiful thing is TAX FREE for principal residence ! Link to comment Share on other sites More sharing options...
beerbaron Posted September 16, 2020 Share Posted September 16, 2020 So with the federal govenrment borrowing like crazy and the housing market exploding... How levered are househould and goverments together? Do we have historical data to compare? BeerBaron Link to comment Share on other sites More sharing options...
Cigarbutt Posted September 17, 2020 Share Posted September 17, 2020 http://" data-ipsquote-contentapp="forums" data-ipsquote-contenttype="forums" data-ipsquote-contentid="6314" data-ipsquote-contentclass="forums_Topic" 431126#msg431126 data-ipsquote-timestamp=1600300531] So with the federal govenrment borrowing like crazy and the housing market exploding... How levered are househould and goverments together? Do we have historical data to compare? BeerBaron [/img] This is not what you asked but it's an interesting graph. Do you remember the 1990s when credit agencies got agitated over federal debt? You may want to adjust for real GDP growth x 4.4 (1969 to end 2019). The following contains what you are looking for. For the first link, CDN's household debt to GDP reached about 106% at the time of this writing. For the second link, see page 12 for provinces and the federal net debt to GDP. i think you're from Quebec? i don't want to get into politics but there was a lot of noise about "austerity" for a few years and the new government does have some more breathing room as a result although IMO marginal debt addition even at super low rates may eventually become an issue. https://betterdwelling.com/canadian-household-debt-has-grown-over-49-faster-than-gdp-since-2005/ http://www.rbc.com/economics/economic-reports/pdf/canadian-fiscal/prov_fiscal.pdf http://3.bp.blogspot.com/-2NiwRPP4uS4/U_ye1sgb70I/AAAAAAAAFeg/kkS92RwVU-Y/s1600/download.jpg Link to comment Share on other sites More sharing options...
SharperDingaan Posted September 17, 2020 Share Posted September 17, 2020 The great thing about a mortgage is that you just need to pay the interest. If you have remaining borrow capacity, you don't even need to do that. Your banker simply increases your mortgage, credits your chequing account, and you just pay it back to him/her as last months interest. With a little help from the BoC ;) no defaults as long as the price of the average residence keeps going up. Same thing applies to rent, the lender just needs to receive the interest, the landlord just needs to receive interest and operating cost. A little regulatory grace ;) a refi to reduce the interest rate, and everything can stay open - at 25-50% less rent. More people back at work, and spending again. The home owner also benefits from inflation ;) 'cause the real asset inflates, and the monetary liability deflates - increasing your equity. Compare the major fiat currencies to gold - and we can see that inflation both exists, and is sizeable. The incremental $'s just don't spread evenly over the same fixed supply. Hence the 31% price rises in PEI, and 5% in Alberta. Point? It's going to be a very long time before real estate blows up in Canada. SD Link to comment Share on other sites More sharing options...
cwericb Posted September 17, 2020 Share Posted September 17, 2020 Yes! Alfred E. Neuman for President in 2020 ! Link to comment Share on other sites More sharing options...
alpha Posted December 3, 2020 Share Posted December 3, 2020 The Canadian Government is now subsidizing home purchases valued over 500k for buyers with 150k incomes. https://www.yahoo.com/now/federal-liberals-boost-firsttime-home-buyers-incentive-and-plan-foreign-buyers-tax-204818131.html Link to comment Share on other sites More sharing options...
gary17 Posted December 30, 2020 Share Posted December 30, 2020 do people know why vancouver RE still going up with COVID foreigners are not coming! Link to comment Share on other sites More sharing options...
Viking Posted December 30, 2020 Share Posted December 30, 2020 do people know why vancouver RE still going up with COVID foreigners are not coming! My comments are directed at the single family home segment 1.) very low supply - few people want to move out of their house during covid 2.) very high demand - people (especially those with kids) want to move out of their smaller place and into something larger 3.) historically low interest rates - variable rates available under 1% and 5 year fixed rates under 2%. 4.) governments (federal and provincial) highly motivated to keep housing as engine of economic growth especially while pandemic is here My guess is the spring selling season will see prices setting new record highs; forecast is 8% increase in pricing in 2021 and my guess is this will be low. Monopoly money :-) Real estate is increasing in value pretty much non-stop since 2000 in Vancouver and Toronto. Price increases of $100,000 - $150,000 per year is now normal. Cash flow? Who cares. Price appreciation makes any purchase look like a no brainer investment. I know lots of people who own multiple residences. Owning real estate is as close as an average person can come to printing money legally. —————————— - a recent example: my neighbour (Langley) listed his house 2 weeks ago. 2,550 sq ft; great condition; cul-de-sac; close to very good schools. It was listed for $1,350,000. He immediately had three offers and it sold for $1,390,000. He is moving to new brand new larger house on a larger lot in south Langley. Link to comment Share on other sites More sharing options...
gary17 Posted December 30, 2020 Share Posted December 30, 2020 Thank you Viking Interesting perspective— I totally missed the supply side With all the money Justin is printing... I can’t see interest rate going up.... I’m tempted to take some money off stock market.... Gary Link to comment Share on other sites More sharing options...
gary17 Posted December 30, 2020 Share Posted December 30, 2020 The other thing that sets floor on price is cost of skilled construction labour which is about $400/sf So valuation of new home = land plus cost of construction will set the market for existing homes too Link to comment Share on other sites More sharing options...
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