Anyone who’s read this site for a while has probably noticed a couple of things:
1. A number of regular reader and commenters here blame wealthy Chinese ‘investor immigrants’ for the high cost of real estate in Vancouver.
2. The administration of this site disagrees and thinks that over-stretched house-horny locals and government insured lending on real estate are primarily to blame for high prices.
Yet we must admit this story has us thinking perhaps the truth is a blend of those two viewpoints:
U.S. alleges Metro Vancouver homes were part of scheme to launder money embezzled in China
Authorities allege that in the summer of 2011, shortly after they qualified for U.S. green cards, Qiao and Zhao began surreptitiously using accomplices to transfer millions of dollars into bank accounts in Wenzhou city, Hong Kong and Canada. At least two Canadian banks were used, HSBC Canada and the Royal Bank of Canada.
Zhao recently put the White Rock property up for sale for $689,000. Paulo Leung, a real estate agent with Regent Park Realty, said he had also sold the property to her in 2012 as an investment. He declined to say more. Both properties are being managed by Vancouver-based Chartell Properties. A receptionist there said they knew Zhao.
A search of property and title records conducted by The Vancouver Sun show that Zhao’s numbered company bought the properties outright. However, a few months later, it took out mortgages on both, totalling $1.1 million, that represented almost their entire market value. According to the U.S. indictment, a few weeks later Zhao and Qiao took money from their Canadian RBC account to pay for a Bellevue home.
Officials for the RCMP and Citizenship and Immigration Canada said they did not know if their departments assisted U.S. and Chinese investigators, and could not comment if they did.
Read the full article over in the Vancouver Sun.
This is kind of amazing.
yvr2zrh posted this analysis of the percentage of property listings for sale that are vacant:
Across REBGV 19% of listed SFH are vacant and 31% of attached/apartments are vacant. So – 50% as the comment from Jesse is higher than actual but not completely out of reach for apartments. Some variations are noted.
SFH Vacant stats (number/%)(in order or highest to lowest)
Richmond 175 – 24%
Van West 148 – 23%
North Van 55 – 21%
Port Coq – 22 – 21%
Whistler – 39 – 21%
Van East – 87 – 20%
Burnaby – 71 – 20%
etc . . .
For Apartment/Attached, the following are the vacant properties
Whistler – 177 (42%)
Maple Ridge – 94 (34%)
Van West – 522 (34%)
New West 110 (33%)
Van East – 169 (33%)
Burnaby – 261 (31%)
Richmond – 298 (31%)
North Van – 115 (30%)
So, even if you have people who just want to hold back, why would they when there is cash outflows to carry the property and the future outlook is for price decreases?
Those who just hold off selling, where they are actually living in the unit, and are waiting for prices to increase, are bound to die living in that unit.
Later today, I will post my predictions for the 2013 market based on my model. What is really helpful is the MOI/monthly price change graph. That has been a really good indicator of price movements. Thus, I will post the projected MOI movements for 2013 and then we can see where the prices fall. It is important to know that listing volumes are down from last year. This is sufficiently so that we may see 2013 inventory intersect the 2012 inventory possibly at the end of the Spring and then track 2012 for the rest of the year.
This will be interesting to watch because once we are down 10-15% from peak prices – how can they continue to say things like prices are flat and this is a soft landing? I would say any decrease of 20% from the peak is not good as you immediately remove even more move-up buyers and put 1000′s of people underwater immediately.
According to Paulb tuesday saw only 66 properties sold in Vancouver.
VHB says that makes a record 11 days in a row with double digit sales.
We haven’t broken more than 100 sales in a day for more than two weeks.
As VHB points out:
I have PaulB’s daily numbers for 2010 to now. The current streak of 11 straight double digit sales days is now a record.
You might think you could see this kind of streak in December or January. But August? This is nutty low sales.
Yesterday was Wednesday and we saw 71 sales. That means we’re now on the 12th day of an unbroken chain.
Even if this record holds up through the end of the month it will likely be broken on Tuesday as sales made over the long weekend will add two days into one.
But what we also might expect to see next week is a flood of listings. Here’s VHB again:
In past years, the September listings surge begins precisely on the Tuesday right after Labour Day. Last year, we had 356 listings on that Tuesday. In 2010, it was 282.
So, it would be a surprise if there are fewer than 1000 new listings hitting the books during the four days next week. Good chance to get over 1200.
And finally ZRH2YVR left a wrap up of what this market is looking like in a few select areas. We’re approaching a MOI of 20 (!) in some areas:
1.) SFH in West Vancouver will end the month with approx 1 sale per day. Down 50% from last month and down 70% from last year. MOI will now be over 20 and up from 5 last year. Inventory is near record at 530 units.
2.) Richmond SFH. July repeat. Same sales level, same inventory. I would say prices have to be down. MOI close to 20. The month had a blip in the first half with the first 10 sales days coming at 33 sales but the next 10 days being 21 sales. Quite a different second half.
3.) Van-West Attached (Appartment/Townhouse). This is a big big market so it’s tough to have it stop completely. It is the centre of the uninformed buyer especially young people with parents money. This month will be 15% below last month, 30% below last year and pretty much on par with 2008. Many sources have indicated prices are down but maybe about 5%. So many units are available. MOI in this large market will end the month close to 9, up from 5 last year and 8 last month. The sales pace in first 10 days and second 10 days were constant.
Read his full comment for the low down on other areas including East Van, North Van and Burnaby.
Inventory posted this update to detached sales in Richmond and it’s astounding.
We’re not at the end of the month quite yet, so this number will rise, but we would have to have an incredible amount of sales to not have July 2012 register as an all time record low number of sales.
Here’s the comparison for July detached sales all the way back to 1995, we’re currently sitting at about half of the low normal level:
Richmond Detached July
1995 = 108
1996 = 117
1997 = 122
1998 = 86
1999 = 113
2000 = 96
2001 = 183
2002 = 154
2003 = 209
2004 = 129
2005 = 170
2006 = 97
2007 = 175
2008 = 92
2009 = 221
2010 = 107
2011 = 123
2012 = 54 (-56%) ***July 29
Just what is happening there to the south of Vancouver? Have houses in Richmond fallen out of favour with buyers for some reason?
The June news release from the REBGV has been released and it looks like the market has turned a corner.
As all of you regular readers here know, sales have plunged to a 10 year low.
The HPI benchmark price has also dropped from the previous month in some areas. Oddly enough it’s houses in the desirable west side and Richmond which have both dropped about 2% from May.
Best Place on Meth summarizes the total changes for all areas:
Summary of June HPI:
I was expecting no change for June and declines to start next month so this is a bit of a bonus.
Yes the hot summer market has turned out to be anything but. As prices drop a few percentage points from their all time highs some are calling this a ‘buyers market‘.
Meanwhile at least one local realtor has sold his own house and says it’s time to cash out.