Royal Bank, CIBC, BMO, CTV, REBGV, Michael Levy, Royal LePage, Global TV – “Housing Crash Fears Unwarranted”; “There is no property bubble. Period.”

vanc re keep calm

In contrast to the recent MacLean’s ‘2013 Crash’ article, we now have a surging surfeit of reassuring commentary from other sources:

“Canada’s real estate market remains “relatively solid” and should experience a “soft landing” despite the current slowdown and fears of overbuilding in the condominium segment, the country’s leading bankers said Tuesday. …
“Our expectation is that the overall real estate market in Canada is still relatively solid,” Royal Bank CEO Gord Nixon said. …
“Pure math says that a soft landing, if it means you go back historic levels of activity, that we’re going to have some softness in our economy,” Gerry McCaughey of CIBC said.
“… That softness doesn’t necessarily come out in mortgage defaults, it comes out in employment softness and consequential unsecured consumer lending softness.” …
“In fact, house prices may just stagnate. Condominium prices may just stagnate for a couple of years. And that’s the definition of a soft landing,” Bank of Montreal CEO Bill Downe said.”

– from ‘Bankers expect soft landing for Canadian housing market despite slowdown’, Canadian Press care of CTV News, 8 Jan 2013 [hat-tip Dr. Bubble]

“I just watched ctv vancouver news. they did a 5 minute piece on real estate here. they interviewed two realtors and one guy from real estate board. they all said prices of sfh in vancouver were down 1 % for 2012 and say prices won’t fall more than 3% in 2013 as sellers don’t need to sell so they will just pull properties and wait…so buyers who are expecting big drops will not ever see that. the real estate board guy said there is nothing in the cards that is showing sellers will have to sell so prices will stay high. then the host of the news said, well, there you have it… no bubble popping here and went onto next story.”
– vancouverbubbleman at VREAA 8 Jan 2013 5:49pm

Michael Levy, financial analyst: “There is no property bubble. Period. We’ve had prices come up because of demand, both domestic and from off-shore, and demand swelled, and particularly here in Vancouver, a most desirable place to own property, you want to live here or invest here.” …
Announcer: “Prices seem to be holding, as the tug-of-war between buyers and sellers continues.”

– from ‘Experts Say No Real Estate Bubble In Vancouver’, Global TV News, 8 Jan 2013 [video archived by Greenhorn; hat-tip YVRhousinganalyst]
[“There is no property bubble. Period.” – this latter-day pronouncement added to “What Bubble?” sidebar]

“Royal LePage forecasts that the price of an average Canadian home will rise by a modest 1% in 2013.
Canadian home prices will see a “very modest” appreciation over the next two years, as economies in both the U.S. and Canada gradually improve and family incomes climb slowly, the brokerage said.
“More home buyers moved to the sidelines as 2012 progressed, as economic uncertainty abroad and reduced affordability became a drag on the market, however house prices proved resilient,” said Phil Soper, president and chief executive of Royal LePage.

– from ‘Housing-Crash Fears for 2013 Unwarranted, Forecasters Say’, WSJ, 8 Jan 2013

62 responses to “Royal Bank, CIBC, BMO, CTV, REBGV, Michael Levy, Royal LePage, Global TV – “Housing Crash Fears Unwarranted”; “There is no property bubble. Period.”

  1. These guys are like the tech analysts of the late 90s. They’re going to look like utter fools, and all the more so for having sustained their views in the immediate aftermath of the U.S. housing collapse.

  2. “We’re going to have some softness in our economy.” Gerry McCaughey, CIBC

    [NoteToEd: Yep… “Softness!” The ‘campaign’ slogan that just won’t… cough.. cough… Die.]

  3. How many of these people predicted the significant sales volume decrease in 2012? (few to none?)

    How many of these people leveraged up by buying 10 properties each in 2006? (few to none?)

    If they didn’t predict it before, why believe them now. Idiots

    • Yet, you seem perfectly ready and willing to listen to analysts now who failed to call the bull run year after year for the last decade…. Why are they so much more credible?

      The reality is, very few analysts have predicted anything right, consistently over the last 5-10 years. Why listen to any of them?

  4. Pure math?!!! Pure math says price to income is grossly over priced!
    Media in this town is horrendous and one sided. Economists think they tomorrow is a sunny day weathermen. Sorry! You see a storm coming report it.

  5. Lifetime Renter

    There is panic in the industry. And the media , as usual, are giving voice to real estate shills. Not surprising given who owns the media. And for print media, it’s hard enough to make a buck publishing a newspaper these days. Imagine losing all those colourful and expensive condo adds.
    But it won’t work for the same reason so many on blogs like this were not able to convince people about the insanity of buying into a bubble. Most base their actions on experience. People bought because people they knew or heard about were buying and seeing gains. This aligned with all the propaganda spouted by the banking and real estate interests. A few voices in the wilderness were never going to make a dent against the torrent of propaganda under these circumstances.
    Now the shoe is on the other foot. People will increasingly know of or hear about folks who can’t sell, who had to greatly lower their asking price, who now feel claustrophobic in their closet sized condo for fear they will never be able to dump their property and “move up”. No campaign to convince people to ‘move along, there’s nothing to see here’ can counter the facts on the ground as they develop over the coming months.

  6. It does not matter what “they” say, the same way that it did not matter what the bears were warning about for years. When the credit is withdrawn and there are fewer greater fools then required to keep the party going, it stops. I can appreciate the jaw boning, cheap and surprisingly effective short term.

  7. So if prices don’t go down because not much is listed and not much sells, what happens to the incomes of realtors? Please correct my math if I am wrong, but that adds up to less in Commissions. So why would your average realtor play along with the “don’t list” strategy? Have they really thought this through?

    • I don’t know, but you know what they say,

    • What they say is not necessarily the same as what they believe.

    • I am trying to think of this in terms of individual incentives. If I am the average realtor, do I show solidarity with my industry and convince my client to hold firm, not lower the price, thus not selling and thus earning me no Commission? Or do I convince the client to lower the price 10%, thus closing the sale and earning me a Commission 10% lower than I hoped? Let’s assume I also have to eat, make lease payments on the Beemer and pay my smart phone bill. Thinking of it this way, perhaps the average realtor will become the biggest pumper for lower prices. Such irony!

      • I think industry players will try to convince everyone the bottom is in and drag things out for another year (maybe two) before resorting to the other option. The full page spread Polygon did in last Sat’s Vanc Sun (pg F3) is a perfect example.

  8. Want to make a sale?
    Don’t want the listed/selling price to go down …
    Include a new honda civic in the purchase price.
    Not enough …
    Include more goodies
    but do not lower the listing/selling price.

    Keep up the pretense.

  9. Real Estate Tsunami

    I’m keeping an eye on the Townhouse listings here in Richmond.
    During the first week of the new year, listings have already gone up from 244 to 291 (47 or almost 20%).
    Richmond will be the canary in the coal mine for which way the HAM investors will go this spring.
    No matter what the spin doctors are saying, the “ground truth” is that the supply will rise to a level where sellers will have no choice but to lower prices. The only question is to what degree.

    • 244 on January 1st? That number might be artificially low because of listings that expired on Dec 31st, only to be re-listed in the first week of January.

  10. “Owners don’t have to sell”

    I love the blase assertion that they somehow understand the financial situation of every homeowner in the market. Have they talked to every owner personally? Do they know what the owners’ monthly payment is and what stress, if any, it’s putting on the bank account, lifestyle, the marriage, etc? Do they know if the owner originally purchased as a home or as a speculative investment?

    What about all the newly built homes? Are they arguing that developers have as much time as they would like to sell a recently finished development? Their bank may differ on that.

    • The Poster Formerly Known as Anonymous

      Developers will set the new lower benchmarks fastest, as they will offload at bargain basement prices because they have no choice. For them, as organizations rather than families, it is an impersonal, balance sheet and cashflow issue. Just like a store that discounts inventory to clear it out, they have deep pockets and it is just business. Yes, some may get ruined, but their creditors will need to get paid so they will have no choice.

      With speculators/ investors leaving the condo markets, and families either owning or not wanting an 800 sq ft box, it will be hard to see the newly developed condos sell without significant price cuts…. I’m talking 50% off reversions to historical means, and then some overshoot to account for supply glut.

      Fun times ahead!!

      • Lifetime Renter

        Re “Owners don’t have to sell”. The purveyors of real estate need this to be true. Demand is falling and the last thing they need is more product causing further price reductions and buyers holding off to see how far things will go. They are doing all they can to fight the simple law of supply and demand. At all costs they must avoid the panic that leads sellers to list now, even at a loss, for fear that if they wait, they’ll get a lot less. As for buyers, none has to buy. And when was the last time you heard the industry encourage people not to list? Another sign the bubble is bursting.

    • Owners don’t have to sell + Renters don’t have to buy = ?????

  11. As if there was any doubt we’d be hearing from the usual cast of characters. Masterful job if I might say so myself. It’s only Jan 9th and the campaign has already been ramped up into high gear. What does that tell you? I figure for every one bearish MacLeans-type article, there will be 10-20 bullish RE touts following right behind it. How long before some MSM talking head deems the MacLeans article to be another one of those “contrarian indicators” and a sure sign the bottom must be in? LOL….Let the games begin, I guess…

    BTW, I’m not sure why Global would be carting out the likes of Michael Levy to comment on such matters? He must have some friends in high places. I thought he would have faded into the woodwork a la Ozzie Jurock by now. Hmm….

    * * *
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    * * *

  12. As for me, I always let vested interests inform my opinions!

  13. When those who have the greatest vested financial interest start to suddenly sing loudly, and in chorus, that “there is nothing to see here”………….you best be advised to put on your X-ray spec’s to help you better see right thru these liars, cheats, frauds, and conmen who populate the “real estate industrial complex”……..for the moment of “greatest financial risk” in the “denied bubble” has appeared.

    When this is all said and done, we need to have a huge trial, just like the Nuremburg War Crimes Trials…….

    We can call it the “Finanacial Crimes Trials” and put every banker, broker, builder, politican, media journalist, et al, who can be legally implicated in this scam on the stand for “financial crimes against humanty”…….and borrow a couple of those roving execution vans from the mainland Chinese for dealing with the worst of the offenders.

    I am a right wing capitalist, and I am not joking……not one single iota.

  14. Vancouver Renter

    It’s almost like the RE pumpers strategy is to now convince people simply not to sell rather than sell at a loss and lose face. I wonder how long that can last?

    This won’t be the last silly reason they offer up during the downfall that much is for sure.

  15. Real Estate Tsunami

    VREEA, this from the Richmond News 13/1/9:

    “The last half of 2012 was like a Mexican standoff. Buyers kept hoping for greater price drops while sellers who didn’t have to sell just took their home off the market rather than lower their price,” said Scott Olson, president of the Fraser Valley’s Real Estate Board.

    Realtor Larry Biggar said one of his clients did just that in November. The Richmond home had been for sale for about six months, and rather than lower the price any further, the couple decided to take the home off the market. They are in their late 60s and want to downsize to a condo, Biggar said. He said everyone who went through the home liked it, but that they all seemed to be waiting to see what would happen with prices.
    “We watched the market slow down, and slow down, and slow down. … It just got quieter and quieter,” said Biggar, who works with ReMax Westcoast.
    “Finally they said enough is enough. We really don’t have to sell. We can stall our plans if need be, although that’s not our first choice.”
    Biggar said the couple will be putting their home back on the market soon, and although they have not discussed the asking price, it will probably be the same price it was when they took if off the market.
    Biggar’s slogan is “Go Biggar and go home”.

  16. As if there was any doubt we’d be hearing from the usual cast of characters. Masterful job if I might say so myself. It’s only Jan 9th and the campaign has already been ramped up into high gear. What does that tell you? I figure for every one bearish MacLeans-type article, there will be 10-20 bullish RE touts following right behind it. How long before some MSM talking head deems the MacLeans article to be another one of those “contrarian indicators” and a sure sign the bottom must be in? LOL….Let the games begin, I guess…

    BTW, I’m not sure why Global would be carting out the likes of Michael Levy to comment on such matters? He must have some friends in high places. I thought he would have faded into the woodwork a la Ozzie Jurock by now. Hmm….

    • Nice catch, thanks for that link to the piece on Levy…..

      • The don’t call the VSE “Vegas” for nothing. Many don’t realize that Vancouver is the pump and dump financial capital of the world. More promos and dealers per capita than anywhere else and certainly Canada’s hot money capital.

    • A quote from the requiem at the URL:

      ‘“The irony that the Waldorf was taken over by a condo developer in the very area we helped reinvigorate is obvious to anyone. The Waldorf filled a void. People responded because they needed it. We tried to stand for something authentic and real in a city with thousands of empty condominiums and a community starved for cultural spaces,” says Anselmi.’

    • Another shameless outrage.

      Where are DrinkBot, LaLa, JohnnyJohnny and Dr. Tiki when we really need them!

  17. The industry doth protest too much, me thinks.

  18. The nice man on the TV said it would be a pleasant comfortable cruise. We never saw this coming

  19. Pilger’s Law: Don’t believe anything until it’s officially denied.

  20. Levy is so full of crap. He predicted gold to tank to $1200 last year and he even sells gold. He called for a house market crash in 2006 and we know what happened there for the next two years.

  21. Realtor behavior

    The art of persuasion is you have to believe what you are selling, even if you really don’t! You need to make-believe, period!

  22. … 😦 … has been one of the worst holiday seasons i can remember

  23. Re: Waldorf.

    What a travesty!

    I had figured something big was in the works for that area when we started hearing grumbling about odours from the rendering plant.

    Then Canadian Tire closed to make room for condos.
    Then the dealership sold to make room for condos.
    Then the full city block sold, presumably for condos.

    Now the Waldorf land assembly sells, likely for rezoning.

    Its a shame, really is. What little character Vancouver has left gets taken away with each new condo.

    I am not opposed to development or progress, but it needs to be managed sensibly so that culture can thrive. See New York or San Fran for examples.

    Its not so much about the building itself , its more about the fact that there wont be a replacement made for the Waldorf. Just as the Cobalt went, Smiling Buddha, etc etc.

    The real travesty in all this is that all we as a city can muster up is 30 somewhat comments on G&M complaining about too much condo development. No one in this city has the heart to step up and lead charge in a way that collectively benefits us as citizens. Who is actually reaping the benefits of all this development?

    Why is that we are so anti business here? I know what it takes to get a space ready for occupancy, or to get a change of use, to get past the red tape is a challenge requiring brilliant minds and deep pockets. This is not an environment that fosters small business growth and the cultural growth that comes with it.

    I think we collectively need to have a conversation that goes beyond “affordability” and encompasses the broader social problems our RE mania has created.

    One can dream, right?

    • I agree. It is pretty nauseating that an energetic group of people doing exciting and interesting things — the type of organic culture that Vancouver could definitely use more of, and probably had more of at one time — can get chopped off at the knees like this. All for another boring condo. I certainly wouldn’t relish being truly poor, but when is Vancouver going to figure out that wealth, in many of its guises, can actually be quite boring?

  24. My friends don’t believe there’s a bubble. Only time will tell. But if interest rates rise, while the market continues to be sluggish, and prices slowly drop, this will put pressure on those speculators who drove up these prices to begin with. In my Richmond neighbourhood, i have seen asking prices drop $50k to $100k and still no takers. Many brand new homes listed for $1.7 million still unsold a year later. I’m sure those developers are feeling the pinch. We sold our home to someone intent on tearing it down. Instead, it’s been sitting there untouched and unrented for 9 months. Ouch!

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