Yes We Have No Bubble Trouble.

For all of you worried about a ‘housing bubble’ just stop and read this article:

No Housing Bubble Trouble.

At the national level, what could possibly kick national home prices downstairs? There is nothing to suggest massive job loss ahead or a huge oversupply of new homes. That leaves only the dubious assumption of a big increase in mortgage interest rates as the trigger for any nationwide decline in home prices. But national housing prices did not fall in the past when mortgage rates rose to twice their current level.

Oh, wait.. Sorry that’s from the Washington Times in 2005 and refers to the US market.

This is the one I meant to point to:

No Bubble, No Trouble.

A housing slowdown in Toronto and Vancouver could affect consumer confidence in regions with strong economic fundamentals like Calgary, Edmonton and Halifax, adds Don Campbell, best-selling author of Real Investing in Canada. But rather than a sharp decline, you’re more likely to see slower rates of price appreciation and home sales, says McKellar. “Overall the economy of Canada compared to other countries is still doing very well,” he says. “Housing markets are a function of the economy. Not the other way around.”

Hat-tip to Patriotz and Many Franks for the article links.

 

 

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VultureBoy
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VultureBoy

“An interesting stock to watch for the severity of the housing downturn may be Westjet. If you pull up a chart, you’ll see it has gone absolutely parabolic in excitement … over… over what?”

FYI: earnings way up, load factor up, more planes, code sharing, better pricing power, less undercutting AC. No mystery here.

JojoMalone
Guest
JojoMalone

Burbs Boy – no worries. I posted it as an fyi and to continue the conversation. Which it did. Appreciate your perspective.

YLTNboomerang
Member

Re: Rize

OMG, thes guys are f@cking idiots! I love the internal bedroom concept…basically, we would push it to the corner but that’s illegal even if nobody ever sleeps in our flipper targeted units that will remain empty.

Sorry, the whole “Rize Labs” section pisses me off more than Hipsters.

YLTNboomerang
Member

Re: Rize

OMG, thes guys are f@cking idiots! I love the internal bedroom concept…basically, we would push it to the corner but that’s illegal even if nobody ever sleeps in our flipper targeted units that will remain empty.

Sorry, the whole “Rize Labs” sections pisses me off more than Hipsters.

Aleksey
Guest
Aleksey

Getting 500 errors all the time. DOS attack from Belarus? =)

Anonymous
Guest
Anonymous

14k party by Friday

VMD
Member

Last 5 business days: 2013 vs 2012
Sales: 311 vs 445 (-30% YoY)
Seems like we’re back on track with the YoY sales declines.

Romeo Jordan
Guest
Romeo Jordan

the trends are going in the right direction.

listings growing at a decent rate.

sales slow.

Toronto announcing a shocking drop in sales, this will tighten lending at the banks even more (typical knee jerk reaction, after the horse has left the barn).

but….i can’t help but to hope that we see a SHOCKING surge in listings…come on…anyways, I can hope.

YVR, thanks for your comments on average prices. Was not what I was hoping. That said, I think there is little doubt that actual average prices continue to weaken.

I want a shocking drop, one that rips the pants off of people.

Bring it.

RaggedyRenter
Member
RaggedyRenter
@Many Franks That article is written by the CEO of Rize Alliance, known around these parts as the builder of “the building other buildings want to have sex with”. This building is not sold out yet, so other buildings may want to have sex with it, but apparently few people want to have sex in it. Interesting quips in the article: “Typically, Chinese New Year is when Chinese investors visit Vancouver and go on a shopping spree, but last year, Vancouver real-estate developers and marketers noticed the absence of the mainland Chinese buyer, a telltale sign that China’s policy was working and that the overall economy was slowing down.” The Chinese buyer hype was so strong last year and lasted well into Summer, it was frequently cited in all the condo launches as well as prestigious area sales. However he… Read more »
HAM Solo
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HAM Solo

@ patriotz

Interesting link on the rising spreads in unsecured loans. That is quite telling. I don’t believe the banks are trying to meet profit growth targets through interest spread increases (although that could have something to do with it, and goodness knows it would be hard to grow ‘profits’ through loan growth in 2013). It probably talks more to recent credit loss experience … and that’s a good thing. Maybe early indication of tough reporting season for Canada’s subsidized loan brokerages, AKA the chartered banks.

HAM Solo
Guest
HAM Solo

An interesting stock to watch for the severity of the housing downturn may be Westjet. If you pull up a chart, you’ll see it has gone absolutely parabolic in excitement … over… over what?

With Western Canada Select oil price down in the $50’s and with every region of British Columbia in housing correction mode, it takes a peculiar kind of optimism to believe in growth of the borrow-to-consume lifestyle in these parts. But apparently, believe we do.

patriotz
Member

Banks are raising rates – for those who can’t manage their debt

Banks are raising rates – for those who can’t manage their debt

Interest rates are going up.

The Bank of Canada left its trendsetting overnight rate alone on Wednesday and made it clear borrowing costs won’t increase any time soon.

But that news presents a false picture of what’s happening with the rates some people pay when they borrow money.

Selectively and quietly, the big banks have been cranking rates higher for credit line and credit card customers with a less than sterling record in managing their debts. It’s all part of a growing trend to tie the interest rates charged on loans more closely to the client’s credit history.

Told ya this was coming. Risk matters.

Hibernating Renter
Member
Hibernating Renter
I got a flyer in the mail today from a local used leasehold promoter. I’m having trouble understanding him, though. ———- UBC MARKET REPORT – 2012 The Real Estate Board of Greater Vancouver (REBGV) reports that the residential property sales of detached, attached and apartment properties on the region’s Multiple Listing Service (MLS) system reached 25,032 in 2012, a 22.7 percent decrease compared to the 32,387 sales in 2011 and a 18.2 per cent decrease compared to home sales in 2010. Looking at UBC in 2012, 227 listings were sold. This is a decrease of 25.6% compared to 305 listings sold in 2011. Call at to find out how much your property is worth!!! ———- Can anyone translate? a) Business is way down. b) In fact, it’s down even more here than the REBGV average. c) My car lease payment… Read more »
Anonymous
Guest
Anonymous

…….The professor cited the West Coast scenery, culture and lifestyle, mild weather – and even our hockey team….

Tsurd; a hockey team? Really? Are you fucking kidding me? I’m supposed to be OK about having to pay $1M for a Vancouver tear down because of a hockey team? Holy fuck this dude must have a lot of money sunk in local RE to say this kind of shit in public without a laugh track.

Best place on meth
Member
Best place on meth

+138

Hibernating Renter
Member
Hibernating Renter

I got a flyer in the mail today from one of the local used leasehold promoters. I’m having trouble understanding him, though. Anyone have any ideas?

———-
UBC MARKET REPORT – 2012

paulb
Member

New Listings 242
Price Changes 59
Sold Listings 60
TI:13731

http://www.paulboenisch.com

Groundhog
Guest
Groundhog

Here are the 4 highlighted stories right now on http://www.theprovince.com :

Justin Bieber – Selena dumped Biebs after drug-fuelled romp with student nurse: report

Medical Pot – Ross’s Gold: Olympian Rebagliati’s career goes to pot with proposed medical marijuana chain

Celebrity – Pregnant Pitt Meadows lingerie model moves in with Bourne Legacy star and his roommate

Murder Trial – Accused gangster tells court he was too horrified to look at murder victim’s body

…..Does anyone seriously pay for this tabloid?

Ludvig von Mises
Guest
Ludvig von Mises

Fair enough. Some articles, including this one, are not really worth bringing out the heavy artillery.

Many Franks
Guest
Active Member
Many Franks

@Ludvig von Mises: I’ll be happy to give serious consideration to articles that deserve it.

Ludvig von Mises
Guest
Ludvig von Mises

Re. #140

Apart from the fact that this piece is written by an “industry fluffer” (which really isn’t much of an argument against it) I found the following pretty weak:

“The brisk return of China’s real-estate market means many Chinese will once again look for a safe haven to park their newly regained wealth.”

Would anyone looking for a “safe haven” consider Vancouver real estate these days? I’m not much of a bear, but my guess is no.

Many Franks
Guest
Active Member
Many Franks

A little gift for anyone bemoaning the lack of Chinese New Year bubble-reinflation hand waving written, predictably, by an industry fluffer.

gokou3
Guest
gokou3

Re RealityCheck #138:

Just in time to prove to everyone that low interest rates cannot stop the decline.

RealityCheck
Guest
RealityCheck

Did you guys hear?

Bank of Canada is keeping rates low for a long time!! Oh, the Bond market 5 year yield dropped by -3.74% after the announcement.

Just in time for the spring market?

Anonymous
Guest
Anonymous
@pricedoutfornow Rents are not cheap in Vancouver! Your argument is that rents in Vancouver and Calgary are about the same, whereas real estate prices are much higher in Vancouver than Calgary, ergo rents in Vancouver are cheap. Okay, yes there is a way bigger differential between renting and owning in Vancouver compared to Calgary. Compared to the cost of owning in Vancouver, rents look cheap. But from a renter’s perspective, it is irrelevant to compare rents to the cost of owning. The cost of owning in Vancouver is insane and distorted not only by cheap credit (which also distorts Calgary real estate prices) but also by the HAM effect (which is less in Calgary). Ownership prices are insane in Vancouver, they do not reflect economic fundamentals, so it means nothing to tell a renter in Vancouver they have a great… Read more »