The federal government, concerned about sky-high real estate prices in Vancouver and Toronto, announced Friday it will make new buyers come up with a heftier down payment starting in mid-February.
The move was part of a three-pronged effort aimed at lowering risks in the housing market, though Finance Minister Bill Morneau rejected the suggestion that Ottawa fears a real estate “bubble” in the two cities.
“We’re not talking about bubbles here,” he told reporters. …
“We are talking about ensuring that Canadians take the right approach to investing in a home. It’s to protect the market for the existing homeowners and it’s to protect new home buyers as well, so they have the appropriate amount of equity in their home.”
…
Morneau was asked by The Vancouver Sun why the federal government is targeting first-time buyers in cities like Vancouver, while doing nothing to deal with the alleged impact of speculators and foreign buyers driving up prices.
“You know, we are taking measured approaches to make sure we protect Canadians,” he replied.
“We are looking at how we can ensure the Canadians who already have homes recognize there is a stable housing market, and those people that are aspiring to have homes can be assured that their biggest financial investment is in a stable and effective market.”
…
Details of mortgage changes: [Effective February 15 of 2016, the minimum down payment for new Canada Mortgage and Housing Corp.-insured mortgages will jump from five to 10 per cent – though that extra five per cent will apply only to home purchase prices exceeding $500,000. In other words, the current minimum payment on a $500,000 house would be $25,000. If the house costs $600,000 a 10 per cent charge is levied only on the extra $100,000, bringing the minimum payment to $35,000.The new rule will not apply to Canadians who already hold mortgages, and doesn’t impact sales of properties of $1 million or more because they already require 20-per-cent down payments. Morneau, in a statement to reporters, made clear his concern in targeting homes in the $500,000-$1 million range was Vancouver and Toronto.]
“We are looking at how we can ensure the Canadians who already have homes recognize there is a stable housing market.”
Huh?
Why does that even come up?
What’s with “protecting the market for the existing homeowners”?
Doesn’t a sound market inherently protect its participants?
If we really aren’t “talking about bubbles”, if prices really are driven by fundamentals, if there really is a “stable housing market” in Vancouver, why the need for any of these reassurances?
Related points:
How many years has it been since Vancouver RE buyers have “taken the right approach to investing in a home”?
And, who can blame them? – how many years has it been since our government sensibly priced the risk of borrowing money?
-vreaa.
ADDENDUM:
“It’s a little disingenuous,” said Tom Davidoff at UBC Sauder School of Business. “They really mean they want to protect themselves” from a potential housing market meltdown spurred by imprudent buyers.
“If you have to put 10 per cent down on a house over $500,000, that doesn’t sound like the most crazy thing I’ve ever heard,” Davidoff said. “If people are like lemmings buying houses, when interest rates go up it protects them from jumping off the cliff.”
But that doesn’t place housing more in reach of home buyers or renters, Davidoff notes.
“It makes me nuts that nobody’s acting on the more obvious issue — that there’s an affordability problem. Trudeau should really have to answer for his lack of affordability policy. I’m a little mind-boggled by the lack of leadership there.”
– The Tyee, 12 Dec 2015
Vancouver Real Estate Anecdote Archive 
But, vreaa, wait. Don’t you know? Down payments don’t matter. Interest rates don’t either. Fundamentals are irrelevant. There are Chinese pig farmers coming! Even thought they’re millionaires, they’re financially illiterate. They don’t care about value. And even though Vancouver represents 0.02% of the world’s population, it’s the only place they’ll consider coming.
So, buy a westside house, and you’ll make money–guaranteed! Isn’t this grand?
P.S. Thank me later for my deep analysis.
And how do you use the word value if renting wasn’t an option? Or are you assuming it always is? Cause you know, for new immigrants being kicked out of your house on 2 months notice is such a great option. Forget that, last time we made a move and the net result is that our current property outperformed the previous one by 300k. Guess what, my wife has not stopped complaining since about the move. Suffice to say I am never doing that again no matter how much I could make. So no, renting is not an option for anyone who wants stability.
Keep on renting money from the bank, if that floats your boat.
Of course it does. Because whereas one I can control myself, one I can’t. My ability to make money is controllable by my own capabilities. My ability to not get kicked out is not. Think about it this way, whether I make 100K or 500K is not contingent on others. But if I rent, I have no control over the most important part of my life, my home.
Owning is not a luxury, it is a neccessity because I can do whatever it is I want to my place. You really think owing a few hundred grand to the bank is that bad? That’s only bad if you can’t make that money. Many of these people can. Do you believe the majority of millionaires rent or do they own? Do you think it is merely a value proposition to them?
You can control interest rates, can you? I have news for you. The cost of carrying a mortgage has nowhere to go but up.
By the way, the whole “getting kicked out” thing is such a sleazy sales pitch. Plays nicely on people’s fears, but isn’t especially common in reality.
I’ve rented for 20 years in various countries around the world. Not once have I been kicked out. Not once. Instead, I’ve enjoyed total mobility. Repairs? Just a phone call away. Insurance and property taxes? Not my problem. Meanwhile, my capital hasn’t been tied up in a mediocre investment, it’s been growing in a diversified, liquid portfolio.
You are right I can’t control interest rates. But I can control my ability to pay them. Like I said, I can control how much money I make. Again, how many millionaires do you know who actually rent. I would be willing to bet not a lot.
So you got lucky, haven’t been kicked out. You obviously travel a lot so stability is not a factor to you. Unfortunately, it is for a lot of people. The threat of getting kicked out, the lack of control is why we own. You can’t put a price on that.
pffft! … http://tinyurl.com/ohwm4nb
I don’t see Vancouver as a sound market that protects its participants. It is, like most places, ruled by economic despots. Call them robber barons, plutocrats, CEO’s, billionaires, queens, or oligarchs – there are many euphemisms.
Some tyrants like to put up statues of themselves. Others pollute our visual environment with billboards with their names, or the names of their crappy products on them. One billionaire with in excess of 10,000 wage slaves robs people’s lives of dignity and, cumulatively, their life’s blood. Without hope for economic betterment; dressed in slave uniforms – whether they’re handing out garbage ad rags at Skytrain; punching a cash register, or selling cars – their lives are shortened day to day and to the final time clock in the sky. Without hope and security we die younger. They kill us.
It’s not just about real estate.
I love what Anthony Bourdain said about the “royals” – that their heads should be impaled on sticks while people throw excrement at them. The greedy don’t want to share.
And, predictably, here’s Muir, once again deflecting, and touting Vancouver’s uniqueness and immunity.
http://www.vancouversun.com/business/real-estate/experts+mortgage+rules+will+affect+only+buyers/11583924/story.html?__lsa=514f-026c
Do you think this measure will do anything to our market? Do you seriously believe that something that is already required by most banks is going to put even a slight dent on this market?
Agreed: the mortgage changes won’t make a shred of difference to the Vancouver market. Way too subtle a change.
Market forces alone will implode the market. But this isn’t going to help it.
Why should it be a surprise a populist government protects the interests of the populace that elected them.
“protects the interests of the populace” is a highly subjective affirmation.
I would be surprised if any action to be taken was thought to be viewed as harming the middle class.
The issue is not whether a policy is thought to be harmful, but whether it IS harmful. A lot of bad policies are well-meaning.
Actually I disagree. If the government wanted to protect home owners, just bring back the old iip and see where our value would be. Hell, just process the thousands that were in the queue when they cancelled the program and see where our home prices would be.
You have totally misunderstood the intention behind this policy, as faulty as it may be. The government is not trying to increase prices, it’s trying to lower them.
That’s actually what I was trying to say. I don’t believe that government is trying to raise prices. If they really wanted to, they can just bring iip back and stop forcing people to go through loopholes to come here.
way, way too late for any preventatives now – it’s just cya. when the populist govt thinks that is necessary, means they believe some shtf is near … the extraordinary interventions have stopped working: boj, boc, eu … fed loses all confidence if they don’t tighten. if they try with this much leverage and fragility, could become agent of the implosion themselves … completely boxed in and of their own doing
Agree this is cya stuff.
It’s a ponzi scheme… propping up RE and almost the entire Vancouver economy for the last 10+ years.
Brian’s right-> like all ponzi schemes, the only way of keeping it inflated is an infinite amount of incoming money.
Vreaa, you’ve misread Brian. He by no means sees Vancouver as a Ponzi scheme. In his world, westside detached still represents good value.
Actually wrong answer. I think that for any local vancouverite, the value differences between Vancouver and other cities like Seattle does not justify the difference in value. But again, value proposition is different to each person, you still haven’t shown why we should only use rent to ownership as the definition of the word “value” because most people don’t see the home as an investment. To any Chinese person with money who wishes to immigrate to the west, Vancouver’s value proposition is as good as it gets. It has a low integration curve. You can’t buy that with money. So, as long as there is chinese who want to create a second home for themselves in the west, there will be a large amount of money that will flow to Vancouver, whether you want to call it a ponzi scheme I frankly don’t care. It’s been going on for a decade now. I have friends who recently immigrated here from China who feels completely comfortable around town without knowing a word of English. Try doing that anywhere else in the western world.
“Vancouver’s value proposition is as good as it gets.”
This says everything you need to know about how screwed Vancouver RE is.
El Ninja -> I understand Brian, just playfully suggesting that his very argument implies ponzi scheme … (which I know he is adamantly not seeing here..)
Sorry, perhaps too obscure for the web.
The protection isn’t a surprise; the degree of hypocrisy is vaguely surprising.
I’m not surprised in the slightest. Not one party was willing to venture anywhere near the housing market morass in any substantial way during the election.
All efforts will be made to convince homeowners that their choice of homeownership sponsored heavily by the government will continue to be sponsored. It’s the housing bubble dilemma, nobody has the political capital to hit the brakes.
Yeah, okay, agree; not at all surprising.
‘The House’ on CBC Saturday a.m. was dealing with the ways in which the elected federal government are about to break all of their campaign promises re the budget.
Even the fact that the populace puts up with all this is no longer surprising.
I’m surprised The House didn’t ask Morneau about why their upper class tax hike projections were falling so short, namely weren’t they going to crack down on tax avoidance schemes. Now crickets on that front.
Morneau did mention ‘income growth’ in the same breath as ‘housing price growth’ so you know that he knows that the Vancouver math is outrageous.
Yes, he lives in a other market with issues. I’m sure he has connections who are telling him stories. I wonder what they are really doing about it. Probably not just the DP, MBS, and OSFI thing.
“…the Bank of Canada’s chief finally said what we had been patiently waiting for over the past several months: admission that Europe’s experiment with negative rates is about to cross the Atlantic. From Market News:
BOC POLOZ: NOW SEES EFFECTIVE LOWER BOUND FOR POLICY RATE AROUND -0.5%
BOC POLOZ: CANADN FIN MKTS COULD FUNCTION IN A NEG INT RATE ENVRIONMNT
BOC POLOZ: ‘SHOULD THE NEED ARISE’ FOR UNCONVENTIONAL MONETARY POLICY, ‘WE’LL BE READY’
That, as they say, is “forward guidance” of what is coming. ”
– from zerohedge, 8 Dec 2015
It’s a cultural thing, some have difficulty to call a spade a spade, much less to take a shot at a bull’s eye.
To date underground money transfers service still is being advertised online on chinese-language sites similar to Kijiji and Craiglist. C$ or US$ is collected in Canadian cities, payment in RMB collected in Chin’s cities.
One of the “Methods of bypassing China’s currency controls include:
* getting an overseas mortgage based on savings held within China”
http://tinyurl.com/qgmqwn8
‘Biggest underground bank’ in China busted – The case highlights the nation’s struggle to control capital outflows that have helped to send real estate prices soaring from Vancouver to Sydney
– even when Chinese citizens are officially limited to converting US$50,000 of yuan a year.
http://tinyurl.com/htfomus
In another news report dated today, an L.A. lawyer said that two months ago his client had US$2 million cash on him and did not declare the amount to the airport customs. He later helped his client to prove that the money was withdrawn from a H.K. bank.
http://tinyurl.com/qgmqwn8
Interesting that all reputable news agencies reported on “China busted a US$64 Billion Underground Bank”, without mentioning that this discovery was triggered by a fraud case of a mere HK$8 Million.
A retired octogenarian from HK decided to sell his factory in Shenzhen, but unsure of how to remit the funds he consulted a Shenzhen bank manager. The latter assured him No Problem, the cost would only be RMB 2 Million paid in advance. Six months later, the factory was sold for RMB 63,370,000.. The sum eventually was remitted to its HK owner but less the missing 8 million, and hence a police report was filed.
I grew up on the east coast. I started getting depressed about the coming winter as early as August and when it would finally arrive I’d watch the weather report. “Mon pays, c’est l’hiver,” goes the great Vigneault song – but I’m not a Quebecker. Where to live in Canada if you hate winter? If you’re a city dweller, it’s Vancouver or Victoria. Multiply that by the multitude freezing their asses off east of the Rockies. I left 23 years ago and have never been back. Speculators and immigrants from other parts of the world are just icing on the cake.
If you’re a Canadian who has accumulated a decent amount of money, unless you enjoy cabin fever, or like risking a broken hip, you’re moving this way – welcome to the world of spec houses. It’s a crazy situation. Normally, the price of land is near 20% of a build. Here it’s more than half. So they build these shitboxes with monster basements for revenue. The builder wants max cash for his shitbox, so he pushes for the basement and the buyer thinks he’s going to get all this free money. The reality is that paying for that basement will take years – and it sucks to have tenants. They hate you because you’re literally lording it over them, and you hate them except for the rent.
What people don’t realize about these hideous basement houses is that they’re losing valuable above ground space. All they hear is that you can build .6 of the lot above ground, or .7 with a basement. But when you calculate that basement footage, you’re losing, if memory serves me correctly, about 400 square feet above ground on a standard-size lot. Now, unless you’re a wolf spider (saw one scooting through the living room once – thought it was a mouse – they are fast and hard to kill), or a prairie dog, you and everyone else values above ground footage massively more than than underground. And it’s way cheaper to build. And you’re never going to have water coming in. And you can sell/rent to variously abled people. You can charge more. I doubt that one out of a hundred new-builds is wheelchair accessible.
But the new-builds always have fireplaces and freakin’ granite tops. Chinese love those fireplaces. They store their shoes in them.
Dude, you are escaping winter, do you know that there are three things in China that will almost certainly kill you? Air, water, and food. So unless someone can solve China’s problem in these three areas, get used to wealthy chinese sending their families abroad. I know that there is no way in hell I would let my children live in China even though I was born there. Just the air and water alone would shorten their life span. I was in Beijing last year for two weeks and let’s just say that I had enough of it and couldn’t get back to Vancouver fast enough. The smog takes quite a bit to get used to. Thank god there are some coastal cities that aren’t as bad.
Brian Chen | 13 December 2015 at 12:15 am
“I know that there is no way in hell I would let my children live in China even though I was born there.
Is this “Brian Chen” the same poster as that “Brian”?
Just to be sure that I am not getting contradicting information here.
Yep, same. Why, you think I enjoy living in China? I like Chinese money but not living there at all. I don’t like living in smog.
One of my Mainlander co-workers likes to point out: You know those post-apocalyptic wastelands with poisoned food, water, and air with ash falling from the sky and destitute people? Yeah, that’s a lot of China right now. Wouldn’t you do just about anything to get out of there and to a place like Vancouver?
how many post-apocalyptic wastelands does it take to put fuel in a RE bulb bowl?
You didn’t let the smog cloud your thinking. Other than smog, many others escape from a country with weak rule of law and a lack of governance. It was quite a spectacle when Lai Changxing lived in the penthouse at Crystal Mall. He would greet everyone and anyone he met on his daily rounds. No one would walk on the alleyway he passed by, because it was full of saliva spitted on.
I don’t think that everyone shares my opinion; I am sure there are a lot of people who are perfectly happy being where they are. But as people’s awareness of just how much better it is abroad in terms of the fundamentals of life, I think there will be more desire to leave. Lai’s case is a great advertisement to all the criminals of china how having money and being in Canada could prolong your freedom by decades. I can’t believe that our system managed to harbor him this long given the mountains of evidence that China had on this guy.
In reality, there is actually a “race” to get this money that is fleeing china every year. Some places clearly don’t want it. Look at Australia for example, they have taken severe steps to restrict foreign money into their markets this year. To increase supply, they are trying to force foreigners who illegally bought houses under the restrictions to sale. This seems to be working as Sydney and Melbourne’s markets are starting to cool. UK has talked about similar controls, US is starting to get alarmed. We on the other hand, seems to not give a shit at all. Hell, Hong Kong is more concerned about the effect of Chinese money on its markets and it is part of China. But portugal on the other hand, seems to want to get as much of it as they can get. Only issue is that there is little Chinese in Lisbon or Porto or else the deal they give to investor immigrants is just ridiculous.
Seriously though, I have to give Vancouver brokerages some credit. They have figured out after this many years that all it takes is a bit more marketing push in China. Hence why they finally have decided to market in the luxury property show in Shanghai our detached listings when there is clearly appetite for it shown through recent surveys. Hell, if no one else wants their money, we seem to crave as much as we can get.
There has been some recent uproar over the fact that some realtors are taking detached listings to the luxury property showcase in shanghai. Turned out that they did a survey last year and we are number four on the list of preferences from the people going to the show. Ranking went New York, London, Melbourne, Vancouver. Now that Australia has restricted foreign ownership, UK is talking about doing the same, we might rocket up that list. Btw, we are higher than cities like Paris, LA, San Fran, go figure. I am sure it is all a coincidence and the chinese will soon realize that we do not belong on that list cause we are supposed to be in the league of seattle, portland. Magically, the fact that we have been one of the top destinations for them means nothing even though it has been happening for about a decade.
Just to get back to the anecdote part of vreaa – the gossip, as it were, of this site – which we tend to find most interesting.
2004 was my year of the monkey and I had serious house lust – even though I was single. I loathed renting. Early in the year I made 3 offers on properties – all accepted. I backed out of all three. One was a house in Maple Ridge (first and only time I visited that town); one was a shit condo in New West; another was in East Van – a former grow-op that stank because the power had been shut off and everything was rotting. Could have had that house for 335K. But I chickened out. Financing would have been dicey and I was out of my depth to get it up to code.
Why was I all over the map? The market was hot at the beginning of the year and I was taking pot shots at whatever I could.
By the middle of 2004 it looked like the possibility of my getting into the market was over. I had blown my chances. The market had heated up.
By the fall of 2004 there was another development. I was no longer single and she was six months pregnant. The game was afoot. But I couldn’t get through to agents – everything was sold, or too expensive. But there was a slight dip in the market.
We wound up on an avenue at the top of a crest in Renfrew Heights – an area I dismissed as being unaffordable. There was an old house for sale that I called about. The agent told me the price, which was not insane, but high for me. I did not ask to view.
I don’t know why, but I decided to drive around to the back of the property. The owner happened to be there – on his way out. We chatted. He said they’d lived there 40 years and that he’d put a lot of money into the place – raised 4 kids. That sounded great. The more we talked, the more I wanted it, and told him so. Then he said the house was sold. Shit. But his wife had come out and overheard this. She said the sale would actually be confirmed the next day.
Because of that, the next day I called the agent again. He thought I was the old homeowner asking about confirmation of the sale. He said the sale had fallen through. I let him quack on for awhile and then told him I wasn’t the old guy and that I wanted to make an offer. He offered to take me over. I said that wouldn’t be necessary. I was going to offer a few K under ask, while prepared to pay full whack, but he disclosed a price range that prompted me to offer 17K under. “That’ll work,” he said. I drove over to his office, signed the offer, and it was accepted without counter with a one week subject removal. That was a struggle.
The bank threw a couple of wrenches – one just the day before expiry of the offer – they wanted proof that there was no financial relationship with my ex-wife. They also wanted a copy of the divorce papers. WTF. Fortunately, she was in town and still had the papers – she had almost thrown them out. And she was willing to go with me to a lawyer who typed out what I had written – cost me 20 bucks. Managed to shut the bank up.
A day later there was a sold sticker on the sign and we had a long long long three month wait until we could take possession.
Note: my offer was under lot value. Why hadn’t it sold to someone else? Why not to a builder? It was the perfect confluence of the dip in the market; a low commission; and a perfectly slimy agent who was worried his listing would expire. The total commission on the property was 6K. If a “buyer’s” agent had come in with an offer, that amount would have been split 4 ways – between two brokerages and two agents – only $1,500. each. That’s peanuts. So, if a “buyer’s” agent would call, the “lister” would say it was under contract, hoping that in the interim someone unrepresented would spot the for sale sign and make an offer. That was me.
See original post for Addendum quoting Tom Davidoff.
Hey, we’re a bargain!
http://www.huffingtonpost.ca/ben-myers/toronto-vancouver-real-estate_b_8810878.html
This is essentially what I have been saying but El Ninja feels that numbeo is only a croatian website that knows nothing. But apparently its stats are pretty accurate.
Now there actually is a valid counter point. If you use what this article uses to value assets then it’s pretty difficult to value because whereas the rent of say New York supports its valuations, rent of Vancouver may not. However, this assumes that renting vs owning does not have much of a premium which I think is a terrible assumption. The more money you have, the less you want to rent so the ownership premium goes higher. Of course, there is little ways of valuing it based on this. For me, it’s pretty simple, you are a global shopper of second home for yourself, if you feel Vancouver is a good choice, how much does its price compare to your other choices. If it is cheap, you will buy regardless of the rental alternative because that is not an option to you, especially if you are rich.
It’s apples and oranges. You’re comparing first-tier cities like Paris, London, New York, and San Francisco, to a second-tier city whose economic, cultural, and other attractions are at best comparable to places like Seattle and Portland. It’s like saying, “hey, this Chevy Sprint is pretty cheap compared to that Lexus.”
Anything to feed your delusion, though…
And, yes, I do question the data of a solitary Croat nerd over that of The Economist, Morningstar, the IMF, and other major institutions that have analyzed Canadian RE in the global context. Besides, he’s not actually IN Vancouver, so he can’t have any insight, can he Brian?
Errr… in case you haven’t bothered reading, Numbeo doesn’t pose any comments, it merely estimates numbers. To anyone who has actually been to those places, the numbers look about correct. Besides, it is a crowdfunded source. Why, do you have reason to believe that his numbers are off? And also, he isn’t from Vancouver, but he also poses no opinion on Vancouver housing.
Love your Apple to Oranges comparison. Sure, you can keep looking at it this way, that’s your opinion. I have been to all those cities with the exception of Mumbai, can’t say that I prefer many of them over Vancouver maybe except San Fran. I don’t think many people in China think of Vancouver as Chevy Sprint considering we are one of their favorite places in North America. Seattle on the other hand…. that might be your chevy sprint. But whatever works for you. 2 years and 11 monthes. Oh and single family homes also went up since your last prediction… so a bit further to fall to where you need to go to be correct now.
Vreaa… since El Ninja has finally put some semblance of a prediction, care to take another shot at a prediction? We can sit here and debate all we want, but doesn’t mean anything without some solid predictions. Then again, there are a lot of people here who just talk…
Just to address renting vs owning – and investing the difference: that assumes the discipline, knowledge, and timing to invest. It also assumes that you can find a pleasant place to rent. That has not been my experience. At the very least, with owning, you can get a mortgage triple or more of what you have as a downstroke, and, in a rising market, while it gives you a place to live, this leverage gives you an astounding cash on cash return, while paying down the debt. Of course, in a downturn you are vulnerable, but you simply shouldn’t overextend.
I’d also add that in some ways it’s better to rent than buy into a strata situation – there can be some really fascistic mini-governments in this arrangement. At least in renting you have the government on your side. There are good reasons why detached homes are at such a premium. I’d rather live in a shack in the woods than a condo.
And I’m disturbed by the inferiority complex that residents of this city have compared to the big global players. You couldn’t pay me to live in New York or London. I’d hate Tokyo. Beijing or Moscow or Mumbai? Major shitholes. I like the sidebar vreaa has on what is good about Vancouver – for me, it’s kind of like what Leonard Cohen said about composing a poem – that’s it not about loving it, but getting to the point where he can stand it. No place is going to fulfill you, but the water’s good; the air is clean; it’s pretty safe; the weather is good. My favorite is probably the topography – Ditchmond by contrast, is dismal.
Durrell wrote that a city is a world when you love one of it’s inhabitants, so I’m kind of stuck here, but I could see living in two places if circumstances were different. I’d spend half a year on the south coast of France and half in Uruguay, to have perpetual long days.
El Ninja, people don’t move to Vancouver for economic or cultural reasons. The new Canadians I speak to are here because and I quote, you can breathe the air, drink the water, eat the food, and say what you want. If you live in a smaller city in Canada, Vancouver will be a vibrant urban centre with art galleries, museums and a cultural scene. No one believes for one minute that in those areas Vancouver compares with any American or European city of similar or larger size.
Like it or not, Vancouver is attracting people from all over the world, for the “lifestyle.” I get that for you and many others, that lifestyle is overpriced and overrated for a self absorbed provincial Canadian city. So far, the message in the market is that Vancouver is very attractive to enough people in the world that we have the economy and real estate market that we do. I’ll leave you and Brian to argue the number and fine details of whatever analysis you can find.
There are several million square kilometers in Canada where you can breathe the air, drink the water, etc. There’s no reason for Vancouver in particular to be priced so differently from the rest of it.
As for Brian being able to argue “numbers and fine details”, I’m afraid you’ve mistaken him for someone else.
Like the 1 million sq km in NTW or Nanuvat?? Are all those places serviced by roads, electricity, sewage, water, cellphone, internet, and other modern basic necessities? Not to mention winter temperature that don’t dip below -40C or have a foot of snow in the winter?
As for culture or outdoors, here is some news for you, though it might be hard for you to believe. The newly rich Chinese don’t give a shit, or most locals for that matter. Go ask a random 100 Vancouverits on the street and ask them the last time they went to: Art Gallary, VSO, Queen E theatre for a play, etc? Vs the last time they went to watch a movie? I bet most of them watched a move in the last year but didn’t go to any of the “culture” avenues in the last year, or 5 or 10. Heck, I’ve been here for like 25 years and the few times I went to Art Gallary was either due to corporate events or on that VanPass thing from VPL.
And ask them about going for outdoor sports like Whistler, Skiing, camping, etc. Again I bet a good many of them haven’t done it in a long while. A lot people probably don’t even go to Canucks, Giants, or Canadians, Whitecaps games either.
Finally, a lot of the Chinese people don’t care about any of those stuff! Why do you think everyone in the world must have the same priorities and interests as you do? If you don’t care about those stuff, but instead care about easy of flights to China, existing Chinese convenience infrastructure, clean air/water/food, cheap RE, nice relaxing city, and where a lot of your existing friends and connections already live, Vancouver fits the bill to a tee. Those rich biz people, or corrupt officials aren’t looking to retire to NY, Singapore, HK, London, etc. Hell, I wouldn’t want to retire to those places either. They want a nice laid back safe country that isn’t going to be deport them just cuz Chinese gov’t requested so, or they have to really work at integrating into the existing community.
Actually, let me ask you a question. If what you say is true, why are they all here??? What, this is all coincidence and there is no reason behind it? They all threw a dart on the board and it all landed on Vancouver since we have a magnet on some magical board? So since you seem to know the numbers and fine details quite well, can you share with us some numbers and fine details that would explain what has actually happened? Before you start looking at the future, why don’t you tell me how the past came to be first.
Also, you still haven’t been able to show me how without foreign capital, we could possibly have gotten to where we are on the detached homes. Your biggest source of additional leverage beyond the paltry 50K from TFSA, 20K from RRSP, 100K from additional suite which adds up to a grand total of under 200K whereas the westside has gone up by like 1.5 million in a decade. So where did the rest come from? Even additional leverage is 5 to 1 to income as a maximum. And I am sure the bank of mom and dad has half a mil in cash sitting around somewhere doing absolutely nothing right? Without foreign capital, how did you suppose vancouverites got that additional half a mil in cash, by our income?
You are right there is a big bank of mom and dad element. But those are mostly mom and dad’s who downsized after selling to the chinese and have millions in cash to play with. To them, it’s like hitting a jackpot. Why do you think they are so generous.
Vancouver has one of the worst economies in North America.
and hopefully nobody’s first day in Vancouver was a day like today or else they’d be on the first flight the hell outta here
2 degrees and rain in hypothermic vancouver lately….SoCal and Miami are lookin awfully nice
I know quit a few people who went to Toronto and first day was -30C and snow and decided to get the hell of out there right then and there. What’s the only place in Canada that doesn’t snow in winter they asked the locals? Vancouver! Ok, Vancouver it is! Next plane out.
the entire 16000 miles of BC coast dont get snow so Vancouver isnt special in that regard ……
Florida and California are also options for wealthy people
Miami has a 1.0% asian population. I wonder why the wealthy chinese aren’t all flocking there.
Seriously, I don’t see why is this so difficult. If you are rich and you can afford to buy anywhere, I am pretty certain you want to buy a place with lots of people who are like you and the adaptability curve is small. It’s very different between those who have money and those who don’t. If you don’t have money, then you will go wherever you can make it regardless of circumstance. If you have money, then you have much more choice.
It’s not any different than when I go to France, I like going to places that actually speak english. I don’t like going to Japan without my wife because I don’t speak a word of Japanese. If I am moving somewhere, I need to move to a place that either speak english or mandarin, that is a minimum requirement for me and I am not even worth tens of millions of dollars yet. When I reach that level, I am pretty sure I would demand a place that adapts to me than the other way around.
“I am not even worth tens of millions of dollars yet.”
Such humility! I’ve noticed you like to throw around how much money you (supposedly) have. You realize how lame that is?
I will give you credit for optimism, though. But if you think you’re going to get there by buying Vancouver RE, you are sorely mistaken. Your odds are better in Vegas.
I don’t know, been pretty good so far. But that’s just one side of my wealth generation. I don’t need to get there using vancouver real estate. I just have to be hedged in the market place so that a westside detached doesn’t run away from me. But some people have already made that kind of money in the market. I am not one of them. But I have done pretty well.
I dont’ care how lame that is. The difference between us two is that I have my money where my mouth is. You don’t
See folks, this is one of the turnoffs about Vancouver. It is beset by shallow windbags, like Brian here, who think that RE is the path to riches, instead of productive enterprise.
So you think economy grows faster than assets then? Also define productive enterprise.
Have not been on for a long time. You guys in B.C. have long been worrying and protesting oil pipelines while you have had pipeline of corrupt money coming in for years. Every time I see Gregor on TV, I get sick – he has done nothing. I know many people here with parents on the westside in Vancouver, and they all comment on the loss of community with homes demolished etc. I even know a few people who could afford a place on the westside, but don’t want to move back and not know neighbours, brutal traffic and also take a huge pay cut.
I’ve been seeing some crazy things in the private mortgage market that is making me sick. I used to agree with Garth and think it will be a slow meltdown, but now I think the housing market is just going to crash. You can’t have an average working person with an income of $50k and have $900k in private mortgages (they all have terms of one year), and have the market be considered “strong” and “healthy”. I’ve been seeing this a lot in the last year-the last great pyramid scheme. This market is anything but strong and the weakest among us will bring us down. And don’t get too excited, houses will be cheap but our economy will suck.