Glenys 7 Jun 2011 in the comment section ‘Vancouver home prices poised for correction, could fall 21 per cent: report’, The Canadian Press, 7 Jun 2011 -
“For the last decade or so these reports by “experts” continually say Vancouver’s housing market is overpriced and the bubble will burst and prices will fall. Still waiting for it to happen – small adjustments that last less than a year don’t count. Still people from somewhere able to buy and keep the market high, regardless of world economy or interest rates.
In my neighborhood, the people who are buying the overpriced homes sold their smaller overpriced home and took on a new mortgage. And they were originally able to buy the smaller overpriced home because they sold their overpriced condo or even smaller home. They are willing to take on the debt because they like living here and want to live here. Not because they are speculators or investors.”
Anybody attaining more RE exposure, in an ‘overpriced’ market, based on an underlying belief that price growth will remain strong, is a speculator. This is true regardless of whether they know it or not, and regardless of whether they are selling one property to move up to another. If they are borrowing money in order to make the move up, they are using leverage in their speculation.
This is a fine example of the thinking behind the unseen, unidentified, unconscious speculation that has been a major driver to our market since at least 2003. – vreaa