The Vancouver bubble blog bubble is rapidly deflating. The latest casualty of this humour downturn is the witty and beloved condohype, who posted notice of closure this morning.
I hold out hope for a change of heart, afterall it wasn’t so long ago I posted about this blog closing for similar reasons.
Le hype est mort, vive le hype!
patriotz: Very true. But I would consider a change of ownership to be a point of maximum risk for this type of problem. I remember looking at a nice condo someone was trying to rent out a few years back. She said she was moving in with her boyfriend and therefore wouldn't need the place for a while. A couple people viewing the condo were still trying to woo her into renting to them, but I was gone immediately; like I want to have my tenancy depend on how she gets on with her boyfriend? Things go too well, you're facing new ownership. Too poorly, she's moving back. Not for me, thanks. Yes, a lease is helpful, but it takes me a year just to get my boxes unpacked. I've moved once in the last decade, and that's about as… Read more »
And you can get evicted from a forced sale, because you have no guarantee that the buyer won’t be moving in.
You have no guarantee that the buyer won't be moving in if the property isn't sold either. Unless you have a lease of course.
The point is that change of ownership does not affect terms of tenancy.
Dave:
#50 Dave, a lot of the 'new immigrants ' are family members who live with extended family already here. I know a lot of new immigrants and they pack them in tight sometimes 4 to a bedroom , sleeping on the floors in the living room with grandma and pa sleeping in a purpose built garage suite. Multi families living together with brothers and sisters with families all under one roof. I have personally seen 10 to 20 individuals bedding down in one resideance. This is to refer to all races and ethnicities of new immigrants. It is simplistic to assume that 'all new immigrants buy houses/condos.
NET HOUSEHOLD CREATION IN VANCOUVER FALLS
The amount of households in Vancouver fell by 49,000 last year as Chinese, Korean and Japanese families and ESL students returned to their countries of origin to join the income earning head of the household, more memberes of the elderly demographic died or moved into care facilities and construction workers from Quebec and Atlantic Canada returned home upon completing projects.
patriotz: I also detect a bit of “straw bear” in your posting. I don’t see anyone on this board claiming that purpose built rentals are going to get cheaper. It’s the rental condos which are already getting cheaper. I can assure you I am not trying to create "straw bear" arguments regarding Vancouver real estate. I just wanted to clearly separate Hollyburn & friends from Joe Trapped Flipper in the rental market. Hollyburn, for instance, is definitely facing higher vacancy now than they had a year ago, and my wife says she has seen a lot of Hollyburn vacancies advertised in places they never bothered with even six months ago. So they're working hard to fill rentals, and it is conceivable this could lead to a drop in purpose-built rental prices at some point. I agree with you that they… Read more »
Foreclosure hot potato: banks refusing to take possession of foreclosed properties because it would cost more than the property is worth.
Dave: "Using 2.5 people per household, that translates to an increased demand of approximately 3,200 units just in the 4th quarter alone."
Not so fast. BC Stats (pdf) shows increase in Vancouver CMA population of 130K from 2001-2006. That is an average of 26K per year. Using 2.5 people per household that is 10K new dwellings per year. Completions will be approaching 18K for 2009 and 2010 (link). I'm sure readers can work out how many years of new supply that is.
Here is a look at new persons per start data, which you are effectively calculating, for historical perspective.
NET IMMIGRATION TO VANCOUVER-UP
Vancouver received 37,000 net new immigrants last year and is expected to see the same this year.Immigration from UK is up 38% and the numbers from USA and France are also up.
Dave, 9,200 people in BC died, moved or married, merging housholds in Q4 of 2008. That's a deline in demand of over 9000 units of housing.
Oh, wait. In Dave's world, no one ever moves.
Dave, its income and rents that drive values. Do you know that California, Florida, London, Hong Kong, have very good rates of population growth and we all know what happened/happening to their real estate market. But hang on, its different here, silly me.
The number of bear blogs still active vs previous active bear blog ratio is a measure of demand for moldy basement suites and that is all. You can't read anything else into it.
So now the bulls are bullish on purpose built rental apartment rents! This is too funny. I am too bullish on purpose built apartment rents, they wont decline but will remain relativley stable although vacancy rates may edge up slightly. See a pattern here bulls, something to do with affordability! Residential real estate currently unaffordable by at least 50%!
Niko, 9,200 immigrants came to BC (8,100 to Van) in Q4 of 2008 (October – December). Using 2.5 people per household, that translates to an increased demand of approximately 3,200 units just in the 4th quarter alone.
"huge influx from the new units that will contribute to increase future rents"
How can increased supply increase prices? Go back to school.
My common sense is telling me: The bubble lasted years: The fizz will last years too. Of course those that "invested" will resist. Of course those in the industry will spin. Nobody wants to lose, they are all "hopeful", just like those that spend $5 on a lottery ticket. Hope. But it is a gambling hope, and those hopes are very flaky. As a modest person with no illusions of grandeur my enjoyment is to watch all the spins, creativity, the denials, the grasping for straws and see those with no integrity weeded out from those that have integrity. It is very interesting, economic/political history is in the making. I feel lucky to have the opportunity to witness this circus. Now I get to see what historians tell over and over, humans have not changed that much. Some may learn,… Read more »
I wonder if this is the beginning of the end for them? I know they say it's because of parts supply problems, but surely this could be a shot across the bow for old Lewenza and the CAW.
I don't think Michael Moore will be heading to Windsor anytime soon to contrast Canada with the US…
Are you sure it was a Condo in Vancouver?
It was a townhouse in Surrey. He bought it because he was able to get a very good deal on it and he needed it for his family (one more kid now arrived).
He said specifically that he did not think it was a good time to buy in general but the combination of the price and his family needs made his purchase worthwhile.
Mohican continues to be bearish on the RE market as anyone who reads his blog would know.
I believe Mohican bought a townhouse in Langley for a reasonable price that was less than his current rent, and necessary for a growing family. To extrapolate that fact to mean Vancouver real estate is somehow now a good investment is false.
listenup:You have scored a big jackpot for your comment,How much?10,000 scores.I believe Gerth Turner have been buying in Vancouver on his last year visit and he was on visit again few weeks ago,Most probably to take possession and rent out his units.
"Mohican BOUGHT a CONDO in VANCOUVER."
Are you sure it was a Condo in Vancouver?
ted:There is no surprize ahead from bearish point of view you can imagine lots of glut has been completed through all those given year,While new units entered into re-sales market those units help raise the average rents.There are only eight months left in year 2009 We won't be able to see cranes at work like the way we had seen in last couples of years.I believe that we are going to see huge influx from the new units that will contribute to increase future rents.Guess what? You have got only eight months to argue against slow economy pace and future supply.One more thing,In last 5 years of data shows that only five percent units from new projects hit back into market for sales.The center of gravity for strength of Vancouver Real Estate Market is located right there,The ability(ABSORPTION)through preoccupation of… Read more »
Good to see you back Fish. And yes I will miss condohype too.
Anonymous: I love how in your world a C is a "good" grade and a D is "fair".
Way to strive for the middle!
You bears have to face some facts here. Let's review all the bears who have fallen and turned into bulls in the last year:
1) Mohican BOUGHT a CONDO in VANCOUVER. Enough said. That must be a big blow to you moldy basement dwellers.
2) Paul moved to PEI because he knew he could never afford a house in Vancouver if he kept chasing away clients with his bear mentality. That's a bullish move.
3) Condohype gives up. It's not funny anymore because Vancouver condos really are about a hip new lifestyle of refined individuality and mobility surrounded by a natural village.
Sorry to see condohype go. I am back to posting for now: