Home and Condo sales battle map

VMD has been busy over at the new Vancouver Peak Forum uploading new Battle of Vancouver maps.

These maps show the increase or decline in year-over-year REBGV home price index (The Benchmark or HPI).

There are maps for both the condo market and for single family homes in the lower mainland, along with a few historical maps for comparison.

Here’s the map for SFH, showing big changes in South Surrey and UBC:

Battle_of_GV_SFH_2012_12_arrow

And here’s the map for Condos, which looks similar but the big changes are in South Surrey but Bull forces are firmly entrenched in Guilford and Pitt Meadows.

Battle_of_GV_Condo_2012_12

 

Here’s the original discussion thread for the Condo map and for the SFH map.

You can find more great creations and analysis from VMD over at greaterfoolvancouver.

74 Responses to “Home and Condo sales battle map”

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    Thanks Pope! Just to make sure, blue tanks are the “good guys”!

    From October to December, the following areas have been “liberated” to becoming HPI YoY-Negative territories:

    
    

    SFH: West Van, North Van, South Surrey & White Rock, New West, Burnaby N&E, Tsawwassen. (Van East and Burnaby S are imminently becoming YoY Negative, making the entire area West of Coquitlam and North of Delta a sea of blue.)

    
    

    Condo: Van West. (North Van and possibly Van East may turn YoY Neg very soon, leaving the only YoY Positive areas being Burnaby E and the outlying Port Moody, N Surrey, Pitt Meadows & Langley)

    Well-loved. Like or Dislike: Thumb up 45 Thumb down 1

    Many Franks Says:
    2

    Further clarification in who’s at the bottom of the pecking order from the Vancouver Sun: Single-family homes still winners in property price race.

    We have it from other media that Everybody But Vancouver Will Be Fine, Perhaps Excluding Toronto Condos Also. This article clarifies that Vancouver SFH Is Fine Too, It’s Just Vancouver Condos That Suck.

    For those of you holding your breath, here’s the big reveal:

    “The resource that is scarce is land,” said Tsur Somerville, director of the centre for urban economics and real estate, Sauder School of Business at the University of B.C. “You can always build more condominiums, but if you want a backyard, there’s a limited space.”

    Spectacular research, Dr. S.

    Again, heavy use of 5-year changes in valuation, as if flat 5-year pricing represents a triumphant ROI and all that year-over-year stuff he used to quote was just noise.

    Well-loved. Like or Dislike: Thumb up 40 Thumb down 0

    UBC in Crisis Mode Says:
    3

    Good work, VMD.

    I hope CBC and Globe and Mail can use them.

    Hot debate. What do you think? Thumb up 14 Thumb down 1

    patriotz patriotz Says:
    4

    “The resource that is scarce is land,” said Tsur Somerville

    Scarcity of something is measured by how much it costs to use. For example, Sidney Crosby gets paid a lot of money because people like him are really scarce.

    Does it cost more to use (i.e. rent) land in Vancouver than in other big Canadian cities?

    Yes in the future the value of use of the land may increase, but there’s no credible scenario where the present value of future use justifies today’s price. Tsur teaches a course which deals with this, so he knows this as well as anyone else.

    Well-loved. Like or Dislike: Thumb up 40 Thumb down 1

    /dev/null Says:
    5

    This looks like it’s only for Toronto at the moment, but it’s an interesting (and potentially disruptive?) business model. They provide detailed listings and neighbourhood information and sales staff (“Angels” heh) that are not commissioned. Staff are paid based on customer satisfaction bonuses and you get 25% rebate on the realtor commission. Too bad there’s still a traditional realtor on the seller’s end, skimming off the big commission. Is this similar to some of the outfits in the US?

    http://www.theglobeandmail.com/report-on-business/small-business/starting-out/buying-a-home-brokerage-offers-more-listings-than-mls-with-no-commission/article6995343/

    Mr. Hamidi teamed up with two other technologists and one realtor to found TheRedPin.com, a brokerage with a business model that they hope will turn the market on its ear: a customer-service oriented, web-friendly firm where agents aren’t commissioned, but rather salaried and given bonuses for customer satisfaction.

    Like or Dislike: Thumb up 5 Thumb down 0

    Many Franks Says:
    6

    @Patriotz: Don’t take this the wrong way, but I’m starting to doubt your faith in Somerville’s media persona.

    Hot debate. What do you think? Thumb up 16 Thumb down 0

    It’s funny, land for building SFH in Seattle and SF is just as limited, possibly if not more, and they saw huge loses of 30 to 37%, if not more. Condos decreased, at least in Seattle, almost 50%. How many Fortune 500 companies are in those cities compared to Vancouver? Seattle also saw an increasing GDP during the recession.

    I’m surprised Maple Ridge and Langley have not gone down, they are ground centrals for overbuilding. My assumption is the only thing propping them up at this point is it’s the only place resembling affordability.

    Well-loved. Like or Dislike: Thumb up 45 Thumb down 0

    @Patriotz

    Re: your message yesterday on the previous post:

    “US has crossed the line where theyre now comparable to Japan. ”

    They’re not at all comparable to Japan. Japan is one of the world’s biggest creditors and their government does not borrow from foreign lenders.

    If you thought Japan is doing fine, you might want to think again…

    Japan’s Growing Sovereign Debt Time Bomb

    In recent decades, Japanese governments have piled up debts worth some €11 trillion ($14.6 trillion). This corresponds to 230 percent of annual gross domestic product, a debt level that is far higher than Greece’s 165 percent.
    (…)
    Unlike countries in the euro zone, Japan borrows most of its money from its own people. Domestic banks and insurers have purchased 95 percent of the country’s sovereign debt using the savings deposits of the general population. What’s more, the Japanese are apparently so convinced that their country will be able to pay off its debts one day that they continue to lend their government a seemingly endless amount of money.

    Experts warn that this system cannot go on for much longer. Takatoshi Ito, an economics professor at the University of Tokyo, says for example that Japan could become the “next Greece” if its government doesn’t change course; the money, he says, will eventually run out. Ito and a colleague have calculated that even if the Japanese people invested all of their assets in sovereign bonds, it would only be enough to cover 12 years of state expenditures.
    (…)
    Since 2011, his bank has launched emergency programs with a total volume of around €900 billion. In comparison, the euro bailout funds jointly financed by the euro zone’s 17 member states only add up to €700 billion.
    (…)
    One thing is sure, warns central banker Shirakawa, “If we don’t deliver fiscal reform, then the yield on Japanese government bonds will rise.”

    Were that to happen, it would be tantamount to pulling a card directly from the center of a house of cards. Fully one-quarter of the government’s overall budget currently goes toward servicing debt. Were Tokyo forced to pay higher interest rates, it’s mountain of debt would grow even more rapidly.

    Japan has ¥1 quadrillion of debt. Japan will soon have a solvency problem. When that happens, watch out for a repeat of the 2008 GFC.

    For more on this, watch Kyle Bass talking about it in December 2012:
    http://youtu.be/HtEw2FdVe_0

    Full disclosure: I’m short on JPY.

    Hot debate. What do you think? Thumb up 21 Thumb down 3

    Just added VW SFH public MLS historical daily inventory chart to the forum here: http://vancouverpeak.com/Thread-Inventory-Graphs?pid=160#pid160

    The big run-up in VW in 2012 happened in January. +300 units in one month, then stagnated at 800 for 60 days before resuming a slower-paced upward march to 1000.

    What do you think–will we see the same kind of wild +300 inventory run-up in January 2013 for VW SFH? Or will inventory growth be more measured?

    Like or Dislike: Thumb up 7 Thumb down 2

    Bull! Bull! Bull! Says:
    10

    Hidden due to low comment rating. Click here to see.

    Poorly-rated. Like or Dislike: Thumb up 2 Thumb down 22

    Re #2:

    “This article clarifies that Vancouver SFH Is Fine Too, It’s Just Vancouver Condos That Suck.”

    So I wonder if COV condo prices go to hell and a 2000SF unit is available for $400k (or more generally speaking, $200/SF), I wonder if those SFH of same size and neigbhourhood would still be selling in the $800k ($400/SF).

    I bet not. Maybe those with Ph.D disagree.

    Hot debate. What do you think? Thumb up 14 Thumb down 2

    Yesterday I visited two of Surrey’s newly launched townhouse projects.
    Some observations:
    -the finishing level, appliances quality, the kitchen cabinetry and generally all hardware is leaps and bounds superior to what I saw the last time I looked at brand new townhome (apprx. 5 years ago).
    -both sales brochures explain the effort to achieve the units’ excellent sound insulation in great detail. I have to say, the places I saw felt very solid and quiet
    - the prices are now advertised as “excluding” taxes. I guess with the HST soon to be defunct, and general perception that it was 12% of the price that “net of HST” sales strategies were saving the buyer, including tax that is now cut in half no longer makes the price look attractive. Although it is all about “perceived” value – the tax paid will be exactly the same anyway, it just looks cheaper
    -one of the developments I visited started pre-selling their homes nearly 3 years ago. They are now selling first of the units from phase 4 (they will be a total of 6 phases when done)
    The prices asking today are exactly the same as the day they launched the project, minus some special incentives, free upgrades, etc.
    -there are 69 new townhouse projects meeting my criteria in Surrey that are selling now. I need lots of weekends to see them all, I guess. It will be fun though, no crowds, no hassles, no pressure – and most of them do look quite pretty and well appointed (just like the sales associates I got to meet yesterday ;)
    Good Times!

    Hot debate. What do you think? Thumb up 19 Thumb down 1

    vancouverguy Says:
    13

    Don’t worry, Canada. The government and the banks have everything under control. Just continue going about your business and paying your mortgages. Nothing to see here. Put your trust in the chief executive of TD bank. He even has on a nice suit, which is quite comforting.

    http://business.financialpost.com/2013/01/07/why-tds-ed-clark-says-canada-isnt-heading-for-a-u-s-style-housing-bust/

    Hot debate. What do you think? Thumb up 9 Thumb down 1

    Domocrass Says:
    14

    There is a great post today at http://vancouverpricedrop.wordpress.com/

    He compares the percentage declines in US cities at the 6 month post peak and 12 month post peak marks and compares them to the current Vancouver decline. Compared to the US housing crash, Vancouver’s crash is really, really bad.

    Here is a snipit:

    “Now, where does the Vancouver West detached home sit in comparison to these numbers? First of all, if you are a home owner like myself then you should probably sit down. OK, ready? Our peak month according to the MLS Home Price Index was April 2012 and 6 months later we were down 8.6%, so 50% HIGHER THAN ANY AMERICAN CITY. After 8 months we are now down 11.1% which, with 4 months to go in the period, is much higher than all US cities other than Miami. THIS IS NOT FLAT!!! THIS IS NOT A SOFT LANDING!!!”

    Well-loved. Like or Dislike: Thumb up 34 Thumb down 1

    @goku3

    Interesting thing–condo inventory for areas I track is starting 2013 below where it was in 2012 and 2011. SFH for areas I track is starting higher. If there are big MoI’s out there, they are in SFH not condos. So far, anyway.

    Hot debate. What do you think? Thumb up 15 Thumb down 0

    Mark Carney to get annual $400,000 housing allowance from Bank of England – http://www.canadianbusiness.com/blogs-and-comment/mark-carney-housing-allowance-bank-of-england/

    How ironic.

    Hot debate. What do you think? Thumb up 9 Thumb down 4

    Hidden due to low comment rating. Click here to see.

    Poorly-rated. Like or Dislike: Thumb up 1 Thumb down 28

    Richmond Realtor’s humour…

    My Response to the MacLeans Magazine Cover Article

    As usual, the general press when trying to get into the specifics of a particular industry without any detailed knowledge of same creates eye popping headlines which are of more relevance to its business than to the target of its supposed study.True the average observer may have had his head in the sand in Vancouver, but the market has already moved down some 25% depending upon the particular sector and being right in the middle of it, I detect a renewed vigor among buyers as of the end of November. Many listed properties in our market are owned by sellers who do not have to sell and skew the sales to active listing statistical ratio. I see prices holding firm and buyers coming back in. The effect of all this now, is that garbage will not sell as fast as it would have and properties will have to be better prepared for the sale.Frankly, from the inside of this industry, I think MacLeans missed their call by about 8-11 months in the west coast market, and, short of producing additional fear into the market by their article, signals to me that additional opportunities can be reaped in the existing climate by betting against broad brush articles with incendiary pictures produced by newsmaking press. How about producing actual new data to back up the hype?

    Buyers coming back in, in Richmond?
    From Friday’s numbers:
    33 new listings
    5 price drops
    1 sold

    Well-loved. Like or Dislike: Thumb up 70 Thumb down 5

    HAM Solo Says:
    19

    Thinking through whether we are seeing signs of recession in broader economy:

    -The Canadian unemployment rate, which may not be measured particularly accurately, has held steady, but Cdn wage growth has disappeared

    http://ow.ly/i/1kv7Y

    - Housing starts … may have helped to keep Canada job growth positive, at least until recently. However, housing starts beginning to move from a positive factor to a negative one… especially in BC, where the y-o-y comp is -15% with a declining trend. Given what we know is happening in Ontario wrt condos, it shouldn’t be many months until condos are a national headwind.

    http://www.cmhc-schl.gc.ca/odpub/esub/64695/64695_2012_M12.pdf?fr=1357590540312

    If the province of BC were in a recession, wouldn’t there be a series of negative surprises in provincial government finances? Well, yes actually, there are…

    http://www.cbc.ca/news/canada/british-columbia/story/2012/11/28/bc-budget-deficit.html

    - What about Investment activity in the oilsands. A really big driver of high wage jobs in Alberta, with national importance, and not insignificant to BC housing markets. It is too simple to say these oilsand investments relate to the price of oil, they need to relate to the price of oil in Alberta, where it is produced. The Alberta Western Canada Select benchmark price has typically been discounted to West Texas. However, the recent discounts are huge. Back in 2008, WCS topped out at $129/bbl, at the same time WTI topped at $141/bbl. Since then, however, the spread has widened and prices are lower. While West texas crude has dropped to $92, WCS is now at $55, and touched as low as $44 in the week before Christmas. Whether or not any of these pipeline projects get approved, investments in the Canadian oil patch must slow down.

    It looks an awful lot like Canada is entering a recession here. And if Canada is entering a recession, how on earth can Vancouver avoid it…in fact we are probably leading it. In the US, the housing downturn actually started before the economy turned recessionary … but it didn’t take long before a housing-driven US recession started. It does not look different here. The “phoney war” period may be over. Synchronized housing crash and national recession coming right up.

    Like or Dislike: Thumb up 8 Thumb down 0

    patriotz patriotz Says:
    20

    “If you thought Japan is doing fine”

    I didn’t say that at all. I was responding to someone who was saying that the US would likely see low interest rates going forward like Japan has seen from 1990. The US’s situation today is nothing like Japan’s in 1990.

    The part of my post that you quoted is factually correct, and it was and is one of the big differences between Japan and the US.

    A very likely outcome to the debt crisis you project for Japan is a rise in US – and Canadian – interest rates.

    Hot debate. What do you think? Thumb up 13 Thumb down 11

    ” Kyle Bass talking”

    Bassmasters, It’s A Fishing Show

    Feel free to chalk this up as an obnoxious victory lap, but I thought this was worth a look. As I pointed out over a year ago Kyle Bass seems to have become victim of the great widow maker macro trade of the century. The exceptional quant team at Nomura, which has produced some of my favorite charts, decided to highlight some problems with the short JGB trade.

    Like or Dislike: Thumb up 4 Thumb down 4

    RealityCheck Says:
    22

    Vancouver’s housing gets a little less attractive as of Feb 15th…for foreigners.

    Presently, foreigners can get free health care by using a relative’s Carecard at a Medical walk-In_clinic. New cards will have picture on it so getting free health care for the unqualified gets a little harder.

    I know of one instance where a person from the USA got an operation here under someone else’s name. I’m sure this problem is widespread and thats why we pay MSP Premiums.

    http://www.theglobeandmail.com/news/british-columbia/new-id-services-card-to-replace-carecard-in-bc-starting-in-february/article6999709/

    Well-loved. Like or Dislike: Thumb up 31 Thumb down 2

    A while back someone wrote a letter about tax evasion to their MP. (Sorry I can’t remember who it was) but I had copied it and sent it to my MP. I just got the response.

    Thank you for your email. I appreciate hearing your concerns regarding illegal rental suites, and the potential income being generated and undeclared to the Canada Revenue Agency. I share your frustration with this form of tax evasion and sympathize with honest tax payers that do declare, and pay tax on, their rental suite income.

    In light of her ministerial responsibilities, I have taken the liberty of forwarding a copy of our correspondence to the Honourable Gail Shea, Minister of National Revenue and Minister Responsible for the Canada Revenue Agency, for her review and consideration.

    Please accept my best wishes.

    Well-loved. Like or Dislike: Thumb up 41 Thumb down 0

    @Jesse

    From the same blog

    (…) but as many asymmetrical negative carry trades before it, he [Bass]may simply be early to a serious shift that proves lucrative to his clients.

    Timing the market is an art, not a science, as we all know it here…

    Hot debate. What do you think? Thumb up 11 Thumb down 5

    Groundhog Says:
    25

    @patriotz

    To clarify, I don’t think US rates will stay low forever, I think US rates will stay low until suddenly they aren’t which will cause severe problems and real structural changes in the country. That being said, like Japan, the status quo of low rates will probably be maintained for quite a while longer yet and while they are our interest rates will stay low as well.

    When US rates do see any significant rise I think it will be sudden and market driven.

    Like or Dislike: Thumb up 6 Thumb down 1

    Anonymous Says:
    26

    …..”How about producing actual new data to back up the hype?”….

    Oh, the irony!

    Sorry dude: there wasn’t any data to back the hype on the way up and you’re too stupid to see what the data predicts on the way down.

    Yes, I will have fries with that.

    Well-loved. Like or Dislike: Thumb up 31 Thumb down 2

    “Timing the market is an art, not a science”

    Bass has, to date, lost a lot of money for his clients. If you’re short JPY I hope you know what you’re doing. I have no qualms admitting I don’t.

    Hot debate. What do you think? Thumb up 14 Thumb down 6

    vancouverguy Says:
    28

    “Presently, foreigners can get free health care by using a relative’s Carecard at a Medical walk-In_clinic. New cards will have picture on it so getting free health care for the unqualified gets a little harder.”

    The idea makes sense, but unfortunately will still likely be misused. I can’t see physicians offices inspecting the picture carefully and then calling patient’s out on it. It would be potentially offensive to the patient (which could lead to a college complaint), and has zero upside for the medical practice.

    Truth is, if the patient gets photo ID from a patient with the same gender and of the same ethnic background they will probably be OK.

    Hot debate. What do you think? Thumb up 15 Thumb down 4

    @jesse

    “Bass has, to date, lost a lot of money for his clients.”
    Actually, that’s not true. His Hayman Capital Master returned 10.5% in 2012, after a paltry 1.8% in 2011. Sure his JPY short has not worked well for him so far… As an old professor kept repeating me, what matters are the assumptions.

    Page 3 of this document: http://media.bloomberg.com/bb/avfile/rR5RAJp5IuR8

    As far as shorting JPY, I’m not a sophisticated investor, just a guy that likes crunching numbers on spreadsheets. So far it has worked well for me, but rest assured, it’s only a small portion of my portfolio.

    Hot debate. What do you think? Thumb up 9 Thumb down 1

    Girlbear Says:
    30

    Jesse

    Not sure your statement re Bass is quite correct. He made a killing on the sub-prime crisis and then another killing on Greece. Yes he was in the JPY trade early, but doubt he has lost a lot of client money “to date” given his first 2 big trades. I guess it depends on when you invested with him.

    Also last couple of months he is getting vindication on his JPY short.

    Probably one of the smartest guys out there. However, as we all know smart doesn’t always make you money…at first. Look at BullBullBull! lol

    Hot debate. What do you think? Thumb up 14 Thumb down 2

    Vote Down The Facts Says:
    31

    ‘It would be potentially offensive to the patient (which could lead to a college complaint), and has zero upside for the medical practice.’

    How could it be offensive to the patient? I agree, however, there would be no upside to the practice unless there are substantial fines for letting fraudsters slip through.

    Hot debate. What do you think? Thumb up 10 Thumb down 2

    vancouverguy Says:
    32

    “How could it be offensive to the patient?”

    Suggesting that they are engaging in health care fraud would be a potentially offensive situation.

    “I agree, however, there would be no upside to the practice unless there are substantial fines for letting fraudsters slip through.”

    I cannot think of a practical way to start fining medical practices unless they are wilfully engaged in the process. This is unlikely. Rather, they will see a picture of somebody who looks kind of similar on a card and then just bring them in to see the doctor.

    Like or Dislike: Thumb up 7 Thumb down 1

    real_professional Says:
    33

    VMD – This chart is just the right mix of real estate, graphics, and nerd that I need to enjoy my day.

    However, I am surprised that the Tri-Cities is still occupied. Without looking at the official numbers, I would have to say prices are at best flat for some time now. It is the one neck of Vancouver that didn’t seem to have the stupendous upwards moves and thus may be “holding” as indicated in the map despite appearing more “dead” on a price chart.

    I am forming an armed resistance movement in the Coquitlam foothills.

    Viva le Port Coquitlam!! Viva le Tri Cities!

    Hot debate. What do you think? Thumb up 15 Thumb down 0

    @#32 real_professional:
    like Van E, Coquitlam SFH was one of the ‘hot’ markets in first half of 2012:

    Jun 722,700(+6.3%)
    May 719,000
    Apr 708,200
    Mar 697,400
    Feb 688,800
    Jan 679,800

    However, from July to December:

    Dec 701,000(-2.6%)
    Nov 705,000
    Oct 708,200
    Sep 713,600
    Aug 715,000
    Jul 719,900

    Unless Coquitlam SFH can pull off another 6 months of +1%/month gain, it too will fall into Bears’ paws in a few months..

    Well-loved. Like or Dislike: Thumb up 22 Thumb down 0

    VanRant Says:
    35

    I think the new Carecard is more than a replacement medical card, it may be a ploy to see who is in country by the Government.

    Like or Dislike: Thumb up 7 Thumb down 2

    “doubt he has lost a lot of client money “to date” given his first 2 big trades”

    My bet is a lot of clients have rather differing perspectives on Bass’s performance. The Nomura guys basically tore his talking points to shreds, but that doesn’t mean his trades won’t make money.

    Like or Dislike: Thumb up 5 Thumb down 2

    New Listings 254
    Price Changes 73
    Sold Listings 63
    TI:12212

    http://www.paulboenisch.com

    Well-loved. Like or Dislike: Thumb up 116 Thumb down 1

    Patriotz said

    “The US’s situation today is nothing like Japan’s in 1990.”

    The following Japan90s/UStoday chart lines up quite well, and i think has big implications?
    http://2.static.australianindependentbusinessmedia.com.au/sites/default/files/styles/graph_colorbox/public/121214%20RW%201.png

    Like or Dislike: Thumb up 4 Thumb down 1

    Anonymous Says:
    39

    Globe and Mail article entitled “5 ways around tough new home down payment rules”:

    “Meanwhile, you’re free to borrow your down payment from a line of credit, personal loan or even a credit card. That’s right, if you’re creditworthy you can throw your down payment on a VISA at 20 per cent interest. Mind you, not all lenders allow this and the ones that do check that you can afford the extra debt payment.”

    http://www.theglobeandmail.com/globe-investor/personal-finance/mortgages/5-ways-around-tough-new-home-down-payment-rules/article6970799/

    Hot debate. What do you think? Thumb up 14 Thumb down 1

    Anonymous Says:
    40

    Pinnacle International is planning to build new condo towers in both Toronto and Vancouver that will have more than 90 storeys and be the tallest buildings in Canada. These residential buildings will be taller than even the tallest bank tower in Toronto, which is 72 storeys.

    “Speculation is being stoked by a Toronto-area architectural blog, Urban Toronto, which late last week posted a potential conceptual drawing of the site. According to the Toronto Star, the five-building site plan could include towers of 92 and 98 stories, which would make them the country’s tallest buildings.”

    http://www.vancouversun.com/business/Vancouver+firm+planning+construct+Canada+tallest+buildings+report/7786565/story.html

    Hot debate. What do you think? Thumb up 10 Thumb down 1

    vancouverguy Says:
    41

    “The following Japan90s/UStoday chart lines up quite well, and i think has big implications?”

    Interesting link Danny. Is the fundamental nature of a real estate bubble the dependency ratio? Certainly there are other factors at play, but Occam’s razor would dictate that a simply hypothesis such as this may be correct.

    Have a look at the Statscan page on the dependency ratio.

    http://www.statcan.gc.ca/pub/82-229-x/2009001/demo/dep-eng.htm

    As you can see, Canada’s dependency ration troughs in 2011, and then is projected to get worse gradually, but relentlessly, through 2056.

    I particularly like this Statscan quote:
    “For every 100 working-age people, there were 15 seniors in 1971 and 21 in 2006. By 2056, it is projected that there will be 50 seniors for every 100 workers.”

    Can anyone say “where’s my pension?” :-)

    Like or Dislike: Thumb up 8 Thumb down 1

    For the first three days (not counting Jan 2 where there were sales booked from December), sell/newlist is 21%. Jan’12 saw the first 10 days of the year have aggregate 20% sell-newlist, Jan’11 was 34%. As VHB has mentioned, the second half of the month sees somewhat higher sell-newlist. Nothing bullish in the data yet…

    Hot debate. What do you think? Thumb up 20 Thumb down 1

    The Nomura guys basically tore his talking points to shreds

    You mean that the Japanese debt level at 230% is unsustainable?
    Or that there will not be enough domestic money to buy all government bonds in the near future?
    Or that a rate increase on bonds would make the government de facto insolvent?
    Or that a shrinking population and an explosion of the retired population is a massive problem (more adult diapers sold than baby diapers there last year!)?

    I haven’t seen the Nomura guys debunking any of those arguments.
    And by the way, Nomura is (also) a Japanse Bank. Who hold the vast majority of the Japanese government bonds?

    He may have made a bad trade on JGB, but being too early doesn’t mean he’s wrong. The fundamentals seem to be on his side…

    Like or Dislike: Thumb up 6 Thumb down 2

    ” but being too early doesn’t mean he’s wrong”

    He was wrong because his trades involved timing. The Nomura analysts explained why his timing turned out not to be correct, and did not deal with his long-term thesis. Nomura is not just a Japanese bank, they have significant presence in other countries. To suggest their analysts are biased does nothing to invalidate their arguments, which in my view are solid.

    Like or Dislike: Thumb up 6 Thumb down 3

    @jesse sure the numbers aren’t bullish, but it is increasingly unlikely January 2013 will see a listing surge exceeding that of January 2012. Granted, that’s a high benchmark but I don’t know if we’ll have a full on bearcopalypse emerging in January.

    Hot debate. What do you think? Thumb up 10 Thumb down 2

    Groundhog Says:
    46

    I think it might be a bit too early to say that Kyle Bass was too early in his call.

    Am I missing something here? He has said he is expecting his position to pay out fully in early 2014 at the earliest and possibly 2015-2016.

    And Nomuras report didn’t address the vast majority of his reasoning why now is the time to make the trade (as Makaya pointed out).

    Like or Dislike: Thumb up 4 Thumb down 1

    Jan-2013	
    Total days	21
    Days elapsed so far	4
    Weekends / holidays	3
    Days missing	0
    Days remaining	17
    7 Day Moving Average: Sales	61
    7 Day Moving Average: Listings	218
    SALES	
    Sales so far	242
    Projection for rest of month (using 7day MA)	1029
    Projected month end total	1271
    NEW LISTINGS	
    Listings so far	870
    Projection for rest of month (using 7day MA)	3698
    Projected month end total	4568
    Sell-list so far	27.8%
    Projected month-end sell-list	27.8%
    MONTHS OF INVENTORY	
    Inventory as of Jan 7, 2013	12212
    MoI at this sales pace	9.61
    
    	January		
    year	sell	list	sell/list
    2001	1225	3395	36.1%
    2002	2248	3626	62.0%
    2003	1966	3810	51.6%
    2004	1954	3039	64.3%
    2005	1697	3360	50.5%
    2006	1924	3471	55.4%
    2007	1806	4067	44.4%
    2008	1819	4675	38.9%
    2009	762	3700	20.6%
    2010	1923	5147	37.4%
    2011	1819	4801	37.9%
    2012	1577	5756	27.4%
    Mean	1727	4071	42.4%
    median	1819	3755	47.5%
    

    Well-loved. Like or Dislike: Thumb up 33 Thumb down 1

    painted turtle Says:
    48

    Has anyone seen this weird Global video on Garth’s site?
    Mixed messages + mad specialists.

    Like or Dislike: Thumb up 0 Thumb down 0

    “it is increasingly unlikely January 2013 will see a listing surge exceeding that of January 2012″

    I am not convinced that newlists equalling the first quarter of 2012 is necessary to elicit increased weakness in 2013. Listings are starting from a higher base. Demand looks weaker due to not only lower population growth persisting through 2012 but also tighter credit conditions and increased completions.

    I agree that things are not shaping up to be Las Vegas or Miami, but I’ll take it!

    Well-loved. Like or Dislike: Thumb up 23 Thumb down 1

    Vote Down The Facts Says:
    50

    VanRant, the government already knows who is in the country. Don’t you have a passport? Or a drivers license? Or pay taxes?

    Like or Dislike: Thumb up 5 Thumb down 3

    Nomura is not just a Japanese bank, they have significant presence in other countries. True but…
    Nomura retreats to faltering Japan

    By the way, one of the reason why I also believe “this time is different” :) about the Japanese situation is that: http://www.tradingeconomics.com/japan/balance-of-trade

    Like or Dislike: Thumb up 3 Thumb down 1

    HAM Solo Says:
    52

    @ VHB

    It is interesting how slow the listings are out of the gate. But sales are slow, too, in fact they are really the shocker of 2013 so far.

    My guess is that listings gather strength, in terms relative to history through the spring. Right now it feels like a “deer in the headlights” phase. Interestingly, because so many lenders are not at risk due to insured credit risk, we are not going to see banks drive the market down.I think the bigger culprits will be developers (whose inventory doesn’t show up here) and deep-equity sellers/downsizers. But any way you slice it, once the HPI starts printing -10% plus…the mortgage insurers will have to enforce foreclosure discipline on the banks.

    Hot debate. What do you think? Thumb up 10 Thumb down 1

    RealityCheck Says:
    53

    if the market stabilizes this spring, can we assume that we are missing something?

    Maybe (1) concentrated Immigration into the cities, (2) Land use restrictions, (3) People buying because they can afford the monthly have more of an effect than interest rates etc.

    Remember, RE in Vancouver has been on a tear since 2002. Long before 0/40 and Emergency Interest rates.

    When should we start considering the above numbered factors? After this spring? Fall 2013? 2015? When?

    Hot debate. What do you think? Thumb up 9 Thumb down 5

    Anonymous Says:
    54

    @realitycheck

    Ive thought about that a lot. My thought is if I am completely wrong, then Ill continue living richly off my subsidized house (rent) and keep piling excess money into other assets which are more appropriately valued.

    Hot debate. What do you think? Thumb up 10 Thumb down 1

    HAM Solo Says:
    55

    @ Reality Check

    Don’t forget a few more:

    a) We’re running out of land
    b) There are helicopters full of rich Asians who want to buy multiple properties for the CNY
    c) Price doesn’t matter because people would rather own than make rational investment decisions with their money
    d) We’re in the Best Place on Earth!

    …oh, and I forgot…

    e) This time, it’s different

    Hot debate. What do you think? Thumb up 16 Thumb down 2

    Groundhog Says:
    56

    In the end to me the costs of home ownership far outweigh the benefits right now so if I am wrong about house prices not falling thats ok with me, Ill continue on as I have been

    Like or Dislike: Thumb up 7 Thumb down 1

    @jesse
    Best to boil a frog slowly .
    An avg 1%-1.5% per month decline is slow enough to allow the RE boards to continue their public reassurances but not too slow to be used as a strong argument for un-tightening of mortgage rules. 1-1.5%/month annualized is 12-18%. If Vancouver drops 12-18% for 2013, nationally it will likely only drop a small fraction of that, insufficient to call for re-loosening of lending rules. Just my thoughts. : )

    Hot debate. What do you think? Thumb up 13 Thumb down 1

    Bo Xilai Says:
    58

    Here’s a novel way developers are trying to recoup their capital from failed ventures… If they can’t finish it, burn it for the insurance money.

    Maybe this will be ONNI’s tactic in 4 or 5 years.

    http://www.cbc.ca/news/canada/british-columbia/story/2013/01/07/bc-arson-suspected-condo-fire.html

    Like or Dislike: Thumb up 8 Thumb down 1

    HappyRe(a)nter Says:
    59

    RealityCheck Says: iIf the market stabilizes this spring, then pigs will start to fly.

    Hot debate. What do you think? Thumb up 7 Thumb down 5

    Vote Down The Facts Says:
    60

    Bo, weren’t there several suspicious fires in 2008 too? A couple at marinas, the Quatro development in Surrey, etc?

    Hot debate. What do you think? Thumb up 11 Thumb down 1

    @ Reality Check
    If RE market stabilizes this year and prices start rising again then I’m leaving. I’m tired of this nonsense.

    Like or Dislike: Thumb up 4 Thumb down 1

    Anonymous Says:
    62

    RealtyCheck: “Remember, RE in Vancouver has been on a tear since 2002. Long before 0/40 and Emergency Interest rates.”

    Yes we started out at 20% down, 25 year amortizations and 7 to 10% interest rates prior to 2002. Then we got 5/25, 5/30, 5/35, 0/40 along with declining interest rates down to 3% emergency interest rates. Yes prices went up with the credit bubble which started in 2002. Now things are going in reverse. Not much chance real estate doesn’t follow. It is kind of like dumping gasoline on a fire then stopping and starting to put water on it. The fire burns out. The water part just started BTW.

    Like or Dislike: Thumb up 4 Thumb down 2

    “if the market stabilizes this spring, can we assume that we are missing something”

    Do you mean prices remain flat or increase slightly from March to June? If so, I would not assume we are missing anything; a 1-2% rise over that period is not bullish for prices for the rest of the year. You could see the same effect in Seattle/Portland during their corrections.

    Like or Dislike: Thumb up 6 Thumb down 2

    Anonymous Says:
    64

    RealtyCheck: “When should we start considering the above numbered factors? After this spring? Fall 2013? 2015? When?”

    Those ‘factors’ have been around in long before the latest bubble and are present in pretty much every other second and third tier city around the world just like Vancouver. Sorry we are not different. Your house value is about to plumet.

    Like or Dislike: Thumb up 3 Thumb down 2

    Democrass Says:
    65

    “Remember, RE in Vancouver has been on a tear since 2002. Long before 0/40 and Emergency Interest rates.”

    2002 was not “long before … emergency rates”. Emergency rates began in 2001 after 911 and the collapse of the dot com bubble. So the Vancouver real estate book did not start before emergency rates but was ignited by them.

    Hot debate. What do you think? Thumb up 12 Thumb down 2

    Groundhog Says:
    66

    I know this post will probably get voted down, but judging by the responses to RealityCheck’s post, I think it needs to be pointed out.

    It is not 100% certain that prices drop and keep declining.

    I have been bearish on RE ever since I first did some math in 2007 on whether I should buy or rent. In all the years since I have never regretted my decision to rent, and I do not now. I am far more ahead right now both job-wise, education-wise, and asset-wise then I would be if I had bought.

    I believe fully prices will return to historical price to rent and price to income measures. House prices, when adjusted for inflation, did not rise in all of the 20th century and I doubt they will in the 21st.

    All that being said: It is not 100% certain that prices drop and keep declining.

    There are circumstances which could either cause the market to be flat or even start to rise again.

    I think the probably of that is very low, but it is quite possible the market in 2013 doesn’t play out how we expect. Attacking RealityCheck for asking “if the market stabilizes this spring, can we assume that we are missing something?” is being ignorant.

    Yes, it is possible we are missing something, and yes, it is possible prices don’t end 2013 lower then 2012.

    Hot debate. What do you think? Thumb up 21 Thumb down 5

    Achilles HELOC Says:
    68

    @ Groundhog

    Yes, anything can happen. But “land-use restrictions”, “immigration to the cities”? Come on, cut our friends some slack.

    I think what could conceivably happen is that a government in Ottawa could freak out and turn a blind eye to(or even encourage) massive lending fraud that temporarily juices prices for another quarter or two. But that’s in the more remote reaches of probability. Most likely we all just hear a big thud.

    Like or Dislike: Thumb up 3 Thumb down 2

    Groundhog Says:
    69

    @Jessie

    Not sure what Kyle Bass’s position is but if he’s short Yen hes in a good position now, its at a 2.5 year low!

    Like or Dislike: Thumb up 1 Thumb down 1

    “There are circumstances which could either cause the market to be flat or even start to rise again.”

    After being students of previous Vancouver housing market “surprises” to the upside, I think commenters here can put a bit more quantitative meat on this. What ‘circumstances’ would cause the market to be flat or rise? (I’m assuming you mean flat for a year or more, not just for a few months, which is not really flat because of relative price strength in the spring selling season)

    I see some possibilities that could lead to less severe price drops than 2012. The first is a renewed bout of investment leakage out of Asia after their latest round of stimulus. I don’t know how to put a value or probability on that but it occurred before and was delayed by about 6-12 months after the funds were released (which they just were). The size of the latest Chinese stimulus was not as large as the previous rounds, and there is an increasing amount of debt servicing that I think will be competing for the funds.

    I see low interest loans as possibly finding ways into BC markets. Low rates are going to persist for some time. Loans can be curtailed for certain borrowers but ultimately there will be huge pressure to lend out somewhere. Whether or not it’s in the Vancouver area remains to be seen. I have already heard there are premiums on some Vancouver-area loans because of the added risk. It may be that even with higher spreads there is still appetite for loans here.

    There will be some savings in April/May onward as the HST is repealed, allowing buyers to save HST on higher-value new builds and transaction fees. That could produce some additional demand among those who are parking cash. Savings on a $20K commission will be on the order of $1000 (or about 12 days’ worth of price drops on a $500K condo dropping at -6% YOY). Savings on a $2MM property will be significant. All else equal I would look for a small increase in sales with closing dates post-transition, and that can plausibly start to occur soon.

    As an aside, we know sales dropped 35% year-on-year. Say average prices are about the same in 2012 as in 2011. Total Realtor incomes will have dropped say 20% year-on-year. BC’s workforce was 1.2MM, Realtors are 18K, or about 1.4% of the workforce. Say average income increased 3% per year from 2010-2011 and all industries ex-Realtors saw the same increase from 2011-2012. In 2012 that would be wage growth of (1200*.986*1.03+18*.8)/1200-1 2.75%, or a decrease of .25% in aggregate wage growth for 2012 based solely on reduced Realtor commissions, never mind the knock-on effects.

    Like or Dislike: Thumb up 7 Thumb down 1

    Groundhog Says:
    71

    Bullish case for RE:

    -A few very large companies announce they are moving HQ to Vancouver

    -Inflation starts to rise significantly and people, viewing RE as a hedge, re-ignite the speculative fever

    -CAD drops and foreign investors, looking at the % decrease in CAD and % decrease in RE the last year, start bidding up properties and locals start bidding up properties as confidence returns that Vancouver IS the best place on Earth

    -The expiration of the first-time buyers tax credit causes a rush to buy and an increase in prices. The increase in prices ignites again speculation that the correction is over, and others jump in

    -Another financial crises (Europe, US, Japan, China,???) causes the government to loosen standards again. CMHC limit raised significantly, party re-starts

    -The return of HAM?

    -Tax changes – Interest rate deductability? More changes to HST/GST that somehow favor people buy houses now?

    -Tax grants/incentives put in place by government to stabilize market (like the US tried) that work, maybe even if just temporarily.

    Like I said, I don’t see much of a bullish case, most of these ideas are pretty far-fetched but I’m trying my best here. The fact remains there may be other “unknown unknowns” out there that could cause prices to remain flat or rise over the year.

    If prices do rise this year, or don’t fall anymore, depending on the reason it might be reasonable to reassess your outlook, as I think RealityCheck was getting at.

    Like or Dislike: Thumb up 8 Thumb down 1

    “if he’s short Yen hes in a good position now”

    I assume you mean he’s short JPYUSD? It depends on how Bass structured his trades and whether he rolls them over.

    Like or Dislike: Thumb up 1 Thumb down 2

    Groundhog Says:
    73

    @Jesse

    Wrote my post before I saw yours. With all the media attention lately the fact that no RE agent or bull has been able to provide any reasonable argument for further gains makes me pretty confident there’s no saving this market, but still I think its good to realize its not 100% certain and there are unknown circumstances that we can’t predict that maybe could keep the market afloat.

    Like or Dislike: Thumb up 5 Thumb down 1

    #70:

    -A few very large companies announce they are moving HQ to Vancouver
    Like Chinese SOEs? Hell all their people are here. Any kind of fraud/scam company could do well.

    -Inflation starts to rise significantly and people, viewing RE as a hedge, re-ignite the speculative fever
    Entirely possible, since people respond to real interest rates.

    -CAD drops and foreign investors…
    Falling currencies get rising interest rates so in this scenario a bomb goes off.

    -The expiration of the first-time buyers tax credit
    The problem is people are running out of money and builders don’t run out of projects.

    -CMHC limit raised significantly, party re-starts
    They’d need to make the effective real interest rate a lot lower than it already is.

    -The return of HAM?
    China is printing so this is on the table.

    -Tax changes
    It would have to be a rebate and it wouldn’t be popular.

    “If prices do rise this year, or don’t fall anymore, depending on the reason it might be reasonable to reassess your outlook, as I think RealityCheck was getting at.”

    I like this advice. It’s a government plaything, up or down. Act accordingly.

    Like or Dislike: Thumb up 2 Thumb down 1

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