“A beautiful Belfast home, in the equivalent of 1st Shaughnessy, bought at their RE peak in 2007 for £3.5 million, has now sold for £800K, almost 80%-off. The market didn’t suffer any significant economic shocks. Rates & unemployment didn’t skyrocket. They didn’t build more land. Sentiment just changed and the prices fell and fell.”


“My old high school pal works at a Belfast, Northern Ireland newspaper – The News Letter – I believe it is the world’s oldest, continuously published paper. Unlike Vancouver journalists he regularly wrote “this is a bubble” articles during the incredible real estate boom that Belfast endured. It was at LEAST as extreme as the 2000-2012 Vancouver bubble period. Their bubble burst in 2007 and real estate has been a taboo topic at middle-class dinner parties ever since. I must say, my return visits have been much more enjoyable since people there stopped crowing about their real estate winnings.

Anyway, his latest of many articles highlights the plight of the owner of a beautiful home bought at the peak in 2007 for £3.5m. The area is the equivalent of 1st Shaughnessy. It has just sold for £800,000, or [almost] 80%-off. I must stress that 80% is not indicative of the average market which ONLY fell about 55% from peak.

Why this is relevant is that the Northern Ireland market didn’t suffer any significant economic shocks. Rates didn’t skyrocket, neither did unemployment, there is a huge percentage of people there who have safe government jobs with pensions. They didn’t build more land; and for those who don’t know the geography, Belfast is surrounded by the Irish Sea and an agriculture land reserve where there isn’t sea.

Sentiment just changed and the prices fell and fell. I will also add that my friend was considered a kook when he quoted the rare economist who called for a massive price correction. People just couldn’t conceive of such an outcome.

If you’re interested in the article it’s available here.”

Ulsterman at VCI 29 Mar 2013 9:38pm

A story for Vancouver RE market observers that requires no commentary.
– vreaa

47 responses to ““A beautiful Belfast home, in the equivalent of 1st Shaughnessy, bought at their RE peak in 2007 for £3.5 million, has now sold for £800K, almost 80%-off. The market didn’t suffer any significant economic shocks. Rates & unemployment didn’t skyrocket. They didn’t build more land. Sentiment just changed and the prices fell and fell.”

  1. If anyone here is hoping for a Ireland style collapse, it’s likely not going to happen. We may have pockets of sharp declines, but rates would need to skyrocket fir that to happen. Last I checked, the Rebgv us at 7 moi, not even close to crashing. A correction is in place, not a crash! Don’t have high expectations like this, otherwise you’ll be dissappointed.

    • And why not? MOI is at 7 (buyer territory) during the peak selling season and will only go up from now on. We have all the same ingredients here to have a Belfast style crash. Rates didn’t go up there either…

      • Peter North

        Look, I sold in 2010 when everyone here said to sell. It was the worded mistake ever!!! If I sold today, I would of made another 130k plus I don’t have to move for the second time. I listened to you doomers and paid the piper for it. It doesn’t feel too good if you know what I’m sayin’.

      • pricedoutfornow

        I too don’t see any reason why prices in Vancouver wouldn’t go down so dramatically. All it would take would be for residents (and non-residents, foreign buyers) to wake up, look around at our mouldy, ugly houses and realize “WTF, why would I pay $800k for that falling-down piece of crap in a city where it rains constantly from October to March and I can’t earn any more income than I would in another city in Canada where house prices are 1/3rd what they are here?” Just people coming to their senses is all I think it would take.

      • So you pocketed how much on your sale? I’m gonna guess $1,000,000? You could have put that in a very conservative portfolio of 40/40/20 stocks/bonds/cash, UNLEVERAGED, and made more then your 130K in 3 years.

        Your treating your home as an investment, but it is clear from a few things you have said that you have little investment experience or knowledge.

      • Regarding MOI:
        I’ve voiced this opinion before, but I don’t think that the apparent linear relationship between MOI and price change need necessarily hold through a substantial downdraft. We may end up with a situation where a little more MOI results in a lot more down pressure on prices (the curve may ‘go sigmoid’.. some kind of threshold effect may occur.

      • Regarding ‘Peter North’:
        Peter, nobody times a top (or a bottom).
        You only have to get it vaguely right to do fine.
        Be sure to come back and blame everybody here when the price of your ex-property drops to $130K below where you sold it (and 200K and 300K etc).

      • The Poster Formerly Known As Anonymous

        YVR analyst pointed out some time ago that MOI trends seasonally, and feb-march are the low points. He/she also said that if MOI does not get below 6 this march, the market is toast… it will hit double digit highs later in the year. Phrased another way, the bulls NEED for prices to increase this spring, not just stay flat, or the rest of the year will see another big dip of 7-10%.

        But keep beating on that MOI 7 stat, bulls. Just another figure quoted out of context; the usual Van RE pumper’s MO.

      • The Poster Formerly Known As Anonymous

        oh, it actually looks like they are talking about it today on VCI! I didn’t know; just remembered the comments from several weeks ago. Here is a handy chart by another poster:


      • ” I listened to you doomers and paid the piper for it”

        And here you are blaming us, a bunch of anonymous spineless bloggers, for your scewup? I’ve heard everything.

        The only reasonable thing I can conclude is that you’re a troll.

      • I second that. (troll)

        Lack of actual detail. Easy story. Plus it’s your own damn decision — it’s not like anonymous spineless blogging bears pointed a gun to your head. Man up to your own decisions.

      • Clearly, Peter North is trolling. But seriously, part of what kind of icks me out about this bubble is that people feel some sort of entitlement to uncommonly large RE profits and have little temper tantrums on perceived returns. Makes me want to say “Get a job, you bum” – and that is not usually something that springs to mind.
        ( Plus, since 2010, quite a number of used condos in this city have seen lower assessments. So even if people took this blog’s advice, the timing would have been good for those owners.)

    • Vancouver Hipster


      Hockey helps Canada’s economy grow again in January


    • Cyril Tourneur

      No Ireland style crash here, I agree. Our crash will be 100% Canadian style, eh!

  2. I think we will not have a US-style crash, Ireland style crash, Spain style crash, nor a Portuguese, Greek, French, or Italian style crash. What we will have is a Canadian style collapse, and we here in Vancouver will have our very own Vancouver style crash, unique only to us.

  3. A bubble is a bubble, no substance, just hot air. Doesn’t matter what “style” it is. The whole idea of style just detracts from the fact that if a person paid too much they are going to be financially raped. The “style” is going to be a lot of very sad nillionaires no longer contributing to the economy, dragging the rest of what economy remains lower in what ever “style” they are forced to.

  4. Poor Peter North.. He shot his wad too early. I thought you were the king of money shots.if only you could have timed it down to the minute.

  5. I have a friend from Belfast, we were just talking about her homeland the other day, not about RE but just the country in general. The whole country is only about the size of the Lower mainland out to Abbotsford, talk about land constraints. The topic of our conversation was the growing unrest, the housing crash has led to a larger economic malaise that has brought the vandals back out. All the hooligans that were finding construction work etc. are back on the streets engaging in “recreational rioting” to quote the local media.

  6. Yesterday two old friends, J & M, from Victoria, mid 50’s, both very bright and mid level bureaucrats at separate provincial government departments came to visit us in the Comox Valley. At one point the topic moved to real estate. I began to say that the market was dead here when J interjected that it is the same in Victoria and that it would remain so for a very long time. I was surprised by her response and asked how she knew this because I know that neither of them reads any of the real estate bear blogs. Their answer was fascinating and should scare the pants off the real estate crowd.

    First, both live in Townhouses and J is the head of her strata council (46 units). She said that last year about 7 units sold. This year one of the most desireable units was listed and got no inquiries at all. It was pulled. In addition one of the vendors of a unit last year did want to buy back in but could only do so with a 0/40 mortgage, which is of course no longer available. She had no idea what he had done with the equity from the sale.

    Second both pointed out that their incomes have remained largely static for years but that housing prices and strata fees (not to mention special assessments) have increased relentlessly to the point where they felt prices are ridiculous relative to income. J was of the opinion that the townhouse unit in which she lives has about $60K of material in it and yet these units were until recently selling for $300k plus. She felt that the spread between material cost and selling price was indefensible. J also pointed out that despite being mortgage free her strata fees and hydro per month were in excess of $500, the better part of a mortgage payment not that long ago.

    Third J said that the price of real estate would be down basically forever because our generation had had few children, overall. As a result who was going to buy our houses when we depart for the great hereafter?

    Fourth both believe that the potential sales price of their own units have decreased substantially in the past year and will probably continue to decrease but intend to stay put. They do not see any point for example in selling and then renting despite knowing that prices are inflated vis a vis rent.

    Fifth both pointed out that they work at very large institutions and that they, of course, interact with many of their fellow employees. One of the constant topics is real estate and these days the virtual impossibility of finding buyers for the units that their fellow employees have for sale. They report that the view of the majority of their fellow employees is similar to their own – real estate is dead.

    Finally, and very ironically, at least for most of us at this site, both get most of their news from CBC and CTV. Their overall impression of reports on both channels was that the real estate market is collapsing.

    • 4SlicesofCheese

      It is good to see some people get it on their own, however they are on the island where the downturn is more pronounced. In the LM,I still find the overall opinions to be bullish, even though I find more and more bearish people everyday.

      This post is from my Uncle, one of the smartest people I know.

      “This is the decade that power and money shifts to the Pacific. The local economy will boom. Land is in short supply. Don’t bet on a big drop. Perhaps 5 – 10 %, but then it will come roaring back with a vengence.Once you’ve sold it will become more difficult to get back in. My suggestion is rent out your house and rent a modest condo for yourself. Become a landlord.”

      It looks like it came from a talking point memo from the RE people.

    • Thanks, Ford, for the interesting anecdote.
      It does seem that RE market developments are now a little more apparent to those on the Island.

  7. 4SlicesofCheese

    There are no rich Chinese in Belfast, as BLM would say.

  8. Speaking of, “they ain’t makin’ no more land”… AnEasterCautionaryTale… of CastlesOnTheSand… [#CouldBeWorse]

    “The homes are certainly in danger. [And] there’s a bigger issue that no one seems to focus on: There’s no beach right now that anyone can enjoy!” – Kenneth A. Ehrlich

    [LAT] – On Broad Beach, slim progress on restoring sand

    …”In recent years, punishing winter storms and high tides have swept away much of the 1.1-mile oceanfront lined with the multimillion-dollar getaways of such notables as Steven Spielberg, Dustin Hoffman, Pierce Brosnan and businessman-philanthropist Patrick Soon-Shiong.

    To protect their seaside showplaces, residents have piled sandbags and built a massive emergency rock wall. Now, under orders from state coastal officials, they are fighting against time to seek a more permanent solution — permanent being relative in an era of rising seas and extreme weather.

    They have spent millions of dollars on attorneys, engineers and environmental consultants who have scoured the coast from Mexico to Canada for a mountain of sand that could be dredged and moved to restore the beach to its original 100-foot to 150-foot width.’…


    [NoteToEd: I would have run that as, “CompanyTown: Life’sNoLongerABeach”. By the way, just between the two of us… Cher’s no dumby, her Malibu’Crib’ CrestsTheCliffs.]

  9. There is a time bomb coming with regards to strata fees. My partner suggested downsizing to a condo and cashing in the house’s equity. I looked at the maintenance fees charged by nicer condos with 2 bedrooms and quickly put an end to that idea. It’s cheaper to be in a house! I can’t imagine what the new depreciation reports are going to add to the toxic mix.

  10. Interesting article and the comments are by and large very informative.

    The whole ” condo” thing screws with the numbers though. Surely a strata unit cannot be mentioned in the same sentence as single family homes.

    ” Condos” appear to only be a long term debt obligation, with an un-known upside cost. Where as “dirt” really is a different animal.

    Thoughts and thanks!

    • “Dirt” is a different animal. Unfortunately the house on top of it still has considerable un-known costs as well.

      All repairs are the owners sole responsibility, no sharing costs with other owners. If a house owner actually saved the comparable amount a condo owner pays in strata fees each month it’s probably close to a wash.

      Don’t get me wrong, I would much rather own a house compared to a condo or townhouse, but all are going to take a hit pretty soon.

  11. Speaking of, “sentiment just changed”… This, HotOffTheWire from Beijing and Shanghai…

    “This will help calm people’s panic about home prices.” – Yi Xianrong, Beijing-based researcher, Chinese Academy of Social Sciences

    [BloomBerg] – Beijing, Shanghai Add to Home Curbs as China Acts to Cool Market

    …”China’s largest cities, including Beijing and Shanghai, tightened rules on home purchases after the nation asked local governments to step up efforts to cool the property market.

    Beijing, the capital, banned single-person households from buying more than one residence while Shanghai prohibited banks from giving credit to third-home buyers, according to the local administration websites. The two cities will also enforce a 20 percent tax on capital gains from property sales.”…


    [NoteToEd: No BankCredit for ThirdHomeBuyers! What would Amanda Lee say!?? Ya know, I’m beginning to like those WilyNewAppartichiks in the ForbiddenCity more with each passing week. One wonders whether our Apparatcichiks will ever deign to BarbecueAChicken to DisciplineTheMonkey.]

    • Ralph Cramdown

      So the local bank pays savers a rate far below inflation, and won’t lend money to buyers of second homes. I wonder if those enterprising folk will find a solution…

      • It pains me to utter this, RC… But if I may be so bold, dare I say – we can only ‘speculate’?

    • Nem, stop gossiping about my hard-working sister, Amanda!!!

      • Vancouver Hipster

        Love your Gravatar pic. man.

      • Funny you should say that, “All Hail Kabloona!”… as it happens… I have a treat for you [and DearReaders, too – natch]…


        [NoteToEd: NemOriginal. BarcelonaStyle. And, I can reliably report… more than a few ‘Chickens’ were ‘barbecued’ on that expedition. Never mind. TheWarIsWon… one ‘Fricassee’ at a time. Personally, I’ve always preferred BBQ to stews, though. Either way, TheMonkeys were Well&TrulyDisciplined.]

  12. Stop sulking Farmer!

    [NoteToEd: “It’s for fun…”]

  13. [#StrangeButTrueMondayMorningZen]

    “We’re hoping the vehicle, once we get it, will serve as an initial conversation point for our officers and young people around B.C.” – Sgt. Lindsay Houghton, GendarmerieRoyaleDuAbbotsford

    [CBC] – Realtor™ cars to be used by B.C. police: A Hummer H2 is the latest edition to the Abbotsford Police Squad

    …”Police in British Columbia will soon be driving flashy vehicles that once belonged to Realtors™ or Mortgage Brokers™ to warn young people about organized crime.

    The Civil Forfeiture Office is taking applications from law enforcement agencies to use seized vehicles for outreach programs.

    The Combined Forces Special Enforcement Unit — an integrated police unit that specializes in organized crime — recently had their application approved for a seized car.

    …”The goal is youth and young adults will want to see the vehicle and that’s where we’ll begin to chat and educate them – accordingly, we’ve tailored our programme slogans [“We’ll Catch You! Ridin’ Dirty” and “EasyMoney Can Get You HardTime”] to that demographic.”…


    [NoteToEd: I blame the EasterBunny.]

    • [*FurtherNote: as regards the original inspiration for the ProgramSlogan, “We’ll Catch You!” – there is absolutely no truth to the spurious rumours alluding to IanWatt’sDashCam recordings of UnoccupiedClientPremises to publicise his DirtyRidin’]

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