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Analyst: Canada’s housing market is ‘Loonie Tunes’

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Canadian Realestate Magazine | 26 Mar 2015, 09:19 AM Agree 0
In the most colourful language to date, an American analyst agrees Canada’s housing market is nearly 50 per cent overvalued – and it’s not just an Alberta problem.
  • Byron Depass | 27 Mar 2015, 04:37 PM Agree 0
    Vikram Mansharamani like all the rest who have been making predictions about the Canadian House Prices over the past 10-12 years are all guessing. Yes, there will eventually be a correction and he who makes the last prediction will look really smart. The GTA market is being driven by the Chinese Buyers and Low Interest Rates. That's it. The correction will come if The Chinese Government cut off the supply of Chinese buyers and money or interest rates increase by about 5%. Until that happens Sell Sell Sell! Unfortunately it's no fun for buyers especially first time buyers.
  • EddieN | 27 Mar 2015, 05:01 PM Agree 0
    During his last visit..... I suggest that he stays home and minds his own business. He has absolutely no clue and the various markets in Canada and what influences them. He is just jealous that he hadn't invested in Canada. That's all. I live and work in Ontario and I can say with a certain amount of confidence that most people here WELCOME lower oil prices. Since we don't spend the money on gas, we can now afford other pleasure and necessities. Furthermore, with oil prices down, the dollar has gone down. That means that Canada can export more, thus producing higher employment and increased spending. Mr American Expert also doesn't take into account for immigration and investment in flow. Don't forget, Chinese are not the only ones buying up real estate. There is also the eastern Europe and the Middle East.

    I just want to know why the media is quoting this guy? Who is he that he deserves our attention? Is he smart but BoC is dumb along with thousands of investors putting up billions of dollars? He doesn't make policies or enact laws. He is a nobody. I think he needs to go back to watching cartoons because that is what he seems to be good at, and Crew needs to stop quoting anyone that's shows signs of a pulse.
  • jeff | 27 Mar 2015, 06:37 PM Agree 0
    wiley coyote, or maybe its a page out of Chicken Little.

    you ever heard about pounding a square peg into round hole, if you work hard enough at it, someday it just might fit.

    if you keep predicting doom and gloom, eventually, normally sane people will start to believe you and figure well I read it in CREW so it must be true.

    Has CREW fallen to the level of the Tabloids that grind out the rumour and sensational articles?
  • | 27 Mar 2015, 06:51 PM Agree 0
    Hahaha! Hilarious comment EddieN. Hahaha!
  • Charles Walwyn | 27 Mar 2015, 09:17 PM Agree 0
    He doesn't even live in the country/province/city
    Stay home!! Wherever that is!!
  • AG | 27 Mar 2015, 11:24 PM Agree 0
    Whether Vikram likes it or not the FACT is there are 2.5 million people slated to arrive in Canada over the next 10 years . A large portion of them will land here in the Greater Toronto Area , the demand for housing will increase .
    The other differences between 1989/1990 , (which we survived ) , and today are interest rates were 17% and we depended significantly more on the USA to buy our exports .
    I agree with one of the other comments ....Vikram is jealous he didn`t get in when the getting was good .
  • Randy | 29 Mar 2015, 08:26 PM Agree 0
    Intriguing. I invest in smaller US/Canada cities in reasonably priced duplexes and have compared the pros and cons of flipping a property or two. I only know one person from my home city working the oilpatch and he's struggling a bit.

    Would like to flip at the peak of the Canadian market but doubt if capital gains exemptions apply for a reinvest in the American market. Lots of fear monguering going on down south too. Looks like sitting tight is still my best option.
  • | 29 Mar 2015, 09:39 PM Agree 0
    Real Estate in Canada is very complicated and regional. A lot of economic factors will influence employment rates beyond the oil fields. For example US/Canada exchange, interest rates, tax rates, government deficits, government spending levels, Immigration, etc, and these factors are an important factor of house prices. Sure there will likely be areas of slow down and correction in certain markets. Markets do that historically. No big news here. Vancouver is greatly effected by immigration but also by land shortage. Being surrounded by water, mountains, and the US to the south and having a government policy of protecting farm land, development is a very expensive prospect. We have experienced price drops in the late 90's once Hong Kong was returned to China and we may see it again. Over simplification basis of only looking at debt levels.
  • Andrew N | 30 Mar 2015, 04:10 PM Agree 0
    It takes more than a visit and some limited knowledge of Canadian market to make a prediction. Vancouver and Toronto market have seen some minor adjustments in the past but every time that creates a buying opportunity. Its true that some segment of market is supported by oversea Chinese or new immigrants, but there are segment that are hot but are supported by local buyers. There are tons of buyers looking for real estate and the trend will continue until there is/are a major impact that will reverse the trend. So far, we don't foresee any coming this way. The people who think our market is over valued should go to other cities like London, Hong Kong, and other major cities, real estate have and will never be affordable.
  • X Man | 31 Mar 2015, 07:16 PM Agree 0
    Byron is correct - low interest rates and Chinese buyers are what drives the markets in Toronto and Vancouver. The GTA and Greater Vancouver are already a big portion of the Canadian housing market. Calgary obviously is affected by oil prices, but I doubt any real estate in Canada outside of Alberta is. I am a lawyer in Vancouver who does conveyances for mostly Chinese clients, and I can tell you that things are not slowing down here right now. Also, there are reasons to think that Chinese money could even accelerate into Canada. First, Canadian housing prices have become 20% cheaper over the last year as a result of the rise of the renminbi which is linked to the US dollar, which as we all know has appreciated against the Canadian dollar. Secondly, with the change of people at the top in China (president and premier), a lot of money from people who were high-ranking government officials in China has moved over to Canada because Li Keqiang wants to look like he is out to stamp out corruption (it makes him look like he's doing something about it) and then he can install his own people in place as well (rewarding his friends). Those people are buying houses in Vancouver and Toronto. If Chinese money stops flowing, THEN look for a big correction.
  • Paul | 01 Apr 2015, 08:54 AM Agree 0
    It amazes me most refute facts. Fact is wage growth hasn't kept pace with real estate. No one can predict when it will happen and the careless borrowing in Canada will have its day of reckoning. To suggest more people coming means higher prices is elementary and unfortunately one day will cause alot of pain. Us Canadians seem to think we are different and have been told our banks are 'safe' and lend prudently, unfortunately few dig deeper than that to see whats going on. In 2012 median income in Vancouver was slightly over $30,000, tell me how this can continue? Ask a Vancouver or Toronto homeowner this. Could you right now afford to buy your own house? Most I ask say no. I could go on but I will leave it to others to look at the real economics of this situation which one day will crash. My prediction is shortly afetr this years election...Good Luck to all.
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