Real Estate

Vancouver housing bubble?

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Feb 15, 2008
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Firebot wrote: I've rented for many years in the past, and having delt with no less then 8 moves as a child, let's just say the grass isn't necessarily greener on the other side and there's a lot of disadvantages (and advantages) to being renting, the main one having the potential of your family to be evicted at any time. All I know is 1700$ a month over 10 years = 0$ equity.
And what's the equivalent cost of owning a $500k-$600k house over the same cycle? A heck of a lot more than $1700 per month, that's for sure.
Renting a 1700$ house is definitely cheaper then paying a 588,000$ mortgage, but at the end of the day you buy or rent what you can afford (frankly that landlord is an idiot for renting with negative cash flow, but I disgress). Both have their advantages and disadvantages and I'm not debating whether owning or renting is better.
The landlord is just being realistic as to what the market can provide in terms of rent.
TodayHello wrote: ...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
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Aug 12, 2004
4511 posts
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Calgary
Mark77 wrote: And what's the equivalent cost of owning a $500k-$600k house over the same cycle? A heck of a lot more than $1700 per month, that's for sure.
Obviously. If your budget is 1700 a month, you certainly dont buy a 600K house, but you might buy a 350K house or condo. Let's just hope the landlord has a very good reason to rent as such a low price or did a 50%+ downpayment, but negative cashflow when renting out is never a wise idea. 1700$ seems incredibly low for a 4 bedroom house.
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Jun 28, 2007
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adamtheman wrote: And I see GonePostal has stopped by. Hope he gives us an update of what's going on over at REIN...
What's wrong Adam? Does it bother you that much that he might be amused by this thread too?

Maybe you can PM him too like you just did with me and threaten him to stop looking or posting on YOUR thread too? If that doesn't work maybe you can go searching out e-bay purchases on the internet of star wars memorabilia and accuse him of being someone that he is not, just like you just did with me?

What kind of creepy person are you Adam? This is just a little thread on a public Internet forum. If someone disagrees with your opinions or calls you out on your analysis, or lack thereof, please don't go stalking them. There are laws against that. Surely your self-esteem isn't that tied up on this thread. Or maybe it is - which then says a heck of a lot about where you are coming from.

Anyways for the last time, stop PMing me with your rants and accusations or I will ask the mods to have you thrown out.
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Jan 16, 2009
4418 posts
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Toronto
gomyone wrote: What's wrong Adam? Does it bother you that much that he might be amused by this thread too?

Maybe you can PM him too like you just did with me and threaten him to stop looking or posting on YOUR thread too? If that doesn't work maybe you can go searching out e-bay purchases on the internet of star wars memorabilia and accuse him of being someone that he is not, just like you just did with me?

What kind of creepy person are you Adam? This is just a little thread on a public Internet forum. If someone disagrees with your opinions or calls you out on your analysis, or lack thereof, please don't go stalking them. There are laws against that. Surely your self-esteem isn't that tied up on this thread. Or maybe it is - which then says a heck of a lot about where you are coming from.

Anyways for the last time, stop PMing me with your rants and accusations or I will ask the mods to have you thrown out.
For the last time, you should STOP derailing this thread. Why are you coming back to the thread when you promised you're not going to post?

You can either threaten him through PM or just ask the Mod. All you did in this thread is personal attacks. Put your energy into good use instead of making meaningless and ineffective threat here, old man.

At least Adam is providing meaingful stats while you're just getting personal with him the entire time.

Since you are the fan of "soft landing", when is the last time soft landing happened in Canada? Is it the 90's? Did the home owner back then get burned?
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Jul 21, 2011
1731 posts
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RMB
Ceryx wrote: For the last time, you should STOP derailing this thread. Why are you coming back to the thread when you promised you're not going to post?

You can either threaten him through PM or just ask the Mod. All you did in this thread is personal attacks. Put your energy into good use instead of empty threat here, old man.

At least Adam is providing meaingful stats while you're just getting personal with him the entire time.

Since you are the fan of "soft landing", when is the last time soft landing happened in Canada? Is it the 90's? Did the home owner back then get burned?
I think for potential buyers it would be nice to hear both sides of the argument. I am not sure how the owners in the 90's get burned, people that brought their asset in the 90's deprecated by 20% for a decade long, but now it worth more than double.
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Jan 16, 2009
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zilber wrote: I think for potential buyers it would be nice to hear both sides of the argument. I am not sure how the owners in the 90's get burned, people that brought their asset in the 90's deprecated by 20% for a decade long, but now it worth more than double.
In Toronto, the depreciation is well more than 20% and they were very tough years for Ontario (remember Bob Rae and Mike Harris?).

It's going to be worse this time as the bubble is much bigger. the challenge is to live through these tough years with enough cash flow to service the mortgage.

Remember, 25% GDP is Construction/RE related. the umemployment number will go up when housing stops moving up.

More than 5% home owner wouldn't be able to keep their jobs and hold their house that long. That's why the price correction will be severe.

It will come down like how it went up.
Jr. Member
Oct 1, 2006
143 posts
18 upvotes
toronto
Man everyone here is getting a little ***** with all the garbage and attacks on people. All I am interested in are number of sales and the average price of detached homes and it seems to me that the number of sales is reduced greatly compared to previous years and the average price is flattened out right now compared to what we have seen on a monthly basis in the last couple years. Some houses still sell for a lot more than they should and some are greatly reduced in price. We are entering in the downward part of the real estate cycle, no one knows how far down it will go, and when it goes back up no one will know by how much until it is finished.

What is crazy is people telling each other how we should be living. For me it makes sense to own cause I have a family and we have stable jobs so stability and control is important. For someone else who is say single and likes to explore and not be tied down it makes sense to rent. You can't attack people's living preference if you don't know their lifestyle.
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Jul 22, 2008
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Hey moderators, wanna help clean up this thread a little and maybe set some guidelines or ground rules? I'm more interested in seeing some STRONG SUPPORT and ANALYTICS on how FAR or how FAST the housing market will fall. Almost everyone knew the easy credit and endless supply of foreign cash that was propping up the market would slow-down or stop eventually.
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Mar 31, 2010
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Terrific_Deals2k8 wrote: Hey moderators, wanna help clean up this thread a little and maybe set some guidelines or ground rules? I'm more interested in seeing some STRONG SUPPORT and ANALYTICS on how FAR or how FAST the housing market will fall. Almost everyone knew the easy credit and endless supply of foreign cash that was propping up the market would slow-down or stop eventually.
+1!!!!
I had the same problem with my poll regarding a the Canda wide crash.
The attempts to derails the thread made me sick of it and I just gave up

In response to charts and numbers I got only ironies and RE ***** talking
I did not have Adam's nerves to continue and I gave up

As anyone can see these guys do not post numbers, graphs, nothing that would support their theory that everything is quite OK
For them such a low level of sales is just seasonality and nothing else even if it the worst in many years!!! You simply can't have a conversation with these guys
Of course I lost my temper and I started arguing with them which won me a sanction from the admins!!
They just looked at my last outbursts but never looked at the context.
I told myslelf that the crash will go on without me :) and in the end I do not need good content here, the admins need that.

Yes the readers will be better server if both sides can post their opinion but with the condition that these are supported by reasonable grounds.
If this thread has an arguable but quite possible 50% crash assumption in the subject line my thread did not have that, yet it was enough to get the blood into their eyes and to make them try to shut down the thread
Now they are focusing on this one...

PS: I think we should start reporting them every time when they try to divert the thread
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Feb 7, 2008
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PF4RedFlag wrote: +1!!!!
I had the same problem with my poll regarding a the Canda wide crash.
The attempts to derails the thread made me sick of it and I just gave up

In response to charts and numbers I got only ironies and RE ***** talking
I did not have Adam's nerves to continue and I gave up

As anyone can see these guys do not post numbers, graphs, nothing that would support their theory that everything is quite OK
For them such a low level of sales is just seasonality and nothing else even if it the worst in many years!!! You simply can't have a conversation with these guys
Of course I lost my temper and I started arguing with them which won me a sanction from the admins!!
They just looked at my last outbursts but never looked at the context.
I told myslelf that the crash will go on without me :) and in the end I do not need good content here, the admins need that.

Yes the readers will be better server if both sides can post their opinion but with the condition that these are supported by reasonable grounds.
If this thread has an arguable but quite possible 50% crash assumption in the subject line my thread did not have that, yet it was enough to get the blood into their eyes and to make them try to shut down the thread
Now they are focusing on this one...

PS: I think we should start reporting them every time when they try to divert the thread
The problem here is what your view of a conversation is. Taking your example of the drop being seasonal or not (I don't agree or disagree), if someone is of the opinion that that is the case, why can't you have a discussion with him/her?

You can't do it because anyone not agreeing with your point of view is instantly just trying to derail the thread. For someone to have a conversation with you, they need to be in agreement with your high level view of the market and then you just discuss the minor points of it all.

As for reporting us, you go right ahead. Us having a discussion about this subject and questioning the stats you are putting up is not against the rules.

It would just be like if you posted a cold deal in the Hot Deals forum and got all pissed when people came in and told you the deal was cold.

As for Adam, I am in agreement with whoever posted their rebuttal to your point of 10-20% being close to 40%. We are miles apart.
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Mar 31, 2010
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Ok let's discuss it
Please explain us with arguments, numbers, point us to precedents, show us facts that will tell that having such a huge drop in sales is not a problem and
why can't this be considered the start of crash. Remember. Just facts. We do not want suppositions. What you saw in my thread was cold numbers
Which part of the that did you disagree with and WHY? Could you support your point of view with hard facts and numbers ?
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May 11, 2008
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PF4RedFlag wrote: Ok let's discuss it
Please explain us with arguments, numbers, point us to precedents, show us facts that will tell that having such a huge drop in sales is not a problem and
why can't this be considered the start of crash. Remember. Just facts. We do not want suppositions. What you saw in my thread was cold numbers
Which part of the that did you disagree with and WHY? Could you support your point of view with hard facts and numbers ?
I don't think I ever questioned the numbers - but the analysis and predetermined conclusion. Sure it can be the start of a crash. It can also be the start of a correction. What about those stats did you post unequivocally proves that there will be a crash?
You say it will lead to a crash. Others say a correction. Only time will tell who will be correct.
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Feb 7, 2008
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PF4RedFlag wrote: Ok let's discuss it
Please explain us with arguments, numbers, point us to precedents, show us facts that will tell that having such a huge drop in sales is not a problem and
why can't this be considered the start of crash. Remember. Just facts. We do not want suppositions. What you saw in my thread was cold numbers
Which part of the that did you disagree with and WHY? Could you support your point of view with hard facts and numbers ?
Who said this drop isn't a problem? I never said this can't be the start of a crash.

I did not disagree with the numbers, I disagreed that just based off those numbers, you could not say for sure that the crash was coming.

I am of the opinion that sales have dropped due to the tightening of the lending policies. Having said that, I do not believe that this is enough for a full blown crash since this by itself is not enough for us to see tons of people defaulting on their mortgage. I think we need to see drastic rate increases over the short term for this to happen. Without a crystal ball, you cannot know for sure if this will happen.

Do I have stats to back it up? Nope. But do you have stats and hard proof that this is all pointing to a crash of 40-50%? Nope, you haven't provided that either.
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May 11, 2008
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TripleHelix wrote: Who said this drop isn't a problem? I never said this can't be the start of a crash.

I did not disagree with the numbers, I disagreed that just based off those numbers, you could not say for sure that the crash was coming.

I am of the opinion that sales have dropped due to the tightening of the lending policies. Having said that, I do not believe that this is enough for a full blown crash since this by itself is not enough for us to see tons of people defaulting on their mortgage. I think we need to see drastic rate increases over the short term for this to happen. Without a crystal ball, you cannot know for sure if this will happen.

Do I have stats to back it up? Nope. But do you have stats and hard proof that this is all pointing to a crash of 40-50%? Nope, you haven't provided that either.
I think we're eye to eye on this issue. If I didn't know better I would swear that this is my second account :lol:
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May 8, 2008
157 posts
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Firebot wrote: Obviously. If your budget is 1700 a month, you certainly dont buy a 600K house, but you might buy a 350K house or condo. Let's just hope the landlord has a very good reason to rent as such a low price or did a 50%+ downpayment, but negative cashflow when renting out is never a wise idea. 1700$ seems incredibly low for a 4 bedroom house.
Firebot has now moved on to refusing to accept reality completely. This is getting more hilarious than ever!

Just for the fun of it, open any single RE site out there that lists rentals along with RE properties and you will find such deals. Before you ask, NO I will not do your homework for you. I found the info to convince myself already that this is truth. It is a rule of thumb that it costs roughly half to rent than to own in my own city (Montreal), in the center of the Universe/Toronto, and across the prairies, in Vancouver. You HAVE to factor in the costs of moving, the costs of maintaining the property (as opposed to being free to bail whenever) and the various taxes and fees. a 25% paper gain can melt rather rapidly.

You seem to refuse to accept these simple facts:
-boomers are coming to the age of retirement with absolutely no savings besides paper gains in the housing market.
-there is already an overcapacity in several RE sectors across the country.
-flippers, "investors" and speculators are overextended, just like the rest of canadians (at 162%+ ratio, it's hard to miss).
-there will be no HAM to save cities.
-a crash cycle begins with a decrease in sales coupled with an increase in prices. The bottom falls out first because young people didn't yet have the time to accumulate a big enough down payment, which impacts the average.
-a crash needn't be exactly 50%. Call it a crash, a soft landing or a poopcockery for all I care, it doesn't change the overall dynamics of the situation.
-Boomers stuck with no savings and a mortgage at 70 years old will be forced to keep their jobs longer. That means 20 somethings like me can't move up, make more more, save more and buy a house at inflated prices.
-CMHC has almost been maxed out already.
-Banks are tightening lending rules and started to increase rates. Again, youngin's are more affected than old farts with liquidity.
-the mortgage rules are different in Canada vs USA. Stop asking for exactly the same events that plagued the USA as a justification for a crash. We can have a canadian styled crash without any USA intervention, thank you very much.
-the RE "penetration rate" is essentially at saturation point. 70% is exceedingly high. Very few gains are possible. Are you going to pretend like the 10% unemployed canadians can magically afford 2500$ monthly payments?
-You cannot get kicked out of your rental instantly. I personally was a renter in a place that got sold. I was given a 6 months notice and I looked up the rules (I do have a few law books at home) and discussed it with lawyer friends. You don't get "kicked out". You simply don't get to renew your lease.
-Renting is fun. I never have to worry about having to wake up to a giant leak in my roof (as it happened to my uncle and his family in a mil+ home) or having to waste time on maintenance. More free time!
-the whole "you're throwing money away on rent" is a myth. Flash freakin' news: you throw money away to your bank to get the opportunity to "own". Use your head, a calculator and uncle Google to figure out ways to become rich at a faster rate through being a renter and investing in a diversified portfolio. It really is not that hard.
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Jan 16, 2009
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rems wrote: I think we're eye to eye on this issue. If I didn't know better I would swear that this is my second account :lol:
I think you guys are late to the party. This has been discussed in here.

http://www.theeconomicanalyst.com/conte ... ies-part-1

If you take a look for income/house ratio and you will realize most places are overvalued 30% to 40%.

When the bubble bursts, it will tend to overshoot so a 50% correction is logical estimate.

I don't think the full crash is here yet but once the trend reverses. It's a matter of time when it becomes a crash.

If you look at US 2007, the price is holding but the trasaction number is getting smaller until the full crash startedin 2008.
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Jun 28, 2007
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PF4RedFlag wrote: Ok let's discuss it
Please explain us with arguments, numbers, point us to precedents, show us facts that will tell that having such a huge drop in sales is not a problem and
why can't this be considered the start of crash. Remember. Just facts. We do not want suppositions. What you saw in my thread was cold numbers
Which part of the that did you disagree with and WHY? Could you support your point of view with hard facts and numbers ?
Same as the others. I don't dispute that sales have softened dramatically and I don't have any doubt that prices in Vancouver will continue to modestly fall either since current listings are outpacing sales levels. But the fundamentals don't suggest that prices will crash. Sales are returning to a more "sane" level as opposed to their "frothier" levels earlier this decade and this is simply because of the new mortgage rules, as others have also pointed out. They have not dropped because of distress - the chart below clearly shows that Vancouver employment is even on the upswing. Without any real distress, there is no reason why listings will surge further - eventually sellers will simply have to adjust their expectations to current sales levels and this will form a balance.

[IMG]http://i883.photobucket.com/albums/ac37 ... erjobs.jpg[/IMG]
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Mar 31, 2010
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So you are not aware of any previous situation when the sales dropped, the listings increased and a crash (read a dramatic change in prices) followed
and the fact that the drop has no precedent has no practical significance to you?
All that your common sense can tell is that at this moment nobody can tell you exactly what will happen right ?
All your arguments are in fact "doubts". That is your only response to facts. I hope you realize that in that light you can doubt everything around you.
Like, you get a disease but the fact is that you can not tell how it will go. You never know. Anything can happen right ? I call that kind of thinking bu.ll.sh.it, will all due respect.
And yes, I am sorry I do not participate in that kind of conversation.

So in the end, let's say I am getting along with that sort of thinking, you are asking for evidences right ? You are asking for hard proof.
To have you stop spreading doubts just because you can not oppose a rational opinion to facts, what sort of proofs would you expect from us?
Please name the type of evidences that will, in your opinion, be acceptable for predicting a crash. I am really curious.

PS: note that words like "could", "we will never know" "you can't say" and "believe" without numbers are the attributes of a religion
When you support that with numbers that is called SCIENCE, more exactly "Statistics and Probability" .
These were developed by the scientific world to anticipate future evolution of systems based on numbers

To tell you that a thing will happen for sure only two categories of entities can do that:
1. Gods
2. RE agents



TripleHelix wrote: Who said this drop isn't a problem? I never said this can't be the start of a crash.

I did not disagree with the numbers, I disagreed that just based off those numbers, you could not say for sure that the crash was coming.

I am of the opinion that sales have dropped due to the tightening of the lending policies. Having said that, I do not believe that this is enough for a full blown crash since this by itself is not enough for us to see tons of people defaulting on their mortgage. I think we need to see drastic rate increases over the short term for this to happen. Without a crystal ball, you cannot know for sure if this will happen.

Do I have stats to back it up? Nope. But do you have stats and hard proof that this is all pointing to a crash of 40-50%? Nope, you haven't provided that either.
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gomyone wrote: Same as the others. I don't dispute that sales have softened dramatically and I don't have any doubt that prices in Vancouver will continue to modestly fall either since current listings are outpacing sales levels. But the fundamentals don't suggest that prices will crash. Sales are returning to a more "sane" level as opposed to their "frothier" levels earlier this decade and this is simply because of the new mortgage rules, as others have also pointed out. They have not dropped because of distress - the chart below clearly shows that Vancouver employment is even on the upswing. Without any real distress, there is no reason why listings will surge further - eventually sellers will simply have to adjust their expectations to current sales levels and this will form a balance.

...
So that is the kind of discussion we have here:

1)sales below 10 years historical levels = soften dramatically. How the hell can you put soften near dramatically and pretend this is your mothers tongue while pretending that you do not understand my english?
2)what makes you believe that while the supply continues to increase, sales "soften dramatically" but the price will "modestly fall" . I am sorry but this is explanation sounds so "softly" gay!
3)can you come with some hard numbers instead of these "fundamentals"? At least for Vancouver since we are in this thread?
4) for the shake of your fundamentals I will hire back 10.000 average workers so you can explain how they can afford the prices in Vancouver because your fundamentals tell you that the prices will not crash, will just soften dramatically, to use your ...words.

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