Prices before and after a housing bubble.

The Vancouver real estate bubble is getting attention from outside Canada again.  This time Mish is in Business Insider comparing current prices in massively overpriced Vancouver to what the same price gets you in post-bubble Ireland.  The difference is rather large.

There are some pretty nice houses you can get in Vancouver for only $890k!  Two of them are even potentially liveable and one has even had some upgrades.

The post-celtic-tiger property is pretty decent as well, and a fair sized discount from the original asking price of $6 million.

Now clearly what happened in countries like Ireland was that people who should not have been were extended credit.  Lots of credit.  And since property prices were rising they were viewed as ‘can’t lose’, until they lost.

Have we made credit too easy in Canada, or are we more sensible than that?

UPDATE: reader Anonymouse pointed out that Mish comparing a hotel to a single family home is not a fair comparison. In response Many Franks posted this link about home prices in Donegal from last September:

The average price of a new home in Donegal is estimated at €179,000, representing a drop of 43pc from peak values. New three- and four-bedroom semi-detached houses are cheaper than in most other parts of the country, with averages estimated at €128,800 and €155,000 respectively.

Second-hand homes are estimated to average €165,800, down 3pc from last April and a drop of 41pc from peak values. The cheapest second-hand apartments in the country can be found in Donegal, with the average price of a one-bedroom apartment estimated at €50,000, and €57,500 for a two-bedroom apartment.

 

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patriotz
Member

@Lotus:
Winnipeg isn’t, yet its prices have gone up a larger % in the last decade than Vancouver’s.

What do all the Canadian cities that have seen outsized price increases have in common? It’s not immigration.

Lotus
Guest

Vancouver is still one of the most popular place to live from people around the world including China.

Extremely rich Van house owner.
Guest

@VMD:
Don’t worry it will be sold in May because now those wealthy party cadets and party connected businese elites are in Poeple Congress once the party event is over they will be here in drones and buy them at 20% premium in a week. Chinese money is invincible.Squash city isa just a remote reserve they ain’t interest in it unless your government build a pipline and Naval base there to serve our national interest.

Extremely rich Van house owner.
Guest

@fixie guy:

Specially buyers from China who are willing to pay a premium to settle in Vancouver for their country coz Vancouver’proximity to US.If there is enough population from China we could build a friendly city for future Chinese Naval base which can put a tight grisp on US Navy.

registered
Member
registered

71 patriotz Says: “High RE prices ALWAYS have only one cause, and that is buyers who are willing and able to pay them.”

Those are two causes, and Canadian federal government mortgage policy has high control over the ‘able’ part. Just like the US.

patriotz
Member

@Clockbike:
“I speculate the values are staying high because the current owners want to break even. Or atleast minimize their losses. ”

Are there ever any owners who don’t want to break even, or at least minimise their losses?

High RE prices ALWAYS have only one cause, and that is buyers who are willing and able to pay them.

SunBlaster
Guest
SunBlaster

@ Panic Sale

Wow this guy bought two units for a combined asking price of $7.5mil. If you read his name backwards it spells KOLA which means “ass” in Spanish :oP

Anonymous
Guest
Anonymous

@Devore: ….Except it’s not Paris. Like Tuscany Villas in Kelowna, which are neither villas, nor, obviously, in Tuscany….

My favourite is: ‘Whistler style homes’ which means is small homes with rental suites full of drunken, stoned Auzies who can’t get to their lifty jobs on time.

VMD
Member

[Eight Van West SFH Chinese neighbors teamed up for group-sale]
Granville St between W45-W47Ave.
Listing $3,568,132 each (most of them). All under same realtor.
Apparently they’ve been on the market for a few months (?)
Wonder if any Dev will bite? ; )

“Excellent potential development opportunity in the prestigious South Granville area. Combine 8 massive lots to redevelop for a total site area of 93,300 sqft. Total frontage of 538 feet. Properties are 173.5′ deep and have a back lane. Lots included in this assembly are: 6137, 6151, 6175, 6187, 6211, 6237, 6261 Granville St, and 1511 W 47 Ave”

http://translate.google.com/translate?sl=auto&tl=en&js=n&prev=_t&hl=en&ie=UTF-8&layout=2&eotf=1&u=http%3A%2F%2Fwww.iask.ca%2Fnews%2Fcanada%2Fhouse%2F2012%2F0306%2F122222.html&act=url

Anonymous
Guest
Anonymous

The green house in the Mish article below was just featured on Global tonight on another story. It apparently just sold for 800K.

MLS® Number V930461
Listing Price: $899,000

VCI Admin
Admin

@Clockbike: Line removed, thanks!

Clockbike
Member
Clockbike

However, I recommend removing the line “Since they had received the land for $1, they decided it would be a good idea to borrow from the equity of that dollar to get alot more money to develop.” That’s second hand knowledge and I haven’t found citation for that rumor.

Clockbike
Member
Clockbike

Go for it.

VCI Admin
Admin

@Clockbike: This is a fantastic round-up. Hope you don’t mind, we’re reposting this as tomorrows story with all the images inline for easier reading. Thanks!

Anonymous
Guest
Anonymous

Speckers in troubles…

PANIC SALE – REDUCED TO COST – NEW TOWNHOUSE 108 – HARBOUR GREEN 3

MUST SELL BEFORE CLOSING DATE – by Mar 31, 2012

CALL ALOK at 604 644 9915 for inquiry.

ONE OF ONLY 2 BRAND NEW HG III TOWNHOUSES AVAILABLE FOR SALE!

** SEE ALSO HG III TOWNHOUSE 107 – 2303 sq ft – 2 br 2 Bedroom + Den + Private Roof Top Patio + Bathrooms 2 fill + 1 half – listing for $3000000

THESE UNITS ONLY GST INCLUDED *** (IMMEDIATE 12% SAVING on purchase) – ONLY 15% DOWN – Assignment Fee can be negotiated

If I’m not wrong, this guy sounds like he’s totally screwed… The rise and fall and Real Estate moguls wannabe, how entertaining is that movie! It’s hard to feel sorry. I tried, I just can’t.

good-format
Guest
good-format
Copied from PaulB’s number http://www.laurenandpaul.ca Date Listing Price(+-) Sold Inv Inv(+-) Feb 28 294 120 179 15,012 81 Feb 29 239 112 145 14,907 -105 Mar 01 313 94 123 14,912 5 Mar 02 251 97 163 14,919 7 Mar 05 338 134 118 15,069 150 Mar 06 298 114 163 15,161 92 Total-C 1,200 439 567 254 5 day-avg 288 110 142 64 Total-Est 6,380 2,423 3,130 16,304 1,461
silverfish city
Guest
silverfish city

@frank: I’d like to see numbers from the South Okanagan (Penticton, Summerland, etc.) They are suspiciously hard to find.

YLTN @ Work
Guest
YLTN @ Work

Australia GDP at half the forecast rate, housing slump blamed:

http://www.bloomberg.com/news/2012-03-07/australia-s-economy-grew-less-than-forecast-0-4-last-quarter-on-housing.html

Premonition for Canada, the other resource country?

Devore
Member
Devore

@thetamax:

Didn’t someone say wait until late February and we’ll see huge sales numbers from the Chinese New Year holiday crowd?

They came, they bought, they left, if you didn’t catch the Feb average SFH price. They didn’t buy in volume ($2M+ MOI is very high) but they did pay a lot.

Clockbike
Member
Clockbike

@chilled:
Probably best you got there after they went out of business. Rumor has it they were selling crack out the back door.

Oh, also: Respectable realtor video.
http://www.youtube.com/watch?v=7VpdWfkZ3Qs

chilled
Member
chilled

@Clockbike:

“Then we have Red Point, a sales center directly off the highway on your way to whistler, across from the KFC.”

Last Saturday I sat at that KFC drive through window, tooting my horn, for almost 20 minutes before I realized the place was boarded up.

frank
Guest
frank

look at the latest numbers form the okanagan.

I may end buying myself a vineyard if prices go down enough, or at least a few bottles of good wine

http://fishyre.blogspot.com/2012/03/heres-meat.html?showComment=1331096731471#c536301556576872297

Devore
Member
Devore

@Yalie:

During the property boom in Japan, house prices got so high they basically built anywhere and everywhere the laws of physics would allow. Not recommended for claustrophobics.

Let me guess, they weren’t making any more land on the island (which, I should remind everyone, is surrounded by water not on just one side, but FOUR! with big mountains in the middle) and prices kept going up forever?

thetamax
Guest
thetamax

Didn’t someone say wait until late February and we’ll see huge sales numbers from the Chinese New Year holiday crowd?

Isn’t it past late-February now?

Clockbike
Member
Clockbike

@silverfish city:

I speculate the values are staying high because the current owners want to break even. Or atleast minimize their losses. Besides, we’re the “Outdoor Recreation Capital of Canada” Which means we have some water to paddle on, some granite to scamper up and some trials to fumble down. We only just recently got a turf field for soccer, and it costs an arm and a leg to play on it as it’s owned by the University.