Vancouver and London came first and second on the 2016 list of cities most at risk of real estate bubbles. Bubble risk was also evident in Stockholm, Sydney, Munich and Hong Kong: house prices in these six cities have increased by nearly 50% on average since 2011. The average price rise in other financial centers has been less than 15%.
Who is to blame for this latest global bubble? Why your friendly, local central banker of course.
As the WSJ summarizes, loose monetary policy at global central banks is a key driver behind rising prices, the report claims. Low interest rates have pushed investors to hunt for returns in tangible assets, “so it is hardly any wonder that housing markets are again overheating,” according to report authors Claudio Saputelli and Matthias Holzhey. …
Meanwhile, Vancouver house prices have been significantly overvalued since 2007, according to UBS. The culprit there is not so much the BOC as the PBOC: until recently Vancouver served as the primary offshore target for Chinese money launderers, which neither the financial crisis nor weakening commodity prices managed to dent. However, this bubble now appears to have finally burst after the provincial government of British Columbia introduced a 15% transfer tax on foreign home buyers in August, leading to a crash in the most expensive local housing segments.
– from Zerohedge, 27 Sep 2016
Vancouver RE, ‘Overvalued since 2007’. Care of weak monetary policy, and strong local narrative. – vreaa
Vancouver Real Estate Anecdote Archive 
Since the introduction of the new tax, here’s what I’ve seen in Steveston:
-Houses are not selling, and few homes have dropped their price.
-The houses that have dropped their price still aren’t selling.
-Nice condos & townhouses are selling, albeit at spring 2016 prices.
-Few condos have dropped their price, and high-priced units are just sitting.
-The dogs aren’t moving.
So it looks like a stand-off between buyers who aren’t paying peak prices anymore and sellers, who are holding out for peak prices.
With any luck, the September statistics will give sellers reason to change their pricing…
I guess Vancouver is somewhere in between Shanghai and Shenzhen.
http://imgur.com/Nns7aS6
http://tinyurl.com/jedmez7
Any wonder that the top ones are all chinese cities or cities favored by chinese investors in the western world.
MOPOE (Most Overvalued Place On Earth).
Some words of wisdom to the bulls who see RE as a surefire, only-goes-up bet:
Those who have knowledge don’t predict. Those who do predict don’t have knowledge.
—Lao Tzu
Doubt is not a pleasant condition, but certainty is absurd.
—Voltaire
Dude you sound so smart quoting others. If I ever get into a product manager interview for tech companies and they ask me to predict trends in technology I am so going to pull that line of yours from Lao Tzu out. I am sure the employer will be amused. But alas your words are so comforting for someone like me trying to get into the westside detached market, surely, there will be one day, I can buy that bungalow in dunbar for a million. There is no doubt about that. It’s just a matter of time…
You’re right. Tzu was a fool.
Did you seriously just call him Tzu?
Did you seriously just suggest that you’re qualified to be a manager at a tech company?
For your information, I am. But that’s a different discussion. Now back on topic, did you seriously just call him tzu? I am serious about this part. If you don’t know chinese, don’t try. That’s like me calling Tchaikovsky sky.
I think you’ve confused “product manager” with “copy room manager”.
And you are qualified to run any business how? I love how you judge people’s qualifications based on what they say on a message board. Very wise indeed… hope your business is doing as well as your views on housing. Again, if you don’t know the chinese language, don’t try to be cool with it.
I’ll do what I please, with any language I please. If that bothers you, don’t read it.
I’ll comment as I please, and if it bothers you, don’t read it. Actually, I would suggest you stop reading at this point cause I think your blood pressure might be getting a bit high, don’t want you to get all worked up.
I get it. With Vancouver RE hitting a wall, and your investment “thesis” falling apart, it’s only natural to want to change the topic.
You are the one who brought Lao Zi into this. And Iook at your reactions, they are so awesome, how is your blood pressure doing?
As for the investment thesis, I am sure two months is a great timeline to evaluate for someone who hasn’t been right in a decade. Oh btw, despite of this two month drop in the market, you are still in the negative, and by a lot. I wouldn’t talk until I am right.
Ah, but Lao Tzu also said: “A journey of a thousand miles must begin with a single step.”
In the meltdown that will be Vancouver RE, the first step has been taken.
Oh I see, you are sure about that this time. Wasn’t you who said something along the lines of wise people don’t predict, people who predict aren’t wise. So are you wise to predict that the first step “has been” taken?
History gave his birth name as Li Er, his posthumous name was Li Dan.
Lǎo Shǔ is a rat, whereas Lao Tzu was “ole master.” in those days or is plain “old man” used by overbearing individuals today when trying to exert pov like so-and-so par exemple. 🙂
yvr has always been wannabee … insecurity is part of the dna … i know this b/c i count myself as one of the bees … now all can enjoy rule as queen bee … life was better as sleepy village, non? … just never understood and appreciated what was great … of course, have to believe this would’ve been entirely different had canucks won at least one of those
Man shouted in the background @0.13: “Run … quickly run!”
The crowd remained motionless.
Looking for significant price drop at HK and other places where foreign-buyer taxes apply, not much data out there. HK house price index is starting to climb back up after a slight dip and is now back to 2014 level. Singapore introduced 15% fee on wealthy foreign house buyers during the 2013 peak, house prices are supposedly down 10% to date. That is back to 2012 level.
http://imgur.com/cm2lQU2
lower prices a start but that won’t restore what was … at least not anytime soon … the place has been wrecked, probably for good … you need a stable environment where ‘normal’ people can do normal things … eg. when msft, goog, fb, whoever took over a neighborhood, prices went up too, permanently … but those communities got certain skillsets and valuesets … what sort of stuff is the westside getting? … how to commit fraud, bribe officials, work political connections, launder $s and gamble flipping assets? … how are all the neighbors getting theirs? if it’s mostly non-legit … stay away
Hong Kong housing prices jump 2pc in August on month, capping a 6pc rise since April
http://tinyurl.com/juq6euu
Home-buyers, Jinan, China
2016, October 01
http://imgur.com/sOsjsUd
2016 October 02
Jinan (7 photos) Home-buyers jam-packed the stadium waiting for
the developers’ opening sales through a balloting system.
http://tinyurl.com/gtbhuyj
Jinan authorities acted up. With immediate effect, first-home buyers shall put 30% down payment up from 20% previously, second-home buyers 40%, and third-home owners no more scatter hording allowed. Foreigners aka out-of-province-outsiders, non-Jinan city-residents are limited to one residential property per household.
OK so what’s UBS doing concentrating on dogs? There’s no way to short this market so why not concentrate on the cities where a savvy investor can make a good risk-adjusted return? I’m genuinely confused.
Simply renting / delaying a purchase is, in a way, shorting.
Wait wait wait… I could pull out previous threads that I have argued the same thing in which you said vehemently that is not the case. So, again, can we have a straight answer. If you are not buying or renting, are you shorting the market or not?
Read my post again. I said it is shorting “in a way”. No, it is not shorting in the way you would short a stock. But yes, it is a bet that prices are going to fall.
I agree with that. That’s what I said originally, that a renter is in effect shorting the market because he/she is betting that prices will fall eventually. The idea of shorting is that you have to buy at some point to cover. You can’t talk about shorting without covering, it’s like saying I bought but I didn’t sell.
You don’t have to cover because you didn’t borrow from anyone.
You might consider “Tzu’s” wisdom here, too: “Those who know do not speak. Those who speak do not know.”
Hmm… you are the one who said that is “in a way” shorting, not me. So if you don’t cover, back to the original question, how is it in “any way” shorting? A short position in any investment sense, which is what yvrhousing was asking, always requires a cover.
Here’s an ESL lesson for you. I said “in a way”. That means “similar to, in one or more respects”. It does not mean “exactly the same as”.
Did you bother reading the original question? How is ubs’ info or your info in “any way” relevent to an investor looking to make some money? That was the question. You still haven’t answered this question you english nut. You are not ESL I am sure, but you sure nailed the point on that one.
A loss avoided is a return gained.
Yep, that’s why I am “in a way” shorting the luxury car market by not buying that Porsche 911. In fact, I am “in a way” shorting just about everything I am not buying, whether conscious or not.
You just don’t get it.
That’s what most people who actually have real short positions would say about you actually. And I am one of them.
Renting is not shorting unless you have an unbreakable obligation to buy in the future. I am not convinced any such obligation is “unbreakable”, even including unbearable pressure from immediate family. But then in that case we should be free to admit we have a consumer surplus and just buy already.
“In a way.”
Brian and yvr: You seem to be struggling with this. Let me help.
I said that renting / delaying a purchase was like shorting, INSOFAR as both involve a bet that prices will decline, which is arguably the central aspect of shorting. But that’s where the comparison ends. Comprendes? Good!
Further, I addressed yvr’s rather innocent question: “Why would this research be published if housing can’t be shorted?” The reason is that an averted loss is as valuable as a gain realized. Banks publish such warnings all the time; it doesn’t mean you’re going to go out and short it. But for those who hold the investment, or who may pondering a purchase, it’s useful information indeed.
Ok, I am going to stop arguing with you about this. If that’s your definition of the central idea of shorting, I can only say that you haven’t really shorted anything. I have a completely different opinion on what shorting really is and what it is used for, but that’s beyond the point. Like I said, if that’s your definition, then I am for sure shorting the luxury car market right now.
There are hundreds of cities around the world, why highlight ones that are bad investments? The only logical explanation I can come up with is that UBS likes marketing some cachet to people with surplus money. What better way than displaying some titillating gossip on the real estate equivalent of the fine art market?
I mean the Hammer is a way better proposition for a discerning investor, but it won’t show up on that list.
They even say as much in the graphic: “select cities”. Quite.
“Finally, there was some good news for Chicago residents: UBS found that the Chicago housing market remains undervalued “relative to its own history.” However, considering the daily shooting spree that takes place in that city, it is probably not a big surprise.”
It’s quotes like these that remind me how odious zero hedge is, never mind their useless and in many cases dangerous investment advice.
Just an observation, but every conversation involving Brian dissolves into foolishness.
Coming from someone with your name, I will take that as a compliment.
Article in today’s Guardian: “This is just the start”: China’s passion for foreign property.
You can forget about buying a post-crash box in Dunbar. Anything good in the East Side is listed at $400K + over last assessed – going up to a million over. Try and find one of Eviston’s listings that is less than $600K over last assessed.
Why are they buying overseas: lifestyle, investment, education, prestige, emigration.
And no one is even talking about the Punjabis. They are building this city house by house. Eventually they’ll be doing towers. They have have the cash, know-how and – they’re making babies – so many babies.
These babies will not grow up to be cowboys. They’re going to buy – they’re going to build. They’re going to buy – they’re going to hold. When they start holding more than building and selling – milking the property cow instead of killing it – the competition for what remains will intensify.
Can’t speak for strata, but detached on a quiet street is the gold standard.
You forgot the Russian oligarchs!
Italians still rule the world of high rise construction.
[Guardian] – London mayor launches unprecedented inquiry into foreign property ownership: Exclusive Sadiq Khan tells the Guardian he will carry out ‘the most thorough research on this matter ever undertaken’ amid widespread concern over rising housing costs and gentrification
…”London mayor Sadiq Khan is to launch the UK’s most comprehensive inquiry into the impact of foreign investment flooding London’s housing market, amid growing fears about the scale of gentrification and rising housing costs in the capital.
Khan said there are “real concerns” about the surge in the number of homes being bought by overseas investors, adding that the inquiry would map the scale of the problem for the first time.
“It’s clear we need to better understand the different roles that overseas money plays in London’s housing market, the scale of what’s going on, and what action we can take to support development and help Londoners find a home,” Khan told the Guardian.
“That’s why we are commissioning the most thorough research on this matter ever undertaken in Britain – the biggest look of its kind at this issue – so we can figure out exactly what can be done.”
Earlier this year, the Guardian revealed how a 50-storey block of 214 luxury apartments by the river Thames in Vauxhall was more than 60% owned by foreign buyers. In one of the starkest examples of the impact of foreign investment, it found that a quarter of the flats were held by companies in secretive offshore tax havens, and many were unoccupied.”…
https://www.theguardian.com/cities/2016/sep/29/london-mayor-sadiq-khan-inquiry-foreign-property-ownership
I see 40 plus comments in this thread so I get a coffee and ready to read it… More bickering between El Ninja and Brian. Truly disappointing and Brian, you are most annoying!
Look at this, I have personal trolls now… I must be getting good at this. Hey Space / Arnie, I have joined the club officially boys, where’s my membership card?
But on another note, to borrow an apt quote from my buddy El Ninja:
“I’ll do what I please, with any language I please. If that bothers you, don’t read it.” Comprendes? Good.
that’s not trolling
More fans, wonder where all these one hit wonders came from.
2547 23rd Ave E: a very good location with a 96 year-old-house that’s too good to tear down, but not good enough to keep – with its head thumper attic and hobbit basement. The square footage given is bogus – agents do this all the time – they measure the perimeter of head thumper attics and calculate off that; when only the dead centre with your arms outstretched actually qualifies as living space. Completely bogus square footage. Bullshit.
This is the kind of lot that builders salivate over. But it’s liveable – probably for longer than the Van Specs that were built fifty years later.
So when is a bubble not a bubble but a bull market? Almost 10 years and going, seems long to be just a bubble? I thought bubble aren’t supposed to last long.
This question reflects a deep misunderstanding of markets.
1986 to 1991: Japan’s economic bubble
1991 ~ ….:…..: Japan’s lost decade(s)
http://imgur.com/aNI9hCg
http://imgur.com/BIF3mC5
http://imgur.com/Q9UzrQa
Let me guess..if you hold stocks then the last 8 years of run-up is not a bubble but a healthy bull market due to a recovering and healthy economy. But since you don’t hold housing and wants to buy housing cheaper, the run up in housing is a bubble!
650 27th Ave E: underpriced by at least $500K – either it’s a typo, or there’s something very fishy here.
5583 Fleming St: 99% chance that it’s sitting on a pile of peat. Putting a basement in here would require an engineer’s sign-off. Weird topography. Nobody agent.
http://imgur.com/a/24TrX
Click to access ko160930a.pdf
Isn’t Hirohiko Kuroda cute quoting from Anne of Green Gable?
Anne Shirley had a step father? WOW!
DAMN! How did I miss that licentious detail from Lucy Maud Montgomery’ novel.
Central Bankers’ bubble
http://imgur.com/oSw0gHb
http://tinyurl.com/jtpn3j5
Ottawa has announced a number of measures aimed at curbing risk in the country’s housing markets, including:
~ tightens mortgage insurance rules to prevent borrowers from taking on too much debt,
~ closes foreign buyers’ tax loophole
~ amends principal residence tax exemption that will now be available only to Canadian residents.
And families will only be allowed to designate one home as their primary residence. (*)
(*) Will we see a rise in divorce rates?
The virtual tour of 4116 Penticton is fascinating to watch – this 103 year-old house on a bog. Poignant. A snapshot of the past. A social history. Pioneer building. Thumbs up to this video.
I presume you are being ironic? What a POS.
Not irony – fascination – this place should be in a museum; or a movie set. I love how the owners adapted the space to their needs – the big tv over the stairwell; the aspirational pictures of a Mercedes on the wall along with the bad boy motorcycles – obviously the son’s room. I love the crazy cracked plaster and wild dormer angles in the attic; the hot plate and rice cooker in the basement. It’s so honest. It’s theatrical. The boards along the ceiling and walls are very unusual – looks Korean.
Worth buying? Not even if it didn’t sit on a peat bog beside Skytrain. Worth looking at? It’s history. It tells a story. I love this place.
My wife thinks I’m crazy to find it interesting.
What I do consider to be a POS is 88 26th E – a new constuction on a mini lot with no laneway – a staged pile for $2.5m. Hate this place.
Nobody cares.
It’s interesting to compare 4116 Penticton to 3203 20th Ave E because the list is the same: $1.289M; and the last assessesed values were very close. That leaves the variables of location, lot size, and improvements.
4116 has a smaller lot, is older, and sits on a bog. It also has the undesirable east-west orientation. On the plus side it is very close to Skytrain – on the minus – it’s too close. On the plus – it sits at the top of Renfrew Heights – with a Mohawk Spec house the views would be huge.
3203 is too far from Skytrain for a comfortable walk. And it’s halfway up the hill, so you won’t get the sense of being on top; but still has a spiffy view. On the plus side it doesn’t sit on a bog, but there’s a stream that goes down Windermere St and veers off before reaching 20th. That should be verified. You don’t want a stream running under your property. To the good, it’s a north-south facing lot. It’s a corner lot. Some like that; some don’t. There will be traffic.
Arnie, since you track this very closely. In your opinion, what is the percentage of detached houses that you would categorize as desirable lots versus Garbage in the active market? And what percentage would you say is in the general supply. So say given any particular house, what is the chances that it would be a desirable lot versus what you would define as “poop”.
As an aside, there are many horrible locations where the owners made out like bandits after rezoning: Kingsway, Cambie, Norquay … If you can get on the bandwagon of rezoning to highest best use, the dreams of a white picket fence will fade.
In terms of a choice property for living; bringing up a family – they’re scarce.
I have a four tier view of places to live. The bottom is easy to find. The second is just okay. The third is good/desirable. The top is unique.
The desirable is at most 10% of the market.
Location means different things depending on our stages of life. Incontrovertible is view. No matter if you’re an oldster or a child, everyone wants a view. In Piers Morgan’s doc on Monte Carlo a property was given an extra 30M valuation because of the view.
When you want to rent out a suite, the first question out of everyone’s mouth is where is Skytrain. Proximity is valuable.
A quiet street is essential.
Walking distance to an elementary school is paramount. I just stopped walking my kids the .9 km to school this year. Made that trip a couple of thousand times. Fortuitously, there’s a library in the middle. We stopped there at least a thousand times. Taking a car was never in the cards. For a parent and the kids it’s awesome.
North-south trumps east-west massively, no matter what a few may say.
Can you walk to a grocery store – banks, hardware, etc. are much less important.
Our property came up for sale once in 52 years and the previous owner had four kids who should have inherited. That’s how hard it is to get something desirable.
If I were looking to buy, and had the wherewithal, I’d bang on people’s doors whose property met my criteria.
I’m often in Richmond, West Side, Coquitlam – used to work on the North Shore. I prefer East Van with Burnaby and New West as second and third. On a budget, I’d be looking at North Surrey.
Interesting perspective, by your criteria, there is maybe a few thousand lots in all of Vancouver that might be the desirables. That’s a tiny number.
Location aside, pay attention to the kitchen sink window – the most important window in a house. That’s where we spend the most time. Our window has overlook of neighbours’ yards and broad distant views. We don’t gawk at our neighbours, but can’t help but look out. You never see our neighbours looking up at our kitchen window. It’s awkward for them – a subservient position. You want to avoid this situation.
Bedroom windows are of little importance.
Roof decks are stupid unless they’re attatched to a kitchen or living area. They sell houses, but are little used. No one wants to hump up a set of stairs with their coffee.
[CBC] – Vancouver architect Bing Thom dead at age 75; Thom’s career was launched by his design for UBC’s Chan Centre for the Performing Arts
http://www.cbc.ca/news/canada/british-columbia/bing-thom-obituary-1.3790632
One of the first people to see the effect of foreign money in the Vancouver market. RIP.
I always appreciated how well he understood Vancouver’s core struggle within, namely wealth divides ensconced in neighbourhood segregation, and how the city– its citizens, not its politicians — cannot seem to collectively bring itself to deal with it.
My Trump tweet:
6585 Brooks – a view into the career trajectory of an agent.
I became aware of this clown Doody after receiving postcards a few years ago in the form of a “Certificate for a free evaluation”. Doody was aiming low; for the most uninforrmed gullible sellers possible.
In 32 years it has worked 69 times, starting with a court ordered condo sale for $134,900 – to lot value houses. His entire sales career is laid out – a sale every couple of years. He’s had a talent for acquiring lists from the nearly dead. Testimonials? Zero. Lols (little old ladies) don’t do testimonials. Biography? A nobody. He’s had quite a few probates – maybe he has an in with a funeral home.
Every year he manages to shift a couple of properties. It has kept him fat. His utility to the world at large? Zero. A ripple in the real estate agent cesspool.
[ColonialTimes] – Condo owners ordered to pay $16 million to fix leaky building
http://www.timescolonist.com/news/b-c/condo-owners-ordered-to-pay-16-million-to-fix-leaky-building-1.2356661
3284 Prince Edward – postage-size lot – changes hands regularly. Sits on top of soil with liquefaction potential and a massive bog. Bonus.
1730 Victoria Dr. – a hideous location – nothing newsworthy there.
What is worth pointing out is the agent’s legerdemain about renos – deliberate obfuscation.
The first line in the blurb is that it had a permit issued in 1909. The second line states that there was an estimated $250K reno in 2010. One carries this first line in their heads about a permit.
But the assessed value of the house today is only $60K. If this house had a permit for a $250K reno, it wouldn’t be assessed at $60K; it would be closer to $300K.
Every nation has its own kooks and quislings.
Knowing how Hillary hates the commies, her drone might target up north, just as Kennedy and MacMillan decided to liquidate “kerchief & woggle” lovers. 500,000 died, of which 300,000 were ethnic Chinese, and mostly in mass graves.
http://imgur.com/QWUpOP2
http://imgur.com/zyYo7y8
2803 Wall St: for sale for the sixth time in 20 years. $325K to $340K to $338K to $840K to $815K. Now listed at $1.625M.
Extraordinary views – doesn’t get any better. A great place to visit – living there – not so much. The initially charming sounds from the railway yard; the visceral shunting of rail cars; and constant noise of container trucks will drive you insane.
The house itself is bereft of walls. It needs walls. As is it’s an echo chamber with searing western sunlight burning through the plethora of windows.
The microlam beams, bannister, and spindles are architectural – and ugly.
But the location is still oh so enticing. It’s a prime candidate for a rich buyer to scrape and replace with a big buck custom – ideally concrete.
I just returned from my second trip to Spain this year where I drove from Barcelona all the way to the Portugal border through Andalusia…..it is amazing the beautiful property you can buy (or rent) over there for crumbs compared to Van…much nicer buildings and not glorified cardboard boxes, a REAL quality of life that put Vancouver to shame, world class infrastructure and road system, world class arts and architecture not to mention the incomparable beauty….thank God I do not longer live in Vancouver, it was a terrible mistake to move there, 3 years of life that I will never get back…
However, kudos to the “Vancouver propaganda machine” (truly second to none) for being successful overselling and over-hyping this unassuming boring town albeit nested in a beautiful natural setting (but rather mono-thematic).
I really feel sorry for people stuck up there (I have few friends trapped in Van, luckily for them, couple of them are leaving)…..is either living in such overpriced, rainy, gloomy city or shoveling snow in the rest of Canada (not that crappy Toronto is not overpriced too)…I count my blessing and kiss my US and European passports.
Vancouver: the most overrated city in the world.
You are not the first one to feel that way. Hell, if I wasn’t attached to asian culture I would feel the same. Last time I was on the Cote D’azur I felt the same thing. But alas, after two weeks spent there I realized there was a problem, I really missed asian food and culture. What Vancouver has is a combination of mountains, water, a new metropolis (most of the downtown buildings are less than 10 years old) and, most importantly, an abundance of asian culture. If you want this combination, there is nowhere else in the world that has this that is cheap. San Francisco is not exactly cheap, New York barely qualifies and is not exactly cheap, let’s not even get started on Singapore and Hong Kong. But if you don’t need it, Vancouver is a terrible place. Hell, I would never go to the vaunted VAG or whatever crappy museum we have, our art scene is a joke (luckily not into that), sports teams disappoint us every year and I have to drive down to Seattle to watch major league baseball or the NFL. And worst of all, it rains six monthes of the year. But believe it or not many immigrants out of asia, especially the rich ones want a city that has a large asian culture component ala San Fran, Singapore, etc. That has driven this demand in Vancouver. Until that changes, you will always get the rich asian immigrant in one form or another showing up here.
Thank you Brian for your message, I heard about the “Asian culture factor” from other Asians living in Van and you further confirm it. However, I’m surprised that a very large Asian community is such a need for Asian expats…..frankly I do not care to find a big Italian community (I’m Italian)…yes I like a place where I can find decent Italian food (and Vancouver is definitely lacking in Italian cuisine) but for me the arts and entertainment, economics, weather and closeness to other cities is more important. I may be wrong but, for example, Seattle seems to have, to my eyes, a decent sized Asian community where an expat could feel comfortable and Seattle obliterates Vancouver on so many other fronts.
However I heard from more than one wealthy Chinese in Van that Chinese food in Van is not necessarily that great….one person in particular told me that there is only one good place in the entire city. I’m not expert in Asian cuisine but, to me, the Asian food I had in Shanghai was way better than anything I had on the west coast including Vancouver…so in my limited experience I would agree with them.
I have been told that in America, you can have America Asian culture, but not real China Asian Culture. So, yes there is a big Asian community now, especially around the tech centers, but apparently, it’s not authentic enough. Also, apparently there, you can just go around and speak Chinese in all the various places and feel like you are in China. However, if Vancouver you can and you do. Lastly, I’ve been told that in US, there is the real American and there is everyone else, and mainland Chinese is kind of 2nd class there. Basically, that’s what my friend who moved to Seattle years ago tell me and now she laments that she missed the boat and can’t buy back in Vancouver now.
X Space 899
I can guarantee you that Asians in Seattle are much better integrated than Asians in Vancouver.
The American socioeconomic system facilitate integration better than Canada (in my experience) and you can still keep your own culture.
@Saturno, thanks for your message. Yep everything you said is actually very true. So give you an example of what I am talking about. I came to Canada when I was little so I don’t need to feel a strongly connected asian culture, in fact, going back to Beijing for two weeks is usually the max for me. I will probably be perfectly fine in France and Spain or even better the Northern European countries. It took over 20 years for me to be this way. It is really only a prerequisite for recent immigrants. The issue is that China is leaking wealthy people like the “Iraqi Navy”. Those usually need to have some connections to Asian cultures. I don’t neccessarily say that Vancouver has the best Chinese food, in fact, it doesn’t, San Fran I think does. In all honesty I think San Fran is a much better place for recent asian immigrants than Vancouver but it is just as expensive. But, what Vancouver has, is an abundance of recent immigrants, many of whom came in the last decade. If you go to Richmond, you don’t feel that different than say China.
Seattle does also have a large contingent but it is much more spread out. I believe and I might be wrong on this that the percentage is something like 10 percent whereas Vancouver might be like 25. But I agree with you on one thing, Seattle Asians are much much much better integrated. In America, you are expected to assimilate which for some reason you are not in Canada. I mean, I doubt anyone in Bellevue will put up with all chinese posters being all over the place like we have in Richmond. The flood of recent immigrants basically took over Richmond and made it their city rather than integrate.
Brian I have enjoyed our exchange, I have few questions for you from your Asian perspective.
Do you think Vancouver (specifically some areas of Vancouver) has really reached “escape velocity” becoming, in practice, “the Montecarlo of the northwest” for wealthy Asian individuals, protecting these areas from a serious RE dislocation? By the way, to be fair, even Montecarlo has experienced a significant RE valuation correction recently, these areas may not necessarily be as immune as we may think.
Personally I do not think that Vancouver has made that leap, there are many ingredients missing but, from my perspective, I may be totally wrong.
Or do you think that Vancouver is still simply perceived among wealthy Asians as an “easy escape play” (meaning easy to get immigration status and citizenship and easy to move funds) compared to other more desirable areas?? Could Vancouver RE suffer from a long term normalization (or “westernization”) of the sociopolitical landscape in China?? Even as simple as just loss of interest and search for the next great place??
Finally, for the truly uber wealthy elite obtaining residence/citizenship in pretty much anywhere you want is not an issue….do the upper strata of the Chinese wealthy class really think Vancouver is so desirable or they feel the gravitational pull of traditional world elite hot spots?? Places like the French Riviera, south coast of Spain, London, the wealthy enclaves of the United States (New England, California, some areas of South Florida), the Caribbean, etc…
Thanks Saturno, same to you too. I think one thing need to be said with the Monaco comparison. I have been a proponent of this comparison but I note three important distinguishing factors.
1. Whereas western wealth going into Monaco is what I would categorize as a slow and gradual process, this chinese wealth hitting anywhere in the world is fast and furious. I don’t have stats on Montecarlo and which nationality is owning what but I would bet that the Russians likely own their fair share. And that wealth likely left Russia in a similar fashion.
2. The other thing is, whereas there is only one Monaco, there are many other cities that are desirable to them than Vancouver. For example, we are actually number three or four on the list when surveyed at the Shanghai Luxury homes show. London, New York and Melbourne are ahead or tied with us. So whereas there is only one monaco, there are other Vancouvers.
3. The area of Vancouver is much larger than Monte Carlo. So to say all of Vancouver Real Estate should behave that way is incorrect. For me, I only focus on this asset class, detached properties in Vancouver, Burnaby, Richmond and West Vancouver. The reason why is that this asset class has been the asset of choice for these immigrants if you study sold statistics and track the percentage of sales of this asset class to chinese immigrants versus say condos in the same four cities. Also this particular asset class totals about 100K in supply which cannot increase and is small enough to be affected similar to real estate in Monaco.
As to your second question, there is no question that vancouver would perform poorly if another hotter newer destination was found. But that is hard to do. I track demographics and if you look at demographic history, it took San Fran a long time to get to the 33% of asian population in the city. It has taken Vancouver far far shorter. The demographic trajectories say that Vancouver will be a majority Asian (51% chinese plus indian plus korean plus japanese, etc etc) city in 2031. If you compare that to what the demographics looked like in 1980 say, it is night and day. So it is a city that is highly suitable for immigrants to settle. China, despite of all its problems, will still continue to churn out more and more millionaires, but one thing is certain, the only thing comparable to this exodus of the rich in China is maybe the Russians but even then I don’t think you had over 60% wanting to get out of the country. That is really unprecedented in the history. The other places that you note all have chinese people, but it is similar to the situation in Seattle whereby they are dispersed. You don’t get the concentration that you get in Vancouver and San Fran. Vancouver also has the advantage of being in Canada, a country perceived to be much safer than the US. I say perceived because I am pretty sure crime stats say otherwise. But in a one child policy country, it is hard to send your kids to countries whereby shootings happen on a monthly basis. But those are just some of the factors.
Saturno: you seem very sensible and, I think, accurate in your read re: Vancouver’s relative (un)attractiveness on the global stage.
However, clearly you haven’t properly made Brian’s acquaintance. Him and his sidekick, space889, are perma-bulls with side blinders. Any sense of valuation, history, and the world beyond Vancouver is absent from their discourse. It’s all about an endless stream of wealthy Asians who will drive prices ever-upward because, you know, in Vancouver they can speak Chinese. Oh, and… wait for it… “good schools”.
Dissenting views are mocked or, more typically, ignored, as they are not equipped to address them.
They will tell you my analysis, which is based on Price-to-income, Price-to-rent, household indebtedness, and other universally proven metrics for gauging under / overvaluation, is wrong. Well, perhaps I have been “wrong”, insofar as the bubble has persisted longer than I might have anticipated. But there is a difference in being wrong about timing, which nearly no one can get right, and being wrong about the fundamental structure of the market and its long-term direction. This is lost entirely on them.
Of course, you will judge for yourself. Just a friendly heads-up from someone who has tried, and unfortunately failed, to inject some level or reason into this discussion.
Hey Welcome to our discussion Mama Bear. Our resident perma bear has come out. Now, I have a question for you. If you say all dissenting opinions are mocked, I would gather to say that Saturno probably has a dissenting opinion, is he mocked? Was there a hint of mocking in our exchanges?
However, here we have El Ninja who basically says we are all devoid of economic sense because if an asset is off of its historical averages then it must crash and any other possible explanations is wrong. You are mocked not because your point of view but because you fail to acknowledge that there may be other factors in the market at play in Vancouver other than your simple it’s all about the interest rates explanation and your continued insistance that anyone else who holds a dissenting view to that knows shit all about economics. I can’t comment for myself, but Space, who has a CFA, might know a bit more about investment than you think.
I’ve always said that foreign money is a key factor. Just not the only factor.
As for space’s (supposed) CFA designation, I had no idea they had lowered their standards.
I will let Space defend himself and get back to my normal discussions with saturno cause if I start going off with you this thread will never end.
Guys relax…actually if read other posts and comments on this blog correctly, I think that you guys (Brian and El Ninja) are not that far off from each other.
My understanding is that Brian remain somewhat bullish for the detached homes sector in certain areas…if i remember correctly, he does not exclude a health RE correction in Van as a whole.
El Ninja admit that foreign money is a factor in certain areas so….
Brian you said that Vancouver is not Montecarlo, too many missing elements and geographical sizes differences and I could not agree more…there are indeed so many desirable locations as Vancouver (I would say much more than Vancouver). On the west coast alone, San Francisco has elements that Vancouver simply cannot hope to replicate. Seattle, San Diego….even Sydney and Melbourne have both significant Asian presence and, in my book, for many reasons are much more desirable than Vancouver (not to mention closer to Asia).
One aspect, in my experience talking to people of Asian heritage immigrated in Vancouver (and even outside of Vancouver) that seems to contrast what you said is about the desirability of Canada vs. USA….my impression is that the US, in general, is far more desirable than Canada as a location to move, simply is much more difficult to immigrate here compared to Canada so Canada becomes somewhat a second choice….even on surveys done on immigrants from other areas seems that the US is still the #1 magnet for ambitious immigrants. Actually part of the desirability of Canada compared, for example, to the UK, Germany or even Australia is the geographical vicinity to the United States. I know of quite few wealthy Asians in Vancouver that sent and/or plan to send their kids to study in the US.
@saturno, agreed on the US point. If you notice, I put that last for a reason. It is probably my weakest point of all and to be honest I really don’t have a good statistical backing for that point in particular.
My analysis is focused on the 100K sample of assets because in investing, we are taught to dissect the broader market to basically place laser point focus on asset classes that can be analyzed rather than looking at the market as a whole. I think it is safe to say that detached and attached have performed differently in this bull market. So I like to focus on the detached, but in reality I am only focused on the asset class that is preferred by the new immigrants to try to mitigate things like interest rates which I admit is a factor but not the primary factor in the asset class I am interested in. It is however the major factor in say condo prices.
You could also kind of dumb down my argument to one simple question. Is there a majority chinese worldly city that has cheap real estate. If you use that criteria, I think you would say that the answer is no. Your candidates are Beijing, Shanghai, Taipei, Hong Kong, Singapore, etc. The Australian cities you cite may feature great asian influence as do seattle and san diego, but their demographic numbers are nowhere near vancouver’s, I think Sydney’s asian percentage is in the teens while Melbourne is similar, seattle I think is 13 percent. I reference wiki for all my research and in the western world, the only city that has the percentages comparable to Vancouver is really San Fran. And we are projected to blast past them in the near future. So if eventually the chinese make up a good percentage (they will be 39.2 percent by 2031) and even more going forward. Then doesn’t it mean that we could potentially run into the same fate as say Hong Kong or Singapore. Of course there are many other factors at play but hence why I am especially focused on the detached properties to try to wade out those factors.
.
Oakridge Transit Centre, W 41st Ave
http://tinyurl.com/hm4z7nw
sold for $450m to the 3 musketeers,
– Intergulf,
– Kunyuan International Group, a company linked to China-based investors.
(hqs at 5731 No. 3 Rd, Richmond, BC V6X 2C9, registered in 2013)
its namesake Kun Yuan International Group Co Ltd was registered in Hongkong in 2013 August 20.
father ? – Yong YANG, Chairman of he Board, KunYuan International Group
http://imgur.com/S4Iak9P
son ? – Eric YANG, VP, KunYuan International Group
http://imgur.com/q6cGXJh
and the holy ghost ?
– a Beijing-based Modern Green Development Co. Ltd., operating as Modern Investment Group
@saturn_v
I don’t keep up with this blog regularly, so the late post.
With regard to the Asian integration in US, that’s pretty much the problem my friend cited as why she doesn’t like Greater Seattle, and like Vancouver better. A lot of recent immigrants don’t feel like nor want to immigrate.
As for why Vancouver is so popular? Well, it’s about the only place in Canada that doesn’t snow like crazy and have -30C winters, and not trapped on an island. oh yeah, given the blind eye that Canada had towards money laundering and allowing criminals to stay, it’s a perfect destination. In fact, all 10 of HK most wanted corrupt cop officials with ties to gangs & money laundering live in BC and lived a very nice lives, without any worry of deportation. Canada can’t deport anyone to face death penalty or if their life are likely to be in danger. If you are a criminal / corrupt public official with tens of millions embezzled, is there a better place?
Also, if you ever watch any Chinese TV series that deal with rich kids living abroad, Vancouver would come up in like 80%+ of those series / movies. There have been a lot of popular TV series / movies that featured Vancouver prominently. Catching Vancouver landmarks in Chinese TV series / movies is almost a drinking game now.
“Vancouver is a perfect place for corrupt foreign officials, and it’s even on TV!”
This is the poorest investment thesis I’ve ever seen.
You wouldn’t happen to have links to clips of any of those TV shows or movies? I think those would be rather interesting for those of us who don’t follow Chinese media.
@El Ninja – I don’t know why you can’t get it through your head that Brian is focused on SFH in desirable neighborhoods only – West Van, Van West and the like. His target market is like what? 5% or less of the entire market. I don’t get why you think he’s a perma-bull with no economic sense when he stated very clearly what his target market is. Frankly, even without any foreign $$, his target market is out of reach of the average family or even dual income upper middle class family now because of simple supply & demand. Van West is losing SFH every year, while there are more and more households in GVRD, most of whom would love to own one of those SFH. Shrinking supply + increasing demand and what do you get? That’s simply Micro Econ question.
Sorry, don’t buy it. I grew up in the heart of West Point Grey. For decades prices did not behave as they have in the past ten years, even though it was just as desirable then as it is now. Indeed, they crashed hard in the 80s. And no, SFH supply is not shrinking in Point Grey. Van West will be epicentre of the coming implosion.
Ok, I could hold my tongue but this is just too good. First you have acknowledged, from your experience that the performance of the last ten years have been unprecedented. So like any good investor, one should examine how this came to be? Right? You assert that this is largely due to interest rates and additional leverage. Fair enough, there probably is some of that going on. But two issues:
1. Any mortgage professional would tell you that your neck of the woods in particular, West Point Grey, is not something that normal working professionals can leverage to get to. I know this because even though I make a great income compared to most of Vancouver, I can only scrap enough to meet the low end of that regional market. So there is very little likelihood that this is happening. But alas let’s examine a bigger issue in number 2.
2. If what you say is true, demographics in the west side or in particular west point grey should be fairly similar recently than what they were when you and I went to high school. I would imagine you went to highschool say in the 80’s and I did so in the 90’s. Back then the best high schools in the west side, UHill, Lord Bynd, PG, etc were about 30% asian. Today, they are at a minimum 70% asian with some highschool like UHill being something like 80 to 90 percent. So clearly there is a demographic shift going on.
Now you might actually be correct in one thing, it may not be the chineseness of these buyers that are causing this increase but rather that a lot of them are wealthy. So if I dumped this many wealthy people of any race you would see a similar performance. Sure, that is fine with me. But the main point is that without this wealth, you won’t see this increase in price. And also interestingly, your west side highschool parking lots wouldn’t look like the Vancouver Auto Show with all the luxury cars parked in the student parkade.
Now let’s say even if you don’t accept any of that. And you might even be correct in saying that SFH supply in the west point grey area has not gone down. I would contend that it is because of all the NIMBY’ism that is preventing that from happening and god knows how long they will be able to hold out. One thing is certain, the population of Vancouver is hell of a lot more than what it was in the 80’s and 90’s with the SFH numbers being roughly similar on the west side. Yes, we are no different than any other city in our population growth. But it only also reasons that a constant, non increasing supply versus an ever increasing demand should mean in the long term this should perform well. But that in all honesty is a minor point compared to the demographic shift that has been going on in the west side. If you don’t believe me, look at your typical buyer of west side detached today versus what it was twenty years ago.
Demographic shift, yes. Basis for continued increases in prices, no.
And if the new demographics happen to be wealthy then what happens? You can’t possibly argue that the net worth of the current purchasers of west side detached are similar to what the inflation adjusted net worth of the purchasers in the 90’s were. In the 90’s to give you an idea, a UBC professor owned what would amount to a 4 to 5 mil house today. My father house sat for one of these professors who bought in the 90’s. Today, UBC professors’ salaries have kept up with inflation, they are well paid, tenured staff in the engineer fields are 150K to 200K. But they have little shot at that same place. So what happened? Could it be that the new buyers are all wealthier than what your normal purchasers used to be?
Yes, the new buyers are wealthier, and they have been willing to pay far more than previous buyers in relation to the income-generating capacity of those houses. That is in the PAST. The question is, are those houses a sensible investment going forward? Hell, no. For one, demographics could go the other way. You don’t think they will, but you don’t really know. You have no idea how various international tax, legal, and immigration trends will evolve. Even if demographics don’t revert, they might simply stall. Again, you have know way of truly knowing. And, finally, even if they don’t stall, immigrants’ willingness to pay higher and higher prices will not be unlimited. How will you ascertain the point at which that willingness has tapped out? Once again, you have know way of knowing, other than guessing. By the time you realize it, it will be too late. Prices will be on the decline (they already are, actually), and you’ll be stuck with an illiquid asset in a falling market. Not good.
The other issue is the idea of investment. I pinpoint the analysis to a certain segment for another important reason, this is where I want to live. My personal requirement is a SFH in the westside. You can call that short sighted narrow minded, or whatever. But that is my personal requirement. So in essence, when I don’t own the asset, I am in effect shorting it. So if demographics don’t reverse I lose, if money continues to be printed at this rate I lose, if more chinese wealth comes here I lose. So in essence, I can’t just simply say, oh shit, place went up, oh well, I am outta here. That’s a very different scenario than a simple investment analysis. If market reversal happens even more than a decade later I probably will lose too. There are more people in this boat than you think.
Right, that’s exactly where you and I disagree. I believe that there will be a continuation of immigration as per the projected demographic stats. And such immigration will push the demand for these properties to higher levels in the long term given that the supply is a fixed quantity. You are right that there have been some decline in wealth immigration in the last two year as per government programs. But I believe that over the longer term there are a lot more ways for this wealth to get here (see student visas, etc). Also more importantly, the market of the wealthy will be much bigger in 10 years than it is today. Given that we are the highest percentage asian city in the western world (this was in 2014, we are even higher today), we are primed to take advantage of this wealth. Your so called inflated prices also need to be taken in context of where they are from where prices are often much more inflated by the same stats that you track. So they don’t look as inflated compared to their home countries. If you look at Space’s posts, he is basically stating a case on why he thinks this will continue as we are popular in chinese pop culture. You are right we don’t have a crystal ball, but all investment is a bet. And what you stated is precisely what bulls are betting on. By your rationale we should never buy growth stocks and only stick to those with good dividends because purchasing growth stocks is basically betting on an increased market of a current commodity.
Oh, please. Housing as a “growth stock”? It’s four walls and a ceiling. Get over it.
I had a chuckle at this actually. But on a more serious note, the Birkin bag, a Hermes handbag, had an estimated annualized returns of 14.2% from 1980 to 2015. That significantly beats the S&P 500. It’s only a bag man. Tell that to people who want it.
China’s HNA Buys 10 Seattle Golf Courses for $137 Million
http://tinyurl.com/zqdlb8q
China’s investors are again stampeding to buy homes, and that could be trouble for banks
http://imgur.com/RBd40ns
Popping China’s Real Estate Bubble Could Cost Banks $600 Bil
http://tinyurl.com/haebl5d
UBS exited Wanda deal over compliance
Swiss bank was uncomfortable with structure of $4.4bn transaction
Hong Kong rules require banks to be satisfied with the sources and availability of funds when offers are made.
http://tinyurl.com/jdnoont
$14M for a golf course, that sounds kind of cheap?? I personally have no idea how much golf courses costs and what kind of revenue they generate, aside from they are bloody expensive. Too expensive for what seems to be a pretty boring “sport”.
Nortel et al didn’t learn this at the business school.
“Struggling Chinese companies, some on the brink of delisting, are turning to the soaring property market to bolster their books.”
http://tinyurl.com/j5lsoce
“Two Apartments May Save a Chinese Firm’s Stock Listing”
http://tinyurl.com/jr8sbkq
http://imgur.com/a/cGXTH
Business owners are going into property speculation
http://tinyurl.com/jkd53he
“Some factory owners complain that after all the tough work, it is still hard to make money. Comparatively, profiting from property is much easier.”
“The real economy is still facing immense challenges, with return on investment steadily declining over the past few years, the 21st Century Business Herald reports, citing a survey by the Chinese Academy of Fiscal Sciences.
“As such, many entrepreneurs closed their businesses and jumped on the bandwagon of property speculation, which so far has rewarded speculators nicely.”
Vancouver did better than that, no?
http://imgur.com/g50kVA4
http://imgur.com/H78M6ZD
One more good reason why Vancouver is a safe haven!
http://imgur.com/qT1GUpQ
“Clinton said in leaked speech excerpt that US would ‘ring China with missile defense’ if China can’t stop North Korea”
http://tinyurl.com/zcp4zjr
@bobtheassetuilder – I have to dig deep into my YouTube history for some of these as I don’t really watch modern city drama that much. In Chinese TV series, Vancouver tend to play well Vancouver! Surprisingly enough.
This series has some Vancouver scenes – the female lead ends up dating some guy from Vancouver and moves to Vancouver for a bit I think – didn’t watch the whole series. You can see some of downtown Vancouver in the intro as well:
Vancouver appeared in a crappy Chinese TV show –> Buy real estate and get rich!
This statement alone shows two things:
1 – you were wrong and you will be wrong
2 – you will never ever why you are wrong due to your prejudice and simple frank stupidity.
“simple frank stupidity”
Love it!
Glad you love those 3 words that describe you the best. 🙂 I can now be satisfied I have achieve my pinnacle achievement in my life.
This series heavily involves Vancouver as the main characters and supporting characters all moved to Vancouver. It details the “struggle” of rich immigrant housewives with nothing to do, and the real struggle of average skilled / mid-management immigrants who can’t find any jobs that is close their old jobs in China, as well as cultural / social differences between China & Canada. Best part, it also has those satellite, rich spoiled brats studying locally, driving around in fancy cars, and being rebellious in Vancouver.
I think like 1/3 to 1/2 of the shows take place in Vancouver / West Vancouver. I’m sure you can recognize a lot of landmarks here. The end lesson, as I’m sure you can predict, is nothing is better than mother country China. Both the rich and regular couples move back to live and work in China after suffering close marriage breakups, jobless, etc.
The main characters are all RE developers in China, with personal debt and revelry and revenge. It’s a good lens into China’s RE market and dynamics for the tier 1 cities and why Vancouver is still damn cheap.
Different parenting styles and how school deals with parenting physical discipline – basically tells Chinese parents, come to Vancouver, your kids will be ruined cuz you aren’t allowed to discipline them:
around 22:30 mark
Dialogue here includes English so you can get a gist of what’s going on.
Around 12:30 mark in Ep 1, the main male character goes for immigration interview where he gets grilled about how he got rich, after just working 3 years as some bank account manager. Again dialogue has English so you can follow somewhat. Basically the guy got rich through some speculation and selling some land map or something in a bubble mania, so nothing illegal but he can’t explain it well.
The important thing is about 10 to 15 mins later when the wife goes to immigration consultant and try to figure out a way to sort this out. The immigration consultant basically tells the wife to appeal and they come up with a complete backstory for that appeal. Almost like what you see in some of the Bonds movies.
Note – this is a bit important – the wife is a former famous TV news anchor and she already has immigration status in Canada. The husband does not. Their kid has been in Canada studying for a few years already.
So, people over on VancouverCondo.info keeps complaining about how the husband should be deemed resident and it’s all cheating, and not reporting worldwide income, etc, just simply don’t get it. In many cases, the husband never applied for Canada citizenship / immigration. They don’t own the house here. Everything is under the wife’s name. It’s very hard for CRA to deem the husband as a resident for tax purpose, assuming they can even do it, and even harder for them to get any enforcement in Chinese courts cuz the Chinese court would be like WTF is this crap? The guy never even applied for immigration and you are trying to tax his income?
Aftershock – deals with the two big Earthquakes in recent Chinese history. The main female character moved to Vancouver after being left for dead.
And lastly this one with Vancouver right in the title of the show!
Farewell Vancouver!
If popping the Chinese RE bubble is ONLY going to cost $600B, that’s pretty damn cheap.
However, sometimes the question have to be asked, is there an actual bubble and how big is the bubble?
And can someone please answer, just when is a bubble not a bubble, but a plain bull market, or the equivalent of a growth stock? How many people consider Amazon, Google, Apple, Tesla, Fackbook, etc to be bubble ready to crash 90%, instead of growth stock stories that hasn’t transition to a mature slow growth company stock?
It is truly astonishing that this question is coming from a (supposed) CFA charterholder.
A stock’s value is based on the discounted future cash flows (dividends) that a company is projected to generate. Nothing else. Growth stocks are companies whose future earnings are projected to be significantly higher than their current earnings, usually because they’re working on some innovative technology that takes time to develop, but whose future payoff will be significant. Thus, they command a higher-than-average PE multiple.
In RE, cash flow comes from rent. Unless you believe that Vancouver is the real estate equivalent of Amazon, Tesla, etc. and that future rents are going to be vastly higher than they are now, then current price multiples are not justified on that basis. Not at all.
Instead, prices have risen on pure speculation–the emotion-based expectation that someone else will pay more for a property than you did, not because it will actually be worth more in terms of its income-generation capacity, but because THAT person, in turn, expects someone else to come along later and pay more still. The so-called greater fool. There are no earnings, just air. And so it goes, like musical chairs. It’s self-fulfilling for a while and, then, pop! That’s a bubble.
wow, you so smart, i have never heard such intelligent argument before. why is it a smart person living in rental and landless? of course, you have million dollars in stock market, and cash stuffed in your pillows.
Yo El Ninja, two words for you, Birkin Bag!!!! What is the income generating capacity of this item? How do we measure it. And how in the world has it out performed the S&P in the last 35 years?
http://time.com/4182246/hermes-birkin-bag-investment-gold/
Damn, i shoulda listened to my wife and get on that six year wait list for this bag. Kicking myself for that dumb decision. So is the birkin bag in a bubble? If my wife wants one, should I wait for it to pop before buying it?
Uhm…last time I checked, Amazon, Telsa aren’t exactly raking in the cash. FB and Apple, yes, though at the nosebleed valuation they trade at? They pretty much have to sell to Martians pretty soon to keep up the growth rate.
And really, it is a valid question. At what point do we say, ok the price we calculate based on valuations we use don’t make sense, but why is it not popping? At what do you do say think, hmm..this bubble that’s going on for 8 years and running is not a bubble anymore cuz even a 50% correction isn’t going to bring price down to “reasonable level”. Thus, maybe it’s not a bubble but rather maybe, just maybe, there is something we missed and it is not the realty that’s wrong, but us the analyst who keep calling this a bubble? I really can’t think of any bubble that lasts close or more than 10 years without popping. Stock bull market lasts for decades and when they correct, even by 50%, no one calls that bubble popping – they call it a bear market.
As for housing in particular, geez, there are multitude of valuation factors with rent being the simplest, and rent has been increasing like crazy, and might increase even more. Sounds like a growth story to me. Add in low interest rate, the valuation sudden doesn’t look as crazy now. High yes, but then what asset doesn’t have a high valuation right now? Compared to negative rates on Germany, JP, etc gov’t bonds, or even 1.5% 5yr GIC, rent rates don’t look that bad.
Oh oh. Teasing Brian’s personal troll.
Another reality denier emerges from the bowels of Vancouver real estate.
I think of myself more as a bullish*t filter, with some free financial education thrown in for folks such as yourself.
I would prefer that you keep and use your education during your bowel movement. do tell, you are so smart, why are you in rental and landless?
How do know if you’re trailer trash? You take your dog for a walk and you both use the same tree.
Answer the question, el nino. You are so smart, why are you landless, condo-less? Your financial education just as good as a piece of toilet paper if you just saliva-talk, and don’t know how to use it.
trailer trash has happy life; have you ever seen UBC students live in a trailer? No, I didn’t think so; you don’t get out much anyway. By the way, try to pee to a tree some time, it’s enjoyable.
Fred, sorry but I have to say it….why you think you need to own property to be “smart”?? There are a lot of successful smart people that rent in this world…sometimes is the best decision.
As a matter of fact I know of 2 people that still rent in Van and bought condos in Florida for pennies on the dollar during the crash and now they have very juicy returns in rent dollars and laughing all the way to the bank….
Uhm…Van RE has been going up and up and been in bubble territory for like a decade now. Seems like the bulls are more reality based than the bears who keep insisting that reality and people in general are simply wrong. Never mind even a 50% drop wouldn’t make price reasonable to most bears.
One more comment, I’d like to know how they measured their bubble index. Did they bother looking at the following cities:
Beijing, Shanghai, Taipei, Guangzhou, Shenzhen, Hanoi, etc, etc.. or are we to assume they are not developed cities. Cause based on any metric you use, price to income, price to rent, yada yada, these cities probably have worse numbers than Vancouver.
“yada yada”. Casual dismissal of proven valuation metrics = self-delusion.
Love how you always miss the point of the post but that’s kind of a El Ninja special. So… do you have any metric in which these asian cities would actually appear to be more affordable than Vancouver?
Also.. still waiting on my birkin bag bubble territory answer. Is it a bubble? How do we measure it?
I would expect the laws of economics to apply the same in China as anywhere else.
Regarding the handbag. Is this really what your hopes for Vancouver RE have come down to? A fashion accessory? Embarrassing.
So what you are saying is that chinese cities are in an even bigger bubble than Vancouver. So we are not number 1 in the world after all now are we.
“Regarding the handbag. Is this really what your hopes for Vancouver RE have come down to? A fashion accessory? Embarrassing.”
Weak. That’s all you got? Which other fashion accessory do you know returns 14.2 percent a year? It’s practically an investment instrument. Let’s see, Limited supply (though more are pumped in every year), growing market.. hmm… sounds like a pretty good asset to me, not unlike something else I have mentioned here before. Does it have an ability to generate cash flow.. no… but hey.. that didn’t seem to matter for 35 years. Even you would agree that is a long enough time frame. By your rationale this bubble shouda burst a long time ago. Oh btw, it’s just a handbag, no one really needs that. There are a ton of other fancy handbags, so people could just buy another better value handbag, I hear Chanel is a good option from my wife, its P/E ratio is much better than the Hermes Birkin.
I think bear simply can’t accept that they were wrong, and wrong for a decade, and simply screwed. Now they hope that this is IT! This will be the last chance the bubble will pop and they will be proven right finally! To friends, family, co-workers, and basically anyone who they felt laughing at their RE bearish.
Hence, my question, when is a bubble is no longer a bubble? How long does it have to be before we have to say, ok it isn’t a bubble but a bull market with some froth at the end, but it ain’t a bubble that’s going to crash back to where or close to where it started?
I know my house isn’t going to back to my 2001 purchase price + inflation because there are hundreds willing to gobble it up way way before it got there. Now, if interest rates go back up to 20%, that’s a different story. But again, does that necessarily proof housing was in a bubble though?
“I know my house isn’t going to back to my 2001 purchase price + inflation because there are hundreds willing to gobble it up way way before it got there.”
This one of the great fallacies–the great self-delusions–of amateur investors. You assume that you will have the wherewithal to sell before the value of your investment goes “too low”. The problem is, when prices begin to fall, you WON’T sell, because you will believe the fall is temporary, and that a recovery is imminent. Then prices will drop some more, and again you will hold off. Why turn a paper loss into a real one, you will tell yourself. Ride it out. And this process will repeat itself, all the way down. Blind hope will preclude you from taking timely action, until it’s too late.
El Ninja, you are very attached to comparing real estate pricing to stock market investing. The stock market is a market, the real estate market is a market, but they have different driving forces. Comparing real estate owner behavior to that of amateur stock market players does not reflect reality. Let’s look at a more basic set of numbers.
There are less than 50,000 single family homes in the city of Vancouver. With demolitions running at about 1,000 per year, in ten years there will be less than 40,000 single family homes. With 40,000 people coming to the lower mainland per year, in ten years there will 400,000 more people in the region. Those homes occupy 65% of the land in the city, and house 19% of the population. The remaining 81% of the population lives in housing that occupies 35% of the land.
The Vancouver market will respond to government intervention, interest rate changes, tax policy etc. in the short run. In the long run, single family home ownership in the city of Vancouver is a very desirable commodity that is shrinking in supply daily, with incoming population and hundreds of thousands who would if they could live in one. There are all kinds of people all over the lower mainland that would live in Vancouver if they could. There is vast demand that has been shut out of the market for a very long time.
You keep talking about how the Vancouver market defies fundamental market economics and pricing. If you look long term, the way you should with something like housing, the future is bright – for homeowners.
I compare the two, yes, because the fundamental value of any asset, whether it’s a stock or a piece of property or a cattle ranch, is equal to the present value of the future cash flows it will generate.
Your argument is predicated on the notion that there are no alternatives to Vancouver. That it’s the be all, end all. This is a mere variation on the tired “best-place-on-earth” narrative. A great sales pitch. Unfortunately, not true.
In reality there is a whole world–a very big world–outside of Vancouver. Yes, it’s a desirable place to some. But there are a lot of desirable places. There comes a point when it’s just not worth it to people. When they say, “You know what, I’d like to live there, but I’m not going to pay ‘x’ millions to do it. I’m going to go somewhere else.”
Look at some of the neighbourhoods in Van West. They’re ghost towns. No families. No kids. People have already voted with their feet.
“There are less than 50,000 single family homes in the city of Vancouver. With demolitions running at about 1,000 per year, in ten years there will be less than 40,000 single family homes.”
Not true, because many of the 1000 demolished SFH are replaced by another SFH (at least if you count houses with a basement suite or two as a SFH).
Houses that are demolish are usually replaced with a duplex
“usually replaced with a duplex”
Okay, sure… if that’s what you want to call a SFH with a basement suite.
I believe the rate of decrease is much less than 1K but it certainly decreasing. Even if it moves at say 100 houses a year the issue is that the population is going up. Put it this way, the detached volume as a percentage of the total market is decreasing each year because more and more attached are being built and the detached number is more or less constant.
Again, you are treating Residential real estate as a financial asset. I understand the discounted cash flow model of asset valuation. The unionised blue collar mortgage free for forty years senior owner couldn’t give a toss for your valuation. The person who wants wants wants to live in Canada close to Asia but not in the U.S. in a city.
It’s not that there are no alternatives to Vancouver. That’s the wrong way to look at it. The right way is, how many people want to be in Vancouver. You can call it a mid level provincial mediocre city all you like, the market of demand for whatever reason will push price. Remember, price and value are separate. Price is what you pay, value is what you get.
I’m not looking at Vancouver West, I’m looking at the city I live in where I watch the market daily. I count the open house listings, I watch prices. So far, it’s worth it to lots of people.
I agree that one’s house is not a financial asset in the strict sense. I’ve always viewed it as a consumer good; as shelter. But it is subject to supply and demand, to buying and selling, and to fluctuations in price. In those respects it IS a financial asset. As such, one must have an objective measure of value… a framework by which to approach the question. And the closest thing to such a framework is fundamental valuation based on income-generating potential.
“The person who wants to live in Canada close to Asia…” to use your quote, can achieve this through renting. They don’t necessarily have to own. Thus, the demand from these people should be reflected in rental rates, should it not? Never mind that there may be a small “ownership” premium, I’m speaking in broad terms. Rents are therefore a useful metric in establishing value. And rents in Vancouver are nowhere near high enough to support current prices.
I am going to budge in here. There is nothing wrong with what you just said. The main issue is that the “ownership” premium is defined by each person differently. You use a historical number applied to Vancouver when most of Vancouver’s recent buyers of say the detached market are used to a number that is vastly different. I bet you if you applied say Beijing’s price to rent ratio to Vancouver Real estate your numbers would look very different than if you applied say chicago’s. The issue here is that your so called ownership premium is not very accurate and swings wildly based on person to person and demographic to demographic. For example, my parents, you could not convince them to rent a 2 million dollar place for say 1K a month. You can say that’s financial illiteracy for example, but they would argue they value the stability of owning a place much more than the financial gains, how do you argue that? There are a lot of friends of mine who would never buy but rather rent, they value freedom of no commitments even if buying may be the better decision financially. How do you argue that? Your so called ownership premium largely depends on which group is buying. I would wager that my parents group is probably much closer to your average west side detached buyer than my friend’s group.
The other issue is that most of these buyers are wealthy famillies, they don’t have a culture of renting in China, they simply don’t rent. Imagine you own a business in Asia and you tell your wealthy business friends that you are renting in Vancouver, you would seriously lose face. How do you put a price tag on that?
The value framework they use is simple, do the place seem cheap. How do they value that? Well, take a similar place in beijing, is that place cheaper here or there? If it is cheaper here than it is considered cheap. If the day comes and our real estate is more expensive than there then we are now no longer cheap. It’s not complicated.
The fact that the so-called ownership premium may vary somewhat by individual does not mean that it cannot be quantified in aggregate and considered objectively in appraising value. Your “who really knows?” argument is a red herring.
I have been tracking the west side detached for since 2013 actually. Why haven’t I done it? There is a little bit of a thing called money. See unlike successful businessman such as yourself, I haven’t made enough except to buy a crap shack on the west side. I could buy something better but that would involve me leveraging 1 million to 1.5 million. Banks will approve 5 times income but to me borrowing 1 to 1.5 million dollars is nuts. So I aim to keep it at about 3 times income. So until recently, the places I would be able to get is not exactly abundant. See, the funniest part of all this is, if what you say comes true, it would really really help me.
And I would argue that, on the contrary, a consideration of alternatives is paramount. The only way to gauge “how many people want to be in Vancouver”, is by understanding why they wouldn’t choose somewhere else.
Purchasing a house in a given location, as with everything in life, is about tradeoffs. People may be irrational at times, but they are not totally unaware of the opportunity costs of their decisions. It’s why most people don’t go out and buy Ferraris, even when they can “afford” to. They perceive that their capital can be put to more productive use elsewhere, and that devoting so much of it to that purchase would deprive them of those opportunities. So, yes, alternatives are everything.
I am going to amalgamate my reply to your other post here too. So you are right, there should be a way to aggregate and quantify things like price to rent and price to income ratios. The disagreement that we have is what that is. You keep on saying look at the historical numbers. I keep on saying, it should reference major asian cities at least in percentage. I would do this type of formula, take a percentage of each culture and look at what that number is for that culture (so say if your population is chinese then you look at beijing and shanghai ratios, cantonese use hong kong, korean use seoul, indian use mumbai etc). For native north americans use some average or vancouver historicals. I haven’t done this but am willing to wager that if we did such a combination based on demographics, the final number would probably be reflective of what that number is for Vancouver currently.
The other area where we disagree is exactly how many alternatives there are. Now I never said that we are the only place on earth they go to. But we are certainly one of the top five. And all five cities have some form of bubbly behavior in their top end market. It’s not like no one is complaining about London or Melbourne or Sydney housing prices. My issue is that when you have a country as big as china whereby the polling suggests half of their millionaires want to get out and this class is growing at a pretty good clip, you better hope there are a lot more alternatives than 5 cities. Because unlike the other 4, we don’t have the type of supply that can handle it. We are the smallest of the 5. I think Melbourne is second smallest but they are still at 4 million people whereas we are at 2.3 mil. Our detached markets especially doesn’t supply enough volume yearly to handle any type of investment.
Question for the bulls. I assume you own Vancouver real estate – seems a fair assumption given your passion for YVR and owning vs. renting – but given the change we are seeing in the market, are you selling now and taking your profits?
I own a detached property. But am actually looking to get into the westside finally by moving my house. So no, I won’t be selling per se. I will probably end up with a more expensive house than what I own today. So I would be stepping right into this so called change in the market.
You were saying that a year ago. If prices are only going up, what are you waiting for??
The new taxes and regulations mean that prices are being affected right now. It’s difficult to “sell and take profits” on a house for a few reasons. If you “sell down” you will pay commission on the sale of the property, property transfer tax on the new one, moving and some decorating/furnishing expenses for a new property. If you own a house in Vancouver, those expenses could add up to $50,000, so there is a high transaction cost to selling a property.
Then there is the question of moving to a strata property, with fees and a set of rules to follow. In all likelihood you are losing significant revenue from a suite, revenue which typically covers property taxes and maintenance costs. You are also faced with investing the difference, a nice problem to have but very challenging to get income these days.
You can sell and rent, but you then face the issues that renters face in this market, including the difficult to solve uncertainty of tenure issue.
There is a fundamental issue that in selling and taking the profits, you are timing the market, generally seen to be a fool’s errand. You incur the transaction cost, and run the risk of being shut out of the market. You then want to make a buy decision at or near the market low.
I will eventually buy down, but the decision will be based on a stage of life decision when I no longer desire to be in a house.
do nothing. why would a homeowner cares what market up or down or side way!
For most people who own it’s not about the market; it’s not a real estate play. It’s just where we live.
There are those who are in the business as investors, builders, renoflators. For the rest of us it’s home. Most properties only come up for sale when someone’s dying, divorced, moving, or facing financial difficulties. Rarer still is if they’re upsizing or downsizing and don’t have kids. That’s why good properties are so rare. It’s mostly the same turds that are upcycled and recycled.
It may not be a “play”, but I don’t believe for one second that most owners aren’t acutely aware of and, in many cases, obsessed with the prevailing value of their house. Neighbors watch recent sales like gossipy teenagers. It’s all Vancouver talks about, lacking as it is in anything else of much substance.
You’re absolutely correct about the concern about the market value of the house. Many people don’t have a company pension, and I have heard from many in the baby boom generation “my house is my retirement.” I have been saving and investing on a working income for over 25 years, but the equity in a house absolutely forms the vast majority of my net worth. A one asset strategy does not make sense to me, but I never anticipated that the recession of 2008 would be such a seminal event in my investment portfolio or that Vancouver real estate would soar to such dizzying heights.
The price of your property represents a tax free gain that is not yet realized, and may never be. If the real estate market fell by 50%, it would not change my financial planning strategy one bit. My net worth would fall substantially, but my financial net worth would carry on. You need diversity of assets whether you own real estate or not. If you want exposure, there are plenty of REITs in Canada.
Brian is a case in point. He has an idee fixe that the West Side is better than the East Side, so he wants to move, no matter what the cost. That’s a rare bird. And if he could buy in the West Side without selling his current property, I’m sure he’d hang on to it.
I don’t understand this. I go to the West Side regularly. If I had the cash, I wouldn’t move there. That’s putting aside the über rich spots like Point Grey waterfront or a Shaughnessy mansion. I’d move on one of those like Drumpf grabbing pussy.
Getting to Hwy 1 from the West Side sucks. Commuting east-west is slow and stressful and the sun is often searing your eyeballs. YVR is slightly more convenient.
Public schools are no better. They’re a commodity. If you want to accelerate your children’s education, you can hire tutors or, better, do the job yourself. I teach my children constantly.
I can cycle to a Chinese grocery and bring back bbq before the rice is done. Not happening on the West Side.
How many properties essentially never come up for sale?
There’s a lol (little old lady) behind that lives by herself in a huge house. She’s been there probably 50 years. She’s not moving unless its in a box. Even then that house will not come up for sale, but go to kin. There are a lot of these. Curious to know how many there are like this – never on the market.
Agree on all that.
@Arnie, this is where you and I disagree. I grew up on the west side and my family owns property on the east side. I agree with everything that you have said there about how great east side is. Hell I buy a bbq duck every other week and that certainly ain’t on the west side. But as you said, you don’t care about school rankings; but that’s where we differ, my wife and I went to the best public schools on the west side and we want that for our kids. Do we really think it makes the difference between a good student and bad? No. But we just wanted to give our kids the same opportunities that we had. And if you look at the rankings, all the best highschools are on the westside. Dunbar skyrockets in price in part because Lord Byng is now the best public school. Let’s say we want to send our kids to the private schools, the best four are on the westside. For education, there is no question which side is superior in terms of rankings. So that’s a large part of why we want to move to the west side. The other reason is the proximity to the beaches. We frequent spanish banks, kits beach, english bay, etc. So the west side gives us faster access to those things during the summer. If you look at our social circles and movements, they are more influenced toward the west side also. So hence why the westward move for us.
Brian, you have said yourself that buying on the west side would be a financial overstretch. Have you paused to consider that, with the hundreds of thousands, if not millions, of dollars saved by choosing to live somewhere else you could fund innumerable private lessons and extracurricular activities for your children that would more than compensate any difference in the quality of their education? Hell, instead of them just reading about European history, fly ‘em there. And besides that, remember that so much (most?) of a child’s education comes from his parents, and the values and lessons they impart. You really can’t underestimate the importance of that.
Instead, you want to indenture yourself to a bank for decades. This will mean you will have to work more than you would otherwise, and that’s less time you’ll spend with the kids, and hence fewer educational opportunities that you’ll be able to give them. Not to mention that the stress of work will distract and tire you, making what time you do have less productive. Before you know it, they’ll be off to university and you’ll be stuck with your mortgage payments, wondering what the hell happened, and wishing you’d had more quality time.
And what if something happens to your income-earning capacity? What will you have in the way of liquid financial reserves? How is that looking out for your kids’ future?
And let me tell you. I grew up in Point Grey, and my siblings and I all studied at the best public schools, including Byng, P.W. Mini, etc. I used to think school rankings were all-important, too. But they aren’t. They are unreliable indicators of your child’s prospective education. Rankings are based on test scores, which may or may not reflect the quality of the teachers, and other factors, that you probably think they do. Just as often, they reflect the proportion of psycho Tiger Moms who place academic performance above all else, at tremendous psychological and developmental cost to their children. Who wants that?
Arnie is right, public-school education is a commodity. It’s a common curriculum, and there are great kids and teachers everywhere. Don’t deprive your children of alternative learning opportunities, and of financial security for your family, by mistaking a number on a piece of paper for some sort of golden ticket in life.
This is actually very sensible what you said here. I have thought of the exact thing that you have just mentioned. I went to some of the best schools on the west side but did it really make that much of a difference, I wouldn’t think so. In fact, some of our teachers were transfers from east side schools so in reality it’s probably all the same. This is actually one of the reasons why I still have a bit of hesitation on this move. Cause I could be mortgage free in a couple of years without it. Now, do I really want a property with a say 60 year old house on it and leverage another 500K to 600K when like you said I could be going to wherever I want in the world every year with the mortgage saved? Also like Arnie correctly points out, in reality most of my shopping preferences are in the east side of vancouver. So that balances out the convenience of say going to the beach. For sure it’s not an easy call. However, in my case, my wife is hell bent on going to the west side. I have made the similar argument with her that you listed below but sometimes it is hard to change a woman’s mind. So I am monitoring the situation. The part about the sudden loss of income etc isn’t a huge deal, I am well buffered in terms of my other financial assets and savings; also have a whackload of insurance on things like life or critical illness so it’s not neccessarily that much of risk. But those points that you made here about quality of life are valid. It is not a neccessity for us to be on the west side vs the east side.
Addendum:
Finland is regarded as having the best public school system in the world. Kids don’t start school until they’re 7, and have a much shorter school day.
Schools here function more as a daycare than anything. When I look at the nonsense my kids are “taught”, I feel guilty for subjecting them to it. As an example, one lesson was on Bolivia. Put aside the irrelevance of this subject to a group of 25 11-year-olds facing a school teacher who has no intrinsic interest in the subject. Compare this scenario with one in which we, as a family, watched a documentary with the mayor of Bogota riding a bicycle and talking about transportation issues ((inspiring); or Anthony Bourdain doing one of his shows in this city.
One is a bore; one is fascinating. School is an anachronism.
P.E. is a pile. Kids know how to play. We don’t need someone getting a full year’s pay (with a fat defined pension), for half a year’s “work”.
Kids get “silent reading time”. What’s that got to do with teaching? My kids read all the time. Doing it in a stuffy school is unpleasant.
All I want from the school is maths. My kids happen to be in an arts program. I’m good with that too. The rest of it is daycare.
I highly recomment Michael Moore’s: Where to Invade Next. He profiles Finnish and French schools. The culinary experience of the French kids will make you jealous and realize what a comparitively primitive society we have. Brown baggers.
Comparatively
3575 29th Ave E: An example of a typical fresh turd squeezed out into the marketplace. Last sold in Feb 2012 for $663,800.00., it’s now listed at $1.428M. The location is painful – hideous traffic. The house is a nothing. The laundry is dismal. The “Japanese garden” is a joke. An awful place. Who could imagine this being worth $764,000.00 more in less than five years. It was shit then and it’s shit now.
U.S. Election Special
~ Trumps Bologna Putin, $10.95
~ Clinton Poutine Two Liars, $8.95
http://imgur.com/a/O5cQ0
#trending #”polishthisturd”
StatsCan’s new housing price index
http://www5.statcan.gc.ca/cansim/a26?lang=eng&id=3270046
“The New Housing Price Index (NHPI) measures the change in selling prices for new homes. It is a leading indicator of health in the housing sector.
A higher than expected reading should be taken as positive/bullish for the CAD, while a lower than expected reading should be taken as negative/bearish for the CAD.”
http://imgur.com/a/A6COy
” Aquilini exec who advised Musqueam, Squamish and Tsleil-Waututh on Jericho is now their development CEO #bcpoli ”
http://www.vancourier.com/news/exclusive-leaked-audio-says-towers-part-of-first-nations-jericho-lands-vision-1.2240837
Guys, just give up. Nothing will convince El Ninja that he could possible be wrong in any of his reasons. So, just stop it and don’t bother. Not worth the the efforts.
As for me personally, if it were up to me, I would sell my place (my share of it) and move to some 3rd world retirement country. But wife overrules me.
We are likely to sell in the next year, but where to move to? That’s the big issue. Staying in Van near my kid’s school means 2br bedroom with 3x income mortgage, or for a SFH, move to TriCities – Richmond SFH has not fallen yet, and there is always the bridges and earthquake problems. So a price crash would actually help us. Heck, we might even get into the rental biz depends on what kind of rule changes the BC Libs come up with.
el nino is the type of guy who would argue to his wife that his pee smells like perfume! Why is a smart person like him landless? There is always a reason for everything.
Back to the trailer at trout lake!
Oh, look. Trailer park fred has taken a break from fly swatting to grace us with his presence.
And no, you can’t convince a lot of Chinese people to rent. My dad is case in point. He will never rent and he would not consider moving from our current area.
As for all those European culture thing, uhm..what makes Europe the culture center of the world? What’s with the if you know Europe history & culture, you are a cultured person? Otherwise you are a country bumpkin? And really, how many working parents can take their kids to Europe for more than 3 weeks at a time? I don’t think you would really get the culture with just 3 weeks stay. You think you are getting culture, but no, you really aren’t.
More art, philosophy, music, and varied cuisine have come out of Europe in recent centuries than anywhere else. There are culturally rich places in Asia, and elsewhere, too, of course, but as a relatively small area, Europe packs the greatest punch. That’s a fact. Having said that, it was just an example. Get over it.
That assertion is way too funny….little well frog.
Take a nice trip to Europe and you will understand…their real quality of life put Northamerica to shame.
Vancouver rating is a joke.
3636 Haida: underpriced by at least half a mil – Big Hall effect; recent build; good proximity; larger lot. Has to be an oldster getting screwed.
Funny how those listings that you labelled “underpriced” were sold fast even if they were dumps.
Double ender, to the pretender.
Not all bears are your friends, rather they are competing for the same thing you are after.
Just as not all fact-finders are pumpers, rather they are observers.
I am going to plead ignorance for a bit here, but I am a little confused about something. Can someone explain to me the exact details of the CMHC insurance policy and how it relates to a 20% down payment. Does a mortgage that has at least 20% down not require cmhc insurance? Does CMHC insure all mortgages under a million dollars with a minimum 5% downpayment? If I buy a 1 million dollar home and put 40% down, am I still insured by the CMHC? I am well aware that CMHC is a government organization that insures mortgages but am not clear on what types of mortgages it insures. Or does it only insure mortgages that are between 10 to 20 percent down and under the value of a million?
Hi Brian,
CMHC requires banks to get mortgage insurance (MI) for any loan with less than 20% down. Banks can optionally purchase MI for loans with higher down payments as well, if they desire (MI makes it easier to sell the debt).
CMHC MI requires that the purchase price of the home be under $1M, regardless of the size of the down payment. CMHC MI also has other requirements in terms of debt service ration and the like.
Once the dust settles on the changes, I think you’ll be able to go to a non-bank lender and get a mortgage that is completely uninsured (i.e. subject to the lender’s risk policies only, not CMHC’s). However, it will have a higher interest rate, to compensate for the lack of MI. So it might become possible to get an uninsured mortgage with only a small down payment. Of course, I’m assuming that the institutions that lend money to these non-bank lenders are willing to take on the additional risk…
Thanks for the explanation. Makes sense now.
3919 Lillooet: sits over a stream. If you want your mortgage under water try digging a full basement here.
How many listings have the disclosure that a property sits on a bog or over a buried stream?
A house at Loureleaf Road, Thornhill, last sale in 2014 May at $1.45 million, has been sold reportedly 15% above asking. It was the site of a grisly find in March.
There are so many words spilled about every nuance of Vancouver real estate, but virtually nothing about bogs, underground streams, soil with liquefaction potential, and aquifers.
7084 Beechwood in the West Side is an exception. That place has been gushing how many millions of liters of water for the past year? You can’t hide that – it’s quite a sight. Should be a tourist attraction.
It’s costing the owner a fortune in remediation; and the properties surrounding it have the possibility of turning into sinkholes. Sometimes it is better to rent.
How excited would West Sider wannabes be if Arbutus Ridge was renamed Arbutus Bog? That bog extends from Prince of Wales school to 18th Ave; bounded by Arbutus and Trafalger. That bog is big.
And it has streams running under it. Valley Drive follows one of them
Kerrisdale Park is a bog. Driving around here is like being in a storm tossed boat. That would be a catchy line in a real estate listing. How many foreign buyers would that reel in.
Back in the fabulous East Side, one of the worst areas is Killarney Park – a huge bog surrounded by soil with liquefaction potential – completely surrounded. Want to build your dream home here? It’s reminiscent of Ditchmond with street signs that refuse to stay upright.
The only bog you ever hear about is Mount Pleasant’s Tea Swamp. That too has a section, behind St. Joseph’s Hospital, with soil that has liquefaction potential.
Arbutus Ridge used to be called Asthma Flats, or Consumption Hollow.
3637 Prince Albert – new listing. Build your dream home on a bog.
6643 Vivian – sitting on top of soil with liquefaction potential next to the massive Killarney Bog. Good luck building a full basement here.
Michael Ching aka MoYeung Ching and his daughter Linda Ching are in the media’s spotlight again.
thanks to this documentary (@09:46 – 12:40)
And the likelihood of Canada handing people like him back to China to face justice? 0% cuz Canada don’t believe any country should have the right to impose capital punishment on their own criminals.
455 17th Ave E – not for sale – but interesting to look at. Punch in Tea Swamp House, or Vancouver Garden House.
Designed by an architect and built in 2005, there’s lots of information online – like how it has 30′ steel piles supporting a floating concrete base.
These smug owners are renting their back studio/house to tourists at $1,200.00/week. WTF.
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NO 15% TAX IN ABBOTSFORD FOR FOREIGN BUYERS
Abbotsford is one of the fastest growing city in Canada in Fraser valley region of British Columbia about 50 km from Vancouver with approx 133,000 people as of 2011 census. Abbotsford city comprises majority of English population of 86,660 about 65% followed by Punjabi 24,660 about 18.71% and various other mixed ethnicities.
Abbotsford connects well with Vancouver via road and through railway from city of Mission 15 mins drive from Abbotsford. Rail called West coast express connects to Vancouver. About 62% people living here work here. Most of the remaining 38% commute to Mission, Chilliwack or Vancouver and its suburbs Surrey and Langley. More than 25% of Abbotsford’s workforce commutes to Abbotsford from other municipalities.
Abbotsford has about 95 churches, 3 Sikh temples and a Hindu temple. Abbotsford has the oldest Gurudwara built in 1911 in north America and now it’s a national historic site aged over 100 years old.
Abbotsford is big on agriculture, surrounded by berry farms and one of the major employer here. Abbotsford supplies blueberry, strawberry and raspberry all over the world. There are few lumber mills, manufacturing accommodate large population for employment.
The city has international airport with easy check-ins, short lineups and affordable parking. There are flights going to all over Canada from Abbotsford international airport. The city has impressive sports facilities 4 huge ice rinks with phenomenal sports grounds with skateboard rinks.
There are 46 modern well equipped schools with high education standards with diverse educational programs. Good transportation facilities available for students. Abbotsford has a university offer many courses from bachelor to master’s degree programs and lot of trade programs. Ufv is one of the preferred university by international students.
Abbotsford has three major zones East Abbotsford, West Abbotsford and Central Abbotsford.
Central Abbotsford comprises mix type of accommodation with lot of condos and apartments with lot of single-family homes. There are churches, schools, Sevenoak mall and a beautiful Mill lake park with paved trail goes around two kilometers in the center of town.
The town is next to US border called Sumas-Huntingdon border. You can see mount baker which is 47 km from Abbotsford in US. Mt baker is an active volcano and a famous ski resort. People around the world visit Mt baker for skiing and other sports activities.
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PERVINDER
Asshole piece of shit real estate agent Perverted Kangaroo. Asshole. Go pay for some advertising. Jackass. As if someone from this site is going to call you because of your spam. You brainless toad. Shame on you.
Stay classy, Arnie.
Agree with El Ninja — Please keep it civil.
I really don’t want to have the hassle of having to apply censorship.
Hi Vreaa. I made a couple of posts, but they didn’t show up. Any reason why? Thx.
For some reason (perhaps your handle?) they went to the spam folder..
Now released.
It’s too late to turn back the clock now. And you thought it ominous when the Expo land was sold. Btw …
Concord Pacific’s Terry Hui is battling the Widjaja family who already own 6 pulp mills in Canada over the Plaza of Nation development site. Forbe estimated in 2015 Widjaja’s networth at US$5.6b; GlobalAsia tagged it at US$10.5b. If Terry is tenacious, he wouldn’t let this piece of meat slip out between his teeth. No doubt a BC judge may be led to convince that the Kongers and the Widjajas are purrfect natural bedfellows, and it’s an open and shut case of acceptance and consideration.
Spamming self-promoting cretins deserve diatribes.
… After no new house listings in Renfrew Heights for weeks, there are two:
4279 Boundary Road: $1.299M – pure unmitigated hell – house-shaking motordom hell
3322 Worthington: $2.388M – for the extra $1.089M you get something almost good – it does have the Big Hall effect; it is a solid-looking house.
But it’s a property with a lot of ifs – if it didn’t have Grandview Hwy drilling your eardrums out; if it wasn’t below grade; if it didn’t have a house on its eastern flank; if it wasn’t near the bottom of the Grandview Gully; if it didn’t violate the basic tenets of ergonomics and feng shui.
In feng shui, stairways must not face doorways because the wealth of the family will be sucked out. This house exemplifies this giddy sensation. It’s unsettling. Worthington is not worth it – not by a long shot.
There was no spam I just showed that there is no 15% tax in Abbotsford area for foreign buyers. Is that a false statement. Everything i posted was a truth and there was no hyperlink to promote anything. You must delete that post and be apologetic and show some respect to others.
The spamster phony has been affronted.
A phone number with your name is not a link?
You cretinous Perverted Kangaroo – why don’t you hippity hoppity door to door and find some little old lady that you can con into giving you a listing.
Agents are reviled for many reasons. Your behaviour is one of them.
You’re a vile phony fishing for a listing.
This is again posted by Mr Arnie Carnegie. He is calling me names not good for an educated and knowledgeable person like him.
Arnie Carnegie | 27 October 2016 at 12:22 pm |
The spamster phony has been affronted.
A phone number with your name is not a link?
You cretinous Perverted Kangaroo – why don’t you hippity hoppity door to door and find some little old lady that you can con into giving you a listing.
Agents are reviled for many reasons. Your behaviour is one of them.
You’re a vile phony fishing for a listing.
Where you a loser before you became an agent, or did it come with the turf?
Mr Arnie Carnegie
I think you have a tendency to be abusive. Please try not to be abusive to friends or well-wishers. I don’t know where did you get this tendency from but I feel pity and pray for you
This the reply i got Arnie Carnegie | 27 October 2016 at 1:00 pm | Reply
Where you a loser before you became an agent, or did it come with the turf?
Pervinder, your original post read like ad copy, and you included your phone number. It didn’t add to the discussion. And your addition of a telephone number made it spam. Arnie may have taken it a little far, but your post was spam, without a doubt.
And this clown just happened to have the text of his “public service announcement” translated into Chinese. Maybe he should spam Bob Rennie with his breaking news. My guess is that this piece of spam was painstakingly fabricated by his piece of crap brokerage for use by all of the agents.
Like every brokerage, the name of the game is getting lots of smarmy real estate rodents on board. The funny thing about Kangaroo’s brokerage by default, i.e. – will take anyone with a license and cash to pay the broker, is that their “Join Now” ad is of five white people. Good luck finding five white people working there. Don’t they want to hire white people? They should really make the effort.
Why don’t you pray to your god to not be a loser.
In the “About me” in your profile it says: Loser with a real estate license. That’s it. Did you ever have a real job, or have you always been a con.
You want to pray? Get down on your knees. Find some priest that enjoys what you offer. Don’t forget to swallow and make yummy sounds.
Arnie Carnegie
there is a old saying “Don’t argue with idiots because they will drag you down to their level and then beat you with experience”. You must have an abusive childhood.
There’s the spammer – Perverted Kangaroo – making yummy sucky sounds.
3398 Rupert: garbage house in a horrific location – one of the worst possible – the traffic will drive you insane. Illegal suite. Illegal deck cover. Not worth buying even at the old assessed of $1.332M. The typically smarmy agent has it listed at $2.5M. Ludicrous.
3333 Copley: undesirable viewless pie-shaped lot on the Trout Lake Bog. Overpriced by a million. Russell Peters could have written the copy on this one.
buyer’s remorse?
http://tinyurl.com/hk4846x
The School Board is much better off leasing the closed schools to foreign private schools – German, Finnish, Nihongo, Mandarin … so long as they offer IB program. Vancouver now have 3 French private schools and preschools (Jules Verne, Calypso and Jacques Cousteau.
Yep, we can look forward to the opening of Bismark, Lei Feng, Ho Chi Minh and other such private schools here.
I have seen first hand the bubble hear in BC, as I am a realtor in Whistler. I have an blog post on my website that corroborates the data here if anyone cares to have a look. http://www.daveburch.ca