Real Estate

Vancouver housing bubble?

  • Last Updated:
  • Sep 17th, 2019 3:15 am
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Sr. Member
Dec 30, 2012
880 posts
937 upvotes
Toronto
BiegeToyota wrote:
Jun 5th, 2019 3:59 am
Yep, if you're laughing at that you are seriously mathematically challenged.
Mid-30s, let’s say 35 to be precise, would be a quarter of what number?

You can do it, Methuselah :)
Member
Dec 26, 2005
219 posts
89 upvotes
BiegeToyota wrote:
Jun 5th, 2019 3:44 am
And she's not half my age, she is mid 30's which is barely quarter my age.
So that makes you about 140 years old or am I missing something?
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User avatar
Dec 13, 2016
2967 posts
2358 upvotes
civiclease wrote:
Jun 5th, 2019 4:10 am
Mid-30s, let’s say 35 to be precise, would be a quarter of what number?

You can do it, Methuselah :)
Yep, perhaps I screwed that up :)

Quarter as in I'm 25% older lolz
Deal Addict
Mar 7, 2011
3463 posts
1608 upvotes
Vancouver
BiegeToyota wrote:
Jun 5th, 2019 4:40 am
Yep, perhaps I screwed that up :)

Quarter as in I'm 25% older lolz
Keep them coming, I love free entertainment.
Deal Addict
Mar 7, 2011
3463 posts
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Vancouver
BiegeToyota wrote:
Jun 5th, 2019 2:52 am
Not sure who the real loser is in this whole situation. Some guy whinging about real estate he can't afford while posting pictures of his rental literally in the middle of nowhere
Lol, you still haven't figured out where I live? Ok, let me enlighten you, fool
Image
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Oct 7, 2007
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craftsman wrote:
Jun 4th, 2019 2:21 pm
And how they seem to be pushing, on some media outlets, that sales are actually UP 44% M/M! The actual truth is that sales are down Y/Y as that would adjust for seasonal changes in demand. Hmmm.... anyone who knows anything about monthly statistics like these knows that you need to adjust seasonally as demand traditionally/typically changes from one month to the next as the Summer selling season kicks into full swing.
I know!!! A clip on CTV only mentioned the 44.2% INCREASE without any other corresponding info. What is that about?? Are we supposed to all believe that housing is going crazy again??!!
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Dec 4, 2016
1280 posts
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JayLove06 wrote:
Jun 4th, 2019 10:15 pm
And if this does happen and things really fall off a cliff, who will be held accountable? You can fix the problem without tanking the market and alienating well meaning foreigners. The same people begging the government to drop values 80% are the same who will be begging for help when the market craters, they can't find a job and a place to live. Some people will always beg for help while stepping over others.
For what it's worth, jobs for the working class are already a little bit harder to get in GVA, and employers are a little less accommodating than 1 year ago. That's based on personal word of mouth. Not everyone works for the provincial government and belongs to a strong union.
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Oct 7, 2007
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BlueSolstice wrote:
Jun 5th, 2019 10:18 am
For what it's worth, jobs for the working class are already a little bit harder to get in GVA, and employers are a little less accommodating than 1 year ago. That's based on personal word of mouth. Not everyone works for the provincial government and belongs to a strong union.
There is a serious imbalance in GVA when it comes to the ratio of those who work for the government and those who don't. It really feels like socialism where those who don't work for the government have to continue to pay higher taxes to fund those that do. This doesn't seem like it is going in a sustainable direction for the province.
Deal Guru
Jan 27, 2006
11191 posts
4569 upvotes
Vancouver, BC
choclover wrote:
Jun 5th, 2019 10:14 am
I know!!! A clip on CTV only mentioned the 44.2% INCREASE without any other corresponding info. What is that about?? Are we supposed to all believe that housing is going crazy again??!!
I believe that the initial burst from the media outlets was probably the headline from the news release from the industry rather than actually digging into the information. If you compare the numbers from Toronto that were just published, you would see how bad it really is out there as the GTA actually had an increase Y/Y of nearly 20% in sales while we had a decline! If that's the case, the macro-economic factors of the new mortgage rules and the rates aren't a factor in our housing decline... in fact, it still might be supporting the market!
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Dec 27, 2006
1940 posts
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https://amp.scmp.com/comment/blogs/arti ... uver-tough?

Scared of falling home equity and the war on money laundering in Vancouver? Tough luck, and get a grip on reality
In a city ranked one of the most unaffordable in the world, some people are actually freaking out about price declines Meanwhile, others say a crackdown on money laundering and Chinese cash would be ‘catastrophic’

Ian YoungThursday, 6 Jun 2019, 5:03AM
Heritage homes line a street in Vancouver's expensive Westside district. Photo: Ian Young
Remember the olden times, Vancouver, when dinosaurs and Pokemon Go ruled the Earth?

Cast your mind back to mid-2016.

That was the last time that pretty much everybody agreed that housing unaffordability was a Very Bad Thing – in principle, at least.

Over the preceding two years, there had been a mix of awe and confusion as the average price of a detached house in Greater Vancouver soared 40 to 50 per cent, thanks to the rocket fuel of Chinese capital outflows. Real estate prices across the board were spiralling through the clouds.


Vancouver, seen from near City Hall, has long been a popular destination for wealthy foreign-earning immigrants. Photo: Ian Young
Would-be buyers looked on in horror. Owners tut-tutted in sympathy: I mean, it wasn’t right, was it?

But how many humble-bragged at dinner parties about this terrible phenomenon that was also enriching them beyond all deserving? How many sneaked downstairs to repeatedly check their address on the BC Assessment website, drooling at the improbably pneumatic number spread-eagled before them?

It was ownership as onanism.

Billions in dirty cash ‘helped fuel Vancouver’s housing boom’

How long ago that seems. How quaint the sense of shame.

The big thing now is not to worry about affordability, or pretend to: it’s worrying about equity.

All of a sudden, it’s not plunging affordability that supposedly has Vancouver in uproar, it’s plunging prices.

Yes – in a city still ranked by Demographia’s survey of 309 cities around the world as the most unaffordable in North America, and the second most unaffordable globally (behind only Hong Kong); in a city where the benchmark price of all residential real estate tops C$1 million (US$745,000), having risen 97 per cent in the past decade – some people have lost their grip on reality and are actually freaking out about price declines.


British Columbia Attorney General David Eby releasing a recent report on money laundering in the province. Source: BCGovNews
A real estate market transformed

This comes in the face of a left-leaning provincial government that is doubling down on measures that have sucked the life out of the real estate market.

There’s the schools tax, the speculation and vacancy tax, and the foreign buyers’ tax (introduced by the previous BC Liberal government) that has been expanded in geographical reach and increased to 20 per cent.

Foreign homebuyers in Vancouver hit with HK-style 15pc tax

The Real Estate Board of Greater Vancouver’s benchmark price for all residential properties is down 8.9 per cent in the past year, to C$1,006,400. And the overall market is unrecognisable, compared to 2016: May 2019 sales of 2,638 homes for Greater Vancouver were down 45 per cent compared to the same month three years ago.

Listings were up 90 per cent, to 14,685. The sales-to-listings ratio plummeted from a sellers’ paradise of 62 per cent to 18 per cent.

The measures enacted by the NDP – elected on a platform of battling unaffordability – appear to be working. And yet, somehow, Vancouver is now supposed to be worrying about owners’ equity

The real estate industry has previously tried to pin all of this on the federal government’s mortgage stress test, “which is causing people at the entry-level side of the market to struggle to secure financing”, according to Ashley Smith, president of the REBGV.

The entry level? It was the multimillion-dollar detached home market that changed direction in Vancouver fastest and first, with its benchmark price falling since at least autumn 2017, almost a year before the rest of the market followed suit.

The mansion market, long dominated by Chinese and other foreign money, is littered with eye-popping price cuts, some of 50 per cent or more.

Vancouver’s ‘spicy’ property-price curbs work. Why haven’t Hong Kong’s?

Since price itself is a lagging measure of a changing housing market, the contemporaneous shifts can instead be located with almost pinpoint precision in the pace of price changes.

A chart by RBC Economics shows how these shifts in Vancouver coincided almost exactly with the announcement of provincial tax measures (though the federal stress test certainly didn’t help from a seller’s point of view).

The market careens off these measures like a billiard ball.

A chart by RBC Economics shows how sharp shifts in the pace of home-price changes in Vancouver and Toronto have coincided with provincial tax measures. Graphic: RBC Economics
So, the measures enacted by the NDP – elected on a platform of battling unaffordability – appear to be working. These affordability measures have been wildly popular, at least according to polls.

And yet, somehow, Vancouver is now supposed to be worrying about owners’ equity.

Team Equity’s presto-reverso mindset

Two recent news stories have embodied this presto-reverso mindset.

When anti-tax group Step Up Now released a study last month showing C$89 billion (US$66 billion) in residential home equity had been lost in Metro Vancouver in the past year, it was front-page news.

“This report is cause for alarm,” said Paul Sullivan, who released the report for Step Up Now, in a Vancouver Sun op-ed decrying the provincial tax measures.

He’s right. I’m alarmed for the report’s proponents, and their startling lack of short-term memory, self-awareness and perspective.

15 per cent tax targets foreign homebuyers in Toronto

Never mind that Vancouver was now precisely C$89 billion more affordable – this number was supposed to register as the new Very Bad Thing.

Are most Vancouverites really so dense as to imagine that equity and affordability are not two sides of the same coin? I don’t think so.

Yet there is an air of obliviousness to Team Equity, and those opposed to affordability measures in Vancouver in general.

What can we say about a protest movement whose megaphone-wielding advocates have included such heroes of the proletariat as the chairman of the Rolls-Royce Owners Club of BC?

How do we classify the mindset that derides a 0.2 per cent tax on home values beyond C$3 million (US$2.2 million), and 0.4 per cent beyond C$4 million, as an attack on “working class families”?

A second report landed this past week, to address the allied issue of money laundering, which has been in the spotlight in Vancouver for its role in the real estate and luxury car markets.

Chinese cash fuels vast luxury car laundering scheme in Canada

The story, on the Business in Vancouver website, was headlined “How slow retail sales would hurt economy if BC reins in money laundering”.

The reaction approached the apoplectic, with Attorney General David Eby twisting the sarcasm-ometer up to 11.

“How about: ‘Bullet sales decline could impact gun store jobs if government successfully cracks down on gangs’,” he said on Twitter. “‘Cancer doctors fear for careers with crackdown on tobacco’…’Asbestos cleanup firms blame asbestos ban for layoff’.”

You get the idea.

There’s an element of messenger-shooting at play here. I thought the BIV article was plenty illuminating, and it was certainly newsworthy.

It quoted retail analyst Craig Patterson warning that Vancouver’s luxury retailers would take a hit, if Chinese and laundered money were removed from the market (although he didn’t necessarily equate the two).

“Losing Chinese money and laundered money would be catastrophic. Locals in the city don’t buy a lot of luxury goods, or at least not enough to support what’s there. The average Vancouverite struggles financially,” he told BIV’s Glen Korstrom.

China tycoon’s son buys US$3.8m Bugatti with dad’s credit card in Vancouver

Yes, it’s true. Cracking down on money-laundering could diminish the economy. It’s a bit of a no-brainer: if the issue is big enough to worry about its presence, it’s certainly big enough to have an impact by its absence.

And likewise, making Vancouver more affordable will mean that property owners lose equity, at least on paper.

Stacks of cash are processed in a Vancouver casino, in an image released by the BC government in a report on money laundering. Photo: Province of British Columbia
It’s possible to find sympathetic cases among those fretting over efforts to constrain property prices and, maybe, laundered money.

Seniors who were banking on a certain level of equity windfall in their retirement years come to mind: but with prices having doubled in the past 10 years, it’s a tough case to make, like complaining about tax on a winning lottery ticket.

There are any number of ways to put this. You can’t make an omelette without breaking eggs. Every action has an equal and opposite reaction. You can’t have your affordability cake and eat your equity too. And you can’t break systems premised on dodgy money without putting those business models in peril.

So what to do with that awareness?

If we accept that affordability in Vancouver remains a just goal, and that money laundering is wrong, there is only one wise and moral response. And that is to say, tough luck, and stay the course.

The Hongcouver blog is devoted to the hybrid culture of its namesake cities: Hong Kong and Vancouver. All story ideas and comments are welcome. Connect with me by email ian.young@scmp.com or on Twitter, @ianjamesyoung70.

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‘A laundromat for foreign organised crime’: billions in dirty cash from China, Iran, Mexico helped fuel Vancouver housing boom, report finds
Vancouver home prices just fell the most since 2008, extending declines in Canada’s most expensive city
Woman loses deposit on US$11 million Vancouver mansion, after abandoning purchase because Big Circle Boys triad boss Raymond Huang was murdered there
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