Real Estate

Vancouver housing bubble?

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Deal Addict
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Sep 19, 2002
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asa1973 wrote:
craftsman wrote:
But remember those are just the raw price without taxes, fees... So, if you add another 15% on top of the $1.4 million, that's a much higher number. And since we are talking median prices here, the $1.4 million number is for the GVRD and not just Vancouver where the $1 million US number was for just San Jose. I believe if you just look at Vancouver, the figure would be higher than $1.4 million.
If "investor" has a any legal "permanent" status in Canada (PR, studying) or someone with such status, he will NOT pay this 15% (as we already saw a lot of properties registered on "students" )

I'm still standing on such point that this tax will change a little in terms of price and affordability. Some turbulence and slowing while re-routing but this do NOT change the core reason for price growth - supply&demand issue. With quite limited possibilities to build new housing (especially in Van itself) and stable stream of new PERMANENT residents, price growth unavoidable. Either limit\stop immigration or build more premises (or increase rates to 5-6% and receive a lot of economical and social problems).

Actually the only "soft" way to stop prices AND avoid social problems - build more houses :) Beside developers greed (rumored that they build less then they could) I was told there is problems to get permissions from local authorities (also some the greed from municipalities imo)
Ottawa agrees with you that 15% won't slow the market.
As Ottawa doubts effectiveness of Vancouver tax to slow housing market, Trudeau finds himself in a bind

So far, you have real estate agents reporting what you would expect them to say. In the meanwhile, reality is still in effect: limited land, restrictive zoning, immigration, and students buying $8,000 luxury purses from Nordstrom.
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Dec 27, 2009
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gizmo8 wrote: http://www.huffingtonpost.ca/2016/08/03 ... 22488.html


I say good for Vancouver.It's time to give Canadians a chance at home ownership at reasonable prices.I hope prices drop and BC increase property taxes on non Canadian owners and investors who buys condos and let them sit empty.
It's way too late for them to show "concern" about reasonable prices for Canadians in Vancouver. Several years too late.
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Jan 20, 2016
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Chickinvic wrote:
gizmo8 wrote: http://www.huffingtonpost.ca/2016/08/03 ... 22488.html


I say good for Vancouver.It's time to give Canadians a chance at home ownership at reasonable prices.I hope prices drop and BC increase property taxes on non Canadian owners and investors who buys condos and let them sit empty.
It's way too late for them to show "concern" about reasonable prices for Canadians in Vancouver. Several years too late.
Meanwhile Ottawa decided we need more mainland buyers :) (and they will be NOT taxed by this 15% as they will have permanent status here)
http://www.cbc.ca/beta/news/politics/ca ... -1.3714991
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Jun 11, 2005
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sparky787 wrote:
loho33 wrote: You're hoping for a crash is what you're really saying. And for the people who took that leap of faith and bought this past year...they should be penalized 50% because they should of timed the market better?
Let the market stabilize and flateline is fine by me. Too wish a doomsday scenario benefits no one at the end.
And those whinners on the sidelines waiting for a crash. I doubt they have money saved up anyways.
I was in a position to upsize earlier this year, pre-approved mortgage in hand, checking the MLS daily. But we came to the conclusion that things were just insane and out of proportion. Of course the bank pre-approves you for the absolute most, which I'm sure people take and then rush into the market. Just cause a bank wants to give you the most doesnt mean you should use it all.

Im sure if more people didnt help fuel the frenzy we wouldnt be as deep in this as we are. But of course everyone thought if they didnt get in now, they'd never get in. It was and is hysteria. Exactly what precedes a crash. The idea that it is too good to fail, wont happen to us, cant happen to us mentality that exactly happens before every market crash since the Dutch Tulip crash in the 15th century.

Unless median wages rise across the region (they wont), things need to correct. Plain and simple.

And another thing, all those that bought high during the insanity wont lose a penny post-crash unless they sell. Other factors like higher interest rates and loss of jobs should have been factored in before buying anyhow.
You could have said that things need to correct for the last 30 years, because wages have actually gone down (at least in real terms). Because home prices are rising with stagnant wages, something else is at play. You are hoping for a crash so that you can upgrade. If you have such conviction, why do you not sell now and buy back in after a crash?
Deal Addict
Jun 11, 2005
2617 posts
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craftsman wrote:
mudd_stuffin wrote:
ccyk wrote: best guess is that housing is just like oil price very elastic in economist term. A small % deficit of oil supply
Easy: the ripple effect. The 5% buys at the top end of the market, say $3M on average. The sellers of those properties "downsize" or move to another property that is cheaper so that they are mortgage-free. So they bid on a $2M property that would otherwise go for $1.5M, and the buyers who would buy something for $1.5M are now priced out of that former $1.5M neighbourhood, so they move further into a $1.2M neighbourhood and buy for $1.5M, and so on... and if you subscribe to this theory, it all started with the 5%.
I wouldn't even look at just the top end of the market. A lot of the attention is being given to the properties that were purchased but not lived in or rented out - ie vacant. Those buyers basically had little or no intention of moving here and living in those properties or making the normal longer term rental income on then... they want them available for a quick sale when the right 'sucker' comes along. Also, many have been looking at lower end units to demo and redevelop so that they can get a $1.4M, demo it, develop it, and then sell it for that $3M range.

If it was just the true top end of the market, I don't think too many locals would have carried as not many people can afford a $7M house...
There is no firm data on how many truly vacant units are there, so there is no point mentioning it. The most recent study said something like 10k or 12k units, mostly condos. I think you are over-estimating how many of these "investors" there are (or brainwashed by biased press), because that is not the case based on my channel checks with local realtors.
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Sep 23, 2014
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gizmo8 wrote: http://www.huffingtonpost.ca/2016/08/03 ... 22488.html


I say good for Vancouver.It's time to give Canadians a chance at home ownership at reasonable prices.I hope prices drop and BC increase property taxes on non Canadian owners and investors who buys condos and let them sit empty.
What is definition of "reasonable" price? $500K? $700K? or $900K? Vancouver or BC will be a failed province if RE prices ever "adjust" to these prices. The one getting hurt the most will again be Canadians, not foreigner because $3M or $5M is like $50K to them.
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Sr. Member
Jan 30, 2006
857 posts
286 upvotes
Spinner wrote:
asa1973 wrote:
craftsman wrote:
But remember those are just the raw price without taxes, fees... So, if you add another 15% on top of the $1.4 million, that's a much higher number. And since we are talking median prices here, the $1.4 million number is for the GVRD and not just Vancouver where the $1 million US number was for just San Jose. I believe if you just look at Vancouver, the figure would be higher than $1.4 million.
If "investor" has a any legal "permanent" status in Canada (PR, studying) or someone with such status, he will NOT pay this 15% (as we already saw a lot of properties registered on "students" )

I'm still standing on such point that this tax will change a little in terms of price and affordability. Some turbulence and slowing while re-routing but this do NOT change the core reason for price growth - supply&demand issue. With quite limited possibilities to build new housing (especially in Van itself) and stable stream of new PERMANENT residents, price growth unavoidable. Either limit\stop immigration or build more premises (or increase rates to 5-6% and receive a lot of economical and social problems).

Actually the only "soft" way to stop prices AND avoid social problems - build more houses :) Beside developers greed (rumored that they build less then they could) I was told there is problems to get permissions from local authorities (also some the greed from municipalities imo)
Ottawa agrees with you that 15% won't slow the market.
As Ottawa doubts effectiveness of Vancouver tax to slow housing market, Trudeau finds himself in a bind

So far, you have real estate agents reporting what you would expect them to say. In the meanwhile, reality is still in effect: limited land, restrictive zoning, immigration, and students buying $8,000 luxury purses from Nordstrom.
so what? if 15% it will be 30% then if it doesn't help then 50% if again doesn't help it can be any amount 100%, 1000%

Chinese millionaires have money but they don't vote
Local population clearly not happy and the government will solve the puzzle one way or another

In the mean time 15% is very good for a provincial budget
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Feb 26, 2008
469 posts
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kashirin wrote:
Spinner wrote:
asa1973 wrote:
If "investor" has a any legal "permanent" status in Canada (PR, studying) or someone with such status, he will NOT pay this 15% (as we already saw a lot of properties registered on "students" )

I'm still standing on such point that this tax will change a little in terms of price and affordability. Some turbulence and slowing while re-routing but this do NOT change the core reason for price growth - supply&demand issue. With quite limited possibilities to build new housing (especially in Van itself) and stable stream of new PERMANENT residents, price growth unavoidable. Either limit\stop immigration or build more premises (or increase rates to 5-6% and receive a lot of economical and social problems).

Actually the only "soft" way to stop prices AND avoid social problems - build more houses :) Beside developers greed (rumored that they build less then they could) I was told there is problems to get permissions from local authorities (also some the greed from municipalities imo)
Ottawa agrees with you that 15% won't slow the market.
As Ottawa doubts effectiveness of Vancouver tax to slow housing market, Trudeau finds himself in a bind

So far, you have real estate agents reporting what you would expect them to say. In the meanwhile, reality is still in effect: limited land, restrictive zoning, immigration, and students buying $8,000 luxury purses from Nordstrom.
so what? if 15% it will be 30% then if it doesn't help then 50% if again doesn't help it can be any amount 100%, 1000%

Chinese millionaires have money but they don't vote
Local population clearly not happy and the government will solve the puzzle one way or another

In the mean time 15% is very good for a provincial budget
Well, it is clearly an election move by Krusty. Once the election is over it will be back to "normal".
Deal Guru
Jan 27, 2006
12566 posts
5737 upvotes
Vancouver, BC
mudd_stuffin wrote:
craftsman wrote:
mudd_stuffin wrote:
Easy: the ripple effect. The 5% buys at the top end of the market, say $3M on average. The sellers of those properties "downsize" or move to another property that is cheaper so that they are mortgage-free. So they bid on a $2M property that would otherwise go for $1.5M, and the buyers who would buy something for $1.5M are now priced out of that former $1.5M neighbourhood, so they move further into a $1.2M neighbourhood and buy for $1.5M, and so on... and if you subscribe to this theory, it all started with the 5%.
I wouldn't even look at just the top end of the market. A lot of the attention is being given to the properties that were purchased but not lived in or rented out - ie vacant. Those buyers basically had little or no intention of moving here and living in those properties or making the normal longer term rental income on then... they want them available for a quick sale when the right 'sucker' comes along. Also, many have been looking at lower end units to demo and redevelop so that they can get a $1.4M, demo it, develop it, and then sell it for that $3M range.

If it was just the true top end of the market, I don't think too many locals would have carried as not many people can afford a $7M house...
There is no firm data on how many truly vacant units are there, so there is no point mentioning it. The most recent study said something like 10k or 12k units, mostly condos. I think you are over-estimating how many of these "investors" there are (or brainwashed by biased press), because that is not the case based on my channel checks with local realtors.
Realistically, there's very little firm data on anything before all of this happened. What we do know is:

1. Before the tax was announced, the industry (ie realtors or their associations) stated that there isn't a problem as the level of foreign interest was low or it was our imagination gone wild. Once the tax was announced, there was a rush to get transactions in before the tax takes effect. Now that the tax is in place, there are 427 transactions that didn't make it through the rush! If we believed the industry in the first place and it wasn't supposed to have been a problem, where did all of these transactions suddenly come from? Sure, there would be some from people who are moving in for work (ie professionals and athletes...) but even with that how many professionals would be able to make enough to buy a house in Vancouver?
2. There's lots of anecdotal evidence from people about condos being empty especially the higher priced ones in Coal Habour for the last few years.
Vancouver Sun - More than one in 10 Vancouver condos sit empty - 2016
Metro News - up to 25% of Coal Habour Condos empty or foreign owned - 2013
If people are leaving expensive multi-million dollar condos empty, why don't you think they'll leave multi-million dollar houses empty?

As for channel checks, I don't put much stock into that as it will vary from realtor to realtor in what they know about the entire market and what they might be willing to share. Remember point 1 above about foreign transactions not being an issue.
Deal Guru
Jan 27, 2006
12566 posts
5737 upvotes
Vancouver, BC
q0192837465 wrote:
kashirin wrote:
Spinner wrote:

Ottawa agrees with you that 15% won't slow the market.
As Ottawa doubts effectiveness of Vancouver tax to slow housing market, Trudeau finds himself in a bind

So far, you have real estate agents reporting what you would expect them to say. In the meanwhile, reality is still in effect: limited land, restrictive zoning, immigration, and students buying $8,000 luxury purses from Nordstrom.
so what? if 15% it will be 30% then if it doesn't help then 50% if again doesn't help it can be any amount 100%, 1000%

Chinese millionaires have money but they don't vote
Local population clearly not happy and the government will solve the puzzle one way or another

In the mean time 15% is very good for a provincial budget
Well, it is clearly an election move by Krusty. Once the election is over it will be back to "normal".
Why would it be back to normal? As was stated before, the foreign investor doesn't get a vote so why would it be rolled back any time soon? Also, the provincial government will be provided with a 'housing warchest' of hundreds of millions annually if the tax doesn't push foreign investors away which is hundreds of millions more than we had before.
Deal Addict
Nov 26, 2005
3097 posts
260 upvotes
Vancouver
craftsman wrote:
q0192837465 wrote:
kashirin wrote:

so what? if 15% it will be 30% then if it doesn't help then 50% if again doesn't help it can be any amount 100%, 1000%

Chinese millionaires have money but they don't vote
Local population clearly not happy and the government will solve the puzzle one way or another

In the mean time 15% is very good for a provincial budget
Well, it is clearly an election move by Krusty. Once the election is over it will be back to "normal".
Why would it be back to normal? As was stated before, the foreign investor doesn't get a vote so why would it be rolled back any time soon? Also, the provincial government will be provided with a 'housing warchest' of hundreds of millions annually if the tax doesn't push foreign investors away which is hundreds of millions more than we had before.
maybe not from foreigner directly, but afaik, land developers donate big money to bc liberal. money can move mountain lol
Deal Guru
Jan 27, 2006
12566 posts
5737 upvotes
Vancouver, BC
ccyk wrote:
craftsman wrote:
q0192837465 wrote:

Well, it is clearly an election move by Krusty. Once the election is over it will be back to "normal".
Why would it be back to normal? As was stated before, the foreign investor doesn't get a vote so why would it be rolled back any time soon? Also, the provincial government will be provided with a 'housing warchest' of hundreds of millions annually if the tax doesn't push foreign investors away which is hundreds of millions more than we had before.
maybe not from foreigner directly, but afaik, land developers donate big money to bc liberal. money can move mountain lol
Developers also donate heavily to other political parties as well especially at the municipal level - just look at Vision Vancouver... Vision also takes money from CUPE as well.
Deal Guru
Jan 27, 2006
12566 posts
5737 upvotes
Vancouver, BC
ccyk wrote:
craftsman wrote:
q0192837465 wrote:

Well, it is clearly an election move by Krusty. Once the election is over it will be back to "normal".
Why would it be back to normal? As was stated before, the foreign investor doesn't get a vote so why would it be rolled back any time soon? Also, the provincial government will be provided with a 'housing warchest' of hundreds of millions annually if the tax doesn't push foreign investors away which is hundreds of millions more than we had before.
maybe not from foreigner directly, but afaik, land developers donate big money to bc liberal. money can move mountain lol
Developers also donate heavily to other political parties as well especially at the municipal level - just look at Vision Vancouver... Vision also takes money from CUPE as well.
Developers also donate heavily to other political parties as well especially at the municipal level - just look at Vision Vancouver... Vision also takes money from CUPE as well.
Deal Guru
Jan 27, 2006
12566 posts
5737 upvotes
Vancouver, BC
ccyk wrote:
craftsman wrote:
q0192837465 wrote:

Well, it is clearly an election move by Krusty. Once the election is over it will be back to "normal".
Why would it be back to normal? As was stated before, the foreign investor doesn't get a vote so why would it be rolled back any time soon? Also, the provincial government will be provided with a 'housing warchest' of hundreds of millions annually if the tax doesn't push foreign investors away which is hundreds of millions more than we had before.
maybe not from foreigner directly, but afaik, land developers donate big money to bc liberal. money can move mountain lol
Developers also donate heavily to other political parties as well especially at the municipal level - just look at Vision Vancouver... Vision also takes money from CUPE as well.
Deal Addict
Jun 11, 2005
2617 posts
300 upvotes
craftsman wrote:
mudd_stuffin wrote:
craftsman wrote:

I wouldn't even look at just the top end of the market. A lot of the attention is being given to the properties that were purchased but not lived in or rented out - ie vacant. Those buyers basically had little or no intention of moving here and living in those properties or making the normal longer term rental income on then... they want them available for a quick sale when the right 'sucker' comes along. Also, many have been looking at lower end units to demo and redevelop so that they can get a $1.4M, demo it, develop it, and then sell it for that $3M range.

If it was just the true top end of the market, I don't think too many locals would have carried as not many people can afford a $7M house...
There is no firm data on how many truly vacant units are there, so there is no point mentioning it. The most recent study said something like 10k or 12k units, mostly condos. I think you are over-estimating how many of these "investors" there are (or brainwashed by biased press), because that is not the case based on my channel checks with local realtors.
Realistically, there's very little firm data on anything before all of this happened. What we do know is:

1. Before the tax was announced, the industry (ie realtors or their associations) stated that there isn't a problem as the level of foreign interest was low or it was our imagination gone wild. Once the tax was announced, there was a rush to get transactions in before the tax takes effect. Now that the tax is in place, there are 427 transactions that didn't make it through the rush! If we believed the industry in the first place and it wasn't supposed to have been a problem, where did all of these transactions suddenly come from? Sure, there would be some from people who are moving in for work (ie professionals and athletes...) but even with that how many professionals would be able to make enough to buy a house in Vancouver?
2. There's lots of anecdotal evidence from people about condos being empty especially the higher priced ones in Coal Habour for the last few years.
Vancouver Sun - More than one in 10 Vancouver condos sit empty - 2016
Metro News - up to 25% of Coal Habour Condos empty or foreign owned - 2013
If people are leaving expensive multi-million dollar condos empty, why don't you think they'll leave multi-million dollar houses empty?

As for channel checks, I don't put much stock into that as it will vary from realtor to realtor in what they know about the entire market and what they might be willing to share. Remember point 1 above about foreign transactions not being an issue.
There are some 3000 to 5000 sales monthly reported by the REBGV, and closings take place anywhere between 30 to 90 days typically. So your 427 transactions that did not make through (as well as those that made it through) are transactions which are likely three months of sales to foreigners. Is it really that many transactions if you look at them as three months worth of deals? Your 427 transactions include properties other than houses.

By the way, do we know for sure the 427 failed deals had foreign buyers? I did not come across any articles that said that. In a case where A (foreign) bought from B (Cdn), and B was going to downsize by buying from C (also a Cdn), you can easily see how there can easily result in two failed deals if A walked away. Yet that is one foreign buyer resulting in two failed transactions in this illustration. Maybe it was 427 buyers, but maybe it was like 150 buyers.

"What we do know is" anecdotal? By definition, anecdotal is not proven and so it is not known. This is exactly my point.

I never said that there were not people who leave multi-million dollar houses empty but the article you cited said the vacancy rate for houses is about the same as it was in 2002 (before all this foreign money). The Vancouver Sun article you cited said "The vacancy rate in Vancouver for single-family homes, duplexes and row houses is only about one per cent, and that rate has been static since 2002." This directly refutes your thesis that people leave multi-million dollar houses empty and supports what I said, which is you are over-estimating how many "investors" (who leave homes empty) there are, especially when it comes to houses. The idea of "investors" with vacant houses was nowhere as prevalent as what you read in the press now, and you would agree with me that the presence of such "investors" is (or is at least perceived to be) much higher now than 2002, but they are the same when it comes to SFHs. So sure, empty condos are more prevalent but the article said that myth as it relates to SFH has been disspelled.

We can also compare your two articles. Why would there be a higher percentage of condos left empty based on Yan's study of 2011 data vs the 2016 one done by the city? Again, the theory is that there should be more "investors" owning vacant condos in 2016 than 2011. This makes no sense whatsover, if you buy into the anecdotal evidence. Maybe the Yan method is more accurate, but maybe the COV's method is more accurate. So I say again - all of this is without hard data (there is no good methodology to tell whether a home is truly vacant, let alone how you even define a vacant home). Maybe it is higher than 10%. Maybe it is higher than 25%. No one knows for sure. How can one even conclude that vacant condos are prevalent is beyond me when all we have is, at best, anecdotal evidence.

I would also tell you that a lot of the anecdotal press you read is based on biased journalists who for whatever reason write about empty homes, home demolition, etc.. I would not put much stock into all the stuff you cited either as it will vary from neighbourhood to neighbourhood, and especially from journalist to journalist. The young journalists tend to write bad press about Vancouver real estate, and they will find the neighbourhood or scenario that fits exactly their theories.

Btw, one of CIBC's top economists' experience/channel check is the same as mine: http://www.canadianrealestateinfo.ca/is ... weighs-in/. You can say the people he dined with are in the industry and are biased, etc. but you cannot discount what they said as completely false and you cannot paint all of them with the same brush. Let me just say that I have at least one realtor I trust very much, and knowing a good realtor is like knowing a good service advisor at a dealership.

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