BC, Canada, debt, prices

Vancouver prices now lower than 2011

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84 Comments

If you bought property in Vancouver BC last year and were planning on flipping it this year for a profit, well…

Better luck next year.

Teranet has released their stats for September 2012. Prices are dropping across Canada, but still up Year over year.

This is not so in Vancouver, where prices dropped by 1.2% for the second month in a row, bringing Month over Month (MOM), Year over Year (YOY) and Year to Date (YTD) measures all negative according to Real Professional:

% change y/y: -1.42%
% change m/m: -1.19%
Year to date: -0.60%

The only market that saw a larger monthly drop in the Teranet Home Price Index was Victoria which saw a 1.3% drop.  Together Vancouver and Victoria continue to drag down the national index.

 

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jesse

hahaha this is the guy selling UniverCity condos http://i48.tinypic.com/ehn4uu.jpg

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Bob Arctor

@vangrl:
I like the B&B’s noise policy:

“Noise: In an effort to provide a pleasant time for all guests, the City of Vancouver Noise Bylaw is in effect from 10pm-10am. Enforcement of this bylaw may result in a minimum $100 fine and/or eviction. Please be considerate of others.”

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VHB
Total days	22
Days elapsed so far	18
Weekends / holidays	7
Days missing	0
Days remaining	4
7 Calendar Day Moving Average: Sales	86
7 Calendar Day Moving Average: Listings	174
SALES	
Sales so far	1620
Projection for rest of month (using 7day MA)	345
Projected month end total	1965
NEW LISTINGS	
Listings so far	3795
Projection for rest of month (using 7day MA)	694
Projected month end total	4489
Sell-list so far	42.7%
Projected month-end sell-list	43.8%
MONTHS OF INVENTORY	
Inventory as of October 25, 2012	18910
Current MoI at this sales pace	9.62
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jesse

@YVR2ZRH: If MOI doesn’t get below 6, we will see diverging YOY price changes for most of the year. That would put in a healthy drop. There are a few factors I’ve mentioned that make 2013 look weak: 1) The Bank of Canada is stating loan growth is going to slow. They are relying on fiscal policy to do this. To wit the Bank was worried about debt concentrations in households with the most vulnerability to economic shocks. That means, in my view, households with higher risk factors will find it more difficult to obtain loans. 2) Completions of units are going to increase through 2013. In addition to the higher base of used inventory, there will be an addition of newly-minted dwellings as well. 3) I am bearish on Asian economies over the next few years. I think there… Read more »

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shikko

@Anonymous:
Sorry, that was me. HTML fail. Mods, please delete #79.
@specialfx3000:
I’ll state it directly, since I can’t seem to embed pics in a post:

not sure if trolling, or just stupid

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Anonymous

@specialfx3000:That lambo driver must be a HAM. Given the Google Map pic, he’s probably not pulled over but rather illegally parked at the bus stop so he could run into the Vancouver Bullion Currency Exchange (VBCE) to save an extra .001% for USD currency to later shop at Bellingham’s Costco.

He probably made an illegal U-turn and ran a red-light before approaching this spot.

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rp1

#71 @Bailing in BC: “I didn’t just buy one I bought three.”

So YOU’RE the huzzba!

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GB

@vangrl: Ummm yeah, I think I will just stay in Whistler thankyouverymuch. Also would love to see how they plan on collecting that $25k smoking fine.

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Yalie

@patriotz: Not to get into a Clintonian argument over definitions, but I guess it comes down to your definition of the word “flat”. Specifically, how much variance between points x and y you’re willing to allow. It wasn’t my intention to argue for a particular definition – I just eyeballed the data in those cities and noticed that the apocalyptic crash that appeared to be well underway didn’t actually happen, and indeed some recovery even occurred. The net result has been prices that are currently not too far from prices 5 years ago. Maybe not exactly “flat”, but certainly not a catastrophe either. And, yes, I 100% concur that all of those markets were only saved by record low interest rates delivered by the BoC in the winter of 08/09, and yes, another deus-ex-machina intervention is highly unlikely to save… Read more »

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mac

@Anonymous: Duh!

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Anonymous

@mac: “Maybe but if interest rates stay lower than inflation, you’ve gotta figure something out. Esp. if govt’s plan to inflate away their debt. Then even the bears here will have to think outside the bear box.”

Bond rates (the ones that set long term borrowing) are subject to change without the governments approval. They change when bond buyers decide the rate is lower than inflation going forward or the credit risk is too high for the interest rate. Look at Spain as an example.

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Anonymous

@mac: “You have a 2 million dollar westside house. It’s paid off. You borrow 2 to 4 hundred thousand at 3%.”

The problem is the debt has to be serviced.

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UnagiDon

@Vote Down The Facts: “Unless you have relatives/friends in Richmond, or cultural connections, there’s really no reason to be on No.3 Road”

“Please tell me you’re joking?”

Actually, he has a point. I live in Richmond and I avoid No. 3rd like the plague. I always strategize ways to get around it, like the River Rd – Capstan route, or via Garden City (getting worse too), or No. 4 Road. Unless you’re heading to one of the seafood restaurants or Superstore, it’s really best to avoid 3 Road.

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Bailing in BC

@Bull! Bull! Bull!:

Ha ha numb nuts I did this funny thing- I bought when prices were low and then I sold when they doubled :-). It only took 5 years. I didn’t just buy one I bought three. I had this crazy idea that they should all cash flow and they did (except for the principle res, which was heavey subsidised). So you see I am not a perma-bear. Most of the bears on here are not. They are just people who can tell which way the wind is blowing. Unlike you.

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IamTheChimpman

Chumps – the Chinese are salivating, the slightest drop in prices and they will come over here like a giant wave and buy everything in sight. They will own this town, down to the last blade of grass.

Get on board while you can! Call Arron Best, he’ll help you buy your dream home, and you can start building equity day one!

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YVR2ZRH

@604x: Jesse – With 2008 listings (to start) trending to 2012 listings for summer and then finishing with 2010 listings, we get your scenario (High list followed by slower lists). Used 2012 sales for all year (Spring will likely be even worse however). This paints an interesting picture. 1.) Inventory peaks about 10% over 2008 peak. 2.) MOI comes as low as 6. If we do not go below 6 in the spring, the whole year is dead and a big disaster waiting to happen. 3.) MOI would go up close to 14/15 at our peak which is typically September. 4.) Slowing of listings and the lack of the financial crisis as was in 2008 brings closing inventory down below 2008 closing however and yet again, we close the year with higher inventory again – about 10% higher than 2012.… Read more »

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kinky

“but if interest rates stay lower than inflation, you’ve gotta figure something out.”

One thing that I have to figure out is not to be going into debt. And by taking equity from the even paid out house I am going into debt. For me this is priority. In terms of going into stocks I believe that this is risky proposition too. Market is on QE steroids and as soon you remove QE everything is falling. I don’t know what we are supposed to do,

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Vote Down The Facts

@Devore:

Almost every government inflates away their national debt.

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604 Receding Gains

&

If you have the model set up then could you plug in this scenario:

1. 2013 listing panic: Listings match 2008 levels – aggressive in early months then flattening later in the year when only stressed list.
2. 2013 sales plop: Sales match 2012 with early good performance followed by collapse as reality sinks in.
3. 2014 reality bites: use 2009 listings rates (sluggish) and 2012 sales rates again.
4. If Jesse’s feeling ambitious then plug in resulting monthly MOI for implied price drops for next 24 months (using that 6 month delay logarithmic function). I love a good logarithmic predictive tool. Who doesn’t!

I’m still angling for that Golden Bear award with this one.

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IamTheChimpman

The gov’t will inflate the debt. Prices will rise.

Get real chumps, you missed the boat.

Don’t be so dramatic and self centred. Your a bunch of losers, admit it and move on.

Chumps.

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Devore

@mac: I doubt any government is planning to inflate away their debts, because they know it is not mathematically or practically possible for them to do so. It’s a nice myth on paper, but inflation will increase debt, not decrease it. Inflation does not work in a vacuum, even if the feds were to succeed in keeping rates low, it would not help the debt problem. The only way to reduce debt is to either pay it down, or default on it.

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vangrl

port moody skiing??? $14,800 a month??? what the?

http://vancouver.en.craigslist.ca/pml/vac/3344218951.html

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ScubaSteve

Stats updated:

http://i45.tinypic.com/nfmwet.gif

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mac

@kinky: Maybe but if interest rates stay lower than inflation, you’ve gotta figure something out. Esp. if govt’s plan to inflate away their debt. Then even the bears here will have to think outside the bear box.

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mac

@patriotz: As I said… if the person doesn’t want to move and rent with the kids. I disagree with what’s his face’s original comment that this is a scary disastrous proposition. And I don’t think many stock brokers or financial planners are successful at getting 100% of anyone’s equity.

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