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RBC: market irrational, painful correction possible

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In case you missed his post in the forum, vanpro linked to the latest RBC affordability report:

The RBC Measures climbed by between 1.0 percentage point for condominium apartments and 3.4 percentage points for detached
bungalows, moving closer to their all-time highs reached at the start of 2008. We fear that the Vancouver market is becoming increasingly disconnected from local demand conditions and vulnerable to a painful correction, especially once interest rates resume their ascent.

Such strained conditions warrant close monitoring for any sign that the Vancouver and B.C. markets have become dangerously disconnected from prevailing local housing demand fundamentals.

Check out vanpros post in the forum and the original report PDF here.

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Ravishing Rick
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Ravishing Rick
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Cut the music!

First post…

Hit the music!

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7 years 8 months ago
Ravishing Rick
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http://www.theglobeandmail.com/news/national/brit…

The globe and mail posting a stupid article Of the self lubricating one himself, bob renie..who happens to be a very ugly man, look at that mug. And not ugly compared to the ravishing one but ugly compared to even Li Kai's nasty visual offering.

In the article: (have incomes gone up 4% numb nuts?)

"Mr. McClanaghan said in an interview this week that while house prices in Richmond and west-side Vancouver increased by 18 per cent last year, according to real-estate board figures, increases in the rest of the region were only about 4 per cent."

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7 years 8 months ago
blueskies
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"The Bank of Canada should raise borrowing costs within the next few months to show consumers and businesses that it has a grip on inflation, the Organization for Economic Co-operation says in a new assessment of Canada’s economy."

http://tinyurl.com/byebyebulls

gonna need some stronger Kool Aid to keep

the momentum going………….

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7 years 8 months ago
Keeping An Eye On Th
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Keeping An Eye On Th
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@Ravishing Rick:

"The globe and mail posting a stupid article Of the self lubricating one himself, bob renie..who happens to be a very ugly"

Who can argue with the fact, the guy is ugly,although it makes me wonder way Ravishing would be concerned about bob's looks.

That aside, it is said that figures don't lie, but liars sure can figure.

I also think uuuggly bob will soon enter the political arena in the near future.

This guy is tacky and cagey, but quite obvious from a marketing perspective.

I think he is marketing his political future right now.

And no Vancouverite would vote against a champion of RE.

I think Ms. Clark will call him soon.

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7 years 8 months ago
Flip Flop
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Someone needs to ask RBC what they consider 'prevailing local housing demand fundamentals' to be.

Just so we have it on record for next time.

It appears that they may just be a new bandwagon in town.

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7 years 8 months ago
Flip Flop
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"there may just be"

back to the coffee.

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7 years 8 months ago
blueskies
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RR:

Cut the crap!

Dave will make short work of you.

Hit the bricks!

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7 years 8 months ago
Patiently Waiting
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Free Rent at The Village

http://vancouver.en.craigslist.ca/van/apa/2399996…

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7 years 8 months ago
Patiently Waiting
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"That doesn't mean everyone is completely OK with their debt. The survey had 58 per cent of respondents who owe money saying they feel uncomfortable with it, 33 per cent have lost sleep over it, 30 per cent are embarrassed by their debt and 25 per cent said it has triggered disagreements with their partners."

Read more: http://www.vancouversun.com/Canadians+going+into+…

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7 years 8 months ago
whydoItry
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The difficulty for RBC to tell you what they consider demand fundamentals, is that these fundamentals are continuously changing. The fundamentals of today, will not necessarily be the fundamentals of tomorrow. However, the word fundamental invokes the perception that the author is all knowing, the equivalent of yesterdays alchemist who purported to turn lead into gold. Not only are these fundamentals always changing but depending on the stage of the market they could cause prices to rise or to fall. Today, an increase in interest rates would be considered to make prices fall, however it could also stimulate people to buy now before the rates increase and thereby cause prices to go up. Same stimulus – different result. So pick your fundamentals cautiously and be prepared to change them frequently. A source close to RBC, has explained to me that… Read more »
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7 years 8 months ago
real_professional
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Just released: http://www.housepriceindex.ca/

Teranet March Data

Index Period

Mar 2011

Index Level

138.94 ©

% change y/y

4.10%

% change m/m

0.58%

Year to date

1.04%

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7 years 8 months ago
Extremely rich Van h
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Really man,such idiotic has been postulating since 2000 while the RE of Van blow sky high.PPLs heeding on such stupid have already been priced out.

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7 years 8 months ago
Extremely rich Van h
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@whydoItry:

The fundamental is that local and mainland Chinese are eyeing Vancouver is the best place on earth to live and also a safe place for save keeping their wealth.In one decade Vancouver will be a vibrant Chinese City which is full of Chiense enterprises and possibly a Chinese naval base under land-lease agreement with Canadian governmet similar to the Baltic fleet Treaty between Ukraine and Russia.

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7 years 8 months ago
Extremely rich Van h
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@Patiently Waiting:

As long as Chinese are ok-they are very ok financially-Vancouver RE will keep creeping skyward for decades.

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7 years 8 months ago
SamanthaD
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Best hockey team in the world belongs to the best world class city in the world!!

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7 years 8 months ago
real_professional
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TSX vs Real Estate Chart updated.

Sales Pair Volume Table updated.

Both for March 2011 Teranet Data

http://vancouvercondo.info/forum/topic/tsx-vs-rea…

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7 years 8 months ago
Devore
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@Patiently Waiting: Expected. The asking rents there were much higher than comparable market rents. They're throwing in freebies now, reduced rents later. The private unit rentals have already dropped.

I'm seeing the same pattern at the new Barclay St tower, Patina, except there's no rental company pool. When it first opened, flood of listings on CL @ $1800 for a 1 bed, no parking. Today, still a flood of listings, but they're throwing in extras, including parking, and dropping price. You can get can 1 bed for $1700 now.

Would be interesting to see what Vancouver apartment rental vacancy rate is, and how market rents (as opposed to asking rents) are trending.

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7 years 8 months ago
Anonymouse
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@Devore:

"You can get can 1 bed for $1700 now."

Is that meant to be a good price?!

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7 years 8 months ago
Devore
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@Anonymouse: No, just noting the trend. I expect in a month there will still be a flood of Patina listings, but prices will be $1650-1600. At that point, and possibly now, you'll be able to negotiate them much lower, because they'll have been vacant for 3 months.

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7 years 8 months ago
jesse
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Bob Rennie just can't win: B.C. promises 2% HST cut by 2014

Finance Minister Kevin Falcon announced on Wednesday morning the government will reduce the HST by one percentage point in July of next year and then another point in July of 2014, cutting the tax from 12 to 10 per cent.

Now remember Bob Rennie last year lashing out at Gordon Campbell for raising the HST and killing new condo demand due to uncertainty? Well this just is another reason for throwing potential condo buyers into "wait and see" mode until the HST is cut, which will be 2014.

And to think Bob Rennie was a Christy Clark supporter and property developers poured money into her campaign. That can't be going over well…

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7 years 8 months ago
patriotz
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@Anonymouse:

“You can get can 1 bed for $1700 now.”

Is that meant to be a good price?!

For rentals or any other consumable there is really no good or bad price, just the market price.

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7 years 8 months ago
pricedoutfornow
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I know someone who has been trying to rent out a couple units at the Olympic Village since it opened. One unit was rented for a few months at $1100/month, then they moved out (studio). The other was vacant for a long, long time before they decided to do some sort of corporate/vacation-short term rental. They said when they posted the ad at $1400/month they had NO calls about it whatsoever. Depressingly, this $1400/month is about $1000 less than the mortgage payment.

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7 years 8 months ago
Anonymouse
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@patriotz:

"For rentals or any other consumable there is really no good or bad price, just the market price."

Sure, but $1700 for a 1 bedroom in the West End represents a significant increase in the market price in the last 2-3 years.

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7 years 8 months ago
Anonymouse
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@pricedoutfornow:

"Depressingly, this $1400/month is about $1000 less than the mortgage payment."

But it's probably equal to or greater than the interest portion of that mortgage payment.

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7 years 8 months ago
Supersogs
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@Devore: Speaking of the new Patina building, I had family friends who "informed" me of their knowledge that there wasn't as much speculation going on in Vancouver as I believed there to be. Ah the joys of talking real estate with family and related. Gave them 2 quick examples of just newly finished buildings – 1 being the Patina. Told them to check the MLS – 35 listings yesterday and many craigslist rental ads. Keep in mind these were sold at the peak and many average $1k per square feet as it was – so those flipping believed it could be sold for even higher! And check the asking rents – $3k per month for a 1 million dollar investment? That kind of return on investment is Olympic Village territory. It's not just downtown. Even in Burnaby, the brand new… Read more »
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7 years 8 months ago