- Joined
- Dec 14, 2013
- Messages
- 980
I've been walking around making a distinctive market call but began exploring this with a previous post: Is the sum greater than the parts?, and I'm now going to take an actual stance on it: I believe that Calgary condos are currently undervalued.
- 15-20% discount in purchasing standalone condos vs. consolidated investment product. This is a macro flip, 15 years ago, you could buy investment product at a cheaper per-unit rate than individual condos
- CMHC rules are going to substantially change: CMHC is willing to make an equity investment in properties which effectively extends the amortization from 25 to 30 years + increases RRSP first time home buyers contribution from $25k to $35k. I think this has some very positive implications for the housing market.
- there is blood in the water in Calgary and I see very few chutes of green. Downtown probably has 40% vacancy once you consider shadow vacancy, sublet, and companies with vacant floors.
- Calgary is a significant cyclical low when it comes to rental housing. In the early 1990’s there were 55,000 units, and this stock has been drawn down by 15,893 units (-27.6%) from its peak in 1994 though condo conversions. This is a surprising result given that Calgary’s population has increased by 77% since the mid-1990s
Interested in your thoughts...
Time frame matters, yes. But if you can cover your condo fees in a B product, I'm saying you are getting in at a great floor right now. I think Canada is pretty anemic economically and don't see a rise in interest rates any time soon. More likely, I would believe a rate cut if we keep tracking the way we are right now.
- 15-20% discount in purchasing standalone condos vs. consolidated investment product. This is a macro flip, 15 years ago, you could buy investment product at a cheaper per-unit rate than individual condos
- CMHC rules are going to substantially change: CMHC is willing to make an equity investment in properties which effectively extends the amortization from 25 to 30 years + increases RRSP first time home buyers contribution from $25k to $35k. I think this has some very positive implications for the housing market.
- there is blood in the water in Calgary and I see very few chutes of green. Downtown probably has 40% vacancy once you consider shadow vacancy, sublet, and companies with vacant floors.
- Calgary is a significant cyclical low when it comes to rental housing. In the early 1990’s there were 55,000 units, and this stock has been drawn down by 15,893 units (-27.6%) from its peak in 1994 though condo conversions. This is a surprising result given that Calgary’s population has increased by 77% since the mid-1990s
Interested in your thoughts...
Time frame matters, yes. But if you can cover your condo fees in a B product, I'm saying you are getting in at a great floor right now. I think Canada is pretty anemic economically and don't see a rise in interest rates any time soon. More likely, I would believe a rate cut if we keep tracking the way we are right now.