“My predictions
-Real Estate in BC will continue to skyrocket until 2015 …
-Mass exodus of Vancouverites being pushed into Maple Ridge, Pitt Meadows, Surrey, Langley
-Tale of two cities emerging after the tolls on Port Mann Bridge.
-The world will not end
-Hot asian money will continue to rule the market
-5% increase in real estate prices
From 2012-2018 the current real estate boom that is being fueled by hot asian money will continue to push people into the suburbs and exhurbs. I predict Chiliwack to be the winner for prices percentage wise.”
- FuturePorscheOwner at RETalks 20 Dec 2011 4:21am
Clearly the poster is a friend of the trend, with little imagination.
Given what is going on in other markets, it is arguably surprising that a price crash will surprise so many here in Vancouver.
- vreaa
FuturePorscheOwner = CurrentChilliwackRealtor?
Happy Christmas everyone.
Here’s that Future Porsche!
http://vancouver.en.craigslist.ca/van/cto/2759978813.html
Related: More naive RE bullishness at a Vancouver Sun blog:
“Why do we believe 7.5% or 10% is not usual appreciation for your real estate investment? Who is deciding 10% is high? I want to ask him why?
Why can’t real estate investment be looked at like many other investment? And why doesn’t deserve 10% or even 15% appreciation?”
- Leasidebuzz 23 Dec 2011 6:41am
Leasidebuzz: Truly a sublime grasp of the English language.
VREAA, this goes beyond RE bullishness into the realm of RE “bullsh*tishness.” Yes, “many other investment” deserves “10% or even 15%.” Indeed, each one of us should expect and “deserve” 10% or even 15% from ALL our investments. After all, that’s what they do, isn’t it – increase annually at a 10-15% clip forever and ever and ever? And we all know real estate is merely an “investment,” right?
MASSIVE fail in every respect.
Much like the comment just a bit down the page from that one: “My real estate agent says this is now a buyers’ market. This is a good chance to jump in and build equity in your dream home.”
Sarcasm or yet another realtor with nothing to do? Whoever it is, they certainly know the buzzphrases. “Buyer’s market.” “Dream home.” And my all-time favorite: “Build equity.” What exactly does that mean, anyway? Does it *have* a meaning?
building equity is a nice term for pissing away have your cash every month, with no guarantee of ever getting it back.
The suburbs around Vancouver are in the same bubble. The lower mainland is one metro area and bubble pricing is not magically confined to the City of Vancouver. Has this guy not seen what they want for a crack shack in Surrey?
Also, re the Port Mann…has anybody seen how freakn big that new bridge is? And the other billions being spent on widening and overpasses from 200 st through to main street? What is currently a 1hr trip from Langley to Vancouver will be sub 30min trip when this is all done. The hordes of unwashed masses will gladly pay the toll.
It’s a tale of one city.
The lesson of the modern city is that every road you build will eventually be filled to capacity. Commute times may come down for a few years – that’s it.
I predict there will be even greater densification of the central areas as more people realise the cost, in terms of time and money, of commuting is sapping their quality of life.
Commuting to where?
“From 1998 to 2010, the city of Vancouver enjoyed a net increase of 83,267 new residents and 50,973 new homes — but added just 46 new businesses.
Indeed, Vancouver’s 50,666 business licence numbers in 1998 actually declined slowly and unsteadily until 2007 when they reached their nadir of 46,555. Then they crept back upwards to 50,712 — 0.09 per cent higher than where they started 12 years earlier.
Meanwhile, the number of business licences in Metro Vancouver increased by 24,530 — a respectable 21 per cent, or 230 times faster than in the city of Vancouver. Surrey alone recorded a net gain of 5,571 new licences, and Langley Township 4,268.”
http://fairtaxcoalition.com/2011/10/business-growth-in-vancouver-stalls-while-suburbs-flourish/
Totally agree. Vancouver will densify. Everyone wants to live in the city and not the burbs if they can afford it.
Vancouver commute times really aren’t that bad as it is, and it will only get better with the new bridge. Yes the new bridge will eventually fill up but it is a huge structure and compared to the existing bridge it will make commuting in metro Vancouver much much easier for many years to come. The new bridge will have transit and bike lanes as well which are currently not options on the existing Port Mann.
http://www.vancitybuzz.com/2011/10/vancouver-commute-times-slightly-above-global-average/
Vancouver commute times are atrocious, people outside of the Lower Mainland laugh and would not put up with a one hour each way commute. Combined with low pay adding that 10 hours of commute time into your wage per week, hardly makes things any rosier. Oh yes, the toll bridge, that will make things eeeeeeasier.. yesss….
The Toronto Board of Trade determined these figures? can’t consider that a real world class statistical source either. I think you’ll find most people’s commute on a global scale is within the village that they live in….
don’t forget about the toll and the gas. that can add up over a year of commuting
Well, I put up with 65 minutes a day, but that’s walking. For 8 months of the year its under 25 minutes total, on a bike.
But more than an hour a day, in a car? Nope, won’t do it. Life is far too short.
lol vancity buzz
It will truely be interesting to see what actually happens once the toll is in place. Most people who live in Surrey do so because it is what they can afford to buy. As we know when people buy houses they stretch to the max…perhaps not thinking about the cost of commuting between the suburbs and Vancouver. The added costs to vehicle maintenance etc gets neglected. After watching for years the crying as gas prices have risen…(the stories of how families can’t even rent a friday night movie to watch because they need that extra five bucks for gas on monday morning) I think the tolls are going to be a big deal to many families. I can only hope that the result will be that people will start to live on whatever side their job is on. I think employers are coming around to this conclusion as well as we have for the last decade seen employers leaving Vancouver for the outlying areas. That is where the work force is after all.
Good times are ahead, good post.
Alan is a local realtor. We’ll leave up the link to his site as a seasonal gesture. Not sure if he’s actually read this post, though.
This comment is the bull equivalent of the Price/Rent calculator. Drawing a trend line on a price chart from arbitrary point X to the current date and forecasting into infinity.
Buy/Rent calculators are largely ‘agnostic’; it’s the user who brings their own bullish or bearish predictions/biases to the input variables.
The exercise can be useful in that it can force players to face the fact that they are making market predictions, regardless of whether they think they are or not.
For me, Price/Rent is the same as Price/Earnings. Leads to value traps, selling too soon and avoiding ‘growth’. Over the last 30 years there has only been a 10 yr window where Price/Rent gave you a buy signal (1993-2003).
Price/Rent has given you a false negative for going on 10 years. It’s not my opinion, it’s fact. Will Price/Rent return to historical norms? Probably. But how it gets there and when, is not for you or me to decide.
I don’t predict the future, I manage my risk.
As for the previous post, Price/Rent is fine for cost of living analysis but it is not reliable for investment analysis.
blammo -> Apologies, I thought you were referring to the recently posted buy/rent calculator, but you were discussing using price/rent as a fundamental to determine when RE is a ‘buy’.
You are correct, price/rent has NOT indicated a ‘buy’ since 2003… whether this is a ‘false negative’ or not is yet to be determined. A few of us believe that we’ve been in a speculative bubble since 2003, and that prices will revert to pre 2003 prices after the coming meltdown.
Price/income and price/GDP are similarly overextended.
What does ‘managing risk’ involve when fundamental indicators suggest RE in Vancouver is 2 to 3 times overpriced?
Looks like China is having it’s own correction. In Coal Harbour downtown Van, I think there’s a 40% occupancy rate on these condos. So many condos yet no one lives here. Same ghost town feel to it at night and all the lights are out in these expensive water front apartments.
http://www.foreignaffairs.com/articles/136963/patrick-chovanec/chinas-real-estate-bubble-may-have-just-popped
This homes are the piggy banks for the buyers. No issues with tenants to deal with. Just hope that condo prices just keep going up.
I’m the individual who posted this on jurock.com, didn’t know it would get republished on one of my favourite blogs. I’m an absolute fan.
All I can say is I feel there are a couple of reasons why I feel the prices in Vancouver won’t stop for the near term.
-Strength of commodities
-A population of immigrants (who believe in real estate)
-The biggest city this side of the rockies
-Drugs, drugs, marijuana capital of North America
-Port City
-Capital of the Gold market in the world (Howe Street)
-Foreign money (Hot Asian Money)
-Gen Y’s who want to buy in….