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February 8th, 2010 at 3:37 pm
48….and with interest rates more than likely to rise, I would be willing to put money on the slide happening at some point this year.
If prices slide and interest rates rise well in advance of those mortgage renewals, there will be some pain to be felt by a great number of people.
February 8th, 2010 at 3:34 pm
47
“What will put the brakes on the slide (if it starts) this time around?”
Exactly – IF it starts..prices can stay flat for many many years…that is the elephant in the room
Prices might not correct until the next round of mortgage renewals in 2015 which means a lot of bears sitting on the sidelines for many many many years to come
February 8th, 2010 at 3:31 pm
@VR: 38
Stats are what they are. When comparing stats from early 2010 to early 2008, the seasonality argument is non-existent…apples to apples.
It does look very similar to 2008 and we all know what happened that year. What will put the brakes on the slide (if it starts) this time around? Interest rates aren’t going any lower.
February 8th, 2010 at 3:27 pm
45
Yes, of course host cities never try to SELL their city…
They always put the Olympics on for altruistic reasons, and spend billions in infrastructure just for the feel good factor. They never ever try to sell their cities to attract new investment and build a better city…
Lol.. you have to take your nose out of your books and ivory tower once in a while sessional…
February 8th, 2010 at 3:18 pm
@VR:
“anyone who thinks that snow is a requirement to sell the city obviously does not know their Olympic history”
Good phrasing. The difference being, of course, Nagano and Turin weren’t literally trying to sell the city. It’s a figure of speech you know?
February 8th, 2010 at 3:16 pm
http://www.homesandland.com/Re.....GoogleBase
Sorry about that (for not explaining the link before posting it). Anyways, a 1.18 million dollar house in Cloverdale (Surrey’s cowboy country) has got to be the best anectdotal evidence of a real estate bubble in the Lower Mainland.
February 8th, 2010 at 3:14 pm
@VR:
The only coverage I’ve seen so far in the international media is a BBC report about the protests in the DTES and footage of homeless people…
…or are you being sarcastic? Honestly, I just can’t tell anymore…(apologies if you’re making a joke and I missed the initial thread).
February 8th, 2010 at 3:13 pm
http://www.homesandland.com/Re.....GoogleBase
February 8th, 2010 at 3:07 pm
@wasabe: LOL!
February 8th, 2010 at 3:05 pm
What a fantastic day here is the best place on earth! It is a balmy 12 degrees, and even the arriving international Olympic press is commenting on the great weather and the beauty of Vancouver! So much for all the gloom and doomers hoping for our traditional rainy and foggy February!
The exposure of a quarter million people to this piece of paradise during this fantastic weather will certainly stimulate interest in our real estate! This weather is conducive to walkabouts, visits to open houses, and patio dinners at a time when the rest of the country is buried in snow. The massive party, coupled with the weather and scenery, will leave a positive lasting impression on people! All those people that bought hoping to sell to Olympic visitors may have their gamble pay off.
And anyone who thinks that snow is a requirement to sell the city obviously does not know their Olympic history (venues in Nagano, Turin all had similar issues). What will sell this city is outdoor beer gardens, with weather and views unique to Vancouver!
Better start doing your rain dances bears, become nothing is going to cramp the Olympic spirit!
February 8th, 2010 at 2:51 pm
34 Logic
Try to read and/or quote properly. There is no reference to “you people” in post 33. Nice one git.
February 8th, 2010 at 2:48 pm
#37
Try to paint the complete picture if you cite Vancouver sales and listings information….
First of all, an “increase” in listings is really seasonal.
Is it really a surprise that people took their houses off the market in December and then re-listed in January and February. This supposed “bearish” pattern has been the same all during the boom years. Sorry, but this is no “flood” of listings.
Second of all, listings are still extremely low, around 9000 for the REBGV. Just to keep things in perspective, during the last EIGHT boom years, when MOI favoured sellers, listings hovered between 8000 and 12000. We are STILL in very firm sellers territory and MOI is still around 3/3.5.
It looks like someone is grasping at straws…
Oh well, maybe things will change with the March federal budget. Oh sorry, I forgot there will be no catalyst this year with changes to the DP and amortization requirements…
February 8th, 2010 at 2:39 pm
@Mr. Jones:
Just a follow up. Have a look at Agent Will’s stats
2010 is looking an awful lot like 2008 so far. Weekly sales numbers and listings are almost identical, total listings are actually ahead of the 2008 curve by a significant margin in spite of starting in almost the exact same place. Only this time interest rates are already bottomed out, the government is almost certainly out of tricks to save the market this time.
Your evidence to the contrary? I’d love to see it.
February 8th, 2010 at 2:36 pm
@Anonymous:
“it sounds like people think that the prospect of a housing bubble figures prominently in what the current government, the Conservative Party and the Liberal Party think and are doing…”
That’s because the people saying those things are sane, rational people. Why wouldn’t the Cons care about what is undeniably the biggest potential economic fiasco in Canadian history unfolding right now, on their watch. It is obviously going to play a significant role in upcoming elections. But there’s a big stretch from “significant” to “entire”.
Just what are you trying to say?
February 8th, 2010 at 2:30 pm
@Mr. Jones:
Which prediction did I make that was wrong? So far I’ve been pretty accurate.
I say it will make a difference of only a month or two because that’s all the time the market has left. We are in what market watchers call a “double top” and it’s very rare that the second top exceeds the first by a significant margin.
So, I’m basing my prediction on Economics 101. Where does your information come from? Do you even have any factual basis for your beliefs? Or do you just enjoy being derisive without bringing anything useful to the table?
February 8th, 2010 at 2:14 pm
33,
“you people” – brave words from mr anonymous.
February 8th, 2010 at 1:58 pm
^^^^ to #31
#28
“Flaherty must be blind, deaf and dumb. The average house price in Vancouver is over $900k! We are not all millionaires in this city! ”
#10
“I think what you will see instead is that the Liberals will use their friends in the business community to attack the Cons by proxy. The same sort of thing that the banks are doing already. I wouldn’t be surprised if Paul Martin has been calling up old friends on this topic.”
#16
The only politically feasable approach for the Cons to take is to keep the party going and hope that the bubble collapses on the Liberal’s watch, not their’s. Any move they make to manage the bubble will cause it to collapse. A feature of bubbles is that if they don’t grow, they collapse. The Cons don’t want a collapse on their watch.
Also, the prospect of a collapse is a huge disincentive for the liberals to engineer a non-confidence vote against the Cons. If there is no collapse while the Cons are in power, it will surely come during the next government.”
Sounds like people think that Flaherty cares about house prices in Vancouver; that the Liberals are calling their big boys to stir the pot; that the prospect of a non-confidence vote is linked to the housing bubble…
All in all, it sounds like people think that the prospect of a housing bubble figures prominently in what the current government, the Conservative Party and the Liberal Party think and are doing…
February 8th, 2010 at 1:48 pm
@Drachen “…I say it doesn’t really matter if the Cons reign in mortgages or not, the only difference would be perhaps a 1 or 2 month earlier collapse…”
Wow, what a wonderfully precise prediction! Mortgage rules are irrelevant, the collapse is a given +/- 1 month. Pray tell, which month should we expect this collapse?
You’d think after having your predictions completely wrong time after time you’d be a little more humble in your readings of the crystal ball! But of course it’s all based on sound analysis of data and reasoning, which is 100% accurate, except when something happens that your analysis didn’t expect, like a drop in interest rates. Wonder what it will be this time?
February 8th, 2010 at 1:38 pm
@GR:
Well that’s wonderful!
Thank you for such a constructive comment. We really appreciate your sarcasm coupled with complete lack of insight! I think I can speak for everyone here when I say this is the reason why we come here.
I have yet to see anyone say they think the Cons “entire election strategy” is linked to housing policies. But alternately I think you’d have to be an utter fool to ignore the biggest developing economics story in the country for many decades and shrug it off as irrelevant to the outcome of the next election.
So, are you saying they’re utter fools? If not what are you saying? Just trying to score some points for the grumpy debt slaves?
February 8th, 2010 at 1:30 pm
I love how everyone thinks that Flaherty cares about house prices in our backwater city, or how the Conservative’s entire election strategy is linked to housing policies. Nothing like projecting your priority as that of the national governments. Obviously, none of you have ever worked in politics or government relations because your “political analyses” are so amateurish…
February 8th, 2010 at 1:11 pm
@ Bubble Lad
or as they say in Ireland, if my aunt had ba%%s she’d be my uncle.
February 8th, 2010 at 1:01 pm
@patriotz:
Flaherty must be blind, deaf and dumb. The average house price in Vancouver is over $900k! We are not all millionaires in this city! How could it NOT be a bubble??? Meanwhile, the Americans are laughing their heads off at our stupidity.
Oh, the frustration! Oh well, the higher it goes, the more it will crash. Waiting, waiting…
February 8th, 2010 at 12:17 pm
Hey Domus,
How is the Woodwards building panning out for you?
Is it getting better or worse?
February 8th, 2010 at 12:12 pm
Last post, promise!
Another from the New York Times detailing one more steaming pile you have to avoid stepping in when buying a condo:
http://www.nytimes.com/2010/01.....c_ev=click
February 8th, 2010 at 12:10 pm
@exempt:
“The real estate industry has argued that consumers need real estate agents to help them through a confusing process, and that the updated skills of agents are necessary to maintain the integrity of computerized listings.”
Wow, “real estate industry” and “integrity” in the same sentence.
Am I missing something? Doesn’t google real estate make the whole thing a moot point (or will very shortly?). Does the phrase “low hanging fruit” strike anyone else as appropriate?
http://maps.google.com/help/maps/realestate/
February 8th, 2010 at 11:51 am
@$$$$:
Personally, I want to believe Drachen’s story – if the economy keeps going the way it is, I think “Wal-mart Greeter” is the closest thing I have to a retirement plan.
Please don’t rain on my parade!
February 8th, 2010 at 11:36 am
@VRENGD:
The only way that’s going to happen is if Harper hands over the keys to 24 Sussex to Ignatieff. And the latter doesn’t want them at the present time, notwithstanding the Liberals inching ahead in the polls.
The Liberals are very well connected to big business and the banks and they know full well this bomb is going to blow up big time, and they don’t want to be in office when it happens.
BC is so overextended that I think just the falloff in spending after the Olympics will bring the house of cards down. Alberta is toast if oil prices don’t go back up. As for Ontario, which is what really matters, it will take just a small increase in interest rates (which as I noted above may be brought on by the bond markets regardless of what the BoC wants), or by a double dip south of the border, which is looking increasingly likely. Or just by prices rising to the point where there are no more buyers.
The obvious strategy of the Cons in the last election was to use every available means to make Canadians think the economy was in good shape and get a majority, so that the electorate would have 5 years to forget that they’d been hoodwinked. They almost pulled it off, except Harper couldn’t resist insulting Quebec. They are not going to get another opportunity at this, and the next election will be when the Opposition wants it.
February 8th, 2010 at 11:26 am
Interesting op/ed piece on the American Deficit:
http://www.nytimes.com/2010/02.....7sun1.html
No one seems to want to admit that government borrowing will raise interest rates (at least in Canada) – when it seems like that’s a basic truth: having to offer better and better rates for people to lend you cash.
The other point they raise is that as the Feds (on both sides of the border) keep raising the return rates on their bonds, they’re now effectively competing with the private sector for loans.
I never thought about it in that way, but it makes sense.
February 8th, 2010 at 11:12 am
18 Drachen
“Many of them earn extremely good money.” And what exactly is good money?
In Vancouver, you have a few of these “door opener” types in some of your higher end stores, but they don’t make good money. I know one that worked at Holt Renfrew at the closed door selling functions, and she failed to make any tips despite selling 40k worth of goods to one woman (the store had 2 million in sales that one night).
February 8th, 2010 at 11:10 am
@realpaul:
or as they say in Quebec: if my grandma had wheels she’d be a tractor.
February 8th, 2010 at 10:40 am
A new wave of commercial RE collapse is set to bust the banks again. Will the CMHC come to the rescue and bail out the ENTIRE RE industry?
http://www.globeinvestor.com/s.....5/GIStory/
February 8th, 2010 at 10:35 am
Is this a case of ‘be careful what you wish for’? The CREA’s high profile has brought into the spotlight and what has been exposed is an ugly mess of anti-competative sleaze.
http://www.globeinvestor.com/s.....3/GIStory/
February 8th, 2010 at 10:35 am
@oneangryslav2:
Very high end stores have ‘greeters’ that go way above and beyond Wal-Mart Slav, they could truly be called a concierge in the same way as in a hotel, their job is to make sure every detail is perfect for the customer, make sure they have coffee, tea snacks whatever it takes to make their shopping experience worth the extra thousand dollars or so per item they’ll end up paying. Many of them earn extremely good money. I’m not saying he was one of those few who work in the truly elite stores but he might be.
February 8th, 2010 at 10:34 am
Anyone see the movement in short term rates? They appear to be trending higher with the US halting their MBS purchases and its shifting the exchange rate.
February 8th, 2010 at 10:26 am
The only politically feasable approach for the Cons to take is to keep the party going and hope that the bubble collapses on the Liberal’s watch, not their’s. Any move they make to manage the bubble will cause it to collapse. A feature of bubbles is that if they don’t grow, they collapse. The Cons don’t want a collapse on their watch.
Also, the prospect of a collapse is a huge disincentive for the liberals to engineer a non-confidence vote against the Cons. If there is no collapse while the Cons are in power, it will surely come during the next government.
February 8th, 2010 at 10:25 am
#13 OAS, I think if you looked closer at ‘Ms. Girards’ cash flow , you would find that changing the words ‘supplement’ to ‘subsidize’ may be more appropriate. She is ‘maxed out’ right, at 19.5%, buying houses on her visa card? What happened to ‘the banks want to lend money’? Maybe just not to her? It doesn’t make sense.
BTW regarding the governments position to ‘let it ride’. There is a built in incentive for the government to keep the train smokin’ hot. Don’t forget that this increase in RE ‘values’ has created a landslide of new taxes coming in to every level of government at a time when corporate taxes have dried up. My property tax bill will be going up 21% this year due to my new ‘assesment’.
As always, it has come down to basic greed, on behalf of the government to shore up ailing revenues. It is not about sound management at all. Just good old fashioned greed. It’s like a crime drama where the detective says ‘Follow the money’ and there it is, after all the obfuscation and bullshit, it comes back to raking in the cash for governments who are not willing to manage thier budgets accordingly.
February 8th, 2010 at 10:23 am
That WSJ article is like real estate porn for us bears. This snippet is also erection-inducing.
What a surprise that a “concierge at a clothing retailer” [Which is what, exactly? I mean, I know what a hotel concierge does, but wtf does a clothing store concierge do? If Mr. Gray was working for Wal-Mart, I assume he'd probably be called a greeter.] couldn’t come up with the extra cash. This is not to disparage Mr. Gray’s income [only his job] since for all I know he could be making more money than I, but it once again demonstrates the tenuousness of the demand side of this real estate market in Canada presently.
February 8th, 2010 at 10:14 am
This is insane. There is a whole boatload of crazy in this small excerpt. From the Wall Street Journal article mentioned above:
What is the opposite of supplement? I have a feeling Ms. Girard’s family will be witnessing a counter-supplementary effect to their income by this time next year.
“For years”. I’d bet that Ms. Girard has been speculating on real estate for around 5 or 6 years at most. A savvy residential property investor would probably avoid maxing out on debt service levels during a time of historically low interest rates. But I’m just a bitter renter, so what do I know.
Wow! Just, wow!
February 8th, 2010 at 9:49 am
CREA insists that as long as intrest rates stay at zero housing will remain ‘affordable’. Bwahahahahahahahahaha
http://www.financialpost.com/story.html?id=2536848
February 8th, 2010 at 9:49 am
I say it doesn’t really matter if the Cons reign in mortgages or not, the only difference would be perhaps a 1 or 2 month earlier collapse. They probably know that and figure they’ll get the blame for killing the market if they act. I’m sure they’d rather just be blamed for over inflating the market rather than getting it from both sides and be blamed for over inflating the market and popping the bubble.
February 8th, 2010 at 9:45 am
@ta da:
I think what you will see instead is that the Liberals will use their friends in the business community to attack the Cons by proxy. The same sort of thing that the banks are doing already. I wouldn’t be surprised if Paul Martin has been calling up old friends on this topic. Big business has a lot to lose from a massive US-style collapse and I think we’re just starting to hear the protests from this sector.
February 8th, 2010 at 9:15 am
Agree – just wish they would.
February 8th, 2010 at 8:13 am
Off topic but I kind of like the ad by the BBC for the winter olympics.
http://www.youtube.com/watch?v=-Xwe5x77m8U
This commercial isn’t going to change the direction of the Vancouver Real Estate market though which has only one way to go sooner rather than later: that being WAY WAY down!
February 8th, 2010 at 8:10 am
@ta da:
That would give the Cons an excuse to blame someone other than themselves for the bust. And the public would probably buy it.
I’m not happy about the Opposition parties keeping quiet about this, but if the public is too stupid to face the facts, they are going to have to play the best strategy they can. Which is to wait until the blood is on the streets.
February 8th, 2010 at 7:50 am
Too bad the Libs don’t have the “balls” to say anything real about this
February 8th, 2010 at 7:15 am
“Flaherty has decided to ride this bomb all the way down to ground zero.”
Patriotz, your allusions to movies is bang on!
February 8th, 2010 at 7:12 am
“This is the equivalent of a horse’s head in Flaherty’s bed.”
…and, spotting the Pigman!
February 8th, 2010 at 5:53 am
Surprise, surprise, surprise!
Ottawa says housing bubble not a concern. No plan to tighten mortgage rules
Flaherty has decided to ride this bomb all the way down to ground zero. Hold on to your hats.
February 8th, 2010 at 5:21 am
Although the WSJ has at least gotten around to talking about housing bubbles, they are still getting it wrong, both with respect to the US and Canada. The bubble in the US was not created by “subprime” lending. House prices were inflated in many US markets that saw very few subprime loans. What created the bubble, like all bubbles, was that buyers were able and willing to pay too much. The exact nature of the financing is just a detail.
And the WSJ is failing to recognize the regional nature of the bubbles in Canada, which means that Canada-wide statistics are misleading. They also make the circular argument that the supposed lack of a bubble in Canada is due to “conservative” lending. If a loan is made to someone to purchase an asset at an excessive price, it is not conservative. The second circular argument is that since prices have not fallen (yet) by the amount seen in the US, there is no US-style bubble.
The article only hints at the real issue for housing bubbles – prices out of proportion to rents and incomes. No price/rent or price/income are given for any Canadian market. Nothing else needs to be said except that these metrics in many Canadian markets are comparable to those seen in the US in 2005. Compare to the landmark article in the Economist in 2005, which put these metrics front and centre.
February 8th, 2010 at 4:51 am
Note WSJ article (link provided by Domus):
http://online.wsj.com/article/.....17666.html
When the US’s leading neocon apologist and housing bubble denier (they missed the boat on the US housing bubble for years) starts talking like this, you know things are getting serious. This is the equivalent of a horse’s head in Flaherty’s bed. If he does not act quickly and decisively to cap CMHC’s obligations, the next shoe to drop with be a credit watch from the bond rating agencies, or a bond market run in anticipation of such, which would bring much higher interest rates across the board for both government and private sector debt in Canada. Which would be an unmitigated disaster, as it would hit every facet of economic activity in the country, not just the RE sector.
Sleep tight Jim.