Real Estate

Vancouver housing bubble?

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  • Sep 22nd, 2019 4:59 pm
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Deal Guru
Jan 27, 2006
11197 posts
4574 upvotes
Vancouver, BC
Sam286 wrote:
Oct 28th, 2018 5:10 pm
By the way, when someone is selling 50% of undivided interest normally it means some sort of an ugly situation. Two or more people own the property. One wants to sell, but another one doesn’t. It may be a divorce, a partnership gone wrong, one partner trying to buy out another one for cheap therefore the other one tries to list his share etc.. So no way the second partner will sell his or her 50% share for the same price. Likely will not sell at all. They already have an edge over the one who is trying to sell, they don’t need to negotiate or be reasonable. Imagine such a roommate...
You have a similar situation in any duplex really but in a more formal sense. The other duplex owner can make it an ugly situation as well. Besides, who said that the one that is making it ugly is the one that is staying? It's always possible that the one that is selling is the ugly one.
Member
Jul 26, 2015
203 posts
121 upvotes
Vancouver, BC
craftsman wrote:
Oct 29th, 2018 1:17 am
It's not on the top side of the 'T'. The traditional really 'bad' part of the 'T' is right at the end of the 'I' part where it hits the middle of the top bar as all of the energy is channelled upward through the 'I' towards that junction as that small part of the top bar will face all of that energy. The houses on the side of the junction are normally not considered bad but the house that is directly in the path of the 'I' is considered bad.
Unless you have a different map of Vancouver, 7818 is so on top of the T.
Bit it doesn’t really matter :)
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Sr. Member
Dec 30, 2012
886 posts
950 upvotes
Toronto
According to Zolo (not always accurate, I know) sales of detached houses in Richmond have crashed to the point where there are now 40+ months of inventory.

If significant price drops cannot materialize in such a dead market, they never will. Or at least, not until every last Baby Boomer in the LM is forced to finally pack it in and move to the old age home.
Deal Guru
Jan 27, 2006
11197 posts
4574 upvotes
Vancouver, BC
Sam286 wrote:
Oct 29th, 2018 1:32 am
Unless you have a different map of Vancouver, 7818 is so on top of the T.
Bit it doesn’t really matter :)
We were looking at the different sides of 62nd Ave! :)
Deal Guru
Jan 27, 2006
11197 posts
4574 upvotes
Vancouver, BC
civiclease wrote:
Oct 29th, 2018 7:43 am
According to Zolo (not always accurate, I know) sales of detached houses in Richmond have crashed to the point where there are now 40+ months of inventory.

If significant price drops cannot materialize in such a dead market, they never will. Or at least, not until every last Baby Boomer in the LM is forced to finally pack it in and move to the old age home.
If the economic conditions remained constant, then price drops may not happen. However, given the rising interest rate environment, the limitation of foreign funds flows, and the actual selling price drops in the properties that are actually selling, significant drops in asking prices should be around the corner. Remember that listed prices aren't selling prices and we don't know what the general trend is when it comes to the delta between asking and selling as there are no publically available statistics on that.
Deal Guru
Jan 27, 2006
11197 posts
4574 upvotes
Vancouver, BC
Buggy166 wrote:
Oct 29th, 2018 2:36 pm
in unrelated but maybe kinda, news:

https://www.reuters.com/article/us-gree ... SKCN1N3196

Speaks to whats going on. Always on the lookout for deals, its kind of obvious both Toronto and Vancouver arent anywhere close to that these days. I'd wager places in Australia have run their course as well.
Other European locations (like Spain and Portugal) which have seen their economy or housing market crash are probably seeing the same thing happen now. I'll expect that Italy may be the next place that this happens to especially if their government doesn't get their house in order and the economy crashes.

I wouldn't be surprised that sooner or later Central and South America becomes as hot as many Chinese billionaires might be fleeing looking for some governments that can be bribed to keep quiet about who and where they are.
Sr. Member
Aug 3, 2006
600 posts
392 upvotes
Condo Market Speculators In Toronto, Vancouver A Risk To Economy: Bank Of Canada

https://www.huffingtonpost.ca/2018/06/1 ... _23457118/

"This greater activity — even as carrying costs (including mortgage payments, property taxes and maintenance fees) have increasingly exceeded rental revenue — suggests that investors have been counting on a continuation of large price increases," the bank wrote. In other words, the condo market is now in the thrall of real estate speculators.

"Prices that are inflated because of these types of expectations tend to be more sensitive to adverse shocks. If expectations reverse and prices recede, speculators may quickly sell their assets, which could lead to large, rapid price declines, with adverse consequences for the rest of the market."
Deal Expert
User avatar
Nov 15, 2004
17361 posts
2807 upvotes
Toronto
datoprookie wrote:
Oct 29th, 2018 8:23 pm
Condo Market Speculators In Toronto, Vancouver A Risk To Economy: Bank Of Canada

https://www.huffingtonpost.ca/2018/06/1 ... _23457118/

"This greater activity — even as carrying costs (including mortgage payments, property taxes and maintenance fees) have increasingly exceeded rental revenue — suggests that investors have been counting on a continuation of large price increases," the bank wrote. In other words, the condo market is now in the thrall of real estate speculators.

"Prices that are inflated because of these types of expectations tend to be more sensitive to adverse shocks. If expectations reverse and prices recede, speculators may quickly sell their assets, which could lead to large, rapid price declines, with adverse consequences for the rest of the market."
Time to remove the restrictions on rent increases so all the priced out renters can pay $5,000 a month in rent so landlords can carry their debt on their 600 square foot condos. That's what will happen, right? Or is that too low of a price for anyone to do us the grueling and unforgiving service of being a landlord? Would $8,000 a month be more realistic? 10?
Could HAVE, not could OF. What does 'could of' even mean?
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User avatar
Dec 14, 2007
3061 posts
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craftsman wrote:
Oct 29th, 2018 2:10 pm
If the economic conditions remained constant, then price drops may not happen. However, given the rising interest rate environment, the limitation of foreign funds flows, and the actual selling price drops in the properties that are actually selling, significant drops in asking prices should be around the corner. Remember that listed prices aren't selling prices and we don't know what the general trend is when it comes to the delta between asking and selling as there are no publically available statistics on that.
There's some outfits that are now legally allowed to provide more information thanks to the recent supreme court ruling in Ontario. https://zealty.ca/ is one such site. Very interesting information on that site.
I'd love to write history... in advance.
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Deal Guru
Jan 27, 2006
11197 posts
4574 upvotes
Vancouver, BC
atomiton wrote:
Oct 29th, 2018 11:59 pm
There's some outfits that are now legally allowed to provide more information thanks to the recent supreme court ruling in Ontario. https://zealty.ca/ is one such site. Very interesting information on that site.
Yep. I'm aware of that site as I was the one who originally posted it in this thread...
Deal Addict
Oct 7, 2007
4972 posts
1703 upvotes
Between zealty.ca and myrealty.ca, one can really get a sense of the market on a day to day basis. It is amazing how many properties have been flipped and listed multiple times in the four years of history provided. Truly, there is a level of speculation going on in Vancouver that would never have been known to Joe Schmo without this access. This kind of research was near impossible when sales information was not openly available to the public.

FULL DISCLOSURE: I am not looking to buy or sell but just trying to understand what has REALLY been happening in the Vancouver real estate market over the past however many years. I feel like those who kept the data from us were being dishonest in what was being fed to us through the news, the real estate industry and Vancouver City Hall. Personally, I think the Vancouver real estate market is severely overvalued and could drop a lot if innocent buyers find out what is really behind the curtain that only recently has been removed.
Deal Guru
Jan 27, 2006
11197 posts
4574 upvotes
Vancouver, BC
choclover wrote:
Oct 30th, 2018 11:23 am
Between zealty.ca and myrealty.ca, one can really get a sense of the market on a day to day basis. It is amazing how many properties have been flipped and listed multiple times in the four years of history provided. Truly, there is a level of speculation going on in Vancouver that would never have been known to Joe Schmo without this access. This kind of research was near impossible when sales information was not openly available to the public.

FULL DISCLOSURE: I am not looking to buy or sell but just trying to understand what has REALLY been happening in the Vancouver real estate market over the past however many years. I feel like those who kept the data from us were being dishonest in what was being fed to us through the news, the real estate industry and Vancouver City Hall. Personally, I think the Vancouver real estate market is severely overvalued and could drop a lot if innocent buyers find out what is really behind the curtain that only recently has been removed.
They do provide insight on a property by property basis. What would be more interesting rather than poking at individual properties is to study the area as a whole over the past 10 years and then break it down to smaller regions or even neighbourhoods which no-one has really done.

And as for blame, the media can accept some blame but realistically, they have been gutted in the past few years so much so that reporters really just echo what they have been told and none of them have enough time to follow anything over the longer lengths of time. It's really an issue with the government (all levels local/provincial/federal considering that it took this long for the Feds to bring up a court case so that would be possible) and the industry.
Deal Addict
Dec 27, 2006
1941 posts
916 upvotes
https://www.forbes.com/sites/ralphjenni ... ouver/amp/?

China's Bid To Bring Cash Back Home Will Impact These 3 Places
Ralph JenningsFeb 5, 2018,

A man uses an ATM that provides cash withdrawal services for Union Pay cards in Macau on May 8, 2017. Casino hub Macau said that day it would launch facial recognition and identity card checks on ATM users in what looks to be the latest move against illicit cash flows out of China. (ANTHONY WALLACE/AFP/Getty Images)
Slowing Chinese capital flight will addle property investments in Western college towns — and in Vancouver.

By January, more than 1,000 bank ATMs in Macau had installed face-recognition cameras to identify customers who might transfer large sums of money outside China. Money changes hands quickly in Macau thanks to the massive casino industry, but the decision was taken in part to Beijing’s drive to stop its citizens from parking money outside the country where they feel it’s safe from legal detection or capital market volatility. China worries that too much loss of that money, a trend called capital flight, will devalue the Chinese yuan and undermine economic stability that hinges partly on a strong foreign exchange reserve.

More on Forbes: Why China Lost About $3.8 Trillion To Capital Flight In The Last Decade

Outflows totaled just $408 billion last year, down 54% compared to 2016, according to data from the French investment bank Natixis. The Beijing government has aggressively tried to stop the flows since November 2016, and not only through the 90% of Macau ATMs that use face recognition. While China may be bringing cash back, the overseas destinations where the money’s been parked will retrench as they get less of it. Here are the most likely places to feel the impact.

1. Vancouver, Canada

This city — with a big ethnic Chinese population — tops many lists of Chinese outflow destinations, says Mark Williams, chief Asia economist with Capital Economics in the United Kingdom. You could point at San Francisco or Sydney, too. “Most of the flows from China seem to end up in places with large Chinese communities and good links to China,” Williams says.

In Vancouver, where Chinese money has raised housing prices, a tapering of inflows should make property more affordable to Canadians, one report suggests. Home sales are expected to fall from 102,350 units in 2017 to 91,750 this year in the wider province of British Columbia, and reach an average price of $745,300, the Vancouver Courier says. Prices of other things that Chinese money might buy, from jade to clothing and seafood, could fall in tandem.

2. University towns in Western countries

Chinese families with children accepted to universities in Australia, Europe or North America often send funds abroad along with their kids. Some of it buys property in college towns such as Palo Alto, California (where you’ll find Stanford University), along with tuition and daily expenses.

A pullback in Chinese capital would lower housing prices, perhaps a relief to faculty and university staffers also in the market. Today, says Williams, “properties are often left empty, so you could say that China is exporting its ‘ghost city’ phenomenon driven by people buying property as a place to store their wealth rather than as somewhere to live.”

3. Malaysia

Malaysia counts China as its biggest trading partner and source of direct investment, worth $480 million in the first half of 2017. Although a lot of Malaysia’s inflows come authorized by Beijing from major Chinese investors for the likes of ports and railways (extensions of the 65-nation Chinese Belt-and-Road Initiative), some arrive without state approval. Again, a lot of it lands in real estate.

This picture taken on April 19, 2016 shows visitors walking along the beach at Forest City, a Chinese-invested real estate project on an artificial island in Malaysia. (ROSLAN RAHMAN/AFP/Getty Images)

“If you’re doing [outflows] for property development, then you’re really facing some difficulties,” says Oh Ei Sun, international studies instructor at Singapore Nanyang University. The luxury, Chinese-funded Forest City real estate project in the southern state of Johor may be canceled due to China’s capital controls, Malaysia’s The Star reports. A Guangzhou developer with six sites in the same state may be hampered, too, it says. The report quotes a Malaysian finance official anticipating a broader impact on trade and the Southeast Asian country’s economy.

China won’t stop every yuan from leaving the country, however. Over time it will probably let small carefully thought-out investments proceed, McMillan Global Law Office says on its website. Investments under $5 million can still proceed offshore without regulatory approval. “There has been near unanimous commentary that Beijing is concerned about the quality of Chinese overseas investments,” McMillan says. “The government fears some transactions are rushed through without proper vetting.”

As a news reporter I have covered some of everything since 1988, from my alma mater U.C. Berkeley to the Great Hall of the People in Beijing where I followed Communist…MORE
Deal Addict
Dec 4, 2016
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Piro21 wrote:
Oct 29th, 2018 8:57 pm
Time to remove the restrictions on rent increases so all the priced out renters can pay $5,000 a month in rent so landlords can carry their debt on their 600 square foot condos. That's what will happen, right? Or is that too low of a price for anyone to do us the grueling and unforgiving service of being a landlord? Would $8,000 a month be more realistic? 10?
Rent control in BC has been pretty week until the last few months. Inflation +2% over a decade really adds up. Plus huge fraction of Vancouver rental stock is mom and pop rentals, instead of apartment buildings, so enforcement of rent control is relatively difficult. Vancouver city council has been forcing developers to build rental housing for a while, and all it did was removing incentive for developers to build anything, further reducing supply.

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