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Baby, we got a bubble!?

I see the condo market moving sideways with some natural fluctuations in the near term. New inventory of condos should satisfy new population growth. I do believe single family homes (detached, semi-detached, townhouse) will continue to be strong for the next little while though.
This thread was started in early November 2009.

The Teranet index was 118.27 after October 2009. Now it is 166.44 for April 2015, which represents an over 40% increase.
Is Canada the New Switzerland? Safe reputation abroad seen driving Toronto’s condo boom

Katia Dmitrieva and Jeremy van Loon, Bloomberg News
Friday, May 22, 2015

Canada’s reputation as a safe country to live and bank is luring buyers from abroad and far from creating a bubble, there may not be enough housing to go around. National Post

Canada’s reputation as a safe country to live and bank is luring buyers from abroad and driving the housing boom in Toronto.

The city of 2.8 million attracts about a quarter of the 250,000 immigrants who arrive in the nation each year. That’s helping drive demand for new housing, including condos and rental properties, property Developer Sam Mizrahi, said at the Bloomberg Economic Series Canada summit in Toronto,

“Immigration keeps the market buoyant,†said Mizrahi, president of Mizrahi Developments. “Canada’s seen as the new Switzerland.â€

Developers in Toronto are building 97 residential towers — some as high as 92 stories — more than any other city in North America including New York City, according to data compiled by Emporis GmbH. The developers, and the city’s chief planner expect condominium construction to continue as employees flock downtown for jobs, restaurants and entertainment.

The city is a target for local and international doomsayers. Fitch Ratings Inc. said housing prices in the province of Ontario are 25 per cent overvalued and condo market prices may decline as much as 10 per cent.

Doom, Gloom
“Every year there’s doom and gloom about how there’s about to be a bust,†said city planner Jennifer Keesmaat. “We do not have a market based on speculation. We don’t have empty buildings.â€

Keesmaat is responsible for planning the city and overseeing the review of at least 3,000 development applications the city receives each year.

Canada’s political and economic stability have strengthened housing demand from overseas investors, said Mizrahi. The country’s banks have been ranked the world’s soundest for seven consecutive years by the Geneva-based World Economic Forum.

Canada’s gross domestic product may expand by 2 per cent this year and could accelerate to 2.5 per cent next year, trailing the U.S., Royal Bank of Canada Chief Executive Officer David McKay said earlier at the Bloomberg conference.

The supply of high-rise homes may not be meeting demand, with number of unsold units under construction dropping 9 per cent to 7,059 units in the first quarter, according to Urbanation Inc. Prices rose 2 per cent to $562 a square foot in the same period from the year ago, the data provider said.

Almost half of Torontonians were born outside Canada, making it one of the most diverse cities in the world, according to the municipality’s website. Chinese speakers are the most numerous among recent immigrants, followed by Italian, Punjabi and Tagalog speakers.

Municipal leaders need to ensure the city remains an attractive place to live amid the building boom, with public spaces and efficient public transit, said Keemaat.

“If the city isn’t livable, people move away,†she said.
House for sale for $1 not too far from where I live.

65 Fishleigh - 1 buck

Classic teardown, and probably going to generate a bidding war, given that it's on the cliff overlooking the lake. I haven't been following local prices closely of late, but my guess is it will go for over $900000. As a gauge, there is a house down the street that has been listed for $2.2 million, with the same view, but which is a very new build.

79 Fishleigh - $2.2 million

For the first one though, the real estate agent seems lazy. He didn't even bother showing a picture of the lake view, which is the main draw for that property.
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Meanwhile, out in Vancouver...

Affordable Housing Rally to protest Vancouver home prices
12:44 PM PDT, THU MAY 21, 2015

A rally protesting the lack of action taken by all levels of government to combat Vancouver’s soaring and unattainable housing prices is set to take place this weekend on Sunday, May 24 at the Vancouver Art Gallery.

Eveline Xia, the rally’s organizer and founder of the online #DontHave1Million campaign, has been steadily working to encourage residents to speak up against the unprecedented inflation of housing costs. For Xia, the housing crisis doesn’t only affect millennials hoping to one day own a house, but a much wider range of the Vancouver population: “Anyone who has been affected by the stratospheric prices, from low-income folks to homeowners lamenting this unhealthy and unsustainable pace of change,†the 29-year-old environmental scientist says.

“Homeowners tell me they are affected because their children can’t ever afford to live here, and many also lament the rising inequality which they believe is unjust. Most clearly impacted is anyone under 40. The working middle class will struggle to get into the unaffordable market and raise their families. Last time I checked, a two bed townhouse was close to $900k.â€

She also comments on diminishing rental stock, especially for families who need more space than a typical two-bedroom Vancouver condo can provide.

Xia, herself a Chinese immigrant, is also brave enough to touch on the taboo topic of foreign ownership, a subject that often elicits name-calling such as “racist†or “xenophobic†toward those in opposition. And to be fair, reading through any online comment board shows a great deal of blame on the Chinese for the escalating prices, something that creates resentment toward Vancouver’s established Chinese-Canadian population.

“Chinese-Canadians and the broader Chinese community are affected because they’re being subjected to resentment and stereotyping, people forget that non-wealthy Chinese are victims too,†she adds.

Xia’s rally is also for those born and raised in Vancouver who feel they don’t have a choice other than to leave their families and hometown in order to afford a home.

“It’s gotten out of control and our elected representatives have for the most part, failed us. From all the articles and expert opinions I’ve been soliciting, it’s clear to me that the change has to come from the higher levels of government.â€

Between 2001 and 2014, the cost of housing in Metro Vancouver increased by 63 per cent – and 211 per cent in the City of Vancouver – while salaries only rose 36.2 per cent. Even at today’s prices, much lower than the projected average cost of a detached home in 2030 ($2.1 million), the salary needed to maintain a typical mortgage in Vancouver for a $713,125 house is $78,088.

The Affordable Housing Rally will be the first time a protest is held for the middle-class population in B.C. It is a chance for those affected by high housing prices to “stand up for themselves†and hold the provincial and federal governments accountable for their actions – or lack-thereof.

Speakers at this weekend’s rally will include Paul Kershaw, professor at UBC’s School of Population and Public Health and founder of Generation Squeeze; Saeid Fard, author of blog post “The Decline of Vancouverâ€; Wes Regan, citizen journalist at the Vancouver Observer; and Tony Roy, Executive Director of BC Non-Profit Housing Association. The Carnival Band will also play music to energize the crowd.

The rally begins at noon on Sunday outside the Vancouver Art Gallery and runs until about 2 p.m.

“I used to think that politicians should lead the public to good policy solutions,†says Xia, “but it’s clear to me that they won’t act until the public leads them to those solutions.â€


Affordable housing out of reach for Vancouver millennials
Special to The Globe and Mail
Published Friday, May. 29 2015, 5:54 PM EDT

Eveline Xia may not want to be the voice of her generation, but she’s off to a good start.

After her riveting speech in front of about 500 people Sunday as organizer of the Vancouverites for Affordable Housing rally, Ms. Xia has become the poster child for the hottest issue in the city right now.

If she does continue on with the battle, she’d like to help people get properly focused on what matters.

“I’d like to give people an outlet, and to have their voices heard in a very sensible, productive manner,†she says in an interview. “Up until now, I’d say it’s been haphazard. People will comment on the issue, and then all of a sudden it descends into cries of racism and back and forth, and it just doesn’t go anywhere.

“Nobody has elevated the discussion to the point of it being on a constructive path. There’s so much noise and fog and useless banter.â€

The 29-year-old is like a lot of millennials who are trying to get a foothold in the city. She grew up here, and yet she can barely afford to live here. And like a lot of millennials, she’s now questioning how and why her current lot in life came to be. Why is she supposed to accept that she’ll probably never own a home in her lifetime, or that Vancouver is now the playground for the wealthy instead of for people like her?

Academics who’ve spent years studying the problem point to global real estate investment as the culprit for driving up prices. But government has been steadfast in its hands-off approach. First, nobody would even acknowledge there was a foreign-investment problem. Now, there’s been some acknowledgement, but also a refusal to do the bare minimum, starting with data collection. Other countries overwhelmed by global buying have collected foreign-ownership data and implemented new regulations, such as extra taxes.

The data we do have, have been scraped together from other, non-government sources. Vancouver has more wealth-based migration than any city in the world, according to South China Morning Post reporter Ian Young, who did a substantial amount of research on the topic. Mr. Young’s data show about 45,000 millionaire migrants arrived in Vancouver between 2005 and 2012. That’s far more than the number of millionaires that went to the U.S. in the same time period. That’s a lot of foreign money floating around. How can a city’s housing market not drastically change with that kind of impact?

In the meantime, those residents who missed the boat on owning real estate in Vancouver are expected to lower their expectations.

“Are we going to be a generation of renters?†asks Ms. Xia. “Because if we are, where is the public discussion about this? You can’t expect us to go lightly without a fight.â€

Ms. Xia grew angry at government indifference, at the situation she’s arrived at through no fault of her own. She got her education, she’s working on a career and yet she is squeezed out of her own city because she’s burdened by big rent payments, with no future option to buy. The daughter of a botanist who was mostly raised in California, France and the Lower Mainland, she was not raised in a privileged family. But her family managed on the little they had.

Fed up with all the talk of average house prices soaring beyond the $1-million mark, one day she tweeted the hashtag #donthave1million. It was her first tweet, to her two followers. The hashtag went viral, and Ms. Xia’s social-media fame transitioned to mainstream-media fame. She was overwhelmed.

“People were tweeting me, ‘Eveline, we need you to save the city.’ When did I go from average Jane to Miss Savior? That’s terrifying,†she says, laughing.

Prior to the rally, she did her homework, studying reports by academics and industry experts, who’ve commented extensively about house prices that speak to global capital rather than local incomes. Remember the days when your middle-class income would buy you a house? It seems like a distant memory now, but in reality it was only about a decade ago. It might have been a fixer-upper, but it was still doable. Not so much, anymore.

What we should be doing, says Ms. Xia, is addressing the crisis that’s already well out of hand. She believes foreign money is a huge problem, and there’s no end in sight.

“This is the kind of wealth that is not going to end. It will get worse. This is just the tip of the iceberg in terms of wealth. In Mainland China, there are so many wealthy people dying to get out.â€

Ms. Xia is still seeking a proper career so she can get started on her path, and Vancouver’s job market is slim pickings. Combine that with the low incomes and the high cost of living, and it can be a rude awakening for the millennial looking to get started.

“It’s been so tough. I’m shocked,†Ms. Xia says.

There is evidence that property prices are already driving away young workers like Ms. Xia, who are vital to the economy. Vancity just released a report that said future labour shortages and dropping salaries will drive workers elsewhere. It said by 2025, 85 of 88 high-demand jobs will pay too little to keep up with the cost of housing. The only jobs that will be able to handle the cost are in management jobs, such as engineering and construction. Everybody else will struggle.

Between 2001 and 2014, housing costs rose 63 per cent, while salaries went up 36.2 per cent. By 2025, the average household will need to earn $125,692 to keep up with their mortgage, the report said.

The fear behind those numbers is the reason Ms. Xia’s hashtag campaign took off. As well, there is a momentum underway. People are feeling less tolerant of public officials indifferent to their plight, or who attempt to deny the effects of foreign ownership, or who pass the buck to another level of government.

Premier Christy Clark acknowledged that there is a foreign-ownership problem. But she sees it as a first-time buyer problem.

“[A tax on foreign buyers] is good for first-time owners, but not for anyone who is counting on the equity in their homes to maybe get a loan or use the money to finance some other projects,†she said.

Days later, Housing Minister Rich Coleman said there was no plan to even collect data. And he called Vancouver a “pretty reasonable†place to live when compared to other expensive cities. He failed to consider that those cities have much higher incomes and better job markets.

“They contradicted themselves,†says Ms. Xia. “First they said, ‘we can’t work on the foreign investment issue because that will lower prices.’ Then they said, ‘we don’t know for sure there’s a problem, because we aren’t collecting data.’

“You put that together and it’s very clear they are trying to remain with the status quo, even to detriment of the citizens, the locals,†says Ms. Xia.

“I think everybody on the left, right or centre can see the issue is clearly politicking. They are playing with us. And we have had enough with that politicking. We are wasting time.â€

She also takes issue with those who use the race card to deflect from the issue at hand. Mayor Gregor Robertson was recently quoted in a news story saying that he doesn’t consider foreign ownership an issue. He said, “We’ve welcomed immigrants as long as the city has been here.â€

Ms. Xia says he’s missing the point. The issue isn’t about immigration, but about foreign money messing with house prices. She put it best in her speech:

“Unfortunately, there will be people who will try to hijack this issue and irresponsibly use the race card against those trying to work towards a solution. But we are smart enough to understand that the foreign investment that may be coming predominantly from China this year could easily switch and come from the U.S. next year. It’s not about the foreignness of the people, but the foreignness of the money, the money that isn’t created locally.

“It’s certainly not about race – it’s about a broken system that treats homes like the stock market and completely removes the people and community from the equation.â€

She was especially pointed in her remarks to the province.

“Do your jobs,†she told the Pemier and Housing Minister.

On the bright side, she is seeing momentum. Her 500-strong rally was a start. It even attracted international coverage in Al Jazeera. And she sees a glimmer of interest from government. The mayor has suggested a speculation tax for those who are flipping homes. However, she sees that as only “a piece of the puzzle.â€

She also caught the premier’s office “snooping her†on LinkedIn. At least they’re paying attention.

For now, sheâ€s taking a break. If she does resume her non-profit affordable-housing work, she says she might focus on Jericho Lands, the federal, provincial and native land that will be up for development. It’s the perfect opportunity for all three levels of government to do the right thing, she says. Also, it’s something people can relate to. Why shouldn’t that land be available to everybody, of every income?

“This is an opportunity for them to lead, and to show us they truly care.â€