Foreign buyers disappearing?
The problem with having your recession at the same time as everyone else is that it can put a damper on the dream that a wealthy foreigner will swoop in and bid the price of your Whalley pre-sale back up. According to this article, South Koreans are now purchasing 73% less overseas property than they were a year ago.
According to the Ministry of Strategy and Finance Wednesday, local residents purchased homes and other properties in foreign countries worth $25 million in September, down 73 percent from $92 million a year earlier. The number of transactions totaled 56, down from 288. The September figure was also lower than the $45 million of the previous month.
Overseas property buying in the third quarter totaled $141 million, down more than 50 percent from $312 million for the same period last year.
The ministry said the international financial market turmoil and the sluggish housing market at home and abroad continued to dampen local investor sentiment. The worsening credit shortage and the possibility of a global economic slowdown accelerated a drop in home prices around the world, discouraging Koreans from spending on homes and other properties in foreign countries.
I have a feeling that Korea is not the only country seeing a decline in overseas buying. But don’t give up hope just yet, the Canadian dollar has dropped dramatically against the US dollar recently, so once they get their financial house in order I’m sure we’ll start seeing lots of American buyers in BC again. Yessir, its only a matter of time.
A hat tip to Gadwin for the article link.
October 24th, 2008 at 6:48 am
I wish moving everything to cash would be the safe bet……….I wish moving everything to cash would be the safe bet
Others DID move to cash, which is WHY the surge in monetary base.
Yes, inflation will be nasty, and start soon, but first some more meltdown to survive.
I hope to be MOVE out of cash at that point, (that is MOVE, not BE out of cash!) but not yet. Won't be long….. Who came up with the "TSX Days to zero"? Yes, exactly. Could also be called "Your RRSP days to zero".
Sorry for that!
October 24th, 2008 at 12:10 am
Tomorrow is going to be quite a ride…
Every day is now quite a ride. The S&P 500 can move 10% by lunch. That would not be unusual this month. I wish moving everything to cash would be the safe bet…but as soon as everyone does that (assuming it will take 6-12 months) there is a risk that inflation could hit…just a wild guess. US Monetary base is now up over 30% year over year. Its a beautiful chart: http://research.stlouisfed.org/fred2/series/BASE?…
October 23rd, 2008 at 11:04 pm
Oh, and the Nikkei closed down ~9%(-811). DOW down 256 in pre-market. Tomorrow is going to be quite a ride…
October 23rd, 2008 at 10:56 pm
Here's the video to today's Global story. The media, as expected, is squeezing the air, much of which was their own, right out of this bubble.
On a separate note, my coworker listed his place at the end of August. His asking price was exactly 07 assessment despite his Realtor's request to go 4% lower. A month later and no bites, he had lowered it the 4%. Now, almost 2 months later, he is reducing it another 10% for a grand total of 14%. He was initially hopeful and greedy, saying that IF he received any offers, he wouldn't consider anything <2%. Now he's hoping for ANY offer. I wish him luck, he will need it.
October 23rd, 2008 at 10:39 pm
I think Global TV deserves *some* credit for the way they introduced the story with a mocking recap of RE boosters' past predictions of how it "can't happen here."
October 23rd, 2008 at 10:32 pm
Crabman – I saw that piece on the news tonight. I feel good about that. I think that 30% from peak is still a bit conservative. Take a house at $750,000 quick math says in 2010 that will be worth $525,000. Ouch $225,000 hit. I think it's, I'm thinking it will drop 40%(+).
There is a perfect storm with the credit crisis and the global recession. The funny thing is, people talk about RE prices and point to the recession, but prices would be falling regardless. Supply has outreached demand causing a glut (which has just started), thanks part in parcel to overbuilding, speculation and a lack of affordability. The rest of the issues that are occurring just add fuel to the fire.
October 23rd, 2008 at 10:06 pm
More money than God….
October 23rd, 2008 at 9:54 pm
Thanx VHB. That is amazing! The Nikkei top was almost 40,000 points and now it is 7,000 and change. Any idea of what that amounts to in yen or $'s lost?
October 23rd, 2008 at 9:43 pm
39K for the nikkei, actually. <a href="http://ca.finance.yahoo.com/charts#symbol=^N225;range=my" rel="nofollow">link. It's now 80% off its top.
October 23rd, 2008 at 9:41 pm
What was the top, 20,000 points
38,900 in late '89.
Mish brought this up today, comparing to S&P 500 since the tech bubble.
October 23rd, 2008 at 9:39 pm
japan's a lost cause, they don't make anything anymore that can't be made somewhere else (usually for cheaper), they have little or no raw materials, an aging/declining population, and to top it off they've alienated their neighbors by never apologizing for war crimes. it's not looking good for japan.
October 23rd, 2008 at 9:28 pm
No, they'll be getting the hell out of Vancouver because there will be no construction jobs and housing costs are way too f'n high for what jobs there are.
October 23rd, 2008 at 9:27 pm
Nikkei is currently down 600 points. Wow, how far is Japan going to fall? What was the top, 20,000 points? They have been in a decline for what? 15 years? They kept lowering interest rates until their central bank rate was 1/2 %.
We are curently using those same kind of fiscal polices. Are we headed for the same result?
You better hang on to your hat(cash)!
October 23rd, 2008 at 9:24 pm
Back on topic
I see. By my math that's C$7 billion that the S. Korea gov is throwing at their housing market. No wonder Koreans are pulling out of Vancouver…go where the bacon/welfare is.
October 23rd, 2008 at 9:20 pm
I don't buy jap crap SUVs because they make poor investments. I only buy American SUVs like Dodge Durangos, Hummers and Explorers. I've got a Navigator too. Things are still looking really good.
October 23rd, 2008 at 9:04 pm
Maybe people will still move here because our recession will be a lot less painful then the one most countries will be facing.
Right, the BC economy is bulletproof because BC consumers have so much money stashed away and we produce stuff that the rest of the world has to buy like…. um…..
….crabs?
October 23rd, 2008 at 8:47 pm
You guys have to see this one…
Is that a double, queen or king in the bedroom?
October 23rd, 2008 at 8:43 pm
Wow now half the condos are vacant? That's even a higher number then that Cadman whackjob quotes. Did that number come from Tim "Che" Stevenson?
Maybe people will still move here because our recession will be a lot less painful then the one most countries will be facing. It's not like they moved here in the last few years because we were growing more then China was.
October 23rd, 2008 at 8:40 pm
What will they be going East for, are they starting up the third shift at the Chrysler plant? Maybe Ford is opening up a new plant? Or is GM going to finally build the Volt?
October 23rd, 2008 at 8:39 pm
#73
You must be kidding around like John, half the condos downtown are vacant and there are 10,000 more units and who the heck moves to a country when
a)their country is in recession
b)Vancouver is in recession
I know these questions are beyond you, go back to the warehouse
October 23rd, 2008 at 7:54 pm
as well we’re down at least 2thousand units enough to house 4thousand people. Looks like there will be more people fighting for those rental units.
don't forget the 120K construction workers heading East when construction wraps up or is canceled here….
lotsa basement suites will be empty
bye bye mortgage helper ….
October 23rd, 2008 at 7:39 pm
With most of the 21K listings currently occupied those people still need to live somewhere so that's not adding to supply. Now all these projects getting shelved where is everyone going to live? All the data I've seen shows 30-40thousand people moving here every year. With the Ritz, evelyn, V6A, victoria hills, sky towers, probably infinity as well we're down at least 2thousand units enough to house 4thousand people. Looks like there will be more people fighting for those rental units.
October 23rd, 2008 at 7:32 pm
In the U.S. it appeared to be a gov’t initiative to get more people into home ownership
Dingus, OP was right about the government initiative. Here's the proof:
"…if you own something, you have a vital stake in the future of our country. The more ownership there is in America, the more vitality there is in America, and the more people have a vital stake in the future of this country."
-President George W. Bush, June 17, 2004
In June 2002, President Bush issued America's Homeownership Challenge to the real estate and mortgage finance industries to encourage them to join the effort to close the gap that exists between the homeownership rates of minorities and non-minorities…
Fact Sheet: America's Ownership Society: Expanding Opportunities
What's that Sarah? You say Bill Clinton was responsible for the housing bubble, not that guy whose name you can't mention? Well by God Clinton must have hacked the White House website. That man will stop at nothing.
October 23rd, 2008 at 7:27 pm
"helmut never gave a proper analysis why he expected prices to rise by 10%, and now no analysis for his new prediction. looks like he just goes with the flow. not very good service for his credit union members. he should be fired."
Stagnate:
If Muir, Pastrick, Adamanche, and all the mortgage, and property pimps put out anything less than the BS they put out, they would be canned.
Their job is to dispense the Kool Aid, to an all the too willing Vancouver Re believers.
October 23rd, 2008 at 7:22 pm
don't know if anyone's mentioned v6a here already. ctv says they've stopped work on it downtown too… wow, with all the developments grinding to a halt, i'm having a hard time keeping track of them…
October 23rd, 2008 at 7:16 pm
There certainly is a lot of domestic demand, unfortunately in some cities things have gotten out of control, like here
I agree that income statistics can be misleading, but rents don't lie, be it in Vancouver or Eastern Europe.
If a property sells for 300x its market rent, the price has nothing to do with the actual demand for shelter and there is a bubble. That's all there is to it.
October 23rd, 2008 at 7:04 pm
helmut never gave a proper analysis why he expected prices to rise by 10%, and now no analysis for his new prediction. looks like he just goes with the flow. not very good service for his credit union members. he should be fired.
October 23rd, 2008 at 6:46 pm
"Helmut Pastrick, of the Credit Union Central of BC, is a crude extrapolator, not a forecaster."
WHAT A GEM, CHECK OUT THIS COMMENT:
"Hey everyone, come take a trip with me in a time machine back to March 17, 2008, when cbc.ca posted the article titled "B.C. house prices forecast to keep rising", and cited this claim from the Credit Union Central of BC:
"A report by the Credit Union Central of British Columbia predicts housing prices will continue to rise by as much as 10 per cent this year and as much as seven per cent in 2009."
Helmut Pastrick, of the Credit Union Central of BC, is a crude extrapolator, not a forecaster.
I implore the cbc and other media to check the veracity of "predictions" made by "experts" based on their forecasting records, especially those records published on their own websites, available to anyone with a search engine and an internet connection"
http://www.cbc.ca/canada/british-columbia/story/2…
October 23rd, 2008 at 6:42 pm
Yeah, IGC, funny how you can't link to a television show!
They repeated the story on the 6:00 global news, updated with cool graphics and a depressed looking Helmut Pastrick.
October 23rd, 2008 at 6:20 pm
The Dude is absolutely right regarding situation in Eastern Europe. People in urban centers, especially capitals, have much higher income (easily 10x or more) compared to country side. A lot of income does not get declared and no taxes paid on it, so actual net income is much higher than what one would expect based on official numbers. A lot of people in the country side live on what they grow, so this part of the economy does not register in the stats either.
But the prices are absolutely out of proportion there, even when different quality of housing is considered between older buildings and new ones. It will all come down now that banks can't finance this craziness any longer.
October 23rd, 2008 at 6:03 pm
Wha?? $4600 for a 1 bed in Richmond? WTF? I'd like to call this guy and say "are you serious? prove it!" hmm…maybe it has a meth lab/grow op in it, that's the only way this makes any sense at all. Rent should be what, $1200 max??
October 23rd, 2008 at 6:00 pm
they expect prices to fall 30% from the peak over the next two years.
Good to see the media finally getting the message out to Joe Six Pack & Sally Lunchbox, though the magical rebound in 2010 is of course never explained nor justified.
October 23rd, 2008 at 5:59 pm
Hey crabman you mention Global talking about House prices but you linked to CBC. Time to use a different ointment.
October 23rd, 2008 at 5:59 pm
Post # 57:
Ad looks like a joke…obviously 2 beds…check out the photos.
$4600 month gross income?…ok a pimp that sells drugs and dabbles in stocks and flipping condos.
Pretty obvious.
October 23rd, 2008 at 5:54 pm
Back on the topic, Bloomberg reports of trouble in South Korea's economy.
October 23rd, 2008 at 5:36 pm
I'm sure Arit's oddity rent example is trolling for a very foolish and naive buyer, and the person "renting" gives notice the day after closing.
October 23rd, 2008 at 5:34 pm
Just finished watching the 5:00 news on Global. They reported that RE prices have fallen 12% already, and they expect prices to fall 30% from the peak over the next two years.
Here is the link:
http://www.cbc.ca/canada/british-columbia/story/2…
What took them so long!
October 23rd, 2008 at 5:00 pm
You guys have to see this one…
http://vancouver.en.craigslist.ca/reo/888020120.h…
"$325000 Seller Financing/Positive Cash Flow/No Money Down/Have To Sell (Richmond)
…
bedroom,1 bathroom condo in Richmond.Brand new concrete high rise
Positive cash flow every single month.$4600.00 gross per month in rental income.$2700 per month net income "
The rent there is… 4600 for a 1 bdr condo. In richmond.
Funny!
October 23rd, 2008 at 4:58 pm
Long time reader, first time poster. Can I just say that I'm not a fan of the words getting small with the ++ minus hands. Disagreement is what keeps the discussion going. Without it, it'd be just a bunch of yes man patting each other on their backs. Hopefully that can be fixed.
*back to lurkdom*
October 23rd, 2008 at 4:29 pm
So dingus
Following your " facts " WTF happened to create the mess in the U.S. ?
October 23rd, 2008 at 4:23 pm
You know things are bad when CBC is tracking delayed or on hold construction projects. Where's Evelyn?
BTW Pope, this site is super fast all of a sudden. Did you add a few more hamsters? Either way, good stuff!
October 23rd, 2008 at 3:50 pm
"In the U.S. it appeared to be a gov’t initiative to get more people into home ownership( especially those that wouldn’t normally qualify…more a socialist experiment than speculation, though of course this certainly encouraged speculation . They referred to this as the NINJA’s ie No Income No Job or Assets."
OOofff… this Republican talking point has be debunked so many times it's not funny. Only ONE of the top 25 subprime lenders was subject to the Community Reinvestment Act. Only one third of the loans under the CRA had rates high enough to qualify as subprime. Further, the performance of these loans has been better than the performance of subprime loans that were not initiated through the CRA.
Private industry did this to itself.
October 23rd, 2008 at 2:39 pm
"Economic downturns are always bad for incumbent parties, so I would expect Obama to talk up the problems and McCain to talk them down, just as Dion and Harper (who magically discovered we had problems right after the election) respectively did."
Economic downturns are death to incumbent parties. The Campbell government is turning on the spending left right and centre to try to delay job losses until after May.
Harper called an election before the inevitable fallout. Dude's a smart and calculating economist (rare
) and likely saw the word "recession" written on the wall along with BoC governors Carney and Dodge. He failed in his majority attempt. If the Libs clear Dion and get a strong dark horse leader in place fast, they are back in the game in 1-2 years.
October 23rd, 2008 at 2:37 pm
So John and Krish were the same person after all.
This part is especially funny
"3.Rents are up here and vacancy rates are zero."
Is that why there are over 100 units in the Ritz for rent? I looked at three last week for $1400, $1450 and $1500 (brand new 680 sq ft) and they all would have taken me on the spot but I know I can do better.
Rent has dropped over 20% since the summer and will crash more!
Yet again this was easy to see coming and I predicted it on this blog, check the archives.