“You’ve Got A Bubble, Canada” Article #47 – Bloomberg – “Canada Housing Poised for ‘Severe’ Drop”


The chart above from Bloomberg shows Canada’s housing investment as a percentage of gross domestic product, and the declines in inflation-adjusted house prices that follow when this ratio tops 7 percent.

“Canada may be on the cusp of a “severe” housing correction as real estate investment surges above a tipping point relative to economic output, according to George Athanassakos, professor of finance at the Richard Ivey School of Business. “Eventually, everything boils down to demand and supply,” Athanassakos said in a telephone interview from Western University in London, Ontario. “Whenever this ratio goes over 7 percent, it signifies overinvestment in housing and two or three years later, we have a severe correction.”
Canada’s housing market is booming as historically-low interest rates fuel purchases, driving up home prices and adding to record household debt. Canada’s ratio of housing investment to GDP has averaged 5.8 percent over the last 50 years and is currently at about 7 percent, based on Statistics Canada figures as of the third quarter of 2011, Athanassakos said. Housing investment includes spending on new homes, renovations and real estate transaction fees.
U.S. housing prices plunged by a third between the peak in July 2006 and November 2011, according to the S&P/Case-Shiller Composite-20 Home Price Index. By comparison, Canadian housing prices rose 30 percent in the same period, according to the Canadian Real Estate Association.
“We have experienced bubbles and busts before in Canada, it’s nothing new,” Athanassakos said. “I don’t know why this time would be different.”

– from Canada Housing Poised for ‘Severe’ Drop, Doug Alexander and Ilan Kolet, Bloomberg, 17 Feb 2012 [hat-tip ‘Told-you-so-in-2007’]

We’re joking a bit about the “#47” thing — but there do seem to be an awful lot of articles in the US and international press about a Canadian housing bubble.
We haven’t been headlining all of these articles, but this one is noteworthy because of its focus on the ‘third’ fundamental, namely ‘price’ to GDP. (The other two fundamentals, of course, are price:rent and price:income). By all of these measures Vancouver RE is overvalued, likely by a factor of 2 to 3.
– vreaa

86 responses to ““You’ve Got A Bubble, Canada” Article #47 – Bloomberg – “Canada Housing Poised for ‘Severe’ Drop”

  1. Renters Revenge

    Athanassakos said. “I don’t know why this time would be different.”

    Hmmm, let’s see….previously the whole world wasn’t deleveraging at the same time, and previously the bubble never inflated quite this much, and previously we didn’t have demographics working against us, and previously we weren’t at household debt ratios of over 150%, and previously oil wasn’t over $100, and previously our largest trading partner wasn’t on the verge of bankruptcy. Did I miss anything?

    • “not different” in that the same percentage drop should be expected? – this, of course, means the current bubble will be many times worse in terms of total wealth destruction.

  2. I love this kind of chart with the way it is presented. You see a wave cross the chart from left to right that resembles a slow stochastic or other similar sine and the buy and sell signals are just so plainly obvious.

    If you had to render a viewpoint from a technical perspective then this chart is shouting “get the hell out of dodge” and “we are in serious overbought territory”.

    You don’t even need a discussion with a knuckle dragger of a Realtor or a bank shill . The chart says it all. Sell at the top or hold on and follow prices back to the bottom.

    Anyone unfamiliar with technical analysis should note from the chart that as a general rule, once prices start to decline they tend to not stop until they reach bottom before reversing and heading higher again. That means that if you do not sell at the top you will lose money all the way down and potentially miss the window of opportunity to get out all together.

    • Should not have written “price” in the last paragraph above. I was referring more to the shape of the wave rising and falling. I am sure everyone knew that already…..

      • I think we would all understand; and those of us who are also students of markets, cycles, TA, human behaviour, would say you make good points.
        Also, in a way it is ‘price’, anyway. The ‘price’ of ‘housing investment’ in terms of GDP.

      • Hey thanks vreaa, much appreciated.

    • “If you had to render a viewpoint from a technical perspective then this chart is shouting “get the hell out of dodge” and “we are in serious overbought territory”.

      from a purely investment perspective, yes. But the homebuyer is not necessarily the investor, and the pure investor is definitely not the homebuyer (as is quite evident from these renter blogs). You may be completely rational from a technical/investor position, but real estate markets do not follow this path because buyers do not

      • We have a name for “markets that do not follow this path”, and that name is speculative mania.
        The market seems to “not follow that path”, for a period, but, in the end, it always follows that path.
        As jesse likes reminding us, income does matter; it always ends up mattering.

      • Formula1, if the single largest purchase that a family makes in a lifetime is not an investment then I do not know what is. You, as a buyer have two simple options laid out for you at the outset of a major purchase that lie at opposite ends of a spectrum.

        You may buy low or you may buy high. This is high.

        Which would you prefer?

      • buying housing is a horrible investment if you need a mortgage. Renters who put $ investment above personal investment should never buy a home.

  3. What happened when RE corrected last time? People jumped on it and wanted again. Anyone wanting to get into the market will absolutely jump all over it at a 10% discount. You guys think it’s expensive now? Wait and see when inflation takes over and you guys won’t even afford your rent. You losers stay away from RE. You dont deserve it if you don’t value it. Every year the bears say correction, then they get priced out and keep crying. You don’t make a move, you lose out. I’ve flipped properties like hot cakes and you bears keep waiting. Yes the market may stabilize for some time and then rise again after. It’s mind boggling how pathetic you guys sound. Makes me roll over and laugh on the floor. The majority have bought, the minority will live in tents in Stanley Park.

    Peace losers!

    • These pretzels are making me thirsty

      poco

      Thanks.

      Such commentary makes me feel really good about selling at high and enjoying the show from sidelines.

      This is THE to “shoe-shine boys giving stock tips” moment.

      The end is nigh.

      (Also, you are an an a**hole.)

    • “What happened when RE corrected last time? People jumped on it and wanted again. Anyone wanting to get into the market will absolutely jump all over it at a 10% discount”

      Could you please explain us who’s going to buy? Everybody that could and wanted to be a homeowner already is: 67% ownership and 150%+ average debt/income.

      You’re right, last time the government slashed the prime rate, and mortgage costs decreased. They’ll do the same this time for sure… Maybe they’ll come up with negative prime rate since it’s already at rock bottom level!

      “You guys think it’s expensive now? Wait and see when inflation takes over and you guys won’t even afford your rent.”
      You’re kidding right? Rents are determined by what people can afford, closely correlated to income level… if incomes go down, so will rent. Sorry to disappoint you. It’s basic supply and demand, part of the 101 economic class.

      By the way, it seems that we’re not the only one to thin the market is over-valued. So do The Economist, Bloomberg, MacLeans and all the others.

      “You dont deserve it if you don’t value it.”
      You’re so emotional it’s touching… I can see why you’re feeling a bit nervous these days. How are your recent flips going? Having a hard time to find a sucker to overpay your property?

      “Every year the bears say correction, then they get priced out and keep crying. You don’t make a move, you lose out.”

      Every rationale person can see the bubble. The hard part of the prediction is how this insanity can last, because the bubble is inflated by insane people, like you for example… By the way, we’re not priced out, we’re patiently waiting to grab the properties at dirt cheap prices sold during foreclosures because of failed flips like soon to be yours. Have you heard about Kelowna recently?

      “I’ve flipped properties like hot cakes and you bears keep waiting.”
      Please do continue to flip. Leverage yourself out like there’s no tomorrow. Please do so. My friendly advice: there are great deals in the condo market and some great opportunities in Richmond as well.

      “It’s mind boggling how pathetic you guys sound. Makes me roll over and laugh on the floor.”
      Being laughed out by someone like you make me think that I may not be far from the truth…

      Cheers and have a good night (I hope your debts don’t keep you up at night)

      • Wow! That’s was sweet baby! Do u still think I’m good looking? I’d like to know u a little bit more. Great personality. Lol. Good rant and good come back!!

      • Up uP up. Low interest rates causing hyper inflation, will make RE look cheap now. I’m on crack and I can’t seem to decide if I’m a bull
        or bear. There’s good news one day, bad the next. But prices staying high is a clear indicator RE is never going to drop. Eff me up the @ss hard for not buying.

    • Renters Revenge

      So inflation means nobody can pay the rent, yet house prices still go to the moon?
      Right.

    • Troll, and a weak effort at that. What a waste of an average mind.

    • Given that Canadian mortgages are all adjustable, arguments about inability to afford future rent payments also apply to rent payments on money.

    • john mf'ing galt

      LOLLLL LIVIN LARGE IN POCO

      NORTHSIIIIIIIDE WHUT WHUT

      HOODY HOOO

  4. Great post makaya! ” people will jump to buy at a 10% reduction..” poco, you are kidding I hope! Sorry but a 10% reduction on a westside overpriced tear down at 2 million is not going to have people buying or jumping in. Neither is a 10% reduction on a 400K condo – that is already happening!! Look at the latest Vancouver magazine, even talking about a condo crisis and too much supply.

    • I’ve read this article and I’ve been monitoring their website… still not online yet. When all these condos get to that point in downtown/yaletown, they’ll be blood in the streets…

      • Pretty good retort Makaya. Really enjoyed that one and got a good laugh. Hey I want to see that article you guys are talking about too. What do you mean blood in the streets………..link?

      • @farmer. I’ll scan the article and post a copy here tomorrow

  5. “they’ll be blood in the streets…”

    sounds strikingly familiar

  6. Shazy McShazabator

    @Makaya

    “You guys think it’s expensive now? Wait and see when inflation takes over and you guys won’t even afford your rent.”
    You’re kidding right? Rents are determined by what people can afford, closely correlated to income level… if incomes go down, so will rent. Sorry to disappoint you. It’s basic supply and demand, part of the 101 economic class.

    The REALITY is that if the markets crash due to tightened lending standards, rents will soar in part because it will be harder to get a mortgage. That is why the owner-equivalent rent index has trended up in the USA and UK. Face facts Makaya, you don’t know everything, and you sound like a child – 101 economic class? really?

    • Actually Shazy, Makaya is right. Following the popping of the housing bubble rents did fall. There was a glut of empty homes and almost no demand. Neighborhoods in some cities became almost ghost towns as large numbers of homes fell into foreclosure. As supply came off the market many people began to double up and share. Turns out there was more than enough housing all along. It just was not being used efficiently until the employment picture got really bad. What you are seeing now is that rents are again creeping up. But this is five years after the bubble there actually burst and it has taken that long for even the rental market to start healing. We can expect a similar outcome in Canada as a recession generally accompanies a housing correction. If incomes fall, hours worked decline and unemployment rises then rents will usually respond to weaker demand.

    • Yeah, the REALITY is that owner-equivalent rents have soared in the US since the crash started in 2006. Let’s review those massive increases:

      2007 – 2.8%
      2008 – 2.1%
      2009 – 0.7%
      2010 – 0.3%
      2011 – 1.8%

      Just soaring I tell you.

    • +1 absolutely right. That is just what’s happened in the UK – rents up 20%

      • Really?

        Not all parts of the UK likely to see surge in rents, index reveals

        ‘During 2011 there were frequent reports in the national press about the stratospheric rise of UK rents. However, although the Belvoir Index reveals rental increases in 2011 versus 2010, many regions have still not recovered to the rents achieved in 2008,’ said Belvoir managing director Dorian Gonsalves.

        The latest index from Belvoir, which has over 140 offices nationwide but does not have a strong London presence, shows that just five areas across the UK have overtaken the rental heights of 2008.

        These regions are London where rents are up 5%, the North East up 6%, Yorkshire up 2% and the South West and West Midlands, both up 1%.

        Other regions were up in 2011 compared to 2010, but were still down compared to 2008 heights. The North West is down 3% compared with 2008, the East Midlands down 6% and East Anglia down 5%.

        And by the way, the market in UK is really different than in Canada…

        “In terms of monthly costs, owning a home is now typically 17% cheaper than renting, claims the Halifax.” [what’s the numbers for Vancouver again?]

        Now seems to be a great time to buy in the UK…

  7. Just saw an ad for 2921 W. 40th Ave., a decrepit bungalow listed at $1.7 million, “motivated overseas seller.” That place has been for sale for about a year I think.

    • you mean 2921 west 41st ave?
      It’s mean for sale since Jan. 16th

      • Yes I did mean 2921 West 41st.

        But it’s been for sale since at least last summer (2011) and I think before. I used to live very near there.

        F1, if you’re a realtor, maybe you’d want to check the data on just how long it’s been for sale.

      • Jan 16th was the last price change/re-list.

        It’s like renewing a Craigslist post so it rises to the top of MLS.

      • john mf'ing galt

        but,

        surely that house has more intrinsic value than my nylon, non waterproofed 5 person coleman tent?

        i’ll just keep putting the ad up, someone will give me $9000+ for it eventually

    • “motivated overseas seller.”

      Ohhhh! Can I maybe get it for 1.6 million, can I please!

  8. Shazy McShazabator

    Canada will see a soft landing. The irony here is that these doomer articles simply hedge against housing risk. There will be no black swan event in Canada. Worldwide quantitative easing and record low interest rates will keep housing prices trending upwards. Once interest rates do go up, Canadians will be well past the 0/40 year mortgage renewals, meaning they have sufficient equity to survive any downturn.

    So, please keep the doomer articles coming! It’s only serving to hedge against housing risk. It’s also fun reading about renters acting indignant about the supposed smug attitude of owners (this attitude only really exists in the mind of renters)

    Notice all the renters on these boards are by and large pathologically greedier, striving for deep discounts, in comparison to the average Vancouver home owner who plans to maintain property through thick and thin?

    • Shazy — A “soft landing” like has happened in similar circumstances . . . when, exactly?

    • >record low interest rates will keep housing prices trending upwards.

      And the additional credit will come from where? Just who do you expect is going to keep lending increasing amounts of money at decreasing rates? Would you?

      • Basement Suite

        Well, the banks seem happy to.

      • That can’t without backers. Total mortgage debt is increasing by 100 billion a year. Right now the difference between a cap on total mortgage credit back at 2008/9 levels and ever increasing mortgage credit is securitization (insured by you know who, who also is facing a cap).

        Keep an eye on the five year bond rate. Basically.

  9. Is the RE crash underway ? It seems the swamp has been stirred, looking at both the new trolls and the meanness of their comments. Regular trolls have been more respectful.

  10. those that follow Greater Fool will or should recognize the handle “poco” –i have used it for over 2 years on that site —we all know how trolls–you know the idiots who can’t admit or accept that they are ever wrong, and for what ever reason feel they must “slight you by using your handle and post something stupid as in the previous comments —it was not the real “poco” pumping RE in that post though it is funny that the one i have been having a run in with, posts on this sight right after that comment—VAN GUY—grow up and grow a set bozo —you seem to post on all the local blogs–using various handles–you obviously don’t have a life

    vreaa–please check the e mail address i posted under to confirm to your readers that I the real poco did not post that idiotic post–then check Van guy against that dumb post—you’ll see who did

  11. Vancouver In The Rearview

    Looks like Van Guy has linked his profile to his real identity. Hello Torben Rolfsen! You may consider yourself a writer and comedian, but you don’t seem skilled at either, given your weak trolling efforts!

  12. Shazy,
    I disagree. I believe unprecedented worldwide quantitative easing has occurred, and now the consequences must be faced. This includes countries getting ratings slashed by Moody’s etc, affecting bond yields. The USA can only print so much before they get further reduced. Canada is wary of it’s AAA status and is taking measures to cut spending to keep it. This will allow rates to remain low for awhile, but it comes at a cost of wage freezes ,loss of employment and expansion. For example, have a look at the recommendations for Ontario to try and balance its books. The Bond market is God for countries, they must obey.

    We’re seeing a two-fold situation in that we’re seeing deflation in wages/real full time employment but we’re seeing inflation in energy/food prices etc. If you want to understand the situation that brought down the USA real estate market I suggest, “The Greatest Trade Ever” by Gregory Zuckerman. The findings were that it was the flat lining of appreciation that broke the camels back in the USA housing market (not interest rates). Before that, people could take out equity out of their homes appreciation to finance their living. Our debt levels are at the same as the USA before the crash, our % of home ownership is at the same level as the USA before the crash. There is always a % of people that can never afford a home (those that took NINJA loans,liar loans etc) and that is what brought the yanks up to the 70% home ownership level. If we’re at that same %, wouldn’t that imply that we too must have a % of poor home owners as well?

    I agree many of the renters on here do wish for doom (not knowing that it will devastating on all of us) and it is irritating, but so is the smugness that real estate only goes up. The fact that Canadians point to the increase in prices after 2008’s price drop as proof that the market is stable moving forward is sickening. Anyone who knows a fiddle’s fart about charting knows this market is warped, and knows all things eventually revert to the mean.

    “This time is different” has been thought a thousand times over. Read, ” The Ascent of Money” by Nial Ferguson (Harvard Financial History lecturer) to learn how humans fall into the same trap time and time again. After studying the economics in China from last fall and on, I told people that it will be a poor year of Chinese buyers lining up on Chinese New Years to buy Vancouver real estate. Home owners and real estate agents told of the Year of the Dragon new year’s rush and to get in before it’s too late. They never came.

    Read between the lines of what Flaherty and Carney say. They mention things will be ok ( with a warning on debt) as long as things are ok in Europe. Bottom line is, Greece will eventually default, as they can’t actually fulfill the austerity measures asked of them. Their GDP is dropping rapidly, as money is flowing out, tourism has stopped, and people are getting laid off. After Greece defaults, look to a recession in Italy and troubles in several other European countries. Also, have a look at the Baltic Dry Index. It’s terrible. Why? shipping is still doing ok, but they built too many ships. Way too many ships. Ship owners are going bust and they owe european banks hundreds of milions or more from ship orders. Add that to the European Bank problems.

    Put a little bit of this all together, The USA licking its wounds, Europe getting beaten up, and ask who is buying China’s goods? Why do you think China is offering to bail Europe out of this mess? If China slows down they’re not going to be needing as much of Canada’s natural resources are they? Especially since they’ve been stockpiling. Is Alberta going to save us? Have a look at natural gas prices, they are very low. More and more oil sands projects are coming on line but the problem is, the USA doesn’t need our oil. That’s why our barrel prices are around $60 compared to $100. Ask yourself where is the credit and liquidity going to come from. Ask yourself, could the Quantitive easing that occured from every G20 country right after 2008 cause a spike in the global economy to cause a tempory spike in resource demand and thus make things look good in Canada?

    Just something to think about…..and buy the way, I own my home.

    • These pretzels are making me thirsty

      Thanks..good cerebral post

    • “Renters looking for doom”?

      How about Vancouverites, including renters by choice, looking for social justice?

      The fact that most people can’t afford decent housing here is what has some contributors to this blog hoping for either some kind of market correction or some kind of fearless vision, city-planning, and decent building, or both. Is it impossible? This place is a madhouse where housing is treated like penny stocks and nobody has the courage to say whatever measures can be taken to stop it have to be taken.

      It may mostly be up to the market, but I’ll never forget the political cowardice and land-grabbing greed I’m witnessing on a daily basis in a country that prides itself, often for good reason, on integrity, honesty, equality and fairness.

      • “Political cowardice leaves the correction up to the market.” Nice. That’s where the pain comes from. Correct it before it rises 5% and the pain becomes optional. The return of sanity is what people are rooting for.

    • It’s a historical play
      lower interest, devalue debt against assets, tax profit, and finally raise interest rates and ride out stagflation. But too much cash got hoarded institutionally, hence deflation and garage sales for the consumer and agricultural commodities for investors. RBC was offering the five percent on buy and lease back Saskatchewan and I wonder if they still are. You’re making a case for the shiny stuff, but there isn’t enough and it isn’t widely spread. And after mf global, pslv is the only option… and by the way, I own my hair.

    • Gosh to read that post you would assume the world’s problems all lie within Europe & its banking sector – this of course is nonsense as it is our Friends to the South who have dug themselves into a hole so big there is no escape.

      Yes some of Europe has fundemantal economic problems but these countries are fairly peripheral players in the macro sense with the powerhouses Germany & France Europe is doing very well indeed.

      Europe can (and imho will) eject Greece and still have an overall economic performance & indicators the US would pray for.

      Who can the US eject to remedy their ailments?

    • Excellent point Capilano. That interest rates were flat in the US is often overlooked but should be recalled each time we are warned that only higher rates will crash real estate. For in fact, rising interest rates were NOT the catalyst for the US housing correction.

      The other interesting point you brought up was the reference to the Baltic Dry Index. We all know it has decreased rapidly. It has fallen to historical inflation adjusted lows actually. As a result of steeply falling shipping rates there are quite a number of companies operating container and cargo vessels that now face bankruptcy and insolvency.

      Does anyone out there yet realize that Greece is the country with one of the largest fleets of ships on earth? Or that a number of the flagged shipping lines now facing bankruptcy are of Greek origin?

      Can it really get worse for the Greeks? Shipping represents the second largest part of their foreign income earnings after tourism. I wonder if it means anything? It could not possibly be a conspiracy to drive the Greeks over the edge.

      Could it?

    • Best post I’ve read in weeks – I also own and don’t rent from a bank for what it’s worth.

  13. thank you vreaa for your quick response—this” Van guy” is non stop on all the local blogs –and is a complete pain in the butt. He will soon change his handle to one of the above posters no doubt—renters revenge–makaya–and pretzels–i have followed all of your posts on Greater Fool and if you recall any of mine you know i have been advising for over two years of many properties within the tri cities areas that are clearly underwater and how that market is hooped
    Mr T.R. i suspect maybe a realtor or wannabe realtor–or just

    makaya–that was a very good reply to phony Van guy–i’m sorry you wasted it on a troll—and pretzels–i am not an as***e –Van guy is–you will get to know my posts as i say very little positive about the housing market

    and finally to Van guy( Mr T.R.) time to stop-as i said “grow a set”—-enough said for now–get it Van guy

  14. These pretzels are making me thirsty

    “…….a country that prides itself, often for good reason, on integrity, honesty, equality and fairness”

    Really ? You think so ?
    I am not too sure. May be on the east coast. Certainly not in Vancouver. I am sure my friend Tsur can vouch for it

    • These are ideals I have seen people trying to live up to, but, yes, these ideals seem to have been left behind in many ways here in Vancouver.

      • Social justice is contemplated by philosophers but quickly becomes mob rule under duress or euphoria. You’re talking about humans, that’s why we have a civil justice system. Not everybody has the same ideals. You’ll have to petition your cause to the electorate.

  15. Fairness, integrity, honesty and equality of opportunity seem to me to be fairly universal human ideals. In less successful civil societies, they are less carefully upheld or incorporated in or reinforced by the justice system. The kind of social justice I’m thinking of has nothing whatever to do with mob rule. Canada has a commitment to these ideals which I think is not being upheld in various ways in Vancouver. Canada’s banks and realty organizations need to think more about what they’re doing as well, obviously.

    • —-“Fairness, integrity, honesty and equality of opportunity seem to me to be fairly universal human ideals.”

      Perhaps, but not all people learn/consider these virtues at the same time. That’s why they herd us into an election. Or an event happens that marks a new epoch.

      —-“Canada’s banks and realty organizations need to think more about what they’re doing as well, obviously.”

      It’s not in their mandate. Try a credit union. Yes they probably want a healthy village to work and draw clients, but the resident culture forgot how to build wealth in family groups, they rely individually on lenders to fund their goals. Add up how much interest gets sucked out of all the members in an extended family through loans, credit debt, on and on. You’re looking for a society that hasn’t existed here for awhile. Residents live in a debt based—not savings based—market economy where the interest lending to individuals spurs reinvestment. It seems that people’s wants have exceeded their means and global consumer demand for lower prices has reduced wages.

      —“Canada has a commitment to these ideals which I think is not being upheld in various ways in Vancouver.”

      Canada’s charm exists in a welcoming village. Resource royalties might have preserved a gentler space for these humble aspirations. But the elected weren’t able, or forgot, or were learning on the job. Instead they reinvested because they figured if the big money came, the little money would spread around. People were lulled into acquisition.

      There is still lots of love and land in BC, the dilemma is finding a place to exchange your labor to get the services you need. Don’t worry to much, BC neighborhoods are notorious for getting through this stuff together. The ones who have a good bond will share resources. Maybe we are due for the test? Just remember we carry traits from our past, upright anthropods jostling around the fire, that’s universal.

      • Royce McCutcheon

        ^Pretty damn lucid for 4:30am!

        Agreed that we are perhaps due for such a test. Being forced to rally with neighbors and take some strong medicine might go a long ways to undoing the growing hubris that has made this place increasingly unrecognizable to me over the years.

      • “increasingly unrecognizable to me over the years.” – Royce M.

        Some people buy stuff to fill their joy void, some people make their own. A humbler life teaches you to appreciate little miracles that you can’t buy. People, when they find that, are satisfied with keeping it simple.

        But there’s a lot of noise in a city, lots of manufactured adrenaline. Endorphins are sometimes confused with the real thing. I see people walking and searching, walking and searching, or they keep themselves busy and up to stay working hard. Focus, focus. Work, work, and wonder why.

        I have a nice little niche, and some title on land hidden elsewhere, but I had to make a conscious decision to seek that and avoid paying the overhead to take title here. As Vancouver evolves, there is a little haven tucked away for my family. Anyone can do that, renter included. You have to ask yourself, how much of this life am I willing to sacrifice in work and time to keep up with the next guy in a busy, cosmopolitan city? It wasn’t the money, it was my urban claustrophobia.

        If you travel around BC, there are lots of places where you can find overwhelming joy and it doesn’t cost much at all. I don’t let society pressure me and oddly, the opportunities just seem to appear. I also had to choose a skillset that would generate income where I needed it and this all became sparkling clear when we won the olympic bid. The writing was on the wall center. Even if a house was free, here, it’s not for me. I want to know my neighbor because we look out for each others best interests.

        Team up with a few friends, buy a bit of god’s half acre, or squat on my land. I don’t care. Or you can scrape and claw here for a ‘piece of the action’ (the endorphin rush excitement) and do it in the beehive. Your choice.

        My rules of investing:
        -invest in yourself first, your knowledge and character
        -remember you are dealing with people, market technicals follow human behavior
        -buy low, sell high, and give some away.

        This blog provides insight to that second bit.

    • Spot on Vesta. Let me point out a lighter version of Canada reputation:

      – In the US they care only about money and would sacrifice everything including their health to be rich, dog eat dog, etc. They have money but terrible quality of life.
      – But in Canada, they care about other things: quality of life, who you are not what you have, providing a level ground for everyone, etc. So Canadians may not be as rich as in the South, but they have plenty of more valuable things to compensate for that.

      But Vancouver surprise, it welcomes anyone as long as your wallet is big enough, everything revolves about flashing your expensive toys, bags, houses, sunny vacations, cars … it doesn’t matter who you are or how much you contribute to society … business are being decimated, while everything is being sold to anyone with big money … the stigma against renters, the RE propaganda all around. And lifestyle being defined as playing golf, skying and sailing a yacht. In the US I never encountered such situation, even very important people would engage you and talk about anything but money and toys.

      • @Clipper — I lived in the US for many years, so I know people there do care about many things other than money; it’s in numerous ways a dynamic, innovative, creative and energetic society. However, it’s undeniable there are powerful forces in the US that encourage the pursuit of money and worldly success to the detriment of other things, and an entrenched crass commercialism that despite so many achievements in other areas (arts, sciences) seems very hard to battle.

        Where Vancouver is headed I don’t know….

      • poco (the mature one)

        Agree with Vesta
        Have lived in us for many years and it was a far pleasant experince than living in Van. I find people here much more self serving, self absorbed and frankly selfish. Also there is this aura of smugness. Not so much in the east.
        I could literally throw up every time I hear BPOE or “world class city”.

    • I see that my comment didn’t come out as I intended – too much generalizations and I’m not judging anyone, to each its own.

      What I wanted to say in simpler terms is that there’s a gap in this city from what Canada represents on the world vs. what’s going on.in the ground, whereas in other places it wouldn’t have surprised me.

      • Clipper, you had excellent points. Hope I didn’t misinterpret. I agree with what I realize you were saying!

  16. Yowza, those Okanagan numbers are something else. I think their stats and press releases are going to be a model for other real estate boards to follow, though: Just give total sales numbers and dollar volumes, and hope the lazy media won’t divide one into the other to find that median price is down 4.4% YoY. Also, bury the Active Listings number, and stress the sales/new listings ratio (still <1, but sounds a lot better than 17.5 months of inventory). Or, as the Board's summary puts it: "the housing market continues to show moderate but steady improvement."

    We can also see how the media will handle a bust: The Vancouver Sun says "Okanagan a bargain, but it won’t last long.” Oh wait, that article was from last May.

    • Oops, I meant mean price. Of course they don’t provide medians, even though, on the way down, they look less bad than the means.

  17. Did anyone drill into BC’s inflation numbers? They came in lower than other provinces, I’d like to know why, if it’s anomalous or indicative of a general trend.

  18. Celente says: When the money stops trickling down to the man in the street, the blood starts flowing in the street.

    • Not necessarily. BC is a little different. We’re notorious for backyard scams, homemade jam, and cash deals. The issue is between home-owers, lenders, insurers, and government coffers. Many others can bug out to Grandmas. If you know someone stuck, set them a place at your table.

      If we lose in the finals, then there’s blood on the street.

  19. I just realized this excellent blog needs someone to translate into Chinese. Any takers?

    • @Hazu — I wish I had started Chinese at university years ago. (Right now all I can remember from my recent course is the names of several fruits, plus “thank you” and “I am very busy.”)

      What a good idea, though, to advertise for a translator.

  20. Here’s some more proof of the bubble we’re in. My co-worker’s sister was buying a house in Winnipeg 2 years ago. She had to rush to get her bid in as there was the customary (real or imagined) bidding war in effect. I asked if she had a home inspection done as a condition of sale. My co-workers looked at me as though I had just slaughtered puppies and said, “If you do that you won’t get the house!” My answer was, “Then don’t buy.” As fate would have it her basement was severely flooded during torrential rains as the foundation was a leaky disaster.

    When people spend more time researching shoes or iPhones than they do homes they’re purchasing you know we’re in trouble. You wouldn’t buy a pair of shoes without trying them on would you?

    • “You would not buy shoes without trying them on, would you”?

      Good comment Loomis. This must be one of the most incredible disconnects ever. Who in their right mind would buy a house without inspecting.

      I know a lady who spent more time haggling over the price of a table and chairs that was on sale at the Brick than she did buying her condo. She was apoplectic that the salesman would not cut her a break. The table had scratches. Boo Hoo.

      Then she goes out and drops a decades income on a box without any thought at all and brags to everyone about its great location, close to friends and work blah, blah, blah. And I had to listen to all that BS without pulling my hair out.

      Laugh or cry. Your choice.

  21. Interesting discussion here. Really I agree with many of you “Vesta”, “Makaya”, I am just tired of seeing my/our city be sold out to the highest bidder and the social ramnifications. There have been far too many personal experiences, stories and hearing from other people about what this “hype” has done for vancouver. There was an interesting article in the Courier the other day about a family on west 39th or 40th in kerrisdale and how the fabric of the street/neighborhood has changed so drastically – homes sitting empty, neighbours you don’t even know, monster homes built up etc. Most people in Calgary say “nice place to visit, would’nt want to live there” We enjoy Calgary enough to stay and why not, at least we have jobs in our field and can have some sort of life. We will eventually move back whether prices are high or low to be closer to family and enjoy the things we miss about Vancouver – sadly that list is getting smaller.

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