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January 7th, 2009 at 9:49 am
more layoffs can’t be good for Vanc suppliers
http://www.networkworld.com/ne.....mp;hpg1=mp
http://www.gamespot.com/news/6202771.html
Before we rolled into 2009 I had mentioned several times that early in the New Year we would likely see that start of a phenomena that would label the “National Layoff Festival. It would come as companies which might otherwise have started their layoffs, to meet the recent downturn (partial collapse?) of the economy, played ‘catch-up’. Not the companies that had already over-extended, but companies that were well-run and profitable. It would just be time to ‘right-size’ to use a somewhat antiquated term, in order to stay in business as well-run companies.
So, it came as n o surprise last night when Alcoa sent out a press release right after the close announcing an 18% production cut and a 13% people cut:
January 7th, 2009 at 9:45 am
I believe a 10% return on investment for Vancouver Real Estate is reasonable.
And I believe you’re out to lunch.
January 7th, 2009 at 9:44 am
nolympics:
Reading between the lines, are you implying the Pappajohns are in big trouble financially ?
my understanding of the situation is the
family personally guaranteed a $32 million loan to start the project and
almost half the presales were “friends and family” double ouch……
January 7th, 2009 at 9:42 am
I buy three my huzba buy three!!!
January 7th, 2009 at 9:39 am
In a previous posting, someone had a link to a story about McMansions in the US.
I have to admit that I didn’t think they were so prevalent elsewhere outside BC.
However, maybe there is a formula attached to them that transcends borders.
In B.C. a lot of the McMansions were fed by offshore dollars for the past 20 + years.
In the U.S they were fed by the subprime loans given to literally anything with a pulse.
McMansion ” lite ” was condos.
Both the U.S. and Canada dipped into this subprime or 0/40 loans .
Regardless, all the driving variables in both countries are now toast.
The U.S. was basically a fiat money fantasy catering to a huge population base( and many won’t admit much of it was a social engineering experiment that turned into a Frankensteinian monster ).
In BC…whatever happens offshore hits us.
There seems to be little if any good news coming out of Asia. 67,000 factories closed in China that they admit to in the first half of 2008. Some allege the Oil speculators were to blame for a lot of this. Some people still don’t get the various correlation/s.
I often muse about the early 1980′s and the way the economy tanked, and the Solidarity protests etc. The economy flatlined till Expo 86, then it took off for obvious reasons, but nothing that had much of a domestic base or basis to it. We became, in essence, addicted to an uncertain, unpredictable and fickle amount of offshore investment.
In hindsight one wonders how things would have unfolded if we hadn’t had the Hong Kong turnover in 1997.
I attended the Titanic exhibit in Victoria in 2007. One interesting fact presented was that the Titanic sailed on a clear night on smooth seas. That seemingly minor fact contributed to its downfall.
Why?
….Because no waves existed that would have crashed against the looming iceberg and made a noise that the crew could have detected and been made aware of a large object ahead. However, unlike the Titanic, there were lots of warning signs in the global economy, and especially to those Captains in charge, that should have been heeded.
Like the Titanic, the rest is now history.
However, many think this latest Titanic can still be resurrected/refloated.
Get over it, it was a house of cards since DAY ONE.
January 7th, 2009 at 9:29 am
The Vancouver newspaper article states. House prices 357,770 in December 2001 to $730,399 in December 2007. Well, a reasonable house price would be 750,000 in 2011 factoring in a 10% return on your investment over a 10 year period. I believe a 10% return on investment for Vancouver Real Estate is reasonable.
Is the guy in the car real estate ad blogs running the Vancouver Real Estate Board?
January 7th, 2009 at 8:44 am
“The reality is that people tend to buy when prices are going up, not when they’re going down.”
Dave Watt in the Province
http://tinyurl.com/79ev8b
January 7th, 2009 at 7:38 am
From Vancouverbum2be post 21 link:
You don’t really have to read beyond the first sentence.
“The Canadian housing market is cooling but is not facing a U.S. style meltdown, builders here say.
Oh, the BUILDERS say! Good non-biased information source there. Nothing from another view in there. Pure fluff.
Vancouverboom2 (I used your handle properly to indicate the sincerity of my question), do you truly believe this? I mean, are you trolling, or are you actually sincere in your belief that it really is different here and this time? Do you actually take the time to follow some of the links and arguments here, and remain convinced that the bubble isn’t, and the popping sounds aren’t?
January 7th, 2009 at 7:30 am
Seems to be a common question.
” Why IZ Peepulz so stoopidz” ?
I loved those polls where people are asked simple questions.
A group was asked if Winston Churchill was a real person or fictional and if Sherlock Holmes was a real person or fictional.
About 25 % thought Churchill was a fictional character, and even more thought Sherlock Holmes was a real person.
I had a chat with a Richmond Mayoralty candidate, and he said he talked to a number of seniors, and campaigning for their vote . Many of them said sorry, they would be voting for the incumbent Mayor , ” because we need him to finish the Oval “.
I am sitting there listening in bewilderment.
The Oval was at or near completion at the time of the Civic elections. If a new mayor had been elected, what do they think would happen ? Tear it down, or work would stop? They don’t realize these elected D-Bags abuse their elected powers and the democratic process like kids in a candy store.
These people should be thinking that the incumbent Mayor and many incumbent Councillors foisted this Oval onto them…and it will likley lead to cuts in services to seniors and others throughout the City so as to maintain this looming white elephant.
Someone must have spiked their geritol with kool aid …or vice -versa?
The same ignorance is prevalent amongst many in society, they beleive what they want to beleive, hear what they want to hear, shoot or ignore the messengers
PT Barnum had a saying something about never overestimate the intelligence of the general public. To that I’ll add never underestimate their naiveness , gullibility and detachment from reality. I guess it’s some sort of leftover survival mechanism from the cave man days.
January 7th, 2009 at 6:56 am
Mickey Finn:
Thanks and well said.
What has happened is both amusing and yet disconcerting.
When the big boys fall, we see they are “only human”.
However, when they drink the kool -aid, there are ripple effects from this bad judgement to the rest of us.
When I attended that meeting yesterday on the Pinnacle deal, I got the feeling that the elected officials and the developers really don’t get it. I left with the feeling they are either in denial or really feel the current economic conditions are temporary, a minor blip.
I suppose its their role , or nature to be upbeat and positive, but I think this is a whole new ball game.
It begets the question as to whether Local Gov’ts should seriously consider whether they should act as referee and limit any new development. In this economic climate, in a down ,if not collapsing market, and new product simply dilutes the value of existing product via oversupply versus declining demand.
Usually, normal market forces act as a check and balance to regulate this, but I think there are some groups that feel the current UNprecedented global economic situation is a short term anomaly and are still considering adding more product.
Look at Vancouver.
If Concord wanted to build more product on its remaining Expo lands (which would be directly across from Olympic Village), sure Vancouver might like the DCC’s and economic activity, but the City has ALSO incurred a major liability onto its citizens re the Olympic Village and unsold condos.
Would , should or could Vancouver say NO to Concord, the priority being that Vancouver has to maximize its return/ or this now converts to minimizing its losses, and any more competing product would exacerbate the fiscal disaster the Olympic Village has all the signs of becoming. However, would that be deemed as conflict of interest, now that Vancouver has ventured into wearing a Private developers hat?
This latest boom sort of reminds me of those game shows where a person is in a booth filled with money and they turn on the blower fans from below . The aim is to grab as much $$$ floating around as one can in a limited time period. Common sense was simply left outside the door in a mad grab for the cash. I’m not sure common sense has kicked in yet amongst many parties, especially those at the top.
January 7th, 2009 at 6:23 am
SOrry, I messed up the bold in the above. The second and third paragraphs are my commentary, not Sopels.
January 7th, 2009 at 6:21 am
Royal LePage CEO Phil Soper said that over the long term, home-price appreciation should rise in line with the rate that a city’s incomes rise. “Over the last seven years, Vancouver prices increased at a rate significantly above the underlying appreciation of people’s incomes,” Soper said in an interview.</b?
He know speaks as this is situation normal and that he expected it all along. If that was the case, he obviously would have KNOWN that Vancouver was in a bubble. Why not much such raise such flags BEFORE the sh*t hits the fan?
Last year, he does mentioned affordability, but also muses out loud about million dollar average price:
Vancouver’s rise is slowing in percentage terms, but “at this rate it will be in the next 24 months the first region in Canada to have a housing class with an average price over $1 million,” Soper commented.
“Wages and salaries there aren’t that much superior to other parts of the country, so affordability is an issue,” even as a robust economy and ongoing immigration keep demand ahead of supply.
Demand ahead of supply? As usual, these clowns can’t see the distinction between PHYSICAL and SPECULATIVE demand. As I have always noted, speculative demand can disappear in a parso second.
January 7th, 2009 at 2:44 am
and when referencing my flickr charts, please use the following key words in the text
* REBGV
* plunge
* Whybuywhenucanrent?
January 7th, 2009 at 2:38 am
Some new charts from myself and chris over on the Chipman blog
Greater Vancovuer SFH benchmark (by chris)
http://spreadsheets.google.com.....tput=image
Greater Vancovuer SFH benchmark % YOY (by chris)
http://spreadsheets.google.com.....tput=image
Vancouver REBGV benchmark plunges compared with 12 US cities’s Case-Schiller values (by whybuywhenucanrent? using SeattleBubbleBlog chart)
http://www.flickr.com/photos/2.....175762229/
15 cities/areas of Greater Vancouver compared, declines from top. REBGV benchmark data (3 month running average), SFH home prices plunging. (Port Moody leads the way, PoCo holds value best)
http://www.flickr.com/photos/2.....175881341/
For the flickr photos, click the magnifying glass icon above the center of the photo (middle of the row of grey icons) for full-size view.
Enjoy,
Whybuywhenucanrent!
January 7th, 2009 at 1:40 am
Elitist Royal Bank. Tsk,tsk. Spanky time. Turns out, the general public is alot more informed than the used to be and are not as dumb as they thought they were.
Wow, what a time to short RBC, like taking candy from a baby.
January 7th, 2009 at 12:58 am
So the benchmark is down 16% off peak already, and even according to biased Royal LePage it has at least another 9% to go, that takes it down to 590k or 24% off peak minimum.
And we all know it won’t be the minimum.
January 7th, 2009 at 12:57 am
4 McFinn,
Great post. I’m actually suprised at the recent runnup the banks are getting for their common shares considering the mounting risk.
27 Vansanity,
Very true and that 6.5b all pays some form of dividend so there esentially eroding future earnings. They could have issued at 1/2 the cost if only they didn’t drink the coolaid.
January 6th, 2009 at 11:48 pm
Some of you might remember some posts in the past that I receive through email from the good people at the Harris Real Estate Group. I put these up for laughs more than anything, here’s the latest and it’s a doozey, enjoy:
“Here are some reasons why people just like you are buying RIGHT NOW:
-Because of the lowest interest rates in 5 years. And only getting lower…
-Highest rental prices ever.
-Because of a 0.2% vacancy rate in Downtown Vancouver. Finding good tenants has never been easier. And it’s only going to get tougher to find a rental in this city as more people rent than buy.
-Highly Motivated sellers. If they’re selling in this market, you can assume they need to sell. Asking price is irrelevant. Write offers at ridiculously low prices and something will stick.
-Because of falling prices. Price it in to your offer. Get the discount NOW, and watch the market catch up. If it doesn’t, put that built in equity into your pocket.
-Because it’s still very easy to get a loan. If these rules change, you’ll be saving for your down-payment until you’re blue in the face. Just ask an American.
-Because of cash flow positive properties. If you’re making money every month from a property, how long can you wait until the market turns around? (um. forever.)
-Because your broke uncle who lives in the basement thinks it’s better to wait. Being a contrarion is sometimes the best strategy.
-Because Real Estate is better than stocks. Hands down. Yes, you heard me stockbrokers. Bring it on….”
lol! I knew you’d laugh, well some of you are! I should right back my own list of why people aren’t buying right now… would be too time consuming though.
January 6th, 2009 at 11:37 pm
NO-LYMPICS #29… in hindsight I suppose my posts make it sound like I know something more about the Pappajohn’s troubled project than the rest of us “casual observers” of the Vancouver real estate scene but that’s simply not true.
At one time I was heavily involved in the development game here in Vancouver but not anymore. That said, and as I have pointed-out before, developers have a dangerous tendency to overestimate their business acumen and to underestimate risk. Paul Reichmann’s Olympia and York which crashed when the family bet it all on the massive Canary Wharf development comes to mind… or Robert Campeau’s flame-out on Federated Department Stores (Bloomingdales)… etc.
For the record, I actually feel bad for the schmucks who are going to get whacked by virtue of their poor business decisions… but then again, Vancouver’s development community has lived “high on the hog” for a lot of years and it will do them good to be taken down a few notches… and hey, “what doesn’t kill you makes you stronger.”
January 6th, 2009 at 11:19 pm
#8 rado@freemarkets: Thanks for posting the graph.
The false economy is going down really fast. I am just wondering how it would feel if I were a hoemoaner who looked at the assessment from this year and saw that my house was “worth” 2M.
But I look around me and I see houses similar to mine listed on the market for 1.2M and they are not selling.
Fast forward to December 2010 and I am sitting in my home that the assessors say is worth, say 1M but neighbours around me cannot seem to sell theirs for $800k. I still owe on my $250k heloc and once I sell (if it ever happens) I will have to pay capital gains on the basement suite I’ve been renting out for 20 years.
Is this train wreck going slow enough for these guys who thought they were so rich to process everything or is it happening so fast that it will end up putting them all in the funny farm?
Just wondering…
January 6th, 2009 at 11:09 pm
I remember when it was said the soviet communist system was doomed because centralized planning often resulted in employing workers to build products simply for the purpose of keeping workers employed, regardless of the actual value or quality of the products they were producing.
Despite all the sympathy for bailouts, one can’t help to notice a bit of irony here. Loose credit and low interest rate policies have encouraged economic activities, which wouldn’t otherwise be viable, to be sustained through a bubble of money, albeit through a decentralized process.
The irony is even more poignant given that a good chunk of the loose credit was provided by a (technically) communist country and this in turn was used to buy products produced from this country (well, okay, to be fair, the products weren’t designed there).
January 6th, 2009 at 10:59 pm
MickeyFinn:
Re The Jameson (now cancelled);which you have mentioned recently a couple of times.
If you don’t mind my asking, what is happening with the developers?
Reading between the lines, are you implying the Pappajohns are in big trouble financially ?
I had just presumed they won’t build ,simply suspend or cancel the project, and thus will simply eat the costs to date.
Is there something worse than that going on ?
Thanks!
January 6th, 2009 at 10:36 pm
oh yeaaah nutslaps! no-olympics is smart guy but comment
“hold up sign saying log onto vancouvercondo” is gutbuster of 2009! should have tryed selling get rich renting seminar tapes! try telling crowd printing press is broken! haha real estates going down for decades to cum! oh yeah ha ha
January 6th, 2009 at 10:09 pm
Supra – $200M is relatively small, but look at the bigger picture.
“Canadian banks have raised about C$6.5 billion since November by selling common and preferred stock to shore up regulatory capital. Toronto-Dominion Bank, the second-biggest bank, said yesterday it will raise as much as C$300 million in a preferred offering, while National Bank of Canada, the No. 6 bank, filed to sell as much as C$200 million.”
$6.5B in two months, between the big 5, now that’s a spicy meatball!
Link: http://www.bloomberg.com/apps/.....fer=canada
January 6th, 2009 at 10:03 pm
Mickey Finn – Good post. While I’m at it realpaul and Nolympics, as always nice work.
I’ll add to Mickey’s piece by saying that a Developer I know talked recently and said they have 4 projects they’re completing and a few on hold. He said the banks want 50% presales now… which to me seemed low, but whatever. I asked, what it was before. He laughed and said “nothing, they just gave us money”. You can see how right you are about this “made in Canada” problem they created and how bang on you are in their attempt to increase capital recently.
This guy didn’t seem too worried, said that he believes we’re different out here, in Vancouver, in BC, etc. He was quite confident that the holds would be lifted soon after presales were reached and away they’d keep going. Good luck with that, I thought to myself.
January 6th, 2009 at 10:03 pm
“The Royal Bank of Canada announced today yet another public offering to raise a further $200 million by issuing preferred shares. What has this got to do with the benchmark price decline and Vancouver real estate?
Plenty!”
I wouldn’t read too much into that. My bank manager sounds overconfident about Royal Bank. He said $200 million for banks is nothing. We’ll see what happens, it’s too early to say because I kinda agree with him, $200mill is very little in the banking world.
January 6th, 2009 at 10:01 pm
A little off topic, but for those of you using the LinkedIn professional network, have you noticed an increase in distant acquaintances suddenly linking to you over the last couple of weeks? A few colleagues of mine have noticed the same thing. Seems to be a time that people who have lost their jobs, or fear that they will, are starting up the old networking skills. There’s been a lot of big layoffs in the high tech sector in this town recently. There was a rumor posted in Slashdot that Microsoft would announce a 15% workforce reduction in mid-January. And I know that from a buddy in the trades that building contracts have been canceled for one of the Richmond Microsoft office.
January 6th, 2009 at 9:08 pm
like big houses?
http://tinyurl.com/7ovaqe
“The idea that you’re going to make a lot of money tearing down an old house to build a new one, that’s gone,” says Morris Davis, a real estate economist at the University of Wisconsin in Madison who has advised the Federal Reserve on the teardown trend.
…for the times they are a changin’
January 6th, 2009 at 8:45 pm
And the local cheerleaders will have you believe that little Vancouver will be sheltered from the storm
http://www.globeinvestor.com/s.....7/GIStory/
January 6th, 2009 at 8:44 pm
JD,
On the 2009 assessment roll, be valued at the actual
value calculated using either a July 1, 2007 or July 1,
2008 valuation date, whichever is lower. Properties
valued using regulated rates will be valued at the
rates developed for the 2008 assessment roll.
http://www.bcassessment.bc.ca/.....0Facts.pdf
Canadian housing market ‘totally different’ from U.S.
http://www.canada.com/topics/n.....id=1145088
January 6th, 2009 at 8:33 pm
BC assessment site:
http://www.bcassessment.bc.ca/
January 6th, 2009 at 8:18 pm
Hey pricedoutfornow, whats the link to the assessment site? Are they the same as 2007, or are they actually listing 08, but billing taxes based on 07?
January 6th, 2009 at 8:03 pm
My Civic’s got some of that “magic pony-power”! Should’ve seen me bombin around on those side streets recently.
Our politicians can’t clean the snow off the streets, but they’ll be able to stave off a global recession and re-inflate the global credit bubble, no problemo. Good luck with that everyone!
January 6th, 2009 at 7:59 pm
#3
The pope is dead otherwise he should have unplugged your wires long time ago.
“what goes up must come down”-Gadwin.
Gadwin,
When would you go back to KG? If you can’t answer this question then you can better understand that you are such an idiot.
January 6th, 2009 at 7:43 pm
Helmut Pastrick’s last business meeting with Cameron Muir and the REBGV
http://www.youtube.com/watch?v=IIlKiRPSNGA
January 6th, 2009 at 7:39 pm
#14 The realturds you saw today are just hangers on and party twits.
January 6th, 2009 at 7:33 pm
Re: that Pinnacle deal in Richmond:
It was on CTV and CBC 6 PM news this evening.
Curiousity got the better of me and I attended the meeting this afternoon .
CONCLUSION:
Well, I think there are a lot of delusional people at the upper echelons .
One of the partners wants to keep the deal going,(Concord) but Pinnacle was not there, and they brownosed their way to a 2 month extension(till early March). Council made it clear that the terms and conditions of the agreement form the basis of the 3rd Reading status it is at now . One of those 3rd reading conditions is a contribution of $15 Million to a Skytrain station.
Council was ready to pull the plug on this huge project given this Concord and Pinnacle partnership had already missed several deadlines.
The developers want to build about 2000 housing units. My math say their ain’t no free lunch…just the RAV line station contribution of $15 Million will add about $7000 per unit (on average). Who are these people kidding ? Any savvy buyer has to figure they are subsidizing a skytrain station with an additional $7000 mortgage payment.
Part of the deal is a City owned lot on the site to be bought at a pre-agreed price circa 2007 to be bought. The developers want to offer $1.8 Million LESS than the agreed to price . One Councillor says no…stick to the agreed to price or they start over,( but this Councillor figures the market will change in 2011 and the lot price will double. Huh?).
THUS:
If they want this approved..they cut a cheque for $15 Million on top of a bunch of other fixed costs(ie a City Lot that has lost $1.8 Million in value…DCC’s , etc. My guess is at least $25 Million before they break ground
I felt like holding up a sign saying:
“Log onto Vancouver Condo Info you F*cking morons “.
C-L-E-A-R-L-Y… they are buying time…hoping against hope…They have till early March to get their act together or that’s it, it’s over. However, by March, the Spring RE season will likely begin , the listings will shoot up, the Pinnacle deal will implode.
I think partner Pinnacle is sitting back and letting Concord talk, but Pinnacle wasn’t there. I think Concord is overexposed all over the Vancouver area…. something has got to give.
They also said the ASPAC development ( beside the Olympic Oval ) will start soon, as well as other Richmond projects that have been approved.
Oh Really ?
I left the meeting thinking these people are seriously seriously deluded.
====================================================
RealPaul:
At the meeting wer Thomas and Magdalene Leung (Westin Construction )and realtor Grace Kwok?
Any scoop on them?
January 6th, 2009 at 7:30 pm
Anyone else spending some time checking out the sale prices at BC assessment? I’ve been looking up how much various friends, acquaintances paid for their places this past year…and then comparing to the (oops!) lower assessed value. Sucks to be them. That $3,000/month mortgage can’t be a happy thing…
January 6th, 2009 at 7:14 pm
#2 Bubblelad , The good people at Royal Le Pew just don’t get it. They use the absolute high from the bubble price era and knock off a dime for good measure, more crazy talk from the realturd industry.
In reality prices in Vancouver were and still are crazy inflated, having no relationship to value. The prices meant nothing and continue to mean nothing as it was all just euphoric unsustainable hype. It was nothing more than a giant pyramid scheme that like all pyramid schemes ran out of suckers.
As I said in an earlier posting , economics will reassert
( they allways do)and prices will revert to the historical adjusted average and probably settle somewhere around in the $340K ( or slightly below due to the effect of recession knock on)area as this is what stable value charts indicate the support and affordiblity for housing is based on facts.
Unfortunatley for the cheerleaders industry economic reversion has proven itself accurate 100% reliable (like a natural law) in each and every economic cycle in the past 300 years. SHHHHHHHHHH !!!!! they don’t want you to know this stuff.
Real housing market prices historically are based on the value an average person can afford to pay. This number is based on the average income. The average income in BC for a dual income family is approx 70K ( a lot of you may think WOW if only) which with a gross debt service ratio of
( Bank Act remember) 30% is around $2100 per month, which as you quick studies see is able to support a mortgage (at 6.5%) + (typical example for the sake of easy math) of around the very low $300,oo mark.
The goof balls from the Canadian Builders assoc have decided to do a dog and pony show on the local stations to try to convince us that everythings going to be OK if we just stop thinking about anything except whats good for them, try to catch the show it chock full of nuts and extra creamy with nonsensical rhetoric from the realtard industry.
Unless Big Boob Bob Rennie can blow one of his hypnotic magic farts that he conjures up in his imagination to make it all better, those multi-unit leveraged specuvestors are going to crawl up his poo hole and grow spikes.
#4 Slam dunk MickyFinn
January 6th, 2009 at 7:11 pm
We are going to see major price cut by local developers by the end of January. Just wait.
January 6th, 2009 at 6:39 pm
Lock your doors, there’s gonna be a lot of howling at the moon this summer.
January 6th, 2009 at 5:56 pm
This is great having a front row seat to one of the biggest real estate bubble crashes in North America. Thanks to the information shared by all of you, I’ve keept my equity safely out of the Vancouver real estate market.
I guess all those skeptics were right, the bubble bloggers were ‘crying wolf’ all along and guess what?
The wolf has arrived!
January 6th, 2009 at 5:48 pm
Still a long way to go:
http://tinyurl.com/van-hpi-98-08
Prices are back where they were in summer 2006.
January 6th, 2009 at 5:35 pm
Many people in Vancouver see themselves as savy “investors” when in fact the opposite is true. Many of you may remember the story of the “condo Queeen” that purchased 6 condo units! I wonder if she a had 30-40% down payment and makes bi-weekly mortgage payments? I know several people that have $400,000 mortgages and make $16 per hour! Now these people were happy to pay their mortage when their homes were increasing in value, but now that prices are falling, they are thinking of selling in the spring. We’ll see if the market “picks up” in the spring or ballons with an “investor” fueled inventory.
January 6th, 2009 at 5:20 pm
Buh bye specuvestors, what goes up MUST COME DOWN:
2008 May detached benchmark: $771,250
2008 June detached benchmark: $765,654
2008 July detached benchmark: $753,165
2008 August detached benchmark: $737,985
2008 September detached benchmark: $726,331
2008 October detached benchmark: $695,962
2008 November detached benchmark: $666,525
2008 December detached benchmark: $648,421
January 6th, 2009 at 4:58 pm
Again, sorry if someone already posted this:
http://www.vancouversun.com/Ma.....story.html
January 6th, 2009 at 4:57 pm
The Royal Bank of Canada announced today yet another public offering to raise a further $200 million by issuing preferred shares.
What has this got to do with the benchmark price decline and Vancouver real estate?
Plenty!
Ask yourself why Canada’s number one financial institution is raising money yet again? Oh and for those who haven’t paid attention the Royal Bank did this three time already during the blood bath this past fall, including issuing $2.0 billion worth of common shares at a five year low pricing!
I’ll suggest an obvious answer… “because they are expecting a lot more blood letting going forward.” For the banks, blood letting equates to loan write-offs. Guess what… one class of loans that they know they are going to get smacked on are construction loans.
Not only are the developers themselves going to get crunched (like the Pappajohns are with the 37-storey Jameson project) but so too will the purchasers of not-yet-completed projects.
Vancouver’s real estate market is going to tank because the Canadian banks are not going to be there to finance the thousands of condos that are slated to complete in the next twenty four months. How many of the specuvestors do you suppose have an alternative way to complete on the purchase of their units? How many do you think will have to dump their units before completion?
It is painful to point out but it won’t be just greedy investors who will be hurt by this made in Canada credit crisis… no, it will indiscriminately smack the poor suckers who bought into Bob Rennie’s “I’ve got a stainless steel dream” sales tactics and who put their hard earned cash down as a deposit against their dream. Those dreams are about to become nightmares.
When people cannot complete their real estate purchases for lack of financing it causes huge pressure on pricing because those units get sold by receivers (just like David Bowra and the Bowra group are doing with the H&H development in downtown Vancouver) and they sell’em for “whatever the market will bear”. And that’s the crux of it my friends… the dropping benchmark index indicates that the market cannot bear much more downward pressure before it becomes an outright collapse.
This is gonna be ugly. Unless of course you’ve kept your powder dry in which case this is gonna be good.
January 6th, 2009 at 4:52 pm
Well it looks like I was wrong, just want to apologize to all of the folks here that I have been annoying with my mindless, idiotic posts.
January 6th, 2009 at 4:46 pm
Has anybody posted this yet?
http://www.vancouversun.com/Ho.....story.html
January 6th, 2009 at 4:30 pm
This graph is beginning to resemble a great looking ski slope….one that I would take slowly in case there’s a cliff ahead of me.
Can’t wait for the spring inventory flood!