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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Sherry C
Guest
Sherry C
3 years 5 months ago

It’s a balloon, d**n it!

CanuckDownUnder
Member
CanuckDownUnder
3 years 5 months ago

What a coincidence, there’s also no bubble in Australia. Don’t even get me started about fundamental nonsense like price/income ratios! It turns out our local real estate pimp isn’t too fond of the latest Demographia survey:

‘Dr Wilson, the senior economist at the Fairfax-owned Australian Property Monitors, questioned the validity of the survey by making world comparisons. “You may as well be comparing the Australian housing market to the one on Jupiter, because they are different animals,” he said.’

http://smh.domain.com.au/real-estate-news/economist-tears-roof-off-affordability-study-20130121-2d2e4.html

patriotz
Member
3 years 5 months ago

And right on cue:

Is Canada talking itself into a housing crisis?

Little was heard of housing bubbles in Canada up to about a year ago. Now, predictions of crashes are on the front cover of Maclean’s and other publications. One might wonder if we are talking ourselves into a housing miasma, even though the fundamentals don’t point to one.

Don’t worry, be happy and buy a house. Now.

For more RE bull**** from the same author, google “LARRY MACDONALD Globe and Mail”

Q
Guest
Q
3 years 5 months ago

The perils of living in a condo tower:

“Authorities are investigating after a pipe was opened in the 35th-floor stairwell of a Yaletown highrise Monday evening, sending water cascading down the stairs to the ground floor.

“The water made its way down into every single hallway,” said Capt. Gabe Roder of Vancouver Fire and Rescue Services. “How much of it went into the suites? I can’t tell you that.”

He said it looks like someone deliberately opened the standpipe system used by firefighters to attack fires.”

http://www.vancouversun.com/news/metro/Mischief+suspected+massive+water+leak+Yaletown+highrise/7851859/story.html

vancouverguy
Guest
vancouverguy
3 years 5 months ago

A little more lipstick for the Pigg in Toronto.

http://www.thestar.com/business/article/1318272–downtown-condo-market-is-showing-strange-signs-of-life

This article makes me want to vomit.

pricedoutfornow
Guest
pricedoutfornow
3 years 5 months ago
“Housing markets are a function of the economy. Not the other way around.” Maybe this would apply in normal circumstances, but the past ten years have been anything but normal. People have been encouraged to take on more and more debt through low interest rates, zero down mortgages, lengthy amortizations, CMHC insurance to anyone with a pulse, etc etc. In this case I would say that the economy has ONLY been performing well BECAUSE of housing-without the government stepping in in 2008/2009 where would housing be today? It definitely would not have soared to new highs, that’s for sure. This… Read more »
Q
Guest
Q
3 years 5 months ago
Some interesting statistics to consider in today’s Globe and Mail: -According to a Re/MAX survey, 71% of homebuyers in BC believe that real estate prices will stay flat or increase in 2013 -According to the same survey, BC homebuyers are the “least bullish” in Canada while Ontario homebuyers are the most bullish -According to an Angus Reid survey of 1100 people who plan to buy real estate within the next two years, 80% believe prices will stay flat or increase Those are some stunning statistics. It shows that most people really do not see the bubble correcting/crashing in 2013. The… Read more »
Groundhog
Guest
Groundhog
3 years 5 months ago

“Housing markets are a function of the economy. Not the other way around.”

They haven’t updated their economic models in a decade or so.

Anonymous
Guest
Anonymous
3 years 5 months ago

Yeah, I kind of thought the whole argument against juicing the re market and creating this bubble is this:

“Housing markets should be a function of the economy. Not the other way around.”

painted turtle
Guest
painted turtle
3 years 5 months ago

@Q
Remember: the survey was made by Remax. This is like Monsento saying GMOs are good for the environment.

Many Franks
Guest
Many Franks
3 years 5 months ago

Demographia’s back with another international housing affordability report.

The 4.7 figure is a deterioration from last year, when the Canadian figure was 4.5.

Demographia says that figure would have been higher were it not for a slowdown in Vancouver, with its “grossly overvalued market” resulting in a median multiple score drop from 10.6 to 9.5.
CHART The slow fall of Canada’s mortgage lending rates

However, Vancouver’s score was still high enough to rank it second overall on the list, behind Hong Kong. Sydney, Australia, was third internationally.

Q
Guest
Q
3 years 5 months ago

@Painted Turtle

Yes, the survey is by Re/MAX. Ironically, I don’t think those stats make a very good argument for the bulls. I take it as a bearish signal that the majority of potential purchasers still don’t see a correction on the horizon. Their motivation to purchase is likely capital appreciation and once they start noticing depreciation many will opt not to buy–putting further downward pressure on prices.

lazyrenter
Guest
lazyrenter
3 years 5 months ago

Demographia… from the Heritage Foundation to your eyes.
I am not arguing with the numbers, nothing wrong with median/median. But the editorializing was tiring. Regulations are Bad! Housing would be cheap if the gubmint just let us pave *everything*. No mention of low interest rates as a cause, and strange gyrations to argue that areas with fewer regulations didn’t have a bubble. And of course, somehow, my tax dollars to pave new highways and run water/sewer to the exurbs – no thank you.

Aleksey
Guest
Aleksey
3 years 5 months ago

Am I the only one who think of Re/Max logo everytime they mention housing bubble?

Left already living in San Diego
Guest
Left already living in San Diego
3 years 5 months ago

I cant resist saying this,
26 degree today here… http://ca.weather.yahoo.com/

Are you enjoying skiing, golfing and sailing on the best place on earth all at the same day of course?

gokou3
Guest
gokou3
3 years 5 months ago

“-According to an Angus Reid survey of 1100 people who plan to buy real estate within the next two years, 80% believe prices will stay flat or increase”

I think by definition, those who plan to buy RE wouldn’t be too bearish. And ya, if you still don’t get it, none of you bears would be in this 1100 sample 😀 Nice way for re/max to screen out all the undesirable stats.

gokou3
Guest
gokou3
3 years 5 months ago

Even the bears must agree this house is cheap — if it sells at listing price:

http://www.shuchatgroup.com/Properties.php/Details/84

😀

Groundhog
Guest
Groundhog
3 years 5 months ago

@gokou3

Maybe a sign of whats to come for Richmond condos.

gah
Guest
gah
3 years 5 months ago

“-According to an Angus Reid survey of 1100 people who plan to buy real estate within the next two years, 80% believe prices will stay flat or increase”

And according to the same survey, 100% of people who plan on buying stocks in the next year or two expect those stock prices to be flat or increase.

Um yeah, because if I expected the price to decrease I WOULDN’T BUY IT!

Vote Down The Facts
Guest
Vote Down The Facts
3 years 5 months ago

“And according to the same survey, 100% of people who plan on buying stocks in the next year or two expect those stock prices to be flat or increase.”

If a stock pays a decent dividend I don’t care if the price stays flat.

Ludvig von Mises
Guest
Ludvig von Mises
3 years 5 months ago

“Are you enjoying skiing, golfing and sailing on the best place on earth all at the same day of course?”

I had a great weekend skiing the North Shore mountains with my kids, and plan to go again after work tonight, since it is practically in my backyard. How’s the skiing down in San Diego?

RaggedyRenter
Member
RaggedyRenter
3 years 5 months ago

You may laugh at pumpers’ attempts to paint the picture as rosy and the prices are flat, but you can’t deny that it’s working.

/dev/null
Member
/dev/null
3 years 5 months ago
Question for the group: the Dec 2012 official stats package states that for North Van SFH the 3-year and 5-year change % are both 5.5%. The current benchmark is $908k and the index is 145. So the prices are 5.5% above Dec 2007 but then the index also suggests that prices are 45% above Jan 2005. So are these both right? A big jump from early 2005 to ~2008 but we’re almost back to 2007 pricing? Our landlords are booting us out of the house we’ve been in for 5 years. (She’s divorcing him and booted him out, and we’re… Read more »
Anonymous
Guest
Anonymous
3 years 5 months ago
GlobalTV posted a story on Facebook about how Vancouver was the 2nd least affordable city in the world. Here are some of the brilliant comments From Crystal Walshe, a realtor: “I’m a realtor, and no – it’s not “good” for me, whats good for me is a steady business in a balanced market, where people can buy confidently. But let’s put this in perspective, Vancouver is landlocked and driven by basic supply and demand. Look at New York! It’s simply a matter of sacrificing affordability for lifestyle. Will there come a time that this will balance out, probably not…there are… Read more »
RFM
Guest
RFM
3 years 5 months ago

Will the Transition from HST to GST Distort the Timing of Real Estate Closings this Spring?

Please see my new posting: http://vancouverpeak.com/Thread-Will-the-Transition-from-HST-to-GST-Distort-the-Timing-of-Real-Estate-Closings

vanpire
Guest
vanpire
3 years 5 months ago

Will the Transition from HST to GST Distort the Timing of Real Estate Closings this Spring?

Nobody pays 12% HST anyway as the 7% portion is taken care of by the provincial rebate. What a person pays for a new place now will be virtually the same they will pay after the HST is no more.

other ted
Guest
other ted
3 years 5 months ago
Pretty sad seeing the same arguments being used like “we have great weather, and millionaires moving here” Just came back from southern florida. The weather was amazing and judging by the cars I saw more millionaires on some blocks then we have total. Guess what doing an apples to apples comparison they are way cheaper there. The mansions that are two million down there would be twenty here. Why would a millionaire sell there to come here. Also that argument is bullocks since everthing is overpriced in the lower mainland from apartments in surrey to houses.
Ludvig von Mises
Guest
Ludvig von Mises
3 years 5 months ago
Re. #16 “I think by definition, those who plan to buy RE wouldn’t be too bearish. And ya, if you still don’t get it, none of you bears would be in this 1100 sample Nice way for re/max to screen out all the undesirable stats.” Well, you guys like to say owners who don’t sell don’t matter; only those who sell affect the price. Doesn’t the same apply to those who don’t intend to buy? Why would they matter? Is seems pretty important that those who do plan to buy believe the market is flat or about to rise. If… Read more »
Vote Down The Facts
Guest
Vote Down The Facts
3 years 5 months ago

other ted, I’m sure the weather in Florida is amazing during hurricane season.

Q
Guest
Q
3 years 5 months ago

The BC Government is spending $9.5 million so that Vancouver can host the Times of India Film Awards (aka Bollywood Awards) this April. A little part of me fears the international media attention on the Bollywood Awards could ignite a new wave of foreign investment in Vancouver real estate.

http://www.cbc.ca/news/canada/british-columbia/story/2013/01/22/bc-bollywood-vancouver.html

C.Junta
Guest
C.Junta
3 years 5 months ago
@/dev/null @23 First off, sorry to hear that. Here is my view. We (a family with 2 kids) are renting half-a-duplex in Burnaby for $2000/month for about 5 years. Good area, decent schools, commute is ok. The landlord is a nice person, but has (and always had) thoughts about splitting the place into two units and rent them for $1500+$800 (this trick worked for a while for the neighbour landlord, until last year when they have started having problems with finding good tenants for the downstairs unit). I am tracking the rental pool in the area pretty closely and found… Read more »
Anonymoose
Guest
Anonymoose
3 years 5 months ago
#24 Vancouver is a nice city, it is not a world class city. People who call Vancouver a world class city haven’t been to one. World class cities have world class food, from haute cuisine to food stands. I can’t tell you how many amazing meals I had in Salzberg. Some of the best pizza I’ve ever had was in a stand buried the La Boqueria in Barcelona. World class cities have world class transportation systems, and I’m not talking a new Port Mann bridge and three lanes instead of two. Go to Munich or Barcelona and let’s talk transportation.… Read more »
Ludvig von Mises
Guest
Ludvig von Mises
3 years 5 months ago

Okay, would any of you who voted me down care to explain why owners who don’t intend sell are irrelevant, but non-owners who don’t intend to buy are not? Honest question. I really want to know.

Fabio
Guest
Fabio
3 years 5 months ago

#32 Anonymoose, Vancouver world class city

and ladies…talk about sexy ladies on the streets of Milan, Buenos Aires

Anonymoose
Guest
Anonymoose
3 years 5 months ago

Instead of voting me down tell me what is world class about Vancouver.

gokou3
Guest
gokou3
3 years 5 months ago

Re #28:

“Is seems pretty important that those who do plan to buy believe the market is flat or about to rise. If this is true then the are likely to make a move soon and possibly cause the market to flatline or rise.”

you still don’t get it, do you.

Ludvig von Mises
Guest
Ludvig von Mises
3 years 5 months ago

No gokuo3, I don’t. Please explain.

Anonymous
Guest
Anonymous
3 years 5 months ago
“Is seems pretty important that those who do plan to buy believe the market is flat or about to rise.” Those that do plan to buy in any market are usually going to believe the market will rise. This would have been true for buyers in Japan over the past 20 years, buyers in the US over past 5 years and buyers in Vancouver in the early 80s at that peak. Of course all were wrong. The problem is there were too few greater fools left to keep the market inflated. Kind of like what we are now seeing in… Read more »
Ludvig von Mises
Guest
Ludvig von Mises
3 years 5 months ago

“Those that do plan to buy in any market are usually going to believe the market will rise.

Interesting point, Anonymous. But keeping in mind that the market has been falling lately, wouldn’t you expect a significant number of those intending to buy in the next two years to think the market might continue falling for a while, (which in turn might incline them to delay buying for a while)?

P.s. What’s with the snarky attack at the end of your comment?

Anonymous
Guest
Anonymous
3 years 5 months ago
/dev/null: “Pay $3k in rent for 1-2 years then buy (and deal with 2 moves) or bite the bullet and buy now and pay that much for the mortgage (until rates go up). The potential savings by renting and delaying a purchase is what I’m trying to estimate.” If you plan on spending 900K on a house you will save at least 400K by delaying the purchase. Although you may have to wait more like 4 years. That is 100K per after taxes. Seems like a no brainer to me. Just so you know owning is no more enjoyable than… Read more »
dyugle
Guest
dyugle
3 years 5 months ago

“Is seems pretty important that those who do plan to buy believe the market is flat or about to rise. If this is true then the are likely to make a move soon and possibly cause the market to flatline or rise.”

With an MOI over 11 why should we be concerned by demand side arguments?
The supply side arguments are now driving the bus.
Try to keep up.

Anonymous
Guest
Anonymous
3 years 5 months ago
http://www.theprovince.com/news/vancouver/Vancouver+highrise+condo+flooded+from+down+vandals/7855778/story.html Yikes “A downtown Vancouver condominium building suffered extensive water damage when a number of standpipes were opened. The Vancouver Fire Department was called to 928 Beatty St. in Yaletown around 6 p.m. Monday to respond to a report of a water leak in a highrise building. After climbing the stairs to the 35th floor, firefighters found that at least three standpipes, which are water pipes used for firefighting purposes, had been turned on. “It created a waterfall,” said Capt. Gabe Roder. The building was evacuated while firefighters secured the area, shut off the water and reactivated the fire alarm… Read more »
Anonymous
Guest
Anonymous
3 years 5 months ago
“Interesting point, Anonymous. But keeping in mind that the market has been falling lately, wouldn’t you expect a significant number of those intending to buy in the next two years to think the market might continue falling for a while, (which in turn might incline them to delay buying for a while)?” You would think buyers in Japan would have figured this out after 20 years too. They didn’t year after year. Japanese are just as smart as Canadians and we are only in about 6 months to or crash. Remember those people who figure this our are now likely… Read more »
Ludvig von Mises
Guest
Ludvig von Mises
3 years 5 months ago

“You would think buyers in Japan would have figured this out after 20 years too. They didn’t year after year. Japanese are just as smart as Canadians and we are only in about 6 months to or crash.”

Sorry, but I don’t understand the comparison to Japan. My comment had to do with a survey that found that Canadians who intend to buy in the next two years overwhelmingly think the market will be flat or go up. Are you saying that for 20 years Japanese buyers have also overwhelmingly thought the market was flat or about to rise?

addair
Guest
addair
3 years 5 months ago
“Now, predictions of crashes are on the front cover of Maclean’s and other publications” That obviously explains the biggest sales slowdown in recent history. Wonder how long it will take for the few remaining fools to get the message. I’m always shocked on the rare occasion when I actually see a “sold” sticker on a house that’s been sitting on the market for ages, with asking prices that look impossible to take serious. Even if someone got them 20% below asking I feel sympathetic for the poor guy and can’t help but wonder if he/she won a lotto, got a… Read more »
patriotz
Member
3 years 5 months ago

“Are you saying that for 20 years Japanese buyers have also overwhelmingly thought the market was flat or about to rise?”

Exactly. People who buy any asset overwhelmingly think the price will at worst stay flat, because otherwise they wouldn’t buy in the first place.

As for Vancouver, I think most people have not yet caught on that prices are falling. And keep in mind that that only a few % of households buy in any given year. So why it is such a stretch to believe that everyone who is buying thinks that prices aren’t going to fall?

gokou3
Guest
gokou3
3 years 5 months ago
Re #39 Ludwig “But keeping in mind that the market has been falling lately, wouldn’t you expect a significant number of those intending to buy in the next two years to think the market might continue falling for a while, (which in turn might incline them to delay buying for a while)?” As I said in my original post, in this survey Remax filtered out those who did not intend to buy, so that skewed the results dramatically (probably 99% of the VCI readers here, but of course you would be included). It can be inferred that those who intend… Read more »
Alan
Guest
Alan
3 years 5 months ago

MLS V983607
Listed Price $1

Why not just sell it on ebay?

Vote Down The Facts
Guest
Vote Down The Facts
3 years 5 months ago

“Why not just sell it on ebay?”

eBay bids on real estate aren’t legally binding.

Groundhog
Guest
Groundhog
3 years 5 months ago
“As for Vancouver, I think most people have not yet caught on that prices are falling. And keep in mind that that only a few % of households buy in any given year. So why it is such a stretch to believe that everyone who is buying thinks that prices aren’t going to fall?” Exactly, I really don’t think any of the MSM articles as of late have had any effects of people ingrained beliefs….People might now at best say the market might drop another couple of %, but in the long-run it makes sense to buy. I compare it… Read more »
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