“Just about any professional with ambition considers moving to the US at some point based on my experience.”
- Airedales at VREAA 11 Mar 2012 7:08pm
“That’s what I did. BA, B.Sc MBA, UBC. Old friends from high school went right down to the USA became surgeons and live in real world class cities (NYC) and aren’t coming back. They only people left in BC, are slum lords or at literally the same job for 20 years selling appliances in a department store and getting older. Others teach at the same BC high school they went to and their kids are now going to. Some went to Toronto and rest went to Europe. It’s simply not worth it to pay a million dollars for a dump to live in the rain act like the only thing in the world is Canucks games, hating Americans, doing the grind and Starbucks. Most of the time you can’t even see the so called scenery. I bought years ago and sold all my properties.”
- Ed at VREAA 11 Mar 2012 9:29pm
Could not have said it better.
Having lived in Maritimes, Ontario and United States, I find the attitude in Vancouver amazing, surreal and annoying.
I too have lived other places including the US and I have to say that Vancouver is something pretty special. Especially when you compare it to anywhere else in this country. The only place that would compare in my opinion would be San Francisco and it doesn’t have easy mountain (skiing) access.
Vancouver has always been here, what has occurred in the past 10 years, quality of life wise, that justifies the run up in price?
Tahoe. The Sierras in general… ain’t that far away. S.F. beats Vancouver in every possible way.
I am sharing that “pretty special” feeling especially today in the BPOE.
Really..what are you smoking?
Vancouver is not special, never was or ever will be
our quality of life in vancouver has DECLINED in the last 10 years
everyone, go away
Indeed… Alberta, other parts of BC, California, and even Europe. Vancouver is a nice place, but the locals don’t get out enough to have any real perspective. So they believe the hype.
I find reading and hearing anecdotes trying but entertaining nonetheless.
Hey did people hear the CBC radio piece yesterday? One of the guests was asked by Stephen Quinn to comment on the assertion that Vancouver real estate is a Ponzi scheme. The guest said yes but Vancouver has been in a Ponzi scheme for over 100 years.
If this is taken to mean that future land earnings will increase then yes Vancouver is in a Ponzi scheme but that misses the point. The magnitude of the problem, and the intensely pro-cyclic nature of real estate speculation in Vancouver, are the issues that can and should be solved using policy controls, not suppressing land values increasing faster than inflation.
I don’t understand comparing real estate to a ponzi scheme. A ponzi scheme pays the investor a dividend from their own money rather than from true profits earned. Are you referring to HELOC taken by homeowner rather than a direct sale of property to produce available money?
Speculation (assumption of future growth) occurs in every investment you make – but less so in real estate. An equities investor demands profit or sells his shares. A homeowner does not.
We disagree that there is widespread speculation in Vancouver real estate. We believe that most buyers are motivated to provide a home for their families.
“An equities investor demands profit or sells his shares. A homeowner does not.”
Speculation comes in many shades of grey. Many Americans have looked into the abyss of their emotions and discovered this.
Economics is the study of scarce resources, not necessarily investments or finance.
“Speculation (assumption of future growth) occurs in every investment you make – but less so in real estate.”
This is not an accurate statement at all. Wise investors will invest for cash flow (ie dividends or income generating assets). The real estate mania is largely driven by speculation and anticipation of continued future capital gains. Overseas “investors” have flooded Vcr real estate, just as they did in Florida and California.
As for the comparison to a Ponzi scheme, the comparison is accurate. Cheap money is being loaned out at record low interest rates that fuel a speculative bubble. At the same time savings rates are at pathetic lows. How can money be loaned out without savings – the magic of fractional reserve banking thats how. The low rates set by central banks are to keep the Ponzi scheme going as they know any rise in interest rates to sane levels will pop the bubble. So long as new loans for mortgages for overpriced homes keep getting made, the Ponzi scheme will continue.
“We disagree that there is widespread speculation in Vancouver real estate. We believe that most buyers are motivated to provide a home for their families.”
Who is this “we” you type of ?
PS – if property values do drop in the future, does anyone think municipal property taxes will be reduced ?
“if property values do drop in the future, does anyone think municipal property taxes will be reduced ?”
This has been discussed many times before. In Vancouver (and I believe everywhere in BC) property taxes are not based on the absolute assessed value of the property. They are based on the *relative* assessed value compared to all other properties in the city. So if everybody takes an identical 50% haircut then nobody’s property taxes are affected. Conversely, everybody’s property taxes can increase 100-fold in a bubble, but this gain is not reflected in taxes.
This is one reason why Vancouver has one of the lowest property tax rates (amount of property tax divided by assessed value of property) in Canada.
Sorry “everybody’s property taxes” -> “everybody’s assessed property values”.
“I don’t understand comparing real estate to a ponzi scheme”
You shouldn’t understand it, because it’s a completely inaccurate comparison. Newcomers to the market aren’t directly paying the promised returns to the existing participants. So it’s not a Ponzi scheme by any definition.
Anonymouse, if the existing participants HELOC or reverse mortgage than the new participants are creating the environment that puts that money in their pockets.
Real Estate that rises above inflation rates definitely depends on ever increasing new participants.
With 0% down 30 year mortgages, the speculative component of an owner-occupier doesn’t have to be that large to have an impact given it will be magnified by a 360:1 leverage ratio.
It’s a lie to think that a middle class Vancouverite even has a chance at buying one of these houses! The reality is, agents don’t want to sell them to you. We just spent a frustrating week trying to buy one of these expensive houses. Agent would not put in our offer. Said we should offer something “reasonable” when we wanted to go in at the assessed value of the place (tear downer, asbestos, needed repairs).Told us what the seller’s bottom line was. Didn’t like that we had the condition of selling of our condo (suggested we move into a rental so we had “more money”). Then, discussed what we were going to offer when viewing the home with other realtors & buyers present. Welcome to Vancouver. You can’t even put an offer on these overpriced homes as the agents don’t want to see purchase prices come down. Now, we are without an agent, and the house is still for sale. This was almost as bad as being told previously, “don’t even bother putting in a low offer on this place – we just had a busload of Chinese come through and they are extremely interested” (actual quote from realtor). Obviously, to show that home values in Vancouver are not coming down, no sale is better than low sale. Are agents acting in solidarity together? Sure seems like it.
Honestly, they probably did you a favour. I can’t fathom why you’d even want to.
Not sure about this, but isn’t it illegal for a realtor *not* to present a formal offer?
But really, Liggsie has a good point. Knowing what you know about the local mania/insanity, knowing that the bottom is falling out, why would you want to buy at this time?
can you provide address for this home? I can do a “first blush” opinion on whether I think an offer at BC Assessment value is a reasonable expectation.
Wait – you’d do that for FSBNTY? How generous.
You still owe VREAA an apology.
http://tinyurl.com/6nj9bzs
You should be a realtor. Your talents are wasting away. I am not even being sarcastic here.
F1 probably is a realtor.
We think that a reasonable expectation for the house is what we will pay. And, in fact, if the home owners had been willing to offer us a private mortgage to bridge the gap between what we were approved for and what they were asking, we would have agreed. The point is the realtor would not even put in the offer, and in fact, even made an appointment to see the house without us – when we said we wanted to offer on it.
One question- I am a Vancouver real estate watcher, but I never plan to buy in Canada as I am American. Is it a legal requirement to go through realtors in Canada when making offers on houses, or are people just generally too lazy to go through the trouble of understanding contracts themselves/ consulting outside lawyers?
It is not a legal requirement to go through a realtor although most do because its just “easier”. However, my own recent experience is that a signficant segment of Vancouver’s population deal in real estate without any realtor involvement.
My other observation is that there are many other low-service / self-service options to sell a home in other regions of Canada since many of these markets are much more “balanced” / competitive. Vancouver, on the other hand, has been a feeding frenzy and well established realtors have had a lock on the SFH market helping to maintain the upward price trajectory. Only in Vancouver will you find listing realtors who would rather ask their clients to wait or take their house off the market than make a sale that risks a general increase in competition and an ensuing price slide. Eventually (this year) it will all backfire with a flood of listings and a general buyers strike.
Again, I believe it’s illegal for a realtor *not* to present *all* formal offers. I could be wrong. Did you check into this?
I’m really interested though – seeing that you’re going beyond what you’ve been approved for, and considering you seem to believe this market is due for a pretty serious correction, why are you trying to buy now?
AFAIK, it is perfectly legal to buy without an agent. In fact, the selling agent would be probably be happy to do so because, if the seller is not paying attention, they could collect double the commission. (i.e., the commission that would have gone to the buyer’s agent.)
However SELLERS with no agent, or who use a discount agent (e.g. One Percent), have the deck stacked against them. Buyer agents will deliberately steer their buyers away from these FSBO and discount properties because those activities threaten their livelihood. I’ve heard numerous anecdotes of this occurring “in the wild”.
that is not allowed. Realtors must present any offer no matter how low
Well there’s low and then there’s low.
Then there’s disclosure and disclosure. Two completely different things.
Are you sure about that Reality Check. I think it is going to start to matter pretty soon. Lets do a hypothetical. Say you try to make an offer that is lowball 5% and the realtor refuses to submit. Then six months later you discover that the house actually sold for less than your proposed price. (I am assuming we are in a falling market by the way). So can you sue? What would you demand? Do you have rights of recourse? If the realtor is not under an obligation to submit all offers then you would not have much to complain about……..is there lawyers on this site that might know the answers?
How about reporting realtors involved to the realtors board? What you describe, FSBNTY, sounds familiar. A couple I know who live in Burnaby put their house on the market in 2010–their realtors entertained/presented offers from mainland Chinese only. In the end the couple took the house off the market. Realtor told them offers were lower than expected/desired because their house was too close to a busy road.
I sense a tone of anger towards the pomposity and greed of these realtors, when in fact they’re digging their own graves. Why would you feel upset about not being allowed to get sheared. Just rent and wait, and if you can afford such a bloated price, you shouldn’t be worried about spending it anyways.
I certainly wouldn’t want to put myself in a million bucks worth of debt on a gamble, but hey, I’m not rich…
Stop bitching and just rent.
I am going to guess that the buyer, “For Sale But Not To You”, was trying to use the listing agent to put the offer through. Right? When you drove past the house and saw the nice lawn sign with a smiling Realtor looking back you called his number…….yeah, that would be the listing agent.
He is not on your side. Don’t even bother.
“It’s simply not worth it to pay a million dollars for a dump to live in the rain and act like the only thing in the world is Canucks games, hating Americans, doing the grind and Starbucks.”
I love comments like this. Are you saying you’d tolerate all those negatives if you could buy a place for cheap in a city you clearly hate? If you think it’s not worth it to buy, then rent. If you don’t want to rent because you don’t like the place, then leave – life’s too short to spend it whining about something that’s so easy to change.
I dont understand, I hated everything about Vancouver it was a city I hated, every corner from top to bottom. I don’t understand why anyone by choice would live there. I came there bought property in cash and sold many years later to foreigners ( both properties). There is nothing likable about it to justify the prices. Vancouver was ok until year 5 when I had enough.
Never could understand it myself but then again I don’t think most Vancouverites have travelled outside the lower mainland. I have lived all over Canada, parts of the US, Europe for a short time and Asia for several years so maybe I was blinded during my five years there. Vancouver is horrible place to live and an increasingly less desirable place to visit in my opinion.
Not sure how old you are (or how mature), but as you grow older life happens there are many compulsions that decide where you live and what you do.
Living in Vancouver for an average hard working Joe (as opposed to organic granola bar chewing, latte sipping crowd with no real jobs except RE) is difficult for many reasons enumerated on this blog. It really is a smug town that thinks of itself as “world class” city
It is not as simplistic as packing up and moving if you don’t like it
things aren’t as simplistic as organic granola eating etc.
i really doubt the local RE crowd is into granola – they’re into voting for the BC Fiberals
Pretzels… I know thats why I lived there for literally years on end, I wasn’t there by choice
http://www.globaltvbc.com/video/highend+olympic+village+units+go+on+sale/video.html?v=2210198960&p=1&s=dd#video
Nice infomercial by global.
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