Canada Housing Market Is 63% Overvalued: Deutsche Bank


B00Mer
#1
Canada Housing Market Is 63% Overvalued: Deutsche Bank


Airdrie, Alberta development in last 5 years.

Canada, Australia and New Zealand are in the top ranks of the developed world’s most overpriced housing markets, according to Deutsche Bank AG.

Homes in Canada are the most expensive, being 63 percent overvalued, the bank said in a survey ranking Organization for Economic Co-operation and Development countries’ markets. The measure reaches 56 percent in New Zealand, the second-most priciest, 53 percent in Belgium and 49 percent in Australia.

In Wollongong, a seaside city in the Australian state of New South Wales, homes are more expensive than in New York when the median house price is compared to the median household income, economists Torsten Slok, Matthew Luzzetti and Peter Hooper wrote in the report. The survey compares home values to their historic multiples of rent and household income.

Central bankers have been using financial policy to reduce the risk of house-price bubbles in countries including the U.K., Hong Kong and Singapore. Restrictive policies reduce credit growth and price gains by 1 percent annually, Goldman Sachs Group Inc. economist Hui Shan estimated last year.

Warnings by Canadian policy makers about overvalued homes are starting to sink in, with households the least optimistic since May 2013 about further price growth. In Australia, home prices have climbed 19 percent over the past two years, driven by a cash rate that’s remained at a record low since August 2013, contributing to record-high debt levels.

Home values in the U.S. are about 5 percent below their historical average based on the measurement, the Deutsche Bank report said. In the U.K., where the government has encouraged low down payments on mortgages, they’re 38 percent overvalued.

Values in Canada are 35 percent above the historical average relative to incomes and 91 percent higher when compared with rents. Prices in Belgium are 51 percent higher than the average relative to income, and in Australia 60 percent above the average relative to rents.

source: Canada Housing Market Is 63% Overvalued: Deutsche Bank - Bloomberg

............................................

Something I have been saying on this forum for 5 years.. Over price and over rated.

$500,000 for the average home in Airdrie, Alberta.. why?? If I'm going to pay 1/2 million for a house I want a yard.

You can get a home for $100,000 equivalent to one in Airdie, in Dallas - Ft. Worth.
 
Walter
+1
#2
A house is worth what someone is willing to a for it.
 
B00Mer
#3


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City: Tempe
State: Arizona
Zip: 85281
County: Maricopa
Price: $87,500
Listing #: 5216865
ARMLS
Property Type: Condo/Townhouse/Co-Op
Listing Type: Short Sale
Subdivision: Casitas East
Status: Under Contract-Bckup
Property Information:
Bedrooms: 2
Total Baths: 2
Year Built: 1979
Sq. Feet: 1037
Lot Size: 0.00
Taxes: 770.00; 2014
Air: Refrigeration
Heat: Electric Heat
Pool: No Pool
Construction: Frame - Wood
Stories: 1
Appliances: Disposal
Utilities: City Water; Sewer - Public; Elec: SRP
HOA Dues: $188.50
HOA Description: Common Area Maint, Water, Sewer, Garbage Collection, Front Yard Maint, Exterior Mnt of Unit; Clubhouse/Re
Land Tenure: Fee Simple

More homes here: 85281, 85282, 85283 Homes for Sale

Quote: Originally Posted by Walter View Post

A house is worth what someone is willing to a for it.

...and there is one born every day.
 
Sons of Liberty
#4
Oh man, no pool in Arizona? Phuck that.
 
Walter
#5
Quote: Originally Posted by B00Mer View Post

...and there is one born every day.

You got another place to live.
 
Scooby
+2
#6
Not to worry, the government will bail out the banks when the mass defaults come down, besides the CMHC insured ones.
Last edited by Scooby; Jan 9th, 2015 at 10:04 PM..
 
B00Mer
#7
Quote: Originally Posted by Scooby View Post

Not to worry, the government will bail out the banks when the mass defaults come down, besides the CMHC insured ones.

...and you can pick up a nice house or condo with an assumable mortgage like the 80's in Alberta.
 
Angstrom
#8
Value will be re-set and adjusted to real value when all the baby-boomers try to sell their house in the next 20 years. That will pop the bubble.

10 million house for sale in Canada at the same time. Value will definitely drop.
 
damngrumpy
+2 / -1
#9
Boomers most will be dead in twenty years and the people holding
reverse mortgages will get one hell of a surprise when the re-evaluation
takes place. The bubble will burst soon I am afraid. This was not even
calculated when the government policy in 2008 was supposed to save us
we are going to be victims of something worse if the bubble bursts
things that are unsustainable do burst
 
B00Mer
#10
We are always behind the USA.. they had their housing bust, we will have ours.. 2015/2016.

The Bank of Canada came out today saying the market was over by 30%.

Housing market overvalued by as much as 30%, BoC says

The German Bank bested that with 63%..



Wait till this spring.
 
Angstrom
#11
Quote: Originally Posted by B00Mer View Post

We are always behind the USA.. they had their housing bust, we will have ours.. 2015/2016.

The Bank of Canada came out today saying the market was over by 30%.

Housing market overvalued by as much as 30%, BoC says

The German Bank bested that with 63%..



Wait till this spring.

Nah, this spring is too soon.

It's more when all the boomers try to sell to go move into a old age retirement home.

It won't be foreclosures by banks.

Boomers are done payments on their houses. They just won't get their asking value.

Worse case scenario 50% of the houses don't sell at all and they will be abandoned.
 
B00Mer
#12
Quote: Originally Posted by Angstrom View Post

Nah, this spring is too soon.

It's more when all the boomers try to sell to go move into a old age retirement home.

It won't be foreclosures by banks.

Boomers are done payments on their houses. They just won't get their asking value.

Worse case scenario 50% of the houses don't sell at all and they will be abandoned.

The housing market does not have to wait for people to sell..

Alberta's economy is oil based, and people moved here when oil was $120 a barrel, now it's around $50. Shell laid off 150 employees today, and other companies are starting to layoff workers.

People move where the jobs are..

Also, inflation will hit Canada soon, with an increase in mortgage rates, and people will not be able to afford the payments.. backs will foreclose and no buyers will drive the price down, maybe 80%.

1980's all over again.
 
Angstrom
#13
Quote: Originally Posted by B00Mer View Post

The housing market does not have to wait for people to sell..

Alberta's economy is oil based, and people moved here when oil was $120 a barrel, now it's around $50. Shell laid off 150 employees today, and other companies are starting to layoff workers.

People move where the jobs are..

Also, inflation will hit Canada soon, with an increase in mortgage rates, and people will not be able to afford the payments.. backs will foreclose and no buyers will drive the price down, maybe 80%.

1980's all over again.

Well that will be good for people like me who decided to not buy based on prices were over-evaluated.
Last edited by Angstrom; Jan 10th, 2015 at 03:50 AM..
 
petros
+3
#14  Top Rated Post
It's going to hit each region differently
 
Scooby
+1
#15
Quote: Originally Posted by B00Mer View Post

...and you can pick up a nice house or condo with an assumable mortgage like the 80's in Alberta.

hahaha, I've been looking around with that in mind.
 
Sons of Liberty
#16
I thought for sure your bubble would have burst years ago, I guess all good things must come to an end at some point.
 
captain morgan
+2
#17
Quote: Originally Posted by B00Mer View Post

We are always behind the USA.. they had their housing bust, we will have ours.. 2015/2016.

Apples and oranges.

Proceeds from the sale of a primary residence in Canada is not subject to capital gains tax (or income tax etc). To my knowledge, this is not the case in the USA, although I understand that you can write-off the financing charges in the US

Quote: Originally Posted by B00Mer View Post

The Bank of Canada came out today saying the market was over by 30%.

Housing market overvalued by as much as 30%, BoC says

The German Bank bested that with 63%..

Above is the reason that the analyses of the 2 institutions are highly questionable... 30% vs 63% and somehow I am supposed to believe either?

Quote: Originally Posted by Sons of Liberty View Post

I thought for sure your bubble would have burst years ago, I guess all good things must come to an end at some point.

A big part of the differing experiences between Canada and the USA has (had) to do with the different banking regulations between our nations in addition to the demographics that were buying the homes.
 
taxslave
#18
Quote: Originally Posted by B00Mer View Post

...and you can pick up a nice house or condo with an assumable mortgage like the 80's in Alberta.

But it will still be in Alberta.
Right now you could probably name your price in Tumbler Ridge. SOme cheap ones in Thasis too.
 
MHz
#19
About the same ratio for our perceived morality and what it actually works out to be.

Quote: Originally Posted by taxslave View Post

But it will still be in Alberta.
Right now you could probably name your price in Tumbler Ridge. SOme cheap ones in Thasis too.

You know that is in BC right?
 
B00Mer
#20
Quote: Originally Posted by MHz View Post

About the same ratio for our perceived morality and what it actually works out to be.


You know that is in BC right?

Maybe he was thinking "British Properties"(AKA West Vancouver) when he said name your own price.

Luxury West Vancouver Real Estate and Homes - Vancouver's Listings and Waterfront by Jason Soprovich
 
MHz
#21
Tumbler Ridge was for sale in whole at one time, after the bust of course, before that they were 200% overvalued but the company was paid that to build them for the workers that were to come in. If you want a good look at how the West still runs Company Town that would be the perfect example. Whoops forgot who this reply is to.
 
Kreskin
#22
No way. You can still get a rancher in Fort Mac for less than 900G. Get in while you still can!
 
MHz
#23
Ft Mac is heavy oil. NG is going to be the mode then your car engine will get filled up and applied to the NG on your home account. Anything that moves neeeds grease, turning grease into gas is really expensive and rather stupid in that we are overflowing with gasoline as it is. Gas should be injected into jet and diesel engines when 'under load'.
He is right though, the boom is yet to come as the value in the area is not in the grease components as they allow for machines big enough to move the water-proofed gritty-sand into commercial production wher it is sold by the ton as road repair material as well as occasional road erosion control and as a free salt barrier applied at tire-shops which is actually a grip compound that is meant to all fall off within a few months an it comes off it bigger pieces when bigger bumps are encountered.
Now that 900G is 90,000G in 10 years.
 
taxslave
#24
Quote: Originally Posted by MHz View Post

About the same ratio for our perceived morality and what it actually works out to be.


You know that is in BC right?

I hope so unless someone moved the border without telling me.
 
B00Mer
+1
#25
Quote: Originally Posted by MHz View Post

Now that 900G is 90,000G in 10 years.

That'll be hard for you to earn with your 7/11 cashiers job.
 
Sal
#26
Quote: Originally Posted by Walter View Post

A house is worth what someone is willing to a for it.

exactly
 
taxslave
#27
Quote: Originally Posted by B00Mer View Post

Maybe he was thinking "British Properties"(AKA West Vancouver) when he said name your own price.

Luxury West Vancouver Real Estate and Homes - Vancouver's Listings and Waterfront by Jason Soprovich

If I had a shack in British properties and some fool offered 15 mill for it I most certainly would take it.
 
Sal
+2
#28
Quote: Originally Posted by B00Mer View Post

...and there is one born every day.

yup...they are called renters

Quote: Originally Posted by B00Mer View Post




Wait till this spring.

hm I smell some investment property perhaps...it's all good
 
B00Mer
#29
Quote: Originally Posted by Sal View Post

yup...they are called renters

Smart ones purchased a condo when they were $100,000 to $120,000, same dam thing is now $225,000.

http://www.remax.ca/ab/airdrie-real-...d109791954-lst
 
Sal
#30
Quote: Originally Posted by petros View Post

It's going to hit each region differently

agreed

Quote: Originally Posted by B00Mer View Post

Smart ones purchased a condo when they were $100,000 to $120,000, same dam thing is now $225,000.

# 8322 304 MACKENZIE WY SW MLS®-C3647030 for Sale | RE/MAX

it depends upon your region.. but rule of thumb is 10 to 15 years should double your investment

I wish I had bought earlier...can't say I wasn't told
 

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