Ridiculous prices welcome ridiculous comparisons

Did you know you could buy nine mansions in France for the price of one boarded up Vancouver tear down?

Of course you might have to live in closer proximity to fresh baked croissants if you choose the French route, but at least one of them comes with 400 acres of land which should give you some buffer if you find that scent offensive.

PriceyPads ran this comparison and includes some beautiful pictures in their post.

Of course this is Vancouver so that’s an ‘asking price’, which may or may not bear some some relation to reality.

Just like craigslist rents, sometimes we get carried away with our asking prices.

You might remember the story of the extremely expensive listing in West Van with pictures of an imaginary house in the listing.

The asking price on that one was just south of $38 million.  That was the asking price.  The selling price was a bit less, well nearly $30 million less actually.

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Aggregator
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Aggregator
Read this first paper as a pretext for what's going on. Developing a Residential Property Price Index (RPPI) for Canada The geographical coverage of the MLS data, although extensive, is skewed towards mostly major metropolitan areas. CREA has already stated its intention to negotiate with additional real estate boards to join the MLS-HPI project. Another limitation of this approach is , the absence of data on private transactions, that is, properties marketed outside the MLS system. Venues available for private transactions have increased in importance in recent years, currently accounting for anywhere between 10% and 30% of the total residential properties sold in Canada.   Complete reliance on a private provider for the resale component of a RPPI data may expose Statistics Canada to new risks with respect to data quality, reliability, potential for index manipulation, index longevity and changes… Read more »
tedeastside
Member
tedeastside

vancouver is so sad even the people in France are more friendly than vancouverites..
and that’s saying quite a bit

patriotz
Member

@1: “the absence of data on private transactions, that is, properties marketed outside the MLS system.”

Of course there isn’t any absence of data on private transactions, they go into land titles like any other and Teranet gets them.

What CREA means of course is that private transactions don’t go into their data, which to them is all that matters.

jesse
Member

“they go into land titles”

It used to be in Burnaby you could go to city hall and ask for reported sales prices for any property. Not sure if that’s still in place or how accurate it is.

Bull! Bull! Bull!
Guest
Bull! Bull! Bull!

the stock market’s in a bubble guys. you throwing your money into a speculative mania! wake up sheeple!

VMD
Member

CADUSD continues to decline, dropping below 94 cents today.

As many of us have investments in US stocks/ETF or holding US cash, it’ll be interesting to plot the “Van SFH price in USD” chart (I think someone did the Van SFH vs Chinese Yuan chart not too long ago, good work).

Newcomer
Member
Newcomer

“vancouver is so sad even the people in France are more friendly than vancouverites”

You have obviously never lived in France.

Many Franks
Member

Poloz says there is no bubble, and that non-existent bubble will deflate slowly.

The central banker, testifying before the Senate banking committee on his latest economic outlook Wednesday, said he believes the most likely scenario is a soft landing where home prices stabilize, although he acknowledged that an imbalance in the market and high household debt remain key risks.

Summary: the market is stable and poses no threat. However, it’s unstable and is a key risk.

Almost makes you wish he’d go back to spaghetti recipes.

crikey
Guest
crikey

@#8 Many Franks,
“there is no bubble, and that non-existent bubble will deflate slowly.”

This “affirmative denial” reminds me of that old Bill Cosby stand-up story about the bullet in the furnace.

He tells a story, I think about his shop teacher, who was trying to figure out which student put a bullet in the furnace.

When none of the boys will admit to having done it, the teacher says that “whoever put a bullet in the furnace must have a terrible mama. His mama must be sooooo awful…” Then one of the dimmer boys in the class says, “He mister, I didn’t put the bullet in the furnace! And *stop* talking bad about my mama!”

Yup, when it comes to real estate these are the kinds of geniuses that the mainstream media is quoting for us.

VMD
Member

@Many Franks

Poloz will probably do better comparing RE to pizza baking.
Bubbles form in the dough but they do deflate.
All will be well as long as the fundamentals are solid.
But if they’re not…

squeako
Guest
squeako
#2: “vancouver is so sad even the people in France are more friendly than vancouverites.. and that’s saying quite a bit” Well..Vancouver is not what it used to be. A town whose face has changed just about 100%, (not quite accurate, but getting there),a segregated town where certain nationalities create their own city in the city and have little interest or reason to integrate, a town where originals feels squeezed out by too high cost of living, mickey mouse jobs with mickey mouse pay. Never ending (so it seems) construction of garbage buildings for profit only. People that are burned out (from 2 or 3 meager paying jobs)or long commutes on plugged up hi ways, frustrated with their financial situation at the same time try to keep a facade: “I’m successful”. I sense Vancouver has changed into cliques, people who… Read more »
Bull! Bull! Bull!
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Bull! Bull! Bull!

@VMD

that’s a picture of what’s happening to your credibility as you continue as you continue to be proven wrong with your rate holds expiring theory.

http://www.lolwithme.org/wp-content/uploads/nuclear-lunch.jpg

Joe Mainlander
Guest
Joe Mainlander

@ skeako #11: David Ley, a Geography professor at UBC, came out with this study last year;

“Divisions and Disparities in Lotus-Land: Socio-Spatial Income Polarization in Greater Vancouver, 1970-2005”

tal+Assets/Cities+Centre/Cities+Centre+Digital+Assets/pdfs/publications/Research+Papers/223+Ley+Lynch+2012+Vancouver+Income+Polarization.pdf

Summary:

“The dominantly middle-income City of 1971 is now divided three ways: one-third lower income, one-third higher income, and one-third middle-income. The middle-income city of the 1970s has become the polarized city of the 2000s.”

City #1: 27% of Metro pop. Most privileged neighbourhoods. 72% native-born. 77% white.

City # 2: 46% of Metro pop. Middle-income. 62% native-born. 58% white.

City #3: 27% of Metro pop. 51% immigrant. 61% visible minority.

Joe Mainlander
Guest
Joe Mainlander

Sorry; Her’s complete link

“Divisions and Disparities in Lotus-Land: Socio-Spatial Income Polarization in Greater Vancouver, 1970-2005″

http://www.citiescentre.utoronto.ca/Assets/Cities+Centre+2013+Digital+Assets/Cities+Centre/Cities+Centre+Digital+Assets/pdfs/publications/Research+Papers/223+Ley+Lynch+2012+Vancouver+Income+Polarization.pdf

VMD
Member
@Bx3 I (among severeal here) predicted the summer sales rebound following the fast-rising fixed rates in June-Aug. Several bank economists and I believe even Flaherty had then chimed in about the demand-pulled-forward phenomenon. Here are a couple quotes to refresh your somewhat selective memory: Scotiabank: “this would feed into our view that sales rose over the spring and summer at the expense of future months as people exercised options to purchase within 90-120 day mortgage rate commitments on fears of losing the juicy rate commitments back in the spring. I maintain the view that the spring and summer market was a temporary interruption along a correcting sales path” CIBC: “there’s a huge amount of mortgage debt already in the pipeline that was created when people took advantage of rates they were pre-approved for in the summer. “I’ve seen what is… Read more »
Maginot Line
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Maginot Line

‘What are the other factors affecting sales’

commodity prices. We have a glut of oil and grain. And gold is out of favor…

look out below!!!!!

unless Flaherty and Poloz can engineer a ‘buy back’ program, like the Americans have pulled off with their Large Cap’s

Softy
Guest
Softy

The question is “When”,

The question has been “when” for the last decade.

It is already December and there is no evidence to support the theory that the red hot sales of the last 9 months are a temporary rate hold phenomenon. The “tapering” of rate hold sales should have been visible by October (I belive VMD said so himself) but there is no hint of it in the data. That means that the “temporary rate-hold buying” theory was wrong.

Bull! Bull! Bull!
Guest
Bull! Bull! Bull!

how are sales and prices looking for the remainder of the year, VMD?

VMD Says:
September 4th, 2013 at 10:30 am 52
As I summarized last week

Greater Van Sales +53% YoY,
MOI=6.4 (vs 5.6 in July)
Expect MOI to rise back to Buyer’s market (>7) by end of September.

Composite HPI price down 0.1% vs July, down 1.3% vs last year.
(Looks like we had higher sales but flat/dropping prices over the summer, despite the expiring-low-rate-hold cohort on their last shopping spree. Now imagine what higher rates and lower sales will do to prices for the remainder of this year)

patriotz
Member

@17: “The question has been “when” for the last decade. ”

Except for that precipitous 9 month drop in 2008-2009.

Remember what stopped it, and they remember that remedy won’t be available next time.

mls watch
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mls watch
C.Junta
Guest
C.Junta

@Joe # 13-14: great link, Joe, thanks! A lot to digest indeed.

A few observations.

1. Table 4: Admission Class of Immigrants Landing in Vancouver, Toronto, and Montreal,
1989-2004, Indexed to Canadian Average (2005 IMDB), in Percentages

Total Number – Vancouver: 319915, Toronto: 825925, Montreal: 253040
Business (Principal Applicant) – Vancouver: 254%, Toronto: 70%, Montreal: 57%
Business (Spouse & Dependants) – Vancouver: 241%, Toronto: 74%, Montreal: 66%

Oh, that’s why every kind of business is thriving in Vancouver now.

2. Falling incomes in West Van and Richmond. Well, it correlates with absurd child poverty rates in these areas – see page 14 of this research: http://www.ralphsultanmla.ca/wp/wp-content/uploads/2011/02/Poverty-report_Dec_8_10_Sultan-2.pdf

Aggregator
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Aggregator
#15 There is some validity to that argument and it shows in this chart. But I believe this happened much differently from the way banks are telling it. Seriously, are we to believe that households acted on rates and just decided to run out to buy a house in matter of a few months? All across major Canadian cities? That doesn't jive. The way I see it: rising rates would have been viewed by senior management as a perfect opportunity to get their sales team to start calling pre-approvals with a good ol' "buy now or pay more later" sales pitch. Who knows.. they may have dug really deep into that pile and started calling denied applicants, and here's why… Lenders are market makers who take little risk. At least not with their money. One reason why they would have… Read more »
squeako
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squeako
#13 Joe Mainlander: “@ squeako #11: David Ley, a Geography professor at UBC, came out with this study last year;” Thanks you for the enlightenment, my “study” is based on what I observe on the streets, and how acquaintances are faring. My observation is that people in Vancouver seem to do worse today than they were a few decades ago. My “street observations” was the reason as to why I seeked out this blog: house prices, lots of luxury cars on the streets, but nobody got any raises, including myself. And sure enough, the facts/info on this blog were different than those in the media; this blog reflected what I observed. So, we keep hearing how the middle class is disappearing, so how big is this segment now in Vancouver compared to the 70’s. Also, with residents with non declared… Read more »
RealityCheck
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RealityCheck

http://www.canadianbusiness.com/blogs-and-comment/foreign-capital-and-the-u-s-housing-bubble-a-cautionary-tale-for-canada/

HAM Deniers–read on

33% of the run up in house prices in the USA leading to 2008 was caused by foreign capital inflows….ie “HAM”

Oh the source is Federal Reserve Economists.

Let’s see the Yahoo’s here try to deny this.

C.Junta
Guest
C.Junta
#23 @squeako, I pretty much agree. “…it seems Canada is not that interested in really getting to the truth in some areas” In this quote, I consider the term “Canada” an unnecessary generalization 🙂 On a serious note, I am afraid there is nothing can be done to estimate the influx of the offshore money. Well, banks can probably publish a study on ATM withdrawal traffic and personal wire transfers from foreign banks. Or CRA can spend a lot of taxpayers’ money trying to investigate offshore money flowing into local companies that employ, say, just a few folks and pay millions in dividends every year. But I think we are far from that yet. On the other hand, I welcome every attempt to digest all available data (like that UBC study or the link I mentioned) that shows the absurdity… Read more »
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