Vancouver Bubble from the Californian Perspective

A very good analysis form a leading Bubble Blogger in SoCal. The good Doctor began blogging about the US bubble years before the collapse. He has an interesting analysis of Vancouver’s bubble here along with some good comments.

The other CA bubble – Canadian housing bubble ripe for popping. Vancouver real estate increased by 142 percent from 2002 to 2011. Average detached home in Vancouver costs roughly $1 million while the median household makes $67,000 per year.

In the last few years I’ve noticed that many of the cable finance and housing shows highlight families in Canada. Shows that talk about debt or home buyers are usually focused on families in Canada which is rather odd given that we are here in Southern California. Yet the funny thing about these shows is that they rarely identify that they are in Canada although I recognize locations like Vancouver. If one simply tuned into the show it would appear that a bubble was still going on in the states. This is probably the point. After all, the cable shows focused on flipping houses or making quick bucks on real estate started going off the air yet another bubble was still going on up north. Obviously these shows had an audience otherwise they would not be on the air. Now the focus is on the Canadian bubble and American audiences can swim in the nostalgic dreams of the glory days of domestic housing. Yet the shows rarely mention their location as if English-speaking families and cookie-cutter condos and homes are so easily interchangeable that they will fool an audience. Yet one thing the shows fail to acknowledge is that the Canadian housing bubble is even more pronounced than that in the United States.

50 Comments
newest
oldest most voted
Inline Feedbacks
View all comments
Anonymous
Anonymous
8 years ago

@Saint Patrick: Best description of what's going on is this decaying city in a long time!

rp1
rp1
8 years ago

@vangrl: Vancouver will *never* get back to reality, even if housing does correct. The people here are just too far gone.

Invest in lotteries.

Saint Patrick
Saint Patrick
8 years ago

I’ve lived in Vancouver my entire 47 years. I’ve owned 4 properties. I’ve traveled extensively around the globe. So what. Let’s be honest Vancouverites. The weather in Van is some of the worst weather anywhere. It has been minus 3 or so for the last week. Now it’s freezing rain. It will continue to rain fairly steadily until May or even June or July as it did last summer. The weather sucks. Please don’t retort with “the best weather in the world” because it’s actually some of the worst. What do we do in Vancouver? What do we manufacture? Where is the industry? The sad truth is that other than a couple of small companies we don’t manufacture anything. Vancouver has quickly become a service industry town. We buy and sell stuff to each other like houses and this does… Read more »

trackback

[…] 12:44 pm and is filed under news. You can follow any responses to this entry through the –>RSS 2.0 comments […]

fixie guy
fixie guy
8 years ago

@40 VHB Says: "…troll who makes exaggerated, stupid, irritating claims to discredit the bear case."

Include in that group posters who use phrases like 'all bears' and 'the lot of you'. 'John Vance' for example.

jumpin in
jumpin in
8 years ago

"These investors like to buy Vancouver property while visiting the wife and children at this time of year, Lau says."

Next week they will be busy putting all their properties for sale.

Laibach
Laibach
8 years ago

@Apocarypse Mao:

Lau’s clients are wealthy Chinese businessmen who set their families up in tony areas of Vancouver and West Vancouver that offer multi-million dollar homes with top schools.

These investors like to buy Vancouver property while visiting the wife and children at this time of year, Lau says.

This jives with the Ralph Sultan's report on Child Poverty in West Van and Richmond. Fcuk them all.

VHB
VHB
8 years ago

Jan-2012 Total days 21 Days elapsed so far 13 Weekends / holidays 6 Days missing 0 Days remaining 8 7 Day Moving Average: Sales 72 7 Day Moving Average: Listings 295 SALES Sales so far 819 Projection for rest of month (using 7day MA) 574 Projected month end total 1393 +/- 142 NEW LISTINGS Listings so far 3697 Projection for rest of month (using 7day MA) 2363 Projected month end total 6060 +/- 634 Sell-list so far 22.2% Projected month-end sell-list 23.0% MONTHS OF INVENTORY Inventory as of Jan 19, 2012 12657 MoI at this sales pace 9.08 Sales are starting to pick up as they always do in the 2nd half of January. while higher than last week, sales are still well below norms for January. New listings are off the charts high. We have only once done 5000… Read more »

Benny Wang
Benny Wang
8 years ago

@Meh: it is moderated, just by the users. I never miss a chance to down click RTS comments, and it looks like other do too. Those comments are gone now, hooray democracy!

YLTN @ Work
YLTN @ Work
8 years ago

@Yahoo: I might, I'll have a look.

VHB
VHB
8 years ago

@john vance: You could try reading again but ignore RTS. He is a troll who makes exaggerated, stupid, irritating claims to discredit the bear case.

JR
JR
8 years ago

@Confucius: I think you hit the nail on the head Confucius. There are whole generations of property virgins, speculators, also-rans, huge hoards of more-money-than-brains types, wanna bees etc. who know nothing else than what has happened in the past decade, give or take (this particularly applies to Mainland Chinese for whom their home country has been a recent example). The prospect of prices actually going down has never occured to these groups, and persons who already own homes are hoping with baited breath that it all hangs together; I know, I've been there more than once in this market. The fact is its going to pop, big time, in Vancouver. Will it be this year? Chances are better than 50/50, stats so far including today's would seem to suggest this but there are never any guarantees. Its very hard to… Read more »

Confucius
Confucius
8 years ago

@Danm: @Danm:

Unbearable from a net loss. Speculators don't mind loosing 10k a year from subsidizing a property that goes up 30k a year. It will quickly become unbearable if prices don't go up at all and even faster if they go down 10k a year. They have only thought in terms of monthly carrying cost (interest rates) because the capital gains have been so steady, they can't even fathom a reversal. They will learn quickly that a loss is a loss, and it is very unbearable.

john vance
john vance
8 years ago

jesus i find reading the comments quite hilarious sometimes, as much as i'd like the market to crash so i can maybe afford a house one day , it seems like all the bears here rejoice a little to prematurely. Wait till there is more concrete evidence before the high fives start, no point getting all frothed up again this year, the lot of you are just getting all the cubs hopes up for no reason.

Meh
Meh
8 years ago

@RippedtoShit: Sometimes I wish this site was moderated just a little bit.

ReadyToPop
ReadyToPop
8 years ago

"Corporate governance and the rule of law is very different from the West," he said. "(And) there's a huge bad loans issue in banks. The real estate market is probably in the biggest bubble in the world we have right now."

European hedge funds line up bets on China downturn

Apocarypse Mao
Apocarypse Mao
8 years ago

"Chinese cash buyers may be about to spice up choice neighbourhood real estate market"-The Province, Jan 19/12

http://www.theprovince.com/business/Chinese+cash+

China air cavalry looming on the horizon! Cue Wagner!

RippedtoShit
RippedtoShit
8 years ago

Phil,

Your right.

Sales are set to skyrocket, and MOI will fall into place around 3-4.

I expect new record price levels in a few months.

Frack!

Phil
Phil
8 years ago

Uggggh… Looks like the sales/list ratio is begginning to mirror last year..

RippedtoShit
RippedtoShit
8 years ago

I'm going to share something with you all.

It is meant to save you from the stampede.

This market is melting down now.

There, I said it.

Anyone have a read on average prices at this point?

Danm
Danm
8 years ago

18

What will get the investors to bail is not a small increase in interest rates, but a flattening of prices that convinces them that the game is over and it’s time to cash out.

The investors I know will only "bail" if the cost of carrying the property becomes unbearable (ie major interest rate rise or loss of rental income) or if a developer offers a big time premium to buy the property (like Cambie corridor properties)

paulb.
paulb.
8 years ago

New Listings 234

Price Changes 45

Sold Listings 100

TI:12649

http://www.laurenandpaul.ca

Anonymouse
Anonymouse
8 years ago

Larry's numbers for today:

Vancouver East & West*

New Listings – 78

Back On Market Listings – 0

Price Changes – 12

Sold Listings – 27

Vancouver All Areas*

New Listings – 225

Back On Market Listings – 3

Price Changes – 42

Sold Listings – 99

*Attached & Detached – Date: 01/19/2012 Time: 17:49 Pacific YatterMatters.com: Courtesy REBGV. Data believed to be accurate but is not guaranteed.

Anonymous
Anonymous
8 years ago

""A west side Realtor wearing running shoes chasing a chicken down Arbutus"

must be paul.

RippedtoShit
RippedtoShit
8 years ago

the comments on the rise in gov't bond yields, although modest, could be material…if the two year goes to say 1.20% i suspect that mortgage rates will go higher…IF the stock market recovers the bond market could sell off quite a bit, and squeeze rates up say 50bps, and that would hurt things…

i hope we blow through 20,000 listings in the next few months, bring on the 500 listings day….frack!