“I’m on the front lines and I see some stupid people, doing stupid things out there, but I saw that years ago as well, and they’ve all made big money in this game. I deal with Europeans, Asians, and Americans buying here, and boy they are bringing some serious wealth with them.”

Couver…. at greaterfool.ca 16 Mar 2010 3:09 am –

“I’m a realtor from Vancouver, stop throwing things at the screen and give me a sec. I’m university educated in Urban Land, I’ve spent my life surrounded by some of the who’s who of the real estate world in this city, and I don’t always buy into the BS that some of my colleagues and other “experts” spout off about, ie the Olympics and all that crap. I tend to look at the big picture and try to figure out what that means to my market.Right now, I think that things in this city are a little nuts, but not as nuts as [some] might think it is. I’m on the front lines and I see some stupid people, doing stupid things out there, but I saw that years ago as well, and they’ve all made big money in this game. I deal with Europeans, Asians, and Americans buying here, and boy they are bringing some serious wealth with them. I see smart money getting out right now, but I also see smart money getting in. Some have said that it’s a bit of the Monaco effect, but I only see that in a very small area of Downtown and the Westside. There is no doubt that this latest run has been caused by Flaherty’s lax mortgage rules and poor monetary policies (rates), but the problem with Vancouver is, lots of demand and the lack of supply. Our land locked city is bursting at the seams with very little room to grow. I’m under no illusion that things could drop a good deal here, but I just don’t think that it’s going to be as bad as Garth [Turner] thinks it is. At the end of the day, I’m of the belief that it’s going to land somewhere in the middle of the two extremes.”

“I just don’t understand how RE in Vancouver makes sense. I rent in downtown Vancouver and if I were to foolishly buy a place, the mortgage would EASILY be double what I pay in rent.”

West End Girl at greaterfool.ca 16 Mar 2010 1:06 am –

“I just don’t understand how RE in Vancouver makes sense. I rent in downtown Vancouver and if I were to (foolishly) buy a place, mortgage would EASILY be double what I pay in rent. And luckily, I make above the average income (which was recently reported in the neighborhood of $40K/year) Yet most friends/acquaintance/collegues I know own and think me foolish for not owning. I tell them that if I invested the difference between rent and mortgage, in 5, 10 whatever years, I would still be ahead by renting. I guess we’ll see who’s right, in the meantime, I’m not a slave to my mortgage and can still go out and enjoy life. Time will tell who’s right!”

“For 8 years I have managed 14 condo properties in Vancouver. All of the investors suddenly listed their properties this last month.”

Strataman at vancouvercondo.info 15 Mar 2010 9:09 pm –

“For 8 years I have managed 14 condo properties in Vancouver, all owned by investors who are somewhat more well off than me!  All of the four investors suddenly listed their properties this last month. They all know each other (thus my management contract) yet not ONE listed during the 2008 downturn.”

Update 2 Apr 2010 8:29 am -“As a sideline for almost 8 years I have managed 14 properties for long term investors in Yaletown looking after the rental agreements. They are four independent investors, every one of them is now listed, never before have they listed even one. These people have lots of room to move with over 50% equity in all of them. They have said they will be out of the market by July 1st, and I know they can do it. Their competitors have little room to move, these people have already indicated they have missed the top but are not worried, they quadrupled their investment even if they drop 10 % from this months prices.” and more at 8:59 am “Okay I should admit there is a downside to my comment # 5. I am one of the tenants arggghhh! And as they pretty well covered my rent ( I pay net $400.00 for a 1 bedroom in a really upscale condo…) I am faced with the ridiculous possibility of having to pay $1500.00 a month!!!!! if some newbee investor buys this place. Arggghh stress city!”

Wife Of Renting Realtor – “A Vancouver Special, 2 blocks west of MAIN STREET, and for for 1.5 million??!!! That’s plain laughable. If it sells I’ll shake my head and move to Tucson.”

Garth Turner, at his blog greaterfool.ca, headlined this anecdote in a 15 Mar 2010 post. It is of interest from many perspectives: the ‘it’s-beyond-crazy’ sentiment, the passing mention of value in US markets, and, not least of all, because it describes a renting realtor. -vreaa

“I am a new mom and I am obsessed with owning a house on the westside of Vancouver, where I grew up. My husband is a realtor (an ethical, good one, for the record, not a slimy semi-retarded liar like most of them out there). We did a search for anything under a million dollars from Dunbar (very west) to Fraser street (east side). There were SIX LISTINGS. 5 were total dumps and the 6th was a super cute cottage 2 blocks west of the east border (that would have been considered by my circles as ‘ghetto town’ about 4 years ago). I would say 100 people viewed it yesterday (and it had been open the day before as well so I’m sure it was just as many people then). It will definitely go for over asking, probably a multiple offer situation. I’m pretty good at predicting these things, it’s on for $848K…I’ll bet it goes for $915K…I’ll post later to say if I was right. Despite my stress and anxiety about getting ‘into’ the market, there was one listing that actually made me laugh. If you are from Vancouver you may know the term “Vancouver Special”. Vancouver Specials are homes that were built in the 70’s and 80’s and are cheaply built eye sores that are littered around Vancouver, mostly in the lower income neighbourhoods. Well, a “renovated” Vancouver Special went on the market last week for 1.5million dollars. They slapped some paint on it, put in a new kitchen, bathrooms and big deck on the back, but the house next door is the identical twin of the original house before reno’s and if you look at them side by side they have the exact same roofline, window placement, EVERYTHING but the paint. Sorry, you couldn’t pay me to live in a Vancouver Special, 2 blocks west of MAIN STREET, and for for 1.5 million??!!! That’s plain laughable. If it sells I’ll shake my head and move to Tucson. It’s really ridiculous. I can’t understand where people are getting the money for these down payments and monthly payments. They can’t all be that stupid, can they? I am stressing out about it so much. My brain tells me this is crazy, but my emotions are nagging at me that if we don’t ‘get in now’ we won’t get in at all. My husband isn’t stressed at all, he is very happy that we are renting and keeps telling me to be patient.”

“I know a number of people from Vancouver who have sold their investment properties here and purchased in Palm Springs, Arizona & Hawaii. The smart boomer money is doing this now.”

junius at greaterfool.ca 12 Mar 2010 11:32 pm –

“I know a number of people from Vancouver who have sold their investment properties here and purchased in Palm Springs and Arizona. I know another who bought in Hawaii. The smart boomer money is doing this now. This trend will accelerate over the coming months as it becomes clear that Canadian prices have peaked and are heading down.”

Condo In Florida For Price Of A Parking Spot In Toronto

RE is not portable, but there has to be some kind of osmotic price effect from one market to another. How long before Canadians get the message? -vreaa

This from ‘Half-price homes? Canadians pounce on the Sunbelt’, by Tony Wong, yourhome.ca, 14 Mar 2010 –

“Being in Toronto you become jaded at the high prices. There really is a bit of a disconnect to what is happening here and what is happening in the U.S.,” said Toronto buyer Lynn, who works at an agency representing photographers. Lynn’s first buy was a relatively new one-bedroom condominium in upscale Naples near the beach for $54,900. That’s about what parking would cost at a new luxury condominium in downtown Toronto. (An extra parking spot at the still-to-be-completed Ritz Carlton on Wellington St., for example, costs $55,000 Canadian.)

“Our combined income is around 130k. I absolutely refuse to buy a $600K dump and max out on a mortgage that will only be affordable to us if interest rates never rise. I have no idea how the average person in this city can afford to buy.”

This from Tanya at VREAA 16 Mar 2010 2:44 am –

“I am in shock every time I look at real estate prices in this city. My husband and I both have jobs that would be considered above average to stats Canada. Our combined income is around $130k. I absolutely refuse to buy a $6ooK dump and max out on a mortgage that will only be affordable to us if interest rates never rise. While we are capable of doing major renovations ourselves, we would not be able to afford the materials under such a cripling mortgage. I have no idea how the average person in this city can afford to buy.”

“Yesterday, in a bus, I overheard the bus driver giving a passenger advice about high end condos in Coal Harbour.”

A shoe-shine-boy moment for our market. -vreaa

bubbly in vancouvercondo.info 14 Mar 2010 2:10 pm –

“Yesterday, in a bus, I overheard the bus driver giving a passenger advice about high end condos in Coal Harbour.”

“This is more stressful than the stock market, and it’s really not supposed to be. Who knew how complicated a simple home purchase could become?”

Share this individuals experience of discovering that moving up in a down market is going to be impossible. People have not thought through the implications of RE price drops on their futures. – vreaa.

rofina at RE Talks on 11 Mar 2010 at 7:04 pm, 13 Mar 2010 6:41 pm & 14 Mar 2010 10:10 am–

“[Just say that] Vancouver RE has corrected, the average price sits at 30% below its current peak.  I find myself looking to purchase a second property, but I realize that my condo is now underwater. What is the best option in this situation if one is looking to buy a second property? Sell the condo, take the loss, and start over with a new property?  How does having an “investment” with a loan amount over the asset value affect my chances of obtaining a second mortgage? The new property will likely be qualified for on a dual income, current property is not. Is this a major factor? If current condo is rented at supposed time of purchase of the new property, will that make a difference be it positive or negative? Condo will more than likely not cash flow.”

“Simply put, unless I have equity come purchase time for my second property, I’m going to be out of luck. This complicates things a bit, makes me wonder if I really should sell this condo. Ugh Vancouver is all I have to say, this market is brutal to deal with. This is more stressful than the stock market, and it’s really not supposed to be. Who knew how complicated a simple home purchase could become?”

“My logic for buying this property was as a hedge of sorts. If property prices continue to climb for another couple of years, even if its more modestly, I have exposure to that but not a on a grand scale like purchasing a house on a double income plus suite. The problem is that I can’t help but feel pessimistic about whats going on in the province lately, the work horror stories are going around again, layoffs, people sitting on the sidelines. The listings are climbing again, and we don’t have much stimulus ammo left. Which leaves me in the position I’m in, and thats wondering if my hedge is just going to turn into a terrible investment.”

Couple with Combined Annual Income Of $123K Decide They Cannot ‘Responsibly’ Afford To Buy A Home In Vancouver

When sensible people making responsible financial decisions are deciding to sit on their hands, only the irresponsible are left to buy. This has arguably been the case for some time already in Vancouver. Now, the new mortgage requirements will force all buyers to buy more within their means. The only result can be decreased demand and the beginning of falling prices. -vreaa

West Coast at greaterfool.ca 13 Mar 2010 9:10 pm –

“I went out to about a half dozen open houses today, most at about $600K, which put us at the furthest outskirts of Vancouver City proper. It was pretty sad because, if my partner and I kept our full time jobs indefinitely – one at $55,000, the other at $68,000, we could almost realistically afford the mortgage, [but] have no hope of responsibly having a family. I got to see first hand the tension and frenzy at one house that was “under priced” (on a busy road, with an undersized lot and what looked like 7′ ceilings).  I also asked another realtor about how much people were typically overbidding at the Burnaby border ($20,000-$50,000!). The most daunting feeling I was left with today was that each and every house was either old, run down, poorly built, or a combination of the above and we could not afford it (responsibly). That said at every single house we visited there were at least 2 other couples / families…”

“It’s Culturally Different This Time” – The ‘Cultural Difference’ Bull Argument for Vancouver RE

‘Vancouver Rocks’, a poster who frequents the greaterfool.ca site, has previously been featured here as a proponent of the ‘overwhelming demand’ bullish argument for Vancouver RE. Here he presents the argument that culturally determined behaviours make Vancouver RE different this time. We at VREAA don’t buy this argument (either), but we archive it here for posterity. With an appended succinct refutation by ‘junius’. -vreaa

Vancouver Rocks at greaterfool.ca 12 Mar 2010 6:09 pm –

“Vancouver has the highest percentage of young adults by government definitions (18-30) living at home in Canada. Much of this is cultural, where members in certain communities (Asian, East Indian just like Greeks and Italians in Toronto) do not leave home until they are married as renting is a huge waste of money in their eyes. When you leave at home for a couple years, it is very easy to accumulate a large DP when you have no expenses (someone making 30k living at home is much better off than someone making 60K having to rent). Factor in that 40% of the city is made up of primarily two ethnic minorities, and that people are getting married later, you have a situation where FTBS come to the table with very very large DPS that more than offset the high cost of houses. The do not need massive salaries to afford their homes…

Many FTBs also have large DPs from “unconventional” living arrangements by “traditional” living standards. In many communities, houses are bought by groups of immigrants who live 3-4 families to a house. Once that house is paid off, they facilitate migration of other relatives to purchase the next home, and repeat the process. When you have 3 extended families living together, all of which are committed to paying off the house, “average 2 person family incomes” are meaningless. These types of living arrangements also are more absorptive of economic shocks, as they do not rely on a sole breadwinner.

It is not rocket science. Posters from other parts of the country fail to realize that cultural attitudes and practices play into the market, and that you cannot simply use deterministic economic models to assume a crash will happen. The era of leaving your nuclear family home when you are 18, renting for many years trying to save a DP, and buying a house when you are married and settled career wise is dead in this city. That era still exists in other parts of the country, but not in two key metro areas – Vancouver and Toronto. That is why there is some truth to the statement all RE is local, and why blanket statements of universal crash are coming are meaningless. Many of the experts fail to see this…if you live here then you would see this and you would adjust your expectations of an impending crash accordingly. Some Vancouverites will try to refute this, but they know that this is an accurate portrayal of the RE landscape.”

junius at greaterfool.ca 12 mar 2010 6:33 pm refutes –

“These same factors exist in many other cities including US cities from New York to Miami to San Francisco and more affordable cities in Canada such as Montreal. They are not unique to Vancouver or Toronto and in no way support a continued affordability gap in the range that currently exists.”

The Trials Of Trying To Trade Your Vancouver Home For Profit

It is not easy to trade markets for profit, and even more difficult if you are trying to do that by trading the Vancouver RE market with your personal residence. If you make a bad trade in stocks, you lose money. If you make a bad trade with your home, you literally have to live with your error each and every day. In normal RE markets, people do not think of  their homes as potential trading vehicles, but in Vancouver we continue to live under very abnormal market conditions. The following story comes from someone who tried to profit by selling their Vancouver home during the drop from the summer 2008 peak. Essentially they were trading using a trailing stop: “when the market drops by ‘x’, I’ll get out”. They ended up being ‘whipsawed’, in that, almost immediately after their sale, the local RE markets turned around and rallied through 2009, purely (and with perverse irony) because of the free money brought in to rescue the world’s stock-markets. Now, with housing at a second peak (a likely ‘double top’), our protagonist is in the depths of remorse; they are very despondent about having traded out. Yet, note that their assessment still seems to be that the market is overheated. In vreaa’s opinion, if they simply hold steady with their renting, they will see properties like their original home drop back through the Jan 2009 trough and plummet down further. Their trade will end up being a profitable one, even though they will have been sorely tested by market volatility along the way. To realize their ultimate profit, they have to have courage to hold with their original conviction that housing in Vancouver is very overvalued and is set for a fall. And that conviction is tested when you are living in sub-optimal digs, with the reminders of your bad trade around you every day. Of course, the classic trading error in this situation is for ‘badkitty’ and her partner to panic and buy back into the market just in time for the second price descent, the ‘crash’ proper. Don’t do it, ‘badkitty’! -vreaa

This from badkitty at greaterfool.ca 12 Mar 2010 3:01 am, in response to someone wrestling with the owning or renting dilemma –

“We, sadly, listened to the contrarians in November 2008, sold our home in Vancouver when the market crashed and lost 30% of equity. That pathetically amounts to at least $300,000 of tax free money. We are renting right now and it sucks large. You want to make sure you are on the same page as [RE contrarians]. They make you feel like you are some sort of leper for wanting to nest and make a home for yourself – insisting that you are yuppie scum who have bought the lies of HGTV instead of recognizing that you just want what your parents wanted and their parents wanted..a home… They tell you to that you are a fool to want to live somewhere with a pulse like Toronto or Vancouver and you should be content with living in RR#5 Newfoundland or Jacksonville Florida for 1/100 of the price. Sorry guys, Life is too short to live in the burbs and the city comes with a price because everyone wants to live there (and the fact that eveyone wants to live there raises AND sustains prices). So, selling our house was the WORSE thing we ever did – once you are in the market, DO not leave it, hedge your bets if you must and move to a more affordable property in case things go south. Who cares if prices come down 20% when they already went up 30%? you need a place to live for heavens sake- real estate is cyclical it goes up, it goes down…follow history. However, the damage is done.. we know we screwed up with selling. However, I think we would be fools to buy in this sellers market..we have no choice but to wait for awhile…Like you, however, I just hope it is not the wrong choice. It is the supply/demand thing that speaks the most volumes for buying now – if there is no supply how can there be this monumental crash about to happen? A correction yes, but bollocks to a crash. Don’t look at a home as an investment, look at it as a place to live.”

badkitty added the next day, 13 Mar 2010 8:51 pm –

“I saw my house as an investment which is the dumbest mistake a person can make -then, because I saw the house as an investment, I acted out of fear and greed when I sold it (the second dumbest mistake a person can make). So, I alone have knocked myself out of the ability to ever own again in Vancouver.”

“Vancouver really is the ‘Best Place on Earth’ for me! Do I have to own it? No.”

Dorker at vancouvercondo.info 11 Mar 2010 9:07 pm –

“I sold all my properties a couple of years ago and thought the crash would happen soon after. It hasn’t. Am I bitter? No. I’m actually relieved and liberated from all that RE maintenance, bills, and accounting. Frankly I don’t care if RE continues to go up because I’m enjoying life more renting. I have a fabulous apartment which I couldn’t afford to own, but here I am: top floor, spacious, sweeping views, and great location. My landlord even renovated for me for which I’m grateful. Vancouver really is the best place on earth for me! Do I have to own it? No.”

“I grew up in a house with a garden and my children grew up in a house with a garden, just 10 thousand miles away. When we moved to Vancouver I took one look and I knew that buying a house here is a definitely a bad idea.”

White Payer at vancouvercondo.info 11 Mar 2010 3:33 pm –

“I am not young and I am an ex-homeowner. I grew up in a house with a garden and my children grew up in a house with a garden, just 10 thousand miles away. Then we moved to Vancouver I took one look and I knew then and there that buying a house here is a definitely a bad idea and so we’ve been living in a co-op ever since. We’ve been trying to enjoy life in this town taking advantage of what it (apparently) has to offer, although as of late it’s been getting increasingly harder to find this place appealing. Still, the reason I am here is my job – a well paying, secure job with good prospects for the foreseeable future and a good pension when I’m done. But first and foremost I love mobility, so we “travel light”, so to speak. If life around here does finally piss me off enough I will take my cash out and move somewhere where the sun shines more than 10% of the time.”

“I flipped 3 homes between 2003 and 2007 and more than doubled my money. Banks would lend me $1,000,000 if I asked for it. I do not see any good opportunities in Vancouver at the moment. Vancouver is like the souvenir shop at the airport where items are sold for twice their value.”

Anonymous at vancouvercondo.info 11 Mar 2010 3:14 pm –

“I am not young, I have flipped 3 homes between 2003 and 2007 and more than doubled my money. I like to buy cash. Banks would lend me $1,000,000 if I asked for it, may be more. I am neither a bear or a bull, I have no idea where the market is heading, and I do not mind. I like good opportunities, and I do not see any in Vancouver at the moment. Vancouver seems to me like the souvenir shop at the airport where items are sold for twice their value. I never buy in airport shops, sorry…”

“I was in no situation to buy RE in 2005. Prices here have nowhere to go but down. There is no jealousy, hate or immaturity in this position – just financial discipline.”

Nero at vancouvercondo.info 11 Mar 2010 2:49 pm –

“I was in no situation to buy RE in 2005. I was a recent MBA grad and embarking on a career. Since then, my wife and I have accumulated about $100k while saving for a downpayment. Now, if there were any logic in the assumption that the Van RE market (prices) would be steady and increasing (or even flat), I would have bought already. The simple truth is that prices here have nowhere to go but down. The article (and so many others) support the argument with respect to Vancouver. So why should I enter a market that I know is stretched (thanks to a perfect storm of interest rates and psychology) and peaking? There is no jealousy, hate or immaturity in this process – just financial discipline.”

“When I explained the Vancouver housing mania to them, my friend’s wife said “Oh that’s what we all thought too.”

Ulsterman at vancouvercondo.info 11 Mar 2010 12:20 am & 12:22 am –

“A friend and his wife arrived today from Belfast, Northern Ireland. It was the bubbliest place in the UK over the past 10 years. Apparently the locals thought it was different in Belfast and fundamentals didn’t apply. It’s now off 40% from the peak. My friends bought their place for 93k in 03, at the peak houses on their street sold for 275k and they put their house on the market last June at 189k. I asked them today if they’d had any offers. No they said, not even one viewing. Now THAT’s a bear market. Since June they lowered the price in increments to 149k and still NOTHING. When I explained the Vancouver housing mania to them (We’re different; Offers 100k over asking; Real estate always goes up; etc) my friend’s wife said “Oh that’s what we all thought too.” BTW, they are on holiday, not emmigrating. With the collapse of their real estate holdings (2 houses) and the British peso, they have been well and truely priced out of the Vancouver market. They had considered moving as she has a Canadian passport.”

“I’ve been waiting in Vancouver since 2004 when prices looked too high. Today the wife circled a date on the calender, April 2011, suggesting my theories had had their time long enough. By that date next year we buy a place in Van or find another town where we can.”

The bubble market has greatly inconvenienced many regular citizens who, under normal circumstances, would have bought property at reasonable prices (even given that there’d be a Vancouver premium) and be getting on with their lives. Instead, they are ruminating about the RE market and some are even considering leaving town. These forces are not good for our community. -vreaa

jay at greaterfool.ca 11 Mar 2010 2:14 am – “I’ve been waiting in Vancouver since 2004 when prices looked too high and I had just got married. Now two kids and 6 years later we have saved a lot but not enough… still renting. The wife circled a date on the calender today, April 2011, suggesting my theories had had their time long enough. By that date next year we buy a place in Van or find another town where we can…”

“I had lunch with a group of contractor friends yesterday. They all seemed quite shocked that their work has slowed down so much.”

metalhead at RE Talks 11 Mar 2010 11:50 am –

“I had lunch with a group of contractor friends yesterday. They are in concrete, electrical, cabinets etc. They were all complaining how slow it has been the past few weeks. These guy’s work equally for developers and for home owners doing reno’s etc. One of them hasn’t had any work at all for 2 weeks and no phone calls at all for the same time. Another has only 2 days of work and his phone hasn’t rang for a week. These are all guys who have been busy for years. They were all talking about how their workers are complaining cause they are not getting any hours. They all seemed quite shocked that their work has slowed down so much.”

“This is the first time since we started searching for houses a few months ago that we’ve seen 3 price reductions on a single search. Usually we see none or sometimes one.”

David and his wife are a “30-something 2-income couple with 1 kid renting in Kits and waiting to pounce. $100k in the bank.” They kindly sent vreaa an e-mail 9 Mar 2010 to point out: “This is the first time since we started searching for houses a few months ago, that we’ve seen 3 price reductions on a single [realtor search] email. Usually we see none or sometimes one. The one on Glen Dr. and Woodstock Av were reduced by about $50,000 each.”

“All the couples I know who bought in the past 4 years overextended themselves, and are going through very hard times. The stress burden on a family is huge.”

These overextended couples are reportedly experiencing stress near a bubble peak. Imagine how much more stressed they will feel when prices drop the relatively small amounts necessary to wipe out all of the equity that they have in their homes. -vreaa

Anonymous at vancouvercondo.info 10 Mar 2010 2:27 pm –

“All the couples I know who bought in the past 4 years overextended themselves (I mean mortgage > 3 x family income), and they are going through very hard times. The stress burden on a family is huge, especially if you have small kids that make you life crazy enough by waking up the middle of the night (this is almost the perfect recipe for a divorce). My friends also had to deal with post-buying depression: after a month, they open their eyes on the drawbacks of bying, the bills were pilling up, their home was smaller than what they used to rent, they started to realized the kids would soon outgrow their bedroom and their was no way they could afford a larger home. Then came the time when we were going for holidays, restaurants, or paying ski lessons to our kids, while “buyers” had to stay home and eat cheap. When I see a couple making $200,000 telling me they cannot afford the average sushi place, I find it bizarre… Another thing I noticed is the amount of time my friends spend looking at interest rates, inflation, bubble talk, etc… If they read prices might fall by 20%, they lose sleep (20% x 800 000 = $160 000, not something you save in one month… or even a year). I was obsessed with having a house of my own, so I bought a nice recreational property for cheap in a remote area.”

“I’ve spent a lot of time convincing my fiancée that it is a horrible time to buy. She agrees, but is becoming discouraged.”

Human778 at vancouvercondo.info 10 Mar 2010 12:23 pm –

“I need some help. I’ve spent a lot of time convincing my fiancée that it is a horrible time to buy. She agrees, but is becoming discouraged. I’ve presented all the arguments on risk, fundamentals, etc., and made a strong case as to why Vancouver is ripe to crash, big time. She countered me the other day with, “I don’t know. You have good arguments but I also think you hold this stance because you are waiting for the crash. Yes, the States is a mess, but some metropolitan areas must be fine – what about New York?” I did the whole, not everybody wants to move here and the Vancouver is not New York bit, but need more evidence of differences. I noted how net migration into Vancouver is not high enough to absorb supply and the income levels are drastically different. Also noted the insane income ratio for Vancouver, but I need more.”

“One realtor is hustling young people into 500K slum shacks telling them it is the best time ever to buy. He has several slum shacks of his own and only sees up side. I don’t think he is a bad person, he is just very naive. He really believes his hype.”

Most bubble cheerleaders aren’t being intentionally deceptive, they believe their own arguments. -vreaa

junius at greaterfool.ca 10 Mar 2010 9:47 am –

“A friend of mine is visiting from Europe right now. Two of his old friends are realtors here in Vancouver so he met them over the past few days. Completely different attitudes. One is hustling young people into 500K slum shacks telling them it is the best time ever to buy. He has several slum shacks of his own and only sees up side. He thinks I am crazy for my view and I think he is going to end up hurting a lot of people. The second realtor is totally realistic and agrees with me that the market is about to fall. He tells people it is the worst time now to buy unless you have a very good reason. I don’t think the first realtor is a bad person he is just very naive. He really believes his hype. I think this is the most common realtor even for the bad ones. Unfortunately this also makes him more effective because he really believes now – and always now – is the best time to buy.”

“This is one of the bad effects of overheated big-urban markets. The warped perspectives mess things up everywhere!”

Nancy at greaterfool.ca 10 Mar 2010 8:51 am –

“I am trying to persuade a young Vancouver couple (2 young kids, self-employed) not to buy a house in Kingston, Ontario this spring, but to wait till the fall. They can’t afford to rent let alone buy in Vancouver, so they’re getting out. Good idea. Kingston is very affordable with a great quality of life. But the 5/35 mortgages and low interest rates mean even houses here are inflated. Because they’re in Vancouver, they think a midtown house is a steal at $250,000. I can’t persuade them they’re out of their minds, and they’ll see that price drop $50-70G over the next two years. This is one of the other bad effects of overheated big-urban markets. They bring their warped perspectives here and mess things up everywhere!”

Visual Anecdote – US RE Sentiment Mar 2010 vs June 2005

from NYTimes article by Robert Shiller, March 2010

Time Magazine, June 2005

“My realtor suggested I wait until September 2010 when we’ll have a “better read” of what’s happening.”

april at greaterfool.ca 9 Mar 2010 11:44 am – “I live in the Vancouver/Lowermainland area. I sold 5 months ago and am renting. I talked to my realtor a few days ago and he said he’s not suggesting I do anything right now, but to wait until September [2010] when we’ll have a “better read” of what’s happening. A business consultant friend has sold his home and is renting. He and his business associates think it’s going to “get worse before it gets better” here in Canada and many of them think we could go the way of the US.”

“I have heard from a few realtors that it has been slow on the buyers’ side since the Olympics.”

junius at greaterfool.ca 9 Mar 2010 12:56 am – “I have heard from a few realtors that it has been slow on the buyers side since the Olympics. I had thought it would stay hot until the April 19 rule change. However it looks like most of the buyers have dried up before the party ended. Only 5 more weeks to go. [until changes in mortgage qualification requirements].”

The Charts Don’t Lie – Water Consumption During The Gold Medal Hockey Game

Okay, this is off topic, and, okay, these are Edmonton stats, but they could just as easily be stats from Vancouver, and the chart is just too beautiful not to post. Thanks to my good friend Clive for send it along. From patspapers.com 8 Mar 2010 -vreaa

New Mortgage Rules Will Result In 20-25% Drop In Purchasing Power For Most FTBs

The new mortgage rules mean that buyers with less than 20% down, requiring CMHC backed mortgages, will have to be able to afford monthly payments at the posted 5 year mortgage rates. This represents an effective 2% rise in mortgage rates, and, because rates are currently so low, it represents a relatively large decrease in purchasing power. It is hard to see how this will not apply downward pressure on prices. -vreaa

The Pope, at vancouvercondo.info, 7 Mar 2010 –

Household income: $100,000
Down payment $30,000
Monthly loan credit card payments: Zero
Term: 25 years Property taxes: $2000 Condo fees: Zero
3 year discount rate: 3.29% – you can borrow $491,551
5 year posted rate: 5.39% – you can borrow $397,349

VHB, at vancouvercondo.info, 7 Mar 2010 10:32 pm –

I worked through an example with 5% downpayment, 6K/year property taxes and 5.4% vs 3.3%. I get a drop of 23.9% in the price you can pay if you are maxing out.

Canadian Business Magazine Cover – ‘Why Buying A House Is A Bad Investment’

RE Bears shouldn’t get too excited about covers like this. Usually it’s the exuberant covers that indicate market tops. As a sentiment indicator, this cover indicates that the market has a way to run yet. But perhaps it’s different this time. -vreaa

.

Canadian Business, 16 March 2010

“In my own line of work, I get access to a lot of private company info including salaries. I am consistently amazed at how low the majority of salaries are in Vancouver relative to other parts of Canada.”

Clarke at vancouvercondo.info 6 Mar 2010 4:58 pm – “In my own line of work, I get access to a lot of private company info including salaries. I am consistently amazed at how low the majority of salaries are in Vancouver relative to other parts of Canada. The stats I have seen on median incomes in Canada seem to bear this out as well. But, we have the most expensive real estate. Go figure.”

From Someone Who Left – “That’s the problem with Vancouver. It promises so much, but delivers so little. Unless you’re making a ton of money.”

scullboy at vancouvercondo.info 6 Mar 2010 9:25 am – “I [also] gave up caring about ownership, and actually I had a good hard look around Vancouver before I made the decision to leave. I’ve spent about 60K all told in the last 5 years going to different schools so I could gain wealth the old fashioned way…. through work. What I saw in Vancouver didn’t look good. As far as I could tell the only people able and willing to rent in [my] building were people who made a lot of money under the tables (hookers, waiters etc) and cops, who have a pretty good salary and pension plan.  A LOT of my friends who were working in eBay, EA etc were getting laid off. They were pretty calm about the whole thing, as they had pretty good packages. They all said the same thing “Everyone needs IT people”. After 5 years of stormy seas I realized yeah, everyone needs IT people but if you skills are even a 10% mismatch, you won’t get the job. It there are 500 applicants and you were the second choice… guess what, you lose and you’re back to Square 1. Even given many years of management experience and a great education, I found most of the restaurants in Vancouver [where I worked as a chef] were run by shady jerks with questionable business acumen. At my age (38) and with my skills, starting over and getting repeatedly ripped off was not an option. If you had to stay in your current position (job, home etc) for the next 5-10 years would you be happy? By the end of my stay in Van, I was frustrated and miserable. Despite about 15 years in IT, a degree and a professional certification (PMP), I simply couldn’t find work in that sector. The restaurant jobs I was getting were crappy and ridiculous. I was making 15 bucks an hour cooking for a 200 seat restaurant in a kitchen half the size and far less well equipped then the one I’m sitting in now. I think that’s the problem with Van: It promises so much, but delivers so little, unless you’re making a ton of money… and my that I mean healthy six figures. There just aren’t that many legit jobs like that in Van. You really have to be a gangster, a drug kingpin, someone involved in human trafficing or a real estate agent. I think most of the bears understand instinctively you may spend all your money on the “investment” of a home in Vancouver, but you aren’t going to be happy living in it, and I think making decisions based on what makes you happy seems to be the best course of action. That’s what I chose and now instead of living in a crappy penthouse with an amazing view but situated in a shady building, I’m enjoying the Maritime sunshine is a light filled kitchen so large, I was able to set up a really nice little home office. I have a garden, a front years, a back yard and a shed. While there are no mountains, I do have a great view of the MacKay Bridge and the Atlantic ocean. Rental cost for this 1,000 sq ft bit of heaven: $975 including heat lights and power. Now *that*’s affordable, which makes me *VERY* happy.”

“I no longer care about ownership. I’ve given up on it entirely. I want to see the Vancouver RE market turn before all my friends leave the city. The attrition is getting worse… and they’re not wrong.”

Depletion of human capital: People leaving Vancouver, or avoiding settling in Vancouver, is an invisible yet profound cost of this boom. -vreaa

Absinthe at vancouvercondo.info 6 Mar 2010 12:36 am – “I no longer care about ownership. I’ve given up on it entirely – as I said, I am renting a house with a yard, and since I grew up in apartments, this is a step up and my kids have room. I’m not moving into a tiny space for the pleasure of property taxes and a deed. I want to see it [the Vancouver RE market] turn before all my friends leave the city. The attrition is getting worse and they’re not wrong. Truly, there’s no other market in Canada in which my husband and I couldn’t buy something similar to what we’re renting now. Now, we’re sticking to BC for the grandparents, who are more important than land any day. Rent is still an option. But man, I’m missing many people, these days.”
other ted at vancouvercondo.info 6 Mar 2010 1:59 am – “The only option for bears, according to the bulls, is to rent. How about moving all together? When this puppy blows it’s not just housing that will tank, but the entire fake economy. I live elsewhere but will buy with all the cash I am saving. Not sure if Vancouver will ever be home again though.”

“I am one of the few that are happy to rent. There is no need to own real estate. It doesn’t make you a better person and it certainly doesn’t make you happy.”

Rent-o-rama at vancouvercondo.info 5 Mar 2010 6:40 pm –

“I am one of the few that are happy to rent. But that is mostly because the place I rent is much nicer than I could afford to buy. I am content to never buy. It may slowly deflate or it may suddenly crash but either way I am better off renting, and I don’t have to stress how my mortgage might go underwater. And, as the market deflates, there will be even more and better rental opportunities than there are now. My rental cost will keep going down with the housing market. There is no need to own real estate. It doesn’t make you a better person and it certainly doesn’t make you happy (just ask all those husbands who are constantly having to renovate the house). All that said, housing bears have been wrong so far and may have to wait a long time to be proven “right”.”

A Bull’s Position – The Government Will Continue To Juice The RE Market For Homeowners, “the 70% of the population that “counts” from a political perspective.”

Ponzi schemes built on debt-financing always eventually collapse on themselves, regardless of what governments want. But, for the record, here’s a recently stated variant of a common RE bull position. – vreaa.

Dr. Know at vancouvercondo.info 5 Mar 2010 5:16 pm –

“It is amusing to watch the bears raise the same old arguments for 6 plus years, pointing out that the inevitable crash is just around the corner. Whether it was zero down/40 year mortgages, slashed interest rates, home reno credits or property tax deferral programs, both the federal and provincial government have demonstrated an ability to implement policies and measure designed to keep the housing market hot. The introduction of each new policy and program has caught the bears by surprise, and each time bears repeat the refrain that the government has used up all its ammunition. But who is to say the government doesn’t have any more “ammunition” left to prevent a collapse of the market? Everyone thought the minor 2008 correction was the beginning of the end, and they were sorely wrong. Bears failed to predict that rock bottom interest rates would be introduced, and that people would run out and buy despite it being “counter intuitive” amidst a recession. And while prices have edged beyond their previous high, bears are secretly (many openly) upset by the current state of affairs. The current state of the market goes contrary to their own personal wishes, “logic” and perception of “economic fundamentals.” Bears love to say that the government is idiotic because they failed to learn from the collapse of other “bubbles” around them. But maybe, just maybe, they have watched and learned and know how to keep things moving nicely all the while preparing for a soft landing or minor deflation. After all, maybe there are a few bright public servants who have paid attention to the global real estate condition. Bears fail to realize that their vested interest in a crash in prices is in stark contrast to the 70% of the population that “counts” from a political perspective. The government will do whatever it can to prevent any US style meltdown. And while a fast correction is in the interest of bears, I am afraid to say that we are looking at 5-10 years of minor price decreases at best, as the government will intervene every step of the way to protect prices. And how many here actually want to continue to rent for 5-10 years while prices slowly deflate? Everyone here wants to buy at the “bottom,” and few if any will buy after only a 10-20% reduction because you will still “lose” that hard earning savings you socked away (difference between rent and home ownership) as prices continue their downward spiral (according to your own theories) Bears pretty much have to keep waiting for many many years in order to have their theories validated. Whether you want to admit it or not, many bears here have put their lives on hold waiting for a crash (despite all the glib comments about 1000 bucks per month in the bank, eating out and traveling more than indebted homeowners). With a culture that constantly socializes you to own, only a fraction of you are self confident enough to be truly happy renting. The vast majority of the posters here cling to the notion that they are rational investors, pretending to be happy renters, all the while hungering for a collapse in the market and loathing homeowners. And while you might be the rational investors, at the end of the day, you are a tiny minority with values that run contrary to the current values of the vast majority – instant gratification, short-term thinking, greed, entitlement, and abdication of personal responsibility (after all the government will bail them out if things go sideways). Unfortunately, or fortunately depending on which side of the market you are on, many bears will be renting for many many years, clinging to the notion that they are “right” and pretending to be happy despite knowing deep down inside that they were/are wrong.”

Olympic Consumer Spending – “Canadians themselves were the high rollers for total spending, representing 78.4 per cent of all transactions.”

Canadians opened their wallets for Vancouver’s Olympics, Vancouver Sun, 4 Mar 2010 –

“We saw a big surge in spending after Canadian athletes won their gold medals,” said Santo Ligotti, a spokesman for Moneris. Moneris processes about 40 per cent of electronic transactions in Canada, including those of Visa, MasterCard and American Express.

Canadians themselves were the high rollers for total spending, representing 78.4 per cent of all transactions.

“I bought a house in Kits in June of 1994 for $389k. I sold in 2008 for $970k. Do you think that sort of return is sustainable? Of course it isn’t.”

Patrick at vancouvercondo.info 3 Mar 2010 11:46 am – “Even the most lethargic investors realize this market has been played out. I bought a house in Kits in June of 1994 for $389k. I sold in 2008 for $970k. A remarkable profit for that period by any standards. Do you think that sort of return is sustainable? Of course it isn’t.”

“I just sold my two investment properties. People get sucked in by mass hysteria and cheap money. This is probably the worst time to purchase real estate that I have ever seen.”

anonymous at The Vancouver Sun 2 Mar 2010 10:51 pm – “I just sold my two investment properties that I bought about 10 years ago, and I have to say, anyone that is buying right now is making a big mistake. It never ceases to amaze me how people get sucked in by mass hysteria and cheap money. This is probably the worst time to purchase real estate that I have ever seen.”

Vancouver RE Prices are “no mystery, folks” … “I have a salary very well into the six figures with another big bump this year and a bonus that I just bought another property with.”

anonymous at The Vancouver Sun 2 Mar 2010 10:55 pm – “There are a lot of people making a lot of legitimate money in Vancouver. I have a salary very well into the six figures with another big bump this year and a bonus that I just bought another property with. I work in software and many of my colleagues are in a similar situation. Properties around me on the north shore sell very fast and its young professional familiies with very good income. They are well educated and have great jobs…its no mystery folks.”

Post Olympic Job Losses – “The show’s host had to ask her several times how many people were hired who will now be out of work. After much dodging she finally came up with a ballpark figure. Over 50,000”

bestplaceonmeth at vancouvercondo.info 2 Mar 2010 at 5:31 pm – “I was listening to a spokesperson from Adecco Employment Services on CBC this morning, they’re the ones who hired people for the Olympics. The show’s host had to ask her several times how many people were hired who will now be out of work. After much dodging she finally came up with a ballpark figure.”Over 50,000″ was her answer.”

“I work in high-tech and moved here from Ottawa recently. I honestly don’t know why any high-tech company stays in Vancouver.”

Vancouver RE prices are strangling local industry. -vreaa

taylor192 at vancouvercondo.info 2 Mar 2010 1:23 pm – “I work in high tech and moved [to Vancouver] from Ottawa recently, so I can comment on Vancouver vs Ottawa:

– Ottawa has many more jobs and company headquarters.
– Vancouver tech jobs have dried up meanwhile Ottawa has seen some growth in jobs since the recession started.
– Ottawa tech jobs are primarily located in the nice suburb of Kanata. You can buy a 2000sqft 3bd/3bath home there for $300K with a yard, garage, and no condo fees.
– Ottawa tech jobs pay on average a little more.
– Ontario income and Ottawa property taxes are more than BC and Vancouver.

I honestly don’t know why any company stays in Vancouver, especially in high tech. Seattle/Redmond are only a short drive away too, with higher salaries and lower costs of living.”

“I have noticed a very definite trend of Asians of Chinese descent moving back home. The big complaint from my soon-to-be ex-neighbours is that there are no business opportunities in Canada.”

This observation is noteworthy in that it is contrary to general opinion. -vreaa

old kitsie at vancouvercondo.info 2 Mar 2010 12:59 pm – “I live in the Arbutus area of Vancouver, my kids were often the only non-Asian kids in their high school science classes. I have [now] noticed a very definite trend of Asians of Chinese descent moving back home. They are now citizens, with two passports, and no longer have a need to educate their children here. The big complaint I have heard from my soon-to-be ex-neighbours is that there are no business opportunities in Canada. China is the place to make money. There are many homes vacant in this neighbourhood and it appears to be an escalating trend. I do not see an influx of immigrants as in the past.”

Olympic Visitor, Foreign Buyer? Part 6: “I know of one condo sale to a couple from San Jose. I’m going to assume we’ll see a mini-wave of these kinds of purchases, but the effect will be minimal.”

raventalk at RE Talks 2 Mar 2010 9:17 am – “Those of us living at 1155 Seymour were flooded with pre-Olympic requests to list our condos and I know of one sale to a couple from San Jose. I’m going to assume we’ll see a mini-wave of these kinds of purchases, but the effect will be minimal.”

If There Isn’t A Bubble, Why Are All These Public Figures Feeling Moved To Publicly Announce That There Isn’t A Bubble?

This post, originally published 2 Mar 2010, will now be used as a repository for similar statements from public figures, and updated on an ongoing basis. It is accessible from the ‘What Bubble?’ sidebar graphic. – vreaa

“People use the B-word, in terms of a housing bubble. Vancouver isn’t in one.” – Will McKitka, real estate agent, Macdonald Realty, Globe and Mail, 9 Mar 2013

“The bubble is non-existent. The sky is still there. … What remains clear for current and future homeowners in Metro Vancouver, is that the underlying fundamentals of the housing market remain strong.” – Anne McMullin, President and CEO, Urban Development Institute, homesanddesign.ca, 13 Feb 2013

“We don’t see a bubble in Vancouver.” – Brian Yu, Onni Group, CTV News, 29-30 Jan 2013

“There never was a housing bubble. So it hasn’t burst, because it never existed.” – James McKellar, academic director of the Real Property Program at York University’s Schulich School of Business, MoneySense, 16 Jan 2013

“There is no property bubble. Period. – Michael Levy, financial analyst, Global TV News, 8 Jan 2013

“You can’t burst a bubble that wasn’t there.” – Tsur Somerville, Director of the UBC Centre for Urban Economics, Sauder School of Business, The Province, 14 Sep 2012

“People come to town and say it is a bubble, but what do they know?” – Bob Rennie, Vancouver condo marketer, The Province, 24 Aug 2012

“The big question people ask is, is Canada’s housing market in a bubble. Our answer to that is no.” – Jim Murphy, CEO of the Canadian Association of Accredited Mortgage Professionals, Bloomberg, 8 May 2012

“The housing market is not in a bubble. … We remain quite comfortable. Frankly, I’d like to see the rhetoric come down a little bit.” – Gordon Nixon, CEO of Royal Bank of Canada, Bloomberg, 8 May 2012

“In our view, the national housing market is more like a balloon than a bubble. While bubbles always burst, a balloon often deflates slowly in the absence of a pin.” – Sherry Cooper, BMO’s chief economist, and Sal Guatieri, senior economist, BMO report, 30 Jan 2012
[Frighteningly reminiscent of:
“Balloons don’t burst. You can put air in a balloon and it can expand or you can deflate a balloon, where air comes out… now air can come out of the balloon rather than the balloon popping.” – David Lereah, PBS, 29 Nov 2005
“It’s more like a balloon that inflates and deflates… The air is coming out of the balloon, but the bubble is not bursting.” – David Lereah, Lowell Sun, 21 Mar 2006]

“What bubble? If I never have to hear one word again this year, it would be “bubble.” One of the most compelling aspects of the bubble is there is no way to predict it.” – Leah Bach, Realtor, BC Business magazine, 6 Jan 2012

“The threat of a bubble has largely dissipated. But, really, there never was one.” – Robin Wiebe, Conference Board of Canada, speaking of Metro Vancouver [Vancouver Sun, 29 Nov 2011]

“Ward McAllister, president of Ledingham McAllister Properties, and fellow panelists Eugene Klein, president-elect of the Real Estate Board of Greater Vancouver, and real estate consultant Richard Wozny, of Site Economics Ltd. were at the board of trade to debate whether or not Vancouver real estate is in the midst of a bubble. They all agreed it is not. Moderator David Podmore, CEO of Concert Properties Ltd agreed. Podmore wore a button to the conference with the slash symbol for “no” imprinted over the word bubble.” – 21 Oct 2011

“We have not seen clear evidence of a bubble in the housing market in Canada.” – Jim Flaherty, Canadian Finance Minister, news conference, NYC, 5 Oct 2011

“Well I guess the first question is, is there a real estate bubble at all? … We had a financial crisis, the largest we’ve seen since the Great Depression, we had an ensuing global recession, and if that isn’t a trigger or tipping point, for any kind of inflated market to see a major correction, I don’t know what is.”
– Cameron Muir, Economist, BC Real Estate Association, CTV 27 Sept 2011

“Vancouver real estate no bubble says economist”, cbc.ca quoting Brian Yu, economist, Central 1 Credit Union, 15 Sep 2011

“Canada’s market is not in the midst of a bubble” – Sal Guatieri, senior economist at BMO Capital Markets, marketwatch.com, 29 Mar 2011

“While Vancouver prices are high by Canadian and North American standards, as evidenced by a recent photo essay on the most expensive streets in the world, they are still less than some European and Asian cities.” – Michael Geller, francesbula.com, 21 Mar 2011

“An overpriced market isn’t the same thing as a bubble. Overpricing is a perfectly normal thing in any market.” – Jay Bryan, Montreal Gazette, 30 Dec 2010

“I don’t see a price bubble and I don’t see that we need the mortgage criteria tightened as is suggested in some quarters” – Helmut Pastrick, chief economist of Central 1 Credit Union, Financial Post, 19 Dec 2010

“I’ve prided myself in walking away from conversations involving the housing bubble, on the basis of me being fed up with telling people it doesn’t exist” – From ‘No Bubble, No Trouble‘, by Stephen Dupuis, president and CEO of the Building Industry and Land Development Association (BILD), Toronto Sun, 12th Dec 2010

“The evidence is not there that Canada has a housing bubble. In fact, the evidence with respect to affordability of mortgages in Canada is solid and we have a stable market” – Finance Minister Jim Flaherty, to the House of Commons finance committee, 23 Nov 2010

“The Canadian housing market does not appear to be in a bubble.” – BMO Economists Earl Sweet and Sal Guatieri, report from BMO Capital Markets Economics, cited at pr-canada.net 18 Nov 2010

“Fears of a Canadian housing bubble unfounded” – Jay Bryan, Reporter, Postmedia News published in Vancouver Sun 15 Nov 2010

“There isn’t a bubble in Canada” – Don Campbell, Real Estate Investment Network, BNN.ca, 28 Oct 2010

“[I] do not believe the city is in a bubble.” – Michael Goldberg, dean emeritus at the Sauder School of Business at the University of B.C., The Vancouver Sun, 20 Oct 2010

“They’re saying a “bubble” is about to burst. It makes me laugh…” – Pierre Marchildon, Marchildon Property Investment Partners, in a video commentary, ‘The Vancouver Real Estate “Bubble”, youtube 7 Sep 2010

“I found the use of the word ‘bubble’ a little odd right now. Bubbles aren’t just prices — they are turnover, volume and transaction. I don’t think anyone is out there lined up around the corner, sleeping three nights in a row to buy the first condo in Winnipeg. If you go back to 2008, that was the environment — that is ‘bubble-ish.’ That was Vancouver and Toronto as well.” – Tsur Somerville, University of B.C. business professor, CTV News, 1 Sep 2010 [Um.. what we’re seeing at this point is a bubble that has peaked and is beginning to implode. We’re past the phase of manic run-up. The buyers are exhausted. -vreaa]

“There is no bubble; no crash will happen.” – Don Campbell of REIN (the Real Estate Investment Network), as heard on CBC radio 31 Aug 2010 (quoted by pricedoutfornow at vancouvercondo.info 31 Aug 2010 1:03pm.)

“Just because homes are fully priced in many areas does not mean a bubble has formed.” – Patricia Lovett-Reid, senior vice-president, TD Waterhouse, Financial Post, 26 Jun 2010

“Phew. With yesterday’s report that home resales are cooling and price increases shrinking, we can finally put behind us the horror of Canada’s great imaginary housing bubble. This mythical creature terrorized credulous analysts and journalists in recent months, only a short while after some of these same unhappy people had been shaken by the equally nonexistent Canadian housing-market collapse.” – Jay Bryan, ‘Canada’s housing market settles down’, Montreal Gazette, 17 Jun 2010

“There is no evidence of a bubble.” – Jim Flaherty, Canadian Finance Minister, Reuters, 12 May 2010

“A bubble in the national housing market is not in evidence.” – Phillips, Hager & North, April 2010

“Anyone expecting a massive price decline like you are seeing in the US is going to be sorely disappointed.” … [Interviewer: “In your view, there is not a housing bubble at present?”] “No.” – Gregory Klump, Chief Economist with the Canadian Real Estate Association, CBC Radio, 19 Apr 2010

“I don’t believe there is a housing bubble in Vancouver.” – Rob Regan-Pollock, Vancouver mortgage broker, CBC Radio, 19 Apr 2010

“You know, we don’t hear people saying “It’s different this time”, that’s the classic manifestation of a bubble.” … “We don’t have a housing bubble in Canada” – Will Dunning, Chief Economist for the Canadian Association of Accredited Mortgage Professionals, G&M, 13 Apr 2010 [more here]

“We haven’t been able to find any evidence yet of housing prices being out of line with fundamentals in any of the markets in Canada.” – Bob Dugan, Chief Economist, CMHC, bnn.ca 12 Apr 2010 [more here]

“We do not have a bubble.” – Vancouver Realtor ‘silverman’, RE Talks 15 Apr 2010 9:36 am

[Regarding the risk of a ‘double-digit crash’] “It’s not going to go there.. I have no reason to believe it would drop anywhere near that.” – Larry Yatkowsky, Vancouver Realtor, CBC News, 7 Apr 2010 [more here]

——-

Original Post:

“I would certainly not say we are looking at a housing bubble” – Paul Jenkins, senior deputy governor of the Bank of Canada, ‘Jenkins says no housing bubble’, Reuters, 22 Feb 2010

“I’m confident that we are not going into a bubble situation.” – Elton Ash, Re/Max’s executive vice-president for Western Canada, The Vancouver Sun, 24 Feb 2010

“Whether there’s a bubble or not you can only see after the fact” – David Dodge, former Bank of Canada governor;  ‘Dodge suggests Feds should cool house market’, The Globe and Mail, 14 Feb 2010

“I do not see evidence of a housing bubble” – Mark Carney, Governor of the Bank of Canada, Reuters, 16 Feb 2010

“Recent house price increases do not appear to be out of line with the underlying supply-demand fundamentals.” – David Wolf, an advisor at the Bank of Canada, 11 Jan 2010

“There is no clear evidence now of a housing bubble in Canada” – James Flaherty, Minister of Finance, The Globe and Mail, 6 Feb 2010

“There is no compelling evidence of a housing bubble, but we’re taking proactive, prudent, measured and cautious steps today to help prevent a housing bubble” – James Flaherty, Minister of Finance, Reuters, 16 Feb 2010

“While some analysts and commentators say there’s a house price bubble forming, it is not clear that this perspective is supported by the facts” – Canada Mortgage and Housing Corp., The Globe and Mail, 6 Feb 2010

“Everyone is confusing leftover pent-up demand from 2007 to 2009 and the current low interest rates as a possible bubble.” – Peter Kinch, of the Peter Kinch Mortgage Team, Vancouver; ‘Bubble. What Bubble?’, brokernews.ca 1 Feb 2010

“The market is reasonably healthy but certainly not frothy” – Stephen Dupuis, president, Building, Industry and Land Development Association, The Toronto Star, 24 Feb 2010

——–

You’d think people would keep this in mind:

Bernanke: There’s No Housing Bubble to Go Bust, Washington Post, 27 Oct 2005

——–

Addendum: ‘Those Who Get It’

Kudos to those who get it. Here’s David Rosenberg, 17 May 2010: “No Housing Bubble, Eh? (Okay — we’ll call it something else: a giant sud). Home prices have surged to record levels relative to incomes or rents so call it whatever you like.”

And this list of ‘Those Who Get It’ quotes care of Ben Rabidoux at financialinsights 30 Jan 2011:

Dean Baker– “It looks me like you have some real problems…Canada could see house prices collapse by 25 to 30 per cent if interest rates rise by about two percentage points”

Robert Shiller– “The Canadian housing market could face a similar housing bust to the United States, particularly in more bubbly markets as Vancouver and Calgary”

Paul Krugman– “Canada cannot be complacent in the face of disturbingly bleak global conditions, because Canadians spend too much relative to their household incomes and the country’s housing bubble has yet to burst.”

David Rosenberg– “…Housing values are anywhere between 15 per cent and 35 per cent above levels we would label as being consistent with the fundamentals. If being 15 per cent to 35 per cent overvalued isn’t a bubble, then it’s the next closest thing. We are talking about two to three standard deviation events here in terms of the parabolic move in Canadian home prices from their lows. So, if it walks like a duck …”

Mike Shedlock– “A Canadian housing crash is a given. The only thing that remains to be seen is how deep the crash is.”

Don Coxe– “Canada continues to experience a real estate bubble”

Stephen Jarislowsky– “In Canada the hardship still lies ahead. Our houses are still 20 to 30 per cent above normal levels…I think things are going to get a hell of a lot worse….I hope I’m wrong but I think Canada is on the edge of a lot of trouble.”

And even more ‘those who get it’:

“This is a city where we’ve built our economy, and many of us have built our personal lives, on speculating on real estate. Even our own houses, we pay crazy prices for them, in the expectation that prices are going to rise, not because our incomes can in any way cover them.” – Frances Bula on CBC Radio, ‘The Early Edition’, 17 Feb 2011

Fitch, OECD – “People should think twice about continuing to leverage up in order to buy more house than maybe they really need” – 22 May 2012

“I know a 20 somethings couple with a mortgage, living pay cheque to pay cheque; the hubby lost his job in construction, payments due, can’t afford it, no emergency fund to pull him through.”

Vansanity at vancouvercondo.info 1 Mar 2010 5:39 pm – “I know a couple where the hubby lost his job in construction, payments due, can’t afford it, no emergency fund to pull him through. They’re 20 somethings and they were living cheque to cheque with a mortgage, and now they’re proper fucked.”

Olympic Visitor, Foreign Buyer? Part 5: “Aspac Developments says it sold $31.8 million in high-end units to people visiting Vancouver for the two-week duration of the Games.”

One $22.3M sale, and five or six others averaging $1.5M. “Sold $31.8 Million in high-end units” sounds more impressive than “Sold seven units”.  Is this the beginning or end of something? -vreaa

This from ‘2010 visitors buy $32M in Vancouver real estate’ by Darcy Wintonyk, ctvbc.ca, 1 Mar 2010, 3:11 pm – “Aspac Developments says it sold $31.8 million in high-end units to people visiting Vancouver for the two-week duration of the Games. The penthouse at Three Harbour Green alone, within spitting distance to the International Broadcast Centre and nestled on the shores of Coal Harbour, sold for $22.3 million. A spokesperson for the developer said the warm weather helped showcase Vancouver’s natural beauty and showcase it to the world.”

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This pertinent comment from Anonymous at vancouvercondo.info 1 Mar 2010 at 5:12 pm – “Friends and fellow citizens, that article is bullshit. The suites downtown in Coal Harbour, and several at the Wesbrook at the University of British Columbia, were being advertised overseas to Asian buyers only….not olympic visitors. The wealthy asians that purchased these homes use these residences as secondary when they visit canada but many have their children living in them and attending university. How do I know this? My client was part of the team responsible for building the tower at UBC. He told me that not one single advertisement was pushed in north america.”

Vancouverites In ‘The Guardian’ – “It may be expensive to live here; housing is very expensive. It took HARD WORK to buy a house, but we did it. We will continue to make sacrifices so we can live here.” … “I am an immigrant to Canada, and I am lucky enough to live in Vancouver because I bought here before it became a world-class city.”

A somewhat lukewarm review of the Vancouver 2010 Olympic Games in ‘The Guardian’ drew comments from individuals living in Vancouver who, not surprisingly, managed to mention real estate prices:

hhcu at www.guardian.co.uk 1 Mar 2010 6:26 pm – “Vancouver with a mild climate is one of the most desirable cities to live in Canada. Housing prices are the highest in Canada. That is one of the many reasons that we have homeless people. That sounds a bit dismissive, but we also are a city of immigrants, the majority start out working at the basic minimum wage and the majority, if not all, are not homeless. I am an immigrant to Canada, and I am lucky enough to live in Vancouver because I bought here before it became a world-class city. I have lived in and traveled to many so called world-class cities and am always happy to come home to Vancouver, even in the rain which sweetens the air and makes the trees grow, at least a foot a year. The Closing Ceremony was belittled. Who cares! Even the poorest (here often bus drivers “let” some of the destitute gratis on the buses) can take a (wheelchair friendly) 99 bus out to the university forest and see a real working beaver dam, the “organizing committee” being the beavers themselves. No wonder this hardworking little animal is venerated here. Now we have the Para-Olympians to look forward to. As for the bill? It is a heck of a good party.”

ProudCanuck2010 at www.guardian.co.uk 1 Mar 2010 7:15 pm – “I am a proud Canadian, that has also lived abroad in Tokyo, and have travelled to many cities in the world, and I work in tourism/hospitality, and I have experienced racism, challenges with language, and also warm hospitality from my hosts where I visited. So I speak from experience when I say that Vancouver qualifies as a World-Class City. I chose to live in Vancouver for it’s beauty, weather, people, culture, and diversity and have called this home for 15 years after my travels abroad because it what it offers. BC residents are the healthiest in Canada, we get to look at those beautiful mountains, whenever the clouds lift, and we wait patiently and happily for those days, and live in the most liveable city in the world. And in my job, I speak with visitors EVERYDAY of how they fall in love with our city, and our province, and can’t wait to come back. It’s on the list of “Things to do before I die” for many. It may be expensive to live here, and housing, admittedly is very expensive. But we worked hard to buy a house, and it took a few years, but we did it. But it took HARD WORK, and we will continue to make sacrifices so we can live here. We could have moved to a city and found a job where it wasn’t so expensive, but we want to live HERE, and that is the price you pay. I imagine if I chose to live in other “World-Class Cities”, it would not be any different. New York? Tokyo? The same! Viva la Vancouver! It rocks!”

“I know tons of people who want to move to BC but when they look at a) the available jobs and b) house prices, they laugh and go back home.”

!(EconomicsDegree) at vancouvercondo.info 1 Mar 2010 8:24 am – “I know tons of people who want to move to BC but when they look at a) the available jobs and b) house prices, they laugh and go back home.”

Dutch Housing Prices Over 300 Years

From huizenmarkt-zeepbel.nl, 2008. Corrected for inflation.

4526 Connaught Drive. Asking $2,19M. Tenanted at $4650/month. Price/rent 470:1.

4526 Connaught Drive, Vancouver. MLS# V804461.

4,183 sqft; 14,076 sqft lot.

Asking $2,19M. Tenanted at $4650/month. Price/rent 470:1.

[This house is underpriced in today’s market and will likely sell for over ask. That is not a comment on it’s value, but rather on the current market. -vreaa]