Real Estate

Vancouver housing bubble?

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  • Jun 18th, 2019 5:39 pm
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Deal Guru
Jan 27, 2006
10679 posts
4236 upvotes
Vancouver, BC
BlueSolstice wrote:
May 24th, 2019 9:56 am
Because Trudeau and Singh are "greater evils" compared to Harper/Scheer, while BCNDP has Eby.
That may be true but you don't even see people attacking Trudeau on this issue... Instead, they are giving him a pass by saying 'no-one told him that it was problem until now' which is the same excuse they gave the Conservatives. So, I don't believe it's a true Left vs Right type of deal.
Deal Addict
Dec 4, 2016
1110 posts
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craftsman wrote:
May 24th, 2019 1:29 pm
That may be true but you don't even see people attacking Trudeau on this issue... Instead, they are giving him a pass by saying 'no-one told him that it was problem until now' which is the same excuse they gave the Conservatives. So, I don't believe it's a true Left vs Right type of deal.
CBC, Toronto Star, and Globe and Mail perhaps doesn't attack Trudeau on this issue. Trumpists on RFD certainly did.
Jr. Member
User avatar
Oct 27, 2008
101 posts
31 upvotes
Coquitlam
atomiton wrote:
May 23rd, 2019 3:54 pm
Well, that's pretty common. No one wants to buy in a descending market... everyone wants to catch the bottom to feel like they're a genius. Same reasoning at the top... no one wants to sell when prices are still going up. THIS is the biggest market mover. Fear and emotion. Greed. The Chinese aren't alone in their avarice, that's for sure. They're really just humans like the rest of us. The whole anti-Chinese rhetoric is mostly just finger-pointing. While there is absolutely some dirty money... having a boogeyman handy to blame problems on is a great way to point elsewhere and distract the populace. Interesting how whenever there are internal issues in a country like China, somehow anti-Japanese/American/Whatever news somehow gets to the newspapers.

SELLERS
  1. Bought at $800K
  2. Considered selling at $1.3M... but market was still going up! up! up!
  3. Market peaks at $1.5M... but markets could still go up! up! up!
  4. Slow-down... ( oh, it's just taking a break )
  5. prices slightly drop ( that's good, but I don't want to LOSE money... I'll list it at$1.5M
  6. Doesn't sell. Probably could sell it for 1.3M... but that's leaving $200k on the table
  7. Takes it off the market. ( I'll wait out this dip )
  8. Prices averaging 1.2M. ( Really want to sell, that would be crazy to lose 300k... if I wait long enough... it'll go back up )
The problem: Seller doesn't realize that 1.3M is a 62.5 % gain. ( I know it's much less than that when you account for Opportunity costs, carrying costs, etc... but we're talking about how people generally feel... )

BUYERS
  1. Prices are so high and going up! Gotta buy now or be priced out! (It would be STUPID NOT to buy now.)
  2. Prices are falling... I'll just wait. It would be stupid to BUY now only to have your property be worth LESS next month.
Problem... people tend to buy high, and sell low.

When prices are going down... no one buys. When they hit bottom... everyone assumes it will keep falling. How many people bought into the stock market in 2009? Not many. How many sold? Lots.

So Prices have come down... is it a good time to buy right now?
If you can afford it now, sure. If it seems like a good deal, why not? Are prices at their lowest? Probably not, but maybe.

Are they at their highest? Nope.

House prices melt in Canada like spring snow in Iqaluit.

They don't crash... every year that houses don't go up but stay steady is actually a loss due to inflation, property taxes, etc. Houses have relatively high carrying costs.

If the housing market didn't go up for 10 years, a homeowner loses considerably... despite the perception that they haven't.
This post should get more recognition. This emotional behaviour is seen in stocks, housing, and more recently cryptocurrency.

Bitcoin exploded a couple of years ago to almost 20k USD and was all the rage. After the peak it crashed down to 3k as people sold and buyers sat on the side lines seeing it drop further and further. Even to this day it still doesn't have the same luster as it once was. This mentality applies to housing as well except it will be much slower crash as housing is not as liquidable as stocks or crypto
Newbie
Dec 5, 2009
73 posts
13 upvotes
JayLove06 wrote:
May 23rd, 2019 7:29 pm
Keep hearing about investors and speculators. I have never talked about them. It's the people who want to set roots and plan to live there for a long period of time. They are the ones who are getting killed. Not the investors.
How are the people who want to set roots and plan to live there for a long time getting killed? Its not like this is the end of the market in vancouver. Eventually it will reach a point where the investors will start buying again and prices will rise. May not happen in the next 1 to 2 years but we may see it happen over a 5 to 10 year window. People looking to put down roots did not buy to sell after 1 to 2 years later unless there was a life changing event...
Deal Addict
Aug 21, 2007
4459 posts
375 upvotes
Yah, the sad "we have to live somewhere" arguement to justify the horrible typical Canadian investor who puts all their eggs in one basket. Second only to renting is wasting money to ignore the substantial non recoverable costs on a home not to mention almost all canadians have no bloody clue what their ROI is on their largest investment let alone what it actually costs.
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Dec 14, 2007
3036 posts
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Alpine84 wrote:
May 24th, 2019 7:58 pm
How are the people who want to set roots and plan to live there for a long time getting killed? Its not like this is the end of the market in vancouver. Eventually it will reach a point where the investors will start buying again and prices will rise. May not happen in the next 1 to 2 years but we may see it happen over a 5 to 10 year window. People looking to put down roots did not buy to sell after 1 to 2 years later unless there was a life changing event...
Yep, I DO agree with this sentiment to some degree. But people often DON'T end up staying at one place for a long time. And yes... markets will go up and down... but the idea was that RE was a way to make a bunch of money quickly. Buying a condo strictly as an investment to make money, for example. People who buy houses to LIVE in aren't the issue. They're just unfortunately the ones that get caught holding the bag in the end after the smart money leaves the market. They end up buying at the top or near the top and it takes a decade to break even. Yeah, sure they eventually get the feeling that they won when they see a 200% gain over 20 years... but they rarely take into account that inflation is a real thing.

How many retirees who bought back in the day are quoting how they bought a starter home for $250k back in the day and they've made $1M if they sell. Sure, they made a tonne of money... but it's also 30–40 years later. Things cost more, wages are higher, and they've had decades of costs put into that place. But nope... they'll just get fixated on PRICE, instead of on COST and VALUE... and actual ROI.
I'd love to write history... in advance.
AMEX Biz Plat 75K AGAIN! | Plat 60K | Biz Gold 40K | Gold 25K | SPG 20K
Deal Addict
Mar 7, 2011
3420 posts
1541 upvotes
Vancouver

It's also worth noting that the private citizen quoted in this article appears to work in real estate and development:
https://ca.linkedin.com/in/ricpow

Nothing wrong with working in that sector, but I do think it's really unfortunate that that bias/ conflict was not presented here (whether undisclosed by the reporting or Mr. Pow himself). The failure to disclose these sorts of conflicts has consistently occurred in real estate reporting over the many years of the affordability crisis.
We shouldn't be seeing "Local man complains about slow down in real estate sector" when it's also true to say "Real estate sector worker complains about slow down in real estate sector"
https://www.cbc.ca/news/canada/british- ... -1.5144280
Deal Fanatic
Feb 29, 2008
7696 posts
2882 upvotes
When people start talking about fairness, I just roll my eyes.
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Oct 7, 2007
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craftsman wrote:
May 24th, 2019 1:29 pm
That may be true but you don't even see people attacking Trudeau on this issue... Instead, they are giving him a pass by saying 'no-one told him that it was problem until now' which is the same excuse they gave the Conservatives. So, I don't believe it's a true Left vs Right type of deal.
I am not sure that we would ever know what Trudeau gets attacked on when so much of the media reports fake news and gives biased reporting. I can't believe how many times the news reports that Trudeau is getting "attacked" by protesters when the whole thing is very staged and involves a bunch of high school students and Trudeau is correcting the "protesters" by saying things like "not mankind but humankind" and similar episodes.
Deal Guru
Jan 27, 2006
10679 posts
4236 upvotes
Vancouver, BC
choclover wrote:
May 25th, 2019 10:56 am
I am not sure that we would ever know what Trudeau gets attacked on when so much of the media reports fake news and gives biased reporting. I can't believe how many times the news reports that Trudeau is getting "attacked" by protesters when the whole thing is very staged and involves a bunch of high school students and Trudeau is correcting the "protesters" by saying things like "not mankind but humankind" and similar episodes.
But we don't even see it happening in this 'internet forum' type of environment in regards to this issue. All we see by a select few is a concentrated effort on one former Premier using questionable or non-existent evidence at best while we have others (of all political stripes) who either have the same amount of evidence or much more evidence against them getting a free pass. By not bring the heat on the ones that are still in power or accurately recalling history, we are just asking for these issues to be swept under the rug in the next Federal election as no party will present a plan to tackle the issue as none of them would have felt any heat from the issue.
Deal Addict
Mar 7, 2011
3420 posts
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Vancouver
JayLove06 wrote:
May 25th, 2019 8:24 am
When people start talking about fairness, I just roll my eyes.
I agree, especially when the same people complain about high(er) taxes on their multi-million dollar properties.
Hey, I've noticed the two of us tend to be on the same page lately... Face With Tears Of Joy
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Dec 14, 2007
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charlesd79 wrote:
May 24th, 2019 1:00 pm
There's no such thing as healthy greed. Greed is greed.
The idea that capitalism = greed is really a movie meme that people cling to in order to justify their actions. The idea that greed is good, because that's capitalism... and if you're not greedy you're a dirty commie... which is pretty close to a curse word in some circles.

Sure, there are greedy capitalists... but the actual idea is based on efficiency. Reduce costs in order to increase profits to invest into the company and rewards those that worked hard to attain it.

Compare a successful company in a capitalist market that has a CEO that isn't paid 300x a line worker but rather takes a modest income vs. a company that has an uneven distribution of its wealth among the decision makers. Is one company MORE capitalist than the other because of the greed within the upper ranks, assuming they make the same approximate profit margins?

Is Japan a successful capitalist country? Absolutely. Yes... what about this:


I like this quote:
"We learned in the bubble economy that businesses who pursue money first fail."

It's really the same thing with real estate. Is a house an asset? Yes. Is the right to shelter a basic human right? Yes. So real estate is tricky... and it's why things like Air BnB are also tricky. When you make it more lucrative to remove the possibility of a home/suite/apt. as shelter... and turn it into a saleable asset that turns a profit... it makes the value of that asset worth more than perhaps it SHOULD be worth.

Those are the pursuit of money first... instead of the pursuit of good housing, adequate shelter, etc.

Houses are not JUST commodities like iPhones as long as we believe that shelter is a human right... not matter WHERE they are, they are not luxury goods... at least not in Canada... not yet.
I'd love to write history... in advance.
AMEX Biz Plat 75K AGAIN! | Plat 60K | Biz Gold 40K | Gold 25K | SPG 20K
Deal Fanatic
Feb 29, 2008
7696 posts
2882 upvotes
charlesd79 wrote:
May 26th, 2019 4:02 am
My job is to advise you against this reckless myopia and protect our economy from potentially tragic consequences
https://business.financialpost.com/real ... osen-rules

@JayLove06 , maybe you should go and explain him what a genius you are, eh Face With Tears Of Joy
@charlesd arguing with himself again. Either you can't read or have a comprehension problem. The stress test is what it is but it is FLAWED just like every stupid narrative you keep pushing.

Have yet to see anyone refute the ridiculousness of a "stress test" on a 10 year fixed rate conventional mortgage.

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