Food for Bulls

No matter how insane the Vancouver housing market gets, don’t take too much comfort in the fact that it can’t get crazier.  For all the logical arguments and reasoning, those who are negative on the price of Vancouver real estate have been more wrong than right for years.

Ulsterman points out one take on this situation:

I just renewed the rental on my $1.2m rental SFU for 2k/month. I great deal no doubt. But i’m dealing with a wife and three kids. My very patient wife would of course like to make changes and modify her nest. I mean, all her friends are doing it. I’m actually surprised I’ve managed to to suppress the mutiny thus far. Yes honey, just wait, the price correction is JUST around the corner. Every year we wait in nervous anticipation to know if we will be uprooting the family to search out another home.

If you have a family rental living is just a pain in the arse. Buying in 2005 or so and just getting the fuck on with your life would have been the best choice. And don’t think to yourself, “well duh, of course i’d have bought in 2005!” Back then, the people who read these blogs were the people who didn’t buy because they already thought there was a bubble. It’s really easy to look back now and say if only i’d had a downpayment back then i’d have bought. You probably wouldn’t have because you’d have been reading stuff like this and thinking a bubble was forming.

If you are a new bear out there, take no comfort reading these blogs. You could still be reading them 10 years from now. Seriously.

Read the rest of the comment here.

Sure, condos haven’t done so great in the last half decade, but detached homes keep going up and up.  At what point does this market affect your major life decisions? Do you capitulate and buy what you can, keep renting or are you considering a move away from the metro area?

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Jimmy
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Jimmy

Recall how nuts Van became in the past too.

http://thedependent.ca/featured/land-destiny-history-vancouver/
“Incredibly, by 1912, – at a time when wages were roughly 50 cents an hour, and a tailored suit cost less than $40 – a lot in the very same area was worth $725,000.”

LS in Arbutus
Guest
LS in Arbutus

I think you have to be patient. Personally, buying into this market is simply not worth it and too risky. To each their own.

space889
Guest
space889

West Van homes for sell $1M+ over asking but sorry no HAM….

Non-Chinese agent, 9 offers, buyer local.

http://www.vancouversun.com/business/West+Vancouver+home+sparks+bidding+sells+million+above+asking/11117034/story.html

Watch this get downvoted cuz it doesn’t fit the bear & anti-Chinese meme.

space889
Guest
space889

@Shut It Down Already – Don’t bother arguing with Patriotz cuz even though the guy has no degree and likely never took any courses in stats, the guy will still insist he is right and you are wrong, all without offering any concrete stats evidence/proof. For some reason he believes the burden of proof always lie on the other party and without it the other guy is always wrong. Yet somehow that rule don’t apply to him.

For the record, asset returns tend to be auto-correlated – look up in Google Scholar search, lots of research papers on that – and hence why technical rules work to some degree, even though they shouldn’t in a perfect market which incidentally don’t exists in the real world.

space889
Guest
space889

@realist – By the same argument, you don’t realize your profits in stocks & bonds until you sell them all and be out of the market. So why you are laughing and boosting about your investments returns when by your logic you don’t have returns/gains until you sell and move out of the market?

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

@3

nothing in the story says that the buyer is local. the buyer agent is iranian btw.

VanRant
Member
VanRant
This latest (China’s) government action is part of a pattern that extends back to the global bank crisis of 2008. China avoided a recession by flooding the economy with cheap money. Few people lost their jobs, but the artificial investment boom created a bubble in the housing market that is now starting to deflate: millions of properties lie empty, and millions of mortgages are “under water”. Sooner or later, this game is going to run out of road. The risk is that China’s road ends where Japan’s 30 years of high-speed growth ended in the late 1980s, with a collapse to 2 percent growth or less and a quarter-century of economic stagnation. China is around the 30-year point now, and its regime is doing all the same things that the Japanese government did just before the collapse there. http://www.gisborneherald.co.nz/opinion/columns/article/?id=42416 This… Read more »
Canis
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Canis

On that West Van “local buy”: are the surveyors’ stakes out yet?

MikeS
Member
MikeS

So I whipped up this diagram after chatting with a friend. It shows how Energy and Non-Energy exports have changed over time, as a percentage of total exports. I’ve normalized both series to 100 at their start to really show off their interrelation. It’s worth noting that energy exports still only make up 18% of exports, though this is down from a high of 28% in March 2014. Non-energy exports of course make up the rest.

https://pbs.twimg.com/media/CKdLN88UYAAjnNY.jpg:large

You’ll notice the slight rebound in non-energy exports since Poloz came in in 2013. It’s not really much of a rebound in comparison to the decrease in energy exports, in percentage terms.

realist
Member
realist

@4 space889 “Don’t bother arguing with Patriotz cuz even though the guy has no degree and likely never took any courses in stats”

No one needs a degree or a statistics course pass grade to make sound arguments, including (and perhaps especially) about economic matters.
This is a logical fallacy recognized by the ancients: “argumentum ad hominem”

realist
Member
realist

@5 space 889

I stated a fact about investment: monetizing profit. I have made no assertion “boosting about” anyone’s investment returns, much less my own. And I never laugh at any investor for being wrong – all are from time to time, and if you ask them/me, far too many times!

You might want to consider the proposition that discussion and disagreement do not necessarily entail disrespect and mockery.
“If everyone thinks alike, no one thinks at all”

vangrl
Member
vangrl

#3

That house at 4130 Burkhill place

“Nine offers were made on the property — the lowest among them for the full asking price.

Harvey said having the house sell for $1.1 million over asking price is a first for her.

The buyer, from mainland China, already owns a home in the Lower Mainland, and plans to tear the existing home down and rebuild on the lot, said Harvey. He hasn’t decided if he’s going to live in the house or resell it, she added.”

but nice try…

https://www.biv.com/article/2015/6/4m-teardown-sells-1m-over-asking-price-throwing-mo/

vangrl
Member
vangrl
B.C. Green party MLA Andrew Weaver isn’t the only politician who wants to amend regulations to determine who’s investing in residential real estate. It’s also become a hot issue in the Big Apple. New York City mayor Bill de Blasio’s government has ordered shell companies that buy property to provide far greater transparency. It comes as Weaver is trying to get other MLAs to support his recently introduced bill to enable governments to better track investments in B.C. properties. According to a New York Times article, the names of all people involved with the shell company must be disclosed to New York City’s finance department. It came after the newspaper had revealed that high-end properties are being bought by shell companies controlled by international buyers who’ve been the subject of government inquiries. The New York Times also reported that more… Read more »
bullwhip29
Guest
bullwhip29

imagine for a moment that mulcair wins the election…

or maybe harper’s ploy to buy votes with taxpayers’ own money will actually work? since the average person wont be doing their taxes until well after the election is over, anything is possible

http://www.cbc.ca/news/politics/3-things-to-know-about-the-uccb-payments-impact-1.3161108

Royce McCutcheon
Member
Royce McCutcheon
Apologies for the lengthy post. Who you are is important in creating your “scorecard” in relation to the housing market here. I’m someone who was in a position to enter the attached market in later 2009 and, since about 2012, have been in a position to carry a seven figure mortgage (based on the banks offering to lend that much, not my interest in borrowing that sum!). Bull triumphalism about people “mistakenly” calling a bubble in 2005 and lecturing from people who bought decades ago and haven’t looked at today’s realities are irrelevant to me. There are increasing numbers of young professionals coming online here who are absolutely hosed by the status quo and this is at the root of the protests on this issue. Taunting the handful of people who got it wrong a long time ago makes you… Read more »
crikey
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crikey
#3 said, “Watch this get downvoted cuz it doesn’t fit the bear & anti-Chinese meme.” (1) It is not an “anti-Chinese meme”. The exact same discussions are happening in New Zealand right now. Consider New Zealand Labour party leader Andrew Little: ‘The issue isn’t about being Chinese. It’s about non-resident foreign buyers’ At the moment the overwhelming majority of non-resident foreign buyers happen to be Chinese, at a time when such non-resident buyers are so plentiful that they are having undeniable effects of prices for citizens of Vancouver, New Zealand, Sydney, etc, etc. It is very useful for us to watch how things are playing out in those places at the same time as they play out here. “Mr Little told Radio NZ today that the average income of ethnic Chinese living in Auckland was below the average income overall,… Read more »
One_Ttick_Pony
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One_Ttick_Pony

‘Foreigners (Chinese) laundering money via your housing industry.’

Says it all.

Mister Obvious
Guest
Mister Obvious
When I sold both my detached properties a few years ago I had no idea if a correction was just around the corner or a decade away. I still don’t. By now I’m ready to believe anything. My motivation in selling was to convert two sizable assets with high carrying costs into many diversified assets that pay me directly and consistently. That has worked out well. I still have all the capital (and more) that I started with. In the meantime, I’ve easily paid my rent and other living expenses with investment income. Whether the RE market expands for 10 more years or falls off a cliff tomorrow no longer matters much to me. I personally don’t play that game anymore and I don’t miss it much. But I do admit to being an avid spectator on the RE sidelines.… Read more »
crikey
Guest
crikey
(Long post warning!) It is exceedingly obvious that New Zealand is undergoing to same real estate pricing problem as Vancouver, and as Sydney, etc, etc. The parallels are staggering. This is NOT a coincidence. In a recent New Zealand article, Don McKinnon cowers in fear that “China will be listening to our housing debate”. Oh, the horror! Let’s screw our own citizens then, since wouldn’t want to offend anybody, eh? Check out the comments section of the article. There is a huge backlash that is similar to many voices in Vancouver (and Sydney, and etc) right now!! How many of these sentiments can you recognize as being identical to Vancouver?? HINT: ALL OF THEM From the comments section below the article: “This is a rather domestic issue, who cares if China is spying or not!!” … “John Key needs to… Read more »
crikey
Guest
crikey
One last thing – What would really garner more public attention is a simultaneous international collaboration on a day of protest with organizers in Vancouver, New Zealand, Sydney, etc. Can you imagine the platform/press that an internationally coordinated protest day against non-resident foreign buyers would get? Protests in Vancouver, Auckland, Sydney, etc — all on the same day, even if not large in numbers, would go farther to wake some people up as to the root of the problem. More people would come to realize that it isn’t about just Vancouver being some “special, different” place that deserves bubble prices, and it is not just Auckland being some “special, different” place that deserves special prices, and it is not just Sydney being a “special, different” place.. etc etc. More people would realize that this is happening around the world simultaneously,… Read more »
Bull! Bull! Bull!
Guest
Bull! Bull! Bull!

B.C. gets record gambling take

Rise in bet limit results in $1.25 billion profit

Foreign gamblers who bet up to $100,000 in a single hand in some B.C. [banned word] helped drive B.C.’s gambling take to a record high last year

http://www.richmondreview.com/news/b-c-gets-record-gambling-take-1.2005503#sthash.mrDjdCnK.dpuf

Yunak
Guest
Yunak

@3

West Van homes for sell $1M+ over asking but sorry no HAM…. Non-Chinese agent, 9 offers, buyer local.

@12

The buyer, from mainland China, already owns a home in the Lower Mainland, and plans to tear the existing home down and rebuild on the lot, said Harvey. He hasn’t decided if he’s going to live in the house or resell it, she added.”

but nice try…

Lol, what would you expect… Lucky-fella is well informed and traditional, lies and deceptions are part of culture.

Simon
Guest
Simon

@space889 – “By the same argument, you don’t realize your profits in stocks & bonds until you sell them all and be out of the market. So why you are laughing and boosting about your investments returns when by your logic you don’t have returns/gains until you sell and move out of the market?”

You don’t have to sell them all space. I sold off a fraction of my portfolio just yesterday to take some profits and reduce risk. I suggest you sell off a fraction of your house to do the same. Just not any of the bathrooms… given what you are full of – you will need all of them.

UBC in crisis mode
Guest
UBC in crisis mode

You can do the math to see the price of SFH is not going down any time soon.

There are 4 millions of millionaires in China:
http://www.newsweek.com/china-adds-one-million-new-millionaires-2014-343175

Assume only 50% of them want to move out and buy houses in top 20 cities around the world (New York, London, Sydney, San Fransisco, Seattle, … …, Metro Vancouver).

4 millions x 50% = 2 millions
2 millions / 20 = 100,000, e.g. these cities will get 100,000 millionaires in next few years.

How many SFH with price higher than $1,500,000 (locals will fight for anything below $1.5 millions)? As of today:

Van West: 500
Richmond: 310
West Vancouver: 447

Assume MOI of 6 months, these 3 cities can only supply ~ 2,500 SFH per year.

100,000 / 2,500 = 40 years

Conclusion: price will not go down.

Like it is.
Guest
Like it is.

Price won’t go down in Metro Vancouver. Too much $$ out there. But for the life of me, why would you want to live there? The city is changing too fast. I’m thinking of a way out from here. Congestion is crazy as are the segragation of the different ethnic groups.

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