US & UK Housing Markets already in freefall, AUS & NZ Softening - Canada Next Bubble to Burst?

[El Pinko]

http://www.canada.com/calgaryherald/news/story.html?id=348c49c4-c194-4d3a-9446-5564332a1ea9&k=96391

Calgary rental vacancy rate on the rise: Apartment Association
Mario Toneguzzi , Calgary Herald
Published: Tuesday, February 19, 2008
CALGARY - There is a softening of demand for apartment rental units in Calgary, says the Calgary Apartment Association.
As of the end of January, vacancy rates industry-wide reached the three to four per cent level for the 50,000 apartment rental units within the city.
The vacancy rate bottomed out at a historic low of 0.5 per cent in 2006.
A number of factors have contributed to the rise in the vacancy rate, said Gerry Baxter, executive director of the Calgary Apartment Association.

"We have always said the market is the market and the market always has a way of correcting itself in time," he said. "One of the very large reasons for improved vacancy rates is the number of condos now part of the rental market. We are advised that up to 40 per cent of new condo construction is available for rental."


It sounds to me like people are dumping their condos into the rental market. If nothing else it seems the market must be overbuilt. Canada has seen several years of insane home-price appreciation, and like the US, has not had significant increases in median household income to support those increases. Canadians tell me that there are no subprime loans in Canada, so a housing bust is unthinkable there.


Hmmm... I wonder.

[Extend a Hand]

1. I think Spain and Ireland are in trouble too

http://en.wikipedia.org/wiki/Spanish_property_bubble

[El Pinko]

2. So it's turning out to be a worldwide real estate bubble!

What are the odds that insane real estate appreciation would hit so many of the western democracies at one time?

It makes one wonder how independent governments are in regulating their economies anymore...

[provis99]

3. as usual, Calgarians only tell half the story

The fact is that housing prices in Calgary are in decline because the oil-based economy has peaked. Their neighbors in Saskatchewan have the fastest growing economy in Canada now, and housing prices are cheap in Saskatoon and Regina, in Saskatchewan. So thousands of Calgarians have been flooding out of Alberta and moving to Saskatchewan. The population of Saskatoon is expected to double in 15 years from 200,000 to 400,000 from this influx of Calgarians sick of being ripped off by unscrupulous housing speculators in the laizzez-faire "Texas of the North".

It has nothing to do with sub-prime lending, or people overextending their mortgages; its simply that the Albertans are getting better deals in Saskatchewan, where the housing market and economy are now booming.

[El Pinko]

4. I understand the lending standards are different there, but the income/price ratio problem is same

Prices in Vancouver are through the roof, well above 3X local median wages, and buying a home is becoming more expensive than renting equivalent housing. That's as much a part of the problem as shady loans were here. In 2005, everybody was insisting that the fundamentals supported the prices, and that 15% annual appreciation would continue forever. But then it became clear that that was not the case.

So forgive me for looking north with a slightly gimlet eye.