“On the CBC Radio Early Edition this morning [13 Nov 2012], a few minutes before 7:00 am, Rick Cluff interviewed CMHC market analyst Robyn Adamache, who will be speaking this morning at the CMHC conference in Vancouver. No mention at all of a bubble, and the typical positive spin — “market may decline 1% in 2013” — but there were a couple of interesting things. She said Vancouver (I’m assuming broadly across the Lower Mainland) is down 9% from the 2011 peak. I’m assuming she has access to comprehensive and current data not generally available. And at the end of the interview, with Cluff pushing her pretty heavily on whether now was a good time to buy, given the price slump, she adamantly remained on the fence, and wouldn’t state an opinion. Rather interesting if you’re saying, at the same time, that the market will be stable in 2013.
There may be some followup stories in the local media about the half-day CMHC conference, although I doubt there will be any great revelations, or admissions of any impending serious problems with RE. Given CMHC’s role in all of this, they are probably controlling their message pretty carefully these days.”
- Froogle Scott, via e-mail to vreaa, 13 & 14 Nov 2012
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- “My best guess: this property is now an ‘investment hold’ and will be built ‘when prices recover’. Good luck on that!”
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- The Rare Individual With A Negative Ownership Premium
- Advice Regarding Renting In Vancouver, Please – “Unfortunately, the Vancouver rental stock is absolutely atrocious. It just seems like every landlord is looking for someone to pay 100% of their mortgage on a crappy place through rental income.”
- “I just visited Manhattan for a week, and happened to snap some real estate ads on both the Upper West and Upper East sides of the island. Compare to Vancouver. It simply doesn’t compute.”
- Ben Rabidoux In Vancouver Next Week
- “The mortgage company told me they were calling in my 40-year, 0-down mortgage. I have paid nearly sixty thousand dollars towards it, but, nearly five years in, I have yet to touch the principal.”
- ‘Vancouver City Hall: Housing Report Card 2012′; Plus Revised Version
- “My folks find themselves at 65 still owing half the value of their home and recreation property to the bank. After almost 30 years of ownership in the BPOE and a number of boom markets, they have very little to show for it.”
- “Rent for $2,200 a month or buy and have a mortgage of $4,310 per month. Why would anyone buy?”
- “They were talking about two couples they knew who had recently bought a lot and planned to each build a house on it and live as neighbours.”
- Greater Vancouver Home Builders’ Association Annual First-Time Buyer Seminar Attendance Plummets
- Mom and Pop Get It Wrong In All Markets, Time And Again
- The average British Columbian homeowner is not going to pay off their mortgage by the time they retire.
- “He’s sold all his properties except his current one, which is now for sale. He explained that the market’s currently in crash mode, worst that he’s ever seen.”
- “One of my old high school buddies finally got her mother to sell the family home in Kitsilano – sold for over $1M, monies realized after debt paid off $185K.”
- “I know someone who just declared bankruptcy because her condo was assessed at $150k and she bought it presale north of $250k in 2005 or 2006.”
- Sturdy, With Views – “Calling Froogle Scott!… Is Dr. Scott ‘In The House’?” [Not In This One, Certainly]
- “She said the market was dead in Victoria and that it would remain so for a very long time. I asked how she knew. Her answer was fascinating and should scare the pants off the real estate crowd.”
- Kits Notes – “I’m pretty sure that this is the first 3+ bedroom property of any type that I’ve seen in the 5 years I’ve lived here that is priced below $700K.”
- “A beautiful Belfast home, in the equivalent of 1st Shaughnessy, bought at their RE peak in 2007 for £3.5 million, has now sold for £800K, almost 80%-off. The market didn’t suffer any significant economic shocks. Rates & unemployment didn’t skyrocket. They didn’t build more land. Sentiment just changed and the prices fell and fell.”
- “Two family members of hers are trapped, underwater, in condos on the East Side.”
- “Interprovincial migration is not saying good things about BC’s economy.”
- Vancouver RE: Not As Expensive Provided You Don’t Think – “It’s clear that our perception of affordability has been coloured by living on a continent where housing is unusually inexpensive.”
- More Undisclosed RE Industry Insiders Publicized As Clients – “In 1995, Allan and Karin Hoegg were mortgage-free. But no more. Today their Vancouver home is a valuable source of income as they plan for full retirement.”
- Rumor that some OV units will be reduced by 20%.
- Downside Weights On The Vancouver RE Market – “One of the older guys (over 60) mention to the guy beside him that he and his wife were thinking about selling their family home, and renting, in order to get some of the money that was locked up in the house.”
- “My buddy was looking to upgrade to a house in the Coquitlam area. With 200k extra for a home, that’s half of lifetime saving between him and his wife.”
- “I was walking in the Fraser neighborhood yesterday, I noticed that the population, on average, seem to be composed of workers. I belong to the top 5 percent in terms of income. Nevertheless, I cannot afford any of the houses for sale in that neighbourhood.”
- “Vancouver is an urban resort whose value mostly resides in its real estate and not much else.”
- “Rogers Communications is expanding into RE; aiming to relaunch website; providing critical data that can help potential buyers assess the value of a property from the comfort of their home computer.”
- I’m only 50 and I can just about retire if I want to, all because of a single simple decision – “When prices rebounded to their former highs, then rocketed another 30% higher to what I considered to be totally unsustainable levels, I decided that only a fool would pass up a second opportunity to harvest such a massive non-taxable capital gain, and in 2011 I sold my place.”
- The Vacant Lot of Versailles, Richmond.
- “I don’t think that most people think things are going to crash, just that there is going to be a slight correction, but it was amazing to me how sentiment has changed, and the fact Vancouver RE is too high was just understood.”
- “The ‘investor’ who purchased our house put it up for sale two months later, in January 1981, but the bubble had burst.”
- For A City To Have That Kind Of Vacancy, It’s Like Cancer – “Downtown, the vacant unit rate is so high that it’s as though there were 35 towers at 20 storeys apiece – all empty.”
- “What’s the worst that can happen? You can’t pay your mortgage, so sell your house! No fear.”
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The crack pusher’s analyst is on the fence about her own product?
We’re screwed.
It seems CMHC is seeing reason to hesitate.
CMHC is virtually bankrupt. If you look at their balance sheet, there is no way they are going to survive an 10% correction nationwide. She’s about to look for another job in the near future…
Comrades! Pay no attention to the infirm and feeble minded analyst!
Strongly recommend continued resolute purchases in this treaty port!
Onward and upward!
“The Gods of wealth enter the home from everywhere, wealth, treasures and peace beckon!” [Lulu caishen jin jiamen, zhao cai zhao bao zhao ping'an (路路财神近家门, 招财招宝肇平安)]
http://tinyurl.com/c79c4yx
I’ve seen this before, but I’ve never noticed the piles of American cash! Haha
How can anyone really take CMHC analyses seriously? Don’t forget that our distinguished BCREA scholar economist Cameron Muir formerly held the CMHC analyst job.
Exactly. IMHO, this industry is too large (and likely TBTF like financial services) with all players involved having too much of a vested interest in lining their pockets with obscene amounts of $$$ while the gettin’ is good and not a care in the world about what the eventual outcome will be.
Meanwhile, in other news…CMHC pulls plug on “condo speculator survey”…shocker…never saw that coming.
http://www.theglobeandmail.com/report-on-business/economy/economy-lab/data-on-condo-speculators-prove-elusive/article5258051
Again it shows whose running this country – The RE developers.
Comrade, no 50 cents for you!
Why are you attempting to sow discord and unharmonious sentiment among the local populace?
CMHC must have moral hazard to bias them not to talk market down. It’s one thing to talk to facts of about what has happened, aka the 9% drop, if that is accurate. It’s another to forecast a second year of dropping like that which would mean nearly a 20% hit or nearly all their client base that purchased in last couple years underwater. The latter comment implying risk on the CMHC books.
Vancouver is very cheap! Very affordable! Buy now! We are the Hong Kong of Canada!…compared to Hong Kong, China http://www.theprovince.com/business/Hong+Kong+condo+sells+nearly+million/7540995/story.html
This theme is outdated.
Totally agree. Many Chinese already have one foot out the door now. I’m sure Premier Dix will be more than happy to hold the door open for them too.
One foot out the door, two passports in the pocket.
“One foot out the door, two passports in the pocket.”
Bwahahaha! I’m using that phrase and calling it my own.
Leo, are you implying that Vancouver is becoming a Chinese outpost?
Its what the RE developers keep telling us.
The the from-China- Chinois rich sees Canadian real estate as cheap in comparison. Why wouldn’t they buy here? http://www.mondaq.com/canada/x/205346/real+estate/Hong+Kong+Investment+in+Canadian+Real+Estate. I’m being sarcastic as well as. We are nothing like Hong Kong but think we belong up there with the likes of HK and NYC.
Let me guess, the buyer was either a member of the Communist party, a chinese dotcom billionaire or a drug dealer. Vancouver is at best the San Diego or Portland of Canada. Didn’t the Province also do an article which compared Robson St to the Champs Elysees?
With Vanc’s status as the so called best place on Earth in addition to being the former hosts of the winter Olympics, how come we weren’t able to place a single property on this list?
http://www.cntraveler.com/gold-list/2012/platinum-circle#slide=1
(and no, Tofino and Whistler don’t count)
We’re the San Diego of Canada (but without the decent weather).
I was wondering why these guys look at averages when there are far better measures of market strength out there, then I realised they care about volume*average_price, not any same-sales or hedonic measures because it tells them nothing about their issuance volumes.
Stick with Teranet and MLS-HPI. If you like eating soup with a fork, go with the average. If anyone cites average prices it’s an indication they’re trying to sell you insurance or debt.
On a related note, I’m sure we can pull up some previous CMHC predictions of 2012 for Vancouver and see how they fared, from “The Archives”. As of now it’s looking like we’ll be down about -4% in mid-winter (according to Teranet).
don’t recall … how does teranet treat new construction?
If a new construction or another reno significantly increases the value of the property above what other properties are indicating, the datum is excluded on grounds of material change to utility.
If a newly-constructed property is sold, then resold, it would be included in the dataset.
thanks … it was something that has bothered me about paired comps … where there is a lot of new or reno
rod, the Teranet methodology won’t catch all instances. For example someone can do a relatively minor reno but still book a decent price increase (say kitchen worth $40K). There are a few checks they have for this and estimate the amount of renos and depreciations will roughly balance out. It’s worth noting that to tread water as per the Teranet index it requires the structure to be in roughly the same condition under which it was bought. Those who see their structures degrade and don’t keep them up with a reasonable amount of maintenance costs will be disappointed in the returns vis a vis the benchmark.
http://www.thestar.com/business/article/1287268–canadian-debt-loads-reach-another-record-high