Real Estate

Vancouver housing bubble?

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  • Sep 17th, 2019 3:15 am
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Jul 26, 2004
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Just read something interesting. I'd take it with a grain of salt since it's ZeroHedge -- but it's possible the first dominoes dropped in China! If true, I wonder if they will be able to keep the contagion localized to the high end housing market, or if this will set a chain of events that will affect the Vancouver housing market as a whole. (Since the wealthy Chinese also buy condo's, apartments, and other started homes too)

http://www.zerohedge.com/news/2014-03-1 ... amble-cash

If you want to read more about what initially caused it, sounds like the house of cards is finally coming unwound. I wonder if the PBOC will come to the rescue and give bailouts for some and mini flags for others.

http://www.zerohedge.com/news/2014-03-1 ... collapsing

I'm very interested to see how things develop.
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Zerohedge has a lot of really funny posts.. so take what you read there with a grain of salt. You may find some posts made by one of the regulars here.
Andre Oliveira - Mortgage Agent
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heh, I pick and choose what I read. The Yuan crashing (already confirmed) and people liquidating high end houses in HK will come out in the mainstream tomorrow or the day after if it's legit.
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lazarus wrote:
Mar 19th, 2014 11:07 pm
Just read something interesting. I'd take it with a grain of salt since it's ZeroHedge -- but it's possible the first dominoes dropped in China! If true, I wonder if they will be able to keep the contagion localized to the high end housing market, or if this will set a chain of events that will affect the Vancouver housing market as a whole. (Since the wealthy Chinese also buy condo's, apartments, and other started homes too)
There's very little actual "Chinese" money involvement in Vancouver, but a Chinese collapse may very well be positive for the Vancouver RE market as it is likely that the demand for gold as a safe haven asset will ramp up. Vancouver being home to a significant proportion of the world's gold mining industry's administrative headquarters.

In the relatively few enclaves that actually have true Chinese money invested, you may find properties being up for sale as their owners struggle to liquidate assets to support their distressed assets back in China. So this can serve as a counterbalancing force.

As someone famous said, "may we live in interesting times".
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:
Mar 19th, 2014 11:23 pm
There's very little actual "Chinese" money involvement in Vancouver, but a Chinese collapse may very well be positive for the Vancouver RE market as it is likely that the demand for gold as a safe haven asset will ramp up. Vancouver being home to a significant proportion of the world's gold mining industry's administrative headquarters.

In the relatively few enclaves that actually have true Chinese money invested, you may find properties being up for sale as their owners struggle to liquidate assets to support their distressed assets back in China. So this can serve as a counterbalancing force.

As someone famous said, "may we live in interesting times".
You'd be surprised. I live in an area where there are 6 + 38 story apartments being built and multiple townhouses too. Starting costs are 250k for a really small one bed. I make decent $$$, but no way I'd buy these dumpholes at these prices.

I went for a jog past the townhouses that are almost complete and there were a lot of Asians (my guess mainland Chinese) checking out the places and probably prospective buyers. GVA municipal gov's don't actually keep stats on people who buy houses for investment purposes, so neither of us can say one way or the other conclusively if "rich" Chinese were dumping money in real estate in GVA.

From my observations, I think they are though. None of (except 1) my co-workers who make near my salary own a home. Him and his wife both work and make around 100k (combined) and literary have zero room for error. Their mortgage is about $2500/mo for a 35yr mortgage on a place that cost them over 600k. (was a real fixer upper too). He's doing good, but unfortunately people in the GVA don't get the same salaries as people out in Alberta, so a lot of us do in fact get priced out from foreign investors.
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lazarus wrote:
Mar 19th, 2014 11:47 pm
I went for a jog past the townhouses that are almost complete and there were a lot of Asians (my guess mainland Chinese) checking out the places and probably prospective buyers.
You checked their passports? Talked to them? How do you know that they weren't Singaporeans? There's a heck of a lot of "Asian"-ethnicity Canadians in Vancouver. They're young, so naturally they're going to be a significant portion of the buying demographic.
GVA municipal gov's don't actually keep stats on people who buy houses for investment purposes, so neither of us can say one way or the other conclusively if "rich" Chinese were dumping money in real estate in GVA.
If there was a money dump, then leverage would be falling. Leverage, ie: mortgage debt as a ratio of house prices has not been falling. Rising actually.
He's doing good, but unfortunately people in the GVA don't get the same salaries as people out in Alberta, so a lot of us do in fact get priced out from foreign investors.
I'd suggest that you're getting priced out by local people, some Asian, some non-Asian, who are blowing their brains out on cheap credit, chasing the last vestiges of a bubble, honestly believing that they will be "priced out forever" if they don't pull the trigger. That's what the data supports. Not mainlanders with suitcases of money.

Of course it certainly helps to have a significant population of people with a cultural affinity for real estate who fear monetary instability. Which is why you see the RE bubble far more vigorous in Vancouver than basically anywhere else in Canada. Other arguments such as an alleged shortage of land, or high rents, have been thoroughly discredited.
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:
Mar 19th, 2014 11:56 pm
You checked their passports? Talked to them? How do you know that they weren't Singaporeans? There's a heck of a lot of "Asian"-ethnicity Canadians in Vancouver. They're young, so naturally they're going to be a significant portion of the buying demographic.



If there was a money dump, then leverage would be falling. Leverage, ie: mortgage debt as a ratio of house prices has not been falling. Rising actually.



I'd suggest that you're getting priced out by local people, some Asian, some non-Asian, who are blowing their brains out on cheap credit, chasing the last vestiges of a bubble, honestly believing that they will be "priced out forever" if they don't pull the trigger. That's what the data supports. Not mainlanders with suitcases of money.

Of course it certainly helps to have a significant population of people with a cultural affinity for real estate who fear monetary instability. Which is why you see the RE bubble far more vigorous in Vancouver than basically anywhere else in Canada. Other arguments such as an alleged shortage of land, or high rents, have been thoroughly discredited.
Haha, I think my point is that no one knows where they are from because the government is too afraid to start taking stats. I guess I'm picking on the Chinese, but they are by far the majority of foreign investors coming to Canada. When we axed the foreign investors visa, I think there were like 45k millionaires applying through the Canadian Embassy/Consulates in mainland China.

But in general rich eastern Europeans, south east Asians and Indian foreign investors are probably still buying too.(I don't consider anyone who came here on an investors visa as Canadian unless they actually live here. Most return back "home" where they still have to make money)

I'll agree that some local (i.e working/living in GVA) buyers might be causing some of the price increases in the 1-2bed apartments/condos, but not in single detached homes. I guess some combined income couples are able to qualify 800k + mortgages, but you would need to be making a lot more money than the GVA average. Or if less risking default later on if interest rates go up.

Not to call you out, but I don't believe you that GVA has more houses bought on mortgages than cash. If you have some articles, I'd love to read them cause that's news to me. :s


Anyhow, you kinda obfuscated my point. This Chinese black swan could develop into something more wide spread if it's actually true. Either way, I'm still gonna stick to my guns and hope prices will have to come down eventually. Even if a lot of people are using cheap credit to finance their purchase, that still means a lot of them will be underwater if interest rates rise/people lose their jobs unexpectedly due to an economic downturn like 2008.
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Oct 7, 2013
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Mark77 wrote:
Mar 19th, 2014 11:56 pm
....chasing the last vestiges of a bubble, honestly believing that they will be "priced out forever" if they don't pull the trigger.
you said the same thing in 2009
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accountant86 wrote:
Feb 12th, 2014 11:16 am
Any thoughts on cancellation of the investor immigration program?
I've noticed a slight dip in housing prices primarily in West side Vancouver (I only track Mackenzie Heights, Dunbar, Point Grey, and Arbutus). 50x130 lots (aka, old timer homes that are meant to be torn down- pure lot value) without view were ~2.5-3.3M but have tailed off to 2.2-2.8M. Even from a transaction perspective, I've noticed buyers trying to leverage the cancellation of investor immigration program to decrease selling price. However, lots with views were still being snapped up in <5 days on market. I did notice a steady /slight raise in nicer East van neighborhoods (Killarney, Fraserview) [50x120 lots which were 1.2m are now ~1.4m]. Again, these are just observational and I'm not saying these are facts.
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menchieseveryday wrote:
Mar 20th, 2014 12:16 am
you said the same thing in 2009
And credit was massively expanded in 2009 courtesy of the CMHC, low interest rate policy, etc. Demand was pulled forward. Now we will pay the price for that as a policy response. Just like the US did.
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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Well, someone thinks there is Chinese $ in the market. There's a 20 page Chinese language insert in yesterday's North Shore News. Doesn't mean it's foreign investment of course.
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Mark is as accurate at predicting a peak, as a steaming pile of manure can predict weather.

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Driving around this town, I can't believe how may SFDs are being torn down to make way for condos in the city. Whole communities that used to be single family homes are now suddenly gone. I can't imagine SFDs close to the core will ever go down in price as they get scooped up by developers. Condos? Maybe they will have a crash as too many are being built?

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