Rampant speculation. Cash back mortgages at rock bottom rates. Mania – stirred by corrupt, real estate industry-funded media outlets that routinely broadcast just one side of the story. The widespread yet wholly mistaken belief that “everyone wants to live here.” Realtors as rock stars, chanting the “real estate only goes up” mantra. Buy now or be priced out forever – by hordes of Chinese. Get your real estate groove on.
The reality? Vancouver is home to the most overpriced real estate in the world. Lower mainland owners, on average, spend an absurd 70% of pre-tax income on housing, and ownership rates are upward of an astounding 70%. Mortgages are granted on stated income. Canadians, who owe $1.50-plus for every dollar of disposable income, are some of the most indebted people on the planet.
In short, the wealth we feel is on paper only – a direct by-product of the stratospheric valuations of our homes. And if everyone who could conceivably buy has already bought, if there are no renters left to rent, when the vast majority of our population is already massively in debt, when the foreigners we’re told only want to live in Vancouver find similar homes in better climates at a third or a quarter of the price – as they already have – when interest rates bump up even a point and the mortgage defaults begin, when the crash we’ve already seen in the Okanagan, parts of Vancouver Island, in the eastern Fraser Valley, and throughout most of BC finally sticks its tentacles into the Best Rainforest on Earth, when media outlets can no longer ignore declining prices, when realtors are seen not as investment gods but as the mere salespeople they are, and when this manufactured lie we call a bubble explodes and $1 million teardowns are worth a few hundred thousand, that is the reality. Everything else is merely The Matrix. Cue Keanu Reeves.
Yet the most important reality of all is this: Housing, the buying and selling of real estate to one another, the furtherance of this bloated bubble, is key to this country’s GDP. Indeed, it currently comprises anywhere from a quarter to a third of Canada’s GDP. Without it, we wouldn’t look so seemingly grand on the international stage. We wouldn’t seem to blissfully able to blow through the global downturn. It’s completely unsustainable of course, and hundreds of thousands of families and individuals who bought into the deception will be brutally impacted when it all comes apart.
But in the meantime, it is of utmost importance to our government that the mania continues unabated as long as humanly possible. We can blame the realtors, the media, the banks and the lenders, and ignorant buyers as much as we want. But it can all be traced back to the government. A government that puts up a good face by issuing repeated debt warnings yet at the same time allows this thing to continue full-throttle. “Candy is bad for you, but here’s a real easy way for you to get as much candy as you want.”
And that’s precisely why we in the Vancouver region are witness to a housing construction boom of epic proportions.
I live in a rental house in the Douglas region of extreme South Surrey, between the Peace Arch and Pacific border crossings, south of 8th Avenue. Ten years ago, this comparatively small area – just a few square miles in size – was one part ALR land, one part golf course, one part older homes on massive lots, and one part bush/forest. Indeed, it remained comparatively sleepy, comparatively untouched even two or three years ago. But the turn of the decade signaled change. And what change.
Today, the ALR land and the golf course remain. So far. Otherwise, our neighborhood is a war zone. The battle? Time. The housing/construction/real estate mafia can see the writing on the wall. They know this house of cards, this corrupt pyramid scheme, is about to come crashing down all around them. They know the last of the greater fools is out there right now, somehow oblivious to rationality, planning their fateful purchase. And after that, a void. A gaping chasm of disinterest and wholesale inability to buy.
And so they build. Non-stop. And the marketers market. Non-stop. Anything is a potential target. The forests are gone, in their place forests of signage. Homes are seemingly built in a matter of days. Backyards and a sense of privacy are pass?. The streets overflow with construction waste. Temporary real estate offices are everywhere – from makeshift trailers to show homes and all things in between. And no land outside the ALR is wasted – homes and townhomes are rammed together and crammed into any available spot. Must…catch…the…end..of…the….mania.
Even in the last vestiges of daylight on a Saturday evening, the work continues. And it was on Saturday, Feb 28, 2012, that I snapped these pics. Please note that one can walk from corner to corner of this neighborhood in just fifteen minutes. Despite what the photos seem to indicate, it is not big. Please also note there are in excess of 75 residences, either new or pre-build, currently for sale on the MLS. I expect that number to increase as more units are puked out and come available and as this bubble, finally and thankfully, blows apart. Strange how you can’t sell an overpriced future slum when there are no buyers.
The first image you’ll see below is the current Google Maps aerial shot of the region, likely taken some time recently. Suffice to say it’s now ridiculously inaccurate.
Not much has changed on the west (left) side of 172nd because it’s generally untouchable ALR land and a golf course. Having said that, there are two or three small pockets that aren’t ALR, and of course they’ve been torn up and built upon. And east of 172nd, it’s been a blitzkrieg.
- [Words and Pictures by Gord Goble]
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All photos by Gord Goble, who lives in a home he rents within a half mile radius of all of the scenes in the images above.
Gord wrote an important early and rare bearish op-ed for the Vancouver Sun concerning the local RE bubble, and has been a vocal critic of the RE-bullish bias in local media.
Our thanks to Gord for the words and pictures above.
