Real Estate

Vancouver housing bubble?

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Deal Addict
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Apr 2, 2007
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And so it starts with Fraser Valley RE board May stats:

[QUOTE]
The Fraser Valley Real Estate Board’s Multiple Listing Service® (MLS®) processed 1,379 sales in May, a decrease of 15 per cent compared to the 1,616 sales in May of last year and 1 per cent more than were processed in April. By historical comparison, sales in May were the slowest for that month since 2001.
........
In May, the benchmark price of single family detached homes in the Fraser Valley was $549,200, an increase of 0.2 per cent compared to $548,000 during the same month last year. For townhouses, the benchmark price was $298,000, a decrease of 2.9 per cent compared to $306,800 in May 2012 and the benchmark price of apartments was $203,400, virtually unchanged from $203,600 in May 2012.[/QUOTE]
My work here is done - [IMG]http://pbs.twimg.com/media/Au7PTwsCIAAu7G_.jpg[/IMG]
SOFT Landing - [IMG]http://i50.tinypic.com/14ilmqt.jpg[/IMG]
Bonus parade Can banks - here - with "No banker left behind"
Les États-Désunis du Canada - http://www.youtube.com/watch?v=LpDRg7TLY8c
Jr. Member
Oct 1, 2006
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toronto
Conquistador wrote:
Jun 3rd, 2013 11:42 pm
I see that crashadam has posted the latest numbers in the first post of this thread and with nary a bleat about them. Hmm. :rolleyes:
Well of course, that's how he rolls.
Sr. Member
Feb 5, 2013
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PF4RedFlag wrote:
Jun 4th, 2013 7:31 am
You know what is funny ?
It is funny to calculate average prices with sales like this

http://www.cbc.ca/news/canada/british-c ... condo.html

and to pretend that everything is OK when even with a $25M sale like above the condo sales are down "just" 20K
That 25 million sale wouldn't be reported and incorporated into the averages until July, right?

What is more troubling to me is that will make all the crashers claim affordability is at a crisis when that sale goes into the average numbers both for sales +25 mil and for income of buyers (zero) as they are supposedly offshore and will show no income in Canada. Supposedly when you take out the outliers, affordability is not so out of whack in Vancouver.
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Jul 14, 2008
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bankonit wrote:
Jun 4th, 2013 2:52 pm
That 25 million sale wouldn't be reported and incorporated into the averages until July, right?

What is more troubling to me is that will make all the crashers claim affordability is at a crisis when that sale goes into the average numbers both for sales +25 mil and for income of buyers (zero) as they are supposedly offshore and will show no income in Canada. Supposedly when you take out the outliers, affordability is not so out of whack in Vancouver.
Foreign buyers are not a stat outliner if Vancouver's an international city.
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bankonit wrote:
Jun 4th, 2013 2:52 pm
That 25 million sale wouldn't be reported and incorporated into the averages until July, right?

What is more troubling to me is that will make all the crashers claim affordability is at a crisis when that sale goes into the average numbers both for sales +25 mil and for income of buyers (zero) as they are supposedly offshore and will show no income in Canada. Supposedly when you take out the outliers, affordability is not so out of whack in Vancouver.
How do you know that it will be incorporated in June?
After all the article states that "However, sources tell the CBC that members of a wealthy Middle Eastern family were in town last week to look at properties in Vancouver."
And also "The new owners did not just buy the penthouse at the Fairmont, but at least one other property as well, sources said."

Chances are the other property is one of these:
[IMG]http://www.yattermatters.com/wp/wp-cont ... -46-PM.jpg[/IMG]

And while Larry claimed that the average prices are up in all three categories the just released REBGV stats claims different (with their benchmark price)
Sales of detached properties reached 1,212 in May 2013, an increase of 2.7 per cent from the 1,180 detached sales recorded in May 2012, and a 22.8 per cent decrease from the 1,570 units sold in May 2011. The benchmark price for detached properties decreased 5.2 per cent from May 2012 to $917,200.

Sales of apartment properties reached 1,136 in May 2013, a decline of 1.7 per cent compared to the 1,156 sales in May 2012, and a decrease of 7.5 per cent compared to the 1,228 sales in May 2011. The benchmark price of an apartment property decreased 3.7 per cent from May 2012 to $365,600.

Attached property sales in May 2013 totalled 534, an increase of 3.3 per cent compared to the 517 sales in May 2012, and a 7.8 per cent decrease from the 579 attached properties sold in May 2011. The benchmark price of an attached unit decreased 3.2 per cent between May 2012 and 2013 to $454,900.
Three for three DOWN - Bank on It! :twisted:
My work here is done - [IMG]http://pbs.twimg.com/media/Au7PTwsCIAAu7G_.jpg[/IMG]
SOFT Landing - [IMG]http://i50.tinypic.com/14ilmqt.jpg[/IMG]
Bonus parade Can banks - here - with "No banker left behind"
Les États-Désunis du Canada - http://www.youtube.com/watch?v=LpDRg7TLY8c
[OP]
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It's worth a laugh to check in here and see the "usuals" are trying to drag me into a mud slinging match. The mods have made it clear, personal attacks are out on this thread. I refuse to get dragged into childish name calling and taunts. You guys ruined that for yourselves by derailing this thread one time too many. Tough luck.

As for Vancouver, just another day of a bubble popping. Gross sales are down around $500 million, or about 25%, in two years. Areas all around Vancouver, and in the rest of BC, are crashing hard, with MOI's in the 20's. The stats that bcbgboy posted don't tell the whole story either - it's much worse. Trust me, when the FVREB says, "By historical comparison, sales in May were the slowest for that month since 2001.", they are being generous. Case and point, the population in Surrey in 2001 was 347,820. Today it is over 500,000. So we're talking sales comparable to 2001, yet it's not mentioned that the population (and number of houses) today is significantly higher. If we adjusted those numbers based on population, I'd take a guess that the Fraser Valley is currently at the lowest sales of all time.
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Again, who cares about sales, other than RE agents? You don't see people going on and on about volume of stocks being sold on a particular day/month. Sales volume is the only thing you doomers have to grasp onto.

The only thing that matters is the final selling price. Period.
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Here's a question for you (or anyone else): If sales volumes plummet, but prices rise, does that make a home more or less affordable?
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RCGA wrote:
Jun 4th, 2013 5:17 pm
Here's a question for you (or anyone else): If sales volumes plummet, but prices rise, does that make a home more or less affordable?
The benchmark price for detached properties decreased 5.2 per cent from May 2012 to $917,200.
The benchmark price of an apartment property decreased 3.7 per cent from May 2012 to $365,600.
The benchmark price of an attached unit decreased 3.2 per cent between May 2012 and 2013 to $454,900.


I assure you that if it is there then it is everywhere at every level, including the high end.
Too bad we do not have the listings for those top 10 west side sales to see if they were discounted or not.
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Nov 22, 2009
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Markham Ontario
PF4RedFlag wrote:
Jun 4th, 2013 5:21 pm
The benchmark price for detached properties decreased 5.2 per cent from May 2012 to $917,200.
The benchmark price of an apartment property decreased 3.7 per cent from May 2012 to $365,600.
The benchmark price of an attached unit decreased 3.2 per cent between May 2012 and 2013 to $454,900.


I assure you that if it is there then it is everywhere at every level, including the high end.
Too bad we do not have the listings for those top 10 west side sales to see if they were discounted or not.
Where do you think it those numbers will be (in relation to 2012) in 2017?

Lower than 2012 - back even?
[OP]
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RCGA wrote:
Jun 4th, 2013 4:50 pm
Again, who cares about sales, other than RE agents? You don't see people going on and on about volume of stocks being sold on a particular day/month. Sales volume is the only thing you doomers have to grasp onto.

The only thing that matters is the final selling price. Period.
That's a weak argument. Who cares about sales? How about the government, which uses the money to run our country and our provinces? All new home sales are taxed, and used home sales get taxed with property transfer tax. When total gross dollar sales amount is down $500 million in one single month, that's a lot of money a province is missing out on taxing. We're talking tens of millions of dollars in tax revenue lost to British Columbia every month compared to 2010 and 2011. So no, 1 sale at $1.2 million is not the same as 2 sales at $1.2 million. Not even close. As for stock markets... volume is not the same as sales. But I guarantee you, if Microsoft announces that they are shipping 10% less product this year compared to last, their stock will plunge. In fact, many companies lose money every single year, yet continue to rise in share price because their sales increase. You clearly do not know what you're talking about.
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Feb 7, 2006
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Wow Adam, you go from:
adamtheman wrote:
Jun 4th, 2013 3:52 pm
It's worth a laugh to check in here and see the "usuals" are trying to drag me into a mud slinging match. The mods have made it clear, personal attacks are out on this thread. I refuse to get dragged into childish name calling and taunts. You guys ruined that for yourselves by derailing this thread one time too many. Tough luck.

To this:
adamtheman wrote:
Jun 4th, 2013 5:41 pm
. You clearly do not know what you're talking about.
Maybe instead of bashing everyone and being rude just admit your wrong. Almost one year later, no crash, prices are rising (according to some stats), no blood in the streets and life goes on.
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Feb 15, 2008
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RCGA wrote:
Jun 4th, 2013 5:17 pm
Here's a question for you (or anyone else): If sales volumes plummet, but prices rise, does that make a home more or less affordable?
The problem with looking at aggregate statistics, rather than taking a more in-depth view, is that we need to question why the sale prices on used housing are rising.

In the case of many areas, Calgary, Vancouver, etc., in particular, prices on equivalent low-end used houses are not generally rising. In fact, they're falling. However, this segment of the market has seen its volumes decimated, as the first-time new homebuyer can no longer easily obtain CMHC-insurance for their subprime mortgage.

The higher end of the market, ie: established people with lots of equity, trading houses amongst themselves (conceptually), is still intact. Hence, the average prices appear to be rising because the low end of the market has now been excluded from the calculations.

"Affordability", and any discussions of it, are, by their very nature, "loaded issues", and are highly subjective. I would tell you, "yes, a house is less affordable if it costs more". However, others may inject other measures or seek to use a derivative of house prices (and interest rates) -- the "monthly payment", to describe "affordability".
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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RCGA wrote:
Jun 4th, 2013 4:50 pm
Again, who cares about sales, other than RE agents? You don't see people going on and on about volume of stocks being sold on a particular day/month. Sales volume is the only thing you doomers have to grasp onto.
adamtheman gave most of the response I would have given -- with so much of the Canadian economy levered to RE transactional activity, it is a major problem for many people if transactions stop. Someone recently posted on a blog, perhaps Zerohedge, that no fewer than 100 people are involved with a typical refinance transaction. Everyone from the homeowner, to various clerks in a bank, to the technicians at land titles, lawyers and their technicians, etc.

You are correct though, stock market transactional activity has pretty much ground to a mere trickle of its former self, especially once you exclude algorithmic traders (the so-called "HFTs") merely trying to extract pennies from each other.

Historically low transactional volumes, for both the stock and the housing markets, have represented inflection points before significant price changes.

Now, a quick pop quiz: Which is more likely to go up or down in price:

a) An asset class that trades at a P/E of 35, and typically grows its profits at 2-3%/annum?

b) An asset class that trades at a P/E of 12, and typically grows its profits at 6-7%/annum?
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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