Real Estate

Vancouver housing bubble?

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  • Dec 17th, 2017 8:23 pm
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Deal Addict
Feb 9, 2009
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Again when I say protectionism I dont mean impede trade... but foreigners speculating on our housing is one area where we can add protectionism to our country -- in fact many countries can use this measure.

I have nothing against FAIR trade but we know the trade we have with China is not fair -- they dont pay their people accordingly to our standards, they dont have environmental laws according to our standards, they also have protectionist policies with regards to their housing and banking.

Also India another big country that Canada likes to pick immigrants have policies that limit foreign investment in their real estate. Many countries have implemented foreign buyer taxes.

So to say what I am advocating would isolate us like North Korea is very very far fetched -- North Korea is a way different ball game.

Like I said if people really want to move here, no problem get a PR card and buy a house -- but foreigners who have no interest in coming here and only want to invest for capital gains needs to be kept out ... trust me China would almost love this as well as they are starting to implement policies that limit money outflow -- the fact that people have been able to do so are also in my book lawbreakers...
Deal Fanatic
Jan 27, 2006
6670 posts
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Vancouver, BC
Here's RBC's latest view of the Vancouver and Toronto markets -

Image
Sr. Member
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Aug 15, 2013
583 posts
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Guelph
zakarydoks wrote:
Mar 13th, 2017 12:29 pm
We should aim to eliminate the other protectionist barriers not add more.
Hmm.. you should realize it is the very protectionist measures of the govt worldwide that is shielding this madness. Remove protections? How about open all floodgates then and for once BOC comes up with true inflation numbers and let the market forces determine interest rates, and the govt stops pumping money into the economy to stimulate demand.. this house of cards will fall off a cliff in one week.
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Jun 24, 2011
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West Lafayette, Indi…
craftsman wrote:
Mar 13th, 2017 7:50 pm
Those are really isolated short term gains as a segment of the economy is really out of balance from the rest of the economy. If local incomes moved up even in a faction of the increases seen in the housing market, then you can argue that things are OKAY. However, high housing prices (and cost of living in general) causes difficulty to attract and keep talent in the local workforce. In addition, many of the purchases are for investment and not for immigration which effectively removes housing resources as well as ongoing financial stimulus through spending in the community from the local area as many of these properties are left empty (not even rented out).
Your assumption is that the rise in house prices are due to foreign demand, specifically, unguided demand. No rational buyer will overpay for something, foreign or domestic, unless they see value in it. No investor will focus on a market without consistently well performing stats to back it up. Therefore, the housing market started to overheat first, before any foreign investors came. And really, a rational investor will only pay the market rate for houses, and isn't always the highest bidder. If you assume an investor is clueless and just splashes money however he sees fit, a 15% or 20% tax isn't going to effective, either.
Member
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Oct 19, 2016
411 posts
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Toronto
Based on this chart, it would suggest toronto may not be in a bubble as bad as vancouver.. atleast for now...

where did you find the chart ?? i want to read more on it...


craftsman wrote:
Mar 13th, 2017 8:40 pm
Here's RBC's latest view of the Vancouver and Toronto markets -

Image
Deal Addict
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Dec 13, 2016
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Sanyo wrote:
Mar 13th, 2017 11:46 am
Why dont we change our protectionist laws on things like dairy, wheat and banking? Why cant a Chinese bank buy a Canadian bank?

Sometimes you need to do stuff to benefit YOUR OWN CITIZENS and not worry about what others think. If people want to immigrate here, great, if its just to speculate to buy property, its time to ban...
To be perfectly honest, I could care less what other countries think of Canada. I live in xenophobic Asia where foreigners have very little rights even if they start a family. Trump is about to introduce a reciprocal visas and no doubt many Asian elites will be unhappy about it.

The problem with this scenario is that Canada is a nothing country. The only economy Canada has is importing immigrants who bring money and eventually but real estate. It keeps economy and banks rolling.....For now.

Just how many RFD millionaires work here in finance, it and public sector? What other success story Canada has? Bombardier? Research in motion? Snc lavalin (on par with corruption like Thailand), Lol lemon? Tourism? How's that airport link going?Everything Canada does is a failure. So, we rely on foreigners to keep the gravy train going. So, any kind of protectionism Canada introduced regarding real estate ownership would be shooting itself in the foot.
Deal Fanatic
Jan 27, 2006
6670 posts
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Vancouver, BC
IndustrialKid wrote:
Mar 13th, 2017 10:15 pm
Your assumption is that the rise in house prices are due to foreign demand, specifically, unguided demand. No rational buyer will overpay for something, foreign or domestic, unless they see value in it. No investor will focus on a market without consistently well performing stats to back it up. Therefore, the housing market started to overheat first, before any foreign investors came. And really, a rational investor will only pay the market rate for houses, and isn't always the highest bidder. If you assume an investor is clueless and just splashes money however he sees fit, a 15% or 20% tax isn't going to effective, either.
You are assuming that everything is on a level playing field for all buyers. It's not.

You are correct that rational buyers will not overpay for something unless they see value in it. The key here is the term value. What you and I might define as value may not be what someone else defines as value.

Examples - Let's say that a foreign citizen looking for some place to put millions of dollars as an "insurance policy" because they don't have faith in the situation in their own country. They could in China, Russia, numerous African countries, or a left slanted Billionaire in the US - it doesn't matter. They want to put those millions in some place that their local government can't get to or know about since the local environment can change on a dime. They probably want some place that honours the rule of law, is stable, and not much politically happens. If they make a few bucks, that's OKAY but they really want to be sure that its safe so if they loose a few bucks, that's OKAY too. The value for this foreigner isn't the same as what most people think. The value for them is that the money will be safe more or less and not that they made any money.

OR

Let's say that a foreign citizen is looking to make a few bucks and has no intentions of keeping the property for any length of time - heck, if they could sell it for a few bucks more the next day, then it's a done deal. They don't care about the house, the property, the location, the schools nearby... they just care that the market is moving quickly - that's their value... to make a few bucks quickly. Just like people who buy stocks of companies that make no money, have high cost, and a questionable product but has price momentum on their side.

Also, your statement - No rational buyer will overpay for something, foreign or domestic, unless they see value in it - basically defines a market in a bubble and if you listen to what analysis are saying, we are in a bubble.
Deal Fanatic
Jan 27, 2006
6670 posts
1798 upvotes
Vancouver, BC
mrtrump wrote:
Mar 13th, 2017 10:20 pm
Based on this chart, it would suggest toronto may not be in a bubble as bad as vancouver.. atleast for now...

where did you find the chart ?? i want to read more on it...
I got it from LinkedIn where one of my contacts at RBC posted as an update.
Deal Fanatic
Jan 27, 2006
6670 posts
1798 upvotes
Vancouver, BC
The article has a certain amount of bias against the current government in how the information is presented and implies that correlation implies causality which it does not. All of the graphs are presented in such a way to show all of the bad things happened due to the current government and fails to show any external factors - ie increases in housing prices as well as slow wage increases. He only mentions a small disclaimer at the end talking about housing prices increasing in ALL of Canada and not just BC. The author seems to imply that the government is responsible for salaries dropping when the private sector is the primary employer in BC so that would have little do with the government. Also, I don't know how salaries could have continually dropped since 1976 when according to Statistics Canada (http://www.statcan.gc.ca/tables-tableau ... 8a-eng.htm) the median family total income in BC has increased from 2010 ($66,970) to 2014 ($76,770). There numbers simply doesn't make any sense.
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Dec 14, 2007
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BiegeToyota wrote:
Mar 12th, 2017 9:04 am
And do you have any real life experience besides googling things? This is the area that includes places like Narita. This is worse than comparing Milton to Toronto.

Fake news.
About 27 years worth. Though admittedly not in Tokyo itself. Narita is not Tokyo. Just because it's a big airport that handles Tokyo's international flights. No Japanese person considers Narita part of Tokyo. A friend in Mitaka has a SFH for about 400k. Admittedly that was a few years ago but from a quick search it looks like nothing much has changed. 5 minute walk to the train station too.

Tokyo has a range of options available in many areas at different prices. Different sizes as well. They had their bubble. And prices still haven't recovered. Many people lost everything. Homes are now considered in most parts of Japan to be a place to live or as a place to invest as an income property, not as a speculative personal ATM.
I'd love to write history... in advance.
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Deal Addict
Nov 26, 2005
3069 posts
241 upvotes
Vancouver
condo and townhouse remain hot
low level SFH is warming up... it is the high end 3M+ market that is lagging


5624 Inverness Street
2200sqft detached built 1999
33x 122 RS-1 lot
Asking $1,598,000
Sold $1,700,000 on 13 March-2017
Deal Addict
Jun 29, 2007
3720 posts
814 upvotes
The segment of the detached market that I track is hitting an all time high. Multiple offers, some of which are subject free.

It started about 4 weeks ago. Not sure if it will continue or it's just a short term blip.

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