Real Estate

Vancouver housing bubble?

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Deal Guru
Jan 27, 2006
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Sanyo wrote:
Feb 16th, 2017 12:23 am
You can even argue Toronto may have a floor here since it has many more jobs than Vancouver if it introduced a foreign buyers tax -- but Vancouver really doesnt have much of anything -- sure they may grab a few hundred scared of Trump right now (though that will change shortly) but really they have nothing except hot chinese money -- i can see vancouver crash exceptionally hard...
About having more jobs in Toronto, you should as the population is much higher and therefore, there should be more jobs - of course, Wynne is trying her best to change that. However, if you pop over to the Careers subforum, you'll see a lot of complaints in Toronto about not being able to find a job (or at least a job that they want to work at ;)).

You've forgot that Toronto's housing prices relatively to affordability levels hasn't even gotten close to the levels seen in Vancouver. According to RBC's latest report (dated December 21, 2016) - http://industrial.panasonic.com/cdbs/ww ... 0CE285.pdf - Vancouver's affordability was still at 92% with 40+% drops in sales while Toronto was at a relatively lowly 63.7% which should cushion any fall as Toronto wouldn't have fallen from all that high to start off with. But with 92%, there really isn't anywhere to go but down even with an economy that going strong.

BTW> For January 2017, Stats Canada reported that BC's unemployment rate is sitting at 5.6% down from 5.8% in December while Ontario is at a steady 6.4% so it's BC that has more jobs right now. http://www.statcan.gc.ca/tables-tableau ... 1a-eng.htm
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craftsman wrote:
Feb 16th, 2017 2:04 am
About having more jobs in Toronto, you should as the population is much higher and therefore, there should be more jobs - of course, Wynne is trying her best to change that. However, if you pop over to the Careers subforum, you'll see a lot of complaints in Toronto about not being able to find a job (or at least a job that they want to work at ;)).

You've forgot that Toronto's housing prices relatively to affordability levels hasn't even gotten close to the levels seen in Vancouver. According to RBC's latest report (dated December 21, 2016) - http://industrial.panasonic.com/cdbs/ww ... 0CE285.pdf - Vancouver's affordability was still at 92% with 40+% drops in sales while Toronto was at a relatively lowly 63.7% which should cushion any fall as Toronto wouldn't have fallen from all that high to start off with. But with 92%, there really isn't anywhere to go but down even with an economy that going strong.

BTW> For January 2017, Stats Canada reported that BC's unemployment rate is sitting at 5.6% down from 5.8% in December while Ontario is at a steady 6.4% so it's BC that has more jobs right now. http://www.statcan.gc.ca/tables-tableau ... 1a-eng.htm
Articles from 2016, but the trend continues:

http://globalnews.ca/news/2585369/jobs- ... time-ones/

http://www.burnabynow.com/opinion/colum ... -1.2198047


"Take last month, for example. According to Statistics Canada, the number of jobs in B.C. increased by an apparently impressive 14,000 over the month previously.

But a closer look shows what really happened: a whopping 20,000 new part-time jobs were created, but that was partially offset by the loss of 6,000 full-time jobs. And this was not a one-month phenomenon."

edit: you also have to remember unemployment numbers only count so long as you're officially on EI. As soon as you run out, or are not eligible, you dont "count" and for all intents and purposes, dont exist. So if you work a part time job, get laid off, and dont qualify for EI, there's no statistic change in the unemployment numbers, because you never really qualified to be classified as unemployed to begin with.

Government numbers on job growth and unemployment are generally BS. Real numbers are closer to dividing the job growth by half, or slightly more, to account for the part time jobs vs real full time jobs, and multiplying the unemployment by anywhere from 2 to 4 times, to catch people that dont "register" based on their current qualifications to be included in the system, and figure in their math.
Deal Guru
Jan 27, 2006
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Buggy166 wrote:
Feb 16th, 2017 3:02 pm
Articles from 2016, but the trend continues:

http://globalnews.ca/news/2585369/jobs- ... time-ones/

http://www.burnabynow.com/opinion/colum ... -1.2198047


"Take last month, for example. According to Statistics Canada, the number of jobs in B.C. increased by an apparently impressive 14,000 over the month previously.

But a closer look shows what really happened: a whopping 20,000 new part-time jobs were created, but that was partially offset by the loss of 6,000 full-time jobs. And this was not a one-month phenomenon."

edit: you also have to remember unemployment numbers only count so long as you're officially on EI. As soon as you run out, or are not eligible, you dont "count" and for all intents and purposes, dont exist. So if you work a part time job, get laid off, and dont qualify for EI, there's no statistic change in the unemployment numbers, because you never really qualified to be classified as unemployed to begin with.

Government numbers on job growth and unemployment are generally BS. Real numbers are closer to dividing the job growth by half, or slightly more, to account for the part time jobs vs real full time jobs, and multiplying the unemployment by anywhere from 2 to 4 times, to catch people that dont "register" based on their current qualifications to be included in the system, and figure in their math.
In Canada, those same conditions apply consistently across the board - ie in every province - as it's measured by one Federal agency so it's really an apples to apples comparison (even if the apples are all rotten). Now, if we were comparing the numbers that are measured by two different governments (ie. between Canada and the US), then those differences in who is included and when is important.
Deal Fanatic
Feb 9, 2009
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Bubble has popped in Vancouver...

Buyers exhausted
Sellers wanna cash out

And it's about to be a buyers market soon... the thing with real estate is it takes years to pop the bubble...it's gonna be ugly in vancouver i think.
Deal Guru
Jan 27, 2006
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Sanyo wrote:
Feb 16th, 2017 8:34 pm
Bubble has popped in Vancouver...

Buyers exhausted
Sellers wanna cash out

And it's about to be a buyers market soon... the thing with real estate is it takes years to pop the bubble...it's gonna be ugly in vancouver i think.
I have no doubts about ugliness... the market went far to high for too long.
[OP]
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Dec 3, 2004
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Updated main page for February stats. Average price bounced back up, some high end homes must have sold, but the price is still down from last year. In February 2016, there was $3.24 billion dollars sold in detached real estate. In February 2017 there was only $1.32 billion. Will people drop prices going into spring? Or will sellers hold their ground? And if so, is there any money waiting on the sidelines?
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Sep 8, 2007
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adamtheman wrote:
Mar 2nd, 2017 5:11 am
Updated main page for February stats. Average price bounced back up, some high end homes must have sold, but the price is still down from last year. In February 2016, there was $3.24 billion dollars sold in detached real estate. In February 2017 there was only $1.32 billion. Will people drop prices going into spring? Or will sellers hold their ground? And if so, is there any money waiting on the sidelines?
Interesting data as detached recovered well and condos and towns rose to fresh new highs. The lower volume remains interesting.

I think given the wide gap between detached vs towns/condos there remains good potential for that gap to close and why we are seeing the new highs on towns/condos.
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Feb 7, 2006
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adamtheman wrote:
Jun 23rd, 2012 6:09 pm
Here is some interesting info about the previous booms, for those who asked:


Let's stop here and take a look at where we are. A 153% increase (100% with inflation). It looks strangely familiar to when the two previous bubbles burst. Now would be a good time to predict a bubble burst... and... sure enough, wouldn't you know it? The bubble "pops" (or so everyone thinks). In Feb 2008, prices start dropping, and they drop almost 20% over the summer. It was supposed to end here... but it didn't. The government steps in with super low interest rates and prevents the normal cycle from happening. Not only does the market recover almost immediately, but the bubble continus to grow at an alarming rate. So what ends up happening? Here is where we end up, exactly 4 years later:

- Feb/12 @ $1,235,200 (239% increase in 121 months - 177% with inflation)

Because of the government's intervention, we are now in a much larger bubble than before, with a 177% increase after inflation, compared to the previous 102% and 92% gains. The end result will be a much quicker, faster and deeper drop in real estate prices. As proof of this, we are already down 15.7% in just 5 months. And now the government is literally begging for a "soft landing". However, the government had their chance for a soft landing in 2008, and they blew it, and now we will all suffer a "hard landing" because of the 4 extra "bonus years" that extended our bubble.

How ANY rational person can sit here and look at the above statistics, and then (with a straight face), try to tell me (or themselves) that real estate will continue to boom simply shows the true power of denial. And all that I hear constantly is, "It's different here" and "We have asian money so we'll be fine". I guess we will see how it all works out, but statistics do not lie.
Almost 5 years ago and holy cr%p Adam were you wrong!
adamtheman wrote:
Feb 4th, 2017 4:14 am

January is finally the month that is has become clear that the camel's back has been broken. But July was probably the straw that broke it. It just took this long to realize it. There is now the "trifecta" so to speak... listings way up, prices way down, and sales way down. In previous months, we had higher listings and lower sales, but prices were staying the same. Now, all 3. That's a deadly combination. Just focusing on Detached homes, we see:


Those numbers are so different it's almost hard to comprehend it is the same market. In just 1 year, sales-listings ratio has gone from 38% to 11%. In other words, there's 3 times more listings on the market than last year per sale, or triple the competition. As we know, competition leads to price drops, which we are now seeing.

Outlook is not good for this year at all. The last real stable prices in Vancouver were around 2011-2013, when the average house price for a detached home hovered around 1.1 to 1.2 million. It held steady at that for almost 3 years without any significant fluctuation. But the Canadian dollar was at par then. If real estate drops back to those prices, but the canadian dollar remains around 1.3x, then it will mean that many foreign investors will be significantly underwater. At this point, I will be genuinely surprised if prices ever drop (even for a single month) into the 6 digits range. But you never know.
Seems the camel had a some back surgery and is doing okay.

adamtheman wrote:
Feb 4th, 2017 6:05 pm
I was looking around for some good examples of how insane the Vancouver market was. To do this, I focused on townhouses that are exact same layout and I wanted to find an example that illustrated just how crazy the Vancouver market was in the 1 year before the foreign buyers tax. I found the PERFECT example. Just take a look at these 3 sales in Coquitlam, BC:

Just two months after they bought, the market basically began to collapse. It's not difficult to imagine that if they were to list it now, it may only fetch around $550,000. If they were to sell it, they would pay realtor fees and other closing costs, meaning they would easily end up losing about $300,000. If they bought it with 20% down or less, all their down payment is now wiped out and they are probably under water. This is just one example of many stupid deals made in Vancouver. As Garth Turner would call them, these are the TRUE greater fools, the ones who bought right before the collapse and paid higher than asking price because they felt pressured by the market. I feel sorry for these people in some ways, but on the other hand, you can't say they weren't warned! Toronto people better pay attention because you have even more warning signs available to you now. No, Toronto is not "different" than Vancouver - sorry to tell you.
Your idea of a collapse is a little strange, possibly a soft landing might be correct....
MashGhasem wrote:
Feb 13th, 2017 9:11 pm
One thing I've noticed from the doom and gloom end of the world theorists is that they like to use data that only matters in a very limited sense. They then use that data to make ridiculous conclusions. You see this here as well.
1) In the previous page a member responded to my data, which showed the increase in condo prices since the introduction of the tax, by saying "luxury condos" have fallen!! Meanwhile the vast majority of condos in the market are one and two bedroom condos.
2) On this page we have jonkoktosen doing something similar. There is no point in looking at average prices. The benchmark price, which is what the Real Estate Board of Greater Vancouver uses needs to be studied. The average price takes into account the price of 10+ million dollar homes! We have houses worth 40+ million dollars in this city! Any up or down movement of any significant amount will cause the average to go full retard. Those also happen to be the houses bought almost purely by foreigners and investors.

Now that you understand why average price=going full retard, here's some useful data from the REBGV:


MMMM also debunked the bull shit statements of the mustached dude in the video.
adamtheman wrote:
Feb 13th, 2017 9:24 pm

Wow, that's some passionate denial. You must be really deep in it. Your post is unconvincing and highly subjective. Good luck.
Put down the keyboard Adam, might be a little early to claim the 50% crash (insert bizarre % here) claim. Almost 5 years of ridiculous claims and still having a tough time understanding the fundamentals. Face With Tears Of Joy
Maybe take a long hard look in the mirror.
Wow, that's some passionate denial. You must be really deep in it. Your post is unconvincing and highly subjective.....Heavy Exclamation Mark Symbol
Deal Guru
Jan 27, 2006
10868 posts
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Vancouver, BC
The inventory numbers are a bit confusing - percentage wise, there's a drop in Y-o-Y but if you compare it against last month, the inventory actually increased. There was just a larger increase in inventory last year at this time - might be due to the weather as the snows might have prolonged the cold weather slump.
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Jun 24, 2002
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Using YoY stats when last year was nuts seems pretty pointless. Why not use a longer set of data points?
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Dec 14, 2007
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DEAD cat bounce or a pause before we get $2M houses?

I'd LOVE to get my hands on the RAW data free of REB number smoothing.
I'd love to write history... in advance.
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Deal Fanatic
May 1, 2012
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Apparently the bubble started in 2002. Boy it's been a really long bubble.

Who's in for a detached in West Vancouver for 350k? I am down for 5.
Deal Guru
Jan 27, 2006
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Ren wrote:
Mar 2nd, 2017 2:22 pm
Using YoY stats when last year was nuts seems pretty pointless. Why not use a longer set of data points?
Longer data points would show a better understanding when reverting back to the norms but Y-o-Y seems to be the 'standard' for most of these statistics (ie very few if any sites publish a lot of figures that show a long term moving average like the stock market).
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Oct 23, 2003
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Anikiri wrote:
Mar 2nd, 2017 4:00 pm
Apparently the bubble started in 2002. Boy it's been a really long bubble.

Who's in for a detached in West Vancouver for 350k? I am down for 5.
2002...if only the gen-Y 8-16 yr olds woulda had $350k back then, eh?
Sr. Member
Aug 3, 2006
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Is there any place I can find month to month benchmark prices for detached homes. Basically something similar to the 1st page of this thread but benchmark prices instead of average prices.

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