Hasman calls market ‘unhealthy’ ‘not sustainable’

If you live in Vancouver you probably recognize the name Andrew Hasman. He’s a local realtor since 1993, and apparently doesn’t agree with the view that we’re in a new paradigm, but still manages to steer clear of the word ‘bubble’.

“Many people who buy here aren’t buying because they’re moving here,” said Hasman. “They’re buying on speculation or to park money here … There have been cases where people come and purchase five or six houses. No one needs five to six houses unless you’re speculating.”

Overseas buyers from Mainland China have been the driving force behind the price rise, Hasman said. “That’s what’s driving the market, really — of single family homes that have sold in the last 18 months, I would say, they’re conservatively 70 per cent, probably 80 per cent of the buyers,” he said.

He said that in some cases, the houses are placed back on the market within weeks, at a 10 per cent higher price, or simply remain empty.

For more local realtor reactions to the current market check out the full article in the Vancouver Observer.

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patriotz
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Active Member

Preparing for higher interest rates

From the Globe, not Global. Nothing earthshaking but I thought I'd just shock everyone by showing a couple of guys talking common sense.

Keeping An Eye On Th
Guest
Keeping An Eye On Th

Oh here we go again, Hasman wants to raise his profile.

Overseas buyers from Mainland China have been the driving force behind the price rise, Hasman said. “That’s what’s driving the market, really — of single family homes that have sold in the last 18 months, I would say, they’re conservatively 70 per cent, probably 80 per cent of the buyers,” he said

70% to 80% sure ok and pigs fly.

But let's just suppose it were true, why would we not want these people to continue, until it blows up in their face?

Runawayscreaming
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Runawayscreaming

"The local person is completely out of this market"

And there you have it.

Jim
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Jim

Hassman real beef is that Asian buyers use Asian agents.

vreaa
Member

It's rough for employers AND employees in over-expensive Vancouver:

"Trying to hire for my IT based business was impossible in Vancouver, we have given up. People wanted ridiculous salaries, just to keep their heads above water. We can’t make the numbers work. We have set up shop in Halifax."
http://wp.me/pcq1o-2lD

"A few months ago I applied for a pretty advanced software engineering position at a local company. I realized that if a potential employer here asks you why you live in Vancouver they are just setting you up to expect a crap pay."
http://wp.me/pcq1o-2l7

whydoItry
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whydoItry

So, what happened to the Asian buyers in Seattle when prices began to fall? They stopped buying in Seattle and bought in Vancouver instead. Speculators don't buy in falling markets. Right now, Vancouver is China's little whore, but she'll be dumped when the US real estate market starts to rise and becomes the better investment.

Anonymouse
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Anonymouse

@vreaa:

"People wanted ridiculous salaries, just to keep their heads above water. "

I call bullshit on the candidates actually saying – or even implying – that was the reason.

patriotz
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Active Member

@whydoItry:

Right now, Vancouver is China’s little whore, but she’ll be dumped when the US real estate market starts to rise and becomes the better investment.

RE will become a worse investment in the US when prices go up. The cheaper a given asset is, the better an investment it is.

Better to say "when the US RE market appears to have bottomed". Speculators aren't concerned about whether something is really a good investment, just in which direction prices appear to be moving.

rp1
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rp1

@Anonymouse: Maybe they don't own houses.

VanRant
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VanRant

So what is the Conservative doing about this housing problem, now that they have the majority! Let the house prices go to the moon and beyond?

jesse
Member

@VanRant: "So what is the Conservative doing about this housing problem"

They already did something: they reduced credit availability last month… But seriously, my bet is they will do more, but not directly, in the next few months after the budget is passed.

Let's assume the federal government — the Bank of Canada and the Department of Finance — are aware and annoyed that Vancouver is "nutzoid" when it comes to house prices and raw unadulterated speculation. What could the federal government do to deal with this, without affecting other regions of the country that aren't in bizarro bubble territory?

southseacompany
Member
southseacompany

Melbourne Herald Sun; Caution reigns amid falling property prices.

"Australians are divided over whether it is a good time to invest in property amid falling house prices and signs that Australia's economic bet on China may not be as safe as houses."

http://www.heraldsun.com.au/business/caution-reig

patriotz
Member
Active Member

@jesse:

What could the federal government do to deal with this, without affecting other regions of the country that aren’t in bizarro bubble territory?

Impose a targeted maximum limit on CHMC-insured mortgages, obviously, which would render most Vancouver properties ineligible but leave most properties in other cities eligible.

Think that's going to happen? Introduce a policy that will be seen as targeting Vancouver?

Anonymouse
Guest
Anonymouse

@rp1:

Or perhaps the "ridiculous" salaries they were asking are actually offered by competitors? The candidates obviously felt they could get paid more elsewhere.

Anonymouse
Guest
Anonymouse

@patriotz:

"Impose a targeted maximum limit on CHMC-insured mortgages"

There's already the "32% of household income" limit, which necessitates higher downpayments for pricier properties.

Frank Grimes
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Frank Grimes

Convenient to have the UBC Hospice open house the same night as the (possible) end of the Canucks/Sharks series:

http://www.cbc.ca/news/canada/british-columbia/st

I suppose the only people that will show up are the ones concerned about property values the harmony of the yin and yang.

Maybe we can use this as inspiration for the CoV neighbourhood emblem contest:

http://www.news1130.com/news/local/article/230773

"Old people being run-down by poorly driven German luxury cars"

for the UBC neighbourhood emblem?

jesse
Member

@patriotz: "Think that’s going to happen? Introduce a policy that will be seen as targeting Vancouver?"

Actually, why wouldn't it happen? If Vancouver's exposure to a massive bust is seen as a thorn in the side of long-term economic growth I don't see much popular resistance to this, especially if phrased in a way that the rest of the country will foot a bigger and bigger bill when TSHTF, if left unchecked.

They don't need to call out Vancouver but can call out and effect conditions seen as causing long-term affordability problems. As mentioned, I expect there is some talk of this already but the federal gov't may decide to do nothing and hope the situation quickly dies on its own. I would bet they will do "something". It may go as far as foreign residential property ownership restrictions.

onenangryslav2
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onenangryslav2
@patriotz: The interviewee notes that people should start living "within their means." That's just crazy talk! What a moron! There's nothing in my life that I can't achieve without a call to capitaldirect.ca. And I'm not the only Canadian who has figured this out. With help from Pink Floyd: Credit, go away Get a good job with more pay and you're okay Credit, it's a gas Call up capitaldirect.ca and make a stash New car, caviar, four star daydream, Think I'll buy me a football team Credit get back I'm alright Jack keep your hands off my stack. Credit it's a hit Don't give me that do goody good bullshit I'm in the hi-fidelity first class travelling set And I think I need a Lear jet Credit it's a crime Share it fairly but don't take a slice of my… Read more »
Patiently Waiting
Member
Patiently Waiting

@jesse: Well, Garth Turner seems certain that the government is going to do something big along those lines. The way he's sticking his neck out makes me believe he knows something from his political connections.

Then you have guys like Peter Ladner, who probably have some influence on the Conservatives.

I think something is in the works.

(btw not all posts by "Patiently Waiting" on Turner's blog are me)

patriotz
Member
Active Member

@jesse:

It may go as far as foreign residential property ownership restrictions.

That could be challenged by one or more provinces as an infringement on their jurisdiction over property rights.

OTOH the feds could just levy punitive taxes on offshore owners and/or prohibit the banks from lending to them.

Anyway, given that the #1 target group for the Conservatives in BC is the Chinese immigrant community, I'll believe it when I see it.

Patiently Waiting
Member
Patiently Waiting

@patriotz: "Anyway, given that the #1 target group for the Conservatives in BC is the Chinese immigrant community, I’ll believe it when I see it."

You think our local Chinese like these (supposed) offshore buyers?

As a white dude, I couldn't care less about the prices in Richmond. If I were Asian OTOH…

jesse
Member
@patriotz: "the #1 target group for the Conservatives in BC is the Chinese immigrant community, I’ll believe it when I see it." You hit on the jurisdiction aspect, which is why I expect there is some federal pressure for provinces to be more heavily involved in dealing with property asset bubbles. I don't think the government is ignorant of the legal framework but does have incentive to impose regional restrictions. The government may have "targeted" the Chinese immigrant community, but first I know the immigrant Chinese community does not speak with one voice when it comes to foreign ownership (witness the mass protests in Hong Kong and Taiwan over limiting foreign ownership), and second the government has targeted many other groups who stand to be net losers from a specific region's unsustainable profligacy, most notably people living anywhere but Vancouver… Read more »
Anonymous
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Anonymous

All the government has to do is to come up with a rule that will put the Vancouver Sun out of business. Maybe a simple rule like: print real news. That should do it!

It sounds crazy, but it’s surprising how many people believe, or if nothing else, allow the nonsense printed by the Sun thinly disguised as news to reinforce their own believes in unlimited unabated returns from Vancouver real estate.

The single worst thing that ever happened to this city was the amalgamation of the Sun and the Province. Time for the both the Sun and the Province to set a real newspaper to take their place!

registered
Member
registered

11 jesse Says: "What could the federal government do to deal with this, without affecting other regions of the country that aren’t in bizarro bubble territory?"

Oh FFS, the federal government caused this problem. By loosening lending standards, by wildly increasing the scope of mortgage loans they back, and I'll argue by immigration policies. These polices had the effect of making their numbers look good, they don't give a rat's ass about the voter until the voter gives one.

What I expect them to do, and shortly, is move back towards traditional landing requirements. The false 'miracle economy' coupled with the Liberal implosion gave Harper the majority mandate he so desperately wanted and now they won't tip toe around backing away from the precipice.

Bear Vancouverite
Guest
Bear Vancouverite
@Patiently Waiting "You think our local Chinese like these (supposed) offshore buyers? As a white dude, I couldn’t care less about the prices in Richmond. If I were Asian OTOH…" No local Asian that I'm aware of is happy about the supposed HAM. @Anonymous: "All the government has to do is to come up with a rule that will put the Vancouver Sun out of business. Maybe a simple rule like: print real news. That should do it!" Getting rid of a single paper won't do anything. The Chinese papers, both here and overseas, do alot of RE pumping, and agents are paying for full page spreads to perpetuate the myth of ever rising real estate here in Vancouver. @patriotz: “Anyway, given that the #1 target group for the Conservatives in BC is the Chinese immigrant community, I’ll believe it… Read more »
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