Yes, there’s a housing bubble
Painted turtle pointed out this article in the Vancouver Sun: Yes, there’s a housing bubble in Canada – but only in three cities. You read that correctly. The Vancouver sun printed an article calling the Vancouver market a bubble. I hope Beelzebub has some of those left over Olympic mittens.
According to a national study released last year by Pitney Bowes Business Insight, the average household income level in Calgary topped $113,000, while the average in Edmonton exceeded $90,000.
Vancouver was well behind both Alberta cities, at $82,300. That’s about $2,000 higher than Windsor, Ont., which has some of the lowest house prices in Canada. Toronto boasted average household incomes of $101,400.
Let’s look at it another way.
When U.S. house prices got to their most extreme levels during the U.S. housing bubble, the ratio of average household income levels to average local house prices got to 10 times or more in overheated markets like Los Angeles and Phoenix.
In Vancouver, the average detached bungalow now costs roughly 11 times the typical average local household income level, based on the data above.
Read the full article at the Vancouver Sun website.
April 29th, 2010 at 6:40 am 1
Bubble never pop bear. When can you understand this? Another 10 year from now when house worth 2 million and you renting dungeon still?
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April 29th, 2010 at 6:44 am 2
It's actually printed in the Vancouver Sun…did I just see a flying pig go by?
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April 29th, 2010 at 7:09 am 3
"Bubble never pop bear. When can you understand this? Another 10 year from now when house worth 2 million and you renting dungeon still?"
Vancouverboomgivesfreeheads, you promise to still make mortgage payments on that 2 million crackshack in 10 years while a renter stays in your basement for cheap?
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April 29th, 2010 at 7:16 am 4
Homeowners, moreover real estate speculators, are about to find out how illiquid real estate is, and why it (like all other investments) come with inherent risk.
When prices start to decline some, who are in the market, will see it as a buying opportunity; however, they will not be able to liquidate their asset to take advantage of lower prices. Furthermore, they will watch as their asset declines in value before their eyes, before they've realized the gain that they had been counting on. For those that were using their home as an ATM or their retirement plan, they're in for quite a shock.
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April 29th, 2010 at 7:40 am 5
Vansanity, that's the unkown factor for me – how many people with relatively modest incomes but expensive lifestyles have HELOC'ed themselves to the max on their properties and how close are they to tipping underwater? Would a modest 5% decline in property values do the trick? How about 10%? Say that David Rosenberg is correct and the Canadian housing market eventually reverts to the long-term mean and values correct by 20% – how many people with modest incomes and over-valued homes will then find their debt impossible to handle?
Then what do they do….sell their house into a declining market?
This could get ugly….
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April 29th, 2010 at 8:09 am 6
vancouverboomtimesahead: You sound Chinese. Assuming you are and that you took advantage of your country and bubbled your way to Canada like many Chinese before you, 2M is probably not a lot of money to you. But you've probably lost touch…but then again that has to be expected when you shiild yourself from anything Super Natural in BC behind a veritable barricade of sun visors fancy cars, Louis Vuitton and other stupid consumer goods. I have no idea why such a materialistic culture would ever come to BC and pay a premium for it at that. All you seem to need is something to brag about – will Vancouver have such a high cache for the silly, rich Chinese when the housing market crashes? I sure hope not.
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April 29th, 2010 at 8:10 am 7
@Vansanity; kabloona:
This is the question that many of us are pondering:
How many sellers will come into a steadily falling market?
IMO, if 5-8% of homeowners attempt to lock in paper gains/minimize losses, listings will overwhelm the market and price drops will accelerate.
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April 29th, 2010 at 8:24 am 8
vancouverboomtimesahead
I think he's just joking. Saying bubbles never pop is an oxymoron.
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April 29th, 2010 at 8:27 am 9
"In Vancouver, the average detached bungalow now costs roughly 11 times the typical average local household income level, based on the data above. So just who can afford to buy these homes?"
Good question. Obviously people can or they couldn't be buying.
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April 29th, 2010 at 8:49 am 10
9-
I think the question during this runup what who COULDN'T afford to buy these homes? Anyone with a pulse and some form of income could get an effective 100% LTV mortgage at 35-40years. The amounts banks were willing to lend (backstopped by the taxpayer of course) SHOULD have given rise to an article such as this years ago; but then again who could have known!!
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April 29th, 2010 at 9:01 am 11
@jesse: "..so just who can afford to buy these homes?”
Good question. Obviously people can or they couldn’t be buying.
—
Depends on ones definition of the word 'afford'.
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April 29th, 2010 at 9:05 am 12
Some of you seem to like to engage in logical debates with obvious trolls… Why?
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April 29th, 2010 at 9:19 am 13
"Good question. Obviously people can or they couldn’t be buying."
Warren Buffet once said something to the effect of: when the tide goes out you disover who has been swimming naked.
A significant portion those buyers who bought because they could "afford" it, will be financially crippled when the tide goes out.
And the tide is going out now: listings explosion, rising rates, tighter lending, HST, BOC saying that there will be a marked slowdown in housing for the next two years. The cusp of the collapse is here.
Lets wait and see who was swimming naked during the bubble years. You will see them on CBC news whining for a bailout.
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April 29th, 2010 at 9:21 am 14
@Don Lapre: I'm trying to answer the author's question. He seems genuinely confused as to who can afford to buy.
I say there should be no confusion at all, including, but not exclusively due to, the points you made. Money made and brought from outside of Canada is an obvious reason as well, as much as many may think it a myth.
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April 29th, 2010 at 9:23 am 15
They're still trying to favour the Real Estate market. Taking average income instead of median income makes things look better, and they compare US HOUSE/avg income to Vancouver BUNGALOW/avg income. Nice bit of statistical trickery to make things look better than they really are.
So they're saying house prices are approximately 275% of rational value (assuming multiple of 4x annual income is rational, since a bank won't give you an uninsured loan for much more than that I think that's reasonable), but that seems to be a low-ball figure.
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April 29th, 2010 at 9:26 am 16
@Canadian:
Most of the goofs that sound Chinese are just trolling. Kite for example uses obvious misspelling or intentional poor grammar in one message and "forgets" in others. Just ignore..
BTW this article was written by a journalist in Edmonton. Its funny to see cities in Canada turning on each other
But its true, there's no bubble in Edmonton or Winnipeg or Sault Ste Marie, bubbles are localized but clearly there is one here.
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April 29th, 2010 at 9:31 am 17
@kabloona: Yes, that's exactly it. The only indicator that I think gives any idea as to how much debt people are carrying is the debt to household income ratio. Now, that's an average across canada, so it has to be viewed in that light.
Latest reports were from December which had Canadians at $1.46 owed for every $1.00 earned. Today it's estimated to be even higher. It's already higher than the US's average, as they have been paying down debt during this recession while Canadians have been taking it on.
The result is that we've staved off the worse of the recession through domestic spending. Spending by taking on record levels of cheap credit. Can we afford to keep doing that? What happens to our economy if Canadians stop taking on all this debt and stop buying? What happens if Canadians continue to pile on the debt to levels unseen? Both scenarios end.
My previous point was more geared towards homeowners that are trying to climb the property ladder. That game works as long as demand is high. When demand disappears, you're stuck with an illiquid asset in a declining market. I've been there before, it's hard to sell and even tougher to swallow a loss.
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April 29th, 2010 at 9:39 am 18
@Vansanity: "it’s hard to sell and even tougher to swallow a loss"
It depends how you define "loss." I find it amazing how flawed reasoning is used to turn what is really a loss into either a wash or a gain. Using nominal instead of real gains is the big one but ignoring maintenance costs and time spent are others.
If I had a nickel for every time some guy claims his 10 straight weekends of renovations are going to "pay back", I'd have enough to put 5% down on an OV condo.
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April 29th, 2010 at 9:55 am 19
#9 J. I thought the average income was $47000 p/a. , which makes the average detached bungalow 21 times earnings. Does anyone have an actual number on exactly what the average income is? Are the now including multi person families in the definition of income? Like….if you have 17 cousins and six sets of grandparents, does that skew the ratio? What about normal ratio, average real incomes, using the SFH and not condos? The RE whores want to do everything they can to keep the idea that RE is too expensive from the general public. Lets face it, two kids getting married and taking out a 400,000 mortgage for a condo the size of a walk in closet is not normal by any stretch of the imagination unless you're under the influence of the bullshit laced kool aid the local media.
Meanwhile corruption is where you find it isn't it.
http://www.vancouversun.com/business/More+than+Ch…
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April 29th, 2010 at 9:56 am 20
@jesse: Loss = net loss. Net of all interest, maintenance, insurance, etc…
I know many never calculate it when figuring out if they made a profit on flipping their home, it's easier for them not to.
Anecdotally: I knew one guy who sold his place and told me he made $24,000 on it. I asked him how much he paid in interest alone, just interest. He didn't want to talk about it. I made him sit down and calculate it and it turned out what he thought was a $24,000 gain was a $16,000 net loss, ignoring insurance, property taxes etc.. just on interest (carrying costs). As an investment… he didn't do so well.
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April 29th, 2010 at 9:58 am 21
40% off condos in Kelowna!
http://tinyurl.com/23baaaz
A 2 bedroom, 1116 sq ft was selling for $560k before and is now $379k. Wow that's still way too much for a condo in Kelowna. I can buy a nice 2 bed, 2 bath in burnaby for less than that. Kelowna is popping fast.
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April 29th, 2010 at 10:04 am 22
The Vancouver Sun article is 5 years late!
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April 29th, 2010 at 10:04 am 23
@ Spectrum
That 40% off figure is interesting. Someone here recently ran some numbers showing the reduction in purchasing power of first time buyers after April 19th. Wasn't it reduced by 30-40%? Can someone provide some insight into this?
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April 29th, 2010 at 10:23 am 24
@Spectrum:
Kelowna! Hahahahah. WAS $595k for a 2 bedroom now it's $429k. OMG I never realized how idiotic Kelowna was. That's a joke. Even at $429k it's about $250k too much. How do they justify it in Kelowna? Running out of land? The rich of the world flock to Kelowna? Feel sorry for the morons that bought in there, more so than here.
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April 29th, 2010 at 10:24 am 25
Today I saw someone had posted a home made poster on a telephone pole on Denman street that loudly proclaimed that the real-estate bubble was going to pop in Vancouver. It gave a few reasons why like growing inventory and a few others. Didn't pay too much attention being a bit behind getting to work already.
Wondering if it one of the commenters here?
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April 29th, 2010 at 10:26 am 26
I thought you were all nutters but…
Last night "it" happened to me. Out at dinner with several sensible professional well-paid collegues. Conversation eventually drifted to RE and house prices. Some owners beaming with delight that their east van property was worth 1mil, others sheepishly lamenting that they could never afford to enter the market at today's prices. Me saying it will crash hard, don't worry. Then word-for-word the arguments in earnest 1. It's different here, 2. They're not making any more land, 3. everyone want's to come here 4. it will never go down.
I wouldna' beleived it if I had not heard it. I am humbled…
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April 29th, 2010 at 10:26 am 27
Canadian:
That is some very strong words against a whole group of people. It shows what kind of person you are and I feel sorry for you.
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April 29th, 2010 at 10:34 am 28
Very simple calculation to see how to afford house bear. You take income cheque and divide by 2 and that what you get. Only loser with small cheque need to rent everyone else buy and live dream. You go to pub to buy cheese loser bear. You go to pub to buy stolen cheese.
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April 29th, 2010 at 10:43 am 29
I don't get it. Could you translate from your weirdo realtor speak?
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April 29th, 2010 at 10:48 am 30
@Canadian: Hey incidentally, that is not me.
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April 29th, 2010 at 10:51 am 31
Median household income in greater Vancouver – $58,000
Median SFH price in greater Vancouver – $800,000
Price:income ratio – 13.8
The look on recent buyers faces this time next year – PRICELESS.
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April 29th, 2010 at 10:51 am 32
Spectrum Says:
40% off condos in Kelowna!
http://tinyurl.com/23baaaz
A 2 bedroom, 1116 sq ft was selling for $560k before and is now $379k. Wow that’s still way too much for a condo in Kelowna. I can buy a nice 2 bed, 2 bath in burnaby for less than that. Kelowna is popping fast.
.
Wow! That is one helluva haircut.
But, I'd hold off on buying the Burnaby 2/2. It's probably over-priced as well … and there could be more haircuts coming up.
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April 29th, 2010 at 10:59 am 33
I understand the frustration of some bears like Canadian seeing housing prices go up due massive speculative buying by Chinese. But it is not just the Chinese doing that. I know of whites, Indians, filipinos, Koreans and other race doing the same thing, flipping houses using borrowed money and living a materialistic life with fancy cars, bags etc. Anyway, their flipping days are numbered especially here in vancouver. It is just a question of how soon and how fast.
As for me, I am moving to Toronto for good this year where I can buy an almost new detached/semi-detached house in Markham or Richmond Hill for the price of a small 1200 sq ft townhouse in Burnaby or Richmond. No reason to stay in overpriced vancouver.
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April 29th, 2010 at 11:06 am 34
Canadian,
No need to hang ethnic labels on posters who succeed in trying to needle you.
Heck, I wouldn't be surprised if vancouverboomboy is a bear trying to showcase the sad and hopeless mentality of the average bull.
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April 29th, 2010 at 11:10 am 35
@bhtbg: Heh, firsthand!
You know, there's some truth to those arguments, except for the never-go-down part.
Vancouver is an extremely pleasant location. Historically, it's been the most expensive city in Canada to live in most of the time. The Vancouver premium is real, it will still be there in the long term.
That said, the premium is finite. It's not like Vancouver is getting exponentially nicer than Toronto as time goes on. I know what it's worth to live here. $350K for a downtown shoebox, $1M for a bungalow is more than it's worth to live here.
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April 29th, 2010 at 11:26 am 36
@granite countertop: "The Vancouver premium is real, it will still be there in the long term."
That is a premium to LIVE in Vancouver, not necessarily OWN. What matters is prices compared to rents and by that measure the "Vancouver premium" is significantly less.
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April 29th, 2010 at 11:30 am 37
"certified BUBBLE PRICING"
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April 29th, 2010 at 11:40 am 38
Heres something fun to do. I knwo someone with a house, a big expensive house, but hes ok, he has lots of money, howere hes of the opinion that this wont pop, which is insane since hes a stock market guy, so the other day I told him
Id ont hink its a bubble either and just feed him 'its different here' etc… I dont knwo, i just get a kick out of it plus when the s**t hits the fan he will not eb able to say he thought differently.
http://en.wikipedia.org/wiki/Cognitive_dissonance
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April 29th, 2010 at 11:43 am 39
The biggest bubble I see is that of government stimulus. Easy credit, excess spending and accumulation of debt. This is a very sick economy, which relies on government subsidies, ZIRP and massive deficit spending. Despite all this unemployment is far above normal.
As I've said, home prices will fall 20% (nationally). It could be more in Vancouver, butThe government won't tolerate anything more. It will create all sorts of inflation to counter falling home prices.
The real problem comes when governments can no longer finance themselves. You need to own gold. Average into it. Don't buy all at once.
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April 29th, 2010 at 11:48 am 40
@nonymouse: I think I saw the same poster on Davie street!
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April 29th, 2010 at 11:51 am 41
@bhtbg:
Good post. By definition, you can't have a speculative bubble without that kind of "Irrational Exuberance" out there.
If the Lemmings actually realized they were near the edge, they would have stopped running by now.
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April 29th, 2010 at 12:04 pm 42
@Vansanity:
It's absolutely astounding: people made the biggest financial purchase of their lives based on what a few of their idiot friends told them at a dinner party.
"bhtbg" can attest to that, as can everyone else who's been given "the treatment" for even SUGGESTING in mixed company that maybe RE in Vancouver might not be worth what ever idiot says it's worth.
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April 29th, 2010 at 12:20 pm 43
@vancouverboomtimesahead: Dude, houses are almost 2 million now. In 10 years they will be 10 million at this rate. How is that going to work? Or how about 50 million in 20 years? Do I hear 250 million in 30?
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April 29th, 2010 at 12:33 pm 44
"That is a premium to LIVE in Vancouver, not necessarily OWN"
Well lots of people wants to own and that is real. So not only you pay premium for the location you pay premium for ownership. With easy money policy in the last decade "ownership" has never been easier.
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April 29th, 2010 at 12:42 pm 45
This week the Governor of the Bank of Canada said that real estate prices are going down.
Economist Klump of the CREA said that prices are going to go down.
There is a 100% chance that prices are going down. There is no debate anymore.
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April 29th, 2010 at 12:49 pm 46
Raincouver –
That is a nice link you posted – are you Margaret Smith?
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April 29th, 2010 at 12:53 pm 47
@MArk: "So not only you pay premium for the location you pay premium for ownership."
That may be currently true but the premium for ownership can only temporarily keep prices high. Eventually landlords wake up and realize they need to make a decent return off rents. Landlords invariably and inevitably set the market price because they won't buy if they don't think they can make a decent return. In other words the "ownership premium" is nothing more than a work of fiction.
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April 29th, 2010 at 12:59 pm 48
tough times in Ktown
http://view.exacttarget.com/?j=fe5a157071670d7b72…
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April 29th, 2010 at 1:05 pm 49
@nonymouse: If anybody could post a snapshot of one of these posters, I'm sure many of us would appreciate that.
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April 29th, 2010 at 1:44 pm 50
@Canadian:
Too bad you are trying to stand for a whole group of people against another whole group of people…please note not every Canadian thinks like you and not every Chinese is like what you think…so stop using "Canadian" and "Chinese" please.
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April 29th, 2010 at 1:49 pm 51
@jesse: I agree with you that you get the benefits of Vancouver from renting, owning is unnecessary. Rents are also higher here than they are anywhere else, but not as sharply, and I'm expecting them to come down too.
Actually, I'd think renting would be more in line with the Vancouver experience. It seems like most people don't want to set down roots here, they want to hang out and enjoy for maybe a few years. If you're probably living somewhere for less than 5 years, it makes more sense to rent, under sane conditions.
Ownership is insurance against rent increases, but if the rents actually did increase to justify what it costs to own, the service worker class would seriously have to leave en masse and the local economy would become nonviable.
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April 29th, 2010 at 1:51 pm 52
I am so glad I got bubble inoculated by a stupid, and expensive, but non-catastrophic mistake. Bought a place in '94 because, "Gee, prices are going up. I can't lose." Enter market softening, hanging on foolishly, finally selling in '97 and taking about a $20K haircut. Ouch!
But geez, that's only a little flood in the basement from a broken washer hose compared to the coming wrath.
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April 29th, 2010 at 2:34 pm 53
@Canadian:
Canadian, you obviously don't have a brain. The housing bubble is caused by the average Joe, NOT the Chinese or any other ethnicity. The people buying is representative of the population in GVA. So finding an irrelavent scape goat to put on the blame will not help the bear's position.
As bears, we should focus on providing the market with an accurate information and why its not the buyers best interest to buy at such a inflated market. Attack those who are providing misleading information in the market to pump real estate.
And why do you care if they buy Louis Vuitton? People have the right to spend their money where they please as long as its not illegal. I think LV is a waste of money, but others may buy as they please. Its no concern to me. Louis Vuitton is used by all sorts of people. Why don't you just walk down to Holt Renfrew and see what type of people are in there? All sorts. Not just one ethnicity.
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April 29th, 2010 at 2:44 pm 54
I keep coming back with the question – "Are we there yet?"
- hoping for that 17K party!
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April 29th, 2010 at 2:45 pm 55
And here I thought Louis Vuitton playd goal for the leafs.
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April 29th, 2010 at 2:57 pm 56
@sluggo:
Had Louis Vuitton playe in net for the Leafs they may have made the playoffs this year!
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April 29th, 2010 at 3:04 pm 57
Did Patriotz leave when it was suggested he was Freako?
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April 29th, 2010 at 3:09 pm 58
#31 A, thanks, but aren't going down the 'average' road a bit too far when we say that the average includes Chilliwack and Aldergrove. The incomes are the same in Vancouver and the 'average price is one million. The pimps will have us counting chicken coops in hope next, isn't Squamish a bedroom community? Shouldn't that be counted? Lets not have the pimps skew the real figures with obfuscation about which figures are included. Apples with apples etc. Even at 58K (which I really think is on the high side , but give you the benefit of the doubt for diligence) the average price/income in Vancouver is 17.24. In LA they dodn't count San Francisco into the average, in Sydney they don't use Brisbane as a comparable. So lets not have the whores try and water down the truth about prices here either.
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April 29th, 2010 at 3:10 pm 59
jesse:"In other words the “ownership premium” is nothing more than a work of fiction"
It is NOT fiction. It is reality. RE Ownership is very emotional. If it was fiction we would have more balanced cost for ownership versus renting. But we do not have it. When the prices of owning deflate, rents will follow and deflate as well. But you will ALWAYS pay a significant premium on ownership regardless at what price level. It is common sense that people value more ownership then rentership. Landlords do not matter. Don't confuse single speculator landlords with companies that own hundreds of renting properties. Your Single/speculator – Yaletown landlord will get burned and it will disappear with huge loss.
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April 29th, 2010 at 3:18 pm 60
@MArk: "But you will ALWAYS pay a significant premium on ownership regardless at what price level.
I cannot disagree with you more. To think that landlords (investors) will perpetually accept sub-par returns is laughable.
Is it cheaper to rent a car or to buy one? A car rental company is in no position or mood to rent cars at a discount compared to what they cost to buy, so why would it be any different for property owners?
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April 29th, 2010 at 3:18 pm 61
If its in the sun, the sky must be falling.
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April 29th, 2010 at 3:21 pm 62
Avg income $84k???? I serious doubt that… Around $60k should be more accurate
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April 29th, 2010 at 3:49 pm 63
http://news.sympatico.ctv.ca/home/contentposting?…
“ Ottawa best place to live in Canada”
Uh oh, who is going to break the news to Gordo and Rennie that Vancouver is not the best place to live….
Lucy, you have some splaining to do…
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April 29th, 2010 at 3:50 pm 64
@Summer:
I think that was your wife.
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April 29th, 2010 at 4:10 pm 65
17k party may have to be postponed
New Listings 208
Price Changes 120
Sold Listings 155
16873
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April 29th, 2010 at 4:14 pm 66
@Max: That's household income, not per person, likely two incomes combined. $84k combined is very low. That was the point.
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April 29th, 2010 at 4:15 pm 67
@paulb: do you have the volume of sales? Or the average/median sell price for the day? I'm kinda curious what's selling. And if the average realtor is gonna have to eat dog food next week.
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April 29th, 2010 at 4:19 pm 68
@paulb: we are just 127 short, so no big deal. Any idea about what was yesterday's final numbers.
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April 29th, 2010 at 4:21 pm 69
@paulb fan: No problem, got the numbers from yattermatters.com
New Listings – 292
Back On Market Listings – 0
Price Changes – 175
Sold Listings – 199
When did these sales happen? Pre or Post Apr 19?
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April 29th, 2010 at 4:48 pm 70
That's too bad the listings aren't sky-high today, but hey they can't all be awesome days!
I guess I'll just appreciate my dream home that much more, when I buy it… in…? Two years maybe? Ah that sucks.
Okay, I can see why the Greater Fools are buying things today.
It sucks to be the hardworking ant to their party grasshopper ways.
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April 29th, 2010 at 4:51 pm 71
@paulb: 17k party may have to be postponed
New Listings 208
Price Changes 120
Sold Listings 155
16873
I guess lots of listings must've expired today and yesterday. Yesterday it seems like Inventory's #'s ended at 16,866 which was already didn't match up with the list/sales difference.
Today, sitting at 16,873 is only 7 more but the net gain is currently 53. Let's hope those expired listing make their way back soon.
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April 29th, 2010 at 5:02 pm 72
I am calling BS on the average income. Looking at stats Canada for 2007 the average(median)income for all family types in BC was 65,780. Households are made up of families and singles who are not included in this average. So the average household will be less than 65,780. I highly doubt that either Vancouver is that much over the provincial average or that the average salary grew between 2007-2009.
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April 29th, 2010 at 5:11 pm 73
You bears do realize that if the market does tank and all those realtors and mortgage brokers are out of work it will severely impact the male prostitution racket right? How will you bears buy without any tricks to turn?
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April 29th, 2010 at 5:49 pm 74
#72 OT, yeah I think the same thing. I don't go for the governments stats on family income. They keep changing the goal posts. What the hell does 'family income' mean. Is that the kids paper route? Sorry but with the majority of people in the working class I doubt very much that the average is 65000 or even close. I don't buy real estate with my 'family'. If I take out a mortgage it has my name on it. They are just blowing smoke up my ass by using these convieniant figures when it comes to hiding the true state of affairs in BC. There are whole towns in BC where zero percent of the population makes 65K pa.
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April 29th, 2010 at 5:59 pm 75
VRENGD,
Aren't you suppose to be renting few condo on cheap prices?
Aren't you suppose to buy some bubble books and fool titles?
You guys are good for Garth and The Sun.It's easy to buy bubble articles and fools titles rather than housing because housing units are expensive than titles.So bears have lots of purchase power to run the economy and Media bussinesses atleast employees of those companies and the writers of fool can buy multi millions dollars of properties through bears in Canada.
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April 29th, 2010 at 6:01 pm 76
@realpaul: #58
Sorry, #31 was me. I keep forgetting to sign in.
The median household income is correct but it's Metro Vancouver which doesn't include the Wack or the Grove. Langley is probably the furthest it goes.
But in any case, Vancouver has very low median household incomes compared to TO, Calgary, Ottawa and other cities yet our morons choose to pay 70% of their incomes so they can own something tiny or dumpy, or both.
We're at a breaking point, people are tapped out. And we're about to get taxed like there's no tomorrow.
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April 29th, 2010 at 6:03 pm 77
@realpaul:
Sorry if it's complicated Paul, but household income is just that… a single household.
Why are the numbers so hard to believe for you? Do you really think this is some grande conspiracy?
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April 29th, 2010 at 6:06 pm 78
@jesse: “To think that landlords (investors) will perpetually accept sub-par returns is laughable.”
But they are not landlords. They are “accidental” landlords. Mostly they have been speculators. They will dump the property as soon as they realize that speculative appreciation is finished.
regarding comparison with car rental is not applicable here. As I said RE is emotional purchase for most of the people. Car purchase is just emotional purchase for few guys. Majority do not care at all what kind of car they are driving. You don't have to pay premium for owning the car versus renting a car.
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April 29th, 2010 at 6:10 pm 79
@Ottawa Rocks:
If Vancouver can't even make the top 10 best cities to live in IN CANADA for Christ sakes, where does it leave us on a global scale?
Come to think of it, I can come up with 100 places I'd rather be if not for the fact that my work and family are here.
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April 29th, 2010 at 6:18 pm 80
@Ottawa Rocks
Interesting article and having lived in Ottawa and now Vancouver I'd probably agree with the ranking. Let's contrast the two: Natural beauty… close to a draw (IMHO). Culture… discussing that would be a low blow. Economy… Ottawa has a real economy. Not only in the public sector, but, the high-tech center of Canada; it's called "silicon valley north" for a reason. Vancouver's economy, from what I can tell, is simply highly leveraged people with Canada's lowest savings rate trading real-estate, using HELOCs to buy luxury cars and items to "appear" wealthy, and pouring each others lattes. Yes, the highly vulnerable film industry has a few short lived economic benefits, but, that's shaky ground.
Ottawa win without a question, but, please also consider that we were just crushed in terms of livability by Winnipeg!!! Surely the final bell has rung. "Vancouver plummeted in the rankings as it is the absolute most unaffordable city in Canada." I am shocked… who knew?
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April 29th, 2010 at 6:19 pm 81
New Listings 294
Price Changes 157
Sold Listings 211
16,884
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April 29th, 2010 at 6:20 pm 82
Summer Says:
April 29th, 2010 at 6:44 am
It’s actually printed in the Vancouver Sun…did I just see a flying pig go by?
++++++++
Maybe something to do with Shaw taking over Canwest? I know the Aspers and the Shaw family have much of the same business accumen, but the families do go to different temples. Just a thought.
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April 29th, 2010 at 6:21 pm 83
@paulb:
Ah well, it's good to take a little break.
The volume of listings was making me breathless.
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April 29th, 2010 at 6:24 pm 84
@paulb:
Strong day. Wow. May should be an interesting month.
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April 29th, 2010 at 6:27 pm 85
@other ted:
StatsCan also has median non census-family incomes listed ("non-census families") – and it's, as you've said, low. $24Kish.
A "census family" is a couple with or without children or a single parent.
A "non census-family" is anyone who doesn't fit into that description – living singly or with roommates, or their wage-earning non-dependent kids, or whatever.
I thought I'd post a bit about median vs. average – which aren't the same, but I've found a lot of people I talk to re: rental demographics are confused about -
Median contains more information about the population as a whole. It says "half the families in this area make this income or less, and half make this income or more."
Average contains more information about the overall money being made out there in the aggregate: it's all the incomes in the sample summed and divided by the number of families in the sample.
Vancouver's average is higher than the median, by a bigger difference than other cities. Most cities have around 15% of the population making over 100K: we have 18% of our population making over 100K. We have "extra" well off people, and a few Very Rich people, and the Very Rich people offset the fact that we also have "extra" destitute people (and Canada's poorest postal code.)
So, our average census family income is approaching 80K. But our median census family income is 66K. (And our median non census family income is 24K.)
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April 29th, 2010 at 7:08 pm 86
@Absinthe:
To put how median vs average skews statistics here is an example.
Five families, four earn 25k per year, one earns 100k per year.
The median income is 25k but the average income is 40k.
Median income is more important because that tells you what real families can buy, a few millionaires throw the whole thing out of whack when you're using averages.
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April 29th, 2010 at 7:12 pm 87
@vreaa: I would also like to see some snapshots. Anybody?
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April 29th, 2010 at 7:20 pm 88
@MArk: "regarding comparison with car rental is not applicable here. As I said RE is emotional purchase for most of the people."
Landlords, whether "accidental" or not, don't care about the ownership premium or the emotions. They buy because they want to make money and they do this by charging rent and capital appreciation. If the latter disappears how will they make their money?
With 25% of properties in Vancouver being rented, that's more than enough to determine the marginal price. There just aren't enough owners who buy based on "emotions" to sop up the total housing supply. That listings are increasing fast is an indication of just that.
You are more than welcome to justify to yourself why owners will pay more in perpetuity but I am convinced it's a flawed argument.
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April 29th, 2010 at 7:23 pm 89
@Vansanity:
Vansanity Says:
April 29th, 2010 at 9:31 am
…….Latest reports were from December which had Canadians at $1.46 owed for every $1.00 earned. Today it’s estimated to be even higher. It’s already higher than the US’s average, as they have been paying down debt during this recession while Canadians have been taking it on. …..
++++
Sorry for skewing the numbers, but I have $5 in savings/liquid investments for every dollar earned. (And my income is well above the average) LOL!!! (Just call me a smug bitter renter, I'm OK with that.)
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April 29th, 2010 at 7:34 pm 90
Well, I'll put the beer back in the fridge. No biggie about not making it in April . We'll be there soon!!!
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April 29th, 2010 at 7:40 pm 91
realpaul Says:
April 29th, 2010 at 9:55 am
Meanwhile corruption is where you find it isn’t it.
http://www.vancouversun.com/bu…..story.html
++++++++++++++++++++++++
RealPaul, your rants are usually right on but you missed it with this one.
This bullshit about the former Attorney General of BC "surfaced" 3 months after HE shut down and expropriated the Hell's Angels Nanaimo Clubhouse under the proceeds of crime legislation. The inside scoop is the HA's in the valley dug up this "dirt" on Les to get him out of office and discredit this real estate expropriation. The vermin bikers only want to take the man who signed the papers out of office. We are only a decade or so away from the Mexican way of assasinations in the street. (Mark my words.)
Sorry, Realpaul, you missed this one big time. As someone who rants about the corruption in this province (that I totally agree with) this just demonstrates how fucking complicated the entire BC Narco state of the North is.
I spoke to Les on these issues personally, I know a little more than I can tell. I doubt there is anything wrong with Les' integrity, he just is fed up and wants to retire, if anything. Probably the reason you won't hear much from him on this. Why should anyone have to defend themselves against scurilous accusations of no merit?
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April 29th, 2010 at 8:18 pm 92
New Listings 371
Price Changes 158
Sold Listings 266
Listings are getting decent again, when sales taper there will be fireworks.
Keep the beer on ice till tommorrow VHB.
16,908 so far
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April 29th, 2010 at 8:23 pm 93
Well with a normal distribution mean and median should be the same. The fact that it differs so much shows the distribution is skewed. We are no longer a healthy middle class city but on where a few rich can skew the average. Becoming more like a third world city.
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April 29th, 2010 at 8:40 pm 94
@paulb: What's the point while everyone else is buying? One of my friend she actually went for walk and she bought a condo on her way.Why only your customers(bears)are too lazy? Oh maybe there is a bubble in their tugs that's why there is no way to keep them on ice.They can not play,They could have bought long ago,if they were able to walk off the screen.I think they are here to count listings go up and down.
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April 29th, 2010 at 8:47 pm 95
@paulb:
Wow, if you told me that there would be 266 listings in the Spring, you'd normally (lately) expect it to be 125% of sales.
Yet it keeps getting dwarfed by the ever faster rising amount of listings!
Like a Kite towards the Moon, you could say.
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April 29th, 2010 at 8:55 pm 96
oho that combination of beer and bear become funny.however,someone is in search of beer without money,I hope he won't able to steal the bears before party.Wish you all good good luck!
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April 29th, 2010 at 9:09 pm 97
New Listings 389
Price Changes 160
Sold Listings 271
16,919 not too shabby
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April 29th, 2010 at 9:20 pm 98
If you're interested in a late nite laff 'n' snooze, go to the CKNW Audio Vault and listen to Michael Levy's BS re" the "housing bubble" on the Bill Good Show…11:00 am time slot.
You'll hear about how rock solid Canadian banks are…
Bob Rennie's prediction on the "lower-end condo market 4-5 years from now"…
Asian money will keeping propping up the West Side…
Zzzzzzzzzzzz
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April 29th, 2010 at 9:23 pm 99
@paulb: What is the historical ratio of listings to sales?
What is the historical months of inventory for this time of year?
Does anyone have a link
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April 29th, 2010 at 9:24 pm 100
Kite you are a fool.
It is said that those who worry about other people's sheep, risk loosing their own flock.
Don't you have your own blog?
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April 29th, 2010 at 9:32 pm 101
Hey Paul
I don't know for certain but that looks like an extremely high level of sales. Is this still largely a pre-April 19th rush?
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April 29th, 2010 at 9:51 pm 102
I can't believe hos strong sales are still even after the April 19th deadline.
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April 29th, 2010 at 10:01 pm 103
@Anonymous:
"What is the historical months of inventory for this time of year?
Does anyone have a link"
http://agentwill.com/weekly-stats/
http://vancouvercondo.info/forum/topic/total-inve…
The first only goes back to 2008 but has a wider variety of stats, the second starts in 2006. The reason for the inconsistency in numbers is they're using different regional boundaries.
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April 29th, 2010 at 10:04 pm 104
@PJ:
Sales lag by about two weeks. We're seeing the pre-April 19 rush to buy still playing out.
Arranging a mortgage doesn't happen overnight and there's details like inspections and such that can be built into a contract so the sale isn't final until all the conditions are met. That's when it's recorded, not when it's signed.
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April 29th, 2010 at 10:09 pm 105
The Ottawa Citizen has a story announcing that, according to MoneySense magazine, Ottawa has been chosen as the best place to live in Canada! Shhhhh! Don't tell anyone that owns real estate in Vancouver; they won't be able to handle it; their future financial and emotional well-being depends on them believing that Vancouver is the best place on earth to live, and that everyone wants to move here.
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April 29th, 2010 at 10:56 pm 106
$58,000 median household income?!? How do families live on that kind of income in the Lower Mainland? Baffling.
We live in such a bizzaro-world here. We have supposedly wealthy enough to bid average houses over $1m, yet we can't keep schools open for a full school year. Curiouser and curiouser…
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April 29th, 2010 at 11:01 pm 107
Check out how they're dealing with oversupply in Ireland:
http://www.belfasttelegraph.co.uk/breaking-news/u…
" A Green minister in charge of planning rules has backed plans to bring in the bulldozers to tackle massive oversupply of property.
Ciaran Cuffe, appointed to the job in last month's reshuffle, said he supported selective demolition as some loans taken over by bad-bank Nama will be so worthless buildings may have to be flattened.
"
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April 29th, 2010 at 11:42 pm 108
could be seeing the final push from the April 19 deadline – everyone would want things to close prior to the weekend and May.
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April 29th, 2010 at 11:43 pm 109
@ulsterman: 58K in 2005. 2007 (last reporting from StatsCan) – 66K. I imagine it's not up much from that, but I could be wrong.
But yeah, even still, dollars are being stretched. And credit maxed.
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April 29th, 2010 at 11:48 pm 110
Kite, I have a pre approved mortgage but act fast I needs, but with all these rich asians coming i need your help.
Where should I buy tomorrow?
Hurry I am running out of time. I am approved for $570k so please give me some options.
Also if I move to a house I want to get maximum rental potential so please help me with future rental needs. I want ot rent ot a bitter bear and makes maximum cash!
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April 30th, 2010 at 6:43 am 111
@Summer: Why, yes:
http://thedailybite.files.wordpress.com/2009/10/f…
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April 30th, 2010 at 8:29 am 112
@paulb:
Close to 400 sales, that's massive.
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April 30th, 2010 at 6:32 am 113
[...] LY at vancouvercondo.info 29 Apr 2010 10:59 am – [...]
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April 30th, 2010 at 6:35 am 114
[...] April 2010 · Leave a Comment nonymouse at vancouvercondo.info 29 Apr 2010 10:24 am [...]
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April 30th, 2010 at 6:38 am 115
[...] April 2010 · Leave a Comment bhtbg at vancouvercondo.info 29 Apr 2010 10:26 am [...]
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April 30th, 2010 at 9:53 pm 116
@Is Kite is Good:Home ownership is not a bussiness,however,buying a place to live or as investment will begin with ability to carry monthly expenses and the extent of loss you can take in any other circumastances.There is no advice to switch over your target,Your current circumastances and financial future will help you decide to click on the cost of home or apartment areawise.If you feel comfortable then buy if not then just rent a place.I think it's good to buy re-sale home instead of new homes for efficiency purpose.Homeowner as seller will have it repaired for you and you would be able to run inspection.The service response to national home warranty programme is like you are talking to somebody who is dead but somehow they will pick up phone to secrew you up further.
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May 2nd, 2010 at 4:39 pm 117
[...] members of the public, trapped in disinformation bubbles, for whom this will be news. Thanks to nonymouse (at vancouvercondo.info 29 Apr 2010 10:24 am) who broke the news of the posters and, at our request, forwarded these photos. [...]
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