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.
May 24th, 2011 at 7:36 pm
@the R:
Hello? Like we kidnapped them from China and made them live here? Like we're trying to disrupt their lives or something?
If I were to immigrate to China (which is practically impossible) it would be demanded of me that I accept Chinese culture. They still remember those foreign concessions, you know.
Why should we make any "concessions" to people from other countries who decide to take the opportunities to come to Canada which we generously offer?
May 24th, 2011 at 5:02 pm
People born and raised in PRC (People's Republic of China) do not believe in shén guǐ lùn (god-ghost-theory), thanks to Chaiman's teaching and re-education.
May 24th, 2011 at 4:41 pm
@macho nacho: Amen to that. Notice that Blackstone says "no comment" when asked about the sale. A friend of mine near the top of a BC commercial real estate group is exiting saying the trend data shows he will not be making enough money to support his family or make his own mortgage payments in Vancouver in the near future. Sounds pretty bleak to me.
May 24th, 2011 at 4:03 pm
@Simpatico: On commercial RE, if Blackstone is bailing out of Canada, something's up.
May 24th, 2011 at 3:45 pm
According to the weekly stats, sales have steadily fallen by 10% over the last month. Meanwhile, prices have been rising rapidly. SFH sales are growing while attached are declining. The market is choking.
May 24th, 2011 at 3:31 pm
An article about the UBC hospice says a lot about the way many of these new "Canadians" think:
"The people who live next door are mostly newcomers from Asia," Jung said. "This way of thinking is formed throughout our lives, especially in our childhood. Suddenly, you are asking them to accept Canadian culture."
Jung said while he supports cultural integration, it is important to understand the concerns of the small but vocal group of opponents and give them a say as well.
Read more: http://www.vancouversun.com/health/hospice+oppone…
May 24th, 2011 at 3:26 pm
@1.9milCrackHouse: As a confirmed bear with plenty of money to buy when I wish, I stand pat as a renter, unperturbed by the mindless rambling of the RE bulls, or the usual bumps in the road down for residential real estate in Canada and Vancouver. There is a systematic way deflation unfolds in RE and we simply see inventory build to the point where the folks recognize times have changed, time to sell before everyone else and their brother, oops too late, now we have to paint and fix up to sell, oops too late, now we have to price to sell, now prices start falling, the fools rush in too early, the prices keep falling, then the buyers recognize, oops, too early to buy anything, let's sit pat.
There is lots of bad news out there in the world, and not much good as counterweight. The effect of a decelerating global economy is affecting Vancouver, but the effects will not be apparent to all for a while.
Bears who are smart are paying off debt, saving their cash, moving out of equities into safe cash equivalents, diversifying their currency holdings, selling real estate fast, shorting where it makes sense, and making their plans to buy sometime close to 2016 when we are likely to be near a bottom in several types of markets.
Bulls have much to consider but few are doing so, as usual: all markets, all asset classes, all the same is the big problem, the unusual problem. The signals tell me that equity markets are resuming an historic fall, and we are seeing the turning in silver and probably gold. Meanwhile, the USD rallies (at last for awhile), and global real estate, with a few pockets of exceptions, resumes its fall. Australia goes down, followed by Canada, the last ones standing. Government intervention has not and will not make any difference, only prolong the pain.
The Euro zone is going to implode, probably this year, maybe by summer, as Greece, Portugal and possibly Ireland go down the rabbit hole. Closely following are Italy and Spain, the latter being the final straw. German and French banks will follow down that hole, entangling and dragging in banks in the UK, US etc. in a grand kickoff to the next big economic crisis, which may then start to focus on the UK, and ultimately, the US.
The EU and the US are recognized by most international economists as now falling into the dreaded double dip. The situation of the US being particularly concerning because 70% of our economy still depends on US consumption. A cluster of natural disasters on an unprecedented scale, with a depression in Japan that will continue and deepen following the nuclear disaster there, are going to put the finishing touches on 2011.
Meanwhile, salvation coming from emerging economies is unlikely. China is much weaker than most thought, and inflation is killing its hoped for growth rate, fomenting labor unrest inland, which the government hides from the international press. This inflation will choke its demand for Canadian commodities.
In Vancouver, commercial real estate vacancy rates are up and moving higher, and those in the business have begun exiting and planning their exit because the writing is on the wall…we are following the unfolding downward conditions in commercial real estate that started earlier in the US.
Sorry to be a "Debbie Downer" but I'm still waiting to be convinced that there is some kind of magic that will sustain the unsustainable in Vancouver. I just don't see it, in spite of all the smoke, smoked HAM, and mirrors.
May 24th, 2011 at 3:00 pm
"Comments on this blog have slowed from 100+ per day to a trickle."
Everyone is focussed on the Canucks' drive to win the cup!
Go Nucks Go!
May 24th, 2011 at 2:47 pm
Guys, I've changed my name to 1.9milCrackHouse from 900k to keep up to date with the house prices in 2011.
Comments on this blog have slowed from 100+ per day to a trickle. Even the bears have been converted to bulls or are too depressed to write.
We've got to be close to a top if even Austrailia is down 7% from their recent peak.
May 24th, 2011 at 2:21 pm
Lookee lookee…
Its almost the end of May and sales are still strong strong strong!
So much for the dumbass predictions of Best Place on Meth.
Those "dramatic" March 18th rules certainly had an impact!
Hahah bears – look at that price chart for vancouver RE – straight up! Good thing you sat on the sidelines you smart little bears…hahahhahah
May 24th, 2011 at 2:20 pm
Rennie comes to the rescue:
http://www.theglobeandmail.com/news/national/brit…
May 24th, 2011 at 1:03 pm
PaulB, Larry over at Yattermatters.com is commenting on the build up in inventory that has gradually manifested – any thoughts?
If you run into McLosin, please warn him of what is to come. Remember – it takes a village to raise a child.
xoxox
Romeo Jordan
May 24th, 2011 at 12:47 pm
Sold Listings 196
sorry, ha ha
May 24th, 2011 at 12:40 pm
@paulb.:
Sales?
May 24th, 2011 at 10:45 am
New Listings 271
Back On Market Listings 7
Price Changes 170
May 24th, 2011 at 9:32 am
HAM, Shmam.
Much ado about nothing.
This market will correct (as it always does) when it gets the message.
Vancouver is ALWAYS the last in, last out. Move along.
May 24th, 2011 at 8:54 am
@Old guy:
Not always, the Province was a respectable newspaper once upon a time. I think it changed to a tabloid in 1983.
While the Aspers deserve all the blame directed at them the decline started before their ownership. Conrad Black must take his share for the slide of the Sun which included regular columns by wifey Babs.
May 24th, 2011 at 8:34 am
@Anonymous:
You can blame Israel Asper for that one. The Sun was a half decent newspaper, while the Province was alway trash. Then it was swallowed up in Israel Asper's empire and that was the end. Party line from HQ and little else. Many other fine papers in this country were also destroyed by him and his sons. Any editors or columnists that stood their ground were tossed.
May 24th, 2011 at 7:53 am
@fixie guy: I expect them to not tighten broadly, since the housing market in many parts of the country is already in trouble. I think they will reimpose CMHC insurance caps of ~750k, avoiding disruption in Toronto.
It seems totally insane that bank deposits are insured up to 100k and mortgages to infinity. Everything about the mortgage market in Canada reeks of moral hazard.
May 24th, 2011 at 7:47 am
@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 when I see it.”
It's true that the Conservatives have a stronghold in the immigrant Asian community, but that community is split into different types of immigrants – those who've been here a while, and those who have not. I recently had dinner with some older relatives from Montreal, they've been living in Canada for 30-40 years and they voted Conservative, but they are more than happy to see measures taken to curb pricing and it wouldn't stop them from voting again. Established immigrants care a lot about the future generations and overall sustainability of the country, and many of them "get it".
May 24th, 2011 at 7:17 am
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.
May 24th, 2011 at 7:13 am
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!
May 24th, 2011 at 6:36 am
@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 and Toronto.
May 24th, 2011 at 5:43 am
@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…
May 24th, 2011 at 5:08 am
@jesse:
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.
May 24th, 2011 at 4:59 am
@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)
May 24th, 2011 at 4:46 am
@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 pie
Credit so they say
Is the root of all evil today
And if you ask for a hit it's no surprise that they're
giving it all away
May 24th, 2011 at 4:40 am
@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.
May 24th, 2011 at 3:56 am
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 valuesthe 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?
May 24th, 2011 at 3:43 am
@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.
May 24th, 2011 at 3:39 am
@rp1:
Or perhaps the "ridiculous" salaries they were asking are actually offered by competitors? The candidates obviously felt they could get paid more elsewhere.
May 24th, 2011 at 3:37 am
@jesse:
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?
May 24th, 2011 at 3:34 am
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…
May 24th, 2011 at 3:27 am
@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?
May 24th, 2011 at 3:01 am
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?
May 24th, 2011 at 2:35 am
@Anonymouse: Maybe they don't own houses.
May 24th, 2011 at 2:29 am
@whydoItry:
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.
May 24th, 2011 at 2:25 am
@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.
May 24th, 2011 at 2:16 am
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.
May 24th, 2011 at 1:45 am
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
May 24th, 2011 at 12:46 am
Hassman real beef is that Asian buyers use Asian agents.
May 23rd, 2011 at 11:14 pm
"The local person is completely out of this market"
And there you have it.
May 23rd, 2011 at 11:02 pm
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?
May 23rd, 2011 at 8:01 pm
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.