“I am a realtor with a banking background. I think that it may require a significant economic slowdown in China to stem the outrageous prices paid by “greater fools”.”

It is very, very difficult to be an industry insider with market insight during a bubble. Corpses of sensible stock advisors littered the roadside during the tech boom – the skeptics were made to look like fools by the relentless, illogical bull. Afterwards they were seen as unheeded visionaries, but it is exceptionally difficult for naysayers to stay the course; there is immense pressure to get in line.
‘ckung’ is a local realtor who understands the state of the market and has warned of a pending price collapse for at least a year. We have featured his quotes twice previously, 22 Dec 2009 and 25 July 2010.
Here he is again, ckung, at one of our fellow Vancouver RE bubble sites, ‘Whispers From The Edge Of The Rainforest‘, 11 Jan 2011 8:24 am
“Firstly, I am not a bull but a realist and thus am more of a bear given the economic conditions we are in. Secondly I am a realtor with a banking background.
I just sent out an E-newsletter to my network of clients and contacts with regards to the influence of Mainland Chinese Investor immigrants on our market and more specifically on Vancouver West and Richmond. These people are not just looking at houses in these areas in terms of economic rents or even in terms of short term capital appreciation. They are seeking a way out of China for themselves and their families. So how much is it worth to them given this context? Something to ponder when you see outrageous selling prices.
Personally, I think that it may require a significant economic slowdown in China to stem the flow of such immigrant investors and thus the outrageous prices paid by these “greater fools”. Interesting times.”

17 responses to ““I am a realtor with a banking background. I think that it may require a significant economic slowdown in China to stem the outrageous prices paid by “greater fools”.”

  1. The current trend of Chinese immigration is in some ways similar to the ‘exodus’ of people from Hong Kong before 1997 (hence the moniker ‘Hongcouver’). A lot of those people and even their next generation had since liquidated their Canadian assets and returned to Hong Kong for good, mainly for economic and lifestyle reasons. Immigrants from Mainland China may choose to do the same if China continues to prosper. On the other hand, if economic conditions in China deteriorate, then the flow of easy money originating from China that has been supporting Canadian (especially Vancouver) RE would cease and the bubble would deflate.

  2. “They are seeking a way out of China for themselves and their families. So how much is it worth to them given this context? Something to ponder when you see outrageous selling prices.”
    And the only way out of China leads to brutally overpriced Vancouver? The Chinese don’t ever move to other – much cheaper – cities?
    I think this “Chinese buyer” argument is as bogus as the “We have Olympics so 25% up/year is normal”.
    Read the news, you will see that the Chinese are really moving to cheap places like Miami.

    • Immigration to the States is much more difficult than immigration to Canada. Our countries have totally different philosophies on the matter.

      • Use your imagination. How about Toronto? Almost 300,000 Chinese already there and housing prices are half of what they are in Vancouver.
        And there are other cities.
        If they really just want a “way out of China” then there is no reason it has to lead to Vancouver. Don’t get me wrong, I have nothing against Chinese people, but the argument that the Vancouver real estate prices are high because they somehow provide a way out of China is nonsense.

      • What about all other Canadian cities with great universities. How about Waterloo, Kitchener, Cambridge, Guelph, Toronto, Ottawa, Montreal, Calgary, Edmonton … etc! Vancouver is not the only city in Canada.

      • I get your point. But other than Canada, I don’t know what the other options are for Chinese wanting to get a foothold in a developed western democratic country. I’m assuming it is probably pretty limited. Maybe Australia?

        But I wonder if some trying to make this move have seized on Vancouver as the Gold Standard. For the same reason they want to buy in West Vancouver over other neighorhoods, they might want to buy into Vancouver over other cities.

      • There are plenty of other options besides Canada, USA or Canada. EU has more Chinese people than Canada. There are little Chinatowns in many European cities. Actually, there are Chinese communities all over the World.

  3. Bubbly, for some but not all of the Mainland Chinese immigrants wanting an alternative “home” outside of China, Vancouver makes a lot of sense not in terms of housing prices but in terms of a welcoming infrastructure.

    That is, Vancouver have the restaurants, the demographics, the schools etc. already in place which facilitates a much easier transition (for lack of a better term) to the Canada. Many may even have relatives and/or friends already living here. All of these factors are enough for some (not all) to pay the premium prices.

    We may only be getting a fraction of the these wealthy Mainlanders but there seems to be enough of them to push real estate prices in Vancouver West and Richmond to new highs.

    • Read my comment above. Toronto has restaurants (way more than Vancouver), it has favorable demographics, schools, etc. And there are other cities in Canada and elsewhere where the Chinese are buying real estate. And they are almost always much cheaper than Vancouver.

      • Moving to Vancouver is a status symbol. It’s about ‘face’ in the Chinese culture.

      • “Moving to Vancouver is a status symbol.”
        This one is in the same category as “The best place on Earth”, “Everybody wants to move here”, “It’s different here” etc.

        If you want a place to live that is a status symbol, try Monaco or even Marbella (which has much lower RE prices than Vancouver)

  4. Bubbly, I agree. I’m just sharing the Chinese perspective with you.

  5. How does spending lots on a house help them get out of China?

  6. I don’t think ‘bank teller’ qualifies as ‘banking background’…at least not how they are implying

    • Who is implying what? I was a Mortgage Sales Manager with 10 years in residential and commercial lending. Hope this clarifies my background a bit. What’s your qualifications/experience/background?

  7. I don’t think you appreciate how unique vancouver is. Ask someone from china what the best university is. Ask them what the best car is. The answers will be 95 percent the same. Then ask about the city they want to immigrate to…. Totally illogical. But the madness of a crowd obsessed with the ‘best’…

    • 4SlicesofCheese

      Couldn’t you say that about any culture?

      I am Canadian Born Chinese, 90% of my friends are Asian mainly from Taiwan, Hong Kong, China and I have been to HongKong and lived in Taiwan. My best friend is from Chongqing.
      From my little cross section of friends that are from Hong Kong, a good half have returned to Hong Kong, they came more or less a few years before 97. The reason they go back to Hong Kong is that they do not see any opportunities in Vancouver to make a good living. They are bullish on RE in Vancouver but with the local wages, staying in Vancouver is kind of pathetic career wise. Being fluent in Cantonese and English they have an upper hand in succeeding back in Hong Kong.
      Most the Taiwanese and Chinese I know are well off and usually have the mom and children here and father back home. This group usually just gets bored of Vancouver or get their education and leave. Some stay. The migration from China is still pretty recent so in the long run who knows what will happen.
      Having been to all those places, when you ask people about Canada or US or Europe. Everyone I talk to know about as much of these western countries as the average person does of Asia. Meaning not much. They do not have an overwhelming preference of Canada, that is really ridiculous.
      I think they are more curious about the US since most the exposure of North America they see is from Hollywood.
      I agree with the people when they say immigrants go where there is an established group of your family or fellow country people. But that is exactly the point. There are more Chinese people in the States and some parts of Europe then in Canada. There is a saying where there is a sun there will be Chinese people.
      This is just what I have observed of course. Its an anecdote, that is why I am posting it on this site.

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