Cracks in Canada's Housing Market Start Appearing

For the past 25 years, Canada has been in the grip of the world's biggest housing boom, a near unbroken run of price appreciation unparalleled among its developed peers. Now it's over, and pain is starting to spread. Bloomberg's Kevin Orland is on BNN Bloomberg discussing "The Big Take."

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[donaldwatson]

After selling a couple homes in 2020, I'm anticipating a housing crisis in order to buy inexpensively. As a backup plan, I've been thinking about purchasing stocks. What recommendations do you have for the best time to buy? On the one hand, I keep reading and seeing trader earnings of over $500k each week. On the other side, I keep hearing that the market is out of control and experiencing a dead cat bounce. Why does this happen?

[marcoprolo]

I just went through a purchase in Montreal recently and I did not find the market was glutted by properties. Far from it the good quality stuff set at the right price goes off the shelves pretty quick. What's left are mostly the problematic items (Dark, facing a grey wall, noisy and polluted street, old and crappy, etc...) that nobody wants to buy.

[ryanboyd]

Only when AML (anti-money laundering) measures are implemented with steep prison sentences will the housing market in Toronto and area moderate.

[lastChang]

Canadian🇨🇦 housing problems started with Chinese🇨🇳 money laundering, drug trade and human trafficking - the first being the biggest.

[dorissteve]

The stock market has been a really tough one this past year, but I watched an interview on CNBC where the anchor kept mentioning " karina mattis ". This prompted me to get in touch with her, and from August 2022 till now we have been working together, and I can now boast of $540, 000 in my trading portfolio.

[harpdude]

the question should be "why is a basic human requirement being treated as an investment speculation instead of a free market commodity?"

[ram-it.damn-it]

Better this market crashes. No one can support such crazy house prices and this kind of inflation with the peanuts income levels. You cant have a NY priced property being paid off with half the NY city income level.

[AM.]

Good, house prices need to be cut in half in some parts of the country.
In the average house hold income is 80k, houses should cost 3-4 times that. Or 240k-320k. Not 1 million.

[jokwon]

Take a good look at Seoul's housing bubble. Housing got so expensive that rate increases on mortgages are creating panic selling by taking a 40% hit but guess what...there are no buyers. People are expecting bigger discounts up to 80%!!!! Canada is in big trouble here as I'm seeing the same liquidity issues play out.

[MortgageBrokerLondonOntario]

It will be the anticipatory selling, rather than than forced-selling, that will really push the downward trend (which is going to be extremely difficult to track).

[Lumpology]

If the housing bubble broke I would be the happiest person in the world. Who cares if there is a rescission let it all fall! Tired of houses costing millions for a crappy bungalow.

[jessefaw]

Its horrendous the government let it get to this point. I know many "international students" who have never worked that have bought many condos in

[jmcg]

A 5 year example.
In 2017 you bought (or your house was worth) - say $500k
In 2022 (March) it was worth $925k after the big bubble peaked.
It increased by $425k = 85% = 13% compounded for 5 years. Mostly in 2020 and 2021.
You are a real estate genius! Refinance fast ! Buy investment properties and get rich! Fill your boots with adjustable rate cheap debt.
BUT - If that same house had increased 3% a year for 5 years it would be worth $580k after 5 years.
AND NOW = If the market falls by 38% from the 2022 peak then that $925k value will become $580k.
Yep. Drop of $340k from $925k is drop of 38%.
What is happening in your area? Maybe smaller markets will feel less pain but their bubbles were smaller?

[justinjones]

Started appearing when a century home from old towns appraised for 400k. Those got sold all the way up to 600k and renovated and sold for 1-1.5million. Why did it take two more years to figure out that was dumb.

[parthppatel]

02:18 you're saying they had to sell their investment property not their primary home. That's great!!! We want more of those.

[jmcg]

Average house is now over 8.5 times average household gross income. The ratio was 4 in 2012. Some say once you hit 5 you have a bubble. This bubble will not burst but it will deflate over the next 6-24 months. Where the bottom is could be anywhere in that 6-24 month window. If anyone is telling you to BUY NOW block them because they are starving for fees.

[keikairin]

Everytime I see a Homelife Realtor I shudder. This is a foreign investor / foreign immigrant realtor selling to other foreign investors. This realtor does not result in houses being in Canadian hands. No profits go into the hands of Canadian citizens. Its foreign people profitting on land they have no rights to.

[domjohnson]

I hope everyone who flips homes for investment gets burned badly here. They are the reason prices pushed people out of the market and I hope they lose theirs too.

[rolfehorne]

To a certain extent, the market will depend on anticipated interest rates and house price expectations regarding future prices. If the current lending rates decrease, the market will stabilize. However, if we are going back to historical rates (9-10%), average house prices will be determined by a multiple of average household earnings X rate = approx. $340K using current income figures in Canada.

[kevinthompson]

Sub prime loans also called the Brampton loan are going to be the first ones to fall. Then ones markets get over run with new listings, prices will drop 50% to 80% before bottoming out in late 2023.