CBC 29 June 2011[hat-tip ams] -
“Canada’s housing market is in a bubble that’s set to burst and prices could plunge by as much as 25 per cent, a major independent research firm warns.
“Housing valuations have lost all touch with fundamentals and household debt is at a record high,” economists at the research consultancy Capital Economics say in their most recent Canada Economic Outlook, issued Wednesday.
“Our fear is that, with the housing bubble now close to bursting and commodity prices retreating, Canada will go from leader to laggard.”
The report predicts a fall in house prices by as much as 25 per cent over the next three years.”
Many readers will already be familiar with the predictions from ‘Capital Economics': their economist David Madani made the 25%-drop prediction in a recent interview with Rob Carrick from the Globe and Mail.
We record the fact of the CBC story here, for the record, as it is noteworthy that they run a headline featuring the words ‘housing bubble’ and ‘bursting’. All part of the apparent steady increase in bubble-talk in MSM. – vreaa
UPDATE: This story was also run in the Vancouver Sun 29 Jun 2011, a similarly noteworthy occurrence. Interestingly, it isn’t featured on the online front page, or in the ‘Business’ headlines, but it was found second on the ‘most read’ sidebar.
Posted in 08. Overextended Buyers
Tagged Anecdotes, Banks, British Columbia, Bubble, Canada, Debt, Housing, Media, Mortgage brokers, Sentiment, Vancouver
TPFKAA at VREAA 23 Jun 2011 9:03am - “Got talking to a family I know. Two kids under five; a boy and a girl. The wife confided that they had dipped into the equity to the tune of 60,000 over the past four years just to make ends meet. 2 bedroom condo in 25 yo building, purchased in 2004 for 200k, now “worth” 350k, family income 3k/month net, mortgage payments 1500/month, strata fees 300, and special assessments rain down like riot debris. $900 last month, $2,000 a couple of months ago… She estimates a couple of k per year. A 2 br in same building costs $1200/month to rent. I asked why they don’t sell and rent for a while. She told me it is because the husband believes renting is just “throwing money away.” He wanted to sell and buy a house in Abbotsford about a year ago, but she did not want to leave the area they have lived in for 7 years. What is going to happen to this family if/when the equity disappears and no more RE_ATM? Even worse, their HELOCs may place them underwater.. and with a boy and a girl in a 2 br, that is no fun. What if rates rise? and the kicker… the sole income earner, the husband, works in construction. I don’t think they realise the dangers they are in thanks to being home”owners”.
Vancouver Westside, Month over Month:
SALES dropped over 60%:
28 April – 27 May 2011: 359 sales
28 May – 27 June 2011: 138 sales.
PRICES were pretty much flat through the period:
Average about $2.42M
Median about $2.15M
LISTINGS decreased from 1013 to 764
[numbers from yattermatters.com, thanks to Larry]
Start of seasonal summer slowdown, or beginning of buyer drought?
Who will be stepping up to take the über-jumbo-mortgages necessary to ‘buy’ these properties when prices start falling? – vreaa
Example of a median priced Westside property:
3261 W 38th Ave, V888979
Sold 27 May 2011; $2,098,000
2,580sqft SFH on 33x130ft lot
Excerpts from‘Vancouver ranked ‘nicest’ city in Canada’, Vancouver Sun 28 Jun 2011 [hat-tip 'calguy'] -
“[A] survey of more than 1,500 Canadians, commissioned by the Montreal-based Association for Canadian Studies and carried out during the week of June 21, presented respondents with a list of nine major cities from coast to coast and asked them to name their first and second choice for “nicest city in Canada.” …
Twenty-five per cent of all Canadians picked Vancouver as No. 1. Quebec City drew the second most votes as Canada’s nicest city, with 20 per cent of respondents nationally. …
The overall results, noted association executive director Jack Jedwab, partly reflect the fact that Vancouver residents themselves overwhelmingly named their own city the nicest — with 94.7 per cent of those living there convinced there’s nowhere better in Canada.”
“…such “hometown patriotism,” while evident to some degree among residents from each of the cities offered as choices, was strongest in Vancouver.”
“63 per cent of B.C. residents in general chose Vancouver.”
This comment below the article from an individual representative of the 94.7%, full-patch cult member ‘len2′ 28 Jun 2011 2:34pm – “excuse me, I don’t need polls to tell me what a Garden of Eden I live in, of course this is utopia. have you ever seen the moon on the rise standing by prospect point? how about from the cap river looking west, the string of pearls across the Majestic Lions Gate with a full moon in the background or underneath the Lions Gate looking south at the beautiful span, as it disappears into a forest of green. I have had the pleasure of living in this place of breathtaking beauty for over 40 plus years and I am still in AWE and THANKFULNESS when I look around me. nothing compares. I say to all you Vancoverites get out and explore your paradise, don’t just drive around, walk around the sea walls at night, visit the parks through out the lower mainland. to me this will always be heaven on earth. biased, of course I am, who would not be.”
[Note to self: Avoid getting into a bidding war on a Vancouver property with 'len2'. -ed.]
Yes, it’s another one of those almost innumerable polls/surveys/ratings.
We don’t have access to the methodology or raw data; the actual poll results themselves doesn’t appear to yet be publicly available. The poll was “conducted last week via web panel by the firm Leger Marketing”. A “web-panel” is a group of people who have previously agreed to participate in such polls. ‘1500 Canadians’ were each presented with a list of 9 cities (Vancouver, Quebec City, Ottawa, Montreal, Toronto, Halifax, Calgary, Edmonton and Winnipeg) and asked to rank them by ‘niceness’. There also appears to have been an ‘Other’ choice.
It looks like almost all Vancouverites polled voted Vancouver #1, and that is “partly reflect[ed]” in the “overall result”. We take this to mean that the pollster is pointing out that part of the reason that Vancouver did so well is that it got all of its home-town votes. Perhaps Vancouverites actually are more invested in their city than most?
Anybody with access to the actual poll publication, please share it with us. It’d be interesting to know more about the methodology, if only for curiosity sake, and we’d like to see the actual numbers.
And, by the way, what is the rationale for funding such a study? – vreaa
Posted in 01. He Said, She Said
Tagged Anecdotes, British Columbia, Bubble, Canada, Housing, Life, opinion, Ownership, Real Estate, Sentiment, Vancouver