Rennie ‘guarantees’ post Olympic values
Bob Rennie is the quintessential salesman and like most marketers he knows how to talk his product up. Here he is expounding on the wonders of Vancouver condos on the Chinese news site xinhuanet.com. This follows the template of most of his ‘news’ releases but includes one very interesting quote about the post-games market here in Vancouver:
“I’ll guarantee it won’t hurt our values. I’ll guarantee it will maintain our values. The frightening part is if values go up too much. We don’t have financial sector head office jobs, no manufacturing. If we are basing things on local incomes, how does housing keep up with local incomes if we have a shortage? We have to be very careful on the affordability side.”
This is a very generous offer. If anyone has the financial resources to ‘guarantee’ that your condo won’t drop in value it’s Bob Rennie. This could be exactly what anyone who fears the fallout of a housing bubble needs to get them to buy property in Vancouver. After all, many people are leery of buying in a market where prices are near record highs and there are no ‘financial sector head office jobs’ and ‘no manufacturing’, particularly when that city has a history of volatility in house prices and has seen market crashes of up to 50% in the past. Watching people in cities around the world go into foreclosure or make mortgage payments that are far beyond the current value of their property doesn’t exactly instill confidence either, even if it IS different here.
I’m not sure exactly what the contract on this deal would look like but I imagine that you’d ‘lock in’ your purchase price and it would be held on record for any future point you decide to sell. If the market goes up, you’ve made free money. If the market goes down, I’m guessing Bob Rennie would write you a cheque to cover the difference between your purchase price and the price you were able to sell for.
Nah, that’s just silly… he’d probably have an employee write you the cheque.
I’m not sure if there are any catches, but with a deal like that how could you possibly go wrong?
January 18th, 2010 at 6:02 am 1
Pretty bold marketing ploy by Bob. This in a market where even Cameron Muir, the uber bull, has acknowledged another potential BC housing bust.
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January 18th, 2010 at 6:11 am 2
If anyone had said what Rennie did about securities they would be hung up to dry by the regulators and courts. Take a look at the ABCP fiasco. I strongly believe that those who sell RE should be held to the same level of accountability.
Also – Mish on the global housing bubble:
http://globaleconomicanalysis.blogspot.com/2010/0…
From a commenter:
Well of course "Canada" didn't, BC was just starting to climb out of the early 80's bust and Alberta was still in it. The commenter is talking about Toronto which of course to those who live there equals "Canada".
There is a remarkable lack of awareness among many (apparently Canadian) commenters that (1) RE markets in Canada, just like in the US, were not correlated prior to the global bubble of this decade, and (2) much of Canada has not participated in the current bubble, making Canada-wide figures of little relevance.
I'm not going to blame Mish himself as it's not his business to focus on the domestic Canadian economy. But the locals should know better.
There are also a few bull commenters spouting the usual brainless rationalizations.
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January 18th, 2010 at 7:24 am 3
Guaranteed pricing? Hmm,,that reminds me of a couple I knew who owned a house in Burnaby. Bought in 1979, sold in 1981 at the April peak. The realty company guaranteed them a sales price. So, they went and snooped around the Kelowna area and bought there. When they finally moved sveral MONTHS later, the collapse had begun in earnest and the house never did sell.
I doubt the company was ever that foolish again.
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January 18th, 2010 at 9:10 am 4
I'll take that "guarantee" Bob, with two conditions: one, you give the "guarantee" to me in writing and two, I get senior creditor status.
That won't be a problem though, since you're good for it and real estate only goes up, right?
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January 18th, 2010 at 10:31 am 5
There are always two sides of a coin so i think Bob Rennie is better than Drachen as Drachen still owe Satv more $350,000 from the bet he lost to Satv and two year of anually compunded interest rates on 25% of the Value of a house that Drachen is currently renting.
Rennie is better than Garth Turner as Garth owe Canadian bears almost 50% value of Canadian housing prices,His own book is witness that his writter is wrong.
Rennie is better than Professor Robert Shiller despite bubblicious call Vancouver real estate went up through recession.
Bears leaders also owe them 70% Value of market or we can just call it market forces that drive the market that way VHB and RENNIE won't be responsible for anything,Nope?
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January 18th, 2010 at 10:32 am 6
Rennie could offer a written guarantee if a market crash would bankrupt his company anyways. Like AIG writing CDOs with no reserves. There's no reason to do that though. If investors are looking a Vancouver condos they've drunk the kool-aid already.
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January 18th, 2010 at 10:41 am 7
This talk of a guarantee is just advertising fluff and puffery, not an enforceable contract.
For the sake of discussion, Rennie, could actually offer a guarantee on values for RE he sells very easily and at no risk to himself.
He would incorporate a company called Rennie Guarantee Corp. which would issue the guanrantees on all homes Rennie sells. Rennie gets the commissions and Rennie Guarantee Corpo gets all the liability in a bust. When the bust comes, the first claim against the Guarantee Corp. would bankrupt it and all other claims aginst the corp would be worthless because Rennie would ensure that Rennie Guarantee Corp. held minimal assets. (perhaps some office furniture and one computer and a phone).
Rennie's reputation would be toast but in a bust he is not going to make much money selling RE anyway. May as well have one last push to earn commissions before the market collapses and take the money and live like a king for the reast of his life.
That is how you can offer guarantees and be shielded form the consequences through the separate legal identity and limited liability of the corporation.
The only way to protect yourself is to ask for a personal guarantee from Rennie. He would never give it. Moreover, most buyers would never think to ask.
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January 18th, 2010 at 10:56 am 8
"Vancouver real estate went up through recession."
You mean you think the recession is over in this province?
Who have YOU been listening to? Michael Campbell? Global TV News?
Don't make me laugh!
It's just beginning here, chum!
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January 18th, 2010 at 11:23 am 9
"Don’t make me laugh!"
If you did not get lay off notice it's time to smile buddy,Cheer UP like Bob Rennie.I am going to work!
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January 18th, 2010 at 11:44 am 10
I remember is when Seahawks QB Matt Hasselbeck made his playoff guarantee at midfield at Lambeau in 2004. Hasselbeck guaranteed victory after the Seahawks won the coin toss against the Green Bay Packers in the NFC Wild Card. He then proceeded to throw a game winning interception to Packers' Cornerback Al Harris for the winning score.
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January 18th, 2010 at 11:50 am 11
http://www.slate.com/id/2241226/entry/2241227/
A view of Vancouver from someone who lives in New York. Really Interesting
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January 18th, 2010 at 11:54 am 12
@patriotz:
Patriotz raises another interesting point: the fact that no one in the "corridors of power" gives two shakes of a lamb's tail what's happening out here in BC.
The fact that we're not even on the radar for the known universe (sorry to all who think this "Best Place on Earth" and everyone wants to live here blah blah blah – vomit bag please…), I think is a big reason why the bubble has become so completely ridiculous out here. That, combined with the fact that everyone here seems to be either high or completely delusional…
It's also why if people who are stretched beyond their means think the Feds are going to run to their assistance, they may be sorely disappointed. If housing values were as completely inflated vis a vis incomes in Ontario or Quebec, there would be an emergency parliamentary hearing. In BC…
BC could fall into the ocean tomorrow and no one would notice.
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January 18th, 2010 at 12:36 pm 13
""I'll guarantee it won't hurt our values."
The thing is, if he had actually guaranteed that prices wouldn't drop he might have actually given some owners legal recourse to come after him when prices DO drop.
He didn't say that prices won't drop there though, he just said he guaranteed the Olympics wouldn't CAUSE prices to drop, and that's an unprovable proposition (as I'm sure he knows perfectly well).
"I'll guarantee it will maintain our values."
Again, he leaves himself a pretty wide margin of wiggle room there because he doesn't give a time-frame for 'values' to be maintained over. So is he saying for a week? A year? Indefinitely? Who knows!
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January 18th, 2010 at 12:59 pm 14
These RE pumpers sound more and more like sleazy used car salesmen every day.
@Purp: "Tonight, though, Vancouver is looking pretty good. Kristin, my high-school friend, shows me around the house she has just bought with her fiancé. It has five bedrooms and a deck overlooking the inlet and the city. They each have a car and take elaborate vacations—to Patagonia and Northern Italy in recent years. She laments that her four weeks of annual holiday are not enough. Through the window, down the hill and across the water, the city lights wink on and off while we eat our ordered-in Thai food with Okanagan wine. I am forced to concede that the best-city list-makers might be onto something."
Yes, I'm sure if you can afford a 5br house in North Van, two cars and "elaborate" vacations Vancouver is quite pleasant. 4 weeks vaction? Govt job? For most people though, affording an average house in an average neighborhood means foregoing all those pleasures and a lot more. I love it when people take some crap like this and extrapolate it to the general public.
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January 18th, 2010 at 1:32 pm 15
Purp: did you call it "really interesting" just to trick us into reading it?
Her opinion based on-
Okanagan wine: check
Order in Thai: check
5 bedroom house where you have to cross a bridge to downtown: check
2 cars: check
view of downtown and the industrial port (from a vantage point such as N. Van): check
Did I miss anything else that qualifies this as the "best city int he world"…
From Slate's website:
How do I apply for an internship at Slate?
The Slate D.C. office hires interns for the spring, summer, and fall. Spring and fall applicants must be full-time students. Applications should include a résumé, three clips (published articles, blog entries, and classroom assignments all acceptable), and a short critique of a story that's appeared in Slate recently. E-mail only: Please keep messages under 200 KB, and no PDF files. Send e-mail to dcoffice@slate.com. The deadline for summer internships in D.C. is March 1, 2010.
We can all write our own op-ed and have it published. Then again, that is essentially what this blog does.
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January 18th, 2010 at 1:47 pm 16
yes, but this blog doesn't masquerade as "news".
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January 18th, 2010 at 1:50 pm 17
Whoa, whoa, whoa, easy there bitter bears. I didn't post this comment.
That said, I don't really understand the bitterness, clearly this article isn't about an 'average' family, and I wouldn't consider a view property in North Vancouver an average home in an average area anymore, those days are gone, just like those of Kitsilano being a working class neighborhood. That's the rub with growing cities.
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January 18th, 2010 at 2:15 pm 18
The "bitterness" (actually annoyance but if you can't tell the difference between a 500k property and a 1.5 million property I can't blame you for not being able to tell the difference between bitterness and annoyance now can I?) stems from the media's reluctance to publish properly balanced perspectives. This article is merely another example of salesmanship presented as journalism, which is, unfortunately, what has become of nearly every article on Vancouver Real Estate and so many other topics as "news" organizations deal with ever tighter budgets and so rely more and more on 'free' articles written by biased sources and/or they refuse to publish ANY articles which could offend their advertisers.
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January 18th, 2010 at 2:21 pm 19
@Purp:
"those days are gone, just like those of Kitsilano being a working class neighborhood."
I take offence to this too. Kitsilano, Dunbar, Pt. Grey Shaughnessy and the West End (and maybe a few others) are not working class neighbourhoods (all in about the same price range). Who DOES live there? I mean you're talking about 25% or more of the housing in Vancouver proper and the only people who can afford to live there are those who are in the top 5-10% of the population and that doesn't seem odd to you? Does that really seem sustainable to you?
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January 18th, 2010 at 2:25 pm 20
Purp: no big deal, but my comment was that you used the words "…really interesting…"
If you had said "another crappy one-sided op-ed not even backed by a limited survey", i would have skipped it and spent the time avoiding work somewhere else.
I was hoping that you had filtered out the flotsam.
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January 18th, 2010 at 3:26 pm 21
Rennie probably thinks he's 'Too Big To Fail'. His ego maybe…
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January 18th, 2010 at 4:16 pm 22
North Carolina's State Motto is 'Esse Quam Videri' – To Be, Rather Than To Seem.
I think Vancouver's motto could be the exact opposite to that. To Seem, Rather Than To Be.
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January 18th, 2010 at 4:17 pm 23
@20 SD92129 – Once again, whoever posted that wasn't me, so I can't comment on the choice of words 'really interesting'
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January 18th, 2010 at 4:32 pm 24
An outreach worker i know just told me they are giving away Olympics tickets at homeless shelters
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January 18th, 2010 at 4:45 pm 25
@Drachen, I understand your annoyance with shoddy RE journalism, it's certainly rampant these days. I read the article (after someone else named Purp posted it), and to me it's not an article about RE, it's simply one person's experience and their take on the 'best place on earth' label. It's an editorial for pete's sake! Slate even labels itself as an editorial magazine, it's not the Reuter's of online media.
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January 18th, 2010 at 4:54 pm 26
@Drachen, regarding the 'working class' neighborhoods, what I was trying to say was that the notion us going back to a world where the average family could buy a SFH in these westside neighborhoods is probably done. Some families will opt to densify (townhouses, condos etc.), some just move further away into more affordable neighborhoods. How is this different from any major, growing city? The high paying jobs and the wealth stay concentrated in the business core and new population centers pop up farther and farther out. That's not to say that I don't think the market is overpriced and we are due for a correction, just that it won't correct back to where hardcore bears would like.
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January 18th, 2010 at 5:19 pm 27
Purp, sorry I did not see #17 before firing out #20. Sometimes this blog moves fast, sometimes it moves slow.
And my intent was just some friendly ribbing. It is a slow news day.
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January 18th, 2010 at 5:21 pm 28
That's probably true, I'll accept that you used the term "working class", in an incorrect way (in my opinion anyhow).
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January 18th, 2010 at 5:24 pm 29
I posted that link sorry for the confusion I hit the submit before adding a Name and it just used yours.
I called it really interesting because there are frequent debates on this blog about Vancouver and how it doesn't deserve its "world class" label. This article is discussing that very issue written by someone who left Vancouver and moved to New York (A world class city by any definition I'd believe). More importantly from my point of view this person has no vested interest in making Vancouver look good or bad either way.
If the person described in the article an Average Vancouverite is an interesting question. My opinion is they are, honestly it didn't even occur to me to think otherwise. A house in the North Shore, 4 weeks off and regular vacations are pretty standard middle class acruments.
I think the author was making the same point that we often make about other less expensive places. That is if I moved to Winnipeg image the things I could buy with all the money I'd save on housing. Comparing New York to Vancouver is much like comparing Vancouver to Winnipeg in terms of price at least.
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January 18th, 2010 at 6:09 pm 30
"Rennie probably thinks he’s ‘Too Big To Fail’. His ego maybe…"
You know…it's NOT like we haven't seen his kind in this town before.
I remember another bigshot realtor, Alex diCimbriani,(1970-80's) who boasted about his "City Within A City" nonsense in the West End.
And, of course, who can forget Geoff Stephens of Greyfriars? He was a pompous…oh, never mind.
So, Rennie types come and go. No big deal.
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January 18th, 2010 at 6:28 pm 31
Vancouver is to New York what Winnepeg is to Vancouver, eh? A little google shows that the median home price in New York (all five borough included) is US$379,000. (http://tinyurl.com/ykxswq3) Interestingly, around a 25% drop from peak in summer of '06.
According the Royal LePage, average home price in Van across all types is $592,000.
When you say New York, are you really talking Manhattan?
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January 18th, 2010 at 7:01 pm 32
When you say New York, are you really talking Manhattan?
Yes I am. When we talk about Vancouver we really need to take into account the lower mainland. So relatively Vancouver proper is compared to Manhattan while Burnaby, Richmond, New West, Surrey ect. are comapred to the Bronx, Queens ect.
Most cities have long ago amalgamated all their suburbs while Vancouver has not so it is important to keep that in mind when comparing Vancouver to other cities. Really Vancouver is the center of the much larger lower mainland.
Also when I said New York is world class I mean Manhattan, no one in their right mind thinks Queens is world class. Surly we can all agree on that.
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January 18th, 2010 at 7:55 pm 33
"Also when I said New York is world class I mean Manhattan, no one in their right mind thinks Queens is world class"
Exactly what part of Manhattan are you talking about that's "world class"? It's a big island. And North Van is, let me guess, Connecticut?
I drove down Broadway the other day and thought of catching dinner and a show. Then I remembered I was in VANCOUVER.
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January 18th, 2010 at 8:32 pm 34
@jesse: It’s a big island
No it's not it's tiny just under 60km2. Vancouver proper is twice that. Metro Vancouver is almost 50 times larger.
Where according to you is "World Class"?
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January 18th, 2010 at 8:54 pm 35
Anon Manhattan is a diverse place. There are still areas that have high crime rates. Like every city there are parts that attract the aristocracy — because that's what is really meant by "world class" as far as I can tell — but looking at the people who live in Vancouver they for the most part don't "belong" to the same magnitude of wealth, fame, and power prevalent in other cities, even in Canada.
And that's OK as far as I'm concerned. The fact that we need to compare Vancouver to anywhere is all the proof I need that it has a ways to go.
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January 18th, 2010 at 9:04 pm 36
@Drachen:
Maybe if housing was affordable, we wouldn't have to commute so far and traffic would be less.
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January 18th, 2010 at 9:50 pm 37
I took a walk downtown along Granville Street the other day, watching the frantic activity setting up new store fronts, cleaning signs, and in general putting up a fake facade on this pretentious city.
I also heard it in the news that the fake tram line will start operating this week, with real trams borrowed for a few weeks from Brussels, so that we can get a glimpse of how public transit in a real city looks like. (The hope being that the visitors will think it is actually ours.)
I expect walking the same walk on Granville in a few months time, watching the new stores being boarded up as the tourists leave, the homeless re-claim the streets and the city reverts to its true self.
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January 18th, 2010 at 11:02 pm 38
Luckily, Mr. Rennie is putting up his own personal fortune against the 10's of billions of dollars that will be lost this year by owners of Vancouver real estate.
Right Bob?
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January 18th, 2010 at 11:45 pm 39
16 – 18% pay increase for Handydart drivers over 4 years. LMAO!!!
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January 18th, 2010 at 11:46 pm 40
16 – 18% pay increase for Handydart drivers over 4 years. LMAO!!!
http://www.theprovince.com/Mediator+suggests+Hand…
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January 18th, 2010 at 11:53 pm 41
I guess the recession is over, Glad I rent and can GTFO of here before the bill is due!!!! 16 – 18% WTF!!!
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January 19th, 2010 at 12:36 am 42
Rennie on Xinhuanet Casino. LOL
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January 19th, 2010 at 1:04 am 43
Hmm, our contract expires in July.
We'd better be getting 18% over 4 years this time, as opposed to the 2% a year we got last time (when times were actually good).
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January 19th, 2010 at 4:39 am 44
@Purp-A:
That's ridiculous. Manhatten has a population of about 2 million out of NYC pop of 8 million out of Metro New York (remember just across the river you're in New Jersey, etc.) pop of 16 million.
Westchester County, where Tim Geithner can't sell his house for $1.6 million, is just 1/2 hour from Manhatten and is the proper counterpart to Kerrisdale and Shaughnessey.
CoV has 500K out of a metro of 2 million.
And consider for a minute the relative concentration of corporate offices and high paying jobs between the two cities. Vancouver has not one bank, not one multinational, not one international or even national airline, not one international organization (even Greenpeace is gone), in sum SFA.
The pretension and self-importance of this city are mind-boggling. Vancouver isn't even a peer of Seattle economically. Portland and San Diego are more on target, but of course mentioning them to the bulls is like showing a cross to Dracula.
If you want a fair comparision to the Big Apple CoV versus NYC minus Manhatten would be more like it. But even Brooklyn has the world headquarters of the Jehovah's Witnesses.
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January 19th, 2010 at 9:21 am 45
@patriotz: Portland and San Diego are more on target, but of course mentioning them to the bulls is like showing a cross to Dracula.
Correction – Portland has Nike and Intel, among a few others… Portland has a way better fundamental economic foundation than Vancouver in several ways.
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January 19th, 2010 at 9:51 am 46
@patriotz:
"Vancouver has not one bank, not one multinational…"
That's not entirely true, we have EA (and various other video-game and FX companies), 1-800 GOT JUNK, Squirrel (the POS company, no not THAT POS, the other POS).
Hmm not very many really, but there are SOME.
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January 19th, 2010 at 10:13 am 47
There is actually a Globalization and World Cities Study Group & Network that attempts to rate cities in regards to their "Worldclassness". They came up with 12 criteria, and rank cities by the number of criteria they meet:
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January 19th, 2010 at 10:33 am 48
@crabman:
"They came up with 12 criteria, and rank cities by the number of criteria they meet:"
Actually they have four criteria;
Global Service Centre in: Banking, Accountancy, Advertising and Legal.
Then they rate each city from 0-3 1 being a minor provider 3 being major. So I'm guessing Vancouver probably gets a 1 or 2 for Advertising, I can't see any of the other categories where we'd earn a point.
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January 19th, 2010 at 11:58 am 49
if hubris was a criteria YVR would be up there
in the pantheon of the gods…… jus' sayin'
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January 19th, 2010 at 12:54 pm 50
"That’s not entirely true, we have EA (and various other video-game and FX companies), 1-800 GOT JUNK, Squirrel (the POS company, no not THAT POS, the other POS)."
And how much do these companies pay? They're not even worth mentioning for the most part. Even the film industry is almost dead now thanks to not keeping up with tax incentives offered elsewhere.
Vancouver is an overgrown fishing and logging village with delusions of grandeur …
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January 19th, 2010 at 1:14 pm 51
Vancouver is an overgrown fishing and logging village with delusions of grandeur …
That pretty much sums it up
But we do have Rennie he is a one man corporation and he's a tough one to keep down. The big corporate Cheerleader. One last kick at the Cat make it good Bobby.
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January 19th, 2010 at 1:27 pm 52
I live living in said fishing village. Now, if only the RE prices reflected this…
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January 19th, 2010 at 1:29 pm 53
Watch more people come into this city after the olympics. The Olympics will bring lots of great benefits including a tourism boom. Anyone spreading bearish news here should not live in Vancouver. We should all support this great city. I have faith in our city and our economy. The boom continues and expect another 10% rise in property value in the next 12 months. Watch it happen.
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January 19th, 2010 at 1:42 pm 54
That’s not entirely true, we have EA (and various other video-game and FX companies), 1-800 GOT JUNK, Squirrel (the POS company, no not THAT POS, the other POS).”
This is laughable. Compare to Seattle which has, Sarbucks, Costco, Microsoft, Boeing. And those are just the ones I can come up with without any thought. Seattle is a real city with sane real estate values.
Vancouver is an irrational bubble. Just like Ireland, it's economy is founded on construction and RE speculation. When that stops, we will have 10% unemployment. Look for it in 2011.
I personally have about $1.5M in cash left in the bank after a couple of purchases in California (where rents cover my mortgage payments plus some profit). I waiting to buy Vancouver RE in 2011 when the values are 60% lower.
The bulls on this site think that international investors will buy Van RE at these levels. Let me tell you something: we are not stupid.
By any rational measure (historic price growth, price to rent, price to income) this market is probably the worst RE investment in the entire world.
Trust me, there are no international investors buying Van RE right now. It is just a bunch of deluded, frenzied locals.
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January 19th, 2010 at 2:06 pm 55
"By any rational measure (historic price growth, price to rent, price to income) this market is probably the worst RE investment in the entire world.
Trust me, there are no international investors buying Van RE right now. It is just a bunch of deluded, frenzied locals."
Absolutely. Anyone believing otherwise is in dreamland. Is Vancouver a nice little city? Of course it is. Emphasis on little …
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January 19th, 2010 at 2:10 pm 56
Vancouver School Board advises of 800 potential layoffs…
http://www.vancouversun.com/business/Vancouver+sc…
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January 19th, 2010 at 2:15 pm 57
Thanks for the discussion all, some great posts.
Regarding that Slate article: The author should point out that the Okanagan wine that she was sipping in North Vancouver would have cost her LESS to purchase and consume in Manhattan. Apart from all the other forms of insanity we have in Vancouver, we also have the most prohibitive alcohol taxes & policies of almost any jurisdiction you'd be able to name. As with RE, the vast majority of Vancouverites seem to be quite happy to overpay large amounts to consume dreck.
Examples of these consequences:
a) Good red wines costing US$25/bottle in California sell for Can$60/bottle in retail stores here. (Even with the loonie at parity!).
b) Okanagan wines cheaper to buy in Quebec and Ontario than in Vancouver!
c) A bottle of red wine consumed in a high end restaurant in LA cost the same (identical bottle) in a retail outlet in Vancouver (anybody who knows anything about restaurant mark-up knows how insane that is).
You don't have to be a wine buff to get the point. People here are either paying much more for the same thing, or settling for poorer quality at affordable prices.
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January 19th, 2010 at 2:29 pm 58
Just wanted to say this website is a great forum for discussion. I am thinking about entering the market here but im definitely still on the sidelines..Interest rates have nowhere to go but up…So anyone just scraping by now will have a world of trouble on their hands…
One other point to add..Do any of you people factor inflation into the equation? Just a question because if you plug an inflation calculator you will note that $200K in 1980 would have the purchasing power of $500K in 2008…Anyways…Prices continue to go up but lets not forget inflation over time… But I see the other side of the argument…Prices in Van are out of proportion over the short term (last 5 years).
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January 19th, 2010 at 2:36 pm 59
@Ally123:
Yes, all of us talk in real (inflation adjusted) dollars when we're discussing these things, it's the only rational way to compare commodities over a span of years, only Dave insists on using nominal dollars but he's a bit soft in the head if you know what I mean.
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January 19th, 2010 at 2:40 pm 60
@VRENGD:
"Trust me, there are no international investors buying Van RE right now. It is just a bunch of deluded, frenzied locals."
We don't have to even trust you, Landcor keeps track of these things for us and publishes figures occasionally, according to them the ownership of Vancouver properties has been dropping in the last couple of years (ie, more foreigners are selling than are buying right now). So there's a reliable source for statistics, not just an anecdote to show the truth.
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January 19th, 2010 at 2:44 pm 61
@Anonymous:
May I disagree.
A generation or more ago Vancouver was nice. Frankly the city has become quite nasty. Endless conflict between the "haves" and "have-nots". All people seem to talk about is RE and crime. No interest in any genuinely productive activities. Expecting something for nothing just because you live in the "best place on earth".
Sort of Canada's Miami, in short.
If you spend some time in other Canadian cities you will notice how edgy Vancouver has become in comparison. Even in Toronto people often seem more laid back.
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January 19th, 2010 at 2:52 pm 62
@Drachen. Thanks.I agree..The only rational way to compare. Since you replied I guess I'll ask your opinion on the following–Location—Right now prices seem fairly reasonable in Port Coquitlam. I understand the reason is location but 1) Do you think prices are still overpriced in this and other surrounding areas? 2)Have people commented on location areas and issues on this website? IF so where can I find the link.
In your general opinion would you say just hold off from buying right now for: a year? 6 months? 2 Years?…Just curious.
Thanks.
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January 19th, 2010 at 3:05 pm 63
"All people seem to talk about is RE and crime" — Oh the irony of posting that on an RE blog…
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January 19th, 2010 at 3:21 pm 64
"Vancouver is an irrational bubble."
I disagree. I think there are reasons for Vancouver's bubble and they are all down to the "livability", the "mountains and ocean" and all the other cliches – whether we like to admit it or not. The comparatively mild climate compared to other cities doesn't help. The fact is that people with money – mostly Canadians, but also people looking for an international move – find Vancouver attractive and are willing to pay a premium to live here. Others who grew up in Vancouver really don't want to leave and will also pay a premium. I myself am willing to pay a premium to live in Vancouver, just as I would expect to pay a premium to live in a nice neighbourhood of any city. I can't afford the current premium, but I still rent here.
I love Vancouver and have lived here most of my life but kind of accept I may never be able to buy and might have to wait to inherit. I do think, while Vancouver isn't perfect, it is a damn fine place to live and if I had money and wanted to live in a peaceful English-speaking country with good services, low crime and a relatively high standard of living, there really aren't all that many other options. Vancouver isn't everyone's cup of tea but it is certainly attractive enough to be a lot of people's cup of tea – enough to keep prices relatively high (unfortunately).
And the fact that so many people read blogs like this because they are so desperate to buy in Vancouver kind of proves how attractive a place it is. If it wasn't so attractive most of us reading this and Garth's blog would have moved on elsewhere. But where in Canada compares if you're used to what's on offer in Vancouver? Nowhere really. The other cities are great in their own ways, but are very different. So I still think Vancouver housing won't go up as much or as fast for a long time, but I don't think it's going to crash as much as we'd like. I don't like the unaffordability and my main concern is the type of people who will live here if the current situation continues – we won't get a good social mix and we won't be able to sustain good services as key personnel (nurses, police, firefighters, retail workers, teachers, etc) won't be able to afford to live and work here. That's the point where I leave.
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January 19th, 2010 at 3:34 pm 65
"I expect walking the same walk on Granville in a few months time, watching the new stores being boarded up as the tourists leave, the homeless re-claim the streets and the city reverts to its true self."
This is what I don't get about this blog. Are you deliberately running the city down to put people off buying? Or do you genuinely believe what you wrote? (I personally don't like Granville St but don't recognise your view of it). And if you genuinely believe what you wrote why on earth are you reading blogs about buying real estate here? Why would you want to live here if it's that bad?
I constantly come across this on the RE blogs I read – people who talk Vancouver down but are still desperate to buy here. Makes no sense at all. (I'm a bear by the way and would like nothing better than housing prices to come down to affordable levels).
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January 19th, 2010 at 3:40 pm 66
Lets face it, Vancouver will be an ethnic enclave in less than 20 years if the current pace of immigration and settlement continues. It will also exhibit the classic divide between the haves and have nots, and the moral foundation of this once quaint and tranquil city will degrade even further. It is unfortunate, but many will "abandon" this city in the coming years, and many already have, opting to settle in other regions such as the Interior that provide a sense of community.
There is absolutely nothing wrong with those two sides of city living, just as long as you know what you are getting into when you want to buy in the city.
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January 19th, 2010 at 3:49 pm 67
@Ally123:
"Right now prices seem fairly reasonable in Port Coquitlam."
Prices throughout the Lower Mainland are well offside, The only places I'd say Real Estate in Canada is a fairly good deal (but will probably still drop a bit) is east of Ontario or North of Prince George with a few exceptions in smaller towns. PoCo is not one of the exceptions.
"n your general opinion would you say just hold off from buying right now for: a year? 6 months? 2 Years?"
2 Years or perhaps a little more, IMO the time to buy is when the average detached is in the 450-400 range and still heading down, it will mean lots of inventory and you can probably get a deal because prices should still be falling on a fairly steep curve and the general psychology will be a "sell" mentality. The best investment advice I've heard is to buy when prices are falling and sell when they're still going up. Most people practice the opposite and most people working that kind of short term investment do worse than the average.
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January 19th, 2010 at 3:53 pm 68
"Lets face it, Vancouver will be an ethnic enclave in less than 20 years if the current pace of immigration and settlement continues."
I'm suspicious of anyone who brings ethnicity and immigration into debates like these, but I'll give you the benefit of the doubt. Vancouver is already about 50% "ethnic" – it's one of the city's attractions not one of its downsides and it's not the reason for the high prices.
Immigration will not keep housing prices high. People do not move to a new country and then immediately buy a house.
"this once quaint and tranquil city" Ha! This city has only ever seen serious rioting twice. Once when the railroad was being built and once when the 'Nucks lost the Stanley Cup – both a fair while ago. So I see no signs of disintegrating social systems (a gang turf war doesn't count – who's buying the drugs they fight over by the way? Immigrants? I don't think so. That would be whitey.)
I'm sure every city goes through a quaint spell before it's 130 years old. Kind of like kids go through a cute stage. Cities grow and develop just like people and sometimes you just have to accept that or "abandon" it and move to somewhere that is still at the quaint stage, like the Interior (of course then you are just hastening your new home's development from "quaint" to "ethnic enclave". You are essentially becoming the immigrants you seem to dislike.)
vancouver has developed very well in comparison to other cities and I get fed up with people running it down just because they want to buy a house in their favourite part of town but can't afford it.
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January 19th, 2010 at 4:10 pm 69
Drachan – "I take offence to this too. Kitsilano, Dunbar, Pt. Grey Shaughnessy and the West End (and maybe a few others) are not working class neighbourhoods (all in about the same price range). Who DOES live there? "
I live in Kitsilano. I earn around $50,000 a year. Almost all Canadians are Middle Class these days anyhow, but if working class means mechanics, mailmen, construction workers, then all of these people do live in Kits, Dunbar, West End and Pt Grey. So do students, retail workers, waiters…
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January 19th, 2010 at 4:15 pm 70
Stan…have you ever travelled or lived anywhere else? If not, you need to get out a little more. Vancouver is nice and has a lot going for it, however, not that much to be the only place in the world immune from declining real estate.
Give your head a shake, overvalued is still overvalued no matter how you slice it.
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January 19th, 2010 at 4:15 pm 71
@Stan:
And the fact that so many people read blogs like this because they are so desperate to buy in Vancouver kind of proves how attractive a place it is.
——
A bit of a perplexing statement! This is a place to discuss various arguments that support or disprove the presence of a bubble. I, like many others that come here I suspect, have never been less inclined (or desperate to use your word) to buy anything in my entire life. The people that are desperate to buy are the very nut jobs that this blog discusses.
PS: there’s paying a premium, and there’s being delusional about expectations on what the return for paying that premium will be.
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January 19th, 2010 at 4:21 pm 72
69 Stan
In fairness to #67, I have lived in Vancouver since the early 70s, and he or she does have some valid points.
If you have spoken to anyone that has lived here for decades, they will note that the city has become less "liveable" in some ways, but more "liveable" in others. Back then, people were friendly, less focussed on consumerism, had civic pride, had solid paying jobs, and seemed to appreciate the natural beauty more than today.
Sure, we have better transportation systems today, and some better restaurants, but at the cost of reduced affordability and a now neurotic superficial population. Lets not forget that fact that we now receive global attention for our levels of crime and gang activity, and that our economy is complete shell of what it used to be.
We may have "grown up" as a city, but we have grown up to be a completely self-absorbed, insecure teenager who everyone tells to be quiet on the bus because they fail to realize how loud, annoying and insignificant they are.
By the way, I don't appreciate your overtly racist labels like "whitey" and your completely racist conclusions that "whitey" is the only social group buying drugs. Read a newspaper for once, and look at the names of the crime lords, grow operators, fraudsters, and gangsters either incarcerated or killed. They come from all social groups, but there sure is a disproportionate number from some groups when compared to their representation in the population. And don't pull the PC or race card on this one because that no longer stiffles discussion and debate – it has been used too many times in knee jerk reactions.
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January 19th, 2010 at 4:23 pm 73
#71 I already said it's overvalued and I think it will decline. That's not a reason to run the place down though.
I have travelled and lived abroad (and in two other Canadian cities), and I base my opinions partly on that. I do think Vancouver doesn't have many competitors for the title of nicest city to live in Canada, depending on how much cold you can take and what your interests are. It's like the nicest city in any country, or the nicest neighbourhood in a city, or the nicest street in a neighbourhood – prices are higher. And yes I know it rains a lot. This is just my rationale for the high prices – it's not that I think it's a good thing.
And the reason I'm posting is I have a problem with the obvious hypocrisy a lot of people on blogs like this display – they knock a city they obviously (otherwise why read this blog?) live in and/or wish they could afford to buy a house in.
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January 19th, 2010 at 4:30 pm 74
#73 And yet you still call yourself a "long time Vancouverite". Why stay if it's so bad?
As I said, all cities change over time. Vancouver is doing pretty well so far – just for not having a freeway into the centre for a start – the only north american city of its size to have resisted that. I don't own a car and the transit is actually excellent. It all depends on your outlook. Some see immigration and multiculturalism as negative things. Others see them as positives.
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January 19th, 2010 at 4:36 pm 75
Why do I stay – simple – family.
As for outlooks,
"Some see immigration and multiculturalism as negative things. Others see them as positives."
Or some of us can critically point out that there are positives and negatives to both, as opposed to the simplistic, zero sum approach of good or bad…
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January 19th, 2010 at 4:37 pm 76
PS #73 I have also lived here for decades. I choose not to buy here that's all – but not being able to buy somewhere does not make it a bad place to live.
There are a lot of places I couldn't afford to buy somewhere in, and I like a lot of those places. Funnily enough they all tend to be places people want to live, and I would rather rent (or save and eventually buy) in a city people want to live in than buy (cheaply or even affordably) in somewhere no-one likes. This is the conundrum people who are desperate to buy a house face! I personally am happy to rent my whole life but I like to keep track of when a good time to buy is – hence I read blogs like these. I reserve the right to defend a city I like though.
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January 19th, 2010 at 4:40 pm 77
"Or some of us can critically point out that there are positives and negatives to both, as opposed to the simplistic, zero sum approach of good or bad…"
You're putting words in my mouth. Of course I'm talking in general terms. I stand by my previous statement. In too many of these blogs we see word like immigration and ethnicity used in, frankly, a bigoted way and I don't like it.
Vancouver needs controlled immigration or who exactly do you think will look after you when you're old and dribbling? Because I hate to break this to you but we are a rapidly ageing country with a low birth rate and you're going to be thanking those immigrants in 20 years time because they'll be the ones wiping your chin.
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January 19th, 2010 at 4:47 pm 78
Hmm so anyone who says something positive about Vancouver or immigration gets negative post ratings. I get this blog now….
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January 19th, 2010 at 4:54 pm 79
79
No…just a reaction probably to your racist comments
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January 19th, 2010 at 4:57 pm 80
What did I say that was racist? "whitey"? I'm white – I was being facetious. People who blame Vancouver's high house prices on immigrants are barking up the wrong tree. I'm suspicious of them.
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January 19th, 2010 at 5:01 pm 81
Listen I didn't start with this. How about the guy who did – the one who said this…
"Lets face it, Vancouver will be an ethnic enclave in less than 20 years if the current pace of immigration and settlement continues."
… explains what he means. What exactly is an "ethnic enclave" for a start? Then we can decide who the racist is.
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January 19th, 2010 at 5:07 pm 82
By the way Vancouver has always been an "ethnic enclave" if he means a place populated by non-indignant people. The city started as a British enclave. Or do Brits not count as immigrants? Out.
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January 19th, 2010 at 5:07 pm 83
"non-indiginous"
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January 19th, 2010 at 5:38 pm 84
Stan, this picture is for you with love.
http://blog.vancouverbiennale.com/?tag=louise-gad…
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January 19th, 2010 at 2:31 pm 85
[...] January 2010 · Leave a Comment This from VRENGD at vancouvercondo.info 19 Jan 2010 1:42 pm [...]
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January 20th, 2010 at 1:31 am 86
[...] discussion around who lives in the West-side of Vancouver [average SFH now over $1.5M], this from Stan at vancouvercondo.info 19 Jan 2010 4:10 pm [...]
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January 20th, 2010 at 1:38 am 87
[...] [average SFH now over $1.5M], this from Stan at vancouvercondo.info 19 Jan 2010 4:10 pm and 3:21 pm [...]
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January 20th, 2010 at 11:51 am 88
"People who blame Vancouver’s high house prices on immigrants are barking up the wrong tree. I’m suspicious of them."
Actually it's the bulls who believe immigration is why prices will go up forever.
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January 20th, 2010 at 2:49 pm 89
81
People might view your comments as racist because when people use a racist term, or write something that could be construed as racist, they always qualify it by saying they are from that race.
"Eg. The new townhouse across from me is completely owned by asian investors….I am asian, but that is going to affect things around here"
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