“I’m running out of patience with the bubble in the city. If it does not pop soon I’ll move on to another city or country.”

“I’m running out of patience with the bubble in the city. If it does not pop soon I’ll move on to another city or country. So plans do revolve around the housing market for most – either counting on real estate for retirement, or deciding to stay/leave. And that dependence grows as one gets older, has kids and thinks about school districts.”
604x at vancouvercondo.info 15 Jan 2012 at 6:22pm

Succinct.
Can’t the bubbleheads see how bad this is for our town?
– vreaa

28 responses to ““I’m running out of patience with the bubble in the city. If it does not pop soon I’ll move on to another city or country.”

  1. VREAA (and I know you know this), it’s all about the greed. Get as much as you can, any way you can, as soon as you can, and f*** the consequences.

    Happily, 2012 is the year of consequences.

  2. Watch out, the whole of China is landing in the next 3 weeks!! (MSM crap trying to flog this dead horse continues). This was the first google hit when I searched “china housing market”. Now that says a lot.

    http://www.theprovince.com/touch/story.html?id=6021378

    How is this piece of opinion “news”?!

    • Gun ho fat boy!

    • Well considering googles search algorithms are tailored to you specifically it might be a bit biased. In reality the demand from China isn’t going to change this year from years past. If anything I would say that there will be more money per-capita coming in from China in 2012 than any of the previous years.

      China’s wealthiest currently have the majority of their money in the most liquid form it’s been in for years. It is slowly seeping into Canadian soil. I feel that programs like PNP will pick up pace as well as the purchase of more substantial business’s instead of the major focus on residential real estate we’ve seen in the past.

      • any data? what sort of businesses look good?

      • Data is coming from friends of mine in the Chinese govt. I’d rather not release full stats on here 😉

        Businesses such as farms, hotels, motels..etc will all be good and desired options.

      • interesting. able to say anything about how valuation methods? why canada? where else they’re looking?

      • Not sure what you mean by valuation methods, explain?

        The ‘why Canada’ question is really the same as it has been for years. Its safe, stable and generally a good place to raise children and retire.

        There is still big demand for the US, AUS, UK… that won’t change either. We just notice it more in Vancouver since the community is quite tight knit.

        Even the Chinese don’t see Vancouver as a ‘good’ investment, it just happens to be a ‘better’ and ‘safer’ investment than where their money is in China.

      • can’t be buy at any price. valuation method = how to decide under/over valued. imho fwiw, re: safe. govts can and will change laws overnight to suit their needs. safe is where there is strong tradition of private property rights + govt not broke, so doesn’t need your money. at least on the latter count, china is better than those others on the list. if i had only one bank account, it would be hk/sgp, not us/uk/aus/can.

      • They considering ‘valuation’ differently than we normally would in western culture. Some people will pay whatever they can afford to get a house close to friends or in places they have been told are ‘good’.

        When you consider hkg or sgp, those markets are much more expensive than here, plus it isn’t what they ‘want’ necessarily in a home. They want their kids to be brought up in NA and at the end of the day.. the Westen lifestyle is what they all strive for. HKG and SGP are too similar to China, plus.. very hard to actually ‘own’ land.

        Hence my point of VAN property isn’t necessarily a good investment money-wise, but for them its not just about money.. there are many other factors.

      • SimeonG: Two questions, given your expertise:

        1. So, given all that, what do you foresee for the Vancouver market going forward?

        2. How do Chinese buyers respond to an asset class where prices are falling?

      • @simeong re: hk/sgp. wasn’t about RE, though urban residential RE has been a good sell for the savvy pretty much worldwide in the last 5 years. to me it’s paradoxical wealthy people with assets in the political sphere of a creditor nation (i.e. little motivation to take your money) should feel need to safeguard them within the sphere of a profigate debtor nation (usa, x-large welfare/warfare funding shortfall). those buds even managed to get the swiss to rollover on clients. that doesn’t make sense to me so i’ll keep thinking about it.

  3. Why should the bubbleheads care about this? You either invest or you can’t make it in this city.

  4. @mish: http://globaleconomicanalysis.blogspot.com/2012/01/time-to-concede-home-ownership-is-fraud.html

    It’s time to concede that “homeownership” is a fraud.

    When there is $16 trillion in mortgage and consumer debt outstanding and an estimated $16 trillion in residential unreal estate value, with the risk of another 20% decline in prices, there is no “ownership”.

    Rather, virtually everyone with a mortgage is renting debt-money from a lender and leasing the land from a local taxing authority. The mortgagees have a “dead pledge” in the value of the debt owed, not an “asset”. The lenders and taxing authorities are the “owners” of a lien (a bond or constraint on the real property), which entitles them to income in the form of compounding interest and tax receipts in perpetuity.

    Unreal estate is the best investment for lenders and taxing authorities, not dead-pledgers.

    • To paraphrase Robert Kyosaki:

      Your home is not an asset. YOU are an asset… an asset the bank strives to own by chaining you to a mortgage.

      When he first wrote that in 1997, he was villified by banks, financial advisers, realtors and various other financial gurus across North America. In retrospect, that should have been a pretty good sign that he was right.

  5. Emotions run rampant. Still, frustration pales in comparison to the feeling of losing one’s downpayment or worse. Pick your poison.

    • “It is easier to find men who will volunteer to die, than to find those who are willing to endure pain with patience.”
      Julius Caesar

  6. CanuckDownUnder

    Sure we’re missing out on that vague “ownership premium” but let’s look at a few rough calculations concerning renting v. owning our Sydney apartment last year:

    Cost of renting: $465/week

    Cost of owning assuming we put 20% down (that’s standard, right?):
    Interest-only payments: $560/week
    Lost interest income from down payment: $85/week
    Strata/council/water: $90/week
    Lost “equity” assuming 2% drop in value: $210/week

    So all up we were better off by $25,000 having been renters in 2011 and I haven’t considered upkeep, legal costs, or the wonderful benefit of being mobile.

    • Good link, chubster:

      “…a misplaced confidence of unsinkability and the presumed impossibility of human error.
      The Titanic symbolized the end of 19th century’s arrogant assumptions of infallibility, and the mass attention paid to Concordia may speak of a world yearning for strong leadership and instead watching a captain abandon his ship to save himself.”

      “Concordia has become a morality play for how we feel about leadership,” says Paul Bickley, senior researcher at Theos, a public theology think tank in London. “Across Europe and among higher eschelons of society there is a perception that leaders are increasingly selfish, and not helping those in need. We’ve called it a leadership pathology. Even before the details came out, many people assumed or suspected this captain jumped ship.”

    • talking of symbols/metaphors, how about the recent string of ecstasy fatalities?

  7. “When there is $16 trillion in mortgage and consumer debt”

    careful where you pull your stats from. This figure is taken from a blogger with no link sited.
    The actual # is 1.01trillion debt. and since the avg amount ofhomeowner equity is 50% it means there is still $1.01 trillion that owners can take out in HELOC.
    Also interesting, 40% of Canadians have no mortgage at all!

    http://www.canadianmortgagetrends.com/canadian_mortgage_trends/2010/11/caamps-mortgage-market-report-2010.html#tp

    • those are us numbers. but point is debt levels are extreme relative to cash flow, which is about to get worse. take a look at europe – the road does eventually end. australia, if you prefer a set up more similar to canada. the fact that 40% have no mortgage just means their savings are holding up the overeleveraged heap that do – since boc and cmhc will suck on them to bail out the defaulters.

    • Formula1, next time, think before you write.

    • It isn’t the “average” or even the “median” who is going to bring us down. It is the 15% or 20% who are way over-indebted and over-leveraged. Everything important happens at the margins. If just 15% of homeowners in this country end up underwater, we’ve got a major market meltdown on our hands.

      Such is the double-edged sword of extreme leverage: It turns a boom into a bubble, and a correction into a bust. Joe average with 70% of his mortgage paid off may not be in trouble, but that won’t prevent his home “equity” from plummetting 40%. And that, in turn, will leave him unable save his kids from being foreclosed on.

  8. one person has intention to leave town, many wanna move in.

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