Canadian Housing Starts Explode To 9 Year Highs As Renter Nation Spreads

Tyler Durden's picture

Misleading signals from China's capital flight into Canadian homes appears to have sparked a panic-building spree among homebuilders. Canadian housing starts surged in March, to the highest annualized level since 2007, driven by higher multiple unit construction.

"Probably nothing..."

Housing starts soared to an annualized 253,720 units in March, from 214,253 units in February, the Canada Mortgage and Housing Corporation said in a statement. Multiple-unit starts in urban areas surged 30 percent in March to 160,989 units, it said.

This is 6 standard deviations above economists' expectations...

It seems clear that lack of affordability after Chinese economically irrational bids for Canadian homes has sparked an apparent demand for renting and this is the capital misallocation result.

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small axe's picture

no problem as long as you can use your home as an ATM for home equity loans and play the stock market, which never goes down.

JRobby's picture

"We won't rest until everyone is a renter"

Anteater's picture

Just looked at a 3BR 1BA 1962 Rambler fix-iup flipper for $315 a sf, that's $510,000 principal and interest, somewhat higher than the $115 a sf these homes sold for, 1980s models, in 2003. Now imagine Vancouver, BC, where this old rambler would sell for $1,000 a sf as a teardown, and you can see why QEn is just a fiat inflation bubble, and why 95,000,000 are jobless and homeless. And it's not going to get better. It'll get perched, frozen, then upside down. 1,000 points of perpetual interest-only.

auricle's picture

Start building Canada, Chinese need more housing. 

Houses Depreciate's picture

Whoa. 

 

Housing prices have a long way to fall indeed. 

Houses Depreciate's picture

Why buy it when you can rent it for half the monthly cost?

 

Buy later after prices crater for 65% less.

bankerbackbacon's picture

Prices in Vancouver are a function of lack of space and limited inv of free hold detached homes. The bubble is not the same in Vancouver as elsewhere.

TheSilentMajority's picture

A billion+ chinks, packies, and sand-niggers intend to emigrate illegally/legally to Chinadastan in the next few years.

They will need those homes bigly. Demand much bigger than supply.

Déjà view's picture

Press 1 for Mandarin...2 for Cantonese...3 for Pitz...4 for Hindi...5. for English...6 for French...

Grande "Spreads"...

$hì Señor! 

Buck Johnson's picture

Canada is going to be overran by those people and it will look no where near white when they are done.  In fact I wouldn't be surprised if the Chinese continue and get the population to a point that it's China east.

 

Ink Pusher's picture
  1. 2,3

We have names already:

Hong-couver

Van-ghanistan

Dehli-Delta

I sold everything and moved back East when my local English streetsigns were replaced with Punjabi.

 

bankerbackbacon's picture

As a Vancouverite, I can tell you that our open borders + foreign ownership is squeezing all aspects of housing and kind increasing demand. There are not enough schools, the politicians just build homes and to hell with everything else. 

Houses Depreciate's picture

That's what happens when prices fall 20%. It's still a long way down for Vancouver though.

Déjà view's picture

Next...Calgary will experience another kind of '$tampede'...

j0nx's picture

I feel their pain. People here in NoVa are fighting over $400k townhomes in questionable hoods. I don't think it was even this crazy in 2005. Maybe a little but not by much. We are so screwed right now because we really need to buy but can't afford to and I don't want to waste $7k by renting another place with first and last month's rent and moving expenses.

Houses Depreciate's picture

Given the fact housing demand is at 20 year lows, I don't think there is anyone fighting.

 

Remember..... I can ask $50k for my 10 year old used up Honda Accord but where is the buyer at that price? ;)

 

So it is with all depreciating assets like houses.

j0nx's picture

No idea where you live but that's certainly not the case here in NoVa. Demand has never been higher and supply lower.

Houses Depreciate's picture

Incorrect. Demand here in nova is in the gutter. Boots on the ground data my friend.

 

 

 

 

j0nx's picture

You are baked man. Stop spreading lies troll.

Houses Depreciate's picture

It's reality my friend. Get over it and get on with your life.

skbull44's picture

Just ask any Canadian caght up in this bubble: This time is different.

GunnerySgtHartman's picture

Oh, yeah ... it's always different "this time."  LMAO

skbull44's picture

Just hope the insanity lasts another 3 years until my wife retires and we can sell our over-priced Greater Toronto Area home and move to a much less bubblicious locale...

Abbie Normal's picture

Why gamble and wait 3 years?  Why not take your winnings and leave while you can?  Is it worth a 50% drop in value just to save 3 years of rent?

TheRideNeverEnds's picture

The problem with selling your 2br 2ba Canadian home on 1/4 acre built in 1984 at the market rate of 10,000,000 is that you will then need to rent a place to live. Sure ten million sounds like a lot of money, even after taxes, till you realize the rents are 60,000/year for the equivalent and everything is mandated to go higher in price forever by the central bankers.

TradingTroll's picture

Sorry I don't see the 'problem '

If the rent pops to $100k, almost doubling, and after 50 years of renting you die you leave $5m to your heirs.

As for rent, the Chinese are putting up with 1-2% annual yields on theirVancouver properties. If you borrow you pay 4% interest (5yr fix) plus property taxes and insurance and maintenance pushing the cost up over 5%.

The reason I used the 5yr fixed rate is Chinese landlords will lock in the rental rate for 5yrs.

But even on the lowest variable rate the renter still wins.

But people are greedy. Renters don't save the unspent property taxes etc. They see their friends putting a small down payment in and using a home equity line to finance their lifestyle and want to do the same.

In the current market, renters are the smart money.

bluskyes's picture

Sell them if you've got them

1234567's picture

The problem is where do you live if you sell? If you move far away and leave your job good luck trying to get approved for a mortgage. I noticed a lot of people are just renovating what they have and adding additions anywhere they can instead of moving.

silverer's picture

Some are cashing out of bigger homes, moving to smaller. Kids are gone, etc.. No mortgage necessary. Also, if you have some income you will qualify for a mortgage depending on your down payment if you want. Banks don't want to miss a nickel. They'll lend on a home because if you put down 50%, they are well protected.

perkunas's picture

 

There is no Bubble,

OMG the sky is falling rent is doubling

If you look at other major city’s around the world, you will find Toronto Cheep in comparison. Even during the great depression Toronto housing prices rose. The answer has always been the same, that’s where the jobs are. In a jobless world, you will find this trend to not only continue, but accelerate.

peterk's picture

you say  :its where the  JOBS are".... WRONG

the answer is  "its where the BANKS ARE".

 

house prices anr NOT built on  wage growth, they are built on DEBT  GROWTH.

Banks  are located in old   cities, well established, so they lend in those  places  as they beleive its safe to do so

 so where the banks are is the finaincial center of the economy, so that where they lend.

 

Houses Depreciate's picture

Yet rent is half the cost of buying at current grossly inflated asking prices.

Bay of Pigs's picture

Never go Full Retard bro...

peterk's picture

here in austrlaia  today the government is crying crocodile tears for the young as they cant afford  houses... so

in their wisdowm they still refuse to cancel negative gearing which is a policy in austrliaian  tax law where you

as an investor  can claim tax deductibility for the interest on an investment property.

There stupid argument is  if we dont make the rich richer  by sibsidising theor debt load  on theeir investment

the poor can never afford to buy a home...... problem is   there is no NEW housing being developed, its the same  50 year old house being flipped for a profit every few years by new investors.

SO my point is the government is STUPID BLIND, they dont want to  rock the boat as they dont know what the hell is going on anyway, nor  how to  make an economy actually grow. The government in austrlia is  110% behind the asset bubble and no doubt will everyting possible under the sun to continue it. Tax subsidies,  cash hand outs and everything  else including the kitchen sink.

The only thing that will turn it is a SPIKE in interest rates and then NOTHING CNA SAVE THE DEBTORS.

Understand,  ASSET PRICE = DEBT.. simple formulae.

Peoplpe here buying $200000 cars all over the place and they work part time  in a retail shop. They are doing it through  home  remortgaging (invisible home equity).. its all about using immaginary asset prices to fund your lifestyle by raising debt and spending it.

33% of AUstrlians dont have $500   for emergency, and 50% have only 6 weeks savings.. yet  $1-2 milion houses no problems, $100,000 cars, no problem. Currently there is  ALOT OF BUILDING ACTIVITY  here in the suburbs, houses being bought bulldozed and  2  town houses being built in its place, apartment buiildings  going up in the middle of no where. I can say i have never seen a   building boom  like this before ever.

Its greater than 2007 for sure.

AUSTRLALIA IS A HOUSE OF CARDS.. (credit cards)

My prediction is a 2017  housing BUST to   EQUAL that of  the 1890s. ( 1890s was the largest ever depression here in australia,  larger than  1929 ). My prediction is that it occurrs  THIS YEAR, 2017

perkunas's picture

Government is the problem not the solution.

Taxes are a bit of a red hering, the biggest problem is they want us dead or living in apartment slums. If you really wanted affortable housing, it would simply be a matter of working with contractors. How can we build somthing for 50,000 or less, what laws do we need to change, and dont tell me no.

Déjà view's picture

They still mining Opal in Alice Springs...dens are sturdy...sans windows...even save on A/C...

orangegeek's picture

The chi-coms are buying up everything.

 

Who wants a one bedroom condo for $1M in Shitbag, Canada???

 

M2 keeps expanding and the sheeple can't afford dick on a stick - unless you are an overpaid goobmint werker.

 

And this is called CENTRAL BANK GENOCIDE.

 

Suicide rates are never reported, but you can bet damn sure they are rocketing.

Houses Depreciate's picture

Corrected for accuracy.

 

The dumb borrowed money are buying up everything.

yogibear's picture

Blackrock, JPM and Goldman love this. They own the people. Debt slaves.

 

Houses Depreciate's picture

The current US bubble dwarfs Canadas.

OCnStiggs's picture

Just like the Japanese invasion of the late 80's and 90's... Wait 24 months and then buy them back for half.

These are just "spec" houses. They never get lived in. 95% of the condos sold in China are never finished out because that "lowers the price" other Chinese speculators would pay. Only in their insane world would actually buying a home to live in decrease the value of that property. With that kind of logic, what could possibly go wrong???

Same story in L.A. All over O.C. loads of homes built amazingly enough by Chinese companies FOR Chinese investors.

Maybe China was smart to try and hold on to the cash trying to flee their country. With investments like these, that money will never return.

What is coming will hurt a lot of people and help the few that are ready for it.

Sages wife's picture

I'm fucking ready already. Giddyup.

Herdee's picture

Cannabis legalization to the rescue. The Canadian government is bust, they are desperate for tax money, they're working the shit out of the tax department with constantly reviewing everyone's former tax year just to squeeze some for a few bucks. Big military cutbacks because of massive numbers of babyboomers hitting government benefits and the health care system. A lot of Provinces are over 50% of their budgets just for heath care. The Liberals are hoping to bring in Colorado type money from medical and probably recreational Cannabis sales. The federal government is hard up to create national inflation, they are trying to create through the housing bubble.

bluskyes's picture

We Kanadians don't have health-care, just delayed euthenasia.

Ink Pusher's picture

Just when I thought it was safe to stop pumping up the greatest bubble in Canadian history, I sure hope it bursts soon, my back is killing me.....

Houses Depreciate's picture

Here in NoVa, for sale signs are growing like weeds. 

 

We're renting a house for half the cost of buying it.