Real Estate

Vancouver housing bubble?

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  • Aug 24th, 2019 11:58 pm
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Deal Fanatic
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Oct 23, 2003
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BlueSolstice wrote:
Jun 18th, 2019 10:18 am
37% of condos and 15% for detached adds up to 30%-ish non-owner occupied rate. Add maybe 10% "non-market housing" (social housing, co-ops, group homes, etc), we have 40% of population not owner-occupier. That means 60% owner-occupier. For a metropolitan area, I don't see anything wrong with this number. Yan is really making a big deal out of nothing.

UBC and endowment lands are close to a university. For what it's worth, condos near McGill university of Montreal probably also have low owner-occupier rate. Vancouver just don't have a large stock of older rental apartment like Montreal.
Basically half the city doesnt exist in terms of population vs housing, and you dont see anything wrong. lol. I'm sure China has a few ghost cities it wants you to invest in as well, should go check it out.

A run out the door in Vancouver is more viable than previously thought, and 40% of the market being ghost owners, means a majority of them will attempt to drop those assets like stocks as soon as something major spooks them.

Vancouver's walking on a tight rope is those numbers are true.
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Dec 4, 2016
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Buggy166 wrote:
Jun 18th, 2019 10:45 am
Basically half the city doesnt exist in terms of population vs housing, and you dont see anything wrong. lol. I'm sure China has a few ghost cities it wants you to invest in as well, should go check it out.

A run out the door in Vancouver is more viable than previously thought, and 40% of the market being ghost owners, means a majority of them will attempt to drop those assets like stocks as soon as something major spooks them.


Vancouver's walking on a tight rope is those numbers are true.
40% of people not owning their own doesn't mean 40% of the city doesn't exist. Big cities tend to have relatively transient population, and it doesn't make sense for a lot of people to buy. Students, and professionals on contracts, are better served if they rent instead of buy. On the other hand, mom and pop investors buy condos to rent out, as a way of saving for retirement. Nothing wrong with that, given the hostility of governments towards landlords, making residential REIT completely non-viable.

Is there data comparing percent owner-occupier of Metro Vancouver to other areas, such as SF, NYC, or even Seattle?
Deal Guru
Jan 27, 2006
11119 posts
4516 upvotes
Vancouver, BC
BlueSolstice wrote:
Jun 18th, 2019 1:53 pm
40% of people not owning their own doesn't mean 40% of the city doesn't exist. Big cities tend to have relatively transient population, and it doesn't make sense for a lot of people to buy. Students, and professionals on contracts, are better served if they rent instead of buy. On the other hand, mom and pop investors buy condos to rent out, as a way of saving for retirement. Nothing wrong with that, given the hostility of governments towards landlords, making residential REIT completely non-viable.

Is there data comparing percent owner-occupier of Metro Vancouver to other areas, such as SF, NYC, or even Seattle?
Realistically, as much as I like comparisons, you can't use cities like SF, NYC, or even Seattle as all of them have high levels of diverse types of economic drivers (ie. SF is very much high tech, NYC is a hub of many, many things, and Seattle has both industry and high tech (not to the same degree as SF). A better comparison may be Portland which has some economic drivers but nothing crazy.
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Dec 4, 2016
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craftsman wrote:
Jun 18th, 2019 2:10 pm
Realistically, as much as I like comparisons, you can't use cities like SF, NYC, or even Seattle as all of them have high levels of diverse types of economic drivers (ie. SF is very much high tech, NYC is a hub of many, many things, and Seattle has both industry and high tech (not to the same degree as SF). A better comparison may be Portland which has some economic drivers but nothing crazy.
Portland has similar metro population as Vancouver, but does not have anywhere near the geographic constraint. It's not even on the coast.
Penalty Box
Mar 7, 2011
3463 posts
1608 upvotes
Vancouver
BlueSolstice wrote:
Jun 18th, 2019 1:53 pm
40% of people not owning their own doesn't mean 40% of the city doesn't exist. Big cities tend to have relatively transient population, and it doesn't make sense for a lot of people to buy. Students, and professionals on contracts, are better served if they rent instead of buy.
So 40% of Vancouver is transient, that's what you're saying? Because I've been here for 12 years, and rented all this time... do you want me to google news articles from Vancouver about people renting for 30-40 years and being kicked out by greedy landlords? Would you call them transient too?
No, buddy, this number says only 2 things about Vancouver : greed and unaffordability.
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Dec 4, 2016
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charlesd79 wrote:
Jun 18th, 2019 3:49 pm
So 40% of Vancouver is transient, that's what you're saying? Because I've been here for 12 years, and rented all this time... do you want me to google news articles from Vancouver about people renting for 30-40 years and being kicked out by greedy landlords? Would you call them transient too?
No, buddy, this number says only 2 things about Vancouver : greed and unaffordability.
Do you have equivalent numbers for other big cities? Metropolitan areas generally have lower owner-occupier rates than smaller cities, a simple nature of the kind of economy in such places. As for people renting for decades, perhaps they should have bought 30-40 years ago then.
Member
Aug 17, 2013
484 posts
288 upvotes
Toronto
charlesd79 wrote:
Jun 18th, 2019 3:49 pm
So 40% of Vancouver is transient, that's what you're saying? Because I've been here for 12 years, and rented all this time... do you want me to google news articles from Vancouver about people renting for 30-40 years and being kicked out by greedy landlords? Would you call them transient too?
No, buddy, this number says only 2 things about Vancouver : greed and unaffordability.
If Vancouver is all about greed and unaffordability and you have been here for 12 years, doesn't that reflect on who you are as a person? You're just as greedy as everyone here. You can be not as "greedy" as everyone in vancouver by moving to Manitoba.

No one forcing anyone to live here. You can move anywhere in the country but you won't.
Deal Addict
Apr 10, 2011
1245 posts
737 upvotes
Vancouver
Could those so-called "bulls" please buy something?
................................

"Vancouver Detached Real Estate Is Now Cheaper Than It Was 3 Years Ago"

https://betterdwelling.com/city/vancouv ... years-ago/#_

VANCOUVER
JUNE 13, 2019

"The Greater Vancouver detached real estate scene is looking worse.

Real Estate Board of Greater Vancouver (REBGV) numbers show prices fell to a three year low in May.

The drop in prices came with the fewest May sales in over a quarter century.

Detached real estate prices are still falling across Greater Vancouver. REBGV reported the benchmark (a.k.a. typical) price fell to $1,421,900 in May, down 11.5% from last year. In the City, Vancouver East’s benchmark fell to $1,347,000, down 12.5% from last year.

Vancouver West had the largest drop with a benchmark of $2,927,600, down 14.5% from last year. That’s almost half a mill dropped off the price of the last one over 12 months."

.............................
In other news today...

TD Bank forecaster predicts prices in Vancouver will bottom out in Dec 2020.

The recent college grad seems to know a lot about the global and future economic and political developments, over his 3-5 years of study, to accurately predict the bottom.

I wonder if he's buying.

We need his help too.
Deal Fanatic
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Oct 23, 2003
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BlueSolstice wrote:
Jun 18th, 2019 4:03 pm
Do you have equivalent numbers for other big cities? Metropolitan areas generally have lower owner-occupier rates than smaller cities, a simple nature of the kind of economy in such places. As for people renting for decades, perhaps they should have bought 30-40 years ago then.
Nothing like buying real estate pre-birth. Good strategy. Worked for Trump. lol
Deal Guru
Jan 27, 2006
11119 posts
4516 upvotes
Vancouver, BC
Interesting new article in the Globe and Mail -> Vancouver real estate sees uptick in interest from Hong Kong buyers following extradition bill unrest
Real estate agents in Vancouver have noticed something unusual in the past few weeks. For the first time in recent memory, the number of Hong Kong Chinese attending open-house showings has exceeded that of mainland Chinese buyers, who have been a visible presence in the city’s real estate market over the past decade.
I find it interesting not because of the content but of the time of this article as well as the recent bit on Global News featuring a lawyer talking about this very topic. Granted, it can be very possible that this is happening on the surface. But if you look closer and look at the timeline of events, I find that it might be 'manufactured' more than anything else.

For example, the HK bill was first proposed in February of this year. So, if people had concerns about the bill, we should have seen this uptick in the past few months (ie starting in April at least), not in the past few weeks. And why would there be just an uptick in the past few weeks, when most of the 'action' in HK has happened in the past week? Are these people who are 'looking' for properties concerned that if the bill was made into law, they would be immediately subject to that law and sent to Mainland China?

I could understand that there might be some increased interest that would ramp up over time (ie like months or years) as people change their long term plans to move. Wouldn't other countries with a large ex-pat population in HK (like Australia - 100,000 in HK) see the same thing happen there? I wonder if the media in those countries with large ex-pat populations are covering this issue at all (ie are they seeing an influx of ex-pats looking to come home)?
Deal Fanatic
Feb 29, 2008
8107 posts
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Manufactured stories are nothing new but it happens on both sides. I remember all the bullshit stories in Toronto about landlords tripling rents and tenants not being able to find rentals. All bullshit.
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Oct 7, 2007
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atomiton wrote:
Jun 14th, 2019 4:07 pm
I'm with you on this one. In my opinion, doing what you can to crack down on illegal activity is a good long term thing to do anyhow. Corruption starts small and over time... if you ignore the small stuff, it just gets bigger and bigger.

I KNOW that the current agenda is a lot of politics and I also am pretty sure that foreign speculation has had a nominal effect on real estate values... but the PERCEPTION of foreigners buying up the land in Vancouver is a STRONG force. If 1 in 20 homes are bought by foreigners, 19 in 20 are NOT. Those 19 people see crackdowns and they see a pullback in RE values. Much of the pullback in values actually happened before much of the crackdowns... it was just market forces that made houses overvalued, plain and simple... and people stopped buying... FOMO or no FOMO. Those 19/20 are what affected the market... but those 19 out of 20 people felt like there was a crackdown. If 5% of foreign bought property was corrupt and 5% of houses were bought by foreigners... then it's 0.25% which really is a rounding error apart for smaller segments like the really expensive mansions in West Vancouver.

It's the same how I also KNOW that the Olympics are generally a RAW deal, but it provides an impetus for a city to get motivated to enhance/build/create new infrastructure. Given how much opposition the RAV line (née Canada Line) had when it was being proposed, I'd be shocked if it got built without the Olympics. I KNOW that the officials were saying it's NOT an Olympics Line... and that's true on paper perhaps, but the Olympics SMOOTHed the path (ever so slightly) and MOTIVATED the government to do everything they could to just get it built.

It's the same with money laundering. It may be small potatoes, but it's still illegal and there IS corruption at play. If you don't cut out the rotten part of the fruit, it quickly spreads to the whole basket.
Money laundering also makes good news, it allow Vancouverites to point the finger at foreigners instead of blaming domestic lax lending policies, low interest rates, or local FOMO... and it gives politicians something to rally about during election campaigns.

Will these actions mean we'll get less legitimate foreign investment? Yes. It will mean that. Therefore, our economy will grow more slowly. THAT is a given. But in the process, you have the opportunity to make things more transparent... and daylight some of the opaque elements of real estate. IMO, real estate should be subject to the same kind of oversight as the stock market. Right now, it's nowhere near that. Some of that is changing.

Why are developers ALLOWED to hold back 20% of a condo and then claim the building is sold out... it makes a mockery of the whole process. There should be required transparency there. Why are condos allowed to claim in marketing materials that a unit is a 2 bedroom unit when bedrooms must have a window. Why can they get away with including the balcony in the sq. footage of a unit in marketing materials... but officially the balcony is NOT considered part of the sq. footage of the unit? Why don't we have 3rd party detailed selling data like we do for the stock market?

Anyhow... the whole foreigner witch hunt is allowing the government to set more strict guidelines when it comes to real estate, so that's not a bad thing. Transparency is key when you're trying to root out corruption. And I'm all for that, despite the short term pain in real estate values.
Excellent analysis.

I strongly agree with getting rid of the corruption before it increases and sending a loud message to potential tax evaders. Zero tolerance would be ideal. Break the law and pay the penalty.

However, I think we also always have to bear in mind who is sending the messages we hear. Is it the politicians? Is it the media? Is it the real estate industry? Behind every message, there is the possibility of spin so we need to use as close to RAW data is available to vet what we are hearing to know whether it is true or not.

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