Really? Is it Friday already?
Time for another Friday Free-for-all!
Here are a few recent links to kick off the chat:
–A 40-50% drop?
–Crazy Canadian Credit
–Victoria Condos up more than houses?
–On it goes
–Meanwhile in Maple Ridge
–
So what are you seeing out there? Post your news links, thoughts and anecdotes here and have an excellent weekend!
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SIDA, you nailed it.
WSR
Vangrl, I don’t think it really matters what justification your hypothetical buyer might provide. History shows that most like to buy high and sell low. They recency effect makes them throw themselves at in-demand asset classes and shun those which are out of favour and discounted. There will me just as many fallacious arguments about why prices will never increase again after a hard enough crash as there are reasons that prices will increase indefinitely. Most I’ve spoken to provide a variation on the “everybody wants to live here” argument, though. i.e. They’re buying into a resource they expect to me scarcer in the future (SFH close to the downtown core). And, no, I’m not claiming that foreign investment has had zero effect on the high end of the market. I’m saying that the stats don’t paint the picture the… Read more »
#118 What’s really going on in real estate has little to do with population growth, which was the point I believe #116 was making. Metro Vancouver’s population growth has been totally unremarkable these last few years; about 1.25%. Compare that to years prior when it was more than 3.5% or to cities like Phoenix where for a period of years it was 5%+. It might appear that people are beating down the doors to get in to Vancouver based on price absurdity and condos on every corner. These syndromes will be in place until the music stops. When that happens many urban myths will be dispelled, among them, Vancouver’s legendary population growth.
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“Price gap between condos and new houses in Toronto soars”, Globe & Mail http://www.theglobeandmail.com/report-on-business/economy/housing/torontos-price-gap-between-new-houses-and-condos-soars-to-record-level/article23574517/ “In a sign of things to come as Toronto’s spring housing market heats up, the gap between the price of a new house and a new condo skyrocketed to nearly $300,000 in February.” “The growing disconnect between single-family and high-rise homes has pushed the price gap up nearly $40,000 since December.” “Given that the numbers capture only newly built housing, the widening price gulf reflects the fact that the soaring cost of land in the Toronto area has shifted new single-family development toward higher-end homes, while pressure from investors to keep condo prices low has encouraged developers to shrink the size of units.” “But the divide also mirrors what is happening in the resale market, where the price gap between condos and houses hit nearly $250,000… Read more »
Any comments I have regarding foreign investments are geared towards detached houses in Van West, and now I guess West Van by the sounds of things, and yes I believe it’s had a trickling effect in North & East Van.That’s it. I’ve never said that the Chinese are solely responsible for the Canadian real estate market going up. I’ve said that I agree that rates have had something to do with the rise of real estate in general all over Canada. I’ve said I believe that locals have a bit of fear in being priced out forever, as you just said. I’ve said that CHMC had a role in prices going up in Canada. And I agree that people are buying assuming it will go up or at least stay flat, otherwise they’d be crazy to buy. But why are… Read more »
#116
man, you’re out to lunch.
When I came to Vancouver, some 30 years ago, it was a sleepy Village on the edge of The Rainforest.
lower mainland had about 600k.
No were’s pushing 2.5 mill.
I came from Vienna, Austria which had about 2.5 mill then and still has about the same number now.
Stop relying on official stats, take your rose colored glasses off and see what’s really going on.
Vangrl, I was just chatting with an old university collague of mine who emmigrated to Auckland, NZ about 10 years ago. It seems the property market there is similaar to Vancouvver. He bought in Devenport (short communter ferry to downtown Auckland) for 750k and now find his home worth 2m. He says prices in the suburbs have flatlined or even fell slightly but Auckland itself is booming. And to what do local people attribute this to?… running out of land and, and … Asian buyers! Somehow people there have managed to bid houses into the stratosphere even with interest rates that are at 5.5% for the cheapest fixed rate mortgage. Apparently variable rates are HIGHER there. These are historic low rates for NZ. When i suggested with somee surprise that he was a millionaire, he said and i quote, “In… Read more »
Every Ponzi scheme collapses under its own weight.
WS SFH sales remain a weak spot.
I see trouble in the coming months, once credit tightens.
WSR
@#106 Actually Metro Vancouver’s growth rate during the 00’s was the third lowest after the 30’s and 70’s. And this in a decade where we saw the highest prices growth in a century.
Vancouver’s growth rate fell from the 80’s through the 00’s. Metro growth averaged 44k per year in the 80’s, 38k per year in the 90’s and 33k per year in the 00’s.
The 80’s saw the greatest growth rate, yet prices fell after the bust of 81. And prices actually fell in real dollars during the 90’s.
Then when growth is drops even more in the 00’s, voila housing boom.
No correlation between population growth and home prices.
Vangrl, nice strawman. I never said we were running out of land, that’s probably what your realtor told you. And that’s probably what they told everbody else, too, hence the feeding frenzy. But I agree that it matters not one bit what people believe. Remember that most believe that real estate is a good investment – and that’s reflected in the fact that most boomers have too much house and too little liquidity, and convince their offspring to follow in their footsteps. The locals think prices will continue to climb and that they’ll be priced out unless they jump in head first.
I provided a reason why condos aren’t appreciating as much as SFH yet again you turn the conversation back to China without even attempting to refute my argument.
@108
you are completely wrong about surrey.
Stupidity check:
You are wrong. Most of surreu is alr. Google satellite doesn’t tell the whole story. Most of surrey residential is developed.
Bubbles are a collective brain fart in psychology. Its either running out of land, everyone wants to live here, buy now or be priced out forever, etc.
Its kinda like racism, you know, a few generalizations and then everyone accepts them as fact!
So the crappiest homes now cost $1.5 million on the West side. Approximately 3.5 times what they cost 12 years ago. Will they cost $5 million in another 12 years? (This is, a dump on 10th that’s a knock down.) Can you REALLY believe this will continue? Or a $3 million house will be pushing $10 million in 12 years? I would say it’s economically impossible. A 7% return per year would be a doubling in 12 years. Again impossible. Yet, a balance portfolio, definitely possible.
@104: “so speculation that detached will keep rising, but condos won’t? ”
Anyone who buys a property at a cost higher than renting because they expect prices to go up is speculating. That is currently the case for both houses and codos.
What someone expects is not necessarily what happens.
#108
I agree
I think those that are speculating continued price increases in West, North and East Van are doing so based on their belief of foreign immigration and/or foreign investments continuing at the pace it is.
They can’t possibly believe that it’s the locals that are going to continue to drive the prices up, we just don’t make enough money, especially if rates start to eventually rise, which is the general consensus
106: No, we are not running out of land. I heard the same BS in Phoenix in 2006. Only about half the developable land in Surrey has been developed, there are thousands of acres in West Van that are zoned residential but still untouched, and just look at the satellite view of the Lower Mainland!
105: It’s always land that appreciates. Structures depreciate.
The fact $1M+ SFHs are appreciating while cheap condos need incentives is another piece of evidence this market is now being driven largely by the high-end.