What were they predicting?
Jan 14, 2013 MacLean’s Magazine headline: “Inside the Great Real Estate Crash of 2013. The sudden cooling in Canada’s housing sector seemingly struck without warning.” WTH? Sales up 37%, price up 12%, is not exactly a sudden cooling. Overheated would be more accurate. MacLean’s Crash and Burn
Jan 2013 Ben Rabidoux, analyst, from the MacLean’s story: “The demand for oversized homes is expected to fall.” Calgary has already set a record in 2013 for the most million dollar homes sold in one year. Luxury home market breaks annual sales record
April 2013, Garth Turner of GreaterFool.ca blurted out this forecast: “The beginning of the end in Cowtown.” End of what, inventory? Garth has the audacity to say in this post “realtors lie.” If Garth can misconstrue realtors’ accurate predictions into lies, what does that make Garth? When bulls croak
Two years ago, Garth ejaculated: “That the Calgary market will crack is a given. It’s different here, until it isn’t. Which is soon.” So far, his crack has resulted in the median price being up $40,000. What did he mean by soon?
Dec 20, 2008, Garth said he “expects housing prices will plunge another 30 per cent next year — on top of the 11 per cent drop so far this year.” http://www.ctvnews.ca/garth-turner-says-hard-times-have-just-begun-for-canada-1.353465#ixzz2fpRqGVha
The worst thing about doom-and-gloomers is that they end up actually wishing for disaster upon others, just so they can say that they were right. Why aren’t Garth and his followers happy that things haven’t crashed, and thousands of Calgarians haven’t seen economic disaster? Shouldn’t they be?
This up and up and up isn’t sustainable. Calgary has allot of great economics but disaster isn’t far away. Interest rates *will* return to long term averages… natural gas prices are not doing well and short of some huge new use for it.. they won’t go up any time soon.
The flood spending hangover will end soon also.
Imagine if the Government changed CMHC, to only offer insurance on mtgs upto 400k, and only 1st time homebuyers…
This up and up and up is very sustainable, because it’s really down and down and down of paper money. If we use gold as currency, it’s another story. But we don’t.
Both the housing price and interest rate will go up at the same time for multiple years before a correction really comes. Witness the 1950~1982 interest rate history.
So WSN.. how high can prices go? A $400K condo is heading for $800k! I can’t see that happening..
Who’s going to pay for these houses with a 70% ownership rate in Canada? What about average wages per province/city? House price increases are not sustainable or healthy for the economy. You really think house prices and interest rates will increase in tandem for a long period of time?
The Calgary market feels a lot like it did in 2007 when prices peaked the last time. Back then interest rates were higher but the mortgage rules were more relaxed. Rental vacancies were low. Everyone was panicking to get in the market. After 2007 when the global financial crisis hit, oil and gas prices plummeted, the Calgary market slowed down, prices dropped a bit but we didn’t see a huge crash.
Now in 2013, we have low interest rates but tighter qualifying rules. We also have low rental vacancy and the possibility of rising interest rates. I expect those factors are currently driving the market but those pressures will alleviate in the next while, the market will settle down and house prices will probably dip a bit.
Since the $400k condo was once $200k (or $100k, or $50k, or $25k depending on when you take the sample), why wouldn’t it go to $800k, $1.6M, $3.2M?
It’s a gradual devaluation of paper money. Printing money is a very important source of government revenue. It’s true in North Korea. It’s true in Canada. Unless the government someday stops issuing new money, the price will go up forever.
Money is being devalued, totally agree with you. However, its not at anywhere near the pace that prices have gone up…
When prices really skyrocketed, ie few years before 2007, it was more todo with 35/40 year amortizations, and 5%/0% down.. plus rock bottom interest rates.
After tax income, that 99% of the population has here, hasn’t really moved… since before prices moved up.
If you look at any of the debit/income ratios, its pretty apparent.
At some point in time, maybe next year, 10 years who knows… this will catch up to us.
Hehe, Turder is getting destroyed on his blog once again, the FED QE tapering he was so sure of now “comes later” just like the great Canadian housing crash, how long can a man be wrong yet still stay in the limelight embarrassing himself day in and day out, truly amusing.
Hot air can’t bust a housing bubble that doesn’t exist
Its one thing for the condo to double due to the factors you have mentioned, but what about incomes? They are not doing the same (rising, rising, rising) – despite your reasoning about money being worth less.
You see Garth’s REIT chart on XRE yesterday, lol. He makes it look like XRE soared after the Fed no taper announcement. The thing moved barely .20 cents.
The guy is a clown and has been so sooooo wrong about real estate for the last 5 years or whatever it’s been. You think someone would want him now to be there financial advisor? LMAO
1) Wages did always go up. Maybe not yearly, but if you look at a whole decade or century, what do you see? $500/month was considered a big fortune in 1913, not any more in 2013, right?
2) What really happened was that the rate at which waged increased is lower than the rate of housing price increase. I think that’s what you really meant. IMO, it’s due to the fact of population growth. When the supply of labor is growth faster than the production of housing, the wage would be pushed down due to over-supply of labor. And by population I mean the world population. If people in India are willing to take a software development job cheaper than anyone else, the wage of all software developers in the world are pushed down a bit.
Conclusion: it’s all about supply and demand. Supply of housing, supply of paper money, supply of labor, everything.
old gartho is sooooooooooooo angry! Kicking everyone off his blog, name calling….what a little pussy. He posts the same dribble and his last few clones cheer him on. I wouldn’t be surprised to find out he’s the one posting under different names on his own blog.
The guy is a waste of space.
Having been removed from Garth’s blog as well, I am glad to find a new home of “outcasts” who dare to ask Garth to prove his point with evidence not just opinon and speculative warnings. If you wonder why only “sheeple” are commenting on his blog, it is because he wants/needs it that way. His is a sorry insecure ego.
But we are all aware that prices may fluctuate and I am hard pressed to encourage a first time buyer to enter the market in Calgary right now. Yes, there is some panic buying after the flood and before interest rates climb too much higher, but is it wise to tie yourself to a mortgage that doubles your living costs? It may be three or four years before the correction finally arrives so these are difficult judgements that can only be made by the individuals who are making the decisions.