Here’s your open topic post for friday June 8th.
– Fearing the end of easy credit
– Posted 5 year mortgage rate goes up again
– Richmond prices up, condo sales drop 23%
– Disclosing landslide risk
So what are you seeing out there? Post your news, anecdotes and links here!
"Vancouver is behind Winnipeg for new house price increases, and nowhere near any other Prairie cities."New house prices are very flakey. Disregard.
Winnipeg is Bizarro Vancouver. Static population, no immigration, no international visibility, unlimited flat land, Arctic winters, and an NDP government. And prices are going up? Take a bow, Lex Luthor.
Looks like we're running out of land in Winnipeg!Wait a minute, I thought they were running out of people? So they're running out of both land and people to live on them. Is Winnipeg shrinking or something?
<a href="http://www.statcan.ca/Daily/English/070611/d070611b.htmhttp://www.statcan.ca/Daily/English/070611/d07061… />Vancouver is behind Winnipeg for new house price increases, and nowhere near any other Prairie cities.Victoria is falling.
"Concerned? I'm laughing"I don't think that was meant as "concern" of the maternal instinct variety.
I'm more concerned about the Chinese holding the American MBS bagConcerned? I'm laughing. After years of taking IOU's from the alcoholic, the bartender is going to discover they're not good for much more than lighting the fireplace.
I think the risk and impact of the Chinese stock market has been overstated. It's still just a rigged casino, and most Chinese don't really see it as a capital market to put their savings in. From the streets of China, most people are still putting their money in Banks, and RE is still the primary wealth building tool. The bubble will burst, but the impact won't be too large. This won't be the first stock bubble, and it won't be the last. I'm more concerned about the Chinese holding the American MBS bag, as they seemed to hold the some of the most toxic MBS generated in the past 2 years.
Incidentally, has any of you followed what is going on over at Chipman?Meh, same old shtick at the Flat Earth Society. Nothing to see here, folks, keep moving.
Incidentally, has any of you followed what is going on over at Chipman?There is some near guy who is being slammed left, right and centre. He does not seem to give up, though.
"Who can buy the "A" shares??Only Chinese citizens living in China can and through the Chinese stock exchange. "Not sure what you are getting at here. How does this fact change anything with regards to how marginal price pressure can inflate prices by orders of degree?"While "A" shares market can be inefficient, there's no fair play involved since only the Chinese can play this game. "I assume you meant unfair play?"There's also a limited amount of players in the Chinese "A" shares market since the majority of Chinese in China aren't all that rich and smart to speculate. "They are not smart, and that is exactly the point. That is why they are jumping straight into a bubble. They are buying because prices are going up. Prices are going up because people are buying. With regards to not being "rich",… Read more »
There's also a limited amount of players in the Chinese "A" shares market since the majority of Chinese in China aren't all that rich and smart to speculate.Despite the vast numbers of poor Chinese, many are middle class if not wealthy. You're mistaking percentages for raw numbers. For example, 5% of a billion is still 50 million people.Chinese citizens for the most part aren't rich and neither are they able to save anythingAgain, you're confusing percent with absolute numbers. Further, you're confusing household saving (which is high, despite your claims) with national saving, which is enormous.the Chinese government will never let their people suffer through a severe recession. It is after all a Communist state still!!As the doc "China Blue" suggests, those in power care little about what happens to peasants. Further, despite a central government, the economy is now… Read more »
thevanman: China doesn't buy much BC lumber, or BC coal. It buys mostly oil and gas, which pushes up commodity prices of ALBERTA. BC is heavily FORESTRY based, a resource not yet needed in China. As for chinese money floating around, why isn't it flowing to Las Vegas or Florida? Come to think of it, Canada is not necessarily on the best terms with the Chinese company, compared to most resource based nations in the world. China has a lot of savings, for sure, 1 trillion alone in foreign reserve, and 110 billion in US MBS apparently — yes, they're one of the bagholders of US bubble, among the French, Italian, and Dutch. However, I don't see it flowing to Vancouver RE more than today, or flowing to BC resource sector. They might be interested in BC coal, but that's… Read more »
Freako said;But in the case of Chinese stocks, it is simpler.1. Prices are set at the margin2. There really isn't a payout, as people don't cash out. If more people cashed out, prices wouldn't be rising as fast.I say;It is not the simple.. We seemed to assume that Chinese stocks are available for purchase outside of China through trust holdings in mutual funds, index funds or individual ADRs. Unfortunately, these investment vehicles only hold the "H" shares of the underlying securities. As I said earlier, there's nothing obscenely wrong with "H" shares — they follow fundamentals. If they don't, a correction is likely.However, the securities in question is the "A" shares of the same underlying companies..Who can buy the "A" shares??Only Chinese citizens living in China can and through the Chinese stock exchange. Me and you can't do that, unless… Read more »
"It's really very funny that the very same company that is listed in Hong Kong does not appreciate much at all because of P/E fundamentals (this is the H shares), whereas the same company shares (listed in the Chinese stock exchange as A shares) can appreciate from 300% to 700% in just a few days"We had a similar situaition when Germany unified. It is called market inefficiency. It will correct itself. Will HK rise or will Chinese shares fall? "Now you tell me. How could every gambler in the Casino get a guaranteed payout of 300-700% in just a short time with just a limited pool of money? "You are looking way too deep. Yes fiat money can cause asset inflation.But in the case of Chinese stocks, it is simpler.1. Prices are set at the margin2. There really isn't a… Read more »
Here's an article published in the Belfast Telegraph. Before anyone scoffs, Belfast house-price rises over the past few years have made Vancouver's lastest spasms appear quite restrained.The journalist is a friend of mine and i take some pleasure in knowing that it was i (after reading VHB) that began teling him of the potential for a Belfast melt down. This article is probably the first time that any 'bear' comment has every hit Belfast's biggest newspaper. http://www.belfasttelegraph.co.uk/news/opinion/article2633173.ece
Freako said,I don't follow your logic. A specific situation is analyzed, and then you expect Vancouver to follow this specific situation?Unlike our US neighbors down south, Canada has always been resource based. It was clearly demonstrated during the last Asian downturn (1997), where we suffered more than the Americans did. Globally, our stock market size is less than 3% and yet, the TSX composite has appreciated much much more than our American counterparts. In fact, the talk on business TV these days are nothing more than mining/exploration/gold/oil and gas , your typical resource sector. Why is that?Let me explain..China is a great country to make money in. Imagine putting in $200,000 in a stock and in 2 days, you'll make a guaranteed profit of $1 million bucks! It's not a joke.This is reality.We are talking about the Chinese stock market… Read more »
jeff: I think the investors are no longer buying Yaletown condos. I believe it takes obvious upward price trends to keep specuvestors in, when they are running a negative cash flow. This is why prices can unwind fast. Feer is a more dominant trate than greed.
There's an interesting article ("Labour wins court fight") on the front page of today's Edmonton Journal. It seems that oil sands companies such as CNRL were given special powers which allowed them to dictate wages to all tradesworkers on their project.Those powers have now been struck down by the Supreme Court. Any new oil sands project developer will have to negotiate separate deals with each and every union. This should make any new project much more expensive and time-consuming.
It will take a substantial economic downturn in all the resource sectors to realize our impending RE crash in Vancouver. When is the question.Was the current crash in Florida brought on by a fall in the price of orange juice?A falling US$ is good for tourism, a major industry in Florida. Makes RE look cheaper to foreign investors too.So why are prices falling so much? (hint: "ghost towns").
I totally agree on forestry, and we city slickers need to be reminded of its importance.The high dollar should also be hurting film-making.And of course, once all the Olympic and housing construction is done, we'll have a big up-tick unemployment for trades and REIC.I think this province will be in a mess by 2010.
By the way, I keep mentioning forestry because I believe the coming downturn in BC will be more severe than Las Vegas/San Diego/Miami. I expect general economic activity, wages, and rent to go down substantially, due to impact of forestry. In other words, I expect a Rust Belt style burst, as in Detroit and other Big Auto cities. In medium term fundamentals, Vancouver is actually worse than Miami and San Diego. At least IT is in recovery in South California, and Tourism is somewhat helped by weak US dollar in Florida.
"It will take a substantial economic downturn in all the resource sectors to realize our impending RE crash in Vancouver. When is the question. "Well, compare the size of oil/gas/mining to the size of forestry, and you'll see how dominant an effect forestry plays. Despite the softwood lumber dispute, forestry in BC has enjoyed high lumber prices for the past few years. That, coupled with the last minute rush of stockpiling before the softwood lumber deadline, means there will be substantially less activity in forestry sector in the near future. Just take a look at a historical charge of lumber price, spanning from 1999 to present, and you'll see the difference. Yes, BC has more than forestry. It has natural gas, mining, IT, and tourism, all of which generate significant cash inflow. However, forestry is in fairly deep trouble, compared… Read more »
All the economic arguments on this site and VHB in the past are all fine and everything. But generally I think when people no longer expect price increases and realize that markets also decline… then we'll see momentum on the downside. I personally feel that I can make a living as a Realtor in any market. I am always trying to be ahead of the curve and in fact I called 4 of my listing clients this week to discuss price decreases for their Yaletown condos. Seems like the Buyers are no longer out there… and the ones that are, are taking forever to decide to buy. At $600 per sqft I don't blame them… comparing to rent I would expect prices around $350-400 sqft on average.
income mapThe stats are a few years old. But still… I think Vancouver is in a world of hurt once the home equity dries up.
"This led to the researcher's conclusion that it was intrinsic to the specific country rather than external influences.If you look at our situation now, our neighbors down south are suffering from a RE meltdown. Yet, we are not."I don't follow your logic. A specific situation is analyzed, and then you expect Vancouver to follow this specific situation?It is really not that complicated.1. This RE boom is much more global than the Hong Kong one of the 90's.2. There was nothing Las Vegas specific that caused their inventory to explode and prices to fall. Same for California, Phoenix and Florida. Why should there necessarily be one for Vancouver.3. The fact that we haven't followed the U.S. yet, doesn't mean that we won't. Maybe we are just a little bit more stubborn, or maybe we feel insulated by our "hot economy" and… Read more »