“Our youth is getting screwed over at the expense of realtors, developers, and a government that’s all too eager to bend over backwards and let a rampant real estate market guide itself.”
- JCVdude, youtube, 24 Jan 2011 (quote at 3:15 on video)
Somehow we missed this video when it was posted earlier this year. It covers many of the commonly discussed issues relating to the speculative mania in Vancouver housing. Good production values for an informal video; nice general Vancouver footage; worth the watch/listen. We are impressed with JCVdude’s very reasonable and controlled expression of his frustration. – vreaa
He does well identifying the impact on youth etc. but he’s mistaken in saying the cause is only due to immigration. What about CMHC and emergency level interest rates by the Bank of Canada? The immigrants are only momo chasers anyway, just piling into an already overhyped market. Loose lending and cheap credit coupled with a gullible and a massively delusional public is the root cause, in my opinion.
So loose lending, low interest rates and the CMHC are responsible for Vancouver’s RE bubble and Calgary’s 20% drop in prices over the last 4 years. I think it’s important to recognize that HAM is probably the most important factor in the Vancouver RE bubble. You have to know the Asian herd mentality, perhaps, to understand how important this factor has been.
” I think it’s important to recognize that HAM is probably the most important factor in the Vancouver RE bubble. ”
How so? If all non-HAM decided that prices should be 40% lower, guess where prices would go? Say 1000 investor immigrants buy 1000 properties in cash at $3MM a shot. That’s $300MM; the total volume traded last year, including Fraser Valley, was well north of $15BB. <2% of purchases wag the other 98%? Um… sure…
What about Canadian and American herd mentality, they can herd comparable to the best in the world.
“the single most important housing trend? Immigration!”
http://realestatetalks.com/viewtopic.php?f=8&t=60404
Stop immigration and you stop house price increases. But you better get used to the status quo. The Reform Party needed 15 years to shake off the racist designation so they won’t dare touch this issue.
Unfortunately, the linked article includes fabricated data and old data that was simply trended. Check the latest StatsCan data for BC yourself. Bottom line – it’s a bunch of marketing baloney by a well know RE promoter.
Its those immigants takin ur jobz n’ homz. Would it sound any better if I elucidated in proper English?
The crazy, red-eyed pigeons are distracting me from the narrative.
I don’t agree with his premise that immigration has caused the housing bubble. Definitely not. Cheap credit is a far greater factor in this-why didn’t he recognize that the housing bubble occurred in Arizona, California due to loose lending practices rather than immigration? I’ve never heard an argument advanced that people were coming from whatever country to buy up expensive properties in those states. It didn’t happen, and yet they had a housing bubble. In Vancouver there are far, far more people who are overextending themselves with mortgage debt than there are Asians with suitcases of cash buying houses.
Sorry, this video just doesn’t do it it for me. He sounds more like he’s on an anti-immigration rant than presenting a valid argument about how a housing bubble destroys a community. I think a video like this just causes racism against foreigners. Leaves a bad taste in my mouth.
so would you be on board with increasing immigration levels from 250K/year to 350K/yr? So long as it doesn’t really effect real estate and adds support to our economy why would you oppose?
We don’t think it’s as bad as all that. Note it simply touches on some of the issues; we agree it’s not a careful analysis.
As we have always maintained here, local buyers + free money/loose lending has been the cause of our speculative mania.
I love the pigeon frenzy subliminal imagery, it looks like a hoard of realtors fighting over realty scraps.
I don’t think immigration is the root cause for this speculative mania.That is a false impression.The speculative mania could be easily stopped if Government would impose 2 main and simple measures: 1- Taxes for the “flippers” 2-Taxes (or even limitation) for owning multiple properties,similar with those taxes in effect in China,Australia,Germany and many other countries.In this way the rich “asian” and “non asian” investors won’t find RE business as attractive as it is now ;as a result, the market would self adjust and the main drive for the prices would be the ratio between demand/supply, as in any healthy economic environment
Agree. Speculation has been THE root cause; all the rest is details.
(However, our definition of ‘speculation’ is broader than yours; almost all buyers are speculating on ongoing price strength. When that speculation leaves, prices will crash. And the drops will beget further drops.)
This reminded me of Singapore. Immigration is the only reason GDP growth rate has been spectacular (productivity of that country has been flat) and now the real estate is a super bubble, the locals cannot afford homes and the ruling party of the government has had its first lousy election in decades. But Vancouver has a silver lining; unlike the US real estate bubble where Americans got the mania and have bankrupted themselves, in Vancouver foreigners are buying and it is a transfer of wealth from China to Canada. Japan two decades ago went and bought lots of trophy assets in the US (like Rockefeller center) and suffered huge losses. All that money ended up in the pockets of Americans. Too bad they then went and did it all over again!
Just read the other posts. I think the various comments that it is not all foreign buying is correct; for sure the local population must buy into the real estate story to inflate the bubble. What might have happened is that some foreign buying set some very high prices at the margin, and as this is done quite frequently, the local population has taken this as a cue to try to benefit from this new “trend”, and this become a self-reinforcing thing. I think that the coming bust in China will definitely cause a slump in Vancouver real estate prices. Looking at what happened in Japan, it will be many years of pain potentially.