Meanwhile In Canada, A Real Estate Bargain Emerges...

Tyler Durden's picture




 

We’ve long known that Canada, like Sweden and Denmark, is sitting on a giant housing bubble.

Indeed we took a close look at the issue back in March of last year and have revisited in on several occasions since. Put simply, the divergence between crude prices and the country's housing market simply isn't sustainable a you can see from the following chart:

And while the boom is rapidly turning to bust in places like Calgary, things are humming right along in Waterloo, where Napoleon was defeated in 1815. No, wait - wrong Waterloo. This is Waterloo, Ontario, a town of 140,000 that’s being billed as “Canada’s Silicon Valley.”

As Bloomberg reports, “the town revolves around two universities and a burgeoning technology sector that’s attracted companies such as Google Inc. and dozens of startups.” Here's a look inside the Kitchener-Waterloo Google office:

The buzz has created a “land grab” and now, condos are renting for nearly C$2,000 per month while one-bedroom units are selling for more than a quarter of a million dollars.

Vacancy rates are at 13-year lows and Google's country manager for Canada calls the city “lightning in a bottle.”

If that sounds like a bubble to you, you’d be correct but some investors don’t see it that way.

Take Bill Ring for instance, head of operations for a property management company who Bloomberg notes drove two hours to Toronto to attend a rowdy sales pitch for condos in Waterloo put on by a Bay Street trader turned-tech investor, turned-real estate mogul. “Students are coming in and need a place to live, tech companies are opening. It’ll all drive the value up,” he says. "I don’t want to invest in stocks because they’re crazy and real estate is a solid, safe investment."

Yes, Bill wants a "solid, safe investment" that isn't "crazy."

Like Canadian real estate.

Which definitely isn't a bubble.

After all, if the housing market in Canada were overheating, you wouldn't be able to get "bargains" like the listing shown below from Vancouver.

h/t @penultsquire

Good luck Bill.

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Fri, 01/29/2016 - 17:56 | 7115463 savedeposit
savedeposit's picture

bubble territory

No thank you !

"FUCK ....... THE......MONEY......CHANGERS"

Fri, 01/29/2016 - 18:13 | 7115534 EnglishMajor
EnglishMajor's picture

It has a new door. Not all of the capital was misallocated during renovations.

Fri, 01/29/2016 - 18:18 | 7115548 Durrmockracy
Durrmockracy's picture

You can't eat a home.

Fri, 01/29/2016 - 18:21 | 7115565 FullLegarde
FullLegarde's picture

You can't afford a cauliflower.  

Fri, 01/29/2016 - 18:26 | 7115592 KesselRunin12Parsecs
KesselRunin12Parsecs's picture

Almost as funny as GOLD not being backed by the dollar

 

http://dailybail.com/home/must-see-gold-stupidity-from-tv-reporter.html

Fri, 01/29/2016 - 18:44 | 7115656 I need more asshats
I need more asshats's picture

Meanwhile in the USSA a bunch of $1 houses! FUCK YOU from Churchill!

Fri, 01/29/2016 - 18:52 | 7115700 macholatte
macholatte's picture

When shitholes sell for stupid high prices the smell of government interference is in the air and is often a big cause. Grotesque development fees and geologic time to get plans approved certainly doesn’t help to relieve the problems. But .gov is conflicted and doesn’t want all those property tax dollars that are linked to the price of property to diminish.

Fri, 01/29/2016 - 18:57 | 7115731 Durrmockracy
Durrmockracy's picture

Come to think of it, that house looks a lot like the place where we used to stay on Vancouver Island.  I would tell people not to take their shoes off on the left side of the door (downstairs) or you might wind up having the fridge from upstairs land on your head.

Fri, 01/29/2016 - 18:58 | 7115733 Baby Bladeface
Baby Bladeface's picture

Someone the roof forgot to mow...

Fri, 01/29/2016 - 19:03 | 7115744 Father Thyme
Father Thyme's picture

Fixer-upper

Fri, 01/29/2016 - 19:11 | 7115780 I need more asshats
I need more asshats's picture

Watch out! There are plenty of cunts posting comments on ZERO Hedge!

Fri, 01/29/2016 - 19:42 | 7115896 Durrmockracy
Durrmockracy's picture

YEs theRe arE!

Fri, 01/29/2016 - 20:00 | 7115969 Richard Chesler
Richard Chesler's picture

fucked by jews much eh?

 

Fri, 01/29/2016 - 20:01 | 7115974 Deathrips
Deathrips's picture

DO PEOPLE UNDERSTAND WHAT FULL RECOURSE LENDING IS? I DONT THINK SO!!

 

RIPS

Fri, 01/29/2016 - 20:17 | 7116034 pitz
pitz's picture

In Canada, it just means that a default also comes with a trip to the bankruptcy trustee.  Same deal as in the USA in most cases. 

Fri, 01/29/2016 - 21:12 | 7116227 Terminus C
Terminus C's picture

This is a fake listing.

Fri, 01/29/2016 - 22:09 | 7116441 Arrow2
Arrow2's picture

No it's not.

http://www.remax.ca/bc/vancouver-real-estate/na-4453-w-14th-avenue-na-wp...

The price is lot value in Canadian pesos.

Sat, 01/30/2016 - 01:13 | 7116851 Terminus C
Terminus C's picture

Hmm, it didn't come up for me on MLS.

Point Grey... close to the ocean, upper class and university neighborhood.  You'd have to be fucking nuts to buy that.

Sat, 01/30/2016 - 04:33 | 7117097 Manthong
Manthong's picture

I am pretty sure I can get a nice shack in Yellowknife for less than the one in Vancouver, but I will likely need to go down more than 800 feet to get good geo-thermal.

..but the good thing would be is that nobody would likely hear the target practice.

 

Sat, 01/30/2016 - 02:18 | 7116955 Nobody For President
Nobody For President's picture

Nice sinside, and only $2039 a WEEK mortgage payments- a trifling 8-9 grand a month...

The only downside would be that you would be living in Vancouver.

http://www.accuweather.com/en/ca/vancouver/v5y/january-weather/53286

Sat, 01/30/2016 - 05:19 | 7117137 Toronto Kid
Sat, 01/30/2016 - 11:19 | 7117584 Father Thyme
Father Thyme's picture

11/16 correct. I'm not very good at picking between crack-shack and mansion.

Which apparently is the point. I got certified anyway. Funny!

Sat, 01/30/2016 - 12:09 | 7117720 12357111317
12357111317's picture

I got 6 out of 16.  :0)

Fri, 01/29/2016 - 19:45 | 7115908 Toxicosis
Toxicosis's picture

Like you ASSHAT????!!!!!!

Fri, 01/29/2016 - 22:00 | 7116397 Bill of Rights
Bill of Rights's picture

Dick heads too, what say you dick head .

Fri, 01/29/2016 - 19:28 | 7115852 FreeMoney
FreeMoney's picture

Oil is 2,000 miles from this.

How much land comes with the tear down?  What is the zoning?  There have been more 50+ floor residential towers built in Vancouver, BC than anywhere else on the west coat in the last ten years.

Fri, 01/29/2016 - 21:29 | 7116283 CPL
CPL's picture

Fastest way to keep a nice city a nice city is to cock block glass tower development by jacking up the residential prices of the local crack shacks.  That way development committees with capital that build the tower eyesores. don't build tower condo eyesores that don't fit in with a city.  Montreal and Toronto suffered from that issue during the Mulroney years.  Years later those condo's aren't looking that great and need a bit of work on them.

Because everyone here knows that the 2 million dollar crack shack isn't worth 2 million dollars.  Even the dickhead selling the crack shack knows that.  The 2 million dollar price tag is to keep the dipshit developers second guessing their plans because they are worse than the oil men.  It's only common sense that when a bunch of idiots with money show up with short term plans everyone is polite, friendly and the prices on things magically go up.  It's always been the case Canada as Canada has always had two economies running, one over the table and one under the table.  I think every Canuck old enough knows how Mulroney and his conservative government help teach everyone how to run at least three sets of books and run the price when condo developers show up.

Sat, 01/30/2016 - 03:51 | 7117026 Lore
Lore's picture

I'm inclined to agree regarding the investment prospects for aging apartment towers. East Toronto saw a wave of construction during the last cycle, and those things look like crap now. Highway 401 is a depressing drive, with all those grey cell blocks looming on either side. 

I wonder if we're about to see a slowdown in the market for all those dozens of glass towers that popped up in downtown Vancouver over the last couple of decades.  Most are past prime, vastly mortgaged, and (for the most part) monotonous as Lego.  Most of the residents are dependent in one way or another upon the Canadian resource sector. (Vancouver is the hub for mining company offices, ex oil and gas, which are in Calgary.) With the downturn in consumption, consumer debt rising past 172%, shipping at Vancouver ports grinding down, and a currency that seems sicker than the USD (at least for now), and growing awareness of the fact that Canada is entering a Depression, I could easily see a dramatic shift in local market sentiment.

The numbers are still strong, for now at least. I read somewhere that apartment sales in 2015 were up 35% YOY.

Sat, 01/30/2016 - 09:08 | 7117311 CPL
CPL's picture

Canada never left the depression from the 1980's, we're a resource based economy and if looking...resources haven't done that great for 60-70 years.  Might bubble a little, but there's nothing in terms of trade that makes it dependable. 

First off, in what universe does it make sense that another country sets the market value of another country's entire commodity market.  They keep playing that game, of course the resource and commodities market will get taken over by jew york city thieves.  Fact is by the price point and all established fundementals, Canada is better off just redeveloping it's own internal economy again and finding other partnerships while moving the bid houses back north and out of Chicago.  In 2 years 6 months and 16 days the contractual obligations to allow that type of poor trade action dissolve into nothing.  It means the parasites are going to starve to death once the clock rolls over without a signature.  (fuck'em, wouldn't piss on them if they were on fire)

Yeah Toronto is a depressing drive in spots with the concrete towers that look like a blight.  You know it used to be a pretty city when we were all younger, then the developers got their hands on it and it's become the weird poorly planned mess it is today because of them.  At least Montreal has the french thing going for it which scares most people away. Quebecers are super nice they but to an external developer they love la Langue Francais and to someone that only speaks American, that just fuck's with their head too much.  That fact however has saved Quebec a tonne of headaches over the years and kept places like Montreal and Quebec city really neat towns to visit and live in.

For the apartments somewhere like Ottawa though they slapped a bunch of them up.  The economy shit the bed as usual, everything went back to 'normal' (three book accounting methods) and all those apartments became hotels because they couldn't give away a place when the interest rate was 14-22% and the 25% CMHC down was in full force.  When I see the 'ZOMG' the dollar isn't worth anything, real estate is crashing, etc.  That's just par for the course here and part of the economy.  One of the reasons Canada has got a grey market that's far more complex and better managed by the crazy idea that central regulation makes an economy.  Outside of electronics, the grey market covers pretty much every niche.  Even then most of the Chinese and Lebanese lads are out there finding deals to drag over from somewhere to do the electronics stuff.  The fact is business happens when business needs to happen.  Might not be five star ritz hilton but no one starves, there's plenty of time and lots to do while hussling for a nickle.

As to why that happens.  There really isn't any other choice socially but to learn social financial judo when you live next door to the assholes that tend to fuck up more than they fix.  It's part of the social fabric here.  For that crack shack buddy in Vancouver is selling, he's probably laughing his ass off trolling the shit out of billionaires trying to develop Vancouver while jacking up the price on his moss covered dump everytime they come asking for a purchase.

Sat, 01/30/2016 - 10:10 | 7117421 Killdo
Killdo's picture

thaks for the explaation - I lived in Canada for years but could not connect the dots - why th eeconomy is the way it is and why Toronto looks like a more expensive version of Chernobyl (architecturally)

Sat, 01/30/2016 - 13:13 | 7117884 CPL
CPL's picture

In a nutshell it's called selling out in inches.

Sat, 01/30/2016 - 12:04 | 7117713 20-20 Hindsight
20-20 Hindsight's picture

Seriously, I'm considering buying myself a shovel to go through all that bullshit you put up here.  I wouldn't even know where to begin: your comments about Quebec, Ottawa and, to some extent Toronto, are way off the mark.  You present a picture of total doom and gloom, but you fail to show all the good things about Canada, which I won't bother to list.  I simply resent the false information you're trying to spread around you.  Of course, many of your US compatriots will lap it all up -- hook, line and sinker -- whitout ever doing their own research or coming to visit here to draw their own conclusions. 

Sat, 01/30/2016 - 13:15 | 7117883 CPL
CPL's picture

Dude, I live here.  I know all the good things here and why do you think I stand on guard for her?  Been here most of my life, but you want to sugar coat reality to ignore the regular boom and bust cycles that are BUILT INTO the central bank regime along with the usual FIRE investment schemes? They are parasites, they ain't your friend just because they offer you a sugar coated shit sandwich with a smile.

If you got an issue with maintaining a defensive posture.  There's the door, don't let it hit you on the ass on the way out because ain't no need here for your troubles brought in the house.  Meanwhile consider me laughing when the obvious happens again because you get suckered into the same horseshit the last bunch of "leaders" did since the 1950's.  So pussy foot all you'd like; they'll just make a lion skin carpet and cat gut guitar strings from you if you believe a damn thing they say.  But ain't no one business to fix stupid is it?  And you certainly would be in the same company as all the rest that have come and gone each turn of the wheel.

Fri, 01/29/2016 - 21:54 | 7116377 Moe Howard
Moe Howard's picture

Handyman special.

Fri, 01/29/2016 - 23:05 | 7116624 cheka
cheka's picture

charming bungalow

Sat, 01/30/2016 - 00:51 | 7116819 Dave Thomas
Dave Thomas's picture

Rustic Suburban Hideaway

Sun, 01/31/2016 - 03:41 | 7120304 mkkby
mkkby's picture

Some stupid chink is probably writing a check for that teardown, sight unseen.

Sat, 01/30/2016 - 19:10 | 7119189 omniversling
omniversling's picture

It's the vegetable garden...sprouts, for happy house hippies...

Sat, 01/30/2016 - 07:30 | 7117209 onthesquare
onthesquare's picture

I live within 20 minutes of this house and call BS.  You can ask what ever you want but, even with the C$ at .70 US, this dump will not sell for more than $300k C$.  Real estate is not real.

 

Fri, 01/29/2016 - 19:49 | 7115919 Al Tinfoil
Al Tinfoil's picture

"Almost as funny as GOLD not being backed by the dollar"

The Obamian "New Logic".  May sound upside down to the uninitiated.

Sat, 01/30/2016 - 10:34 | 7117476 Tarshatha
Tarshatha's picture

"GOLD not being backed by the dollar"

That is.... bar nothing, the stupidest thing I have ever heard any MSM cheerleader say.

 

http://dailybail.com/home/must-see-gold-stupidity-from-tv-reporter.html

Fri, 01/29/2016 - 18:32 | 7115613 SILVERGEDDON
SILVERGEDDON's picture

Chinese hot money stolen from the Glorious Chinese Communist Party wil buy that shack, flatten it, and build the biggest motherfucking home they can grease the zoning permits for new construction up to.

Then, Nao Foo Ling can move in the four generations of his family still alive, so's they can collect free medical, dental, and pensions.

Funny how all these bailout Communists become raging hard on capitalist running dog pigs the moment they set foot in The Promised Land with their cash.

Fri, 01/29/2016 - 19:58 | 7115959 Lore
Lore's picture

Can you please link to some information about the "free" medical, "free" dental, and "free" pensions?  I cannot find any such information.

Here is what I found for medical in BC:  Eligibility and Enrollment  And for CPP: Elderly Imimigrants in Canada  <-- Pretty small pickings.

As for that house listing posted above, LOCATION is probably a primary basis for valuation. It's near a prospective development, or in a neighborhood where all the old houses are being demolished to build new multi-family monoliths, which have essentially ruined the character of some formerly grand old neighborhoods. 

That said, I know some builders who've secured their retirement by fixing up quaint old Victorian-era homes in areas like Kitsilano. 

Fri, 01/29/2016 - 20:02 | 7115973 847328_3527
847328_3527's picture

Stolen Money, aka, "Loot" knows no limit since the solitary goal of the Looter is to get the Loot out into a "safe location" like Cali or Vancouver, Sydney or Melbourne.

 

Well, at least 'perceived' safe:

 

Australia orders sales of foreign-owned houses due to breach of ownership rules


SYDNEY, Jan 18 (Reuters) - The Australian government said it ordered the sale of another eight residential properties bought in breach of foreign ownership laws, in a response to concerns that offshore buyers were driving up house prices.

Australian capital city homes are considered among the most overpriced in the world, and the Federal Government announced penalties for foreigners who breach existing rules that restrict them to buying new homes only.

Since the foreign ownership crackdown began last year, the government said it had investigated more than 1,300 property sales and had another 800 under investigation. Severe penalties apply to buyers who have breached the rules.


http://www.dailymail.co.uk/wires/reuters/article-3404235/Australia-orders-sales-foreign-owned-houses-breach-ownership-rules.html

 

Fri, 01/29/2016 - 20:48 | 7116128 SILVERGEDDON
SILVERGEDDON's picture

Hey, Lore - do you pronounce that as " Lorrie " ?

Look, fuck face, I didn't write a term paper on how much free social safety net money the immigrant horde gets to suck up per individual, i just stated the obvious.

Not a single average East indian or Chinese immigrant who ever entered Canada refused to milk the system for every fucking provincial and federal hand out they could get their mitts on, ever. And, they definitely import the rest of their extended families into the country as soon as possible after arrival.

They bank their money in gold and real estate, and live on whatever they can cadge off gooberment first and foremost, live together in mega home multi generational residential family set ups to save on living expenses. They love to watch the average Canuck work to pay the taxes that allow them their socialized benefits, and laugh their holes off at the natives stupidity.

That is the norm, not the exception, in Toronto, Montreal and Hongcouver.

LOCATION, refers to ANY real estate within the metropolitan areas of any of the big three Canadian cities previously mentioned. A fucking particle board shit box in Richmond, BC goes for over 2 million today.

Chinese billionaire Hong Kong real estate development money built downtown Vancouver and False Creek when Hong Kong was being repatriated to the Chinese communists back in 1997, and the first wave of modern Chinese immigrants arrived.

Canadian gooberment let anyone investing a half million Canuck bux in Canada become a Carnation Instant Canadian, toot suite. Then, after the real money got out of Dodge, the rest of the rabble started to arrive.

Welcome to today, you fucking muppet sheeple social engineered Canadian pussy robot dickhead citizen.

Fri, 01/29/2016 - 21:04 | 7116200 garypaul
garypaul's picture

The average Canuck doesn't seem to mind letting the immigrants work and pay taxes. I don't know what planet you're living on. Fuckface.

Fri, 01/29/2016 - 21:31 | 7116254 SILVERGEDDON
SILVERGEDDON's picture

The average modern day Canuck is a sad low cal 2 percent low fat low fiber cardboard faggot meterosexual substitute for what the average Canadian used to be. You included in that demographic, mister Special Snowflake asshole.

For every hard working tax paying immigrant in urban Canada, there are at least 10 more pulling in socialized income of one way shape, and form or another.

Grandma, Grandpa, Uncle Woo, Auntie Ho, and all of the other senior relatives can't, don't, or won't work, ever.

I have lived in Toronto, Montreal, and Vancouver over the last half century - change is obvious when you have an actual lifetime time line to reference.

For the record, I am not anti immigration, and don't give a shit what color you are, or what fantasy sky God you call your own.

Freeloading societal parasites on the other hand of any race, color, or creed can go piss up a rope at 40 below north of Fort McMurray.

So, sit on that, and rotate, banana boy.

Sat, 01/30/2016 - 02:31 | 7116968 cheka
cheka's picture

you and your kind are over

cuz the crown says so

 

Sat, 01/30/2016 - 02:43 | 7116982 Magnum
Magnum's picture

Ha ha good post. I grew up near the border and we had soccer exchanges way back in the day with Canuck kid coming to stay a weekend and vice versa. My mom's family came down here from Edmonton in the 1930s, all of them. Always occupied people.

My image of old Canadians was like the Alaskans. Tough, rough, good humored and hearty survivors. Now I see a different breed of Canadian they are still good humored but as you say, a cardboard nature depending on govt. maybe the Chinese ethnics will keep softening everyone up. Who knows. Seems at least the Vietnamese we get in USA have better looking women than those Hongcouver buck teeth broads.

Sat, 01/30/2016 - 14:00 | 7118074 Son of Loki
Son of Loki's picture

The Chinese and Vietnamese in my classes are very smart but so-so in looks, even when they remove the coca cola bottle thick glasses. However, they are all pretty thin and have great smiles and extremely hard working. Also, there are 1/4 or 1/5 who are absolutely knockouts ... so I'm all for moar Vietnamese and Chinese gals being imported. Too bad Barry seems focused on hajib crowd or somali tribesmen instead.

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