Bloomberg on Vancouver housing slump
It looks like Vancouver’s housing slump is starting to get attention from outside Canada. Several people pointed out this Bloomberg article about our declining real estate market.
West Vancouver builder Sean Hanley thought Canada’s real estate market would be immune to the housing recession that sent values tumbling in the U.S. Then the economy slowed and oil prices fell.
The price of a detached house in this upscale community fell 22 percent in October from a year earlier, helping to drag the average residential price in Canada down by 9.9 percent, the biggest decline in 26 years, according to the Real Estate Board of Greater Vancouver and the Canadian Real Estate Association. For Hanley, that’s meant nary a buyer for his five-bedroom home.
“It’s been a little bit surprising the consequences of the subprime crisis have been so far-reaching,” said Hanley, 48, who has cut his asking price to C$3.99 million ($3.26 million) and is now offering a C$100,000 bonus, on top of regular fees, to the agent who delivers a buyer.
This isn’t the first time we’ve seen offers of a bonus to the buyers agent instead of a price reduction, but I’m a bit suprised that it’s acceptable to openly pay the buyers agent to represent the sellers interest. Is this even an effective technique?
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November 19th, 2008 at 11:25 am
I am number 1…… I tink
November 19th, 2008 at 11:37 am
“The only other option is to reduce my asking price by C$600,000 to C$700,000 to where I’d be virtually giving the place away,” Hanley said. “I’m not about to do that.”
yeah, giving at away, for 3.3 million dollars, lol.
I don’t doubt the place is grand, but denial pervades.
November 19th, 2008 at 11:37 am
I guess the other angle would be if a buyer was out looking at 5 or so different homes then the agent (who was in the know about the commission bonus) would then lead the client in the direction of the home with the bonus. That shows a real lack of belief in the integrity of your fellow realtors. Now integrity aside Realtors have to disclose what we get paid as a buyer’s agent. It may be an awkward conversation to have with the buyer “oh ya buy the way the house I insisted you buy also offers me an additional 100k in commission…sign here”
November 19th, 2008 at 11:45 am
The “buyer’s agent” is always openly paid to represent the seller’s interest, because he’s paid a sales commission just like the seller’s agent.
Not too hard to figure out is it?
November 19th, 2008 at 11:54 am
November 19th, 2008 at 11:17 am
“West Vancouver builder Sean Hanley”
*Builders are not like home owners interest rates that apply to home owners are different than builder,Builders interest rates are very similar to credit card so $100,000 or $200,000 bonus is still a profitable for Hanley type of builder as he is being rat on bloomberg let him scream for exit but home owners no need to scream as rents are higher and interest rates are low http://cuer.sauder.ubc.ca/cma/…..erates.pdf
“For Hanley, that’s meant nary a buyer for his five-bedroom home.”
*Scream Hanley Scream greedy builders you should have measure the size of population and supply of other projects.
“At the same time investors stop buying. Prices are set by the few participants willing to buy. NOT the sellers.”
*Patriotz,There is a technical error in what you saying i mean to say you are not different than what paul is saying,when satisfaction for sellers does not meet than buyers reconsider the merging sense so you and him are moving around each other.
“Your continuing suggestive rhetoric tires me. It serves no purpose other than to taint my reputation. Will, be clear in noting that I am strongly recommending to you that you cease your disparaging personal attacks.”
*Larry you deserve some rants for poping out too early WILL’s point is if you know the insight you should wait atleast a month to report something however What makes you to pop out to report 10 days while real estate count month over month and year over year?Are you trying to scare the sellers or telling the buyers not to jump in?Check your age and your attempt does not match with your outcome.
*Other side Paul has a good point and i know where he is coming from now he know one thing for sure that is one and the only true fact that VANCOUVER REAL ESTATE NEVER GO DOWN
November 19th, 2008 at 11:55 am
Haw haw
November 19th, 2008 at 11:59 am
As was the subprime crisis itself.
November 19th, 2008 at 12:01 pm
“Canada’s housing market seems to be tracking the U.S. with a two-year lag,” said David Wolf, a Toronto-based economist with Merrill Lynch & Co.
In Hanley’s West Vancouver, 565 detached homes were on the market last month, 88 percent more than a year earlier, according to the Real Estate Board of Greater Vancouver.
Sales fell to 19 from 51 a year earlier. The price of a benchmark, or typical, detached house in West Vancouver declined to C$1.14 million from C$1.46 million a year earlier, said Craig Munn, a spokesman for the board.
Though Hanley says his offer of a C$100,000 bonus has increased awareness of his home, he’s starting to think it may be easier to rent the place.
“The only other option is to reduce my asking price by C$600,000 to C$700,000 to where I’d be virtually giving the place away,” Hanley said. “I’m not about to do that.”
Perhaps Mr. Hanley should be reminded why Wal Mart is so succesful.
You can get Poor catering to the Rich … and get Rich catering to the Poor.
This Canadian delusion of being insular to the world on so many fronts needs to be turfed ASAP.
Re West Van:
I remember a tradesmen telling me they made good coin in West Van, buying houses, fixing them up (often just cosmetically), and then flipping them. Assuming that it was a well off area, I asked him how it was possible. He said that West Van is full of nouveau riche’ overnite millionaires who can just as quickly lose their ” Keeping up with the Joneses ” status and have to sell ASAP.
Maybe now the floodgates will really open in West Van ? ( Maybe go to the West Van Police Pub Nite 24/7 at the WVPD station and drown one’s sorrows ? )
November 19th, 2008 at 12:04 pm
http://cuer.sauder.ubc.ca/cma/.....erates.pdf
November 19th, 2008 at 12:11 pm
November 19th, 2008 at 12:27 pm
Pretty soon, we’re going to rival Phoenix in the US. So move over Phoenix, here comes Vancouver!
November 19th, 2008 at 12:39 pm
The next domino to watch?
A few months many of them apparently had $ Billions in reserve to help weather a storm.
However, they are burning their cash reserves at such an ever increasing rate and the slump has been more prolonged than they had ever wildly imagined. I read that there decline in sales is about 7 % more than they had anticipated, but that 7 % decline creates a negative fiscal quantum leap they simply cannot adjust for.
What makes this intersting is that the BIG 3 are asking for approx. $25 Billion to keep them afloat. Given the hundreds of thousands of jobs at stake both directly and indirectly, the US Gov’t still seems hesitant at any bailout . From what is being reported, it seems that the Gov”t actually feels it may be best for the auto companies to go into bankruptcy and then rise from the ashes like a Phoenix.
However, unlike the housing market, where the house (asset) still exists, and simply a matter of what the value is during any/all transactions, now people are left wondering what happens if these Big 3 auto makers start to go broke?
What if you own a Ford…does it become worthless for resale if Ford crashes and burns ? Yes, you can still use it…till it breaks down…but what about parts if required ? What is the market price of UNcertainty “X” .
How about if you want to buy a car ?…stay on the sidelines and NOT buy till one feels more assured the given auto manufacturer is solvent ?
Maybe much of the western countries will be like Cuba….(autos etc. from the 1950’s they have managed to keep running with wire and tape etc ? )
November 19th, 2008 at 12:46 pm
Where’s Bob Rennie to tell us how bullish this article is as it will alert all the rich Wall St. bankers to our attractively priced McMansions and our killer RE fundamentals?
November 19th, 2008 at 12:55 pm
Indeed, the silence from Rennie sure is deafening. I definitely expected him to be trumpeting this tremendous “opportunity” to get in before the next leg up begins. Even he likely has come to the realization that his boilerplate Vancouver cheerleading has been undressed and simply doesn’t work any longer as the masses slowly awaken to the ugly fundamentals that were slumbering next to them all along.
November 19th, 2008 at 1:03 pm
How to still make money on your exisitng real estate?
Lease out your back yard as a DUMP SITE ! Beat the rush !Then lease out your front yard ! ( The hell with curb appeal, dammit !)
http://thetyee.ca/Blogs/TheHoo.....lingCrash/
This is why Vancouver Real Estate NEVER go down !!! (if you are flexible !)
November 19th, 2008 at 1:05 pm
Just goes to show how world-class Vancouver is - we’ll be competing with the big boys for disastrous price declines as well.
November 19th, 2008 at 1:26 pm
http://www.nytimes.com/2008/11.....tzwKye%20A
November 19th, 2008 at 1:28 pm
If you can look at a graph and read interest rates why is it that you cannot understand that prices are way out of line with fundamentals and will have to correct by 50% in order to qualify as an investment (as opposed to speculation).
You managed to quote M2 but don’t understand supply and demand? Or negative investor sentiment?
It’s hard to believe you are as stupid as you act, don’t you get bored of acting like the stupidest person in Vancouver every single day?
November 19th, 2008 at 1:36 pm
you should atleast teach us economy,real estate,demand and supply do not shoot your arrow in dark your comment is dumb as you are such an asshole without any basic knowledge so teach us or fuck off.
November 19th, 2008 at 1:49 pm
November 19th, 2008 at 1:59 pm
November 19th, 2008 at 2:03 pm
http://www.nytimes.com/2008/11.....cy.html?em
No longer life support … simply R.I.P. ?
November 19th, 2008 at 3:12 pm
“NO PETS, NO SMOKING - ONE YEAR LEASE
New Suite on the 15th floor. 1B + flex room and walk-in closet.
European appliances, parking and h/w included. Dark hdwd floor in living area and carpet in bedroom and flex room. Bathroom has soaker tub and shower. Fitness room and whirlpool. Close to sports venues, Yaletown and Robson shopping.
Posession on approval and rent starts December 1.
RANCHO MANAGEMENT”
November 19th, 2008 at 3:19 pm
November 19th, 2008 at 3:23 pm
“he house boasts an unobstructed Pacific Ocean view, *sun-filled patios and an infinity swimming pool.”
Footnote: * only 2 months of the year with sun-filled patios.
What a dumb ass. Im going to call and offer him 100,000 grand to leave. As he’s hauling his shit out the door, I’ll be standing there smoking… only to ash it out on the marble under my foot.
November 19th, 2008 at 3:24 pm
Imagine if there is one person who wants to buy a condo and thinks it’s a good idea. In anticipation of this sale ten people go out and buy a unit before the first person buys one planning to sell to this person.
All ten of these people are thinking they’re going to make easy money but then the buyer sees there are ten people who bought them and starts negotiating the prices downwards.
Instead of making money all ten speculators lose money and the one buyer got a better price than buying directly frm the developer.
Did that make sense? I can try to make it even clearer if you like.
November 19th, 2008 at 3:30 pm
Did you go through inquiry or posting another spam for rancho management? who knows if you work for them then pick up phone to say oh that’s gone would you like to go for next one at $1,699.00 or $2,200.00.
First find out discription like sq.ft.floor,and direction then come back if it’s available.
November 19th, 2008 at 4:01 pm
November 19th, 2008 at 4:13 pm
After reading Lewis’s (ie author of Liars Poker )recent article, you kind of wonder if there should be a Nuremberg Trial for the guilty parties in this Economic collapse.
Excuses like ” they had no idea what was going on” or simply “following orders” don’t cut it because many knew exactly what was going on…given these people created the vehicles that ultimately lead the charge into the economic abyss and dragged else everyone into it like a black hole .
We in BC didn’t have a Wall Street per se locally, our stock market were Real Estate, even Rennie alluded to as much. However, if he , the so called “Condo King” , can say with a straight face he didn’t foresee what happened as inevitable, and due soon,he’s a lying little SOB Mo - Fo. All one has to do is go back several weeks ago and see his so - called market expertise as basically self -serving market -pumping BS.
PS: Maybe he has bailed out of town or laying low for a good reason … as often there are disillusioned parties that have lost literally everything, who connect the dots and go “looking” .
I just wonder if Rennie will ever bounce back, but I certainly wouldn’t touch anything he ever tried to sell, for good reason , given the “emperor/king” has no clothes, if they ever did.
November 19th, 2008 at 4:22 pm
“If the blogger is right . . . then 1000 people are wrong.” Bob Rennie, Vancouver Magazine, June 2006.
Setting modesty aside for a moment, I’d say we score one for the blogger! I shoulda made a wager with him . . .
November 19th, 2008 at 4:29 pm
http://www.princegeorgecitizen.....risis.html
Keep the cash under the mattress where its safe !!!.
November 19th, 2008 at 4:36 pm
These are high paying jobs for the most part. Luckily Vancouver doesn’t have any major banks. Or high paying jobs. Phew.
November 19th, 2008 at 4:47 pm
the construction crane on T2 was
being disassembled…..
very soon there will be completions
to contemplate for the lucky few….
ditto for W an intellectual concept
gone terribly wrong…..
November 19th, 2008 at 4:49 pm
The Bloomberg article should be reproduced on brass placards and copies placed in the lobby of The Vancouver Sun, CMHC, and every Real Estate Board Office, as a reminder
that Muir, Pastrick, Rennie, Tsuir are complete idiots and or liars.
Why aren’t the rich Iranians and Asians who have cash not buying these baragains?
How would the credit crunch (if there is one) affetct all those rich foreigners who have cash, after all is that not the explaination why local incomes didn’t matter?
I’m somewhat suprised the people who bought leaky condos in East Van aren’t selling their units and trading up in West Van.
This is a great time to trade up. Hurry hurry, hurry, West Van is running out of views.
November 19th, 2008 at 5:15 pm
Answer is written in #5 on this thread and in response to #8 by paul and #9 by patriotz on last thread.
November 19th, 2008 at 5:22 pm
Between Rennie has sold vancouver real estate worth more than 500 millions imagine if he was sitting on blogs he should have become a jobless commuter.
November 19th, 2008 at 5:29 pm
November 19th, 2008 at 5:35 pm
Presuming you are in fact Human?
Why don’t you go buy a condo right now?
November 19th, 2008 at 5:43 pm
Rennie and Beasley have been quick to take the credit for what went right on downtown development between 1997 and 2007.
As things crash 2008-201X, I think it is appropriate that they both take the blame for the seeds that they have sown.
November 19th, 2008 at 5:51 pm
I imagine some of that intellectual property can be bought piecemeal and then licensed out to auto shops and 3rd party manufacturers.
November 19th, 2008 at 6:01 pm
Did CMHC author the forecast or the Realtor association, or Central Credit Union?, the only other people who possibly be this incompetent would have to be the VANOC crew.
But then again, are they incompetent or liars?
November 19th, 2008 at 6:12 pm
Recently completed condos appear empty with no balcony furniture and few lights on.
A thought occurred to me. With the growing parking problems in Vic Hill, they should turn some of the cleared, unused land into parking lots. They will be needed once people actually live there.
November 19th, 2008 at 6:20 pm
I have a new slogan.
Be Bold … or Move to Suburbia. Today should read more like Be Bold … or Be Smart, save your money and buy a house at 50 per cent off-peak instead of a Woodward’s ghetto rat trap you can’t even flip for a profit!
November 19th, 2008 at 6:21 pm
like car dealers do!!!
November 19th, 2008 at 6:37 pm
agreed … and I’ve been building up Pope’s wiki with hilarious Rennie quotes. found one from May where he brags Russians were buying it up. From Russia, of course, this is now the Russia that has been apparently burning through hundreds of billions of dollars of reserves to avoid another ruble implosion.
Speaking of the wiki, VHB, you should put your prediction you posted a couple of week ago, in some kind of ‘Hall of Fame’ section.
November 19th, 2008 at 6:59 pm
The bears are sitting in comfy chairs with Bluesman in the corner plucking out “Bring it on home” on his guitar.
WoW: Rejoice my friends, for the time of feast is nigh upon us. The sheep are falling to their deaths, as was and will be again.
Patriotz, looking up from his Financial Times: Earnings, you fool. Check the earnings before you taste.
Drachen:You mean the price/earnings ratio. Please try to be accurate. (The others roll their eyes and ignore him)
Pandora, (a bull): You are very very bad people, to wish ruination upon such fine and fattened sheep.
The bears, in chorus: Twas not we that drove the sheep to the high mountain meadows in the gathering autumn, nipping and chivvying at their heels. Driving them ever onwards with talk of finer and lusher meadows to graze beyond the tarp-shrouded towers. Drove them beyond the range of the mountain goats themselves, there to abandon them as the snow started to fly. And now the sheep are doomed, indeed! And you would deny us our feast on their corpses, as you did deny the truth in our entreaties to the sheep to stay safe in the valley?
Pandora, dreamily: Yes, a beautiful sight, all those sheep, ready for the fleecing. Snaps back to awareness: We took only the lambs and the fleece for ourselves, the sheep were fine. It’s hardly our fault the winter came, cold and cruel. Nobody could have seen this coming.
The bears, in chorus: We did!
Rob: Show me where I said the winter would never come.
Noz (A very small and mangy bear, with a crazed look): The sheep are poisoned, don’t taste them! (Goes back to gnawing his leg off)
Alexcanuck: The sages have warned me, the winter will be long and hard this year. Be very cautious.
RJ: What are you talking about, spring is in the air already. Life is grand, I’m in love and already i can see a new flock of sheep, ready for indoctrination in a perma-growth model.
The air shimmers, as the eerie spectre of Ghostrider’s skeletal arm appears and tears a false bear-skin from RJ’s back, revealing a bull: Behold! The spy in our midst!
Blueskies gasps and recoils, pointing a finger at him: You! But of course! The signs were all about you.
Anon chirps up: And all about you also were many, many posts!
Lord Rennie, a pale and ethereal figure, floats about his art-filled penthouse far above the stage, his faithful lap-dog Dave following at his heel. He flies in and out of the scene in his private helicopter, never descending to the plebeian world below.
Randallbard bursts into the room: Gold, Gold, Gold!!!! The others, bear and bull alike, turn upon him and tear him to pieces.
A peal of trumpets rend the air, and Krissh is carried in, roasted on a platter, an apple in his mouth.
Scullboy follows, jumping up and down in his excitement: Try the gravy, I did a fantastic job on the gravy! Oh, I do hope you like him well-done, I’m kinda worried about parasites, his Mums not the cleanest person in the world, I didn’t want to serve him rare.
Fade back to the clearing, now buried in deep snow. POV follows a last leaf as it flutters down, landing beside the largest mound of snow. A hole is revealed and entered to focus on the fattest bear ever, curled up warm, comfy and slightly smug.
Bluesman strums “Amazing Grace”…
November 19th, 2008 at 7:01 pm
Yeah, when I have time I plan to do a wholesale dumpage of the golden oldies from my blog archives into the Pope’s wiki. That’s a great place for it, rather than languishing and gathering cyberdust on the old blog.
BTW, thanks for all the up arrows on #30. I really saw that Rennie quote from the magazine as emblematic of the mockery that all the bears took in the 2004-2007 period. The dripping, condescending mockery of the bulls did burn, we must admit. Well, he who laughs last . . .
November 19th, 2008 at 7:30 pm
November 19th, 2008 at 7:45 pm
November 19th, 2008 at 7:56 pm
I did a shift at a high end cookware store today and immediately after shoo - ing out a homeless person, I ended up selling a couple of gift certificates to one of the actresses from Battlestar Galactica.
I figure it doesn’t get any more Vancouver then that!
November 19th, 2008 at 7:58 pm
Recycling market tells a lot about the global economy .
News tonite shows recycling glut, stockpiles bursting at the seams, ( may deny it but looks like it will all end up in the landfill ).
Basic implication is overseas countries ( mainly China ) with manufacturing - based economies are not absorbing these recycling materials…because there is no market for their own final manufactured products .
Scrap steel was selling for $250 / ton just a few months back. Now its down to $20 / ton. There is also little demand for recycled paper products, because offshore factories now have much lower demand for cardboard ( made from recycled paper products )used for the packaging of their manufactured products.
No market for their products = no offshore profits to invest or shelter here in BC = reduced market for local Real Estate.
As always ,… the best indicator is at the base level.
November 19th, 2008 at 8:07 pm
BTW in the 80’s bust there were actual properties in Van West that had repeat sales at 50% off. It’s going to happen again.
November 19th, 2008 at 8:20 pm
November 19th, 2008 at 8:21 pm
I agree with your statement that there is a lot of old money but also want to play devils advocate here.
Firstly in 1998 I had three friends parents’ sell their family houses.
One was a 20 year old (at the time) `4,000 sq ft house at 1st and Trimble and it took a year to sell for $870k
Another at 10th and Crown went for `$490k and the third was assembled into a condo project at $770k ( A premium since they held out).
In 2001 an entry level house in Dunbar was $600k and of the couple who bought the house one grew up on the most exclusive street in Vancouver (upper class) and the other was from Shaughnessy (upper middle class) and the husband had an alpha male type job in finance, these same houses were going for $1.25 million 6-7 years later and yet incomes hadn’t doubled and the old money was still old money.
So who was buying theses shacks for $1.25+?
As far as I can tell the old money you’re talking about had bought long ago and didn’t need to wait for the hype machine to make them go buy a $491k condo at brentwood mall.
What will stop the prices from falling back to 2001 or 1988 prices again?
We’ve subtracted the hype, the temporarily inflated incomes of mortgage brokers, real estate lawyers, realtors, “investors” and what’s left?
What industry does Vancouver have that could sustain an entry level house in Dunbar,Pt Grey or Kerrisdale?
What happens when the owners of these very houses (a lot of whom are UBC Professors and similarly modest jobs) want to sell? Who is coming to buy them for more than $600k?
I’m telling you as a longtime resident of the westside it wasn’t slouches who were buying in the $600k range furthermore how will anyone move up to a house in the Westside if they have a $491k mortgage on some piece of crap in Brentwood mall or even worse at TV towers?
“Oops I thought I was a shrewd investor and now I have to pay $2,000 of my after tax income every month for the next 25 years to subsidize my investment condo silly me, luckily I make $33,000 per month so I will go buy that 7 figure entry level home now”
50% from $1.3 is back to $650k for a house that would rent for $2500 MAX.
What happens if interest rates go up?
Do you think the bank would give a 7 figure mortgage to a couple making $120k per year and an existing $491k mortgage?
*VHB didn’t you suggest that the median income in Pt Grey was $109k in your hilarious “The W” parody?
Wouldn’t Pt Grey be the upper echelon of earners?
These same people who already own multiple properties for decades and who’re more likely to start selling than buying more as they retire?
November 19th, 2008 at 8:59 pm
Check out Rennie’s assignment deals (on his website right now, I’m not making this up) at the W!
for only $900+ per sq ft you too can live in the poorest postal code in Canada!
888 sq ft = $819,000
654 sq ft = $425,000
I wonder why Bob didn’t buy these smoking hot deals before they were even listed?
November 19th, 2008 at 9:08 pm
November 19th, 2008 at 9:10 pm
November 19th, 2008 at 9:16 pm
November 19th, 2008 at 9:32 pm
Pope, this is an excellent point. This type of payment should be disclosed to the buyer. I don’t know what the practise currently is, but if disclosure is not currently required, it would be totally unethical not to disclose.
November 19th, 2008 at 10:13 pm
Now that I’m out of the hospital from that beating I thought I’d barge in and announce that tonight gold is 924.63 and that housing prices are going much much lower. Don’t count gold and silver out yet.
***Gold fans hit the green arrow and fans of paper money hit the red arrow please for an informal poll.