Ben Rabidoux Reviews the Status and Implications of the Vancouver RE Market

Ben Rabidoux, at his website The Economic Analyst, has recently reviewed the Vancouver RE market in an article entitled ‘Vancouver housing in full correction mode: Implications for Canadian banks’ [3 Aug 2012].
We earlier headlined a single paragraph from Ben’s article (comparing Vancouver and the US with regard to $1 Million homes), but we’d also emphasize that the entire article is worth the read. Check it out.
– vreaa

17 responses to “Ben Rabidoux Reviews the Status and Implications of the Vancouver RE Market

  1. Looks pretty serious… OK, this is a clearly job for the BalineseTempleBoyz… [They’ve had a lot of practice appeasing Hephaestus/Pele.]

    [NoteToEd: I know… I know… Nobody wants to cut these guys any slack since they ScrewedThePooch with the Krakatoa job. But, like, come on… that was what… a 129 years ago?]

    • homelessindunbar

      Very cool.
      Forget real estate. I read this blog to see what Nemesis will post next….

      • ++
        sir_nem, i was thinking, in the present case, no one will be take seriously without ritual sacrifice … pssst (blog has spare jesse now)

      • Strange. With Nem, you skip his intro and look for his article. Skip his videos. With chubster, you skip everything — I’ve never seen a single thing he’s ever posted related to real estate.

      • @not_gatsby … faith in watertight compartments is a fatal flaw, amply demonstrated … also thought originally of sacrificing some or all of f1’s multiple persons, but apparently someone may already have … and then my own but realized far too self-important 😀

      • TeeHee! ThankYou HomeLess!!!

        [NoteToChub: They can’t help it… NatureOrNuture? ]

    • The clip is from the movie “Baraka.” It’s directed by Ron Fricke who did the cinematography for “Koyaanisqatsi.” Critics will go on about how some movies are supposedly visually stunning. These movies absolutely are. They really are worth and hour or two out of your life.

    • Oooops….

      [Reuters] – Flash, boom, New Zealand volcano roars to life

      [3NewsNZ] – Moment of Tongariro eruption: ‘Flames and sparks’ filled sky

    • But don’t worry, Vancouverites! Whether its AffordableHousing or DisasterPreparedness…CityHall’s got your back!…

      [Province] – Calling on all Vancouver volunteers for new city program

      “Over the next three to four years, the city hopes to get 1,000 to 1,500 people to join the Vancouver Volunteer Corps. The volunteers get a blue golf-style shirt and a lanyard with a name tag identifying them as a member of the Corps. At special events, they’ll even get a vest to make them even more prominent.”

      [NoteToEd: File This One Under “Ooops”… CBC – Rescue team cut: Vancouver’s Urban Search and Rescue Team is ‘shell-shocked’ by federal budget cuts: ]

  2. After looking over these graphs and looking over my data, I find it interesting how difficult it is to justify normalizing Vancouver’s price growth to a specific level. I’ve retreated from all this and have been looking at condo prices and rents. It’s a decent apples-apples comparison to the CMHC rent survey trendline (that Ben uses).

    Overall I think Ben has presented datasets and macro developments that are key determinants describing Vancouver’s situation, though I would have added mortgage rate spreads to inflation measures look to be remaining low for a while. It’s hard to tell when real rates will be positive but I’ve argued negative real rates won’t save the housing market in the long run; other factors like lack of asset liquidity, income growth, unemployment rate, housing supply, and migration will see to it one way or another.

  3. Then again… however useful our analytic and predictive mathematical abstractions are… when it comes to “status and implications”… the answers are frequently right there for all to see… ‘hiding’ in plain view…

    “Students are having to make some pretty hard choices. Perhaps choosing housing that’s not what they would consider safe or what they would consider ideal for their families.” – Tiffany Kalanj, Vancouver Community College Student Union

    [G&M] – Road scholars: B.C.’s cash-strapped students take to living in their cars

    “As Vancouver’s university students stare down the final weeks of August, attention turns to where to live come Sept. 1. For some, faced with rising rents and long waiting lists for on-campus housing, the solution is extreme: Moving into their cars. “I decided, to save money, I’m going to try living in my van as long as I can,” said Anna Baignoche, a master’s student at the University of British Columbia. She lived in her van part-time during the past three years.”…

    • Well as the boomers would say, this is all part of the sweat and tears that young people need to go through to learn what a hard life the boomers had, and come out better prepare for life. These young people need to just suck up, stop complaining, and start working! No more handouts! 🙂

    • Is a student living in a van to cut down on costs news these days?

  4. 4SlicesofCheese

    I would like to get fellow commentors thoughts about implications for banks with the bubble bursting.

    With CMCH backing, what is the worst case scenario we would see?

    I cant imagine any of the big 5 going under. If the US taught us anything, Lehman aside, most of the banks just got bigger and bigger.

    • Ralph Cramdown

      With most of their vulnerable product CMHC insured, they’re not going to take whopping huge hits from mortgage defaults, but the deleveraging on other products will hurt bad — people will pay down or default on their cards, take far fewer auto and home improvement loans, etcetera.

      I’d say look at the banks’ business outside Canada: What % of their revenues, and how fast is it growing? It varies considerably between institutions. Of course, if CMHC started putting back loans due to fraudulent or negligent underwriting, that’d change the calculus a bit.

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