“Who has $1 million to invest?.. We do. Moved back to Canada this summer from many years overseas and are gobsmacked at the state of “unreal” estate in pretty much every corner of this country. Our friends cannot believe we are renting. We cannot believe they think we should part with our savings in this market. We’ll be sitting tight and so happy to rent our 3500sq foot house for a pittance and pay no property tax. Unfortunately it doesn’t have granite counter tops…I can barely survive.”
– McExpat at greaterfool.ca 2 Jan 2012 10:44pm
There are folks exactly like this in Vancouver, but few RE Bulls believe it. – vreaa
Vancouver Real Estate Anecdote Archive 
Just checked out what was arguably last spring’s bubble epicenter – Richmond – on the MLS. Lots of talk these days about how much product is coming on the market in Earthquake Central, but from what I can see, there’s still not a single Richmond SFH priced under $500,000. And only six (6!!!) under $600,000.
Seriously, have you seen some of the dumps in Richmond? Absolute, total cesspool teardowns. This will change in the days and months ahead as greedy sellers realize that whoops, nobody has any money, but it just shows how freakishly, astronomically out of whack our market is. Even with a 50% drop, it would *still* cost more than a quarter million for a fetid one-bedroom hovel directly under the landing path. Wake me when the plunge hits 75%. Until then, I gleefully remain a less-than-human renter.
“Who has $1 million to invest?”
a Vancouver home seller does. Some here think the smart thing to do with this money is leave, but these sellers primarily relocate within the city…moving around, not out.
When you say “relocate within the city”, you mean, of course, “purchase their next home”… in which case their $1M is wrapped up in RE again.
Only sellers who downsize, or change to renting, or leave, will have ‘taken profits’ in the mania. The rest will remain exposed to price drops, usually with leverage.
“easy come, easy go” – anyone who made that kind of money by working is likely to look at any purchase with more critical eyes.
And you assume the house is fully paid off, which may or may not be the case.
“This will change in the days and months ahead as greedy sellers realize that whoops, nobody has any money…”
I don’t know Gordo – Asian (Richmond) sellers will probably be gripping tightly to the price gains seen in the past two years. Don’t underestimate how stubborn asian can be with $
Perhaps, but tastes of all humans can be flighty.
Witness the way in which Richmond suddenly went cold and other areas like West Van simultaneously heated up. In the same way, we can easily imagine the whole of Vancouver suddenly ‘running cold’ in the desirability rankings. We think falling prices will, paradoxically, make Vancouver less attractive to many buyers.
Nem (I think) recently linked a clip regarding Asian luxury good buyers in London where the one commentator noted the phenomenon of rapid flight from one ‘brand’ to another. Today, Vancouver; Tomorrow…?
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Related note:
“Small businesses in China could be facing their bleakest Chinese New Year in more than 30 years – up to 20,000 businesses in the city of Wenzhou, one of the country’s main entrepreneurial centers on the east coast, could suspend operations or close down altogether over the next month, according to a leading local business organization.”
http://usa.chinadaily.com.cn/weekly/2012-01/06/content_14390974.htm
couple friends of mine who are sitting on there million dollars. Most of them bought their properties in 2009 when the price dropped. Now, they are sitting on the cash waiting for next to come — This is the method in the millionairess mind – a bear not a bull. waiting … waiting …. waiting for the best deals in the right timing
this dogmatic notion that ‘owning’ makes life more complete needs to be put to rest. i’ve been on both sides, freely and by choice. it doesn’t. everyone has limited resources – allocate wisely. you just do what makes sense for the time, and adapt accordingly. to characterize as buyers waiting out sellers or sellers waiting out buyers is engaging in egoistic contest of who’s right … it is like a life wasting away watching glue dry.
when will the kingdom come? it will not come by waiting for it. It will not be a matter of saying ‘here it is’ or ‘there it is.’ rather, the kingdom of the father is spread out upon the earth, and men do not see it.
Hahaha !
How can you even possibly bring Religion into a real estate blog ? “God” you weak minded fools are too funny !
Very interesting post on “what is an asset bubble?” http://noahpinionblog.blogspot.com/2012/01/why-do-bubbles-happen.html
It was as if that post was written by me! As a Canadian expat returning to Vancouver with a hefty chunk of money saved we were stunned by the prices…..really $1.2M for a tear down in West Van? Consequently we packed up and left Canada after 3 years for better job opportunities and better standard of living. Renting was a pain for all the reasons other VREAA posters have listed, such as the landlord not doing repairs or giving us notice to move primarily because he felt he could get more rent for it…..he complained that he was losing money on it. Shows the amateur level of investor/landlords in Vancouver…..not knowing what is legal and/or what is a prudent investment. Last laugh was after the landlord moved into our rental, text read something to the effect of his shock at the cost of the heating bill…..and do you think I should sell? Unequivacally YES we texted back, cut your losses and get out now, we texted back. The house with pool was great for us renters (and at a fraction of what it would cost to own and maintain) but a complete money pit for an owner. Landlord was a doctor so one would assume a well educated, intelligent fellow. Goes to show that even those high earning, highly educated folks have got caught up in the Vancouver speculation bug.
Dude, buy income properties and continue renting. Property prices and interest rates are both on the decline and simultaniously rents are increasing. rental properties=lifetime of income
-Sky Minor