Real Estate

Vancouver housing bubble?

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  • Apr 8th, 2020 1:42 pm
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Deal Guru
Jan 27, 2006
12637 posts
5775 upvotes
Vancouver, BC
BlueSolstice wrote: Should Eby resign over the scandal?
No as the voters will decide their fate soon enough. But they should take ownership over the mistake and put safeguards in place so that it doesn't happen again if they want to be re-elected on this platform. After all, these were the same people who expressed so much anger over the failed federal prosecution of a money laundering case a few months back only to have their much published 'victory' go down in flames the same day it was announced.
Deal Guru
Jan 27, 2006
12637 posts
5775 upvotes
Vancouver, BC
BlueSolstice wrote: A better outcome for bears would be developers renegotiating land/zoning/construction costs and build the units at a lower cost. Vancouver RE would have to fall A LOT for all the projects to be cancelled. Some of the projects need to be postponed so that construction trades can be forced to drop their prices. And some projects would need to be re-launched with lower development fees for the city.
They can't necessarily do that as much of their cost is already sunk into the land. To add insult to injury, the lenders, ie the major banks and credit unions, are seeing the writing on the wall for these projects and are worried about their current loans and are probably more risk-averse now with the current market conditions.

As for the city, according to an article I reposted here, they just increased many of those development fees in the past few months so I don't believe they would be in any hurry to reduce them. After all, which left-leaning government has ever put forward the idea of tax cuts for corporations and developers?
Jr. Member
Dec 5, 2009
109 posts
32 upvotes
It's not much of a scandal... He's tring to find "clear criminal links" and that may be very difficult to do... these criminals aren't your standard B&E idiots. It's very possible that everything that he's said (and others, ie. all of the reports from other casino or banking employees) is true, but it will be very difficult to prosecute.
Deal Guru
Jan 27, 2006
12637 posts
5775 upvotes
Vancouver, BC
Alpine84 wrote: It's not much of a scandal... He's tring to find "clear criminal links" and that may be very difficult to do... these criminals aren't your standard B&E idiots. It's very possible that everything that he's said (and others, ie. all of the reports from other casino or banking employees) is true, but it will be very difficult to prosecute.
I didn't say that it was a scandal... I said that they need to a better job before dragging someone's name through the mud especially if it only takes less than A DAY to find out the government was WRONG. We are dealing with people's lives and reputations here so the government should take at least a little care before making these types of announcements.
Deal Addict
Jan 23, 2016
1102 posts
367 upvotes
Kitchener, ON
craftsman wrote: The last point is actually supported by the recent numbers published about the increasing numbers in BC who are financial distress -> up 5+% over the previous year for April if I remember correctly - and that's with an economy doing relatively well. I would hate to think what's happening to those with reverse mortgages and got them at the height of the market (ie. those $3.5 million homes which are now worth $2.5 million...)... what type of squeeze is happening there. And of course, it's property tax season so people are getting their invoices which may just add to the financial pressures.
Don’t need to look further then debt to income. Canada is at $1.80/$1 today. US was at $1,30/$1 when theirs kicked off.
Deal Addict
User avatar
Jul 8, 2010
1142 posts
799 upvotes
Ontario
Sparky9087 wrote: Don’t need to look further then debt to income. Canada is at $1.80/$1 today. US was at $1,30/$1 when theirs kicked off.
This does not matter, everyone knows that Canada is special. Just think about all those 400k+ immigrants that come to Canada each year and they need to buy RE....
Deal Addict
Jan 23, 2016
1102 posts
367 upvotes
Kitchener, ON
Isostar wrote: This does not matter, everyone knows that Canada is special. Just think about all those 400k+ immigrants that come to Canada each year and they need to buy RE....
If you believe the bulls here they are only a small fraction of the buyers.
Deal Addict
Apr 10, 2011
1445 posts
861 upvotes
Vancouver
"Foreign money still driving B.C. housing market despite ownership data"
Vancouver City News
June 11, 2019

The latest numbers from Statistics Canada only look at someone's residency, not where the money to buy it came from.

Of the 2,156,920 residential properties in B.C, 5.5 per cent were owned by foreign individuals or foreign non-individuals such as non-individual a corporation, trust or state-owned entity, according to the Canadian Housing Statistics Program from Statistics Canada.

Josh Gordon with the Simon Fraser University School of Public Policy says the study only looks at someone’s residency, not where they got the money to buy the property.

Just because there are a lot of domestic speculations does not change the fact that the overall market is being driven by the impact of outside money.

https://www.citynews1130.com/2019/06/11 ... ign-money/
Last edited by RxMills on Jun 12th, 2019 1:39 pm, edited 1 time in total.
Deal Addict
Apr 10, 2011
1445 posts
861 upvotes
Vancouver
"Expert who predicted Vancouver housing price drop now expects condos to flood market"
Vancouver City News
June 5, 2019

"We’re going lower, longer. By middle of 2020, average sale prices should be right around $1.4 million for the detached market, signalling a 20 to 24 per cent [drop]. There’s some factors that could maybe cause the detached market to go even lower.”

“[This] basically creates an environment where the inventory can continue to build up, thus causing more competition for the sellers,” he says.

“You’re going to see the cannibalization of the condo market where there’s a flood of new, built properties available to move in today and they’re going to be at relatively attractive prices.”

Eitel also says developers will have to get more competitive.

There’s going to be a flood of inventory that comes up that no one’s really anticipating, which is all those investors that bought five and six properties are just going to walk away, simply walk away from their 15 per cent deposit, 20 per cent deposit.

There’s going to be an absolute ton of inventory available.”

https://www.citynews1130.com/2019/06/05 ... od-market/
Penalty Box
User avatar
May 15, 2016
5214 posts
1765 upvotes
RxMills wrote: "Expert who predicted Vancouver housing price drop now expects condos to flood market"
Vancouver City News
June 5, 2019

"We’re going lower, longer. By middle of 2020, average sale prices should be right around $1.4 million for the detached market, signalling a 20 to 24 per cent [drop]. There’s some factors that could maybe cause the detached market to go even lower.”

“[This] basically creates an environment where the inventory can continue to build up, thus causing more competition for the sellers,” he says.

“You’re going to see the cannibalization of the condo market where there’s a flood of new, built properties available to move in today and they’re going to be at relatively attractive prices.”

Eitel also says developers will have to get more competitive.

There’s going to be a flood of inventory that comes up that no one’s really anticipating, which is all those investors that bought five and six properties are just going to walk away, simply walk away from their 15 per cent deposit, 20 per cent deposit.

There’s going to be an absolute ton of inventory available.”

https://www.citynews1130.com/2019/06/05 ... od-market/
Haven't really followed the thread but has prices really fallen 20% to justify walking away from their purchase?
Deal Addict
User avatar
Dec 14, 2007
3100 posts
1514 upvotes
vivibaby wrote: Haven't really followed the thread but has prices really fallen 20% to justify walking away from their purchase?
Even "IF" there are 20% drops, people typically don't just walk away from the purchase. They just hold on For three years, four years, five years, or however long it takes for them to feel better about themselves when they finally sell at a "profit", not taking into account opportunity cost and other elements. There will be no mass sell-off.... just a slowwwwww erosion of equity.

Remember, real estate is essentially an inverted roller-coaster. Instead of a slow climb and a precipitous drop, it's a precipitous climb and a slow anti-climactic coast.
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
9967 posts
5289 upvotes
atomiton wrote: Even "IF" there are 20% drops, people typically don't just walk away from the purchase. They just hold on For three years, four years, five years, or however long it takes for them to feel better about themselves when they finally sell at a "profit", not taking into account opportunity cost and other elements. There will be no mass sell-off.... just a slowwwwww erosion of equity.

Remember, real estate is essentially an inverted roller-coaster. Instead of a slow climb and a precipitous drop, it's a precipitous climb and a slow anti-climactic coast.
Let them dream I guess.
Penalty Box
Aug 21, 2007
4731 posts
433 upvotes
gave up on rfd
What is somewhat ironic is that people still do not think there is the same issue with money laundering here in Toronto in the real estate market or yer worse, those who think Vancouver is leveling off.
Left rfd
Deal Addict
Dec 4, 2016
1750 posts
801 upvotes
Alpine84 wrote: It's not much of a scandal... He's tring to find "clear criminal links" and that may be very difficult to do... these criminals aren't your standard B&E idiots. It's very possible that everything that he's said (and others, ie. all of the reports from other casino or banking employees) is true, but it will be very difficult to prosecute.
Compare this case to the Mark Norman case, which one is more of a scandal?

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