Derek at vancouvercondo.info November 11th, 2010 at 10:11 pm -
“The thing with Vancouver is that you can never underestimate the pool of morons who will ante up and buy a house. It just seems that there is always another idiot who is looking to get in the game. I dunno when this will run out. It will, but it could take a lot longer than [bears] hope for.”
Devore at vancouvercondo.info November 12th, 2010 at 1:22 am -
“The money is not in running with the herd. The money is in raising your head up, and looking at the big picture to see where the momentum’s going, then getting there first. The herd is right, until it isn’t. Everyone’s an investment genius during the boom, until the boom ends. Then they’re running off the cliff with the rest of the genius herd.”
[We agree with both Derek and Devore. -vreaa]
I disagree with Derek
The Vancouver RE is a huge bubble based on speculation and not on fundamentals. I think that the tipping point will be sudden and a bit surprising, as it has been historically and more recently with the US RE crash.
I have lived in Europe, US and now in Canada and do quite well fiancially. I really believe that there is a great deal of self-deception and delusion about Vancouver being the “best place on earth”. The taxes are high, in addition to the HST. The infrastructure is deteriorating, and the economic growth fundamentals are dismal.
What is there in abundance is misleading advice from groups that stand to make a profit from it and herd-mentality of the greater fools. Can’t help but say it again that this will not end well
Get Real -> I agree with everything you say, but I don’t see how it disagrees with what Derek is saying.
I would submit that Derek is correct… He’s saying that the bubble will end, but only when we run out of fools.
We have been in an identifiable bubble since at least 2006, probably as far back as 2003, and it has been very, very difficult to time a top.
We have learnt it is wise not to hold one’s breath… “it could take a lot longer than [bears] hope for.”
I think a lot of it is going to come down to interest rates. To the non-economics minded buyer, I can see where they are coming from when they say that it makes sense to buy. The monthly payment is within their means, and hey, at least they’re not paying someone else’s mortgage! They are willing to pay a premium to own, and believe that the premium will be covered over time by price appreciation (or by the intrinsic value of owning a home). There is a lot of delusion and hype, but there is also a lot of mis-information and lack of sound advice by so called financial and real-estate professionals.
Agree
I was actively looking to buy a house in the Vancouver/Burnaby area but after some research on this topic have decided to wait.
My Realtor send a newsletter by some guy called Cameron Muiz, the “Chief Economist” for the Vancouver Real Estate. I am sure that he probably has the audience of non-economics minded unsuspecting masses, but he sounds very disingenuous to me. There should be laws against people providing such misleading and sugar-coated advice to the large number of people who may be staring financial ruin five years from now
Get Real -> See here for posts featuring Cameron Muir.
The end will come when the banks won’t lend out anymore. The only reason they kept lending over the past 18 months is because of the BoC giving the banks free money.
Once that happens I expect the Government stepping in both to help ‘distressed’ home owners to keep paying the man and new ones to indebt themselves.
How long they can play that game is going to be anybody’s guess, but no politician would turn the spigot off, they’d be out of the job in no time.
I am a bear, but I see ten years of high volatility with a clear downward trend.
Should the bottom fall out of the market then we’re all screwed anyway.