Real Estate

The Perfect Storm for Vancouver’s Housing Market

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  • May 3rd, 2018 3:09 am
Member
May 22, 2013
305 posts
116 upvotes
Vancouver

The Perfect Storm for Vancouver’s Housing Market

Reasons why I’m convinced that the housing bubble in Vancouver will now burst:
1. Inflated prices where 1bdr condos are selling for $750K-$950K are simply ridiculous
2. NDP government is cracking down on presale condo flipping and implementation on taxes against foreign investors
3. More Chinese international students are returning to China due to better economic prospect (over 80%)
4. Rising interest rates will put the Canadian economy into recession and bringing down wages
5. Tougher mortgage qualifications
3 replies
Deal Fanatic
User avatar
Jan 14, 2009
5887 posts
4816 upvotes
Vancouver, BC
rMBA13 wrote: Reasons why I’m convinced that the housing bubble in Vancouver will now burst:
1. Inflated prices where 1bdr condos are selling for $750K-$950K are simply ridiculous
2. NDP government is cracking down on presale condo flipping and implementation on taxes against foreign investors
3. More Chinese international students are returning to China due to better economic prospect (over 80%)
4. Rising interest rates will put the Canadian economy into recession and bringing down wages
5. Tougher mortgage qualifications
Bring it on lol. Time to buy an investment property. Vancouver is still a lot more affordable than HK and not just for real estate Smiling Face With Open Mouth And Tightly-closed Eyes.
If you buy vgro for a thousand years Vancouver homes will still be out of reach.
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Apr 10, 2011
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They have to live somewhere.

Interest rates are rising, but very slowly. Most are locked in for 5 years. I don't think problems will happen for a few years.

There are mass quantities of renters living in affordable rentals with leases and rent controls.

Those building owners see the huge gap between what they're getting and what they could get at today's rental rates. They are finding ways to act. It's going to be interesting how $800-1200/m tenants react to $1800-2500/m rates.

I've seen houses go up by 2-2.5X in a tiny amount of time. If you drive around Vancouver now, there are 1-3 homes on every block for sale right now. WOW!

People are starting to recognize that getting these prices is truly amazing so they're acting. If there's a steady 10-15% yearly slide, and they no longer NEED the house and no longer NEED to live in Vancouver, they'd be crazy to hang in there. All the tax-free gain might start to reduce.

It's going to be interesting and fun to watch how it all evolves.

There isn't a sense of shortage now. There are tons of homes for sale.

People also don't like the new education tax on $3M+ homes. If I were in a $4M home, I'd save a lot of property tax going into a $2.8M home.

Regarding condos, I'm hearing so many stories of people buying $800,000-$1M condos that turned out to be big money pits. $5,000 for pipe changes, cracks in concrete foundations, etc. etc.

The experts created perfectly staged homes with high end rented furnishings for the open houses, and storage lockers for the accumulated personal junk.

Of course, the agents suggest avoiding inspections and conditions during the offer.

Vancouver's such a fluid situation right now. If some major unforeseen event were to happen, it would be nothing for prices to drop 50-70%. But that's extremely unlikely. Stocks and previous metals can be unloaded in seconds. Real Estate, not so much.

But, most people believe that the past predicts the future. That's how we got to these prices today.

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