Damage from bubble bursting worse than affordability issue

What’s worse?

Working people not being able to afford a home or losing your life savings during a housing bubble burst?

This opinion piece at the Vancouver Sun says it’s not a question of if, but when – and when it does burst the damage to the economy will be far worse than the current affordability question.

The damage will be huge. In 1989, the Toronto bubble burst, and six years later house prices had decreased 50 per cent. Many speculators lost all of their life savings. Financial institutions were in crisis. All home building activities stopped. Unemployment increased. The flow of immigrants decreased sharply. A general economic recession developed.

Governments cannot prevent the bursting of the Vancouver bubble. They can only adopt policies to slow its growth. But these will be opposed by the many who benefit from the price increases and who, as is the case during all euphoric phases, insist that “this time, things are different”.

Read the full article here.

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Its_the_ALR_stupid
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Its_the_ALR_stupid

“will burst and bring hardships to many that could dwarf those arising from the affordability crisis.”

I have little sympathy for anyone who faces “hardships” from the bursting of the bubble. All those lottery-winning home owners did absolutely nothing to earn those millions, and so deserve nothing if and when they lose it all. I have slightly more sympathy for those who bought recently, but then again, they knew prices were bubbly and can hardly claim they weren’t sufficiently warned.

Best place on meth
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Best place on meth

The ones who bought recently are the dumbest of them all.

They deserve the most to be slaughtered in a crash.

paulb
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http://www.paulboenisch.com

rockerguy
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rockerguy

Is anyone tracking Paul’s inventory figures these days?

specuskeptic
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Good point. Folks used to post lovely MOI graphs. What happened to them?

rockerguy
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rockerguy

It’s okay. I wrote a program to fetch all his historical posts from here. I’ll upload soon.

Vanco
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Vanco

What if there is no bubble? What if the price continues to go up at rate of inflation? Why should government intervene to help out the priced out bears who had chances? (Yoy increase was 30% for June, even in one year!)

People took a risk when they bought. It’s like investing.

burntout
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burntout

Government should just stop RE locusts from scooping it up, make sure people who rent their homes/suites out from here or off shore are paying their taxes, kill the CHMC and stop penalizing savers and then keep the f out.

the market will take care of everything.

At present they are doing the opposite. that loser Clark is even flying overseas trying to drum up more buyers to price us out.

That’s plan B. if we cannot get LNG then Christy will just sell the whole Province before she retires on a Gov pension and becomes a consult to some Chinese bigwig like Baird did.

HAMster
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HAMster

I thought Gordon Campbell really screwed us over but Christy is right up there too.

DaMann
Member
DaMann

“Why should government intervene to help out ”

You mean like going from 25 year to 40 year mortgages? Lowering the downpayment requirements for CMHC? I agree, the government should stay the hell out of intervening. They did enough to pump up the bubble. Just remember your own words when it all goes to hell. Every single home owner will be crying for Gov. help!

Combat roach
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Combat roach

Chinese wisdom speaks again, omg…

ostritch
Member
ostritch

A bust is horrible for middle age and onwards. The opposite is true for continuing price madness.

burntout
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burntout

Want to here pathetic De Jong has to say and how the interview attacks him saying “cut the crap”!!

De Jong really is the slimiest POS politician I have heard in a long time.

https://twitter.com/Growler_Prowler/status/750485686424252416

Combat roach
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Combat roach

Corrupted scumbags just keep lubricating the pipe for their Chinese buddies, shame.

burntout
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burntout
Vanco
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Vanco

different year but same whining.
Different posters and different housing prices.
If people only bought their primary residence earlier…..

CanNeverThinkOfAGoodName
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CanNeverThinkOfAGoodName

The only people who ever say “stop your whining” are bullies who know they’re engaged in what other people consider to be wrongdoing but who secretly believe that there’s no difference between right and wrong and that might makes right. In other words, they have no moral compass.

Royce McCutcheon
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Royce McCutcheon

“If people only bought their primary residence earlier…..”

Yeah, if only some people had been born earlier. Seems like a totally reasonable thing to regret.

CanNeverThinkOfAGoodName
Member
CanNeverThinkOfAGoodName

I really have no sympathy at all for people who bought recently in the last year or bought 10 years ago or bought 30 years ago. For those who bought 5 years ago and then remortgaged to buy stuff they don’t need I have even less than no sympathy. Nor do I think that the government or anyone else can make a case that they should get special treatment as compared to other people who handled their money in other ways — such as saving — or as compared to other people who work for a living. I’d be interested to examine any argument that someone wanted to offer but I haven’t seen any offered.

CanNeverThinkOfAGoodName
Member
CanNeverThinkOfAGoodName

I do think they would have a lot to complain about in the way our politicians and banks and people in the real estate industry gleefully egged on this unhealthy market for so long.

would-be buyerl
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would-be buyerl
Combat roach
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Combat roach

Fucking asshole must be cadre of Ministry of State Security (MSS) and tests how far shit can go.

Best place on meth
Guest
Best place on meth

Chan should be investigated by CSIS, he sounds like a commie Trojan Horse planted in the Canadian political system.

CanNeverThinkOfAGoodName
Member
CanNeverThinkOfAGoodName

Otherwise he would stand up for himself not by suing, but by explaining/justifying his behaviour. He’s an MPP the story says. What does he do when he’s in the provincial legislative assembly? Run away from anyone who questions his positions or behaviour? Sic his lawyer on them?

burntout
Guest
burntout

Marc Chodes on CNKW

Mike De Jong has 8-9 investment properties. He is as bad as the locusts scooping up RE and then we are supposed to look to him for fair and reasonable behaviour.

What a joke?
https://twitter.com/CKNW/status/750476305850830848

squeak
Member
squeak

And what will the damage be if it continues as it has been the last 15 years?
Oh, lemme gess… Young Canadians have to exile, and Canada will become the “new Asia”?

Oracle
Guest
Oracle

Metro Vancouver is destined to become the new Asia. WE Asians already have a majority if everyone who has a pr/citizenship overseas came back.

Your Caucasian leaders have no idea what they’ve done.

Just wait.

southseacompany
Member
southseacompany

“Vancouver’s housing market gets even hotter as prices surge almost 40% in June”, BNN
http://www.bnn.ca/News/2016/7/5/Vancouvers-housing-market-gets-even-hotter-as-prices-surge-almost-40-in-June.aspx

“‘Steep prices gains are the unintended consequence of central bankers’ cheap money policies, according to Lyle Stein, managing director at Vestcap Investment Management.”

““Central banks have put money into the system, driven interest rates down – and Vancouver is probably one of the top ten cities in the world in terms of destinations.”

patriotz
Member

Ontario tried a speculation tax on property, and the market ‘collapsed overnight’

The governing Conservatives under Premier William Davis imposed a provincial tax, fully independent of any federal capital gains tax, which allowed for a 50 per cent tax on any land profits. Principal residences and family-owned farm lands were exempt. “The market literally collapsed overnight,” says Bob Aaron, a veteran Toronto real estate lawyer.

So here’s a real life lesson on how to bring down RE prices, and from a PC government no less. But this was when excessive house prices were seen as a problem, not a retirement plan.

squeak
Member
squeak
Agree. One lady at work, stated she had no savings and no RRSP and no investments but confidently stated her house is her retirement plan. I feel Canada is a financially a dangerous country to live in. Seems all eggs have been put in one basket. And I hate to be dragged down with it, as I have done everything “right” according to the old books: Lived modestly, frugal, saved, sacrificed, done without, kept a healthy lifestyle, (no smoking/drinking/junkfood, so not to burden the system), paid every bit of tax, bills paid in full, stayed out of conflicts, no ” oops babies”, ongoing education/skill building and still have kept a “blessed” state of mind. Dear Mr/Ms. “Leaders”, is there something I have missed?? The only 2 things I can think of is: 1/ not buying a house thereby taking on… Read more »
Combat roach
Guest
Combat roach

Locust and various scumbags should be more than thankful to you. You did everything exactly right so they can enjoy fruits of your contribution and sacrifice with a blessing of the governments.

Best place on meth
Guest
Best place on meth

Doing all the right things doesn’t pay.

Lying, cheating and stealing does.

CanNeverThinkOfAGoodName
Member
CanNeverThinkOfAGoodName

Well… there’s the short run vs long run issue.

CanNeverThinkOfAGoodName
Member
CanNeverThinkOfAGoodName

This is what makes me so furious about the housing crisis. These people, Christy, DeJong etc., probably don’t have the ability to understand critics who are concerned about Canadian society and long term sustainability of the economy and fair dealing to all citizens and living rightly. They probably think that all critics are coming from a place of self-interestedness and greed, because that’s the only thing they know about human motivation. It’s the only thing they know about human motivation that’s the only thing they experience in the case of their own minds. That’s how come it’s so hard to get their attention and get them to shift. They have no sense of responsibility and no sense of doing what’s right by all at all. … I mean… what else can explain these years of inaction?

southseacompany
Member
southseacompany

“Vancouver Home Sales Fall 8%, But Prices Keep Rising”, Huffington Post
http://www.huffingtonpost.ca/2016/07/05/home-sales-vancouver-house-prices_n_10820148.html

“Residential property sales in Metro Vancouver totalled 4,400 in June, an increase of about 0.5 per cent compared to one year earlier, but a drop of nearly eight per cent since May.”

patriotz
Member

Home inspections drop drastically in no-subjects market, leaving buyers with ‘horror stories’

Last October, the 40-year-old and his spouse bid $955,000 on an older home in Hastings-Sunrise. It was listed at $899,000 and “we heard there were five bids. We were in the middle. We expected this and wanted to have a differentiating factor…”

On moving day, they arrived to find “an absolute disaster,” said Girard, who described the home as being “not safe for our one-year-old daughter. That was the biggest problem.”

franko
Member
franko

I do the odd inspection for close friends and relatives as a favour, I’m very selective as my advice is not always appreciated. While some buyers who have some exposure to the construction and engineering business are quite knowledgeable, it’s amazing how ignorant and gullible some can be.
There is no shortage of horror stories for suckers.

HAMster
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HAMster

Many house inspections are not worth the paper they are printed on. I have first hand experience with house inspections that missed major problems.

Combat roach
Guest
Combat roach

Why inspections are relevant at all in the current situation. Aren’t the all traded houses teardowns, laundromats or flipping instruments. Who is going to live in them anyway? They aren’t meant for such purpose so why bother with inspection.

paulb
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Combat roach
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Combat roach
Best place on meth
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Best place on meth

“Vancouver Coastal Health spokesman Gavin Wilson said visiting pregnant mothers must pre-register with a physician at a VCH hospital and pay $7,000 to $8,000 for a vaginal delivery and $12,000 to $13,000 for caesarean.”

In case anyone wants to see what the vaginal version looks like….

https://www.youtube.com/watch?v=UcSHmLQN1qE

burntout
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burntout
burntout
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burntout

From Larry Yatter

Forces Beyond Our Control

The question is the same – “will Vancouver’s prices ever take a break?” Though on the surface this might seem a glib response the answer is not until China has a revolution!

Admittedly, for a brief moment that position faltered as Briton decided to leave the EU. The moment passed with the realization that for the most part that revolution will deliver the greatest change to the Brits.

China’s influence prevails as the supreme economic force. China’s forward march like Napoleon Bonaparte’s will leave little in its previous state. Least of which – the price of real estate of Vancouver.

HAMster
Guest
HAMster

So now Larry Yatkowsky (the semi-literate realtor) is an authority on international politics and finance? Give me a break. That guy is a complete goof.

Polozi Scheme
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Polozi Scheme
CanNeverThinkOfAGoodName
Member
CanNeverThinkOfAGoodName

Good read.
Regardless of what the potential may be for globalization I think everyone except the top .5% or .2 % has to agree that the way it has been handled has had some very negative effects that can’t be ignored. Why should multinational corporations be able to sue nations in order to get their way over the will of the citizens of the host country. TPP will be a horror show. https://www.youtube.com/watch?v=mG-3lRgRPsU

southseacompany
Member
southseacompany

“Vancouver housing prices surge 32%”, BNN
http://www.bnn.ca/Video/player.aspx?vid=904996

“Vancouver’s hot housing market continues to climb. Kevin O’Leary, Chairman of O’Leary Financial Group joins BNN to discuss why these gains are really not that great for foreign investors buying Canadian real estate.”

would-be buyerl
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would-be buyerl

At this point, everyone on this website has to agree that only idiots would buy property at this point in time. We are at an inflection point. Sure, we could miss out on short-term gains – the last gasp of this bull market, but the stars are aligned for a big bust down the road. I can’t imagine a scenario where a bust can be avoided now. I am looking forward to a correction. My guess, is 2018. I think China will gasp for another year, but I hope to be pleasantly surprised for a bust in late 2016.

southseacompany
Member
southseacompany

“Is the red-hot housing market cooling down?”, CTV News
http://bc.ctvnews.ca/video?clipId=905896

Oracle
Guest
Oracle

The problem with you mitherfucjers is that all you can do is post to protest high prices.

Is that all you can do for your family? Fight back. The politicians are fighting hard to make their money $$$. They are paying the police to protect them as well.

CanNeverThinkOfAGoodName
Member
CanNeverThinkOfAGoodName

I don’t just post here. I talk to everyone who will listen.

Reddit’s discussions of the crisis, like today for instance, seem vastly superior in their understanding than do people I encounter outside of the cybersphere in the course of the day. Maybe that’s because most people I encounter are sort of established and at work. People don’t want to question the status quo. They don’t want to understand how bad and crazy it is. Many of them are homeowners and they’re just starting to come to terms with it. They don’t know how “bubble” is defined.

The people on the Reddit thread are mostly saying they are going to leave or have left Vancouver.

One thing to do: Keep up the pressure. What else do you suggest in the near term to do, Oracle?

Oracle
Guest
Oracle

Demand an end to temporary immigration. That means no more student visas , tfw’s/imps’s, supervisas , and 10 year visitor visas.

And slash immigration to average of G7 nations per capita.

I tweeted those assholes Trudeau and Mcallum to stop it immediately. People got to fight back.

Time is right to to start an anti-immigrant party. Enough is enough.

ostritch
Member
ostritch

Get on and do it then.

Shut It Down Already
Guest
Shut It Down Already

He can’t – he’s an immigrant.

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