Real Estate

Vancouver housing bubble?

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  • Dec 4th, 2019 4:30 pm
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Deal Fanatic
Oct 7, 2007
5434 posts
1946 upvotes
JayLove06 wrote:
Apr 11th, 2019 5:45 am
I have always done my own research. That’s why I have always bought when people told me not to. Have done quite well. So is now the time to buy? You mean prices are tanking. Or are bears trying to time and he market and waiting for the bottom? You see, when this whole thing runs it’s course the people jumping up and down for a crash are not going to be as happy as they thought they would be.

BC has taken actions to create a sharp crash. I think that is a mistake.

Trump factor: he’s already trying to get them to stop raising rates so we will see. That clown seems to get what he wants. The can’t see US raising rates to the point it has a big effect over. Here. It’s not like they’re going to aggressively raise rates quickly and often. We really don’t know and that uncertainty is used to fear monger.

There’s a difference between concern and fear mongering.

Vancouver will be a hard hit city and frankly those who are struggling will still struggle. I’d at least rather struggle in a thriving environment.

That said, Toronto will be fine. Vancouver is not nearly as desirable to Toronto globally.
That is so awesome. Really, I mean it. I was getting so tired of hearing that Vancouver is one of the best places in the world to live. Hopefully Vancouver drops off the charts so that the investors look elsewhere. :)
Deal Addict
Apr 10, 2011
1328 posts
803 upvotes
Vancouver
So much has changed in 2 years.

2017

- BC Premier Christy Clark (currently: Shaw Board of Directors) goes on China trade mission bringing developers, real estate firms and immigration lawyers

- new condo developments promoted exclusively in China

- hockey bags full of cash unloading in casinos

- low bottom interest rates, anyone with a pulse approved for mortgages

2019

- China in a dispute with Canada

- condos advertising new finished condo units in Vancouver with parties, discount incentives, etc.

- real estate agents offering other agents $25,000 bonuses for sales (radio, yesterday)

- all levels of government starting to work together to go after money laundered into real estate

- "investors" getting hammered with a plunging loonie, qualified buyer scarcity, steady declining values, rapidly increasing supply, new developments now competing locally with resales, etc.

........................................

In 2018, 57% of real estate agents sold 0-1 units. Interesting statistic.

Currently, car leasing companies are being overwelmed by agents who are trying to unload their leased premium cars.

Agents and multi-unit owners promote that it's just be pessimistic and preaching doom and gloom. Most like to stay with the facts and current reality. And some watch the trends from experts at the ground level.

Buying opportunity? Now? Wait 12-18 months if you'd like a significantly lower buy-in point (20-35% lower).
[OP]
Deal Fanatic
User avatar
Dec 3, 2004
5084 posts
3463 upvotes
Vancouver
RxMills wrote:
Apr 11th, 2019 1:52 pm
In 2018, 57% of real estate agents sold 0-1 units. Interesting statistic.

Currently, car leasing companies are being overwelmed by agents who are trying to unload their leased premium cars.

Agents and multi-unit owners promote that it's just be pessimistic and preaching doom and gloom. Most like to stay with the facts and current reality. And some watch the trends from experts at the ground level.

Buying opportunity? Now? Wait 12-18 months if you'd like a significantly lower buy-in point (20-35% lower).
Realtors are done. Only the experienced, well connected realtors will survive this. The new ones and weak ones will have their sales taken from them. That 57% number will probably go up. Just look at the last 4 March's:

March 2016
5173 sales
7358 listings
$815,000 benchmark price
$4.22b gross sales

March 2017
3579 sales
7586 listings
$919,300 benchmark price
3.29b gross sales

March 2018
2517 sales
8830 listings
$1,084,000 benchmark price
2.73b gross sales

March 2019
1727 sales
12774 listings
$1,011,200 benchmark price
1.75b gross sales

Gross sales in March 2016 were 4.22 billion. In March 2019, only 1.75 billion. That's a 59% drop in sales, which means 59% less money for realtors, mortgage brokers, lawyers, notary publics, etc. I did a transaction with my local notary a few months ago and I needed it done last minute. He was super accommodating and flexible, got it done in a few hours. Afterwards I realized he is probably starving for business. Last time I used him 2016 he seemed like he didn't need my business, that kind of aura. Now he seems a lot nicer. Funny how that works. I think a lot of people in the FIRE industry are going to learn a hard lesson about the ups and downs of real estate. With 1727 sales and 12774 listings, things are about to explode.
Deal Guru
Jan 27, 2006
11566 posts
4802 upvotes
Vancouver, BC
adamtheman wrote:
Apr 11th, 2019 3:26 pm
Realtors are done. Only the experienced, well connected realtors will survive this. The new ones and weak ones will have their sales taken from them. That 57% number will probably go up. Just look at the last 4 March's:

March 2016
5173 sales
7358 listings
$815,000 benchmark price
$4.22b gross sales

March 2017
3579 sales
7586 listings
$919,300 benchmark price
3.29b gross sales

March 2018
2517 sales
8830 listings
$1,084,000 benchmark price
2.73b gross sales

March 2019
1727 sales
12774 listings
$1,011,200 benchmark price
1.75b gross sales

Gross sales in March 2016 were 4.22 billion. In March 2019, only 1.75 billion. That's a 59% drop in sales, which means 59% less money for realtors, mortgage brokers, lawyers, notary publics, etc. I did a transaction with my local notary a few months ago and I needed it done last minute. He was super accommodating and flexible, got it done in a few hours. Afterwards I realized he is probably starving for business. Last time I used him 2016 he seemed like he didn't need my business, that kind of aura. Now he seems a lot nicer. Funny how that works. I think a lot of people in the FIRE industry are going to learn a hard lesson about the ups and downs of real estate. With 1727 sales and 12774 listings, things are about to explode.
Hmmm... doing some quick back of the envelope calculations, the benchmark is nothing more than the gross sales divided by the number of sales. If I remember correctly, the real estate industry has always said that the benchmark price is really a model price using a bunch of factors in order to create that price.
Deal Fanatic
Feb 29, 2008
8848 posts
3944 upvotes
mkjr wrote:
Apr 11th, 2019 8:50 am
want to preserve this for posterity. good luck.

of course it will be "different" this time in Toronto. https://biv.com/article/2017/11/housing ... ear-report
I love putting down Vancouver, it always brings out the hurt feelings. Vancouver simply isn’t in the level of Toronto and I’m not talking about the weather.

Go look at the tourism numbers. Toronto dwarfs Vancouver. Also dwarfs them economically. More jobs, more head offices. More concerts, more professional sports teams, more schools, world class hospitals. No one knows the Canucks outside of Canada. Toronto also more multi cultural than Vancouver.

Not to mention the political situation there they’re trying to keep immigrants with money out. Futures not looking too good over there.

Toronto has already had drops in certain areas but for the most part we are better off than Vancouver. You really think NDP is a chance here? Lol.
Deal Fanatic
Feb 29, 2008
8848 posts
3944 upvotes
choclover wrote:
Apr 11th, 2019 10:31 am
That is so awesome. Really, I mean it. I was getting so tired of hearing that Vancouver is one of the best places in the world to live. Hopefully Vancouver drops off the charts so that the investors look elsewhere. :)
Despite no one being able to afford anything? Either these lists are bs or things aren’t nearly as bad as you guys make it.

Once you read the other cities on that list you realize how bogus it is. I don’t care about weather and mountains. I care about jobs, money, opportunity.

I find it funny though all the crying about how bad it is to live in Vancouver but the minute someone says the city is undesirable you guys lose your minds. Which is it?
[OP]
Deal Fanatic
User avatar
Dec 3, 2004
5084 posts
3463 upvotes
Vancouver
craftsman wrote:
Apr 11th, 2019 4:45 pm
Hmmm... doing some quick back of the envelope calculations, the benchmark is nothing more than the gross sales divided by the number of sales. If I remember correctly, the real estate industry has always said that the benchmark price is really a model price using a bunch of factors in order to create that price.
Yeah the Benchmark price is garbage, but I didn't feel like going through and adding up each of the categories separately by average price and then combining them all. The main point isn't the size of the numbers, but rather, the difference between the years.
Deal Addict
Aug 21, 2007
4518 posts
387 upvotes
JayLove06 wrote:
Apr 11th, 2019 4:53 pm
Despite no one being able to afford anything? Either these lists are bs or things aren’t nearly as bad as you guys make it.

Once you read the other cities on that list you realize how bogus it is. I don’t care about weather and mountains. I care about jobs, money, opportunity.

I find it funny though all the crying about how bad it is to live in Vancouver but the minute someone says the city is undesirable you guys lose your minds. Which is it?
I actually do not disagree with you. That is why I work in YYZ and not YVR. I grew up there smart guy. I am only illustrating that if people think that the real estate bubble burst in YVR is somehow isolated and unique and will never replicate itself in YYZ, you are on a one way train to delusionville and history is not on your side. Historically, and do your own research, in a recession, Ontario gets pounded much harder than YVR and the correction in the late 90s was much much worse here and the same types of "real estate is going to the moon" and the frenzied environment around developments is very much like it was in the 80s but I suspect that you were juts a little kid then. And certainly do not remember your parents getting shit canned and taking a bath on real estate. I do. I ever remember my parents getting a break from the bank for several months and rolling the missed payments into the mortgage at the end...yes, banks had some sympathy back then. People's short memories will hurt them.
Deal Fanatic
Oct 7, 2007
5434 posts
1946 upvotes
mkjr wrote:
Apr 12th, 2019 8:21 am
I actually do not disagree with you. That is why I work in YYZ and not YVR. I grew up there smart guy. I am only illustrating that if people think that the real estate bubble burst in YVR is somehow isolated and unique and will never replicate itself in YYZ, you are on a one way train to delusionville and history is not on your side. Historically, and do your own research, in a recession, Ontario gets pounded much harder than YVR and the correction in the late 90s was much much worse here and the same types of "real estate is going to the moon" and the frenzied environment around developments is very much like it was in the 80s but I suspect that you were juts a little kid then. And certainly do not remember your parents getting shit canned and taking a bath on real estate. I do. I ever remember my parents getting a break from the bank for several months and rolling the missed payments into the mortgage at the end...yes, banks had some sympathy back then. People's short memories will hurt them.
Good points. I find when people win in real estate or the stock market, they think they are super smart and better than others. However, a lot of the success in these markets has nothing to do with the investor's own individual efforts. Markets can go both up or down. However, when the market goes down, there is little the investor can do to change its direction. This is just how these markets work. Better to be realistic, humble and sensible rather than deluded and caught off guard. What is happening in Vancouver real estate is happening around the world. That is what makes it a little bit scary. The asset bubble created by the financial mess of 2008 is now deflating. Everyone needs to be ready for whatever is coming next.
Deal Fanatic
Feb 29, 2008
8848 posts
3944 upvotes
mkjr wrote:
Apr 12th, 2019 8:21 am
I actually do not disagree with you. That is why I work in YYZ and not YVR. I grew up there smart guy. I am only illustrating that if people think that the real estate bubble burst in YVR is somehow isolated and unique and will never replicate itself in YYZ, you are on a one way train to delusionville and history is not on your side. Historically, and do your own research, in a recession, Ontario gets pounded much harder than YVR and the correction in the late 90s was much much worse here and the same types of "real estate is going to the moon" and the frenzied environment around developments is very much like it was in the 80s but I suspect that you were juts a little kid then. And certainly do not remember your parents getting shit canned and taking a bath on real estate. I do. I ever remember my parents getting a break from the bank for several months and rolling the missed payments into the mortgage at the end...yes, banks had some sympathy back then. People's short memories will hurt them.
You speak in way too many absolutes and are too easily riled. I don’t know what is in store for the market in Toronto. Unlike you and other super bears, I don’t act like I have a crystal ball and because something occurred before it will certainly occur again, today. I’m not debating that a crash will happen here. You don’t get points for that. But you would have to be an absolute moron to not see that prices are being pushed downwards by policy. So if we get a government in Ontario just like Vancouver that decide to cut prices in half, I don’t expect the same thing to happen in Toronto.

Toronto is not the same as Vancouver. Doesn’t mean Toronto can’t suffer a crash. The fear mongering is comical.
Deal Fanatic
Feb 29, 2008
8848 posts
3944 upvotes
choclover wrote:
Apr 12th, 2019 11:26 am
Good points. I find when people win in real estate or the stock market, they think they are super smart and better than others. However, a lot of the success in these markets has nothing to do with the investor's own individual efforts. Markets can go both up or down. However, when the market goes down, there is little the investor can do to change its direction. This is just how these markets work. Better to be realistic, humble and sensible rather than deluded and caught off guard. What is happening in Vancouver real estate is happening around the world. That is what makes it a little bit scary. The asset bubble created by the financial mess of 2008 is now deflating. Everyone needs to be ready for whatever is coming next.
Sound like a bear who missed out. This is an asinine thing to say because plenty of people lost money even during the heyday were they just unlucky it made dumb decisions? Do you need to be a genius? No but I find people like you try to find ways to cope with missing out and make comments like the above. So now you’re praying for a crash so you can feel validated.

But good to know the winners are lucky and the losers are unlucky. I hope you have that opinion across the board because it would be a controversial one.
Deal Addict
Aug 21, 2007
4518 posts
387 upvotes
hard to ration with people who rely on an asset to go up up up and everyone needs it to go up up up since most Canadians only have this asset class as an investment. numbers speak for themselves and Canadians have very little savings, are broke and live pay check to pay check and have a very poor understanding of investing and debt. their only asset is the equity they have in their highly leveraged asset and all their eggs are in one basket so to engage in a debate with such a large group of people, especially many younger people under the age of 50 who have not or can not remember what it was like, gets tiring. i probably should give up and allow all the more impartial thread crap to continue.
Deal Addict
Apr 10, 2011
1328 posts
803 upvotes
Vancouver
Vancouver Sun
11 April 2019

"Why we need to stop subsidizing foreign ownership of Metro Vancouver housing"

"Imagine that a wealthy person could access all of the same social services and public amenities as a local individual, but not pay income taxes. That would be a huge advantage in the housing market."

That competitive pressure is compounded when satellite families, 200,000 spouses, children and relatives that UBC geographer David Ley says have arrived in Metro Vancouver through investor immigrant programs — don’t pay much, or any, tax in Canada.

People with expensive houses were earning most of their money outside the country and not reporting it to the B.C. and Canadian governments.

Such families migrate to Canada and buy expensive properties in Metro Vancouver, the Fraser Valley or Victoria, while the breadwinners (often referred to as “astronauts”) make virtually all their money in another country. That means their wealth is not taxed in Canada.

The city has become a legendarily attractive gateway city for migrants, a quasi-resort destination for rich people, especially those from unstable regions of the Asia-Pacific.

“A wealthy person could access or enjoy all of the same social services and public amenities as the high-earning local individual, but not pay income taxes. That would be a huge advantage in the housing market, and a great bargain.

The continuing problem, however, is that provincial versions of the investor program, especially the one in Quebec, to this day funnel thousands more wealthy new arrivals into Metro Vancouver, where Statistics Canada researchers recently found the average price of their home is more than $3.2 million.

https://vancouversun.com/opinion/column ... ro-housing

..........................................

Summary:

China gets $20,000-50,000 from each Canadian "satellite family" in tax revenue each year, with none of the Social Service costs.

Canada gets none of their tax income and all their Social Service costs for 2 adults, 2 children, and often 2 grand parents for health care, schools, roads, community centres, and even old age pensions.

Canada is extremely generous to the world's wealthiest and to China's revenue and government services.

.
Last edited by RxMills on Apr 12th, 2019 2:42 pm, edited 4 times in total.

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