Dumb money in Canadian real estate Feb 1, 2021

Dumb money graph

Doug Porter thinks Canadian's like paying more for real estate. He is one
of the people hyping the real estate market.

People who listen to this are the same stupid money that listened to
Gamestop. But take heed, shorting Canadian real estate would be a big
mistake because of the irrational exuberance in the market.


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Informative real estate articles

REAL ESTATE
Canadians piling on mortgage debt as hot housing market continues
(FP - Geoff Zochodne)  - Risk Management Issues
Statistics Canada said Tuesday that household mortgage debt increased 7.4 per cent in November compared to a year earlier, pushing the total up to nearly $1.66 trillion.
Bank Of Canada Sees Real Estate Softening “Gradually”
(Better Dwelling)  - Attitude and Preference Issues
The central bank believes the housing boom was the result of a sudden shift in preference. They point to accelerating single-family home price growth, while apartments slow. Analysts from the organization attribute the shift in preference to “low financing costs.” It must have been a total shock how those costs became so low.
January real estate report 2021
(fsim.ca - Mark Sibthorpe)  - Attitude and Preference Issues
Montreal condos on REM sites were the exception to a record breaking
Canadian pension funds bet on slumping property markets to boost real estate investments
( G&M - Maiya Keidan)  - Financial Services Industry Structural Issues

Canadian pension funds are seeking to boost their real estate investments, betting the slumping property market will recover as the COVID-19 pandemic recedes and office workers and city dwellers return to downtown properties.

'This doesn't look like 2017:' Bank of Canada Governor isn't worried about a housing bubble
(FP - Shelly Hagan and Theophilos Argitis)  - Attitude and Preference Issues
The most recent boom isn’t concentrated in higher-priced markets but is more broad-based across the country, the governor said. “That I think in itself is implying this is less driven by speculative activity and more driven by fundamental demand.”
'This doesn't look like 2017:' Bank of Canada Governor isn't worried about a housing bubble
(FP - Shelly Hagan and Theophilos Argitis)  - Attitude and Preference Issues
Canada’s top central banker isn’t worried about the country’s hot housing market, saying low interest rates and demand for space rather than speculation are behind the price gains.
Canadian Real Estate Prices Grew Over 25x Faster Than U.S. Prices Since 2005
(Better Dwelling - Stephen Punwasi)  - Financial Services Industry Structural Issues
The consistent growth without correction over nearly two decades has disconnected the two. Canadian real estate prices didn’t just see double the growth over the past year. Since 2005, real estate prices have grown over 25.31 times faster than U.S. real estate prices. This is not a normal trend.
A New Study Reveals That The Number Of Vacant Montreal Apartments Has 'Exploded'
(MtlBlog - Teddy Elliot)  - Financial Services Industry Structural Issues
new study conducted by the Quebec Landlords Corporation (CORPIQ) reveals that Montreal's apartment rental vacancy rate "exploded" during the pandemic. According to the CORPIQ, a high vacancy rate ought to be good news for renters looking for a new place to live. 
Canada’s Real Estate Market Is The Fastest Growing In The G7, And The Most Inflated
(Better Dwelling - Stephen Punwasi)  - Risk Management Issues
Canadian real estate prices are still growing at a breakneck speed. Real prices increased 2.93% in Q3 2020, bringing them 8.27% higher than the same quarter a year before. The annual growth is now the biggest of the G7 countries. Since the beginning of the Great Recession, Canadian real estate prices have outperformed every G7 market… by a wide margin.
Mortgage deferrals fall sharply since worst days of COVID-19, many resume payments
( G&M - Rachelle Younglai)  - Risk Management Issues

The mortgage deferral cliff has flattened out.

U.S. consumer confidence rises slightly; house prices accelerate
( G&M - Lucia Mutikani)  - Attitude and Preference Issues

“The slow rollout of the vaccines and the still-raging pandemic continue to depress consumer confidence despite the prospect of further fiscal aid and a brighter health situation,” said Kathy Bostjancic, chief U.S. financial economist at Oxford Economics in New York.

Home buyers face higher costs after Dye & Durham hikes real estate software prices 400%, lawyers warn
( G&M - Jaren Kerr, Sean Silcoff)  - Financial Services Industry Structural Issues

Stock market darling Dye & Durham Ltd. 

DND-T -1.47%decrease
 
 is facing an outcry from Ontario lawyers after hiking prices charged to them by the Toronto technology company’s most recent acquisition.
Toronto’s housing market so hot even the bully bidders are at war
( G&M - Carolyn Ireland)  - Competitive Issues

In many years, the Toronto-area real estate landscape feels glacial in January, but this year, sellers are quick to list and bidding contests are flaring up in some spots.

Condo-Rental Listings Jump 132% in Urban Exodus From Toronto
( Bloomberg - Ari Alstedter)  - Financial Services Industry Structural Issues

The number of condominiums put up for rent in Toronto more than doubled in the fourth quarter compared with a year earlier, a sign of a growing exodus of people from the city’s downtown to more spacious accommodations in the suburbs.

Apartment vacancy rates rise in major Canadian cities as downtown workers face job losses and move to suburbs
( G&M - Rachelle Younglai)  - Financial Services Industry Structural Issues

Canada’s apartment vacancy rate climbed during the pandemic, with job losses and a glut of new condos doubling vacancies in downtown Toronto, Montreal, Vancouver and Ottawa.

CPPIB to invest $350-million in apartment buildings in the United States
( G&M - Rachelle Younglai, David Milstead)  - Financial Services Industry Structural Issues

Canada Pension Plan Investment Board will invest US$350-million in apartments in the U.S., an attempt to capitalize on the pandemic-fuelled real estate downturn and housing shortages south of the border.

Hot REIT Market in India Draws Canada’s Brookfield in $522 Million IPO
( Bloomberg - Julia Fioretti)  - Financial Services Industry Structural Issues

Brookfield India Real Estate Trust, backed by Canadian asset manager Brookfield Asset Management Inc., is seeking to raise as much as $522 million in an Indian initial public offering, adding to the growing number of listings from the sector in the country.

Toronto Condo Buyers Are Paying An 87% Premium To Own Instead Of Rent
(Better Dwelling - Stephen Punwasi)  - Attitude and Preference Issues
Most surprising, is Greater Toronto real estate buyers are paying massive premiums to own a condo apartment. The CMHC economists conclude the average monthly cost of owning a condo apartment “is about 23% above renting an equivalent unit.” That’s just renting someone’s condo though. If you look at purpose built rentals, the economist concludes people are paying 87% more to own an apartment, than rent in a purpose built. That’s a fairly large premium to say you’re not a renter. 
While the world is in the midst of a tech revolution, Canadians bet on real estate
(FP - Kevin Carmichael)  - Fintech and AI
We’ve resumed, after a brief cooldown, plowing a ridiculous amount of money into assets that do nothing to improve the country’s ability to generate wealth. Housing accounted for 37 per cent of overall investment, while business spending on machinery and equipment and intellectual property dropped to 28.2 per cent, the highest and lowest levels, respectively, since early 1993.
Real Estate Prices Are High Because Canadians Want To Pay More, Says BMO Economist
(Better Dwelling)  - Financial Services Industry Structural Issues
In December, the seasonally adjusted average Canadian home was CA$617,000. In the US, this was just over US$350,000, or CA$420,000 after adjusting for PPP. The gap works out to Canadians paying 46% more than Americans, on average.
How Mortgages Work in the U.S.
(WSJ - Video)  - Financial Services Industry Structural Issues
The U.S. mortgage market involves some key players that play important roles in the process. Here’s what investors should understand and what risks they take when investing in the industry. WSJ’s Telis Demos explains. Photo: Getty Images/Martin Barraud
Housing transactions hit 13-year high
(FT - James Pickford)  - Financial Services Industry Structural Issues
More homes changed hands in the last three months of 2020 than in any quarter in the past 13 years, underlining the scale of the resurgence in housing market activity following the relaxation of lockdown restrictions and the stimulus of the stamp duty holiday. 
Lower London Rents Are a Bad Omen for House Prices
( Bloomberg - Marcus Ashworth and Stuart Trow)  - Risk Management Issues

One key factor behind the ailing rental market is the exodus of people leaving London — especially the highly paid and economically mobile — due to both the pandemic and Brexit. The Office for National Statistics estimates that, in the summer of 2020, 893,000 non-U.K. residents left the country. The government-funded Economic Statistics Centre of Excellence reckons the outflow was even higher, at 1.3 million, with more than half departing from London. That’s equivalent to around one in 12 leaving the city.

This has led to fewer tenants and a drop in rents. For people renting, that means more choices for housing and more room to negotiate on pricing. But there is little sign that cheaper rentals are attracting more people into the city. Many are still working from home, and a dearth of job opportunities for new grads means there’s little hope of the usual summer influx of new residents.  
That’s why we’re seeing the most pronounced drops in rent in the highest price inner city boroughs of Kensington and Chelsea, Westminster and Islington. Meanwhile, the outer suburbs have been cushioned by a noticeable pandemic shift to bigger, more rural properties, driving up house prices elsewhere in the U.K. (Rents outside of London are little changed.)  
Covid-19’s Financial Toll Mounts as Homeowners Keep Postponing Mortgage Payments
(WSJ - Orla McCaffrey)  - Risk Management Issues

A promising sign of a bounce back in the pandemic-ravaged economy has stalled: Fewer borrowers are resuming mortgage payments.


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