CBC discovers the fun of ‘Compare and Despair’

We’ve played this game before.

When you compare what you get in Vancouver for your housing dollar vs. some other locations you get some interesting comparisons.

The CBC has an article looking at the cheapest houses in Vancouver and how they compare to some US locations.

A new CMHC report says Canadian home prices are moderately overvalued in some cities, but Vancouver is labelled as low risk by the Crown corporation in its latest housing market assessment.

One measure used by economists is the amount of income earned by the average family compared to house prices. By those standards, prices in Vancouver are some of the most expensive in the world.

See their gallery here.

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Westside Realtor
Guest
Westside Realtor

It is ridiculous.

Foreign buyers have clued in.

Where have all the HAM buyers throwing around money like it was grains of rice gone?

I guess when real estate is getting pounded back home there is both less frothy dough to shove around as well as a reduction in appetite for the asset class causing pain.

That is a pretty normal human reaction I suppose.

My guess is that soon enough local speculators and over payers will wonder what the fuck they were thinking.

WSR

George
Guest
George
Cambie Street merchants have launched a class-action launch suit against the Canada Line. They say it was originally supposed to be a bored tunnel and the change to cut-and-cover meant more disruption and caused them to lose business. One merchant already won their case in court and then lost on appeal. http://www.vancouversun.com/news/Cambie+merchants+launch+class+action+suit+against+Canada+Line/10413867/story.html I hope these merchants lose. It’s the risk of doing business in a growing city. Any business person doing their due diligence would have known that Cambie Street had been selected as a potential rapid transit corridor since as far back as at least the 1970s. I remember being in high school in the 1990s and writing a report on the growth of Vancouver and looking at a city report from the 1970s and it had conceptual maps for how the transit system might grow in the future.… Read more »
George
Guest
George

What an absolute embarrassment Burnaby is! Check out this video on CBC — one street changes names 4 times and you never even turn a corner. No wonder I always get lost in that area. They like to hold up Metrotown and say Burnaby is an urban planning success, but the reality is much of Burnaby has been very poorly planned.

http://www.cbc.ca/news/canada/british-columbia/burnaby-b-c-where-the-streets-have-4-names-1.2850222

southseacompany
Member
southseacompany

“The great Canadian housing debate continues”, Macleans Magazine.

http://www.macleans.ca/economy/business/tsx-loonie-oil-opec-canada-housing-bubble/

“Low interest rates make mortgages seem very affordable at first. But since inflation is also low, the real cost of your mortgage declines only slowly. The upshot is that current home buyers are likely to find themselves still scrimping a decade or more from now. This is not good news for an economy that depends heavily on consumer spending.”

southseacompany
Member
southseacompany

“The IMF can’t stop worrying about Canada’s potential housing bubble”, Financial Post.

http://business.financialpost.com/2014/11/26/the-imf-cant-stop-worrying-about-canadas-potential-housing-bubble/

“Canada’s housing market is likely to achieve a soft landing but authorities may need to tighten mortgage rules further to contain vulnerabilities to a crash, the International Monetary Fund said on Wednesday.”

“Canada avoided the housing market crash that accompanied the financial crisis in the United States. But a post-recession housing boom, fuelled by record-low borrowing costs, has prompted some analysts to warn a bubble may be in the works.”

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

>Where have all the HAM buyers throwing around money like it was grains of rice gone?

the USA.

http://www.dailymail.co.uk/news/article-2843602/How-student-sons-Chinas-super-rich-wealth.html

How the US-based sons of China’s super rich show off their wealth (and beautiful girlfriends) at their secret supercar meets

Westside Realtor
Guest
Westside Realtor

Well Bull, I don’t disagree.

They don’t seem to be flooding here anymore.the outcome is easily predictable.

southseacompany
Member
southseacompany

“Bank of Canada to hike interest rates in May? Not so fast”, Financial Post

http://business.financialpost.com/2014/11/25/bank-of-canadas-interest-rate-will-go-up-in-may-and-rise-steadily-after-that-oecd-says/

“The Paris-based group did it again on Tuesday, stating matter-of-factly in its twice-annual Economic Outlook that the central bank’s policymakers would begin bumping up borrowing costs “in late May of 2015” — many months ahead of when economists here had penciled in for the first rate move in more than four years.”

southseacompany
Member
southseacompany

“Despite spiking house prices, ownership became slightly more affordable in the third quarter, says RBC”, Financial Post

http://business.financialpost.com/2014/11/26/despite-spiking-house-prices-ownership-became-slightly-more-affordable-for-canadians-in-the-third-quarter-says-rbc/

“The report also suggests declines in fixed mortgage rates earlier this year were a key reason for such strength in the housing market since spring.

RBC predicts interest rates will slow the market in 2015 with the Bank of Canada expected to raise its overnight rate mid-year and longer-term rates will rise before that.”

Nice spin… allowing folks to borrow more means “more affordable’.

space889
Guest
space889

@Bull! Bull! Bull! – where are the hot girls??? I don’t see any in your article.

space889
Guest
space889
@George – Compare these mom and pop merchants against what the big corps have done in terms of privatizing profits and socializing losses, I say we got way bigger whales to catch and fry here. If people follow your logic then no one would open business on major streets except maybe big deep pockets chain stores/restaurants, etc which is exactly what is happening on Cambie. Then you will be on here complaining about the death of local shops and how the city isn’t doing enough to help local grown business compete against big box stores and such. Btw, when the fund and referendum or whatever was initially held for Cambie Line, it was repeated said it will be a bore tunnel and that’s how they got a lot of community support. After they got voters and neightborhood approval, it is… Read more »
Best place on meth
Member
Best place on meth

If this ever happens in Vancouver I’ll be out there in the crowd, cracking locust heads with a pipe.

http://www.theepochtimes.com/n3/1105180-g20-chinese-mainland-influence-on-nsw-police-shocks-protesters/

patriotz
Member

@5: ““Canada avoided the housing market crash that accompanied the financial crisis in the United States.”

The housing market crash in the US didn’t accompany the financial crisis, it started over 2 years before and was the cause of the crisis.

And this from Canada’s so-called leading business publication.

Harry Wang
Guest
Harry Wang
Marco
Guest
Marco

This from Garth Turner’s Blog. Man that guy can write. Hope he doesn’t mind me copying and pasting.

“But don’t blame me for this. Dis the OECD. The international agency was a thorn in the paw of CMHC this week, just one day after the feds termed the Van and 416 real estate markets “low risk.” The call is for the first rate hike this spring, and then more of them, “steadily thereafter”. The OECD is also stating the obvious – it’ll ruin the financial plans of Canadians who have gambled it all on a house.”

Looks like the Fed will raise their interest rates Spring or Fall. Canada will follow suit as we are linked to the bond market.

Cheers,

Mark

crabman
Guest
crabman

I’m not sure I would put much faith in OECD interest rate predictions. In May 2010, they predicted short-term US rates would be 3.7% by the end of 2011.

http://www.keepeek.com/Digital-Asset-Management/oecd/economics/oecd-economic-outlook-volume-2010-issue-1_eco_outlook-v2010-1-en#page10

And OT, I just read the bio of our first mayor. Hard to believe, but he was a real estate agent. And he was re-elected on a platform of restricting Chinese property rights.

http://www.biographi.ca/en/bio.php?id_nbr=6254

The Bears!
Guest
The Bears!

I’m not so sure us bears should be cheering for increasing mortgage rates…

‘Over the past thirty years, increases in Canadian mortgage rates have not tended to trigger a decrease in houses prices. In fact, more often than not the reverse is true.’
http://www.integratedmortgageplanners.com/blog/mortgage-market-updates/do-higher-interest-rates-cause-lower-house-prices/

Priced out by choice
Guest
Priced out by choice

@17-Wow that is a credible source!

patriotz
Member

@17:

This nonsense keeps popping up. What they are essentially doing is looking at noise in a secular trend and correlating the noise rather than the trend.

X = 10 + t/10 + sin(t)
Y = 10 + t/10 – sin(t)

Now if you look at X and Y over a few units of t they look negatively correlated. But of course over the long term their correlation approaches 1.

The noise here is the short-term cycles of the economy where rates tend to rise during periods of strong growth and fall during recessions.

Over the past 30 years we have seen the largest decline in interest rates ever combined with the largest increase in house prices ever, and the latter obviously could not have happened without the former. To suggest current prices could survive a significant interest rate rise is ridiculous.

Waiting to Exhale
Guest
Waiting to Exhale

@#12

If you think that is only happening outside Canada you are not paying any attention. The same thing happened here during the Olympics and in Toronto for the G20. Just different context.

People with money run this world and the police will do their bidding. If you believe you live in a true democracy I feel sorry for you. While you are cracking heads the police will be cracking yours. But I suspect you are a keyboard warrior.

BTW, when did this become the protest of Chinese leaders in Australia blog?

@patriotz
Guest
@patriotz

Not quite. Surprisingly from 1942 to 1980 house prices soared 8-fold as interest rates went from near zero to 15%+. That’s a far greater increase than the last 30 years as rates fell to near zero again.

Housing Index vs Interest Rates 1890-2010
http://i.stack.imgur.com/Bxduw.png

Devore
Member
Devore

@12 Best place on meth

“If this ever happens in Vancouver I’ll be out there in the crowd, cracking locust heads with a pipe.”

Amazing this disgusting nonsense gets voted up.

Yunak
Guest
Yunak

@22

Amazing this disgusting nonsense gets voted up.

Why not? Hope you would mind the red comrades flexing muscles in the midst of Canada and hailing Zedong or something similar what BC Parents’ Federation did it to B.C. teachers’ at Vancouver rally.

http://www.cbc.ca/news/canada/british-columbia/b-c-teachers-strike-tensions-flare-at-vancouver-rally-1.2765974

paulb
Member

New Listings 104
Price Changes 43
Sold Listings 154
TI:13752

http://www.paulboenisch.com

realist
Member
realist

@#20 Waiting to Exhale

“when did this become the protest of Chinese leaders in Australia blog?”

It hasn’t, but perhaps Vancouver is similar to some Australian cities?

“Foreigners guzzle Melbourne apartments” http://www.macrobusiness.com.au/

and California too? http://wolfstreet.com/2014/11/26/california-housing-market-cracks-in-two-top-end-goes-crazy/

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