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December 2nd, 2009 at 8:23 pm
@Supraboy: Rich people share common traits, that is they take risks in life. Something you and a lot of bears don’t understand.
What supratard doesn’t understand is that rich people take calculated risks. They study the market, then place their bets if it makes sense to do so. The supratarded risk takers are just gamblers.
Go look at Gold today, Doh! over $1200. Wait till gold rockets over $2000, you’d wish you had bought a property today. I bet you’re holding cash, shove it all into GICs, yup, that’s the way to beat inflation with your mentality.
So, the 400% increase in gold since 2002 was inflation, eh? Boy you truly are a supratard!
December 2nd, 2009 at 7:57 pm
Although I have no hard evidence for the number of speculators in the market, the circumstantial evidence I’ve seen comes from how the market behaved in early 2008, before Fall 2008 when the financial crisis hit full steam. In early 2008, there was a marked increase in the number of new listings and decrease in the number of sales. One could attribute the decrease in sales to the prices hitting affordability ceilings given the interest rates at the time, but the fact that there was an increase in the number of new listings, at a time when the financial crisis was probably only known within certain financial circles, suggests to me that this increase was due to investors trying to sell at peak. The quick turnaround in our markets this year but large rental inventory also smells of investors deciding to hold on to inventory, helped by the low interest rate environment. Yes, the turn around was only possible with FTB coming in, but I also think there is a large shadow inventory out there which is just waiting to be unleashed at exactly the worst possible moment.
Instead of letting the market correct to more reasonable levels, the policies this year (through purchase and extension of CMHC mechanisms) have simply created a whole new stream of FTB at higher debt levels who are sensitive to interest rate resets (i.e. a canadian subprime like situation). In a sense, what the government and banks have done is double up on the bet and hope the economy recovers enough to offset the later side effects.
Personally, I think it would have been better to allow homeowners, who had already gotten rich without effort anyways to take the hit now and in a sense pay for the mess with those windfalls, rather than indebt the next wave of FTB at a higher level only to have it coming crashing it at the slightest lift in bond yields. This will surely happen one day when true recovery arrives.
December 2nd, 2009 at 7:34 pm
Speaking of price volatility, I remember that when prices were going up, analysts refuted the idea of a large number of speculators in the market, pegging them at 5-10%. Then when we had the market downturn, those same analysts came out and said that speculators accounted for at least 25% of the market. If the latter is true, you will always have volatility…
December 2nd, 2009 at 7:25 pm
@Dave: I personally think it is difficult to have stable RE prices given the way the market currently operates. If RE were treated less like a get rich investment scheme and more like a consumable priced in line with the service it provides (i.e. more in line with rents paid for housing), there could be more price stability, like in Germany for instance. However, our RE market is treated more like an investment vehicle for the economy in the way it is taxed and the way credit is loosely given to purchase it. It almost has borderline ponzi like qualities to it depending on how you view it.
The significant amount of investors in the market, especially in Vancouver, makes it prone to price volatility. The RE market is also inefficient for many reasons: it is not very liquid, it is not possible to short RE, it is possible to straw bid up prices, detailed quality data on the housing market is not available from unbiased sources.
This makes housing prices go up more than they should for longer than they should and then drop more than they should and for longer than they should, simply because too many people buy at the peak and there are too few people left to buy at the bottom. Government, CMHC, and bank intervention can have temporary influence over the market as we’ve seen but this control isn’t omnipotent nor ever lasting, and neither does it come without side effects and often it simply postpones the inevitable at the expense of further detrimental effects.
December 2nd, 2009 at 6:45 pm
45
Or maybe the bulls have returned to the board….
December 2nd, 2009 at 6:37 pm
If kansai’s comment scored -4, something is wrong with the intelligence of the voters. Either that or they are CHMC agents.
December 2nd, 2009 at 6:11 pm
43 – Don’t bother trying to convince anyone, especially SP. He has been schooled so many times and he has been called out so many times. After this latest ribbing he will be quiet for a few days and then come back again with the same blather.
December 2nd, 2009 at 5:58 pm
Supraboy, it has nothing to do with being pessimistic.
It has everything to do with an unsustainable market.
Put it another way. Let’s say your buddy is at a Vegas roulette table. He’s won 6 wagers in a row, each time doubling up.
If you tell him that you think he should cash out and leave, does that make your a pessimist?
And for all you bulls out there, there’s nothing unpatriotic or wrong about lower housing prices.
It means that families have more money left after paying the mortgage to afford things like food, clothing, education, etc.
December 2nd, 2009 at 5:52 pm
@Dave: You’re close, Dave. According to the Sauder chart, flat prices occur AFTER a market top, but NOT UNTIL…?
December 2nd, 2009 at 5:25 pm
@patriotz:
Obviously flat prices occur AFTER a market top.
I’m not sure what you are getting at here.
December 2nd, 2009 at 5:16 pm
@Dave:
Do you? Take a look the price charts:
http://cuer.sauder.ubc.ca/cma/van.html
Now where do you find the flat prices? At market tops or market bottoms? There is a reason for this, can you figure it out?
December 2nd, 2009 at 5:12 pm
@Disbelief:
That just isn’t true, gold and RE have been noticeably correlated since the late 70′s, albeit a bit out of phase (gold topped a year earlier than Vancouver RE in 1980 and then both saw busts, gold has seen a very similar runup to global RE since 2000). In the early 90′s gold was out of whack with Vancouver RE but correlated with Toronto and Southern California which both saw RE busts.
The main reason is that both are very sensitive to interest rates. A big hike will bust both of them.
Compare to the RE price charts at UBC. Gold prices can move way faster but you can see the similarity.
http://www.kitco.com/scripts/h.....graphs.plx
December 2nd, 2009 at 5:10 pm
@Supraboy:
I am not pessimistic, but I am equally not too optimistic of there being much more upside for the next while.
I think prices are going to moderate over the next four months and then slowly start climbing again next spring. I think we will still pass the prior price peak, but probably not by much.
I think we have a number of flat years ahead of us. I think prices are going to mostly sit somewhere between the May 2008 peak and the January 2009 trough. Sales volumes will probably moderate a little as well over this period.
I don’t think there is much risk in sitting and waiting out the market at this point. I also don’t think prices are going to crash.
The patient buyer is probably the one who is going to win out at the end of day. But, when the right product comes up, buyers will need to be decisive. For example, I believe there will be some great deals in the Okanagan over the coming months. Inventory there is quite high and I don’t think currently pricing reflects that. I think some of the recent developers are going to start unloading product at relatively good prices. There will probably be some good land deals as well.
Expecting prices to ‘soar to the moon’ in six months is retarded at best.
December 2nd, 2009 at 3:16 pm
Bubble…What bubble
http://ca.news.finance.yahoo.c.....eport.html
December 2nd, 2009 at 2:36 pm
32
I believe that when prices went down 14% between March 08 and December 08, the steepest decline of ANY North American bubble city, you were proven wrong. I believe you were pretty much absent during that period.
With record unemployment, affordability eroded once again, demand from the past and future absorbed, interest rate decisions around the corner, and the soon to be end of the Olympic hype, its only a matter of time. Bears were proven right once through fundamental analysis – they will be proven right again.
December 2nd, 2009 at 2:24 pm
Superlittleboy,
Ah yes, littlesuperboy is known as the big “risk taker” on this site. He is the individual who has acknowledged several times that he still lives with his parents in their Richmond family home.
If you cannot even take the simple “risk” of leaving the confines of your family’s home and mother’s womb to experience the world, you clearly lack the ability to risk anything without the family safety net. And if you have a family safety net to fall back on, my dear little warcraft playing basement dweller, you certainly are no genuine risk taker.
Unfortunately for you superlittleboy, the biggest risk takers are those that have been made hungry through world life experience, who have been on their own so to speak, and who have lived knowing that they alone will receive the benefits of risk and the consequences of failure. Alas, you will never be one of those individuals, and your commentary consistency reflects that fact.
A simple grammar, syntax, diction, and argumentative framework analysis all indicates that you lack the “strength of character” to be anything but a mildly educated, co-dependent individual that lacks the social grace to have anything but antagonistic psuedo-relationships via the internet.
Again, if you take my advice, and indeed your own advice of “planting your ass elsewhere,” you might actually be able to analyze people’s socio-economic background and experience without reverting to juvenile assessments. If you left your crowded extended family home where multiple income earners and undeserving recipients of Canadian old age benefits are required to make ends meet, you might actually learn something. However, I highly doubt that day will materialize. But I must digress before a feeble “pot calling the kettle black” posting arises.
December 2nd, 2009 at 2:23 pm
I never said that gold won’t go down in price. I was just stating that Real Estate and Gold are very different and they are not relating in the slightest. They are polar opposites. When people get scared they buy metals.
Yes I was around in the 80′s I was born in the 60′s.
December 2nd, 2009 at 2:03 pm
@Disbelief:
Like gold isn’t? Guess you weren’t around in the early 80′s.
http://www.kitco.com/LFgif/au80-84.gif
December 2nd, 2009 at 1:55 pm
Just wondering, am I the only one here that’s not pessimistic? Everyone here has been talking bubble for years. It feels good when you’re all wrong and I’m right. Prove me wrong fools. I’ll be here in 6 months making you fools eat it when this bubble gets bloated even higher and I turn into a fat phuck enjoying life looking at my properties soar to the moon.
December 2nd, 2009 at 1:53 pm
@GR:
“My advice is take your own advice. Leave the confines of your home, travel, “plant your ass” somewhere else, engage in discussions with others from around the world from all backgrounds, observe, analyze, and then bring informed arguments to the table. I know that cutting the umbilical cord is hard to do in Richmond, but it will make you, hopefully, a better person down the road.”
Isn’t it too bad you hang around with low income and middle class wage earners who hump for the rest of their lives without taking any risks. You’re the type who hides in your little own cave and got picked on in highschool. The only way for you to bitch at people is to vent your frustrations on the internet.
Rich people share common traits, that is they take risks in life. Something you and a lot of bears don’t understand. Go look at Gold today, Doh! over $1200. Wait till gold rockets over $2000, you’d wish you had bought a property today. I bet you’re holding cash, shove it all into GICs, yup, that’s the way to beat inflation with your mentality.
December 2nd, 2009 at 1:49 pm
@averagejoe86:
“Bubbles across the country. I am glade the bubble had spread to the east so Ottawa have to take notice now. When it pops, it will no longer be a BC thing. ”
Why would Ottawa care? They have properties too, it’s all self interest. They’ll keep rates low and have the bag holders who don’t have land left to rot.
December 2nd, 2009 at 1:48 pm
25
Discussing economic indicators is a very interesting topic but just because metals are up doesn’t mean that everything is going to follow. In fact rising gold is a sign of fear in investors. When investors get scared they buy Gold and Silver etc. NOT Real Estate. Most people know that Real Estate as an investment can be risky especially when in a Bubble as we currently are.
December 2nd, 2009 at 1:36 pm
@Anonymous:
I think they do understand. The problem is that the population doesn’t.
December 2nd, 2009 at 1:33 pm
Oh Supraboy, your mom’s internet connection in your basement “condo” allows you to pick up all sorts of information bits doesn’t it. We are know that you have never left the confines of your family’s home to travel to the region which you so often cite.
Yes, lets plant our ass in Asia. Yes, lets go learn the lessons from the Shanghai real estate collapse, or the pretty predictable HK bubbles that emerge and pop ever 7 or so years. Yes, lets take stock of how well they have done, and how credible the speculative, gambling like culture does when it comes to RE. Yes, lets look at how 70% of China’s recent economic “growth” has been attributed to government stimulus packages; how entire manufacturing cities have become ghost towns; and how they have a symbiotic relationship with the US which is pretty much based on mutually assured destruction if either power makes the tough decisions that need to be made in order to strengthen their respective economies. Yes, where the real money is indeed…
My advice is take your own advice. Leave the confines of your home, travel, “plant your ass” somewhere else, engage in discussions with others from around the world from all backgrounds, observe, analyze, and then bring informed arguments to the table. I know that cutting the umbilical cord is hard to do in Richmond, but it will make you, hopefully, a better person down the road.
December 2nd, 2009 at 12:42 pm
Bubbles across the country. I am glade the bubble had spread to the east so Ottawa have to take notice now. When it pops, it will no longer be a BC thing.
December 2nd, 2009 at 12:41 pm
@scullboy:
Senior this Senior that. Why don’t you just listen to all the retard analysts then? Didn’t Roubini also said that Gold would not hit $1200? And he’s a professor at Columbia University’s MBA program.
Read this on home prices:
http://www.househunting.ca/buy.....95fd673ad8
Morons like scullboy just don’t get it. Gold prices and inflation will lift housing prices to epic proportions. You watch and learn. You’re stuck in freaking Canada and have never been around the world. Go plant your ass in Hong Kong, Taiwan or China and see what real money is. The stock markets are chugging along higher and you’re parking cash underneath your bed in a piggy. Go break it open and by a gold nugget with it.
Some of you here are so one-sided that you’re not willing to look at it from the other side of the trade. You guys are like the shorts getting squeezed everyday on copper, wheat, cotton, sugar, gold and whatever commodity that’s out there rocketing. And you idiots wonder why it’s riding higher.
December 2nd, 2009 at 12:18 pm
Harper is pumping RE in Beijing.
RCMP is suffering from lax recruitment criteria.
No shortage of under-informed RE consumers and greedy unethical RE industry people (agents, brokers, loan officers, appraisers) to take advantage of them and help transfer wealth to the older property holding generations, with the taxpayers to guarantee or underwrite the risk involved with that wealth transfer.
But the bright side. Someone is getting a cheap lobster lunch and if RE in implodes and there is a bailout, then all taxpayers in Canada will be paying, much to the amusement of western sepratists.
This last bubble seems to have some staying power thanks to government intervention.
How close to Vancouver can you get and still be able to cut down the trees on your property without permits?
December 2nd, 2009 at 12:13 pm
@scullboy:
Soon “rich Vancouverites all want to move here” will be the talk around Halifax kitchen parties. Then how their house went up in Value….
December 2nd, 2009 at 11:46 am
To all readers:
Drachen 19 has put up a link with the names and email addresses of all MPs for vancouver metro area. Make yourself heard, drop them a line and let them know how you disapprove of CMHC practices. It is your right and it costs nothing.
December 2nd, 2009 at 11:43 am
Anonymous 20 was me.
December 2nd, 2009 at 11:42 am
@Drachen: You are absolutely right. it is important that we write to our MPs and make it clear that we NOT in favor of CMHC practices.
Just this morning the CBC radio reported Harper speech from Beijing: he sounded triumphant. The reason? Apparently the Canadian economy is recovering (!?!). His evidence of that? House prices are rising again and prosperity is back! People are buying houses in Canada, prices are skyrocketing, the economy must be in good shape then.
This is absolute madness! There is no fundamental economic rationale behind housep price rises, but the leverage allowed by CMHC through taxpayers guarantees. Zero interest rates are blowing up a new bubble in valuations.
It is important that politicians understand this is NOT a desirable course of action for a large chunk of the population.
December 2nd, 2009 at 11:34 am
@M-:
No, they won’t blame the CMHC, they’ll do their best to point to other factors, the CMHC is a cash cow for the banks, they wouldn’t do ANYTHING to risk losing the CMHC’s insurance on their mortgages.
That would be like working as a waiter and blaming the super-rich customer who always tips really well when something goes wrong, his fault or not you’re not going to blame it on him (especially to his face!). Blame the bus-boy!
The opposition needs to start bringing this up NOW the Conservatives mishandling of CMHC practices and prepare to cut that out of the CMHC mandate in the coming years, it’s supposed to be helping ordinary Canadians to afford houses but instead it’s giving OUR money to the big banks and passing all the risk to taxpayers while driving housing costs through the roof.
Voters need to start writing letters, I wrote to Garth Turner and my local MP (Joyce Murray) about my opinions on the CMHC and I strongly encourage all of you to write your MPs too!
Vancouver area Members of Parliament
December 2nd, 2009 at 10:42 am
Calling all Yahoos! Buy now or be priced out forever!
http://ca.news.finance.yahoo.c.....eport.html
Does this make any logical sense? Like house prices last year were at 1930′s valuations or something?
Er, and what happens when rates go up again?
Compare with the Pope’s excerpts from the original at the top of the post and I think you’ll find some serious spin going on here.
December 2nd, 2009 at 10:19 am
#10 Realpaul……
I couldn’t agree more with that post. Personally, I refer to the RCMP as “shock troops”……
As far as the banks go, I think they are just dressing the media stage so there is sufficient reporting on file to show that “they were aware of the bubble and told us so” when the whole mess comes crumbling down. It is nothing more than a PR exercise on their part designed for use in the future.
December 2nd, 2009 at 9:33 am
An amusing and totally off topic observation:
I just walked past a Chinese restaurant offering $5 lobster lunch. You get a cull, which means it’s a 1 clawed lobster but still.
I also ran into 2 guys I know from van who are planning to move here.
“A good friend of mine is a very senior official at TD. I can say with complete certainty he has known about the bubble for years.” « Vancouver Real Estate Anecdote Archive Says:
December 2nd, 2009 at 7:03 am
[...] scullboy at vancouvercondo.info 2 Dec 2009 5:40 am adds the following piece of insider information – [...]
December 2nd, 2009 at 6:51 am
“Because the pool of potential buyers is not fixed…”
That’s a red herring and avoiding the real problem. Whether or not somebody buys does not change the housing supply one bit. They vacate rentals or other properties when they move and that puts downwards pressure on rents in the buying frenzy’s wake.
There is no easy way out. Low interest rates are here because the economy is sick. No free lunch in aggregate.
December 2nd, 2009 at 6:07 am
@logic:
When the banks talk about the “Canadian” market, you can read Toronto. Prices in Toronto are about 70% of here, with about the same rents and higher incomes. If they think Toronto is bubbly, what does that say about Vancouver?
Note also that if you just average out the whole country, you will get numbers approximating Toronto (no bubble in East Coast, Quebec and smaller Ontario cities), anyway.
December 2nd, 2009 at 6:02 am
@M-:
As I have said before, mortgage rates are artificially low because CMHC is guaranteeing them, i.e. the Crown is assuming the risk. It makes no difference whether CMHC or anyone else buys them. There is no risk for the banks to offload.
December 2nd, 2009 at 5:40 am
A good friend of mine is a very senior official at TD. I can say with complete certainty he has known about the bubble for years. He said on several occasions he would not buy in Vancouver. Unlike certain wannabes on this board, my pal makes and extremely hefty salary and and even heftier bonus. That’s always how it goes though. The loud flashy guys are the ones struggling to pay rent and the truly wealthy are the guys holding their cards close to the chest.
Realpaul if you have numbers to prove your allegations, let’s see ‘em. Otherwise you just sound like a cranky and crazy old man yelling nonsense. Some cops are assholed but most are not. I met a guy on the force who was really nice. He was a first responder who saw some pretty bad things and did his nest to make some really shitty moments less shitty for victims.
When my psycho ex putt face through airror and the cops showed up it was a nightmare but at least theyade thing less horrible. I’ll never forget how professional they were and how well they handled the situation. You can scream all you like but when you’re in a bad situation and totally lost, you’ll be screaming for the cops fast enough.
That’s not to say they are perfect. Some of them ate assholes and the force needs more oversight and transparency. Lots of them are good people trying to do their best on a shitty situation though. You would do well to remember that.
December 2nd, 2009 at 4:33 am
#8 Obviously you didn’t get a dictionary for Christmas at any point in time. Bigot? Hardly.
As a Canadian I have statistically a much greater risk of being gunned down by an RCMP psycho thrill killer than of ever being ‘gunned down by a gangbanger’.
Is that the swill that the RCMP is trying to peddle these days to strike fear into the hearts of Canadians so as not to lose thier primacy?
As we speak there is a wide ranging debate in the national parliament which suggests that all Canadians have lost any hope of the RCMP returning to the responsible force of old.
It is now more dangerous to encounter the RCMP in Canada than it is to do a term as a soldier in Afghanistan. The cop thrill kill stats in Canada are appalling.
Sorry to burst your bubble pal but the numbers aren’t supporting your rant against the prevailing attitude of lost faith held by the majority of Canadians.
I suggest that all RCMP agents under the age of fifty be disarmed of all weapons systems and that the entire police force be amalgamated under civilian oversight with civilian penalties for theft, rape, murder and assault doubled against officers who breach the law.
What the RCMP is doing is reminiscent of what the church did with pedophiles. It just moves the scum secretly from one community to another to perpetrate thier criminal misdeeds on another unsuspecting community.
Wasn’t Robinsons history of misdeeds in other communities exposed and then covered up? Shit eaters like him need to licking toilets in a federal facility for life.
Who is safe when RCMP pschos can get away with murder?
December 2nd, 2009 at 2:29 am
Hey, a great anecdote from BC Real Estate Talks website about Olympic rentals.
“i was considering renting out the lower floor of my home until I realized that one of the cruise lines will be docked in North Vancouver. It includes the usual all you can eat food, entertainment, cleaning, etc you’d expect from a cruise ship. all for the starting price of $349 per night. there were hundreds of rooms available around september. i figured why would anyone want to stay in my basement for $500 per night when they can be wined and dined on a ship for only $349.”
http://www.realestatetalks.com.....b1#p163150
December 2nd, 2009 at 1:27 am
“RCMP is short for scumbags and assholes”
——–
Fuck off you bigoted asshole. Why not apint all cops with the same brush. I hope you or someone close to you gets gunned down by a gangbanger and then you’ll be pleading for the cops to do their job.
December 2nd, 2009 at 12:11 am
Governments juicing inflation in fear of reality setting in. The argument from the government seemes to be “there is never a ceiling on prices’. The ploticians will never argue that price spikes have occured to the detriment of the consumer because they have automatically ratcheted up thier own revenue and spending targets to meet the anomaly not the average. This is absurb economics.
If housing prices triple, then just extend the am period, if auto prices quadruple than forget about the price make it a loan instead. Pyramid schemes always fail unless your a four year politician with an indexed pension. The rest of us can go to hell.
http://www.financialpost.com/story.html?id=2290893
BTW did anyone see how that creep cop Monty Robinson is getting out from under the drunk driving allegations arising from the death of the young motorcyclist in Tsawassen. It looks to me like the RCMP has had enough embarrassment from the actions of its own force of psych killing idiots and has gone on the PR offensive. RCMP is short for scumbags and assholes in cahoots to lie cheat steal and cover up crimes by ‘members’. Send the shits packing I say.
December 1st, 2009 at 11:35 pm
Well, if banks are saying this now, I guess it’ll be harder for them to use the “nobody could have saw this coming” argument later (though I suspect some will try). =/
December 1st, 2009 at 11:31 pm
remember too that they are talking here of the “entire” canadian market, not Vancouver.
We’ve been in bubble terriotry for years, but lots of the East hasn’t.
December 1st, 2009 at 11:29 pm
I think the banks are preparing to blame CMHC when the crash comes. They’ll blame CMHC’s boosterism for pumping the market even as they were warning against it, and they’ll blame CMHC for pumping the market by keeping interest rates artificially low (by buying all the mortgage debt). This way, there may not be as significant of a backlash against the banks as there was in the US…
December 1st, 2009 at 11:09 pm
@domus: No they don’t deserve to go bankrupt, not if that means they’re able to pass off the debt on CMHC and by extension the Canadian taxpayer. Essentially, bankruptcy is too good for them.
December 1st, 2009 at 10:51 pm
Hey, when the guys who make money from residential RE mortgages start flashing warnings left, right and center, you MUST suspect something bad is going on, eh?
And yet all these morons are still lining up in the rain to put their name on the dotted line, dreaming to make free money by simply waiting for prices to go up further.
When the bubble will burst and we will start seeing (again!) the usual sob stories, with people saying things like “Who could have known?” and “Nobody warned us this might happen”, I hope somebody tells them, loud and clear, “it’s your greediness and your fault, idiot. You deserve to go bankrupt and should NOT be rescued!”
December 1st, 2009 at 10:28 pm
First!!!!!