UrbanWarrior
Senior Member
Oh I know you weren’t, I didn’t mean it that way.
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- Thread starter Davidackerman
- Start date
DougB
Active Member
This article also mentions Alberta
betterdwelling.com
Toronto Suburban Real Estate Is 76% Overvalued, Highest In All of Canada: BMO - Better Dwelling
Canadian real estate prices are the most overvalued in decades, but not all markets are equal. Earlier this week, we shared BMO data showing Canadian homes were 38% overvalued. Today we’re sharing a regional breakdown, showing where the widest trend deviations are. Most regions are overvalued...
betterdwelling.com
maestro
Senior Member
Toronto and Vancouver are putting up may tall towers while the average resident quality of life continues to evaporate.. I'd be concerned over inviting a major boom from the mechanisms at work in Toronto and Vancouver. It wouldn't be more than 10 years for Calgary to be the next overvalued bubble. It's happening in Montreal and the Maritimes at a lightning pace.
darwink
Senior Member
When policies don’t support the density or footprint growth necessary to suppress unit cost growth, that’ll happen. Nothing can regulate away cost pressure in absence of supply.
DougB
Active Member
Calgary has fewer limits to growth, both physical and political, than does any other Canadian city. Plus interest rates for the next few years are unlikely to enable real estate prices higher than justified by what properties could rent for.
maestro
Senior Member
Supplies and labour are near maximum capacity. Construction costs would outpace increasing supply. Encouraging more supply through loosened zoning controls is unlikely to make things more affordable in either of these cities.
The driving force isn't generating income from properties in these growing number of Canadian markets. Rising interest rates are unlikely to be significant to curb rising real estate values either, 85% overvalued is beyond debt financed investment property generating return from income. Fewer and fewer can afford a mortgage in Toronto nowadays and yet new homes and condos continue to sell well. Real estate is a traded commodity stuck in a Ponzi like scheme and that continues to expand across Canadian markets.
I'm actually surprised this hasn't blown up in Calgary with the amount of available premium office space that can probably be leased for cheap. I wonder if government regulation prevents some of the shady activities that generate the larger housing investments.
The driving force isn't generating income from properties in these growing number of Canadian markets. Rising interest rates are unlikely to be significant to curb rising real estate values either, 85% overvalued is beyond debt financed investment property generating return from income. Fewer and fewer can afford a mortgage in Toronto nowadays and yet new homes and condos continue to sell well. Real estate is a traded commodity stuck in a Ponzi like scheme and that continues to expand across Canadian markets.
I'm actually surprised this hasn't blown up in Calgary with the amount of available premium office space that can probably be leased for cheap. I wonder if government regulation prevents some of the shady activities that generate the larger housing investments.
Mountain Man
Senior Member
Lots of people in the development industry predicting a bit of a crash in the market with interest rates rising, what are people on here hearing?
I have heard that too, but predictions are what they are. I'm sure there will be some downturn due to higher rates, I guess the question is how much?
UrbanRED
Active Member
Given how much things have flatlined in Calgary since 2014 I don't think the market here is super overvalued. My guess is that things remain largely flat, maybe a small downturn as rates go up (although who knows how high they have to go to curtail inflation)
Toronto and Vancouver a very different story obviously
Toronto and Vancouver a very different story obviously
MichaelS
Senior Member
Just anecdotaly, I am noticing houses sitting for sale for longer now than they were just a couple of months ago. Have you heard of any specific projects being cancelled or put on the back burner?
I was wondering of the interest rates are affecting any of the larger projects. We've seen a slew of highrise builds starting over the last 2-3 years, but not much coming down the pipe from what I can see. I get the sense Lofts on 4th could be starting, and maybe the 2nd phase of Park Point, but not much else ready to go after that.
MichaelS
Senior Member
I do wonder if we will see Graywood's Eau Claire one move forward. For having sold out a few months ago, it has been pretty quiet. A building permit was submitted on March 7th though, so fingers crossed:
Urban Outdoorsman
Active Member
I'm not an expert, but if interest rates start taking a dent out of the housing market wouldn't that cause a shift towards more purpose built rentals? Presumably our population will continue to grow and demand for new housing remain. Do interest rates affect developers ability to finance their projects?
I was thinking more from the investment side. If rates rise there maybe would be less appetite for funds to invest in larger tower projects. I'm not an expert by any means, but I have heard that one of the reasons for the high-rise build boom was low rates making real estate more appealing...also it was cheaper to borrow large amounts.
darwink
Senior Member
It really depends on their source of capital, and their relationship with the long term owners. For projects that would be locally financed and then flipped once occupied, yeah it will slow things down. For others? Probably not.