House Prices: Sydney Australia vs. Vancouver BC
A lot has been made recently of this article in the australian press reporting on a house in Sydney selling for 42 percent less than it sold for three years ago. Housing market bears are quick to point to this article as evidence that “yes, actually real estate prices DO go down, sometimes drastically”, while people more bullish on the Vancouver market point to the fact that “this is only one house out of many and the real decline in house values overall has been closer to 15 percent or so, besides vancouver is different because the olympics are coming and I’ll sell just before the crash anyways”.
But I say you’re BOTH wrong, and you’re not looking at the big picture. You’re forgetting one very important fact, and that is that Syndey Australia is on the other side of the world from us. This point is illustrated above and is the cause of a common but major misunderstanding regarding australian housing market data. First off lets look at a graph of that house price:
Looks bad doesn’t it? You might look at that price drop and get a bit freaked out about the possibility of prices dropping in Vancouver just after you buy that shiny new $400k condo right? But that feeling is caused by one common amateur mistake- you are failing to make hemispere adjustments to that data. Australia is on the other side of the earth, which is why we refer to it as ‘down under’. Before you attempt to interpret any Australian real estate market data you need to make one major adjustment, like this:
There! That looks a lot better doesn’t it? Look at that rise- It’s bold, steady and strong. Just like the Vancouver market!
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stuckinburnaby Says:
August 24th, 2006 at 10:45 pm
I love you Pope
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wizardofozziejurock Says:
August 24th, 2006 at 10:48 pm
That is too funny!
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Freako Says:
August 24th, 2006 at 11:56 pm
Encore! And two cheers for having no word verification.
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WoodenHorse Says:
August 25th, 2006 at 8:34 am
So clear now.
What was I thinking?
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dingus Says:
August 25th, 2006 at 8:44 am
What’s next, Christmas in summertime?
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richard Says:
August 25th, 2006 at 1:49 pm
roflmao! more stories like this please!
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the pope Says:
August 25th, 2006 at 2:04 pm
(this is the sound of me bowing)
thank you, thank you, don’t forget to tip your waitress.
Hey freako, do you ever sleep?!? you seem to be all over the blog-o-sphere 24/7. How do you do that?
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Anonymous Says:
August 25th, 2006 at 2:23 pm
Ok, just wanted to get the opinions of the bloggers on here. I am contemplating buying a condo in the New West area but I think it is overpriced ($305 for 970 sq./ft). Are we going to see this ‘correction’ or should I jump on this property now?
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500kcrackhouse Says:
August 25th, 2006 at 2:32 pm
yeah but, Vancouver’s got the Oly…
Uh, nevermind.
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kam Says:
August 25th, 2006 at 2:53 pm
anon- if you think its overpriced why are you considering it? If the numbers make sense to you and you want to live there then go for it, but keep in mind that historically condo’s don’t tend to increase in value much – they often depreciate.
No one can tell you if or when there will be a correction, but we’ve had two years of price increases and even realtors are expecting a correction in the condo market.
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Anonymous Says:
August 25th, 2006 at 3:17 pm
I am considering it for, what I thought, obvious reasons. Those are: 1) the market getting away on me and (2)we are seeing signs of a ‘correction’ but will there be a significant change in prices? For those reasons I am debating the purchase. FYI – it’s been on the market for almost 2 months. Units in this particular building do not stay on the market for over 2-3 weeks.
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solipsist Says:
August 25th, 2006 at 4:49 pm
Anonymous said…
I am considering it for, what I thought, obvious reasons. Those are: 1) the market getting away on me and (2)we are seeing signs of a ‘correction’ but will there be a significant change in prices? For those reasons I am debating the purchase. FYI – it’s been on the market for almost 2 months. Units in this particular building do not stay on the market for over 2-3 weeks.
1) The market got away on you (all of us actually) two years ago…
2) The correction has barely started. Next spring you can probably get that place for 225K, and next fall, for 150K.
Try offering them 200K – along with the links to this site, VHB, AFB, and a few others.
I am getting tempted to start making offers on things at 50% of asking price – just to give these optimists a heads-up to what is coming.
If that place has been sitting for a couple of months, don’t even think about it. Make an offer for at least 10% off asking, and tell them that your next offer will be 20% off, and so on.
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Anonymous Says:
August 25th, 2006 at 8:30 pm
LOL – that’s awesome… all hope is now restored.. thank you
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Anonymous Says:
August 25th, 2006 at 8:33 pm
but freako did you not forget something – the combination of global warming and the poles reversing – will this not turn Vancouver into Down Under??? omg…
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the pope Says:
August 25th, 2006 at 8:50 pm
Hey now! Freako is obviously a very bright guy, but I’m not willing to hand over credit for this insight.. I worked hard on this analysis and I’m taking all the credit.
The reversing of the poles doesn’t change the nature of my argument, one of us is still upside down in relation to the other.. not to mention look at this bright side: If our market crashes AND the poles flip all of our graphs will be upside down so they’ll go up again! hoo-ray for the power of nonsensical positive thought!
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Anonymous Says:
August 27th, 2006 at 4:27 pm
Great to have a blogger with a sense of humour and a sense of the written word.
Cheers!
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Anonymous Says:
August 27th, 2006 at 11:40 pm
Can anyone provide addresses to some other web pages that also discuss Lowermainland real estate? I’m new to this and was wondering where you guys are researching/browsing.
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Anonymous Says:
August 28th, 2006 at 12:43 am
ahh sorry pope – i didn’t read who wrote the article. But thank you for debunking the pole reversal theory – yes that chart flips no matter what scenario! YESSS!!
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Van Housing Blogger Says:
August 29th, 2006 at 9:29 pm
Hilarious. I love it!