Real Estate

Vancouver housing bubble?

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  • Apr 2nd, 2020 12:32 pm
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Deal Addict
Jan 14, 2009
1675 posts
669 upvotes
Vancouver, BC
BlueSolstice wrote: When detached go to 1m, you would have left the province.
I'll comeback when it becomes attractive. Many people did exactly that and I like to remain diversified so my backup home is HK. It's too hot there during the summer but otherwise it's great.
Deal Fanatic
Feb 9, 2009
8344 posts
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Count me in as another who will RUN... not walk.. RUN if Vancouver detached RE ever reaches a mil average...

And lots of others... Vancouver has a floor... I know some think the herd will never buy Vancouver RE again (and if Horgan continues to screw BC then sure) but it's land that can grow on trees and its one of the most beautiful cities on Earth. Besides the rain, it really is perfect.
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Jun 24, 2002
2957 posts
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BC
i6s1 wrote: A single percent of demand in real estate creates approximately 2% in price increases. With 13% of transactions known to involve foreign buyers, we can instantly see that about 26% of the current prices are simply due to the influence of foreign buyers. But then we also have to consider the use of proxies, PR "students" or "homemakers", and the use of trusts. So it's quite rational to postulate that something like 15 to 25% of purchasers use foreign money, therefore roughly 30-50% of current prices are due to foreign demand.

Since this works out to $300-500k that a new homebuyer has to pay to enter the market on a typical million dollar house in the suburbs, it is an issue that needs to be addressed.

The immigration rate is around 1% (Canada-wide, but admittedly likely higher in Vancouver), so I'm not sure that the demand on RE from immigrants is all that relevant.
Do you have any stats proving your conjecture? Specifically in demand and how it's defined in relation to cost of real estate. EDIT saw your other response.

Immigration rate is around 1% in Canada according to wikipedia, however that is yearly. I'm sure you can appreciate the stress of dozens of thousands of additional people every year can place on a city when the majority of immigrants end up moving to Vancouver, Toronto or it's suburbs, this is verifiable on statscan. A sure way to reduce real estate prices is to stop the influx of immigrants seeking housing. A naturally declining birth rate will allow for more affordable pricing in a decade or two. Unfortunately, it is currently politically incorrect to mention this.
Last edited by Ren on May 13th, 2018 12:44 am, edited 1 time in total.
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Jun 24, 2002
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quatchi wrote: Conflicting arguments in the same post? Ridiculous.
I'll wait for you to point it out so that I can prove you wrong.
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Oct 7, 2007
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zakarydoks wrote: I'll comeback when it becomes attractive. Many people did exactly that and I like to remain diversified so my backup home is HK. It's too hot there during the summer but otherwise it's great.
I am just curious if you would still buy a detached home for a million if mortgage rates were 9.5%? If mortgage rates continue to rise, house prices should come down accordingly. Just undoing what caused the prices to go up in the first place.
Deal Addict
Jan 14, 2009
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Vancouver, BC
choclover wrote: I am just curious if you would still buy a detached home for a million if mortgage rates were 9.5%? If mortgage rates continue to rise, house prices should come down accordingly. Just undoing what caused the prices to go up in the first place.
Yes but it still depends on how attractive the detached home is compared to other investments in a high interest rate and high inflation environment. I think at $1M many people will not have to borrow that much anyways. Rich people always have some crappier assets they can sell if they don't have the cash outright already.
Deal Fanatic
Oct 7, 2007
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zakarydoks wrote: Yes but it still depends on how attractive the detached home is compared to other investments in a high interest rate and high inflation environment. I think at $1M many people will not have to borrow that much anyways. Rich people always have some crappier assets they can sell if they don't have the cash outright already.
Are you saying that people have a lot of cash lying around right now? To me it seems that in a place like Vancouver everybody has their funds tied up in real estate and/or they are in debt up to their eyeballs. I have not looked for any data to support this hypothesis but people sure live like they are "rich and famous" even though most we know aren't.
Deal Addict
Jan 14, 2009
1675 posts
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Vancouver, BC
choclover wrote: Are you saying that people have a lot of cash lying around right now? To me it seems that in a place like Vancouver everybody has their funds tied up in real estate and/or they are in debt up to their eyeballs. I have not looked for any data to support this hypothesis but people sure live like they are "rich and famous" even though most we know aren't.
Most people do not have much access to funding but those that do have lots. The "rich" might not have lots of "cash" lying around but they have "buying power" from productive assets. Most asset markets has had very good returns in the past decade and investors can take some profits there. The global economy has grown a lot in the past 50 years and many families are now well established or "rich". Most do not display their wealth ostentatiously. You get rich by saving smart ie. gradually acquiring good assets. It is very slow at first but then the miracle of compound growth takes over and it gives you a huge advantage. In Canada, we need our governments to create an environment that fosters compound growth.
Jr. Member
May 22, 2013
171 posts
55 upvotes
Vancouver
Inventory is going up quickly, sellers are SCARED!!!
Deal Fanatic
Oct 7, 2007
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rMBA13 wrote: Inventory is going up quickly, sellers are SCARED!!!
I found myself driving all through Vancouver yesterday and saw so many for sale signs in most every neighbourhood. Interesting, though, I only saw one "sold" sticker. This seems highly atypical of what we have seen in the past.
Deal Guru
Jan 27, 2006
12570 posts
5741 upvotes
Vancouver, BC
rMBA13 wrote: Inventory is going up quickly, sellers are SCARED!!!
choclover wrote: I found myself driving all through Vancouver yesterday and saw so many for sale signs in most every neighbourhood. Interesting, though, I only saw one "sold" sticker. This seems highly atypical of what we have seen in the past.
Might be more of a 'seasonal' thing for now as there are typically a lot of 'For Sale' signs that go up in the Spring. The big test is what happens to that 'inventory' - does it sell, does it stay on the market without price reductions, are there price reductions?
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Dec 14, 2007
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craftsman wrote: Might be more of a 'seasonal' thing for now as there are typically a lot of 'For Sale' signs that go up in the Spring. The big test is what happens to that 'inventory' - does it sell, does it stay on the market without price reductions, are there price reductions?
could be, yeah... although we're almost done with Spring... it's been kind of a dud this year. Summer's almost here.
I'd love to write history... in advance.
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Deal Guru
Jan 27, 2006
12570 posts
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Vancouver, BC
atomiton wrote: could be, yeah... although we're almost done with Spring... it's been kind of a dud this year. Summer's almost here.
I've been noticing repeated open houses for the same property so we are probably heading to an infection point - the realization by the sellers that the properties just aren't selling like they once were before at the prices that they are looking for.
Deal Fanatic
Oct 7, 2007
6283 posts
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craftsman wrote: I've been noticing repeated open houses for the same property so we are probably heading to an infection point - the realization by the sellers that the properties just aren't selling like they once were before at the prices that they are looking for.
Someone not far from me owns a detached home and has been listing it since last summer. The listing just expired again. This may not be "typical" but I think (never really talked to him directly about it) he is hoping for a price that the market will not pay. He dropped the price a couple of times and I understand there have been a couple of offers over the listing period but clearly the seller is not getting what he wants.
Deal Addict
Jan 14, 2009
1675 posts
669 upvotes
Vancouver, BC
choclover wrote: Someone not far from me owns a detached home and has been listing it since last summer. The listing just expired again. This may not be "typical" but I think (never really talked to him directly about it) he is hoping for a price that the market will not pay. He dropped the price a couple of times and I understand there have been a couple of offers over the listing period but clearly the seller is not getting what he wants.
I see this too. The increase in inventory has all been low quality. Smart people are hanging onto the good stuff.

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