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Friday Free-for-all!

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190 Comments

Hey! It’s the end of another work week!  Lets do our regular weekend news roundup and open topic economic discussion post.  Here are a few recent stories to kick off the chat:

–Vancouver shifts taxes from business to residence
–Booming RE market good news for economy
–Crack Shack or Mansion II – the sequel
–Ei benefits flat in February
–If mortgage rates rise does the sky fall?
–Consumer confidence at 2 year high
–IMF upgrades canadian economic outlook
–BOC: Loonie, housing to drag on economy
–Calgary gets a new parking lot
–Garry Mar: buyers now forced into 5 year fixed rates
–FSBO wants CREA protected from competition bureau
–Canadian banks want return to reform basics
–How to sell in a buyers market

So what are you seeing out there? Post your news links, thoughts and anecdotes here and have an excellent weekend!

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Anonymous

@Anonymous:

check out http://www.vancouvercondoreport.ca/listingalert.aspx for best condo investments

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asalvari1

@painted turtle:

Well if you look at the previous reports , you would see that we are back to November/December stats essentially. It is really depressing if you check the summer stats.

I think its premature to call this trend change, but hey, it is promising…

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painted turtle

A 30 – 60 day snapshot of the detached market activity on the East Side of Vancouver experienced ask/sold prices in decline. Average and Median Price patterns closely match those of North Vancouver, West Vancouver and Vancouver West (Decline of 25 000 on median sold price – 3% in one month, not bad)
http://www.yattermatters.com/neighborhood-numbers…

It really shows the impact of the Olympics: herds of rich foreigners are snapping wrecks in impoverished neighborhoods 😉

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patriotzed

@chip:

Oh BTW Chip, if you want to take a look at my post 184 below, I blame the Australian federal government for the RE bubble there. Which is a Labour, i.e. socialist, government.

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patriotzed

@chip: One, prior to the Cons taking office in 2006 the bubble in Canada was essentially restricted to Vancouver. One of the first things the Cons did was to introduce the 0/40 mortgage. Why do you think they did that? The answer is obvious – to juice the RE industry and crease a false impression of economic growth – as did the Bush admininstration before. The Canada-wide bubble was created under the Cons. Any government that guarantees mortgages is responsible for any RE bubbles during their tenure. Period. That said the Liberals removed the upper limit for CMHC financing in 2003 and yes they can take the blame for the earlier period of the Vancouver bubble before 2006. Two, as I have said before, and you continue to ignore, the only cause for RE bubbles is people being willing and… Read more »

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chip

Patriotz, you keep banging on about the Cons 'creating the bubble' but Harper was elected in 2006. House prices took off in 2003.

And it's very cognitively dissonant of you to blame government interference if it involves parties you don't like, but insist governments have no influence on prices when it comes to excessive land regulation, which not coincidentally I'm sure, is a hallmark of politicians with a leftist persuasion.

So, one version of the truth? Or just base politicking?

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patriotzed

@Goldman Sucks: SYDNEY — Australia Saturday clamped down on foreigners buying property after complaints that a rapid influx of Asian money had helped make its housing among the most expensive in the world. Complete BS. The Australian government, just like here in Canada, is deliberately inflating house prices, through incentives for home ownership. The OZ government is pointing the finger at foreigners to deflect attention away from the true culprits – themselves. If they actually wanted lower house prices they would get rid of incentives for home ownership, clamp down on mortgage lending, and impose a speculation tax. Like Germany, for example. http://globaleconomicanalysis.blogspot.com/2010/0… Fear in the board of governors over the pending crash is palpable. Prime Minister Kevin Rudd did not learn a single thing from the US and the disastrous policies of Greenspan. He gave one last goose to… Read more »

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Nero

@tomvu:

What are you smoking? Median prices dropped some 30% in the early 1990s and stagnated all decade, in a time of strong global economic growth.

Now we have weak economic growth, rising rates, and prices are completely out of whack based on any prior measure, and there's a Chinese asset bubble that is looming larger by the day.

Real Estate WILL DROP 35-50%, then stabilize, and rise again in several years. This is how cycles work, and RE Asset cycles are no different than any other. They can never be prevented and never have been at ANY point in history.

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tomvu

The thing about socialist jurisdictions like BC is that the economic system established by government can go on a lot longer than anyone is able to predict. That is exactly what we have happening in Vancouver.

Vancouver's #1 employer is government or some pseudo government agency. The employees of these organizations buy Vancouver real estate which feeds into the trough they feed from. In Soviet Russia we saw this system last for what 80 years? They didn't survive but China did by opening up it's market to the USA. Sound familiar bears? Yes that's right sounds like BC.

I would argue that the current system in BC was established as Expo 86 was winding down. It could go on forever.

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Nero

Google "China Bubble" and a number of articles appear.

Not the least of whick – recently from Marketwatch:

http://www.marketwatch.com/story/what-if-chinas-p…

"Many Chinese are spending 50 to 100 times their annual income to buy a home"

Yikes.

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Anonymous

bigtimebull/kite

Since you are an expert. Please tell me the best place to buy right now.

I need to get in fast, so please reply promptly.

1.Best building to buy as an investor.

2.Best building to buy to live in and enjoy life.

TIA

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Nero

@Drachen:

I think China is the next shoe to drop and it's the one that still really has to drop.

Nobody talks about China, but it's the elephant in the room. China has pumped more money into their economy than anyone else, and it's all gone into Real Estate.

There has been far less real sustainable productivity growth than is widely believed.

Once the Chinese RE market turns (and it will – it always does), rich Chinese will be flipping any Vancouver property like tech stocks in 2000.

Recipe for disaster.

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Nero

@bigtimebull:

Seriously, if you are going to troll, at least put some effort into it!

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Raincouver

Undeterred by onerous debt loads, herds of first time buyers have decided to follow the advice of RE bulls and are jumping into the housing market.

http://thecrowhouse.com/images/372.gif

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bigtimebull

Let's have a recap here for all the bears in the crowd tonight.

1) Prices in Vancouver continue to rise year after year.

2) Bears continue to be wrong wrong wrong and wrong wrong again.

3) So who do you trust for advice? A real estate BEAR who's been wrong year after year? I wouldn't do it if I were you. No way would I take advice from a Vancouver real estate bear. No way.

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ninjaturtle

Bear, Vancouver is big town and hot money come in to buy all the time from everywhere bear. Happy time is here again. Inventory number made up phony fake bear talk. Only thing that matter is sales bear. Sales good so price go up. Vancouver real estate never go down

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jesse

Does anyone know if Rennie is going to list the OV properties on MLS or is he doing a completely separate sales campaign?

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Drachen

@jesse:

I think China is headed for a serious collapse. It's seemed that way to me for quite a while now. They've been spending money like water.

Their real estate market is one of the worst if not THE worst in the world.

The stock market is in a serious bubble too…

Ordos City is a great example. How can a country afford to build a city for 2 million inhabitants that just sits empty?

It staggers me that they've kept things going for so long but the failure is as inevitable as the collapse of Vancouver real estate. And I guarantee it will be a lot less pretty.

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paulb fan

@elvince:

25k listings by end of may? As much as I would love to see that, it is impossible. For that listings have to be past 10K and sales have to drop like stone.

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jesse

@Dave: There were apparently some potential foundation shifts during construction. Engineers obviously deemed it OK. From what I saw they had a lot of piles going in during construction.

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jesse

China real estate hot hot hot

Seems like Vancouver isn't the only place with speculation.

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Dave

@Bob Arctor: @Bob Arctor:

Did you review the foundation design?

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elvince

My predictions:

1-17k listings at EOW;

2-25k listings by end of may;

3-Canucks in 6.

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bridgeman

"@bridgeman: It doesn’t matter when the financial crisis “began” since it wasn’t yet common knowledge, what matters is when the shit actually hit the fan and panic ensued. That happened Nov, 2008. A good six months after real estate peaked in Vancouver. So the financial crisis actually saved RE here temporarily because the BOC had to drop rates to zero." Oh it definitely matters. (I think Vancouver real estate prices will drop like a two ton heavy thing, so we are on the same side, just to be clear). Do you remember the article floating around here that showed the amount of new mortgage lending by the big four increased by less than 1%? That the government of canada took all the bad mortgages off the books and bailed out the banks? That was a direct result of the actions… Read more »

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NO-LYMPICS

Re Olympic village and civil servants given preference

http://www.theprovince.com/sports/City+hall+hits+…

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