Real Estate

Vancouver housing bubble?

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Feb 15, 2008
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jmjoseph wrote: Man this is still active? Atleast the OP is somewhat smart enough to know when he is beat and abandon this thread altogether. Too bad he couldn't take his even more clueless buddy with him.
Except that housing is falling. The title is "the road to a 50% housing crash", not an immediate 50% crash. These things take time. The experience in California was a slow melt for a good couple of years, and then the bottom plunged as financing completely shut down.
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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May 1, 2012
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Markham
Mark77 wrote: Except that housing is falling. The title is "the road to a 50% housing crash", not an immediate 50% crash. These things take time. The experience in California was a slow melt for a good couple of years, and then the bottom plunged as financing completely shut down.
I am not sure and I cannot be certain 100% but at least 5 or 6 people have asked you for any sort of proof about your claim of "HOUSING PRICES ARE FALLING." Any kind of proof. The best you managed to muster was "go look it up."

Not sure if trolling, but you certainly do it well... whatever it is you are doing... being clueless... with imaginary portfolios.
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Jun 28, 2007
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jmjoseph wrote: Man this is still active? Atleast the OP is somewhat smart enough to know when he is beat and abandon this thread altogether. Too bad he couldn't take his even more clueless buddy with him.
Calling the OP of this thread "somewhat smart" is giving him way too much credit - his belligerence last year when he was critiqued about his ridiculous belief that daily price "data" was somehow proof that the market was going to see a 50% crash" was pathetic at best. His abandonment of this thread when reality ultimately confirmed that he didnt know what he was talking about is just cowardly and sad. But then what do you expect from a poster who feels the need to emphasize his gender in his username.
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May 1, 2012
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gomyone wrote: Calling the OP of this thread "somewhat smart" is giving him way too much credit - his belligerence last year when he was critiqued about his ridiculous belief that daily price "data" was somehow proof that the market was going to see a 50% crash" was pathetic at best. His abandonment of this thread when reality eventuality confirmed he was wrong is just cowardly and sad. But then what do you expect from a poster who feels the need to emphasize his gender in his username.
If what you described is true, then what do you say to Mark77's prediction of a 70% or more crash in real estate? Frankly 50% is slightly more credible than 70%+.
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Anikiri wrote: If what you described is true, then what do you say to Mark77's prediction of a 70% or more crash in real estate? Frankly 50% is slightly more credible than 70%+.
Delusional, but probably also a case of wishful thinking. His whole investment thesis ( if you can even call it that) is that there will eventually be a crash in real estate like there was in the stock market in 2000, and that stocks will surge as a result.

Knowing what I know about Mark, there would actually be a vindication for him if this happened because people whom he considers dumber than him ended up making more money than him simply by purchasing housing. Meanwhile he's spent the better part of a decade effectively unemployed and making nothing, but could not own up any personal responsibility for this.
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May 17, 2013
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jmjoseph wrote: Too bad he couldn't take his even more clueless buddy with him.
I'm curious. Do you care to be more specific as to who this clueless buddy is? /rhetorical
Penalty Box
Apr 16, 2012
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Greely
Mark77 wrote: techcrium, good thing I don't do options, and less than 10% of my portfolio is in individual stocks.

I think its been well established that most people can't time the stock market or create excess return in the stock market without increasing the level of risk. I don't view myself as any sort of exception.

Anyways, come up with all the fantasy scenarios you want. My net worth is up 35% YoY.

So your networth is up 35% YoY investing mostly in XIU?

XIU is up a max of 10% YoY.

If we go back 4 years, XIU is down from its high of high of $20.xx

Unless we are talking about magical money or something...
Member
Mar 2, 2009
278 posts
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Maple Ridge
i live in vancouver(well, a suburb of vancouver) and i work in new home construction. i have plans to get in to flipping.

thing about vancouver is there is a lot of foreign money coming in, more and more. i work in new homes on burke mountain in coquitlam. this mountain is slated for 10 years of new development, i have personally done the finishing in at least 75 of them in the last few years. the ones we are currently doing are selling for $1.3 million, and they arent mansions. they are 4500 sq/ft homes on postage stamp lots. most of the trades do garbage work because the developers only want to pay so much. the builders im doing work for turn a profit of $150-200k on each home, and they are selling fast fast fast. almost all of them are selling to the chinese, who are flowing in to vancouver like crazy.

as long as the foreign money keeps on flowing in i have no reason to believe any kind of crash is in the future. it also means i will likely not want to live here in the near future(and with housing prices like these i simply cant/dont want to afford it), but in the meantime i think there is money to be made. if i can get the flipping thing going for a year and finance a couple house builds i'll be very happy.
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May 1, 2012
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I am sure everyone has seen the Greater Toronto numbers by now. I am not even gonna link it because I am lazy. But ya... this prices declining theory is looking pretty grim for some real estate bears. Has it occurred to anyone that there is something called NEW MONEY. Former impoverished countries now churn out more and more rich and educated that want a brand spanking new life in Canada. And guess where they like to park their money?

We're at 7 billion people now and going. This isn't the Canada of Pierre Trudeau or Brian Mulroney. This is a 21st century Canada with numerous nouveau rich steadily streaming in... while bringing their relatives... with lots of cash to spend. We are no longer the dominant force for housing in Canada. It's the new guys.

So get real, and cut your losses. Bail like the OP, at least that way we don't have to go through this every couple weeks.
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May 17, 2013
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techcrium wrote: So your networth is up 35% YoY investing mostly in XIU?

XIU is up a max of 10% YoY.

If we go back 4 years, XIU is down from its high of high of $20.xx

Unless we are talking about magical money or something...
Interesting points. Magical money and magical returns?
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Dec 27, 2006
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Anikiri wrote: I am sure everyone has seen the Greater Toronto numbers by now. I am not even gonna link it because I am lazy. But ya... this prices declining theory is looking pretty grim for some real estate bears. Has it occurred to anyone that there is something called NEW MONEY. Former impoverished countries now churn out more and more rich and educated that want a brand spanking new life in Canada. And guess where they like to park their money?

We're at 7 billion people now and going. This isn't the Canada of Pierre Trudeau or Brian Mulroney. This is a 21st century Canada with numerous nouveau rich steadily streaming in... while bringing their relatives... with lots of cash to spend. We are no longer the dominant force for housing in Canada. It's the new guys.

So get real, and cut your losses. Bail like the OP, at least that way we don't have to go through this every couple weeks.
Questions for you:

So are you saying locals are going to be priced out of the housing market? Why are we seeing records amount of mortgage debt for Canadians? What do you think would happen if the cmhc stopped backstopping mortgages? Do record high house prices reflect the state of the Canadian economy? Are high house prices and the servicing of the debt good for the economy? Have wages kept up with rising house prices?

Interested to hear your thoughts.
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May 1, 2012
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Motoss wrote: Questions for you:

So are you saying locals are going to be priced out of the housing market? Why are we seeing records amount of mortgage debt for Canadians? What do you think would happen if the cmhc stopped backstopping mortgages? Do record high house prices reflect the state of the Canadian economy? Are high house prices and the servicing of the debt good for the economy? Have wages kept up with rising house prices?

Interested to hear your thoughts.
I am not really here for my thoughts. I am here for facts. But I'll oblige. Furthermore, I'll also put a few numbers out.

- 49% of homes that cost at least 1 million are purchased by foreigners in Montreal
- 25% of such homes in Toronto are foreign owners
- 40% in Vancouver

These are expensive houses. They are not the fixer uppers by any stretch. Then again, how hard is it to find a detached in Vancouver for over 1 million?

As for your questions.

1) Locals are being priced out already. How many people that frequent here aren't buying because they simply cannot afford it? How many that voice their concerns are complaining that they are forced to buy in Brampton or Orangeville... because housing in Toronto is too expensive. Leading up to 2016, there will be echo boomers buying into the market. Do you know what will happen to the real estate market? It will go up up and up.

2) I believe if you dig back a few posts about housing bubbles in Canada, you'll notice the recent (couple years) shift in mortgage pullback, tightened lending restrictions, and increased cash purchases. I am not going to dig it all up, it was all presented already by other users. I am sure you have read them. What you are referring to as a record amount of mortgage debt is really just locals trying to keep up with the market. At some point, you're going to be out.

3) If the cmhc stopped backstopping mortgages, you'll again see a temporary blip like last year... then straight back up. As evidence from the last several rounds of lending restrictions, people simply find ways around it and purchase slightly later. Also, seriously you think the cmhc is going to stop backing mortgages? I am not even going to ask why you raise such a ... questionable question.

4) The Canadian economy has very little to do with housing prices. Think about the new Toronto average housing prices increase of 11.3% over last year. When was the last time you got a 11.3% raise? Housing prices are dictated by many factors:
- immigration
- social mobility, global trend of people moving into metropolitan areas
- foreign ownership
- record low interest rates
- extremely low inflation... even... possibly deflation (see most recent BoC - today - statement)
- so on and so on.

I am tired of answering your questions. But basically it boils to that wages have not kept up, but like I said it's not the locals that are dictating the housing trend. One of the big reasons locals are even in the market is due to their parents backstopping. Wages have not kept up.

It really boils down to this. If you compare the Toronto housing market to many of the biggest and wonderful cities in the world, Toronto has yet a lot to climb. It's really sad, but this can go on for a long time. If you are such a big real estate bear... why don't you bet against the market?

People raise the same questions you've raised every freaking year. Have you seen the housing price index (historic) of Toronto? How many times were you right? ... a better question is... even when you were right... how long were you right for? a couple years? Then it's right back to record numbers.
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Feb 15, 2008
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Motoss wrote: So are you saying locals are going to be priced out of the housing market? Why are we seeing records amount of mortgage debt for Canadians? What do you think would happen if the cmhc stopped backstopping mortgages? Do record high house prices reflect the state of the Canadian economy? Are high house prices and the servicing of the debt good for the economy? Have wages kept up with rising house prices?
Yeah history tells us that there is always a long-term correlation between house prices and incomes. The housing bulls in Canada want to somehow repeal such a long-term correlation, or, alternatively, are implicitly suggesting that there are going to be very strong wage gains in the future.

I wouldn't waste too much time asking the housing bulls about the CMHC. For starters, most of them steadfastly refuse to even admit that it is 'subprime' mortgage insurance, that the raison d'etre of CMHC insurance is to insure loans so crappy that the banks don't even want them as prime assets for their leveraged balance sheets. If they can't admit that, then there's little prospect of them agreeing with or answering your other questions truthfully.
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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Feb 15, 2008
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Anikiri wrote: People raise the same questions you've raised every freaking year. Have you seen the housing price index (historic) of Toronto? How many times were you right? ... a better question is... even when you were right... how long were you right for? a couple years? Then it's right back to record numbers.
Toronto RE took a decade to recover from and return to the 1989-1990 highs. That's a lot more than just a 'couple years'. In the meantime, the stock market tripled and interest rates fell substantially.

Someone who took their 25% housing down-payment in 1990, and, invested it in stocks (ie: the TSE index, TIPs, the predecessor to XIU), a decade later, basically had almost enough to buy the house outright. While the mortgaged homeowner basically made a decade worth of payments and only had the paid-in equity to show for it.

edit: similar deal in Vancouver, slightly different timeframes.
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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Jul 3, 2011
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Thornhill
Meanwhile, the person who invested in stocks had to pay rent in addition to the taxes on the 300%.

Math check - 25% down on a $250,000 is $62,500, $187,500 when tripled. Even if you don't account for taxes on the gain and rent how does one "basically have enough to buy the house outright" when a decade later the difference in average price (GTA) between 1990 and 1999 was $27,000?
Mark77 wrote: Toronto RE took a decade to recover from and return to the 1989-1990 highs. That's a lot more than just a 'couple years'. In the meantime, the stock market tripled and interest rates fell substantially.

Someone who took their 25% housing down-payment in 1990, and, invested it in stocks (ie: the TSE index, TIPs, the predecessor to XIU), a decade later, basically had almost enough to buy the house outright. While the mortgaged homeowner basically made a decade worth of payments and only had the paid-in equity to show for it.

edit: similar deal in Vancouver, slightly different timeframes.

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