Crashing the Market in China

Remember when they dropped prices at the Olympic Village by up to 50% and presales buyers got upset? At least they didn’t trash the sales office.

..the properties owners have not even taken the delivery of the properties (as they were pre-sold), but the latest “group-buying” offered a 30% discount to latest buyers. The properties owners were angry because they haven’t even got the properties … As a result, they went to the sales office last Saturday to demand a refund for the amount they lost, and they damaged the sales office in the process.

Reminds me of that Gem out of the states when a developer slashed prices on a partly pre-sold development. “They promised us they’d never sell for less than market value!”

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fixie guy
fixie guy
8 years ago

@78 Pacifica Partners: Nice resource, welcome to the bun fight.

fixie guy
fixie guy
8 years ago

61 Troll Says: "Sure, agree with that statement. I think that sales could fall off locally without significant external factors if we hit some kind of affordability ceiling (more likely) or sentiment changes (less likely). I think in 2008 we had a bit of both…"

You still don't get that discovering the financial system was systemically poisoned by fraudulently packaged housing debt caused the American financial system to stop, and you're implying the Canadian market coincidentally stopped simultaneously on 'sentiment and affordability'? You're not a troll, you're an irremediable bag of hammers. Go back to RET where pretending refutations never happened is valued.

Anonymouse
Anonymouse
8 years ago

@Best place on meth: "Only a moron would think another .1% change in mortgage rates would get buyers to come running at this stage in the bubble."

I suspect you'll live to eat those badly-chosen words. Your record here is hardly exemplary. Crash after the Olympics? After the HST? After the CMHC rule changes? Yeah, it speaks for itself.

ReadyToPop
ReadyToPop
8 years ago

Hong Kong’s exports declined in September for the first time in almost two years and the government warned the outlook is “bleak,” adding to the risks the city will enter a recession.

Hong Kong Exports See First Drop in 2 Years; Outlook ‘Bleak’

Pacifica Partners
Pacifica Partners
8 years ago

The enhanced real estate chart book has been published! The new chartbook contains 32 charts on Canadian real estate and related economic and valuation metrics. http://bitly.com/tbrJQN

VMD
VMD
8 years ago

[With 4 business days left in month..] using VHB's Oct 21 stats and paulb's daily numbers in the last 3 days: Total new listings: 3768 Total sales: 1970 Last 3 days Listing pace: 180/day Last 3 days Sales pace: 134/day Projected Oct total listings: 4488 Projected Oct total sales: 2506 Projected S-to-L ratio: 56% Projected MOI: 6.66 ================================ 2008 Inventory – MOI – prime rate (Home Price Index trend) Dec 15193 – 16.4- 3.50% (price stabilized, stagnant until Mar/09) Nov 18348 – 20.1- 4.00% (price decline same pace as October) Oct 19257 – 14.1- 4.25% (price decline picks up pace) Sep 19852 – 12.5- 4.75% (price decreasing at same pace as July) Aug 17950 – 11.4- 4.75% (price decreasing at same pace as July) Jul 19138 – 8.8 – 4.75% (price decreasing) Jun 19000 – 7.8 – 4.75% (price starts… Read more »

rp1
rp1
8 years ago

Canada on doctorhousingbubble:

http://www.doctorhousingbubble.com/trifecta-of-ke

ReadyToPop
ReadyToPop
8 years ago
VultureBoy
VultureBoy
8 years ago
paulb.
paulb.
8 years ago

New Listings 181

Price Changes 135

Sold Listings 104

TI:16757

http://www.laurenandpaul.ca

jesse
8 years ago

Just updated CMHC starts/completions graph, with a bit of missing data, here

This is an important graph. Look at it to understand part of the reason why prices have remained reasonably robust in Vancouver so far.

A few things about this graph: starts lead, under construction lags, and completions lag more. Completion maxima and minima are about 8 months behind starts. 12 months of completions just hit a minimum earlier this year and are now trending up. I'll have more analysis later but FWIW there are the numbers.

Best place on meth
Best place on meth
8 years ago

@Anonymouse:

Only a moron would think another .1% change in mortgage rates would get buyers to come running at this stage in the bubble.

Anonymouse
Anonymouse
8 years ago

5yr fixed/closed mortgages now available @3.19% :

http://www.truenorthmortgage.ca/rates.html

I think we're in for a very busy spring.

Boombust
Boombust
8 years ago

"detroit is much cooler than vancouver anyday of the week…"

Yeah. Sure it is.

domus
domus
8 years ago

Not sure this was posted already, but it seems a big deal.

http://www.theglobeandmail.com/report-on-business

Loads of previously hidden info now publicly available on the net! Thanks competition bureau!

sebastian
sebastian
8 years ago

@troll

spent many weekends in downtown detroit, midtown, greektown, its much cooler than vancouver. Mountains and water doesn't make a city great its the people. Name one thing that the great people of vancouver have created that has changed the world. Vancouver will always be a second tier city and eventually the realestate prices will reflect this.

stagnate
stagnate
8 years ago

devore: many people swear by the coop gig, they like the sense of community, stability, size of unit, price, etc. i have one friend who was initially offended that he was scheduled for gardening once a week but once he got past the "stigma" says he looks forward to it now. of course talking about rental coops, although can also see some possibility in ownership coops due to decreased demand (due to downpayment requirements) and credit restrictions.

Devore
Devore
8 years ago

@stagnate: But why would coops be so attractive, when the other alternative to SFH, condos, have gone nowhere in years? Is it just lack of family-friendly (ie >1 bedroom) inventory?

jesse
8 years ago

@Troll: "here is what I think is critical to watch for in anticipation of a correction"

I'm looking at more leading indicators, namely population growth has slowed markedly while housing starts have remained robust (i.e. not depressed). Your "distressed" sellers are the investors/developers with a "reverse musical chairs" problem, or those who bought a new residence without a "condition on sale of existing property" clause and cannot find new buyers to pass the potato. Add in reduced hours from FIRE workers and we're off to the races.

Troll
Troll
8 years ago

@jesse: Good analysis on the migration number BTW.

jesse
8 years ago

@Anonymous: "they know about housing costs in vancouver you would think they would increase support rather than end it."

The federal government has made a long-term decision to not fund housing sector initiatives via cooperative subsidies. I believe there will still be subsidies through provincial means (e.g. BC Housing). This does not preclude cooperatives from forming or them being partially sponsored through local government initiatives (e.g. preferential leasehold financing, zoning, etc.).

Troll
Troll
8 years ago

@jesse: I don’t see how there needs to be an “external shock” to the market for this to happen. In 2008 there wasn’t much evident that directly caused sales to fall significantly starting that May. Or did you see something I missed? Sure, agree with that statement. I think that sales could fall off locally without significant external factors if we hit some kind of affordability ceiling (more likely) or sentiment changes (less likely). I think in 2008 we had a bit of both, remember that US crunch was already well under way, I believe CMHC tightened up rules in mid 2008 in response. And rates had been drifting up for several years, with 5 year discounted rates topping out around 6%. The point is that there is no trigger on the listings side currently, rates are low, employment is… Read more »

Oilman
Oilman
8 years ago

@whydoItry: 'The distress sales then set the market and non distress sellers have to compete with these lower values.'

I believe this is happening in the DT condo market here. There is a pile of inventory and not much moving, as well as pricing that is all over the map.

Anonymous
Anonymous
8 years ago

"Coops are due to come off government assistance in 2020, I think,"

seems backwards to me then. they know about housing costs in vancouver you would think they would increase support rather than end it.

oh, the orientation was for a coop in east vancouver, though they did mention the one in false creek in passing. to be more specific, they were commenting on neighboring coops in the south east part of vancouver.

it was a good sized audience. some couples with kids, some mothers with kids, young couples, a bunch of seniors… lots of interest there. No doubt they will fill their vacancies no problem.

whydoItry
whydoItry
8 years ago

What I have seen that has crashed past markets is when the months of inventory has remained high for a long period of time and the days on market are pushing well into the 60 to 90 day period. Then the mix of sellers becomes more weighted to distress sales. The distress sales then set the market and non distress sellers have to compete with these lower values.