Real Estate

Vancouver housing bubble?

  • Last Updated:
  • Nov 21st, 2019 4:54 pm
Tags:
None
[OP]
Deal Fanatic
User avatar
Dec 3, 2004
5081 posts
3453 upvotes
Vancouver
Things are getting pretty real in Vancouver and it's happening fast. I've never heard so many people talking about real estate as I have the past 2 days. The Vancouver media seems to be enjoying fueling the crisis. Some people are scared others seem defiant and insist they don't care, but clearly they do. Average detached home in Vancouver lost 9.1% value in the past 12 months, but that is the "benchmark" price used by the real estate companies and it is often lagging way behind. In reality, if you wanted to sell your house today you'd probably be looking at a 15-20% drop by the time it sells. That's entire down payments gone, wiped out for anyone who bought last year.

Suddenly, There Are TONNES Of Homes For Sale In Vancouver, And Prices Are Coming Down
https://www.huffingtonpost.ca/2019/02/0 ... _23661096/
Taken together, this means Vancouver's housing market is now a "buyer's market" for all housing types. Only 6.8 out of every 100 detached homes on the market sells in any given month. For townhouses, there are 11.9 sales for every 100 on the market, and there are 13.6 condo sales for every 100.

What's more, the city is headed for a deluge of new housing units set to hit the market over the next couple years, giving buyers even more options. Some 40,000 new housing units are expected to hit the market over the next two years.

People aren't feeling the need to rush into buying a house in Greater Vancouver these days, REBGV President Phil Moore said.

"Realtors are seeing more traffic at open houses compared to recent months, however, buyers are choosing to remain in a holding pattern for the time being," he said in a statement.

Prices are coming down for all property types, with the benchmark detached home price coming down 9.1 per cent in the past year to $1.45 million, down around $150,000 from a year ago.
Deal Guru
Jan 27, 2006
11495 posts
4746 upvotes
Vancouver, BC
EndlessRide wrote:
Feb 5th, 2019 5:12 am
It would be nice to see further breakdown on the stats beyond median prices for detached homes, like square footage and lot size, age of house.

I suspect the numbers would look even worse if it shows that buyers are able to buy more (and newer/renovated units) with less money than previous years.

ie. if in 2017, someone was paying $1.5MM for a 1970-built 1500 sq ft shack overlooking a garbage dump, and in 2019, they are paying $1.3MM for a 2013-built 3000 sq ft house in a nicer part of town.
You won't get that as providing 'too much detail' is against the best interest of the real estate industry as someone might actually use some data analysis to come up with a narrative that will counter theirs. After all, if you are the one in charge of documenting history and you benefit for certain narratives for that history, why would you let someone else do it?

Just look at that agent that represented that buyer in the story above....
“We made a good deal,” said Gordon Ge, the agent who represented the Point Grey buyer. “The market is dropping down right now because of the extra taxes.”
In all honesty, if the market is dropping, how could you say it was a good deal when the market hasn't levelled off and no-one knows when it's going to level off... Things could get worse - just look at the previous price history of that house -
Records for Ms. Lu’s listing show that the property sold for $455,000 in 2002 and resold for $751,500 in 2005 – above the asking price in both instances.
And how quickly it dropped from the highs - ie $1,000,000 in a few years. Will it drop another $100,000? $200,000? or $400,000? Who knows!

All I know now is the trend is not your friend when it comes to real estate prices.
Deal Guru
Jan 27, 2006
11495 posts
4746 upvotes
Vancouver, BC
choclover wrote:
Feb 5th, 2019 10:36 am
I only know of one detached house that sold on the west side in recent months and it was purchased by a builder. One data point is by no means a representative sample or statistically relevant but it is indicative of something.
The bad thing for the real estate bulls is even many newly completed houses aren't selling in this market. There's a row of 4 newly completed houses completed early last year on Boundary Road (just north of Joyce) that hasn't sold any of the 4 in almost a year - even as they change agents and companies. I suspect that the builder is waiting for Spring to see if the fresh year will bring out any buyers and if that doesn't happen, the price will drop. After all, the builder has been on the hook for $4 to $5 million (selling price $1.6 million per house x 4 = $6.4 million) to the bank for a little over a year at that point so much of the margin they would have made would be gone by then financing charges ($6.4 million x a very conservative 6% = $384,000 per year at least).
Deal Guru
Jan 27, 2006
11495 posts
4746 upvotes
Vancouver, BC
adamtheman wrote:
Feb 5th, 2019 2:13 pm
Things are getting pretty real in Vancouver and it's happening fast. I've never heard so many people talking about real estate as I have the past 2 days. The Vancouver media seems to be enjoying fueling the crisis. Some people are scared others seem defiant and insist they don't care, but clearly they do. Average detached home in Vancouver lost 9.1% value in the past 12 months, but that is the "benchmark" price used by the real estate companies and it is often lagging way behind. In reality, if you wanted to sell your house today you'd probably be looking at a 15-20% drop by the time it sells. That's entire down payments gone, wiped out for anyone who bought last year.

Suddenly, There Are TONNES Of Homes For Sale In Vancouver, And Prices Are Coming Down
https://www.huffingtonpost.ca/2019/02/0 ... _23661096/
Of course, the media is talking about it... Just as the fantastic stories of the market going upwards sold ads, these stories about the market dropping will sell ads. It's just in the last year when the market was drifting there weren't any ads sold as who 'cares' about a drifting market?
Sr. Member
Aug 3, 2006
616 posts
404 upvotes
craftsman wrote:
Feb 5th, 2019 12:39 am
Remember that this is traditionally the 'slow' part of the year with fewer listings and low activity. It's going to start being REALLY interesting when April/May rolls around as the Summer selling season starts.
With all the supply coming into the market, things are going to get exponentially worse.
Deal Guru
Jan 27, 2006
11495 posts
4746 upvotes
Vancouver, BC
datoprookie wrote:
Feb 5th, 2019 5:01 pm
With all the supply coming into the market, things are going to get exponentially worse.
Stories like the one posted above about the house selling for 2/3 of the previous selling price isn't going to help move the market upwards. I can see a whole lot of people sitting on their collective hands waiting for things to blow over... and we all know what happens when there aren't any buyers with more sellers coming online.
Deal Addict
Apr 10, 2011
1298 posts
788 upvotes
Vancouver
"Metro Vancouver homeowners losing big in a plunging market"

Vancouver Sun
February 5, 2019

Here's a look at five examples highlighted on Twitter of homes in Vancouver and West Vancouver where the owners took a bath, or are at least one foot away from a nasty fiscal scolding.

https://vancouversun.com/news/local-new ... ing-market

Image

... Just as money laundering washed their money in Vancouver Real Estate, they could also be urgently getting out at any cost.

... From the article, Zi Min Yang lost $780,000 in 2 years of ownership.
... Arman Memarzedeh is getting out fast after losing $420,000 in his two year "investment".
... Takari Investments lost $480,000 since they bought 2 years ago.
... etc.

Nothing like buying high and selling low. And it's going lower.

Several people I know have been waiting to list for the spring buyers. Things have always gone way up in the spring right?

Actually, they'll more likely be meeting all the spring sellers.

Maybe they'll wait it out another year and watch it drop another 15-25%.
Deal Fanatic
Oct 7, 2007
5317 posts
1885 upvotes
Looks like those special interest groups comprised of millennials who have been beating the "more supply" drum finally got their wish. No need to build more....there are now lots of houses to choose from with apparently more on the way.
Deal Fanatic
User avatar
Oct 23, 2003
7732 posts
1367 upvotes
choclover wrote:
Feb 6th, 2019 10:56 am
Looks like those special interest groups comprised of millennials who have been beating the "more supply" drum finally got their wish. No need to build more....there are now lots of houses to choose from with apparently more on the way.
lol millenials dont have 3 million to buy a previously 4 million house. They've got a long way to go to reach millennial household salaries in Vancouver. Maybe in 3-4 years.
[OP]
Deal Fanatic
User avatar
Dec 3, 2004
5081 posts
3453 upvotes
Vancouver
craftsman wrote:
Feb 5th, 2019 2:36 pm
Of course, the media is talking about it... Just as the fantastic stories of the market going upwards sold ads, these stories about the market dropping will sell ads. It's just in the last year when the market was drifting there weren't any ads sold as who 'cares' about a drifting market?
Let's not forget - those developers who plumped up the media and newspapers by buying ads are probably now cutting back. Suddenly the media isn't so nice anymore when their cash cow goes down for the count.
Deal Addict
Aug 21, 2007
4516 posts
386 upvotes
choclover wrote:
Feb 6th, 2019 10:56 am
Looks like those special interest groups comprised of millennials who have been beating the "more supply" drum finally got their wish. No need to build more....there are now lots of houses to choose from with apparently more on the way.
such a but hurt response.
Deal Expert
User avatar
Feb 9, 2003
17868 posts
2477 upvotes
Langley
Wow, I've been watching my local market in Langley and plenty of houses now are getting reductions after just ~30 days on the market. Didn't see that happening late last year.

Top

Thread Information

There are currently 2 users viewing this thread. (2 members and 0 guests)

Tadalafil, Motoss