Comments on: Canadian housing boom ‘definitely over’

By: YLTNBoomerang

YLTNBoomerang — Fri, 19 Sep 2008 00:02:27 +0000

Checked out "The Rise". Seemed good at first, then counted all the stairs that are "not included in sqft calculations" - BS, they are and with three sets in the tiny units you can dream on. Next, the decent sized units have no storage space or one tiny closet in the bedroom and none by the door - they are decent sized because they left no room for storage. Speaking of storage, if you want a locker, that's extra. Oh, and the place is zoned live/work so if you want to rent, you have to pay GST on the workspace regardless of whether you are using it as live work - extra 50-75/month, cha-ching. Then parking, oh yea, $100+gst/month for parking; cha-ching. Oh I thought, at least they have nice big balconies for bbq's, something you don't see anymore...oh, NO BBQ allowed, not even gas, you can use the common area one. Speaking of common area, heh heh, this is the best, they have a common party room that consists of a couch, chair, table and chairs, sink, and the excercise equipment (5 machines) WTF????? "Hello, I'd like to book the party room for a wine and cheese but do you think you could get the sweat stink out or ask the people exercising to not perspire". Good luck Grosvnor!

Current score: 0 (to vote for this comment, please visit the site)

By: dug

dug — Thu, 18 Sep 2008 22:35:10 +0000

Just as housing markets take longer to tank than stock markets they can take a lot longer to rise again as well. I think I read that anyone who bought at the peak of 81 didn't see their vancouver house hit that price again until 1996, that's 15 years! And thats just break even, never mind the fact that transaction costs are much higher on real estate, and generally you want an investment to return a profit, not just break even.

Current score: 0 (to vote for this comment, please visit the site)

By: Drachen

Drachen — Thu, 18 Sep 2008 22:00:45 +0000

Increased liquidity will always result in the possibility of greater turns, just as lower liquidity will always cause slower turns. In just one week many major stock markets have lost up to 10%, I defy you to find a real estate market that drops that quickly. The average selling time for a house is measured in months, for stocks it can be minutes, it's like comparing a blue whale to a dolphin for it's turning ability. Sometimes the dolphin will turn more slowly than the whale but even a moderately quick turn by the dolphin cannot be matched by the whale.

Current score: 0 (to vote for this comment, please visit the site)

By: dingus

dingus — Thu, 18 Sep 2008 21:03:36 +0000

"It doesn’t strike me that an asset has to be liquid for it’s implied value to tank in very little time." Best sentence I read today. Other than the misplaced apostrophe, I mean.

Current score: 0 (to vote for this comment, please visit the site)

By: arbitrage

arbitrage — Thu, 18 Sep 2008 20:08:47 +0000

MickeyFinn, sounds like we're agreeing on the same bits except for the foreign ownership thing - though i have no numbers/anecdotal evidence to contribute except for pointing at the landcor study posted recently. I guess it doesnt matter - there will be a forced sale by the over leveraged - foreign or otherwise. I just don't want MSM watchers bleating that it was wall street that killed vancouver's re market. And politicians calling for a foreign speculator tax.

Current score: 0 (to vote for this comment, please visit the site)

By: MickeyFinn

MickeyFinn — Thu, 18 Sep 2008 19:18:00 +0000

Yeah, I would agree that stocks are more liquid than real estate... then again, we have seen 150 year-old Wall Street investment banks go from having a $50 billion market cap to bankrupt within the space of a year. You'll probably agree that investment banks (and global insurance giants) aren't exactly a liquid asset. It doesn't strike me that an asset has to be liquid for it's implied value to tank in very little time. As far as the amount of foreign ownership of Vancouver real estate. I'll have to diagree with you there. I was involved in the purchase of an extremely large tract of land in downtown Vancouver which had some developments in-progress that we as the purchaser had to complete (I.e. projects that had already been pre-marketed and sold). The number of units sold to non-Canadian was shockingly high. You are right that "pride of ownership" is a real factor. There is plenty of real estate that will never change hands outside of certain families because it is irreplaceable. That's not going to make much difference to general price levels when there's 10,000 too many condos in Vancouver's West side. It only takes some of the stock of real estate to change hands for prices to plummet. Capitulation happens to the few but affects the general mind set of many. Oh and one last thought... when markets go through upheaval, they frequently overshoot the point of FMV. In the same way that markets get over-heated they also get way to pessimistic. My guess is that by the fall of 2009 people may be predicting that it will take 10 years for the Vancouver market to recover.

Current score: 0 (to vote for this comment, please visit the site)

By: arbitrage

arbitrage — Thu, 18 Sep 2008 18:25:33 +0000

i mean - stability (owners)

Current score: 0 (to vote for this comment, please visit the site)

By: arbitrage

arbitrage — Thu, 18 Sep 2008 18:24:48 +0000

+/- some intangibles that are hard to put a value too: - pride of ownership, etc... (owners) - stability (renters) - mobility (renters) Plus a bunch of other qualifiers to make my statement more grey and reasoned.

Current score: 0 (to vote for this comment, please visit the site)

By: arbitrage

arbitrage — Thu, 18 Sep 2008 18:21:48 +0000

Regarding speed of bubble deflation - not sure if we can draw this parallel, since stocks are more liquid than real estate. Re: foreign investors based on a landcor study posted previously - foreign investors were never a big part of the vancouver housing market. So although in tune with the direction "we" want the housing market to move in, i don't think we should use foreign investors bailing as the main reason. We do not need external reasons when the numbers speak for themselves - when renting is cheaper than owning, owning real estate is over valued.

Current score: 0 (to vote for this comment, please visit the site)

By: MickeyFinn

MickeyFinn — Thu, 18 Sep 2008 17:22:36 +0000

The Chinese stock market is now down over 70% from its high of the past year. Chinese authorities are taking measures to restore calm in the markets.

The Russian market has been shut down by the authorities after absolutely plunging this week (down 25% in a single day).

The US government has just bought 79% of AIG (the global insurnace giant) by providing an $85 billion loan all in the name of enabling an “orderly liquidation” of AIG’s one trillion in assets. And that on top of the bail-out of Fannie Mae and Freddie Mac and after having issued cheques to every US citizen to kick-start the US economy.

What does this all have to do with Vancouver real estate?

Plenty.

First, it shows just how easy it is to deflate a bubble… and to do so very fast.

Second, and more importantly, Vancouver is not sheltered from the world economy. In fact, Vancouver is highly connected to the rest of the world’s economies by the simple fact that surprisingly large amounts of our real estate is held by non-Canadians.

I have been a bear as regards the Vancouver real estate market for a number of years as I have watched every guy and his dog get into the development game. I have been even more of a bear when I look at the disconnect between rents and selling prices of identical units (how about investing in real estate with a cap-rate of 2) but I have wondered aloud just what would be the catalyst that would finally crash the party. Well, the devastation of the global stock markets combined with – and caused by – the global credit crunch could be just that catalyst.

Just imagine what it will be like for real estate sellers here in Vancouver if any sizable portion of the off-shore holders decided that now would be a good time to sell that Vancouver condo/house to repatriate the money back home to cover a trading loss or take advantage of the depressed price of an investment closer to home.

No-one knows for sure just how many units that have sold in the past five years have been sold to off-shore investors but we all know that it is a large enough number to be able to swamp the local market if Vancouver real estate should fall out of favor.

I get downright giddy at the thought of those same off-shore investors being “forced to sell” should they be experiencing margin calls or having bank loans called.

We could see an outright glut of real estate in our market and an outright collapse of prices.

Yeehaw.

Current score: 0 (to vote for this comment, please visit the site)

By: oziijjiizo

oziijjiizo — Thu, 18 Sep 2008 15:28:38 +0000

for real estate followed by many more years of steady depreciation and good times for all. yesss! affordability..... a bears' wet dream!

Current score: 0 (to vote for this comment, please visit the site)

By: john

john — Thu, 18 Sep 2008 15:14:37 +0000

You bears make me laugh. This is just a hickup on the way to a soft landing for real estate followed by many more years of steady appreciation and good times for all.

Current score: 0 (to vote for this comment, please visit the site)

By: oziijjiizo

oziijjiizo — Thu, 18 Sep 2008 14:36:57 +0000

Where have all the bulls gone? Welcome to the running of the bulls YVR RE style... exit stage left!

Current score: 0 (to vote for this comment, please visit the site)

By: patriotz

patriotz — Thu, 18 Sep 2008 07:32:49 +0000

How’s the basement suite? Really easy on the net worth and disposable income, thanks.

Current score: 0 (to vote for this comment, please visit the site)

By: slade

slade — Thu, 18 Sep 2008 07:08:36 +0000

To Drachen, Maybe they have a life? How's the basement suite?

Current score: 0 (to vote for this comment, please visit the site)

By: Drachen

Drachen — Thu, 18 Sep 2008 06:14:14 +0000

Where have all the bulls gone? Too busy trying to sell?

Current score: 0 (to vote for this comment, please visit the site)

By: Drachen

Drachen — Thu, 18 Sep 2008 06:13:00 +0000

Well there's a new record in town. 20,333 inventory at Paul's, surpasses July's peak of 20,280. So much for sales picking up in the fall huh?

Current score: 0 (to vote for this comment, please visit the site)

By: patriotz

patriotz — Thu, 18 Sep 2008 04:08:51 +0000

In any case, I don’t remember where I read the stat, but Moscow has the highest price/sq. ft of any city in the world (real value, not relative to anything.

This statistic is probably for new development in the central (expensive) area. All such development is high end or ultra high end, and this skews the statistics. Existing Soviet-era stock is much cheaper, although not cheap by any standard.

You read all sorts of crazy “statistics” about costs in Moscow that are actually for luxury lifestyles and have nothing to do with the other 95% of the population.

5000$ per sqft in Moscow.

Nope, even the Western standard stuff is way cheaper than that. Take a look:

http://www.evans.ru/search/?ty.....diately=on

Take a look at #9 and #10 at the bottom. $675/sq ft. Now that’s pricey, but they don’t compare too badly to Infinity really (with which they are comparable). Those apartments would rent for $1500/month or more so price/rent, although high, is not as crazy as Vancouver. Rentals:

http://www.evans.ru/search/?ty.....diately=on

Current score: 0 (to vote for this comment, please visit the site)

By: zzbear

zzbear — Thu, 18 Sep 2008 02:43:31 +0000

I received a flyer in the mail recently from a realtor that sold a house in our area. House was listed for 469k and sold for 440k. The strange thing was that the DOM was 3 days. Why would they sell almost 30k less than asking after being on the market for only 3 days??? Another interesting thing is that I haven't seen a house sell for less than 500k in our area for a long time (even the little tear down ones on small lots). What's missing in this picture?

Current score: 0 (to vote for this comment, please visit the site)

By: What Bubble?

What Bubble? — Thu, 18 Sep 2008 01:15:49 +0000

satv Says:
May 29th, 2007 at 10:23 pm
“and the next station is”

where ever you go what ever you do I will be (not here)right there waiting for you.

price up has changed the lyrics of richard marx.

if you leave 11.5% up you will find 29.5 % up on next station.

I mean to say if anybody think of moving you will be broken.

anybody think of price fall the june numbers will disturb the picture.

what can you take out of shoe box if you are a developer.

Colleen said

This is a case of the ridiculously rich and the rest of us. Why are we not considering the quality of life in Vancouver for its citizens as well as its development? Where are our elected, well paid politicians? We do not live in London, New York, Tokyo or Hong Kong. This is not Europe. We are Canadians-with our own histories, roots and expectations about how we live. This is what makes Vancouver such a beautiful and special place.

Sincerely,
Colleen

sir I beg your pardon but country’s self strength measure through on its self dependentness, issue is to decide if canada is self dependent to supply our needs,

I don’t think so

chinesenoodles,italian pasta,indian curry canada is multicultural socaity.most of stuff being import from all over the world so our canadian value can not control price’s and architectural structure.

if we can produce cunstruction matterial,and grocery we can reserve our value.

this is not to hurt any sentiments but this post I found suitable answer from best what i can think.

but related thing you can count like we have most jobs in communication not in any original production.so we are dependent on other.

in comunication people can only sell lottery.

Current score: 0 (to vote for this comment, please visit the site)

By: Deja Dosh

Deja Dosh — Thu, 18 Sep 2008 01:10:53 +0000

# 14 dosh Says: June 16th, 2007 at 9:15 am We may have the ‘least affordable’ real estate in canada, but so far I havent seen that keep prices from going up.

Current score: 0 (to vote for this comment, please visit the site)

By: DEFAULT NAME

DEFAULT NAME — Thu, 18 Sep 2008 01:02:39 +0000

even thums up2 realises the market is going to go down for the rest of our lives

Current score: 0 (to vote for this comment, please visit the site)

By: arbitrage

arbitrage — Wed, 17 Sep 2008 23:00:13 +0000

oh, and not Prompton… Gateway Property Management

Current score: 0 (to vote for this comment, please visit the site)

By: arbitrage

arbitrage — Wed, 17 Sep 2008 22:59:09 +0000

i'm talking about the 2200/month, 942sqft unit.

Current score: 0 (to vote for this comment, please visit the site)

By: arbitrage

arbitrage — Wed, 17 Sep 2008 22:57:45 +0000

re: the rise rent rates – i think they’re going by $/sqft – their 1 bedrooms are large compared to yaletown.
I thought Prompton was their property manager.
…yep, they still are – they’re going for $2.34/sqft (based on 1 of the units) – 1 bed, 2 bath. Bit high for that side of the creek?
Though, still lower than Spectrum’s wishing rents (based on vancouverguy’s stats)
Also, 1 bed 2 bath – what demographic is that? Perhaps dinks? Young ppl who like to entertain?

Current score: 0 (to vote for this comment, please visit the site)