Regular readers of these pages know that we have a bearish opinion regarding the future direction of the Vancouver RE market. We also archive any eloquent accounts arguing for alternate outcomes. The most popular alternate argument, by far, is that of overwhelming and ongoing demand, especially foreign demand, for Vancouver RE. We’ve posted other versions of this argument previously. Here’s another one. -vreaa
Alan at greaterfool 6 Feb 2010 11:15 am writes –
“Possibly a voice of reason in all this madness of collapsing real estate prices…. First, it’s good to see so many naysayers and dire warnings of imminent RE crashes, especially in Vancouver. It’s a good sign that there’s no bubble. Most importantly, it would be great to see someone write about what’s really happening and why so many people are bothered about being priced out of the market. This phenomenon is in it’s most basic form, part of global re-organization of peoples and their ability to walk with their money to any country they wish to live. Vancouver when I was growing up in the 60’s to 80’s was still a small town. The only people that moved here in any great numbers to speak of, were Torontonians and a number of Brits and some of our dear friends from the Atlantic coast to work in our once flourishing lumber industry and other remnants of our past economy. Vancouver had it’s real estate cycles then as we do now but those cycles were locally driven. Today, we see people from not only China and India in great numbers, but new people from the former Soviet Union, eastern block countries, middle eastern populations and believe it or not, US citizens running from the US-Bush led debacle of the last ten years. Money has been streaming into Vancouver and it’s not being driven by our local economy. The RE market, while it appears to defy gravity, is being driven by money being moved from one country to another, namely Canada and Vancouver in particular. This has not just happened overnight, its been happening since 2000 in a significant manner. That’s why no one can understand who is buying at these prices, and why the average Vancouverite cannot afford the high prices. Plain and simple, Vancouverites are being displaced by those that have the wherewithall to pack up their families and move to Canada. All this whining is about the global competition we have when it comes to buying an affordable home in our own home town. This is not about a real estate bubble gone to the stratosphere, let’s just admit that were all pissed off because people are landing in Vancouver and buying up our land and because our wages are not going up to make these homes affordable, we’ve now taken on the role of being whiners and naysayers, when really we should all be just moving out to the far distant corners of land afffordabilty. This is what none of you want to admit is happening. Instead it’s about a housing bubble about to burst. I say wake up to the global revolution! It’s happening right here and now.”