‘Are Canadians the New Chinese?’
“So the Christmas season is upon us. It’s time to build a fire in the fireplace, brew up some mulled wine and spend time with the family. A good conversation starter at this time of year might be last night’s Christmas party or upcoming vacation plans.
But if you’ve had enough sugar and spice and everything nice and feel like ruffling some turkey feathers then try dropping the following comment into conversation:
“I welcome Chinese investment in Vancouver real estate”
Mouths will fall open, the music will stop with an exaggerated record scratch and the fire in the fireplace will be mysteriously snuffed out.
These words are guaranteed to start a raucous debate, especially if the booze is flowing. The soaring price of Vancouver real estate is the topic on everyone’s mind. Unfortunately speculation is plentiful, with little concrete fact—just open a newspaper or scroll the Vancouver Real Estate Anecdote Archive for the latest horror stories and heated opinions.
Is Vancouver’s housing bubble about to burst? Is there even a bubble? If so, what’s behind it? Etc. It has our heads spinning and our wallets quivering in fear.
Some feel that the Chinese are to blame for the hefty price tags on Vancouver homes. Recent economic prosperity in China has led to the emergence of a huge class of ‘new rich’ and they are buying up Canadian real estate, sight unseen, to the chagrin of many.
And yet, Canadians are doing the exact same thing in the States, in places like Las Vegas, Florida and Arizona. The economic fallout from the sub-prime mortgage crisis combined with the overall tightening of US credit markets has led to a dramatic drop in real estate prices. The bottom line: American real estate is an accessible and potentially lucrative investment and many Canadians are already taking advantage of the opportunity.
If a house is for sale, whether it be in Arizona or Vancouver, and somebody has the money to buy it, should it matter where they come from?”
– Cam Good, local real estate salesman, post at The Key marketing group website, 16 Dec 2011 [hat-tip Gord]
We’re touched by the VREAA mention. But “horror stories”? We haven’t even started running the ‘horror stories’ yet; they, unfortunately, come later.
And they will be that much more horrific given the heights from which prices have to fall. And just one factor that promoted those price heights was the shameless pumping of real estate by local RE hucksters. And self-anointed poster-boy for local RE promoters would be….?
Anyway, that sub-plot aside, let’s look at the current advice Cam is giving:
If you’re Chinese, invest in Vancouver; if you’re a Vancouverite, invest in… Arizona.
Why the inconsistency? With the love for Vancouver, why bother with Arizona?
Is Vancouver in a bubble or is it not? Cam scorns those who ask, but he doesn’t answer the question.
The rest of us all know the answer.
– vreaa
Most Recent Comments:
- Maria Ter on “Over the years, we refinanced our home a few times to pay off our debts. Now we’re selling our home as we can’t keep up with mortgage payments. In this market, we’re not sure if we’ll break even.”
- space889 on “I’m surprised that everyone else is so surprised to hear anyone talk about a housing bubble” – “Canadian RE 2021 worse than U.S. bubble at 2006 peak” – David Rosenburg
- amitamv on “I’m surprised that everyone else is so surprised to hear anyone talk about a housing bubble” – “Canadian RE 2021 worse than U.S. bubble at 2006 peak” – David Rosenburg
- Keith on “I’m surprised that everyone else is so surprised to hear anyone talk about a housing bubble” – “Canadian RE 2021 worse than U.S. bubble at 2006 peak” – David Rosenburg
- Judy Green on “I’m surprised that everyone else is so surprised to hear anyone talk about a housing bubble” – “Canadian RE 2021 worse than U.S. bubble at 2006 peak” – David Rosenburg
- space889 on “I’m surprised that everyone else is so surprised to hear anyone talk about a housing bubble” – “Canadian RE 2021 worse than U.S. bubble at 2006 peak” – David Rosenburg
- Seeking Knowledge on “I’m surprised that everyone else is so surprised to hear anyone talk about a housing bubble” – “Canadian RE 2021 worse than U.S. bubble at 2006 peak” – David Rosenburg
- vreaa on “I’m surprised that everyone else is so surprised to hear anyone talk about a housing bubble” – “Canadian RE 2021 worse than U.S. bubble at 2006 peak” – David Rosenburg
- space889 on “I’m surprised that everyone else is so surprised to hear anyone talk about a housing bubble” – “Canadian RE 2021 worse than U.S. bubble at 2006 peak” – David Rosenburg
- space889 on “I’m surprised that everyone else is so surprised to hear anyone talk about a housing bubble” – “Canadian RE 2021 worse than U.S. bubble at 2006 peak” – David Rosenburg
- Conflarian on “I’m surprised that everyone else is so surprised to hear anyone talk about a housing bubble” – “Canadian RE 2021 worse than U.S. bubble at 2006 peak” – David Rosenburg
- Conflarian on “I’m surprised that everyone else is so surprised to hear anyone talk about a housing bubble” – “Canadian RE 2021 worse than U.S. bubble at 2006 peak” – David Rosenburg
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Type of Anecdote
- 01. He Said, She Said (248)
- 02. Profiting from the Boom (446)
- 03. Changed my Life (106)
- 04. Changed my Career (39)
- 05. Where do Buyers get the money? (1,111)
- 06. Held my Nose and Leapt (97)
- 07. Avoiding Vancouver (378)
- 08. Overextended Buyers (1,198)
- 09. Delaying Buying (316)
- 10. Demoralized Renters? (367)
- 11. Regrets about Investing in RE (417)
- 12. Effects of Development (279)
- 13. 2010 Olympics Related (74)
- 14. Social Effects of the Boom (1,266)
- 15. Misallocation of Resources (967)
- 16. Missed The Boat? (237)
- 17. The Froogle Scott Chronicles (27)
- 18. Spot The Speculator (174)
- 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 (45)
- 23. Jumping The Shark (1)
- 24. Policies On Housing (11)
- 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 (177)
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
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Latest Anecdotes:
- “I’m surprised that everyone else is so surprised to hear anyone talk about a housing bubble” – “Canadian RE 2021 worse than U.S. bubble at 2006 peak” – David Rosenburg
- “Always the Right Time to Buy!” – Cheap Rope For Vancouver RE Buyers
- Mortgage Squeeze Anecdotes – “Two days ago my mortgage holder called and told me that, after 22 years, they would not renew my mortgage.”
- Wow! – CMHC CEO Evan Siddall Points To Unsustainable Debt & Calls For 18% Drop In Housing Prices – [which of course would mean a lot more off]
- Prediction: Vancouver RE Prices Will Not Crash… Unless They Crash
- Pre-Existing Disease – COVID Economic Stress Uncovers Longstanding Vulnerability in Vancouver RE Market
- COVID-19 the Pin for the Highly Debt-Leveraged Vancouver RE Bubble?
- Vancouver Sun Headline – ‘Five more Metro Vancouver homeowners hosed in a falling market’
- Vancouver RE Prices – Where is the Support?
- Money Laundering & Vancouver Home Prices
- “Psychologically, They’re Ill-Prepared” – “Canadian Chaos Looms”
- Keeping Up With Other Bubbles – Australia Suddenly Not Running Out Of Land Anymore – “Aussie House Prices Could Halve”
- Watershed? or Dam-Collapsing? – Mainstream Media Quoting Vancouver RE Bear-Tweets, and Predicting Shrinking Realtor Numbers – “What they’re used to is not what real estate is typically like.”
- “Within artistic communities in Vancouver it’s hard to spend more than 15 minutes at a social gathering without talking about the cost of rent or knowing of someone who is being evicted.”
- Macleans Wakes Up – ‘This is how Canada’s housing correction begins’ – “We’re not ready for what happens next”
- Vancouver Detached – Sales Down, Prices Down
- Bloomberg Calls Vancouver ‘The City That Had Too Much Money’
- “Our family loves Vancouver, but we’re leaving because the struggle to live here is simply too hard”
- Tendency Towards Corruption Is Inevitable – How Do We Minimize Its Existence?
- Hard Earned Home Savings? Hardly.
- “You know your real estate is in bad shape when there is a game app that displays Vancouver’s Science World and teaches you how to be a money hungry real estate developer.”
- “It’s sinking in that Vancouver is sinking” – “Westside prices have fallen 17% from 2016 & 11% this year; sales volumes down by 80%; 3 years worth of >$3 Million inventory”
- The Carrion Have The Carcass – “I’ve lived in Vancouver since 1968; my wife was born here; we are about to leave; this town has priced us out. All that is left are the investors and the very rich visitors.”
- All Time High, And Climbing… $251 Billion Personal Debt Borrowed Against Canadian Homes
- “I asked a group of young people how many of them thought they’d be in Vancouver in two years, and 17 out of 18 said that they would be moving.” – Mayoral Candidate Shauna Sylvester
- Off-The-Charts Unaffordable – Greater Vancouver Price-To-Income Ratio 28 (average home price: $1,071,800, median one-person income: $38,164)
- Conflicts of Interest – BC MLAs Heavily Invested In RE Making Laws About RE
- File Under Tags: ‘Tolerant Vancouver Renter’ and ‘YouGottaBeKiddinMe’
- Vancouver “an international housing-affordability basket case” with “RE bubble risk the worst in the world” – Maclean’s
- Vancouver Economy Over-Dependent On Debt Spending
- Vancouver City Councillors Wake Up To ‘Fierce Speculative Demand’ – “There is significant evidence speculative investment has the biggest impact on housing costs in the city.”
- The Dance Around Foreign Ownership of Vancouver RE
- Information From Outside The Vancouver RE Bubble – U.S. Senator Lives In (don’t laugh) $500K Home
- “The Position Remains Unfilled”
- Jessica Barrett – ‘I Left Vancouver Because Vancouver Left Me’ – “Like Living On An Abandoned Film Set.”
- “I’ve thought since early 2010 that Vancouver housing was in a bubble, and have refused to buy a house for this reason. I’ve felt that the risk of mean-reversion was far higher than the risk of missing the upside.”
- “It is very difficult to live here.”
- “We want young people to buy Real Estate.” – Vancouver’s Mayor
- “Vancouver RE Balloon Pricked; Median Price Detached Home Down >$500,000 to $1.7 million; Prices Need To Be Slashed”
- Detached Price Trend Remains Up, For Now. Speculators Hold Their Breath?
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Ship. Rat[s]. Sinking.
PS – Re: “the heights from which prices have to fall” – there is absolutely no truth to the persistent rumours that Mr. Good’s next Sikorsky charter was in imminent danger of an assisted JesusNut ‘failure’.
And for those of you who aren’t familiar with the peculiarities of rotary ‘winged’ aircraft…
http://en.wikipedia.org/wiki/Jesus_nut
(Gulp)
Thanks for the education.
oh my oh my — laughing out loud — brevity is the soul of wit!
Cam Good is puke.
Cam Good is NOT puke. Please don’t give puke a bad name by putting them in the same group as Cam Good. Cam Good is a profiteering scumbag.
I don’t hold it against him that he is getting rich. But the fact that he is doing it at the expense of other peoples’ misery. He’s just a raper and pillager in a fancy suit, and ads in media but has no better sense of ethics than an email scammer.
I have no doubt that he would tear down the last Brazilian rain forest if he could make a tidy profit. Sadly like many business sociopaths he will never see past his own subjective wants and greed.
Absolutely Cam. Because investing in a market that is at or near its low, where good money can be made from rental income, is just like investing in a market that is at or near its high, where money is lost every month through negative cash flow.
“If money can be made on a house sale, whether it be in Arizona or Vancouver, it doesn’t matter whether they have the money to buy it, or where they come from”
Let foreigners buy, fine with me. But let’s ensure that government revenue is collected in the form of a Land Value Tax, not via income and consumption taxes.
“LVT is a tax almost impossible to avoid, while money can income can be moved offshore, land is pretty solidly in one place. As it only taxes value of the land not improvements it should be easier to assess than a property tax that relies on the full value of the land plus improvements. That’s important as for any property tax to be fair, even in it’s own terms, the valuations need to remain up to date. As it charges for the full rental value of the land whether the land is developed or not it encourages efficient use of land, discourages speculation and empty sites and provides a natural impetus for regeneration and against sprawl.”
http://brightgreenscotland.org/index.php/2010/04/why-we-should-be-talking-about-land-value-tax/
In Vancouver, you can do everything right when buying a house and still get burned: http://benry.net/2011/07/26/a-fire-story/
“Unfortunately, speculation is rampant…” By George! He’s hit the nail right on the head!
What surprises me the most is that Scam Good reads VREAA!
We knew that already. One of his ass-istents commented here in the past. And I suspect that certain regular commenters may be affiliated with him too.
By ass-istents who were you referring to? I don’t actually think He reads VREAA. Either way, most of the ‘news’ that is put out there by Cam via the media is a ‘chicken-before-the-egg’ type scenario.
I would be happy to answer any specific questions you have about real numbers behind the scenes though.
So apparently one section of the cambie corrider has been sold out!
The block south of Queen Park has a big sold out sign on it when I was passing by this morning.
Queen Elizabeth Park I meant.
Hey VREAA, a new report links high house prices as the top reason new immigrants have declining health in Vancouver:
http://blogs.vancouversun.com/2012/01/07/why-is-vancouver-bad-for-immigrants-health/
I feel a cough coming on…
I think that high house prices are also a reason why more people seem irritated and unpleasant recently.
Loon -> Great find, thanks for the link. Will headline.
Anecdote alert! (In the Vancouver Sun, none-the-less):
http://www.vancouversun.com/technology/Laptop+hobos+face+crackdown/5959499/story.html
“‘Laptop hobos” may soon pay more for the privilege of Wi-Fi as cafés begin to crack down on users who overstay their welcome.
Free Wi-Fi has become the norm in café culture — even MacDonald’s started offering it this year — but like any real estate bubble, this one may be about to burst.”
EG -> Thanks. Example of RE referenced in other context. Will headline.
don’t know cam good but in the end, of course responsibility is the buyer’s. he sees a market and is facilitating supply to demand for a fee. it’s a service; whether a good one, or worth the price is a separate matter. if successful, he will have competition and that will improve the service.
meanwhile elsewhere, check out what you can get for about $3M in Carmel Valley CA. area is bpoe-worthy.
http://www.jamesburgearthstation.com/
after the fallout, similar situations in vcr and bc will arise on a smaller scale.
Cool array!… But I like mine better [agreed, it’s overkill if all you really want is the PlayBoyChannel].
http://tinyurl.com/6nroukm
hahahaha
Was thinking to contract out farmland for grow ops. Build quality good enough for 5 megaton hit – it’s no van special. Structure probably good for a few hundred years. 🙂
With a deck like that you can probably discriminate wookie porn. Giggity.
interesting little blurb about comparing US and Vancouver prices and monthly costs.
“Home ownership affordability in the US versus Vancouver: very different stories”
http://blogs.vancouversun.com/2011/12/13/home-ownership-affordability-in-the-us-versus-vancouver-very-different-stories/
If it wasn’t “Chinese” investment it would be something else. BC just needs an excuse to gamble. Cam is the messenger, not the problem.
One passing anecdote, friend has flipped a few condos in Vancouver, now renting in Toronto. Has presales coming due Jan 17, needs to sell because cannot afford neg carry costs on it.
But funny part is her attitude to owning. She is from Vancouver originally and says she cannot bring herself to rent in Vancouver, with her family there. Renting to her would be like a failure. She would rather live at home than rent. For personal reasons she prefers to live away from parents. So in some bizarre fit of logic the only way she can opt for renting is to leave the city. She’s about 24 years old.
Social pressures and bubbles? Yes.
is your friend Asian?
I have a friend in the same situation… they are renting in a different city, but would live at parent’s house or at a condo she owns if she lived in Vancouver.