Real Estate

Vancouver housing bubble?

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Deal Addict
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Dec 14, 2007
3100 posts
1514 upvotes
choclover wrote: So true. I don't know how the same special interest groups can keep chiming the same mantra when the real estate market is noticeably changing all around us. It is like the developers aren't aware of what what is happening or they believe it is just temporary. Reminds me of when we had the financial crisis in 2008 and the prediction was that it would only last 3 months and then three months later they would say, again, that it would be over in 3 months. And ten years slowly slipped by that way.
The GFC... the largest stock dump in almost a century... lasted about 12–18 months on the market. Of course, for those that sold at the bottom or weren't diversified it lasted much, much, longer... the fallout lasted longer as those who piled out of the market in fear lost a lot of equity.

Of course, the GFC didn't help the housing market in the US helping those houses to drop. Real estate usually doesn't crash... it slowly melts... and that took 10 years or so to correct.
I'd love to write history... in advance.
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Penalty Box
Dec 30, 2012
1097 posts
1142 upvotes
Toronto
The news keeps getting worse for BC real estate.

China is now advising its citizens not to travel to Canada (or be cautious when doing so). Not just weary about buying property in Canada, but actually weary about taking a vacation there.

Canada has become a dirty word in China and I couldn't be happier. I hope the Chinese start burning Canadian flags in Tianamen Square. Come on China, shun us!
Deal Fanatic
Feb 22, 2011
6540 posts
6526 upvotes
Toronto
civiclease wrote: The news keeps getting worse for BC real estate.

China is now advising its citizens not to travel to Canada (or be cautious when doing so). Not just weary about buying property in Canada, but actually weary about taking a vacation there.

Canada has become a dirty word in China and I couldn't be happier. I hope the Chinese start burning Canadian flags in Tianamen Square. Come on China, shun us!
You really think the people who are taking capital out illegally care what the government is advising? They don't even care what the government is requiring by law, with capital punishment on the table. Not to mention people leaving China all together, they don't even want to live there anymore why would they care what the government advises.
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Oct 23, 2003
7904 posts
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mazerbeaner wrote: You really think the people who are taking capital out illegally care what the government is advising? They don't even care what the government is requiring by law, with capital punishment on the table. Not to mention people leaving China all together, they don't even want to live there anymore why would they care what the government advises.
pretty much this. China's regime is North Korean in nature. Everybody and anybody who has money in China, is trying to move it out.
Penalty Box
Dec 30, 2012
1097 posts
1142 upvotes
Toronto
mazerbeaner wrote: You really think the people who are taking capital out illegally care what the government is advising? They don't even care what the government is requiring by law, with capital punishment on the table. Not to mention people leaving China all together, they don't even want to live there anymore why would they care what the government advises.
First, I'm talking about foreign buyers, not immigrants. I.e. people who live in China (and at risk of arbitrary arrest) but want to launder their money abroad.

Second, although I agree this won't deter some of the money-launderers, I look at it this way : will China's new aggressive animosity towards Canada mean that Chinese-based investors will think twice before shifting money to Canada? Will this second-guessing mean that a greater proportion of them will decide against it than would have been the case several years ago? I think yes and yes. The flow of money will continue but less of it than before. And with Vancouver RE sitting on the edge of a precipice, these little shifts matter.
Deal Fanatic
Feb 22, 2011
6540 posts
6526 upvotes
Toronto
civiclease wrote: First, I'm talking about foreign buyers, not immigrants. I.e. people who live in China (and at risk of arbitrary arrest) but want to launder their money abroad.

Second, although I agree this won't deter some of the money-launderers, I look at it this way : will China's new aggressive animosity towards Canada mean that Chinese-based investors will think twice before shifting money to Canada? Will this second-guessing mean that a greater proportion of them will decide against it than would have been the case several years ago? I think yes and yes. The flow of money will continue but less of it than before. And with Vancouver RE sitting on the edge of a precipice, these little shifts matter.
If they are trying to illegally launder money out of China then reduced cooperation between the two states is to their benefit. Why would you want to launder and store money in a place that is working with the government that will kill you for doing it.
Penalty Box
Dec 30, 2012
1097 posts
1142 upvotes
Toronto
mazerbeaner wrote: If they are trying to illegally launder money out of China then reduced cooperation between the two states is to their benefit. Why would you want to launder and store money in a place that is working with the government that will kill you for doing it.
You have a point but I don't think it's possible for Canada to be doing any less than it was already doing. And in your scenario, any lessened enforcement by Canada (I actually laughed typing that; I mean really, the "enforcement" in place right now is like using a yorkshire terrier as a guard dog) may be more than compensated by increased vigilance from the Chinese authorities.
Deal Fanatic
Feb 22, 2011
6540 posts
6526 upvotes
Toronto
civiclease wrote: You have a point but I don't think it's possible for Canada to be doing any less than it was already doing. And in your scenario, any lessened enforcement by Canada (I actually laughed typing that; I mean really, the "enforcement" in place right now is like using a yorkshire terrier as a guard dog) may be more than compensated by increased vigilance from the Chinese authorities.
It's a very complicated issue. I agree Canada is doing nothing and I don't expect that to change, why would they want to stop money coming in, especially when the PM has us on a debt train with no end in sight.

China can increase its attempts to stop this but it could backfire. People are already worried about the economy. Issues with stocks and trade, not to mention unstable government may just expedite the capital flight. You can try whatever you want to stop it but there is always a way around it.
Deal Guru
Jan 27, 2006
12617 posts
5770 upvotes
Vancouver, BC
civiclease wrote: The news keeps getting worse for BC real estate.

China is now advising its citizens not to travel to Canada (or be cautious when doing so). Not just weary about buying property in Canada, but actually weary about taking a vacation there.

Canada has become a dirty word in China and I couldn't be happier. I hope the Chinese start burning Canadian flags in Tianamen Square. Come on China, shun us!
mazerbeaner wrote: You really think the people who are taking capital out illegally care what the government is advising? They don't even care what the government is requiring by law, with capital punishment on the table. Not to mention people leaving China all together, they don't even want to live there anymore why would they care what the government advises.
It might even cause more of these 'illegal' funds to move from China to Canada as a way to protect those funds from the Chinese government. After all, if you want to hide money from your government, wouldn't you pick a country whose government isn't playing ball with your government?
Deal Guru
Jan 27, 2006
12617 posts
5770 upvotes
Vancouver, BC
civiclease wrote: You have a point but I don't think it's possible for Canada to be doing any less than it was already doing. And in your scenario, any lessened enforcement by Canada (I actually laughed typing that; I mean really, the "enforcement" in place right now is like using a yorkshire terrier as a guard dog) may be more than compensated by increased vigilance from the Chinese authorities.
It doesn't have to do 'less'. People looking to hide their money is looking to hide their money. If anything, this chilling of the relationship between China and Canada is providing the ideal cover for hiding money as neither is willing to cooperate with the other which means that little or no information may be flowing back and forth between the governments. No information flow will generally mean it's good for those looking to hide their money.
Deal Guru
Jan 27, 2006
12617 posts
5770 upvotes
Vancouver, BC
Interesting article in Bloomberg yesterday - London, New York and Hong Kong Are No Longer Immune to Global Housing Downturn.

The article talks about how the globe is seeing a housing downtown and talks about the various markets that have been hit - key among those markets are Vancouver, London, NYC, Hong Kong... One would assume that all of them have some sort of foreign restrictions or taxes causing the markets to fall but that's not the case in NYC and the US in general.

It would seem that the 'fade' of real estate as an investment may be moving on to something else as the high prices have driven away investors across the globe.

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