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Toronto & Vancouver Real Estate Prices

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Is the Metro Vancouver real estate market in free fall?

Vancouver Housing Market Implodes: Average Home Price Plunges 20% In 1 Month - "The Market Is Devastated"

There were only three home sales in West Vancouver between Aug. 1 and 14 this year, compared to 52 during the same period last year. That’s a decrease of 94 per cent.

“The market in West Van is up 450 per cent since 2001. So is everyone making 600 per cent more income than they were so they can pay their taxes and buy their houses? Of course not. So how is this inflation been financed? By off-shore money and record debt.”

And while Eilers says the slow-down is at least partly due to the implementation of the Metro Vancouver foreign buyer tax on July 25, which has caused a firestorm of anecdotal evidence saying it has killed the housing market, he adds sales were dropping even before the tax.

The pattern has left the market “devastated”, according to Eilers.

Zolo, a Canadian real estate brokerage, keeps track of MLS home sales in real-time and reports prices as an average rather than the “benchmark price” used by the REBGV.

It currently shows a major correction underway in most Metro Vancouver markets.


According to the website, the City of Vancouver currently has an average home price of $1.1 million, down 20.7 per cent over the last 28 days and down 24.5 per cent over the last three months.


> AX thread: http://hongkong.asiaxpat.com/forums/hong-kong-property-finance/threads/37159e4d-f280-4523-9c24-84a7be3af63b/vancouver-property-bubble-is-bursting/

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Pension funds are looking to unload billions of dollars worth of commercial property assets.... are they trying to get ahead of the curve?

Suddenly Scared of Vancouver’s Commercial Property Bubble?

What do they see that the market doesn’t see, or doesn’t want to see?

For pension funds, which have to achieve predictable and fat returns, this is a bleak environment, with the Canadian 10-year yield at 1.02%, and the US 10-year yield at 1.56%. Stocks are at dizzying levels, even as corporate profits and sales have declined for nearly two years. If these pension funds want to expand into government bonds and high-grade corporate bonds in Europe and Japan, they’ll make the acquaintance with negative yields.

So why are they selling hot assets with a predictable yield when the investment options for the proceeds are so dismal? Preservation of capital?

A commercial real estate bust can take 40% or more off the top. The last one in the US did. They take years to unfold. When prices go down, real estate markets become illiquid. Trying to sell a property at a survivable price might be impossible. And cutting the price far enough to where liquidity reappears might be devastating to the seller.

The key is to get out while optimism makes these transactions possible and before the market becomes illiquid. Perhaps find a Chinese company, such as Anbang Insurance Group, which already scooped up the Bentall Centre in Vancouver, a 1.5-million-square-foot office complex and shopping mall.

More http://wolfstreet.com/2016/08/23/smart-money-scared-of-vancouvers-commercial-real-estate-bubble/

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Vancouver's Bubble versus the Non-bubble in Philly, etc


David and Goliath: a priceless Vancouver academic retires, after 45 years grappling with unaffordability

UBC geography professor David Ley has had a front-row seat to the epic transformation of a city


He arrived in the city in 1972, a bearded Briton in flared jeans, armed with an Oxford degree and an activist streak that had already taken him to Philadelphia. There he had both studied and sought to alleviate the stressed conditions of African American residents of poor neighbourhoods, where vacant homes struggled to find buyers for US$1. The former was conducted through his PhD work at Pennsylvania State University, the latter through volunteer work at a Presbyterian church.



He lived in the urban landscape he studied. The same would be true in Vancouver.


He landed here when the city was undergoing the first throes of gentrification, in contrast to the decay he had seen in Philadelphia. But he noticed victims here too - residents evicted from rooming houses to make way for the first condo developments. He could never have guessed that he was securing a ringside seat for one of the world’s most remarkable urban transformations, turning modest Vancouver into one of the planet’s most unaffordable cities, its residents alternately enriched and overwhelmed by waves of foreign capital. A global test case and basket case.

Is huge loophole being opened in Vancouver’s foreign buyer tax?


His benchmark work, the peer-reviewed 2010 book Millionaire Migrants, lays out the case that Vancouver’s unaffordability woes are products of policy, international capital and wealth migration, and Goliath-like pro-development forces pushing the notion that answers lie in market-driven supply. Ley argues instead that market-driven condo development and on-the-ground unaffordability have gone hand in glove.




Now Ley, 69, perhaps the most significant academic voice in the unaffordability debate, is retiring from UBC; the former head of the geography department taught his last class this month and he officially retires at the end of the year after a research sabbatical. He continues to study real estate bubbles around the world, and there will likely be another book at the end of it, examining and comparing Vancouver, Hong Kong, Singapore, Sydney and London.


> more: http://www.scmp.com/news/world/united-states-canada/article/2089031/david-and-goliath-priceless-vancouver-academic

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Toronto imposes 15% property tax


The government of the Province of Ontario announced a laundry list of measures to prick the crazy house price bubble in Toronto and surrounding areas. This includes a 15% transfer tax imposed on home sales to non-resident foreign investors, including corporations. It’s aimed at Chinese investors in China that buy homes in Canada to diversify their assets and get them out of harm’s way in their own country.

For them, homes in Toronto (or anywhere outside China) are an asset class denominated in a foreign currency. But these homes also confer other benefits in the event some untoward mishaps occur in China, as these investors appear to half-expect.

The Province of British Columbia imposed a similar measure last August to get a grip on the housing bubble in Vancouver that had long ago spiraled out of control. It had the effect of freezing the market, with home sales volume plunging.

Why now in Toronto? It appears that the attention of Chinese investors has pivoted from Vancouver to Toronto: In March, year-over year, the average price for all types of homes in Toronto soared 33%! It doesn’t take a genius to figure out that this is simply ludicrous.


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Toronto’s housing market is unraveling…
Last month, home sales in Canada’s biggest city fell 40%. That was the largest annual decline since 2009


, 170807-cdd-chart02.png
But that wasn’t the only bad news to come out this past month.
The price of the average home in Toronto also fell 4.6% in July. That’s the biggest monthly decline since at least 2000.
It was also the third straight month that Toronto home prices fell. The average home is now selling for $175,000 less than it did in April.
That’s a staggering decline. But it’s just the beginning.
You see, the number of house listings in Toronto also jumped 5% last month. There are now 65% more homes listed for sale in Toronto than there were a year ago.
This is a bad sign.

. . . David Madani, an economist at Capital Economics in Toronto, thinks housing prices could plunge as much as 40%. Madani also said that the coming downturn will be deeper and longer-lasting than previous ones.
That’s the last thing Toronto can afford right now.
Toronto’s housing market has been booming for nearly two decades…
Local housing prices are now up 218% since 2000.
That’s far more than prices have climbed in New York, Miami, Las Vegas, and even San Francisco.
Prices have risen so quickly, the average person can no longer afford to live in Toronto. These days, the only way to swing it is to borrow huge sums of money.
It’s complete insanity.
That’s why I’ve been writing about Toronto’s housing bubble this year. It’s also why I’ve been urging investors to take shelter.

> http://www.investmentwatchblog.com/canadas-entire-housing-market-is-on-the-verge-of-collapse/

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> https://wolfstreet.com/2018/06/04/toronto-house-price-bubble-deflates/

/ 2 /

July 2018 Data from the Toronto Real Estate Board (TREB) shows that average sales volumes were up 16% in the year to July 2018

in the Greater Toronto Area (GTA), whereas average prices were down 4.3%:


The primary reason for Toronto’s initial price and sales plunge was the market-cooling measures brought in by the Ontario government in April 2017 (including a 15% foreign buyers tax), as well as tougher new mortgage rules introduced in January by the Office of the Superintendent of Financial Institutions. These appear to have now run their course.

Elsewhere in Canada, the Teranet-National Bank House Price Index for July shows that annual price growth was 10.6% in Vancouver, 4.0% in Montreal, and 1.8% across the 6-City Composite Index.

/ 3 /

Sep.2018 Market Watch : http://trebhome.com/market_news/market_watch/2018/mw1809.pdf

/ 4 /

TORONTO, October 3, 2018 -- Toronto Real Estate Board President Garry Bhaura announced that Greater Toronto Area REALTORS® reported 6,455 sales through TREB's MLS® System in September 2018 – up 1.9 per cent compared to September 2017.  The average selling price for September 2018 sales was up by 2.9 per cent over the same period to $796,786.  The MLS® HPI composite benchmark price was up by two per cent year-over-year.

New listings entered into TREB's MLS® System in September 2018 amounted to 15,920 – down by 3.1 per cent compared to September 2017.  With sales up year-over-year and new listings down, market conditions became tighter.  Many buyers may have found it more difficult to find a home meeting their needs.

"It is healthy to see sales and prices in many areas across the Greater Toronto Area up a bit, compared to last year's lows.  At the same, however, it is important to remember that TREB's market area is made up of over 500 communities.  Market conditions have obviously unfolded differently across these communities.  This is why it's important to work with a REALTOR® who is familiar with local market conditions in your areas of interest," said Mr. Bhaura.

> Oct.18: http://trebhome.com/market_news/release_market_updates/news2018/nr_market_watch_0918.htm

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