Monthly Archives: May 2011

Five Couples Lost To Vancouver Because Of RE Prices – “In the past few weeks, the number of our friends who have either moved away, taken steps toward moving or expressed interest in leaving Vancouver has been truly alarming.”

Sheesh at vancouvercondo.info May 28th, 2011 at 10:23 am
“In the past few weeks, the number of our friends who have either moved away, taken steps toward moving or expressed interest in leaving Vancouver has been truly alarming. They are all highly educated professionals and the ridiculous cost of living in Vancouver relative to the professional salaries and opportunities available have them suddenly running for the hills.
I don’t know if it is coincidence or if this is a sign of a larger trend, but I feel like we have all waited a really long time for things to get better here and now, in our 30s to early 40s, we are tired of sitting around waiting for a piece of the pie to come our way.
One couple both have MBAs but have had trouble finding work here that lives up to their potential. A corporate recruiter told them staying in Vancouver will kill their careers; one has already found work in Toronto so we expect both to be gone in a few months.
Another couple, both with Masters degrees, is moving to Edmonton. The husband found a job there and they have just put in an offer on a house. They can buy a beautiful house for grown-ups there for the same monthly costs as renting a dark, dank one-bedroom in the West End.
Another couple have met with an immigration lawyer about moving to the States. They can sell their place here and, with the equity, buy a sweet little house in a trendy neigbourhood in Portland for $300,000.
We also know a Canadian/English couple that were going to move here after living in Japan for many years but, after a real estate tour of each city, chose London, England, as the more affordable option!
The last couple that wants to leave is us! Unfortunately, our jobs are keeping us in Vancouver for now. But we have a young son and just don’t see Vancouver as a place where we can raise a family, save for retirement and have anything left over to buy a place.
All of us, by the way, would pick Vancouver as their first choice. It just seems like the city doesn’t want us. At this rate I really have to wonder what kind of place this will be in five or ten years. Can money launderers, speculators and offshore investors really make Vancouver “The Best Place on Earth?”
There are lots of nice places to live in this world; looks like a lot of us that didn’t get in on the ground floor are setting off to find another one.”

We share this poster’s concerns. Speculative manias in real estate cause misallocation of human capital, and our city is going to be poorer for it. – vreaa

“I was born in Victoria BC. I bought a condo in False Creek in 2001 for $275K, sold it for $735K in 2010 and moved to Orlando Fl.”

Z at VREAA 28 May 2011 at 5:55 pm “I was born in Victoria BC I bought a condo in false creek in 2001 for 275, I sold it for 735 in 2010, with mortgage as a dual citizen I moved to Orlando Fl. The cost of living is way, way, way less. You can get a palace for 300k with a pool. we have better weather more entertainment and cool cities to visit like Miami beach and Tampa, Daytona beach etc.The only thing vancouver has over us is, less driving, a better view, and less crime. Sometimes I miss the rain at night and how easy it was to get around van. but I would never go back. Vancouver is bland, boring and the people were rude, unfriendly and dull.And Plus the people here look cleaner and less wore out for some reason( I cant put my finger on why). I notice here in Florida, they also have more manners. Vancouver is a weird place”.

Condo Sales Apparently Hot – “Good times for Metro-Van Real Estate…!”

MultipleOffer at RE Talks 28 May 2011 7:04pm“Eight West Living in New West sold out both phases of the development today in 2 hours. 100+ lined up at the New Water project by Polygon in the ‘River District’ of Vancouver (7000 new homes to be built here). At least 50 sales from what i understand and people lined up now for tomorrow. Good times for Metro-Van Real Estate…!”

Spot The Speculator #38 – Moved here 5 years ago; Already owns 3 properties in Greater Vancouver; Buying more

Narrator:“Rose Li moved here from Mainland China five years ago, she already owns 3 properties in Greater Vancouver, and says new government investment restrictions in Beijing is driving Chinese money out of the country.”
Li: “China government has published a lot policies to restrict or decrease the bubbles in China real estate market…” [Interviewer paraphrases and repeats that statement]

Narrator: “There are cheaper properties elsewhere, but they are investing here because they see a better upside. They know there’s a lot more money in China looking for a place to invest, and as more of those buyers decide West Van’s the place, these prices should rise even further.”

[From Global TV news item, ‘Mainland Chinese Buying West Vancouver’, 27 May 2011 ]

Speculators, Local/Foreign – “There are cheaper properties elsewhere, but they are investing here because they see a better upside. These prices should rise even further.”

From Global TV news item, ‘Mainland Chinese Buying West Vancouver’, 27 May 2011
Narrator: “Properties in West Vancouver are attracting bidding wars these days, and selling for up to a half a million over the asking price, and, as with Richmond, the market is being driven by mainland China. March this year set an all time record for sales, up 57% over last year. But it’s only happening here, sales in neighbouring North Vancouver, and most of BC for that matter, are down.”


Jill Wiersma, Realtor: “Well, the last several months we’ve seen an incredible boom, largely driven by the Mainland Chinese. … Everytime we see a high-water mark of a new price, it seems to get beaten the next week.”

Narrator: “There’s hot and then there’s sizzling hot. This teardown property on Hayward avenue listed for $1.24M, there were more than 500 prospective buyers (90% Asian), there were 26 offers (22 Asian), the property sold for $1.57M.”


“There are cheaper properties elsewhere, but they are investing here because they see a better upside. They know there’s a lot more money in China looking for a place to invest, and as more of those buyers decide West Van’s the place, these prices should rise even further.”


A public conversation has commenced about possibly restricting off-shore speculators, and there may be place for some such limits. We still believe that this activity is but a sub-plot to our deep and pervasive local RE speculative mania story. It would be sensible to consider limiting speculative buying in general, something that has long been suggested in the blogosphere.
In this regard, we like many of the suggestions that jesse made recently [jesse at VREAA 27 May 2011, 6:29pm], about measures that could be taken to limit speculation:
1) Eliminating government-backed insurance of investor loans
2) Capping government backed insurance of owner-occupied loans and increasing deductible on all remaining government-backed insurance
3) Imposing larger capital reserve requirements for loans in regions where the price-income ratio is above the long-term average.
4) Allowing subdivision of wide lots and re-zoning for front/back duplex structures.
5) Increasing residential property tax rates
6) Charging surtax on unoccupied properties and enforce attempts to subvert it.
7) Enforcing secondary suite building codes
Note that jesse’s suggestions target speculative activity broadly, and that the ones likely to have the most effect (1-3) actually involve removing stimulus rather than imposing limits.
We would expect there to be very considerable vested interest resistance to any such measures. As Peter Ladner and David Berner agreed in the recent interview posted here: “The biggest industry in this city is real estate.” – vreaa

Fraser Valley Sales Drop Substantially – Realtors: “We Warn You Not To Panic”.

From richmond-news.com 12 May 2011
Realtors in the Fraser Valley are warning people in Abbotsford and Mission not to panic after property sales in the two communities dropped substantially in April.
There was 33 per cent decrease in sales for detached homes in Abbotsford last month compared to sales in April 2010. The average price for a detached home in Abbotsford went down 4.1 per cent in April 2011 from a year ago – $452,175 from $471,695.
In Mission, the number of sales fell even lower. Sales of detached homes tumbled by 42.1 per cent from April 2010, and 48.4 per cent from March to April.
The numbers were similar throughout the Fraser Valley in April, as property sales were reduced 15 per cent from what they were in April 2010, according to a report put out by the FVREB.

The recent news isn’t necessarily something to worry about, said FVREB president Sukh Sidhu.
“I have seen these ups and downs before. What’s happening in Abbotsford and Mission now is you have a buyer’s market. It’s not a trend. If you have three, four, or five months of going down then we would look at it. There could be various reasons for this.”
One of the reasons, Sidhu said, may have been the recently concluded federal election.
“That could’ve had some effect,” he said. “People were distracted, they wanted to know what was going to happen, who was going to get in . . . people like to know before they make a major purchase decision because [the election] could affect them drastically.”

[Another thing that all local buyers in recent years have wanted to know before buying a grossly overpriced house, is that prices are going up. Now that buyers in Abbotsford and Mission know that that is not necessarily the case, we’ll see how many of them ‘make a major purchase decision’ in the coming months. Bubbles often start their deflation from the periphery, and work inwards. This one may be doing the same thing.
Ground zero/Epicentre = Westside Vancouver. – vreaa.]

Speculative Thinking – “I get thoroughly confused when my friends admit that prices are too high but still expect them to continue higher. So, they conclude, buying now is still a good idea.”

debtified at greaterfool.ca 25 May 2011 11:59pm“I am in Vancouver right now and the air is definitely bullish on real estate. I get thoroughly confused when my friends admit that prices are too high and still expect it to continue to go higher without an end in sight. So, they conclude, buying now is still a good idea (and selling now sounds like an even crazier idea!).
The 20-somethings I know want to buy houses and they do at the first opportunity. Most who have bought are definitely sub-prime.”

debtified’s friends personify the thinking behind the speculative mania: They buy (or won’t sell) even at high prices based on the certainty that prices will continue to rise. Yet it is highly likely that none of them considers themselves a ‘speculator’. We continue to contend that almost every buyer, and many ‘holders’, in the Vancouver market, are, in essence, speculators. – vreaa