Recommendation for Canadians....Sell your house yesterday!

China owns the Canadian real estate market: Chinese account for one-third of all Vancouver home sales volume in 2015.

U.S. versus Canada housing 

The U.S. had a major correction in housing.  We all know this and lived through it.  But home values in many U.S. metro areas are now back in bubble territory.  But Canada never had a correction and in fact, prices continued to move up:

 

In 2005, the typical U.S. and Canadian home were about the same cost in U.S. dollars.  Today, the typical Canadian home is about twice as much and growing.  And in places like Vancouver, prices are going bananas.  A large part of this is because of foreign money flowing in and not only into Canada:

DYI Comments:  Not so fast.....The Canadian housing mania has been been going bonkers since oil prices bottomed back in 1998.

Remember when Exxon was Exxon and Mobil was Mobil? Oil was far cheaper (inflation adjusted) than it is today.  By combining these two companies they were able to maintain their dividends.  This also was the bottom of Canada's RE market for they are a natural resource driven country.  So goes the price of oil/gas and hence, so goes the upward value of the Canadian dollar.  The Canadian economy has been on a tear since 1998 [only recently due to the severe drop in oil/gas Canada is now in recession] combined with world wide interest rates declines (including Canada) you have the seeds for a housing boom.

Foreign Buyers are Not the Cause But Symptomatic of Market Tops

Foreign buyers of this magnitude are symptomatic of market tops.  They come to the party late believing that price increases are forever or at least they believe they will be able to sell before prices go bust.  Today Canada's RE market appears to be doing just that; going bust! As long as oil/gas plus all of the other natural resources Canada provides, stay low in price their housing sector will go into a tail spin.  How insane have prices become?

 This is an obvious tear down most likely in the Vancouver area(this is very typical!).  So $2.4 million (Canadian dollars) just for the land and then the cost of rebuilding? Completed costs pushing the $3 million threshold?  Your average Canadian has been priced out of the market.  Only well healed buyers from foreign lands will be able to afford these prices. 

Again, symptomatic of a market top as foreign buyers dry up the last vestige of buying power will be gone!

Recommendation for Canadians....Sell your house yesterday!

Sell your house and rent.  This is especially for folks with large gains in price, so go out there and find a moron who will buy your over priced home.  The proceeds placed into Canadian securities with 60% to 70% in Canadian Bills, Notes, and Bonds; the remainder in Canadian stocks across the board with emphasis on natural resource companies.  Then simply wait for the U.S. market (stocks and bonds) to reprice purchasing with a stock to bond allocation suitable for you.  About a decade from now (depending on your age of course) you will be able to purchase a home far cheaper and most likely for cash due to your gains in Canadian and American securities.

Best of Luck Canada...

DYI