It is very, very difficult to be an industry insider with market insight during a bubble. Corpses of sensible stock advisors littered the roadside during the tech boom – the skeptics were made to look like fools by the relentless, illogical bull. Afterwards they were seen as unheeded visionaries, but it is exceptionally difficult for naysayers to stay the course; there is immense pressure to get in line.
‘ckung’ is a local realtor who understands the state of the market and has warned of a pending price collapse for at least a year. We have featured his quotes twice previously, 22 Dec 2009 and 25 July 2010.
Here he is again, ckung, at one of our fellow Vancouver RE bubble sites, ‘Whispers From The Edge Of The Rainforest‘, 11 Jan 2011 8:24 am -
“Firstly, I am not a bull but a realist and thus am more of a bear given the economic conditions we are in. Secondly I am a realtor with a banking background.
I just sent out an E-newsletter to my network of clients and contacts with regards to the influence of Mainland Chinese Investor immigrants on our market and more specifically on Vancouver West and Richmond. These people are not just looking at houses in these areas in terms of economic rents or even in terms of short term capital appreciation. They are seeking a way out of China for themselves and their families. So how much is it worth to them given this context? Something to ponder when you see outrageous selling prices.
Personally, I think that it may require a significant economic slowdown in China to stem the flow of such immigrant investors and thus the outrageous prices paid by these “greater fools”. Interesting times.”
Most Recent Comments:
- Farmer on “The bank encouraged her to take the equity in her home to purchase another home. She bought a 2nd home at the peak.”
- kabloona on “The bank encouraged her to take the equity in her home to purchase another home. She bought a 2nd home at the peak.”
- James on “I had a work colleague approach me today to ask about buying a condo in New West. She had no idea about the economics of ownership and real estate.”
- Brian on “The bank encouraged her to take the equity in her home to purchase another home. She bought a 2nd home at the peak.”
- investigativezim.com on Consequences, Intended and Otherwise
- Nemesis on “The bank encouraged her to take the equity in her home to purchase another home. She bought a 2nd home at the peak.”
- dumpster diver on “The bank encouraged her to take the equity in her home to purchase another home. She bought a 2nd home at the peak.”
- Joe at Kits on “The bank encouraged her to take the equity in her home to purchase another home. She bought a 2nd home at the peak.”
- YVR Housing Analyst (@YVRHousing) on “The bank encouraged her to take the equity in her home to purchase another home. She bought a 2nd home at the peak.”
- tedeastside on “The bank encouraged her to take the equity in her home to purchase another home. She bought a 2nd home at the peak.”
- Nemesis on “The bank encouraged her to take the equity in her home to purchase another home. She bought a 2nd home at the peak.”
- an observer on “The bank encouraged her to take the equity in her home to purchase another home. She bought a 2nd home at the peak.”
Type of Anecdote
- 01. He Said, She Said (247)
- 02. Profiting from the Boom (442)
- 03. Changed my Life (103)
- 04. Changed my Career (38)
- 05. Where do Buyers get the money? (962)
- 06. Held my Nose and Leapt (96)
- 07. Avoiding Vancouver (375)
- 08. Overextended Buyers (1189)
- 09. Delaying Buying (316)
- 10. Demoralized Renters? (366)
- 11. Regrets about Investing in RE (417)
- 12. Effects of Development (274)
- 13. 2010 Olympics Related (74)
- 14. Social Effects of the Boom (1257)
- 15. Misallocation of Resources (959)
- 16. Missed The Boat? (236)
- 17. The Froogle Scott Chronicles (27)
- 18. Spot The Speculator (171)
- 19. BlastRadiusPostCards (17)
- 20. The Limitless Demand Argument For Ongoing Market Strength (70)
- 21. Vancouver RE-Verse [Found Poems] (8)
- 22. RE References In Popular Culture (41)
- 23. Jumping The Shark (1)
- 24. Policies On Housing (10)
- 25. Epigrams For The Bubble (1)
- 26. Premature Calls Of "Bottom" (3)
- 27. Seller Panic (3)
- 28. Erroneous Causation Theories For Falling Prices (7)
- 29. Bubblespeak (1)
- Uncategorized (176)
Blogroll
- 01 Vancouver Condo Info
- 02 AmericaCanada [retired, no archive]
- 03 Housing Analysis
- 04 RealEstateTalks BC
- 05 Vancouver RE and then some
- 06 Whispers from the Village on the Edge of the Rainforest
- 07 Greater Fool
- 08 Canada Bubble
- 09 Rob Chipman's blog
- 10 YatterMatters
- 11 condohype [retired; archives available]
- 12 vancouver (un)real estate
- 13 Agent Will's Stats [retired]
- 14 Landlord Rescue
- 15 The Economic Analyst
- 16 Canadian Housing Price Charts
- 17 Hoodsurf [retired Jun 2011]
- 18 World Housing Bubble
- 19 Vancouver Price Drop
- 20 North American Economics
-
Latest Anecdotes:
- “The bank encouraged her to take the equity in her home to purchase another home. She bought a 2nd home at the peak.”
- “Let’s remember how we got here” – Looser and Looser CMHC Limits
- Don’t Worry, I’m Sure Somebody Will Sort This All Out – “Policymakers now know better and will be a lot more proactive in preventing a collapse.”
- “Things have changed, we are not doing that type of mortgage. We are not interested at all.”
- “We are noticing our target type of housing in price decline, albeit slow, as our money increases in value, slowly as well but outpacing housing.”
- Renter Buys In West Van – “For a few hundred more per month, you could own the place. Which is what I will be doing as my offer for a place down the street has been accepted. There is some value in staying in one place.”
- A Bed in the Bathroom, Why Not? [Let Us Count The Reasons...]
- “My husband and kids are pretty happy in our rental house within cycling distance of work that we could never have afforded otherwise. We’re doin’ pretty dang well, thank you, for median income earners in this expensive city.”
- “I Wish Them Bad Luck.” – Jim Flaherty, on those who wish to profit from Canadian RE price drops
- “We asked why he doesn’t just rent the whole house. He said he can’t, it wouldn’t cover his mortgage – he’ll get more to rent it out as two suites. These new landlords are hilarious, thinking that rent will cover their mortgage!”
- “My neighbours, in their late 60s, just put their house on the market. They had said they would die in that house, but now they are worried that with the housing market going south they may be losing a lot of equity and they better sell now before it gets worse.”
- Chat Thread
- Taking A Break
- “My best guess: this property is now an ‘investment hold’ and will be built ‘when prices recover’. Good luck on that!”
- Man Loses $745,000 Vancouver Condo Deposit
- Graphic – Degrees of Housing Overvaluation in Canada
- The Rare Individual With A Negative Ownership Premium
- Advice Regarding Renting In Vancouver, Please – “Unfortunately, the Vancouver rental stock is absolutely atrocious. It just seems like every landlord is looking for someone to pay 100% of their mortgage on a crappy place through rental income.”
- “I just visited Manhattan for a week, and happened to snap some real estate ads on both the Upper West and Upper East sides of the island. Compare to Vancouver. It simply doesn’t compute.”
- Ben Rabidoux In Vancouver Next Week
- “The mortgage company told me they were calling in my 40-year, 0-down mortgage. I have paid nearly sixty thousand dollars towards it, but, nearly five years in, I have yet to touch the principal.”
- ‘Vancouver City Hall: Housing Report Card 2012′; Plus Revised Version
- “My folks find themselves at 65 still owing half the value of their home and recreation property to the bank. After almost 30 years of ownership in the BPOE and a number of boom markets, they have very little to show for it.”
- “Rent for $2,200 a month or buy and have a mortgage of $4,310 per month. Why would anyone buy?”
- “They were talking about two couples they knew who had recently bought a lot and planned to each build a house on it and live as neighbours.”
- Greater Vancouver Home Builders’ Association Annual First-Time Buyer Seminar Attendance Plummets
- Mom and Pop Get It Wrong In All Markets, Time And Again
- The average British Columbian homeowner is not going to pay off their mortgage by the time they retire.
- “He’s sold all his properties except his current one, which is now for sale. He explained that the market’s currently in crash mode, worst that he’s ever seen.”
- “One of my old high school buddies finally got her mother to sell the family home in Kitsilano – sold for over $1M, monies realized after debt paid off $185K.”
- “I know someone who just declared bankruptcy because her condo was assessed at $150k and she bought it presale north of $250k in 2005 or 2006.”
- Sturdy, With Views – “Calling Froogle Scott!… Is Dr. Scott ‘In The House’?” [Not In This One, Certainly]
- “She said the market was dead in Victoria and that it would remain so for a very long time. I asked how she knew. Her answer was fascinating and should scare the pants off the real estate crowd.”
- Kits Notes – “I’m pretty sure that this is the first 3+ bedroom property of any type that I’ve seen in the 5 years I’ve lived here that is priced below $700K.”
- “A beautiful Belfast home, in the equivalent of 1st Shaughnessy, bought at their RE peak in 2007 for £3.5 million, has now sold for £800K, almost 80%-off. The market didn’t suffer any significant economic shocks. Rates & unemployment didn’t skyrocket. They didn’t build more land. Sentiment just changed and the prices fell and fell.”
- “Two family members of hers are trapped, underwater, in condos on the East Side.”
- “Interprovincial migration is not saying good things about BC’s economy.”
- Vancouver RE: Not As Expensive Provided You Don’t Think – “It’s clear that our perception of affordability has been coloured by living on a continent where housing is unusually inexpensive.”
- More Undisclosed RE Industry Insiders Publicized As Clients – “In 1995, Allan and Karin Hoegg were mortgage-free. But no more. Today their Vancouver home is a valuable source of income as they plan for full retirement.”
- Rumor that some OV units will be reduced by 20%.
Follow vreaa on twitter
- "The bank encouraged her to take the equity in her home to purchase another home. She bought a 2nd home at the peak." wp.me/pcq1o-5wr 1 day ago
VREAArchives
- June 2013
- May 2013
- April 2013
- March 2013
- February 2013
- January 2013
- December 2012
- November 2012
- October 2012
- September 2012
- August 2012
- July 2012
- June 2012
- May 2012
- April 2012
- March 2012
- February 2012
- January 2012
- December 2011
- November 2011
- October 2011
- September 2011
- August 2011
- July 2011
- June 2011
- May 2011
- April 2011
- March 2011
- February 2011
- January 2011
- December 2010
- November 2010
- October 2010
- September 2010
- August 2010
- July 2010
- June 2010
- May 2010
- April 2010
- March 2010
- February 2010
- January 2010
- December 2009
- November 2009
- October 2009
- September 2009
- August 2009
- June 2009
- May 2009
- April 2009
- March 2009
- February 2009
- January 2009
- October 2008
- September 2008
- July 2008
- June 2008
- May 2008
- April 2008
- March 2008
- February 2008
Tags
Anecdotes Banks Bears blogs British Columbia Bubble Bulls buyers Canada Capitulation China CMHC Construction Debt Economy Employment Fear Foreign buyers Fundamentals Government Housing Interest Rates Landlords Life Media Mortgage brokers Okanagan Olympics Ownership Prediction Real Estate Realtors Relationships Rent Retirement RE_ATM sellers Sentiment Speculators Toronto US Vancouver Victoria Visual Anecdote Whistler
The current trend of Chinese immigration is in some ways similar to the ‘exodus’ of people from Hong Kong before 1997 (hence the moniker ‘Hongcouver’). A lot of those people and even their next generation had since liquidated their Canadian assets and returned to Hong Kong for good, mainly for economic and lifestyle reasons. Immigrants from Mainland China may choose to do the same if China continues to prosper. On the other hand, if economic conditions in China deteriorate, then the flow of easy money originating from China that has been supporting Canadian (especially Vancouver) RE would cease and the bubble would deflate.
“They are seeking a way out of China for themselves and their families. So how much is it worth to them given this context? Something to ponder when you see outrageous selling prices.”
And the only way out of China leads to brutally overpriced Vancouver? The Chinese don’t ever move to other – much cheaper – cities?
I think this “Chinese buyer” argument is as bogus as the “We have Olympics so 25% up/year is normal”.
Read the news, you will see that the Chinese are really moving to cheap places like Miami.
Immigration to the States is much more difficult than immigration to Canada. Our countries have totally different philosophies on the matter.
Use your imagination. How about Toronto? Almost 300,000 Chinese already there and housing prices are half of what they are in Vancouver.
And there are other cities.
If they really just want a “way out of China” then there is no reason it has to lead to Vancouver. Don’t get me wrong, I have nothing against Chinese people, but the argument that the Vancouver real estate prices are high because they somehow provide a way out of China is nonsense.
What about all other Canadian cities with great universities. How about Waterloo, Kitchener, Cambridge, Guelph, Toronto, Ottawa, Montreal, Calgary, Edmonton … etc! Vancouver is not the only city in Canada.
I get your point. But other than Canada, I don’t know what the other options are for Chinese wanting to get a foothold in a developed western democratic country. I’m assuming it is probably pretty limited. Maybe Australia?
But I wonder if some trying to make this move have seized on Vancouver as the Gold Standard. For the same reason they want to buy in West Vancouver over other neighorhoods, they might want to buy into Vancouver over other cities.
There are plenty of other options besides Canada, USA or Canada. EU has more Chinese people than Canada. There are little Chinatowns in many European cities. Actually, there are Chinese communities all over the World.
Bubbly, for some but not all of the Mainland Chinese immigrants wanting an alternative “home” outside of China, Vancouver makes a lot of sense not in terms of housing prices but in terms of a welcoming infrastructure.
That is, Vancouver have the restaurants, the demographics, the schools etc. already in place which facilitates a much easier transition (for lack of a better term) to the Canada. Many may even have relatives and/or friends already living here. All of these factors are enough for some (not all) to pay the premium prices.
We may only be getting a fraction of the these wealthy Mainlanders but there seems to be enough of them to push real estate prices in Vancouver West and Richmond to new highs.
Read my comment above. Toronto has restaurants (way more than Vancouver), it has favorable demographics, schools, etc. And there are other cities in Canada and elsewhere where the Chinese are buying real estate. And they are almost always much cheaper than Vancouver.
Moving to Vancouver is a status symbol. It’s about ‘face’ in the Chinese culture.
“Moving to Vancouver is a status symbol.”
This one is in the same category as “The best place on Earth”, “Everybody wants to move here”, “It’s different here” etc.
If you want a place to live that is a status symbol, try Monaco or even Marbella (which has much lower RE prices than Vancouver)
Bubbly, I agree. I’m just sharing the Chinese perspective with you.
How does spending lots on a house help them get out of China?
I don’t think ‘bank teller’ qualifies as ‘banking background’…at least not how they are implying
Who is implying what? I was a Mortgage Sales Manager with 10 years in residential and commercial lending. Hope this clarifies my background a bit. What’s your qualifications/experience/background?
I don’t think you appreciate how unique vancouver is. Ask someone from china what the best university is. Ask them what the best car is. The answers will be 95 percent the same. Then ask about the city they want to immigrate to…. Totally illogical. But the madness of a crowd obsessed with the ‘best’…
Couldn’t you say that about any culture?
I am Canadian Born Chinese, 90% of my friends are Asian mainly from Taiwan, Hong Kong, China and I have been to HongKong and lived in Taiwan. My best friend is from Chongqing.
From my little cross section of friends that are from Hong Kong, a good half have returned to Hong Kong, they came more or less a few years before 97. The reason they go back to Hong Kong is that they do not see any opportunities in Vancouver to make a good living. They are bullish on RE in Vancouver but with the local wages, staying in Vancouver is kind of pathetic career wise. Being fluent in Cantonese and English they have an upper hand in succeeding back in Hong Kong.
Most the Taiwanese and Chinese I know are well off and usually have the mom and children here and father back home. This group usually just gets bored of Vancouver or get their education and leave. Some stay. The migration from China is still pretty recent so in the long run who knows what will happen.
Having been to all those places, when you ask people about Canada or US or Europe. Everyone I talk to know about as much of these western countries as the average person does of Asia. Meaning not much. They do not have an overwhelming preference of Canada, that is really ridiculous.
I think they are more curious about the US since most the exposure of North America they see is from Hollywood.
I agree with the people when they say immigrants go where there is an established group of your family or fellow country people. But that is exactly the point. There are more Chinese people in the States and some parts of Europe then in Canada. There is a saying where there is a sun there will be Chinese people.
This is just what I have observed of course. Its an anecdote, that is why I am posting it on this site.