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Albertasaurus said:
I recall hearing that a problem with Toronto and Vancouver's housing markets is that they are all in on small units in highrises, but there's a lack of larger units appropriate for families. Even with all the construction happening in those cities, they're not addressing the core needs in their housing markets.
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It's a reality when the land prices are so extreme. If they can sell a 300sqft studio for 500k, would a family be willing to pay $1.5M for 900 sq ft? That's why they don't build it. One Bloor West (formerly The One) was supposed to be large units, but over 50% of it remain unsold. Then Tridel took over and divided the units to studios and one beds to get sales up. It's not developers unwilling to build, just people cannot afford the true cost of a 2+ bedroom. And now the market is stuck, because developers that paid so much for the land, would rather wait to build until the market improves, then to have to sell into the current market which makes it hard to even recoup cost.

It really is a viscous cycle. Even half a decade of slow building and land price appreciation, almost impossible to bring back affordability. Resales markets will drop temporarily, but with no new supply, it'll soon be supply limited and prices will go up again.
 
Surrealplaces said:
Toronto and Vancouver both have a a lot of apartment inventory. Once it's eaten up, it'll be crane city again. The fact that Calgary has been in the mix for the past two years, and is leading this year shows the consistent growth. Great numbers for a city this size, and also the balance of the numbers. SFH, Semi, and Rowhome roughly equaling the apartment numbers is good. Apartments are good density boosters, but it's nice to have some diversity in housing builds.
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Dont count on it. Both Toronto and Vancouver could face negative population growth due to immigration changes and unaffordability. Plus the market for investment condos may be permanently dead. A normal real estate cycle would have seen busts every 7 to 10 years. Given that these markets have gone straight up for almost 30 years means they will likely stagnate or decline for a long time. This is a good thing as Canada has misinvested capital into real estate and nneds to redirect it to Asset classes that are actually productive.
 
DougB said:
Dont count on it. Both Toronto and Vancouver could face negative population growth due to immigration changes and unaffordability. Plus the market for investment condos may be permanently dead. A normal real estate cycle would have seen busts every 7 to 10 years. Given that these markets have gone straight up for almost 30 years means they will likely stagnate or decline for a long time. This is a good thing as Canada has misinvested capital into real estate and nneds to redirect it to Asset classes that are actually productive.
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100% - no rapid recovery for these markets with an overreliance on real estate as a component of GDP. Slowing population growth, along with decreasing affordability due to rates/slowing job growth/stagnant wages means that the major condo markets aren't seeing a quick turnaround - could easily take a decade plus, but I don't believe investment condos are permanently dead.
 
randomuser said:
100% - no rapid recovery for these markets with an overreliance on real estate as a component of GDP. Slowing population growth, along with decreasing affordability due to rates/slowing job growth/stagnant wages means that the major condo markets aren't seeing a quick turnaround - could easily take a decade plus, but I don't believe investment condos are permanently dead.
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The challenge with shoebox condos is that few people actually want to live in them. Ultimately investors will figure that out.

Plus when the momentum comes out of a bubble, fundamentals takeover and those are extremely poor. Much of the price of Canadian real estate contains embedded development fees and regulatory costs. Those deliver zero value to investors.

I could see Canadian real estate being dead money for 10 to 20 years. BC and ON will likely do far worse than the rest of the country. Busts of this magnitude have happened before. Calgary prices peaked in 1981 and took about 20 years to recover in inflation adjusted terms. Toronto prices peaked in 1989 and took about 10 years to recover.
 
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I heard recently that real estate makes up 28% of BC's economy.

I expect condo construction in those markets will be slow for a long time. Calgary I can see faring better, in part because we haven't overbuilt to the same extent and also the value proposition here is better. But we went through a span through the '90s into the early 2000s where Canadian skylines hardly changed at all. I wonder if we might be seeing that again.
 
DougB said:
The challenge with shoebox condos is that few people actually want to live in them. Ultimately investors will figure that out.
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They will become affordable housing eventually, possibly with governments or non-profits buying the suites for low-income earners. Another scenario is that Airbnb rules are loosened and they become vacation rentals.
 
kora said:
It's localized. Victoria is still doing reasonably well, even in the condo market. But yes, Vancouver IS the BC real estate market.
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The Greater Fool (more opinion source than anything else) recently covered Victoria as a bright spot in BC, and indeed nationwide.
The common thread in the comments was that Victoria's demographics were largely the answer (Victoria skews older and with the current cross-border tensions - some "ex-snowbirds" are cashing out of their sunbelt properties and buying in what Canada has to offer for mild-climate markets instead/ and "would-be" snowbirds aren't buying in Arizona and Florida, but rather Vancouver Island for the same reasons).
 
randomuser said:
The Greater Fool (more opinion source than anything else) recently covered Victoria as a bright spot in BC, and indeed nationwide.
The common thread in the comments was that Victoria's demographics were largely the answer (Victoria skews older and with the current cross-border tensions - some "ex-snowbirds" are cashing out of their sunbelt properties and buying in what Canada has to offer for mild-climate markets instead/ and "would-be" snowbirds aren't buying in Arizona and Florida, but rather Vancouver Island for the same reasons).
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For sure. It helps that a NDP government is in power and they spend more on governance. Victoria is a small town in a big province and most jobs are in government.
 
kora said:
For sure. It helps that a NDP government is in power and they spend more on governance. Victoria is a small town in a big province and most jobs are in government.
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BC's debt has grown almost 50% in 2 years and the revenue outlook is poor due to real estate bust. Eventually austerity will hit Victoria
 
DougB said:
BC's debt has grown almost 50% in 2 years and the revenue outlook is poor due to real estate bust. Eventually austerity will hit Victoria
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No doubt. The NDP barely won the last election.

The other thing Victoria has is robust tourism. 300 cruise ships a year and plenty of tourism from Canada, especially day/weekend trips from Vancouver. Then again tourism jobs are hardly lucrative. They tend to be low paying and seasonal. Tourism contributes to the economy, but it does not support the real estate market, except as an advertising exercise to wealthy tourists who may wish to relocate to Victoria.
 
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