Law Student Posts Vancouver RE Bubble Summary At lawstudents.ca

“I’ve found a post at vancouverpeak.com that has several relevant graphs located in one convenient place that captures the precariousness of our current predicament. I thought I would post them here, add some other graphs and lay out why our run up in house prices is essentially a bubble (unsustainable run up in prices, fuelled by speculation rather than fundamentals).”
– ‘Another Hutz’, author of ‘Vancouver Real Estate Crash’, a distillation of charts and bearish facets, at lawstudent.ca 3 Jul 2012

Young lawyers are being informed.
– vreaa

12 responses to “Law Student Posts Vancouver RE Bubble Summary At lawstudents.ca

  1. Jeff Murdock

    Just another signatureless, spineless blog post. Rennie would not approve.

  2. Pity the student/articling lawyers… All that debt. All that hard work… And not a single BC community will ‘sport’ them a free home in exchange for establishing a local practice. Doctors, on the other hand…

    [G&M] – B.C. village offers a free house to recruit doctor

    “The threat of a closed emergency room and fierce competition for doctors has led the village of Nakusp, B.C., to buy a house so a physician facing 10 job offers can live there with his family.”

    http://tinyurl.com/6s6yo6n

  3. So many familiar charts. And all together in one spot. I can recall as we all dissected and discussed every single one of them as they first appeared. So that was interesting.

    I might have added the kicker of them which was the long term (40 years plus?) house price to GDP sine chart. It is one of the most convincing when you can see the long term perspective. I will be damned if I can locate a copy of it though. It was posted here and also over at GF a couple months ago and it was really the “Get out of Dodge” chart if one existed.

    Speaking of charts….have you all seen this collection from Pacifica Partners? You might find it notable that much of the data is credited to the Sauder School of Business. No mention of Tsur who we suspect might not read from the same data set. Anyway, Pacifica states in it’s summary;

    “We continue to believe that Canadian real-estate is an asset class with an asymmetric risk profile. Simply put, the upside price potential to real estate is limited due to already extreme valuations yet the downside risks are significant from a number of factors including”:

    “•Policy changes involving the tightening of credit availability to Canadian consumers.
    •Rising interest rates as the Bank of Canada ends its period of emergency rates implemented since the financial crisis.
    •Over-supplied housing inventories.
    •Reversion to the mean of long term fundamental economic relationships eg: price to rent ratios, price to income, present value of cash flows from rental properties, home price appreciation to income growth, home price appreciation to GDP growth, etc.
    •Broad economic consumer woes resulting from stubbornly high unemployment, weak income growth, and higher-than-targeted inflation”.

    Here is the link for anyone who wants to have a look at the charts. They are an interesting batch as always….sorry if this has been posted before. It is from March this year which already seems a lifetime ago.

    http://www.pacificapartners.com/blog/2012/03/15/canadian-housing-bubble-chart-book/

    • Perhaps one of these?
      Some past GDP related charts posted here:

      Canada’s Household Debt to GDP Ratio

      Total RE to GDP

      Personal expenditure on consumer goods and services as % of GDP

      • Thanks Vreaa. It is none of those though. The chart I am thinking of looks like an MACD. A sine wave across 4 decades with the current period at the peak and ready to turn down. It showed conclusively that we were at the top of the market and just on the verge of a very significant decline. Similiar if not worse than that experienced in the early eighties. I wish I had linked it for myself. Turner had a version on his site not long ago that he had picked up from somewhere else. Nice little chart. Dangerous as hell and very worrisome. I will have to dig deeper to find it now.

      • Farmer -> Sounds interesting, let’s keep looking.

  4. Somerville should rebate his salary to UBC and go work for Rennie. A match made in heaven…..

    😉

  5. Another Hutz (previously "Moe")

    It was Me! Muhahaha. Now I shall reap all the upvotes and become … oh wait. This isn’t reddit. I guess I’ll have to settle for mad props.

  6. No problem. At what point do we get June inventory/sales/moi?

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