BC, data, opinion, predictions, prices

Buy in the suburbs, prices dropping like crazy.

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134 Comments

Astute reader ‘reveal the truth‘ pointed out a few similarities between a recent Business in Vancouver article about people buying in the suburbs and an earlier article published in June:

“

Millenials Decamp to Suburbs”, published August 20, 2014, sure sounds a lot like “First Time Homebuyers Driving Surrey Market”, published June 24th.

Let’s see:
June 24th: Shayna Thow, director of sales for BLVD Marketing Group – which handles marketing for two Surrey developments for Vancouver’s Fairborne Homes Ltd. – said Surrey has become a viable option for first-time homebuyers who can’t afford to buy in Vancouver. While the average price for a single-family detached home in Greater Vancouver has soared to more than $1.36 million, the average price in the Fraser Valley is still under $655,000.

August 20th: Shayna Thow, director of sales for BLVD Marketing Group – which handles marketing for two Surrey developments for Vancouver’s Fairborne Homes Ltd. – said Surrey has also become a viable option for first-time homebuyers who can’t afford to buy in Vancouver. While the average price for a single-family detached home in Greater Vancouver has soared to more than $1.36 million, the average price in the Fraser Valley is still under $600,000, she noted.

Uh-oh. The only thing that stayed the same was the word for word structure. The PRICE however showed a DROP of nearly 10%! Yikes!!

!

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Lilorox.Free.Fr

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Get Creative...

Westside Realtor,

Good cheerleading posts.

Lots of talk and action on the margins.

Lets say something useless in the hopes it sounds intelligent.

Lets practice remarkable restraint in not responding to those that have called you out.

Lets end on a generalization about the market.

Useless…

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JR

“Still, the survey medians showed house prices will likely rise more than earlier expected at least until 2017, reflecting ongoing reluctance by forecasters, many of whom work for mortgage lenders, to predict negative returns on property.” Gosh, and I thought the media and guys like Tsur were objective!

This, folks, is all you need to know about why the distance between starting point and cliff edge has been extended as the herd of property virgins, brainless, wealthy immigrants and amateur investors grows.

Eventually the leading edge of lemmings will start to fall. Who can predict exactly when? Much sooner that 2017 I think.

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UBC in Crisis Mode

Still on the market.

This property (Van West) has been relisted 4 months ago for $8,990,000 (assessed value: $5,032,700, so it is 79% over assessed value!), still no takers.

http://www.realtylink.org/prop_search/Detail.cfm?MLS=V1058975&REBoards=All&From=MLS

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Westside Realtor

Good posts.

All pointing to lower prices and a shocked Vancouver populace as we go forward.

All bubbles end. This one is way past it’s due date.

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VMD

@128
Interesting, just found the
rental posting on CL

Considering Lido only has 183 units, Bosa’s putting out ~50% of its pre-sale stock on rental market.

Granted, Bosa had a “rental income guarantee program“. At least we know >50% were either sold to investors or not sold.

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Heard Herd selling

Looks like sales are in the toilet down at False Creek on Quebec st, Bosa is renting90 units this fall at 180 SSwitchman street

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paulb

New Listings 142
Price Changes 79
Sold Listings 124
TI:16065

http://www.paulboenisch.com

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Son of Ponzi

#125
Please explain to me the following:
The Steveston area of Richmond is still predominantly Caucausian and the majority of listings are by Caucasian realtors.
In the rest of Richmond, most listings are by Chinese realtors.
What does that have to do with interest rates?

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Zero Down Forty

Most people are still paying attention to the pronouncements of local RE industry pundits telling us that HAM will price us out and that there is no interest fuelled bubble in Canada.
Which does not surprise me given the overall decline in deductive reasoning you see amongst Vancouverites today.
Easier to ingest.

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Son of Ponzi

#122
Most people are still paying attemtion to the pronouncements of industry paid economists.
Which does not surprise me given the overall decline in deductive reasoning you see in society today.
Easier to resurgitate.

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southseacompany

“Mortgage rate drop means housing more affordable this spring”, CBC

http://www.cbc.ca/news/business/mortgage-rate-drop-means-housing-more-affordable-this-spring-1.2749383

“But new buyers in the quarter were treated to lower fixed-rate mortgages than they could have found a year ago, as banks reacted to falling bond yields.”

By “more affordable’ they mean more debt, not lower prices.

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Zero Down Forty

Re #121.

“Canadian households on average hold debt worth over 1.5 times their income and when mortgage costs increase once the Bank of Canada begins raising benchmark interest rates, it will make that burden even heavier.”

“”Lower mortgage rates in the spring and summer have enticed more marginal home buyers who ultimately won’t be able to carry heavy debt load in the future when rates rise,” said David Madani, Canada economist at Capital Economics.”

That is the obvious some people can’t see.

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kabloona

“Canada house prices to rise further, crash fears rising By By Anu Bararia | Reuters https://ca.finance.yahoo.com/news/canada-house-prices-rise-further-crash-fears-rising-170416762–sector.html (Reuters) – The risk of a property market crash in Canada has not ebbed, according to an increasing number of analysts polled by Reuters who said chances of a steep fall in prices have increased in the past year. Still, the survey medians showed house prices will likely rise more than earlier expected at least until 2017, reflecting ongoing reluctance by forecasters, many of whom work for mortgage lenders, to predict negative returns on property. This year Canadian home prices on average will appreciate by 5 percent followed by a 2 percent rise in 2015 and then again in 2016 after doubling in value over the past decade. But seven of 20 respondents in the poll conducted Aug 19-26 said the threat of a… Read more »

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Son of Ponzi

#118

“There were certain neighborhoods in the city which had been impacted by the Chinese factor, but other areas in the city and other municipalities surrounding Vancouver have not seen such effect, yet housing prices in those areas have also gone up, he said.”
———————-
Of course they have also gone up, but not by 300% as in Richmond or Vancouver West.
Also, locals who cannot afford to buy in Richmond or Vancouver are moving to the burbs, driving up prices.
It’s just that simple, but some people just can’t see the obvious.

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Madashell

Today’s FP: “U.S. economy’s rebound much stronger than thought as GDP grows 4.2%”

Hello interest rate increase.

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Taperman

@#98 – 178 out of the 531 they sold to “went to buyers with what he called mainland Chinese names”. There were over 20,000 detached home sales in metro last year. That’s a 2% sample, and 178 is not even 1% of those sales. Doesn’t really prove anything. It’s all in the spin. Here’s another article referencing the same figures, but with a different take; “Chinese buyers have limited impact on Vancouver’s house market: expert” http://www.shanghaidaily.com/article/article_xinhua.aspx?id=237958 “While Vancouver’s housing prices have remained among the most expensive in the world, the Chinese factor has only had an impact on selected Vancouver neighborhoods, said Dan Scarrow of MacDonald Realty, one of Vancouver’s largest real estate firms.” “There were certain neighborhoods in the city which had been impacted by the Chinese factor, but other areas in the city and other municipalities surrounding Vancouver… Read more »

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kabloona

@108 – Good Lord, cheek by jowl with the Trans Canada Highway!!!

Just don’t open the windows if you wanna get some sleep…

😉

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Madashell

Mr. Kurland adds, there is a serious corruption crackdown in China, as well as signs that Canada and China may upgrade a tax treaty some time in the fall – which could lead to more information-sharing between Canadian and Chinese tax officials.

“Those things taken together, I think, are forcing the rich to dispose of high end Canadian residential property,” Mr. Kurland says.

http://www.theglobeandmail.com/report-on-business/economy/housing/is-the-dip-in-high-end-house-sales-in-vancouver-just-a-summer-blip/article20200944/

Bring on the Tax Sharing!

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Get Creative...

What do you actually do ‘Westside Realtor.’? Anyone with half a brain and an ounce of experience monitoring this market knows that you are not a realtor…

I am assuming that your day job is just so mundane that you get a little joy in pretending that you are something other than yourself. You know, most people, when they take on an alternative personality, do something cool like pretending to be a spy, a writer, a rich businessman…

You, on the other hand, have the creative juices to aspire to be a realtor….

Only in Vancouver….

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Madashell

Lindsay David may sound crazy ­comparing Australia’s banks to Lehman Brothers and Bernie Madoff.

But in his mind, it’s everyone else who is living in a “Disneyland” delusion by failing to spot a bank-led property bubble that shows no sign of deflating.

“No one in the Western world has ever done what we are doing.”

http://www.smh.com.au/business/the-economy/australias-housing-bubble-is-real-and-banks-are-to-blame-says-author-20140828-109ahx.html

No one in the Western world….. except Canada!!!!!

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Westside Realtor

Some great posts, thanks.

I am still of the view, and my confidence grows as the trend continues to get reinforced, that HAM is gradually drying up.

I suspect the next market to feel the chill will be Van East sfh’s.

5% Canada year over year price increase…this number is set to tick even lower and then go negative.

Not a big shock. Our time has come. The fairy tale had to come to an end at some point.

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Spec

PuffPost piece on HAM
http://www.huffingtonpost.ca/2014/08/27/foreign-real-estate-ownership-canada_n_5718705.html?ds
“Foreigners Are Taking Over Canadian Real Estate
Definitely
Maybe”

Conclusion: “Hong Kong’s government has levied a 15 per cent tax for non-residents who buy property — in part to curb fears their market will be overrun by mainland Chinese speculation. Denmark forbids foreign buyers from purchasing waterfront property and the U.S. places heavy taxes on the sale of foreign-owned houses.

Meanwhile, Canada’s hands-off approach — whether out of politeness, lack of know-how or self-interest — puts it in the minority among industrialized countries by remaining in the data dark.”

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Taperman

@#106 . “Fantastic. You have bought a money printing machine”

After October, the US won’t be using their’s anymore. Maybe, you can put an offer on it and then, you too, can have your own money printing machine!

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Van Coffee

@ WEST Coast Woman –

Totally agree.

Bye the way, I am not sure if you are aware, but many of those “high-end” Chinese style homes with the clean looking beige faux-marble exterior, that looks to be stone, is actually a concrete on Styrofoam product. It does not last.

There are a few houses in my neighborhood that have used this product and it starts to chip pretty quickly.

Fast forward 5 years……the green stuff starts to grow on it. Home owner calls “contractor” to come clean it up. Out comes the pressure washer……concrete gets pulled off styrofoam.

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