Real Estate

Vancouver housing bubble?

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Deal Addict
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Jul 26, 2004
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Burnaby
bankonit wrote:
Mar 22nd, 2014 3:36 pm
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?
Well, I think there is definitely going to be over capacity issues in the next few years.They are just building way more townhouses, condos and apartment buildings then there are buyers. A 720sq ft apartment is starting at $335,000 in my area, that's just too $$$ and it's only worth about 10x less than that.

This article just shows you how overseas "investors" really messed up the real estate market here. Things really started to go nuts back in 2003.

http://www.vancouversun.com/fight+vanis ... story.html
Jr. Member
Feb 6, 2014
176 posts
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Vancouver
lazarus wrote:
Mar 22nd, 2014 6:11 pm
Well, I think there is definitely going to be over capacity issues in the next few years.They are just building way more townhouses, condos and apartment buildings then there are buyers. A 720sq ft apartment is starting at $335,000 in my area, that's just too $$$ and it's only worth about 10x less than that.

This article just shows you how overseas "investors" really messed up the real estate market here. Things really started to go nuts back in 2003.

http://www.vancouversun.com/fight+vanis ... story.html
Overseas investors have had some effect, but in the context of the Greater Vancouver market, they're a drop in the bucket. The vast majority of buyers are locals with mortgages.

What's really messing up real estate markets across Canada is CMHC with its huge moral hazards. From what I can tell so far, CMHC's role seems to be a controversial topic around here. Not sure why, because it's pretty obvious what's going on...
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Feb 15, 2008
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Calgary
Anikiri wrote:
Mar 22nd, 2014 12:35 pm
Mark is as accurate at predicting a peak, as a steaming pile of manure can predict weather.
Don't listen to him. It's 100 percent pure low grade bull.
I predicted that hitting the CMHC ceiling would be a significant inflection point in the Canadian RE market. I have been proven correct. So what's the point of your post? Resentful or something?
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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Feb 15, 2008
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bankonit wrote:
Mar 22nd, 2014 3:36 pm
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?
We're only talking about a very limited number of houses here relative to the overall amount of housing stock in the GVR, or even Vancouver proper. And if condos crash, that's going to have a significant effect on those houses which, at least at some level, have priced in the speculation of being used for condo development.

Opportunity costs and carrying charges can destroy a lot of owner value in those properties if they sit for the next 10-15 years until the next condo-mania returns.
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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Feb 15, 2008
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minotaur3 wrote:
Mar 22nd, 2014 8:43 pm
What's really messing up real estate markets across Canada is CMHC with its huge moral hazards. From what I can tell so far, CMHC's role seems to be a controversial topic around here. Not sure why, because it's pretty obvious what's going on...
Discussing CMHC seems to be like some sort of 'third rail' around here, especially amongst the sell-siders that participate. As silly (if not stupid) as many of their protests sound, it is clear that the sell-side has an overwhelming sense of entitlement to the sort of implicit subsidy that CMHC provides of their activities.

The way we hear some sell-siders talk, it is as though the sky would fall if people had to come up with a proper 25% downpayment out of real savings. There's some other forums which are quite bizarre in comparison. I like to think of RFD as being more of a venue for people looking to get good deals, and high RE prices are not in many RFD'ers interests. Saving enormously on RE pales in comparison with saving a few bucks on a video game, or a pizza.
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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May 17, 2013
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Anikiri wrote:
Mar 22nd, 2014 12:35 pm
Mark is as accurate at predicting a peak, as a steaming pile of manure can predict weather.

Don't listen to him. It's 100 percent pure low grade bull.
Actually, he is quite accurate when information gleaned is used in a certain manner, namely the contrarian view.

For example, when he told people not to buy AC.B-TO, it rose some 300% after just a few months. Or when he laughed at SODA on Feb 5th because the 'afterhours' was down 15%. Well, on Feb 6th, it recovered all that and closed 10% higher, making it a 25% swing. Or, when he started shorting the USD.CDN and it has since gone up a few percentage points making his short bet a losing position of his. And thats just a few examples. So, if you purchased AC.B-TO shares. purchased SODA shares, or purchased USD.CDN, you would have done quite well.
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Jul 26, 2004
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Burnaby
Mark77 wrote:
Mar 22nd, 2014 9:41 pm
Discussing CMHC seems to be like some sort of 'third rail' around here, especially amongst the sell-siders that participate. As silly (if not stupid) as many of their protests sound, it is clear that the sell-side has an overwhelming sense of entitlement to the sort of implicit subsidy that CMHC provides of their activities.

The way we hear some sell-siders talk, it is as though the sky would fall if people had to come up with a proper 25% downpayment out of real savings. There's some other forums which are quite bizarre in comparison. I like to think of RFD as being more of a venue for people looking to get good deals, and high RE prices are not in many RFD'ers interests. Saving enormously on RE pales in comparison with saving a few bucks on a video game, or a pizza.
No joke! It feels like some people are trying to convince me things will stay high or increase in the future when all the facts staring me in the face say other wise! Obviously it's impossible to call the top, but IMO if I bought now it would be pretty darn near the top. If you're a current home owner, RE price corrections downward shouldn't affect you.

But if you work in the RE sector, I guess you want more new buyers buying at the highs to keep money coming in? (I read that 8% of Canadian employment is derived from RE industry)

Fortunately RE is something that waiting a few extra years and banking that extra saved money is the better option.
Sr. Member
May 11, 2008
639 posts
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Vancouver
bankonit wrote:
Mar 22nd, 2014 3:36 pm
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?
There haven't been very many single family homes torn down for multi family residential buildings the last 5 years.
Most of the condo towers being built were on mixed use sites.
I can only think of 3 sites off the top of my head that were converted from single family lots to multi family residential: near Granville & 49th (completed), Cambie & 33rd (under construction), Oak & 41st (completed).
I'm sure there's others that I can't think of right now.

Right now in the downtown core I'd say the majority of the construction going on has been office buildings and retail.
To my recollection, none of those sites ever contained single family homes.
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Feb 5, 2013
592 posts
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I guess you haven't driven by oakridge recently. Almost all the homes along Cambie from 25th to 49th are slated to go down, and city passed the Oakridge billion dollar plan. Granville and Oak south of 41st. Slocan near the Skytrain. Dunbar and 41st area is getting townhouses started.

Oh and downtown, it was a while ago, but... those are middle class homes in west end when it was a 'suburb'.
Sr. Member
Feb 5, 2013
592 posts
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Here is a province piece on demolished houses.

The founder of Vancouver Vanishes Facebook page started it after she was evicted from her 3rd rental in 6 years, the latest to be made into condos.
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May 1, 2012
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Markham
lazarus wrote:
Mar 23rd, 2014 2:17 pm
No joke! It feels like some people are trying to convince me things will stay high or increase in the future when all the facts staring me in the face say other wise! Obviously it's impossible to call the top, but IMO if I bought now it would be pretty darn near the top. If you're a current home owner, RE price corrections downward shouldn't affect you.

But if you work in the RE sector, I guess you want more new buyers buying at the highs to keep money coming in? (I read that 8% of Canadian employment is derived from RE industry)

Fortunately RE is something that waiting a few extra years and banking that extra saved money is the better option.
So those who waited in 2011 to buy in 2014 would have saved > $150k and bought today at better prices?

How many people here thought buying in 2014 instead of 2011 is a great idea, in hindsight of course. How many (if you wanted to buy) would jump at the chance to buy in 2011 (provided you can travel back in time)... if given the opportunity?

That statement only works if you intend on predicting a peak, a peak that is going to happen very soon. Otherwise, it's going to cost you lots of money.
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Oct 17, 2007
126 posts
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Anikiri wrote:
Mar 24th, 2014 3:23 pm
So those who waited in 2011 to buy in 2014 would have saved > $150k and bought today at better prices?

How many people here thought buying in 2014 instead of 2011 is a great idea, in hindsight of course. How many (if you wanted to buy) would jump at the chance to buy in 2011 (provided you can travel back in time)... if given the opportunity?

That statement only works if you intend on predicting a peak, a peak that is going to happen very soon. Otherwise, it's going to cost you lots of money.
I admire your tenacity to prove you are always right. You are at the point where regardless what other people are saying or showing, you will say the RE market is going only up. From my limited knowledge of market, in general, I don't know any asset going just up for a very long time (>30 years). You have to admit that RE, like any other asset, will go up and down during our lifetime. The fact that someone was able to buy when prices were low is just pure luck. In life, some people are luckier than others...
Now take me easy, I don't want to offend you.
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May 17, 2013
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cstca wrote:
Mar 24th, 2014 3:49 pm
I admire your tenacity to prove you are always right. You are at the point where regardless what other people are saying or showing, you will say the RE market is going only up. From my limited knowledge of market, in general, I don't know any asset going just up for a very long time (>30 years). You have to admit that RE, like any other asset, will go up and down during our lifetime. The fact that someone was able to buy when prices were low is just pure luck. In life, some people are luckier than others...
Now take me easy, I don't want to offend you.
You are missing the bigger theme. The take home message is buy when you need it. Don't try to time the market.

If you can afford to buy, need to buy, but choose not to buy to time markets, you might lose. Case in point, RE kept on rising.

Even if RE falls, how deep will the correction be? Its entirely possible any dips will be shallow, and its very possible the rock bottom will still be at a price that is higher than if you had just purchased RE when you needed it.

Nobody can time markets. So don't bother.
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Jan 2, 2012
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Toronto
lazarus wrote:
Mar 23rd, 2014 2:17 pm
but IMO if I bought now it would be pretty darn near the top.
Funny how lots of the so-called experts were saying we reached the top of the market last year, and 2 yrs ago, and 3 yrs ago, and 4 yrs ago, and 5 yrs ago... etc etc.
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Apr 11, 2008
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rob444 wrote:
Mar 24th, 2014 4:23 pm
Funny how lots of the so-called experts were saying we reached the top of the market last year, and 2 yrs ago, and 3 yrs ago, and 4 yrs ago, and 5 yrs ago... etc etc.
And you can be sure that they will claim prescience once the crash actually occurs, next year, 2 years from now, 3 years from now or 10 years from now. The smarter ones will qualify their forecasts and always claim they were right.

I have no doubt the market will crash (it always does), I just don't know when it will happen.

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