Taking action to reduce housing prices in Vancouver could sap the equity people have built up in real estate, British Columbia Finance Minister Mike de Jong warned last year.
The hit from anything the provincial government might do to drop real estate prices in B.C. would be particularly painful for investors like de Jong, who has a personal ownership stake in seven investment properties in Abbotsford, an hour’s drive from Vancouver.
“You’ve got to be careful about intervening, about having the state intervene to try and regulate pricing, or depress pricing,” de Jong said last May as the #Don’tHave1Million campaign drew attention to the negative effects of high house prices in the region.
“Those who are expressing a concern, I think if you really assess what they are seeking, it is a reduction in the value of homes in Vancouver and that will have consequences for a lot of families,” de Jong said.
“If property values in Vancouver were to reduce by, let us say five per cent, that could easily translate into a reduction in equity for families that own homes in Vancouver of 60, 70 or $80,000,” he said.
“All I’m saying is you’ve got to be careful about how you use the tools and levers of taxation, and you have to be clear on what your objective is.” …
… de Jong owned or part-owned seven investment properties in Abbotsford, plus the home he lives in on the family farm where he grew up. It shows he received rental income from all seven of the investment properties.
– from ‘As Housing Prices Soar, Finance Minister Is Well Invested’, The Tyee, Jan 2016
Did you hear any objections from this individual regarding intervention when the state intervened by mispricing risk with preposterously low interest rates and government sponsored mortgages? No, you didn’t. Hypocrisy.
Intervention will not be necessary for the market to (eventually!) implode.
But, if intervention does occur, many will point to it as the cause.
– ed.
Vancouver Real Estate Anecdote Archive 
@vreaa.. eventually… as in when? You have been calling for this since 2008, that’s 8 years! Some of your blog posts call for 2003 levels. There are a lot of single family homes that are 20% of what today’s prices are in 2003.
Update for El Ninja, since your prediction, single family home prices have gone up, so to hit your prediction, not only do you have one less month to do it, you also got to now go about 60% rather than your lower estimate of 50. So you are looking at a 60 to 85 percent correction within the next 2 years 10 monthes.
Of course Mike De Jong doesn’t want to intervene. You walk through any open house in a detached property in any of the four areas I listed and take a look at who is there and you can guess why he doesn’t want to stop foreign money from coming in. Why would he, his government collects 1.3 billion a year from property transfer taxes.
Thanks for the update, dipsh*t. I stand by my prediction.
Wow.. resorting to insults now are we. Very mature, golf clap is definitely needed for this one. I am going to enjoy rubbing this in your face in a couple of years.
I call ’em as I see ’em.
Is there another way? I am sure no one else does it, you are the only one.
“dipsh*t”
run out of money to pay Xmas bills, or it’s that time of the month? why so cranky? didn’t your mama teach you anything about manner?
@brian … v deserving some latitude … $6T of money printing will do some strange things … but take a look around … the interventions have stopped working … so the process of when already appears to be at hand
In about two years he will hit a decade. I am sorry, if it takes a decade for your predictions to come to fruition then your prediction is pretty useless not to mention that his prediction won’t even likely happen within the next two years. I would hate to be someone who read this blog in 08 and didn’t buy because even if this shit comes true in 2018 I am pretty fucked in terms of my family life.
The prospect of a dramatic decrease in prices is so scary for Brian that he has adopted a childlike “it can’t happen” attitude as a means to cope.
Says El “wrong for a decade” ninja. I would have shut up already with this track record.
If you define being “wrong” as underestimating society’s collective folly, and the duration of near-zero interest rates then, yes, I have been wrong.
If you define being “right” as enjoying dumb luck, instead of performing reasoned analysis, then, yes, you have been right.
So far, that is…
Again, thank god that you don’t do this for a living. Good luck explaining this to any clients of yours that yeah… technically I am right even though you have managed to lose so much money from my predictions. But you know, I am still right…. It’s everyone else that is stupid… Too bad for your loss.
That’s just your opinion. If I had an investment manager who bought Van RE at these levels, I would fire him/her immediately.
And by the way, stop making a discussion about residential real estate part of some hedge fund / portfolio management fantasy. Firstly, because buying a house is not “investing”. Secondly, I’m not answerable to anyone but myself. I’ll eat my cooking, you’ll eat yours.
Actually, funny cause that is my point exactly. If you thought about homes as homes and not as an investment then you would know that not having a permanent residence where you can do whatever you want is hell a lot more important than you think. But funny you mention this cause you keep on ignoring this seemingly obvious fact.
Of course you eat your own cooking. I am simply here to point it out to anyone that might be reading this not to believe the stuff you say because I think your track record is brutal and there is actually a pretty simple reason because you completely ignored who actually is buying all this real estate. And likewise, you think I ignore fundamentals so you make your points. All seems fair to me.
I would rather follow a sensible investment framework and be “wrong”, than follow no framework at all and get crushed. Much in the same way as I would rather drive sober and have less “fun”, than drive drunk and end up killed.
Your are the investing equivalent of a drunk driver. You feel like a genius until a truck broadsides you.
Wasn’t it you who said this isn’t an investment? So how do you value 10 years of family issues because you didn’t buy?
Family issues? Speak for yourself.
you should pull up her post 5 years ago forecasting “trajectory” exactly 65.4% crash. vreaa, why dont you post those charts and graph again, so the world can have a good laugh at.
“But, if intervention does occur, many will point to it as the cause.”
True dat. Anything but their own folly.
As for De Jong, incentives are everything.
There is state intervention now: social/public housing; and private intervention in the form of Habitat for Humanity.
So, there’s a dichotomy here – a kind of lottery where on one side people with little or no cash can find themselves living in Coal Harbour; or being given ownership of property through donated materials and free labour (plus sweat equity) – and on the other side working wage slave jobs; facing the impossibility of ever saving enough for a down payment and qualifying for a mortgage from the robber baron banks.
A secure place to live must be a basic human right. There’s more than enough to go around, but it’s in the hands of the Greedy. People suffer and die younger at the hands of these Economic Bullies. And, as the book Capital points out, things are getting worse as these Parasites pass on their wealth to their Spawn.
Looks at Garth and his followers, heavens forbid anyone try to take their well earned wealth from their cold dead hands. Seems most people believe success is due to their ability and hardwork and only their ability and hardwork. If you are poor then it’s your own fault for not going to school, going to univ, get the right degree, get into trades, etc, etc, etc, and society don’t owe you a damn thing.
To Vancouver’s abundant “natural charm” and “cosmopolitan flair”, we can now add the unique assets of a puppy and a kitten.
http://www.vancouversun.com/business/vancouver+looks+another+tourism+record+2016/11647873/story.html?__lsa=3731-ea61
the cup runneth over with … cash
http://tinyurl.com/zg864mr
Vancouver’s not a bubble …
This is a bubble
https://ca.finance.yahoo.com/news/housing-bubble-sweden-severe-theres-124417319.html
Where should there be government intervention? Two of the ripest fields are real estate and insurance.
Confession: I passed the provincial insurance exam and got some industry training: ways to control the mark (potential client); and looking for magic words to seduce the sucker and sign them up. I exited this process before engaging in any of this trickery and only heard one of the best lines years later from an alpha (pronounced asshole) agent: “It feels good to give a widow a fat insurance settlement.” As if this scag ever did anything for anyone with all the insurance premiums. He was, however, looking at upgrading his luxury SUV to another top line model.
Few realize that Pattison’s wage slaves are required to pay useless insurance premiums – they cannot opt out. Additionally, upon hire, when they are most susceptible, they are pitched additional insurance products – not realizing they themselves will be paying for this expensive crap. This used to puzzle me. What would be the benefit to a billionaire to shaft employees with these painful deductions from their tiny cheques. Then I read that his daughter sold insurance. Here is how I suspect the conversation went. “Daddybucks, would you stick your wage slaves with my shit insurance products, so I can make millions of dollars sitting on my ass while waiting to inherit. You know how hard that is.” “Done deal poor billionaire daughter spawn.” Am I wrong? I doubt it. Insurance is one of the biggest cons out there. The employees also automatically have medical insurance premiums deducted from their pay – ridiculous because most qualify for low income (working poor) medical assistance. No payments are required. At least Walmart assists its working poor in learning how to obtain food stamps.
And speaking of Walmart. How about some of the most expensive real estate in the world – prison. That’s more expensive than the Ginza. I recall watching some poor sad man, speaking from jail, how he’d been nailed with a three strikes you’re out offense. He doubtless had done some things he shouldn’t have – but his last offense? The one that put him in jail for life? He stole something from Walmart. He stole something Walmart? What do they have worth stealing? Stealing some piece of rubbish from people so rich that hundreds of millions of dollars could fall from their back pockets and they wouldn’t even notice. Wouldn’t – even – notice. People who round off their wealth in the billions. And the citizenry pays the corporate prison empire to punish this poor man. This is evil, pure and simple.
I’ll continue with some of what I’ve learned about the real estate game another time, but will end with the recommendation to watch Australian Neil Jenman – a great presenter.
Election in 2017, 70% home ownership rate, even higher in marginal ridings, yeah dude’s going to do SFA. Don’t blame the political animal, blame middle class entitlements.
http://www.timescolonist.com/news/b-c/sea-view-apartment-development-on-tap-for-vancouver-s-molson-site-1.2151060