Real Estate

Vancouver housing bubble?

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Mark77 wrote:
Jun 23rd, 2012 7:50 pm
Rents would be rising if that were the case (ie: Asians flocking to Canada to be here temporarily), and that's definitely not happening.
Who said temporarily? Asian culture isn't a rental culture, it's a purchase culture.
Asian housing collapses are underway, for largely the same reasons as we're going to see in Canada -- massive overcapacity, excess leverage and speculation, and very poor domestic real economies
Where is that happening? How many properties do you own in Asia?

It's always very difficult to seriously discuss these types of issues with Canadians who lack real international experience.

So I won't continue here and will leave saying "OH IT'S ALL GOING TO HELL...SELL, SELL, SELL.....GET THE LIFEBOATS!"

Good luck.
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Beeg wrote:
Jun 23rd, 2012 7:59 pm
Who said temporarily? Asian culture isn't a rental culture, it's a purchase culture.
So? If Asians are purchasing, then other folks who aren't purchasing those properties, by definition, have to rent. Rents describe the size of the overall property base relative to overall demand, whether that be from renters, or from owners.

By definition, over the long term, the price of a property is merely the net present value, discounted at a certain rate, of all of the future rents. Whether someone chooses to capitalize that all into an up-front ownership decision, or choses to pay rent as they go, is immaterial. There's either demand in excess of supply (implying higher rents), or there isn't.
TodayHello wrote:
Oct 16th, 2012 9:06 pm
...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
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Mark77 wrote:
Jun 23rd, 2012 8:04 pm
So? If Asians are purchasing, then other folks who aren't purchasing those properties, by definition, have to rent. Rents describe the size of the overall property base relative to overall demand, whether that be from renters, or from owners.

By definition, over the long term, the price of a property is merely the net present value, discounted at a certain rate, of all of the future rents. Whether someone chooses to capitalize that all into an up-front ownership decision, or choses to pay rent as they go, is immaterial.
Mark77,

You are very strongly opinionated, often with little to back you up. I won't argue with you here. Go spend some time in Greater China and get back to us in a few years.

Of course, it takes courage to relocate and learn new things. Are you up for it?

Good luck in learning more! As a fish in a fishbowl thinks they know how everything works.
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Beeg wrote:
Jun 23rd, 2012 8:08 pm
Mark77,

You are very strongly opinionated, often with little to back you up. I won't argue with you here. Go spend some time in Greater China and get back to us in a few years.
There's plenty to back up my statements. So much so that you don't even try and contradict them, appealing to borderline insults instead. But I don't have time to give a thousand references for everything I say that is merely common sense.

Certain folks keep claiming that tons of "Asian" money is coming to Vancouver/Toronto to buy (and not to rent), but all I see is a leverage bubble, because of a near perfect correlation between house prices, and outstanding credit.

Good thing these pie-in-the-sky claims of "Asians" coming to save hyper-leveraged Canadian homeowners are largely exxagerated and fairly easy to disprove.
TodayHello wrote:
Oct 16th, 2012 9:06 pm
...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
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Mark77 wrote:
Jun 23rd, 2012 8:16 pm

Good thing these pie-in-the-sky claims of "Asians" coming to save hyper-leveraged Canadian homeowners are largely exxagerated and fairly easy to disprove.
Okay, disprove it.

And tell us all about your vast experience buying and selling Asian real estate and what the trends and opinions are.

Sometimes it's best to pull back and "look, listen and learn." Whatever. Good luck.
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adamtheman wrote:
Jun 23rd, 2012 6:49 pm
You own a condo, and you don't want to see it drop... I get it. Pretty much anyone who owns real estate and purchased it recently (especially with a small down payment), will not want to believe that prices can drop. But ignorance is only bliss for so long. You can uptalk real estate all you want but the reality is things aren't looking good. Sorry Gei.
Actually I have zero interest in the housing market, and could care less about where the value of my condo is headed. I have well over 50% equity, so even this doomsday crash would still leave me ahead. More importantly, I have very affordable mortgage payments and plan on being here for quite some time... so this is all irrelevant to me.

So I genuinely just find threads like this amusing... it's not anything to do with a vested interest.

On the flip side, I feel that the majority of people "predicting" this ridiculous 50% crash simply regret not buying something themselves a long time ago, and are more so "hoping" for this crash so they can actually afford something.
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gei wrote:
Jun 23rd, 2012 8:24 pm
On the flip side, I feel that the majority of people "predicting" this ridiculous 50% crash simply regret not buying something themselves a long time ago, and are more so "hoping" for this crash so they can actually afford something.
+1

My tenants often want to tell me my half-million or more house they rent will drop to zero in a few years...that's why they choose to rent.

It's a jealousy issue in many cases. And a xenophobia issue (damn those foreigners are making prices too high!)
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gei wrote:
Jun 23rd, 2012 8:24 pm
On the flip side, I feel that the majority of people "predicting" this ridiculous 50% crash simply regret not buying something themselves a long time ago, and are more so "hoping" for this crash so they can actually afford something.
It runs a little deeper than that. Many of us are involved (or not) in industries which have been starved for capital because of the housing bubble.

Vancouver is a great example -- I'm picking up mid-tier and senior precious metals producer stocks, with huge cash positions and producing assets at often less than book value. Which is quite extraordinary for mining companies because the 'book value' of organically grown assets is usually not adjusted for the significant risk of exploration or over-runs in mine construction.

Why aren't Vancouver-based folks using all their wealth to buy these dirt cheap assets? Because its all tied up in housing.

Just like you, I could care less about the price of houses over the long term as I will probably inherit enough housing to meet my needs. But I'd sure like to see some better returns on my other investments and savings. And decent jobs for Canadians instead of the spectacle of high FIRE industry concentration that we have today.
TodayHello wrote:
Oct 16th, 2012 9:06 pm
...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
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Mark77 wrote:
Jun 23rd, 2012 8:32 pm
It runs a little deeper than that. Many of us are involved (or not) in industries which have been starved for capital because of the housing bubble.

Vancouver is a great example -- I'm picking up mid-tier and senior precious metals producer stocks, with huge cash positions and producing assets at often less than book value. Which is quite extraordinary for mining companies because the 'book value' of organically grown assets is usually not adjusted for the significant risk of exploration or over-runs in mine construction.

Why aren't Vancouver-based folks using all their wealth to buy these dirt cheap assets? Because its all tied up in housing.

Just like you, I could care less about the price of houses over the long term as I will probably inherit enough housing to meet my needs. But I'd sure like to see some better returns on my other investments and savings. And decent jobs for Canadians instead of the spectacle of high FIRE industry concentration that we have today.
You still don't understand the extent the Canadian government, the Canadian banks, the elite families have agreed to Globalization. You really need to spend some time abroad to get a new perspective on what is truly going on.... Now you simply don't get it.

PM me for help.

PS: this is in no way a personal attack...just you need to learn a helluva lot more!
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Don't know about Vancouver, but went Condo hunting today in Toronto....they're not kidding about shoe boxes in the sky, I had no idea how small some of these "luxury" condos are 1 bed room 650-750 sq ft??

What's the source of the avg. Vancouver prices?
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Beeg wrote:
Jun 23rd, 2012 8:41 pm
You still don't understand the extent the Canadian government, the Canadian banks, the elite families have agreed to Globalization. You really need to spend some time abroad to get a new perspective on what is truly going on.... Now you simply don't get it.
I spend plenty of time abroad. Canada is fortunate that we have global dominance over an industry that is one of the few credible alternatives to the current and failing system of banking, in our precious metals miners and intermediaries.

This may very well turn out to be the proverbial 'ace in the hole' that puts a floor under the Vancouver (and to a lesser extent, Toronto) prices. Just think how many rich people would be working in Vancouver if gold was $5,000-$10,000 and $200 silver. Certainly would replace a lot of the overleveraged speculators as a source of housing demand, that's for sure, and bring a lot of earned (not borrowed) prosperity to the GVR.
TodayHello wrote:
Oct 16th, 2012 9:06 pm
...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
[OP]
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Beeg wrote:
Jun 23rd, 2012 7:59 pm
Who said temporarily? Asian culture isn't a rental culture, it's a purchase culture.


Where is that happening? How many properties do you own in Asia?
How about super hot asian Richmond, the one right beside the Vancouver airport you just quoted earlier. Richmond is crashing hard, just like Vancouver. Asians aren't saving it.
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gei wrote:
Jun 23rd, 2012 8:24 pm
On the flip side, I feel that the majority of people "predicting" this ridiculous 50% crash simply regret not buying something themselves a long time ago, and are more so "hoping" for this crash so they can actually afford something.
Actually, many US cities have dropped well over 50%. And that is what we point to as evidence that it could happen here. So what is your response to that? "It's different here". We keep hearing that, but it turns out, it may not be so different after all. Hilariously enough, the bears have no problem using booming US cities as examples. I've lost count of how many times bulls have compared Vancouver and Toronto to other world class cities like London, New York, Los Angeles, Sydney, etc.

How about this approach... we've seen how many cities around the world have had real estate meltdowns. How many cities can you point to that have had a "boom" as long as Vancouver and Toronto have? They all seem to have fallen and/or be falling. Australia is now dropping, and so is Hong Kong.
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Here is an article from TD Canada Trust. They are predicting a 15% drop in real estate over the next 2-3 years. And we all know how conservative banks are - they don't want to create a panic. Keep in mind, TD relies on mortgages and high prices benefit them.

Toronto, Vancouver House Prices: TD Bank Predicts 15-Per-Cent Fall In Medium Term

Expect to see more of these articles from banks as the summer goes on. The banks are realizing they can't ignore it, and so they are trying to reduce panic by suggesting we will only suffer a modest drop. The term "Soft landing" is being used a lot. But we may not be so lucky...

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