“I am not buying cheap crap for a tonne of money. Sorry, you have underestimated me.”

Posted on 4 January 2012 | 22 Comments

“Well, I have been sitting tight for many years. Other provinces looking better day by day.
I am very patient, but now researching what I can get out of other provinces as this one is fcked.
I have been fighting to keep every penny in my pocket, whether shopping or renting or using a car. It has paid off for me. I am not “united way” to the realtors or the industry. I live by the motto, if they want too much, they get nothing, in other words, if you want to do a business deal with me, you better have something to bring to the table.
I am not buying cheap crap for a tonne of money, sorry, you have underestimated me. Yeah, I dont look like a hawtie, but guess what, I have something to my name and you (RE) aint getting a penny of it.
Eat that!”
– squeaky at vancouvercondo.info 31 Dec 2011 7:44pm

This entry was posted in 07. Avoiding Vancouver, 09. Delaying Buying and tagged Anecdotes, British Columbia, Bubble, Canada, Housing, Real Estate, Vancouver. Bookmark the permalink.

22 responses to ““I am not buying cheap crap for a tonne of money. Sorry, you have underestimated me.””

Renters Revenge | 4 January 2012 at 8:54 pm | Reply

Squeaky should look south too. I am.
Renters Revenge | 4 January 2012 at 10:13 pm | Reply

Effectively, only renters pay taxes.
- Zerodown | 5 January 2012 at 8:59 am | Reply
  
  Nice one. I have been thinking about land taxes vs. income taxes too. I think there is a reasonable housing burden on income to be expected (say 20-30% of income). Over time prices will adjust around this level. Applying a decent proportion of this as tax (versus interest/principal) is perfectly reasonable and desirable to limit property price volatility. It gets better: if the tax is applied to the land (not the structure) there is an incentive for all owners to apply best use/density to their land. In a way, high land tax brings all residents half way to being renters, while retaining incentives for care of their properties and even judicious redevelopment. It lowers all rungs of the property ladder and prevents any one cohort of residents from getting a free ride.
  
  Land tax also captures foreign investors that don’t pay much income tax, but still require lots of services to their investments.
  
  Suppressing property values in this way is bad for the banking sector as debt levels would be lower, however the risk and magnitude of price drops would be much lower.
  
  Current income taxes would be lowered. Progressive taxation (more tax for richer people) would be easy enough to implement via land tax and in the residual income tax.
  - Zerodown | 5 January 2012 at 9:09 am |
    
    Helpfully, low land values suppressed by high land tax is a plan that is very pro-developer, by the way.
  - Renters Revenge | 5 January 2012 at 6:41 pm |
    
    I think it could be argued that a LVT would be most effective if it entirely replaced income and consumption taxes. Implemented that way it would also have the added benefit of limiting government prolificacy.
The Whistleblower | 4 January 2012 at 10:27 pm | Reply

It is about time that everyone knows what is actually going on.

I’ve been talking with my private banker and financial analyst who are both senior Chinese in Vancouver, including my powerful Chinese networks, they all mention that there are many invested Chinese groups in Vancouver where the members buy and sell to each other trying to raise the prices in the West Side and West Van. They don’t live in them, that’s why most of them are pretty empty. It is game to them to flip at higher prices to raise the house prices in the surrounding areas so they can buy them low and sell them at higher prices to bigger or according to Garth ‘greater fools’. It is like a ponzi scheme with houses.

They greatly affect the housing prices in the West end, whereas in the east end, most locals including the media see this unnecessary outrageous house bidding as a sign that ‘Everyone wants to come here’ and Vancouver is the ‘Greatest place on Earth’, so the locals overbid each other using cheap interest and easy money to buy and sell many properties as a get rich quick scheme.

However, according to them and my network, the time is about over. Last December 2011, most of these invested Chinese groups are now fleeing Vancouver like they did with Richmond and moving to Europe and trying to pull off a similar housing ponzi scheme scenario. There are some that would linger around, but it looks like the party is over here in Vancouver.

Spring 2012 would be an interesting time. Let’s see how many more Chinese groups are still here bidding up Westside prices. And if they are all gone, I wonder how the locals would respond and how many ‘greater fools’ are left. The Chinese network says we could see colossal house price drops of biblical economic proportions never before seen in our time. This is getting very interesting indeed. It would put the Shanghai, HK, and US housing crash to shame.
- loon | 4 January 2012 at 10:45 pm | Reply
  
  Wow, sounds like a sick monopoly game. Hope it’s true about them pulling out for 2012, I guess the drop off at the end of 2011 signalled the end ?
- bubbly | 4 January 2012 at 11:06 pm | Reply
  
  A scheme like this cannot possibly work for long. If what you are saying is true and if this scheme is happening in significant volumes, then the resulting crash will be spectacular.
- vreaa | 4 January 2012 at 11:45 pm | Reply
  
  Thanks for the comment, Whistleblower.
  A seductive story but, IMHO, it is likely largely an urban myth.
  It’s always tempting to believe that market moves are somehow orchestrated by ‘groups’ with this or that interest.
  We’d acknowledge that there are players ‘hustling for a buck and a dime’ who very occasionally try to pump markets or (do the RE equivalent of) running stops etc etc. But, by and large the market forces are much, much bigger than the players.
  In other words, the market will collapse, regardless.
  Some will interpret the collapse in terms of ‘groups’ backing off or other interests backing off, but, usually it’s just Mr Market doing his own thing.
  - bubbly | 4 January 2012 at 11:52 pm |
    
    Agreed.
    Also a scheme like this seems too complicated and risky.
  - rp1 | 5 January 2012 at 1:00 am |
    
    Chinese cities like Wenzhou did have exactly this behaviour. Large informal groups of property investors pooled money, borrowed money, and reinvested gains with leverage. You get a large group of people doing this and stuff happens.
    
    http://www.wantchinatimes.com/news-subclass-cnt.aspx?id=20111009000002&cid=1502
    
    http://www.wantchinatimes.com/news-subclass-cnt.aspx?id=20111029000012&cid=1102
    
    It would not surprise me at all if this game were being run in Vancouver.
  - bubbly | 5 January 2012 at 1:28 am |
    
    Well, if that has been happening here, we will experience some very interesting times soon.
  - polyderp | 5 January 2012 at 2:03 am |
    
    well if that’s the case, my suspicions were confirmed, and i don’t regret terrifying those fat little men driving over the speed limit in porsche cayennes all over the west side. yes, you are captive at a red light in this country.
- Airedales | 5 January 2012 at 11:24 am | Reply
  
  Additionally, I recently heard from an immigration consultant that some Chinese clients are both receiving margin calls back in PRC and having more difficulty getting their money out of China. This should add some momentum to the unwinding process which has started in Vancouver.
Fish10 | 4 January 2012 at 11:53 pm | Reply

Interesting Whistle Blower and normally like VREAA I would dismiss it as urban myths.

However for some time I have noticed homes in West Van being purchased by realtors known to represent mainland buyers, and then after a few months the house is relisted and quickly sold at a much higher price, even though their may be a cheaper home left untouched down the street.

I was not sure who would be buying a house for 15-20% more after just a few months and thought maybe it was a way for several groups to wash their money and bring it out. This is another possibility too, buy lots of homes and then flip some to raise the price of the rest and then borrow against them? or sell out at a higher price?
- vreaa | 5 January 2012 at 7:06 am | Reply
  
  It is possible that there may be some instances of that kind of thing having happened, granted.
- terminalcitygirl | 5 January 2012 at 1:37 pm | Reply
  
  I agree fish and even made this argument – not that a specific ethnic group was doing this, but rather my suspicion that this was going on and that many RE agents knew and were part of it or at the very least keeping their mouths shut about it – on Chipman’s blog about 4 or 5 years ago now. IMHO what has been happening in BC RE over the past decade has been criminal and many, many people have been duped by spin and blinded by greed. The repercussions have the potential to be quite serious. Desperate citizens/ governments will have no choice but to sell public resources and assets and cut services.
4SlicesofCheese | 5 January 2012 at 12:19 am | Reply

Over at RET…

Re: December 2011 REBGV Stats Mike Stewart

Postby gse36 » Wed Jan 04, 2012 7:12 pm
just a casual observation, past 2 days been seeing more than a few china people listing building lots they only purchased 6-12 months ago. listings say “motivated seller”, or the price is priced such that they will break even after commission, ptt, etc.

2216 w 21st
3560 barmond
3926 w21st
3835 w24th
285 rabbit ln
- vreaa | 5 January 2012 at 7:16 am | Reply
  
  Interesting.
  
  Regarding the REBV commentary, you’ve gotta love their complete lack of ability to understand markets and/or their disingenuousness.
  2011 starts off hot, peaks in Summer, ends noticeably very cold, thus this is a ‘balanced’ year (LOL).
Nemesis | 5 January 2012 at 6:34 am | Reply

Well, as it happens….

[ChinaDaily] – New Year housing sales drop 60% in Beijing

“A total of 570 houses were sold in Beijing during the three-day New Year holiday, a 60 percent drop compared with the same period last year, China News reports. Statistics from the Beijing Municipal Commission of Housing and Urban-Rural Development website show that of the total, 541 were newly built properties, a 57 percent decrease from last year. Some 29 houses were second-hand, a drop of 84 percent.”…

http://tinyurl.com/7dybn3u
whatisinaname | 5 January 2012 at 12:36 pm | Reply

“The Chinese network says we could see colossal house price drops of biblical economic proportions never before seen in our time. This is getting very interesting indeed. It would put the Shanghai, HK, and US housing crash to shame.”

Excellent!!!, I am getting my piggy bank ready for 3085 Point Grey Rd, may be I even scooop up 4707 Belmont ave aswll.
calguy | 5 January 2012 at 9:44 pm | Reply

Just got back from Palm Desert ( i can afford a holiday living in Calgary) Lots of HAM!! Well i am not sure but the outlet mall was a lot of asians and even the golf courses and hotel we stayed at had Asians. Anyways it was interesting talking to some other tourists, some who lived in southern California , did not know much about vancouver. One lady did not realize it had hosted the Olympics!! People – what does this tell you – yes Americans can be stupid, but also…Vancouver is not the greatest city on earth. In terms of housing, some beautiful homes on golf courses with pools etc going for 400K up over 2 million, but compare that to Vancouver.