Land sales indicate end of boom

In a sign that builders seem to see an end to the current housing boom land sales have dropped off in the first half of this year.

Land investment is down 51% in Toronto, 30% in Vancouver and 52% in Calgary compared to the same period last year.

Richard Vilner puts it this way in the Financial Post:

“The slowdown began to happen in mid-2012. There was a big time slow down versus those robust two years pre-slowdown. The cranes you are seeing now are for residential land deals that closed a couple of years ago.”

There’s still a lot of land in the pipeline though, condos will be going up in those cities for some time yet even if no more land changes hands.

Read the full article here.

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jesse
Member

Construction starts peaked late last year in Vancouver. Under construction is falling as completions start to outpace starts. That will affect construction employment going forward.

Construction activity is a horrible indicator going into a slowdown, and projects inevitably get cancelled. Not sure if this is a “slowdown”, but if it is land sales will rarely let us know ex ante.

Interest Only
Member
Interest Only

http://www.bloomberg.com/news/2013-08-08/canadian-june-new-home-price-index-rises-0-2-on-calgary-gains.html

“Today’s data showed prices in Toronto, the nation’s largest city by population, were unchanged in June. Montreal, the second-largest, saw house prices climb 0.1 percent while those in Vancouver, the third-largest, fell 0.2 percent.”

This is for June and new home prices.

UBC in crisis mode
Guest
UBC in crisis mode

Realtor’s view on Zoocasa:

http://www.remaxvision.ca/blog/p/hot-realtor-topic:-what-and-who-is-zoocasa

Find out what your home is worth via zoocasa (is it any good?):

http://www.zoocasa.com/en/zoopraisal#

RPM
Guest
RPM

Vancouver retailer opens up a store in Blaine, Washington so they can offer their customers cheaper prices in the US. They say their operating costs in Blaine are one-tenth their costs in Vancouver. Also, their dress suppliers force them to charge higher prices in Canada or stop carrying their brand. From the Vancouver Sun:

“Vancouver shop owner Boris Chenkis, exasperated by cross-border shopping, has begun fighting fire with fire. He’s cross-border retailing…

“But we were told by some Canadian distributors that we could not drop our prices … or the designer line would be taken away from us…

Chenkis has found the rent for his shop in Blaine is “very reasonable.” His operating costs are a tenth of what he pays in Vancouver.”

http://www.vancouversun.com/business/bc2035/Vancouver+dress+shop+owner+goes+fight+cross+border/8760509/story.html

Boombust
Guest
Boombust

I assume ¨Boris¨ is still living in Canada? Enjoying all the benefits Canada has to offer?

If he likes it so much down there, he should move there.

Mr Chow
Guest
Mr Chow

I live Vangoofah too, but have factory China as worker too costy and lazy here. I enjoy all beautiful city and amenity you ancestor build for me. Boris smart man, show smart move. He come talk me. I make manager my restrant.

Softy
Guest
Softy

“I assume ¨Boris¨ is still living in Canada? Enjoying all the benefits Canada has to offer?”

Then he is a resident of canada for tax purposes and will have to pay tax on his world wide income. What’s the problem?

More people should do that. People should buy houses in Blaine and commute to Vancouver becuase Vancouver prices are so high. Why don’t more people do that? Because they think Vancouver is worth the high prices. Prices will not come down. It’s a soft landing with flat prices.

Son of Ponzi
Guest
Son of Ponzi

Softy,
Get in touch with Mr.Chow.
He’s looking for smart people. Make you manager in his restrant.

Burnabonian
Guest
Burnabonian

huurrrr hey berrrs wat duz “bear” land purchasez and reel estate duhvelupmint hav to do weth housing prices? Nuthing!!

U berrs is chasing smoke if u think that the fact that developers stopped buying land to build new developments TWELVE MONTHS AGO because they all know that the bubble bursting is long overdue has anything to do with the bubble bursting being long overdue.

Or something.

Sincerely,
an under-employed guy whose marriage and family’s future is 90% based on the paper value of the house that he bought six years ago due only to social convention, making all of his brilliant market insight retrospective at best.

(Plus if he sold it to actually realize his theoretical gain, he and his kids would be living in their car.)

(or worse, he would have to become a renter!)

jesse
Member

“Prices will not come down. It’s a soft landing with flat prices.”

It seems you more need to convince yourself than a ragtag bunch of spineless bloggers.

You stating so forcefully a specific outcome, with knowledge of the broad ranging outcomes in history, is at least as silly as someone calling a 25% correction within 5 years.

Softy
Guest
Softy

“is at least as silly as someone calling a 25% correction within 5 years”

It is not as silly as that. We have a local precedent for a flat market: condos. Condo prices have been flat for 5 years. Why should houses fall, especially when they have been on the flat trajectory for 2 years.

Has any real bubble resulted in 5 years of flat prices? The US fell. It did not go condo price flat for years before falling.

I’m looking at the available evidence of market prices. My conclusion is the only rational conclusion to be drawn from the available evidence.

Softy
Guest
Softy

“It seems you more need to convince yourself than a ragtag bunch of spineless bloggers.”

I have already convinced myself. It is my job to bring the light of reason to the darkness of this blog and to erradicate the ignorance that has resulted in 12 years of error.

Bally
Guest
Bally

Why is a “soft landing” a good result? Prices flatten out for years and you gradually lose money while tying up a huge amount of your monthly income. At these prices, Vancouver real estate only makes sense if you have an expectation of future equity gains. Now even the best case is flat prices so it makes even less sense to buy now.

Many Franks
Member
Active Member

Softy, your philanthropic spirit is laudable. Trophy bagged!

Trophy: The Bears Have Been Wrong For X Years (Genus: Bull)

Spotted: http://vancouvercondo.info/2013/08/land-sales-indicate-end-of-boom.html#comment-212083
Last Bagged: http://vancouvercondo.info/2013/07/lets-talk-about-the-weather.html#comment-211673

Scoreboard/Rules: piratepad.net/ep/pad/view/ro.SXqM61It83r/latest

Absinthe
Member
Absinthe

Wondering if any technical analysts think the spring’s good sales could be in part pulling sales forward and in part “bear trap” or right shoulder in a ‘head and shoulders’ pattern?

taylor192
Member

@ #11 Softly

The only rational thing you should do is stop posting. Prices were flat from 1993-1996, fell, then didn’t recover till 2002.

Besides prices are not flat for the last 5 years. Prices are up a ton in the last 4 years, cause they took a nose dive 5 years ago. Prices are flat compared to 5 years ago.

The only precedent we can draw is the bubble burst already due to an economic shock followed by a rate drop. If we get another economic shock, or rates rise, the precedent is the bubble will burst again.

Naked Official #9000
Guest
Naked Official #9000

@loyal cadre Softly

i have tremendous respect for you, logging into this blog to post the truth! your benevolant spirit is an inspiration to all of the people everywhere!

keep fighting the fight against the filthy running dogs! we have no place for doubt and cynicism! it is springtime in Vancouver!

George
Guest
George

Have you folks heard about the petition to re-locate the 2014 Winter Olympics from Sochi to Vancouver because of Russia’s anti-gay laws?

They were just talking about it on CTV noon news. Geoff Meggs said it would be impossible for Vancouver to host the 2014 Olympics because the Olympic Village is full. I barfed a bit in my mouth at that! Actually, there may just be enough empty units at the Olympic Village for Vancouver to host the Olympics next year!!!

This is something the bulls should really get behind. Imagine all the hype another Olympics would bring to Vancouver! The Olympic torch returning to Vancouver could be just the spark necessary to re-ignite Vancouver’s housing bubble!

Softy
Guest
Softy

“Besides prices are not flat for the last 5 years. Prices are up a ton in the last 4 years, cause they took a nose dive 5 years ago. Prices are flat compared to 5 years ago.”

This is a prime example of of the analytical sloppiness that has caused the bears to be wrong for 12 years. Look at the chart of the average price of condos. It has been flat for 5 years.

You can find the chart here: http://www.yattermatters.com

Softy
Guest
Softy

The chart is here:
http://www.yattermatters.com/2013/08/vancouver-average-price-measures-twice/

Average condo price was between $350k to $450K for the last five years.

Kratos
Guest
Kratos
And this is why bulls don’t understand basic stats and math. Everybody who’s taken a basic course in stats knows you shouldn’t use average as a measure of central tendency for something like real estate. The other thing is bulls saying real estate has increased by 286% in 13 years. Do the calculations and that’s an average annual compounded return of only 8.4%. In an era of real estate boom. This is a decent but by no means great investment. Buying the S&p500 index and just holding it long term with reinvested dividends gets you 9.6% compounded annual average return. This adds up to a lot in the long term. While you bulls take on more debt for your investments to buy your SUVs, I thank you for spending your hard earned cash on my retailers, banks, oil companies, telcos,… Read more »
Softy
Guest
Softy
“Prices were flat from 1993-1996, fell, then didn’t recover till 2002. ” The chart does not correspond to your statement. Prices were basically flat from 1994 – 2002, at which point they skyrocketed. What would you have done at that time? Exactly what you are doing now: waiting for some messiah to deliver you from high prices and reciting the mantra that prices must fall, they simply must! You would not have bought during that flat market and it would have been a bad decision. I am telling you that we are in a similar flat market today. We are 5 years in for condos and two years in for houses. It might last 8 years in total like it did last time. The bears say it is impossible for prices to be flat. Well, it happened not too long… Read more »
crabman
Guest
crabman

@Softy, if someone bought a benchmark condo in July 2008 and sold it in July 2013, they would have lost $45k. They would also have paid more to own than the cost of renting over that time and been on the hook for any repairs or special assessments.

Benchmark July 2008: $473,953
Benchmark July 2013: $456,700
Prop Transfer Tax: $8,479
Realtor Commission: $19,485
Loss: $45,217

crabman
Guest
crabman
“I challenge the bears to answers these questions: Why do you think we will have a repeat of 1981 and not 1994-2002? Especially when prices are currently on a flat trajectory?” Between 1994 and 2001, mortgage rates fell by about 300bps. Over the next several years they should be increasing. Vancouver affordability is worse now than it was in 1994. With rising rates, your flat-price scenario will need to last longer than 8 years to get affordability back to normal levels. But either way, I’m much better off renting. If there’s a crash, I can buy much cheaper than I can now. If prices stay flay for several years, I can invest in things that return more than your hoped for 0% condo appreciation, while saving money monthly by renting. Now can you answer my question? Why should someone buy… Read more »
emmi
Guest
emmi

Softy, the era you are pointing at with the handover of Hong Kong to the Chinese was an unprecedented emigration event. It’s not a good example for anything. Except perhaps that to engineer a soft landing you need a massive influx of panicked foreign buyers.

Time Machine
Guest
Time Machine

Conversation to be heard in Vancouver 2030:

Renters Daughter: “My parents helped us with the down-payment”

Owners Daughter: “How could they afford to do that?”

Renters Daughter: They invested their money in the stock market. Hell, they made 20% on their money in 2013 alone. Can’t your parents help you?

Owners Daughter: “No. They bought a house in 2013 and prices have stayed flat ever since.”

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