Global News Switch – ‘Real Estate Bubble?’ Story Becomes ‘Steady Climb’ Story

Global BC TV, 12 Apr 2011, Noon news –


Randene Neill: “Vancouver’s real estate market continues to lead the country in terms of price. the latest survey by Royal Le page shows detached homes in vancouver sold for nearly three times the national average but as Tanya Beja reports some analysts are suggesting that these prices can’t be sustained for much longer.”

Announcer: “It takes just over a million dollars to put a ‘sold’ sign on the average Vancouver home. It’s a little less if you’re buying east of Main Street, and 50% more on the westside. Those figure released today by Royal LePage, showing that prices of homes rose 10% in the first quarter of this year, compared to last.”


Chris Simmons, Royal LePage Realtor: “The vast majority of buyers on the westside and Richmond buying single family homes are from mainland China.”

Announcer: “Royal LePage says strong demand from overseas and low interest rates helped push the price of Vancouver homes three times above the national average.
It’s cause for concern say analysts, who warn buyers are taking on too much debt:”


AJ Sull, Pacifica Partners: “[inaudible]..income concerns, especially here in BC. The debt to income ratios are quite lopsided. We’ve exceded the US averages at the peak of the US bubble. So, that to us is not very comforting.”

Announcer: “The average Canadian household debt reached a record $100K last year, more than one and a half times the average income. Experts warn with rising interest rates, Canadians will no longer be able to service their debts and their mortgages. They say a correction in housing prices is inevitable.”

Sull: “We do think about a 25% price decline would start to balance incomes and housing prices off, quite well.”

Announcer: “AJ Sull says with a federal election looming, it’s time for politicians to weigh in on real estate prices. But unless there’s a drop in demand for Vancouver housing, some realtors say they don’t see prices going anywhere but up.”

Realtor: “We have people who want to live in Vancouver, people from Toronto want to live here, people from China want to live here, people from Iran wish to live here, people from all over the world want to live in Vancouver. So it’s a place where there’s an awful lot of demand.”

Okay, so that was the Noon news on Global, 12 Apr 2011.
Noteworthy for having the words ‘Real Estate Bubble?’ heading the piece, for mention of the word ‘bubble’, and for having an analyst on camera suggesting that 25% price drops are possible, perhaps even desirable, in the Vancouver market. (A concept familiar to bear blog readers. FWIIW, we would tease AJ Sull that he is being overly optimistic. If he’d suggested a 50% price drop, however, he’d likely not have gotten air-time, so “hats-off”, it’s a start).
The realtor, of course, gives the perennial “demand, demand, demand” argument for never ending price increases. -vreaa

The message is softened somewhat on Global between the Global Noon and 6pm news slots [hat-tip to Brian via Garth at greaterfool.ca for alerting us all to this]. Here is the later version, also verbatim, for the archive record:

Global BC TV, 12 Apr 2011, 6pm news [archived by Greenhorn here]-


Announcer: “And even as you ponder how much cheaper your car insurance could be, the price of real estate just keeps going up. According to the latest industry report, a typical home in Vancouver sold for nearly three times the national average in the first quarter of this year, and three things appear to be at work here: low interest rates, a limited supply of houses, and increased pressure from foreign buyers.”

Announcer2: “Putting down roots in Vancouver is getting more expensive, especially if you’re shopping for property in some of the cities most desirable neighbourhoods.”

Simmons, Royal LePage Realtor: “You know you’re probably looking close to two million dollars for an average sale price of a SFH on the westside of Vancouver, and maybe not quite so high in West Vancouver”

Announcer2: “A new survey by Royal LePage shows that vancouver housing prices are now three times the national average, with condos going fro a half a million dollars and bungalows about double that. It’s an increase of almost 10% from the first quarter of last year. according to realtors, it’s fuelled mainly by low interest rates, and demand from abroad.”

Realtor: “There is a large demand for properties in Vancouver and Richmond amongst the Chinese population, and they’re looking to immigrate.”

Announcer2: “While the focus on Chinese buyers has prompted some to push for restrictions on foreign ownership, some analysts say the bigger concern is whether Canadians are taking on too much debt, without having the income to match rising prices.”

AJ Sull: “Canadians had a little bit of complacency, saying that in Canada we don’t incur debt like Americans do..well, we’ve started to trade places with the Americans.. the Americans are paying down debt at a fairly rapid clip, and Canadians have yet to face that and bite the bullet on that.”

Announcer2: “Historically housing prices are three and a half times Canadian’s income levels, they’re now almost six times higher [sic], the average family has a debt of almost $100K, and, unless wages keep up, AJ Sull says, the real estate bubble could soon burst.”

Sull: “… concern is that, as interest rates go up, and they will eventually, will people be able to service that mortgage and the credit card debt that’s been piled on.. and that will have an impact on the economy over time, because people’s ability to spend is going to be more and more constrained.”

Announcer2: “Sull says a market correction of between 12 and 25% could be in Vancouver’s future. For potential buyers, it could just be a matter of being patient.”
—-

Between Noon and 6pm, the segments ‘Real Estate Bubble?’ headline has become ‘Steady Climb’, and AJ Sull’s self-stated “25%” becomes voice over “12 to 25%” mentioned by the announcer. The realtor drones on about foreign demand in both segments, using different words but saying the same thing.
Global have, however, in the second segment, introduced the idea of ‘patient buyers’, which we’ll give them credit for. That can’t be something the RE industry wants to see. Buyers becoming VERY patient will be part of the coming crash. -vreaa

46 responses to “Global News Switch – ‘Real Estate Bubble?’ Story Becomes ‘Steady Climb’ Story

  1. Pingback: Global News Switch – ‘Real Estate Bubble?’ Story Becomes ‘Steady Climb’ Story | Vancouver Real Estate Anecdote Archive « Closing Bell Cafe

  2. “buyers becoming VERY patient will be part of the coming crash”

    Wrong wrong wrong. No wait. Right.

  3. In other words, it’s immoral to not buy real estate.

  4. “Some realtors say…”
    What is a realtor?
    An uneducated sociopath that failed as a car salesman.

    (Apologies to the few realtors that don’t fit the definition above. Your relative numbers are dwindling)

    • Polly Pollyanna

      i know a few that are, to me, decent people

      but i try to avoid looking too closely (i have to TRY) at their vlogs, personal business websites, etc. because the face they put on for their clients and the person i know them as are two COMPLETELY different identities. it’s rather disturbing. i made a point of not contributing their own vlogs to the dashcam realtor list – i just couldn’t stab them in the back like that.

      i have also known a few, specifically in the 24-30 year old range, that honestly think they are John Fucking Galt. they only know the upside. (and one’s a woman – yet she moonlights as a waitress because “i want to know how much money i’m going to make” – if you’ve ever wondered why your waitress is on her blackberry instead of actually serving you – she’s got bigger pigeons to shake down)

      • 🙂 I know a few waitresses that became realtors. Compare that to the stereotypical waitress in LA that wants to be a movie star. We have a bizarre version of reality here in Vancouver. Even compared to Hollywood.

        But, yeah, I know that there are some decent people among realtors too. They are just not that common. You need a “special” kind of personality to do this job.

      • Polly Pollyanna

        this is exactly true – i knew one that quit the industry and before she had really established herself as a realtor, she had already bought a 7 series BMW – i checked her site recently, it’s the saddest collection of surrey condos you ever saw.

        we really do live in a land of illusion.

        ‘someone i know’ has spent 40 years in vancouver, and it is definitely his home – in his words: “…but i fucking hate the idiots that live here.”

      • PSST to Polly… there’s a message & link waiting for you in reply to an earlier posting of yours… it’s in the Writer Whose Home Earns More Than His Books thread….

      • Polly Pollyanna

        vreaa needs some solid BB software to keep up with our torrid pace of quips and rants. 😉

      • Selkirks. F**k Yeah (‘read’ as in TeamAmerica)!

        Route ‘6’ runs right through ’em… Ah – Griso, La Bestia Cremisi Italiano… Maybe next month…???

        If you’re a ‘4BLACKdiamond’ technically accomplished ‘DeathSkier’, Polly – you might to consider Fernie as an alternative… I am reliably informed that it is North America’s best – HELO optional/unecessary – skiing, bar none (for the boldest, ‘best of the best of the best’ [MenInBlack] only)…

        If it’s the Selkirks, though – then settle in Nelson. Very progressive!

        I ain’t strapped on no ‘disco sticks’ or ploughed the ‘Deeps’ since Kühtai, Tyrol in 2000… Sigh…. 😦

        In his ‘formative years’, ‘Nem’ always preferred Desert, vs. Alpine and/or Jungle (whether tropical or ‘urban’) environments… for as Lawrence [of Arabia] once famously intoned, “Because it’s clean.”

  5. As I blabbed about over at Garth’s place today, I’ve attempted to add this little gem to the CRTC/CBSC complaint I lodged a month ago over Global’s “filtering” of real estate news. I really hope they accept it. “Bubble” to “Steady Climb”? Disgusting. And sooooo obvious.

    • NiceOne, Mate!… and please keep us posted on the outcome[s]! ‘Nem’ is desperately cynical in such matters/affairs – and it would be pleasing indeed if the CRTC slapped a hefty… and I mean HEFTY… fine on them. And who knows? Cause anything is possible in a quantum universe… even, occasionally, JUSTICE.

  6. Not much of the stuff that should happen, actually happens. So I wouldn’t expect much from the CRTC.

    Sometimes the world works the way it is supposed to, but for the most part I think nothing will come out of making a complaint about GlobalTV.

    Leigh Morrow (anybody remember her?) got fired from Global for impersonating someone in order to get an interview. It happened very quickly. Now she’s a real estate agent. The only reason Global fired her was to avoid a potential lawsuit. She used to be a reporter with Global up until 2007.

  7. Canayjun: I hear you. Yet every little bit of truth-seeking helps, and I’d rather do it than bury my head in the sand. Every complaint like mine makes at least some people think. For instance, all my complaint correspondence thus far – and there’s been a lot of it – has been seen not only be people at the CRTC and CBSC but also by at least the three people at Global who have been cc’ed on each email. And the one attempt at “sastisfying” my complaint (which I rejected) purportedly came from an extreme Global higher-up. Gotta make noise to effect change.

    • Polly Pollyanna

      you, sir, are a boss – kudos to you.

    • Yeah, you’re right. The reason nothing ever changes is because people, including me, think one complaint won’t change anything. But I think society in general has gotten so complacent about being lied to, it doesn’t really appear to upset us anymore. Our politicians lie to us on a daily basis, all of them. The MSM will happily promote lies, also on a daily basis. It’s insidious. What makes it even more repulsive is that so many people actually believe the lies, especially if they hear them on television.

  8. Great article (applies to Canada): http://www.lewrockwell.com/french/french138.html
    Some quotes:

    When the Fed makes saving seem futile and immediate pleasure seem rational, the world has been diabolically turned upside down. Just one step away from hyperinflation, the central banks’ actions are threatening “to undermine and dissolve all sense of value in a society.”

    “Thus inflation serves to heighten the already frantic pace of modern life, further disorienting people and undermining whatever sense of stability they may still have,” Cantor explains.

    The social order is upended in Mann’s story as wealth is transferred from those who diligently saved all of their lives to speculators. As it was in the Weimar Germany that Mann describes, so it is today, as people believe it futile to sock away a little money here and there, and instead feel compelled to either speculate or just blow what they have on good times.

    Impetuous, high-time-preference behavior displayed by the young appears rational in an inflationary period, while prudence and conservatism appear to be not even quaint but downright silly.

    As Mann described so long ago, the world of inflation is the illusion of wealth, created by the government’s printing press, distorting everything we see and perverting our judgment.

    • Brilliant; spot on.

      • Hayek was an idiot for refuting and suppressing human altruism

        Mises , like Marx, was an idiot for not seeing how, like Adam Smith, no one would actually read his vast body of work, and eventually twist his ideas – he was, like Marx, at the root, a passionate humanist, true thinkers who failed to see the romantic idealism that would lead to zealotry in their not-as-intelligent readers.

        Friedman, whether Milton or Thomas – are an impressive father son duo of complete douchebaggery.

      • “an impressive father son duo of complete douchebaggery.”…

        My favourite Irish expletive (see AlanParker’sTheCommitments) immediately catapulted from my TequilaSauced lips… that would be, “F**kMe!!”

        Best laugh ‘oTheDay!!!!!

    • You people realise mises.org are lunatics right? Some of their dictums include:
      1) abolishing public healthcare
      2) abolishing floating currency in favour of the gold standard
      3) abolishing intellectual property rights (!!!! I know they’re crazy but this makes no sense)

      They even hate the FDA, FTC and, of all things, the EPA.

      Reading mises.org is like mind melding with the wet dreams of a 14 year old adolescent (minus the porn). FUCK RULES, GIMME MY MONEY, FUCK YOU I GOT MINE.

      • Polly Pollyanna

        i agree with you

        i disagree with their social welfare policies, certain copyright ideas, and i do actually oppose the TOTAL abolishment of the state – the government is all that the public technically owns. it’s foolish to destroy social programs and do anything but ‘streamline’ the state bureaucracy (cronyism, graft, waste, etc) once these things are gone, they’re very difficult to get back.

        that being said, i think von Mises interpretation of the fiat money system is spot on.

        so again, we are waiting for the truly social liberal, fiscally conservative party to emerge – i would like to believe in libertarianism, but it’s got that damn “-ism” attached to it, so i’m out.

      • I’m all in favour of the gold standard too.

        As long as we also ban trade, immigration and travel with the rest of the world.

      • i also enjoy thought terminating cliches.

      • The PIIGS calamity is showing exactly what will happen if a country abandons its ability to moderate its monetary policy. Arguably, these countries would not be in as much fiscal pain if it weren’t for the fact that they are bound by the Euro.

        Gold standard?? Seriously?? Not even randroid hero Alan Greenspan would endorse this.

      • Actually:
        “This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.”
        Alan Greenspan, ‘Gold and Economic Freedom’, 1967

      • “You people realise mises.org are lunatics right?”
        THEY are the lunatics? You must be kidding!
        Look at the lunatics in the governments and central banks. I will take someone with “strange” ideas over warmongers and thiefs any time.

      • Maybe you should move to Colorado Springs bubbly. The taxes are low, the government is small and the beast is definitely being starved.

        http://www.denverpost.com/news/ci_14303473

        You won’t need streetlights. You can go make your own streetlights. With the timbers of your neighbour’s house. Who’s going to stop you? Not the police. In fact, just light the whole bitch on fire. Ain’t no statist fire department gonna come extinguish your warmth and light either. All you need are your trusty guns. Suck on this New Hampshire!

      • hahaha holy shit vreaa, I stand corrected. That motherfucker is out of his skull. Well I guess Greenspan has made his point. If the USA had been on the gold standard, he wouldn’t have been able to suppress interest rates for a decade, thereby abating a housing bubbl oh shi

      • I don’t get this. What’s with this attitude? People seem to be really angry at those who offer ideas, but do not really affect their lives in any other way. On the other hand, the same people are willing to pay taxes which will be then used to wage wars (KILL people overseas that have NOTHING to do with us) and to bail out the bankers. Billions of dollars are being transfered from taxpayers to the sociopaths who constitute the current “elite”. Billions are used to manipulate the system so that bad behavior is rewarded and prudent behavior is punished.
        And the people who point out the insanity of the current system are lunatics… Really???

        And please, stop with the nonsense about USA. Where do people get the idea that the US are some kind of libertarian paradise? Is that just another example of Orwellian thinking that seems to be so common these days? Debt=Savings and Fascism=Liberty and Vancouver=Best place on Earth?

        Travel the World, learn about other places and cultures, maybe live somewhere outside of North America for a period of time. Everyone should do that to gain at least some perspective.

      • Bubbly, do you know *anything* about austrian school economics? The policies that have ruined the US economy in the last 3 years are steeped in decades of this Von Mises/Hayek/Friedman nonsense. You want to stop socializing bankers’ losses? Then explain to me how less regulation and oversight of markets is going to achieve this, without severely damaging the economy for the marjority of people who earn far less?

        It’s also lovely to hear all the people decrying the fiscal waste of waging wars when they start talking about how important it is to protect Canada’s sovereignty in the arctic.

        Since you’re so worldly, I’m sure you’re familiar with what happened to Britain after they returned to the gold standard.

      • matt, what does Canadian Arctic have to do with the Canadian mission in Afghanistan, the bank bailouts and money printing?

        “The policies that have ruined the US economy in the last 3 years are steeped in decades of this Von Mises/Hayek/Friedman nonsense. ”
        This is mind-boggling. I am not even going to respond to this, because it’s in the same category as black=white and debt=savings.

        So long…

      • matt,

        as i stated above – you are engaging in though terminating cliches.

        first of all,

        before Greenspan dated Ayn Rand, he wrote a book about monetary policy espousing the gold standard. somehow, he deviated VERY FAR AWAY from his original views.

        second of all,

        my father is a gold mining engineer – this is his forte – his opinion? paper is paper, gold is gold – choose wisely.

        thirdly,

        the large wall street players, spec. JP Morgan et al have been engaged in the suppression of silver and gold prices by selling (leasing) paper gold and silver and other ingenious little schemes. the problem is that there is no way to deliver any of this physically, it does not actually exist. i believe they’ve leased out 100x more silver than is actually physically present above ground in the entire world.

        we can go on like this..
        there are two different schools of the libertarian/austrian school

        the Cato institute is the large, well heeled, corporately funded think tank
        the Mises folk are the ones who were basically discarded, counted as blasphemers from the true believers at Cato.

        it’s all a big fucking game – who controls the printing press and the interest rates controls the state. i’d rather remove that potential for abuse. i don’t appreciate having my currency debased EVERY DAY. oh sure, we’re stronger against the US dollar – but that’s the most over valued piece of toilet paper since Weimar. like the chinese, we don’t really know the truth of the american economic situation. we know it’s bad, and ‘supposedly’ improving – but there’s a lot of murkiness – and don’t think that’s not intentional.

      • matt,

        i can’t leave this one alone

        Colorado Springs

        is actually NOT where the beast is being starved

        Colorado Springs is the BELLY of the BEAST.
        don’t believe me?

        that’s right, CS receives some of the largest funding contracts for military, rocket, satellite and other assorted space technology – it is basically one big Socialist Money Trench.

        the only reason they cut services etc. is because the core of that town are brainwashed Republican technocrats – ‘real’ Amurikanz – but ones who have vested business interests in the military and the militarization of space, more specifically. do it – watch the movie, shit your pants.

        just because people espouse certain views, doesn’t mean they are actually living by those views.

      • “before Greenspan dated Ayn Rand…”

        OhMyGod!!!! That’s one I didn’t know… How utterly repugnant!… how exponentially CREEPY! how luridly disgusting is the thought of those two doin’ the dirty!???? Or worse, the progeny of such a distasteful union…

        Ah….. OK, epiphany!!!! That’s where IraLevin drew his inspiration!…

        http://tinyurl.com/3yo6zyh

      • there are no easy answers and the best we can hope for is to take the best from multiple concepts of how society and an economy and an ecosystem can all ‘work’ in – to borrow my most hated word from China – “harmony”

        this is only possible if some groups sacrifice their role as dominant players, there can be no other way – unfortunately, we seem to have an instinctual desire to dominate, and be dominated.

        i have no answers for you – our lives are brief blips in all of this, and the ‘serenity’ prayer comes into play here, i think.

        http://www.amazon.ca/Escape-Freedom-Erich-Fromm/dp/0805031499

        read that.

  9. It does not seem like the demand from Chinese investors is about to slow down 😦
    http://www.apexvancouver.com/apex/main/frame.php

  10. There’s a great (but short) thread on reddit about housing in Vancouver here: http://goo.gl/hnRsR

    It’s quite hilarious witnessing people arguing that Vancouver is better than Halifax.

  11. i wonder what the national average would be if vancouver prices were removed from skewing the equation? would gues that vancouver prices are 4-5x that average.

  12. Speaking of…. ‘Bubbles’…. This just in:

    [ZeroHedge&MarketNews] – Chinese Real Estate Bubble Pops: Beijing Real Estate Prices Plunge 27% In One Month

    “Prices of new homes in China’s capital plunged 26.7% month-on-month in March, the Beijing News reported Tuesday, citing data from the city’s Housing and Urban-Rural Development Commission. Average prices of newly-built houses in March fell 10.9% over the same month last year to CNY19,679 per square meter, marking the first year-on-year decline since September 2009. Home purchases fell 50.9% y/y and 41.5% m/m, the newspaper said, citing an unidentified official from the Housing Commission as saying the falls point to the government’s crackdown on speculation in the real estate market.”…

    Accordingly… this seems apropos… 😉

    http://tinyurl.com/yh5k2l9

    • Ooops… missing article link:

      http://tinyurl.com/64rbgb7

    • Re China RE bubble bursting:
      Thanks for link, Nem, potentially crucial development.
      Hard to predict immediate effect on us, could be anything from immediately freeze up foreign buyers, to an injection of final buyers running from a falling Chinese RE market into what they perceive to be the only healthy one left (Vancouver).
      Thus, the narrowing that occurs towards the end of speculative manias.
      Regardless, we’re going to crash here.

      • I’ve always maintained that there isn’t any particular mystery as regards the ‘endGame’/outcomes… albeit, in the ‘short term’ – things are often ‘interesting’… Agreed, short term – it could cut either way for YVR RE… intermediate to longish????? muwhahahaamuwaahaha! Of course, as Keynes observed – “In the long run, we’re all dead.” Ergo, it behooves us to have some fun/strive for a few ‘improvements’ in the brief span alloted us… Eh what?… 😉 [Note to ED: I know – I just can’t stop resorting to ellipsi[plural?]… it’s my fave punc. 3 tasties/links to follow on current [China] thread!

  13. …and it get’s ‘better’!!! I just can’t wait to see Global’s coverage of this one!!! (albeit, I do believe a VREAA abstracted summary would be preferable to the actual live/terrestrial telecast)…

    [CBC] – Bribery scandal grows at Surrey city hall

    “Saran told CBC News Wednesday that he’d told Surrey officials that more people at city hall had to have been involved. “I want to bring these things to the surface,” he said. “City hall’s fully aware of this — that it’s not just one person. There are more than one person.” Earlier this week, the city expanded its civil lawsuit against Akolo, adding two unnamed developers identified only as John Doe and Jane Doe. They are accused of offering bribes to Akolo in exchange for not paying city development fees.”…

    http://tinyurl.com/3fcabfg

    And… a delicious/bonus, ‘Quote ‘O TheDay’…

    “I was shocked.” – Surrey Property Developer Jack Saran/Proud Recipient of today’s, “Captain Louis Renault Award”!

    http://tinyurl.com/cp6fnp

    • at least the old boys’ network does it over a game of golf. 😉

      THIS IS JUST LOW-RENT

      if you’re going to come to Canada and scam, at least do it the right way.

      the police should be watching Saran’s house and family 24/7, they will expose more of this network by catching the vandals/thugs.

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