Vancouver “an international housing-affordability basket case” with “RE bubble risk the worst in the world” – Maclean’s

“It was such a lovely picture that the City of Vancouver managed to paint of itself over the 10 years that Gregor “Happy Planet” Robertson was mayor that it’s no wonder so many people believed it. A thriving and happily multicultural Pacific metropolis of bike lanes and balmy weather. Diversity and eco-density and backyard chickens, high-tech startups, and the ski slopes on the mountains just across Burrard Inlet.

Now, with Robertson on his way out, and his Vision Vancouver party a ruined brand, whoever comes out on top in the October civic elections will be left to deal with what’s become of the place. Vancouver is now a kind of free trade zone for gangland money launderers, absentee offshore real-estate speculators, Chinese princelings on the lam and globe-trotting tax frauds. Metro Vancouver is an international housing-affordability basket case and the epicentre of Canada’s fentanyl overdose crisis. Over the past decade, homelessness has doubled, at least 4,000 people are sleeping rough in the streets, and there are now 70 homeless camps across the region. …

For now, the job of sorting everything out has fallen mostly to David Eby, B.C.’s 41-year-old Justice Minister and Attorney-General. Two months ago, in a speech at a conference co-hosted by Transparency International Canada and the International Centre for Criminal Law Reform, Eby described Vancouver and British Columbia in the most accurately unflattering terms.

“We knew there was something strange going on, but, my God, we had no idea it was this big,” Eby said. British Columbia had become reduced to “a jurisdiction where the rules do not apply to white collar crime, fraud, tax evasion and money laundering, where even if the rules do apply, enforcement is absent.”

Over the past 10 years, the B.C. Securities Commission had collected less than two per cent of more than a half a billion dollars in fines levied against a rogue’s gallery of fraudsters, swindlers and ripoff artists. Among the beneficiaries of the previous Liberal government’s opaque “Advantage B.C.” head-office tax shelter scheme: PacNet, a collection agency the U.S. Treasury Department had listed as a transnational criminal organization with a sordid track record in money laundering and mail fraud, and China Poly Group, a shady Chinese state-owned enterprise with a payroll of 76,000, intimate ties to the People’s Liberation Army, and a portfolio that ranges from real estate development to arms and explosives and art exhibits. Advantage B.C. is now shuttered.

Among the sleazier aspects of the Liberal legacy was a peculiar toleration for dirty money being laundering through B.C.’s licensed casinos. Provincial officials were aware of the nastiness as far back as 2009. In January of that year, the Integrated Illegal Gaming Enforcement Team (IIGET) conducted a threat assessment focusing on organized crime in licensed casinos and asked the Crown-owned B.C. Lottery Corporation for expanded powers to tackle the problem. Six months later, the IIGET unit was disbanded because of “funding pressure.”

Last September, Eby appointed former RCMP deputy commissioner Peter German, an authority on money laundering, to come up with a series of recommendations on how to cut the flood of dirty money into B.C.’s casinos, Metro Vancouver’s overheated real estate market and “other areas of B.C.’s economy.” German’s report is due next month.

In the meantime, Eby has instituted a simple rule change aimed at preventing drug money from being loaned out by underground “banks” to visiting high-stakes gamblers. The change was recommended to the Liberal government in 2016 in a report by MNP LLP, a national accounting, tax and consulting firm. The Liberal government kept the report secret. Among its findings: over the course of a single month—July 2015—Richmond’s River Rock Casino accepted $13.5 million in $20 bills from mostly “high roller Asian VIP clients,” in transactions that sometimes exceeded $500,000.

The MNP LLP rule change that the Liberals ignored, but which Eby has put in place: You will no longer be able to drive your Lamborghini from your $10 million Point Grey mansion across the Oak Street Bridge to Richmond, stroll into the government-licensed River RockCasino and buy your chips with a half a million dollars in $20 bills stuffed into a duffel bag, then cash out on the same day.

It’s a start.

Last month, Vancouver showed up as the third most unaffordable city on Demographia’s list of 92 cities around the world, behind Hong Kong and Sydney. When it comes to cities undergoing a deterioration in housing affordability, Vancouver ends up the worst. Demographia classifies a property market with median home prices five times the median income to be “severely unaffordable.” In little more than 10 years, Vancouver’s housing affordability predicament worsened from a home price multiple of 5.3 to 12.6 by last year.

Andy Yan, an urban analyst with Simon Fraser University’s city program, has been tracking the deterioration in Metro Vancouver’s housing affordability for several years. In 2014, 28 per cent of detached homes in Metro Vancouver were valued in excess of $1 million. In 2016, the percentage had jumped to 43 per cent. As of July 1 last year, 73 per cent of detached houses in Metro Vancouver were assessed at $1 million or more. The 15-per-cent foreign-buyers’ tax imposed by the B.C. government in 2016 as a sop to public outrage caused only a slight pause. Within weeks, the upward climb in house prices resumed.

Back in 2011, when the average price of a Vancouver home was roughly 11 times the average household income, Mark Carney, who was the Governor of the Bank of Canada at the time, warned in a speech to the Vancouver Board of Trade that Vancouver real estate was taking on characteristics of financial asset markets that become trapped in “the classic market emotions of greed and fear—greed among speculators and investors—and fear among households that getting a foot on the property ladder is a now-or-never proposition.”

The greed and the fear took hold, compounded by a real estate spending spree of billions of dollars’ worth of capital spirited out of China by a variety of illegal, semi-legal and circuitous routes around Beijing’s currency controls.

The disastrous federal immigrant investor program contributed to this state of affairs by effectively selling Canadian citizenship to millionaire investors, mostly from China. The federal program was shuttered after assessments determined that the millionaires were contributing less to the federal treasury in tax returns than refugees. But the Quebec immigrant investor program continues in the form of a type of racket. Quebec skims an $800,000 interest-free loan from the investors as soon as they arrive. Most of them never settle in Quebec. Roughly half of the Quebec immigrant investors (28,000) have moved to Metro Vancouver, another 22,000 established residence in Ontario and elsewhere. Only 6,000 have stayed in Quebec.

A South China Morning Post analysis last December concluded that only about half of the primary breadwinners of immigrant-investor households remain in Canada after they settle their spouses and children here.

Meanwhile, detached houses and condominiums in Vancouver have become assets in a shadowlands protected by Canada’s lax money control policies. The British-registered charity Tax Justice Network, in its most recent Financial Secrecy Index, pegs Canada’s financial system as even less transparent than the setup in Russia or China.

Something is clearly rotten in Metro Vancouver’s property market. Household incomes reported to the Canada Revenue Agency in Metro Vancouver’s swankiest neighbourhoods are equivalent to incomes reported in the deeply impoverished Downtown Eastside. The disconnect between declared income and apparent housing wealth persists across Metro Vancouver “until you get out to the distant suburbs,” Eby says.

Two years ago, when the average detached home price within Vancouver city limits had soared to $1.4 million, the South China Morning Post crunched some numbers tallied up by the mathematician Jens von Bergmann at the Vancouver data firm MountainMath Software. What the data showed was that one in 10 Vancouver households were reporting a household income that was less than the amount required just for property taxes, mortgage payments, utilities and so on. That’s 24,960 households claiming to earn less in a year than they were spending on accommodation.

Another confounding figure: an almost equal number of homes within Vancouver city limits were empty last year. City of Vancouver staff identified 25,497 homes either vacant or occupied temporarily or by foreign residents. Of those, 21,820 homes were empty, year round. Mayor Robertson’s remedy was to apply an empty homes’ tax of one per cent of the home’s value. The program cost $4.7 million to set up and an additional $1.5 million in annual operating expenses.

It’s gotten so that it is practically impossible to determine how much of Metro Vancouver’s real estate is owned by Canadians, or even by local residents. A recent Transparency International study found that because of the presence of shell companies, numbered companies, trusts and proxy owners (students, spouses) listed as title holders, it is impossible to know who, exactly, owns about half of Vancouver’s pricier homes.

Last month, Statistics Canada released data showing that roughly five per cent of residential properties in Metro Vancouver appear to be directly foreign owned, but that figure may reflect only “the tip of the iceberg,” according to Haig McCarrell, director of StatsCan’s Canadian Housing Statistics Program. SFU’s Andy Yan crunched StatsCan’s numbers to discover that one in five of Metro Vancouver condos valued at $1.5 million or more (a typical three-bedroom condo lists at about $1.62 million) are foreign owned.

Among the items Vancouver housing activists want to see at the top of David Eby’s to-do list is the closing of the “bare trust loophole,” a tax dodge that Ontario outlawed in the 1980s. The loophole obscures the actual owners of a property and facilitates the evasion of various federal and provincial taxes.

On Feb. 20, B.C.’s New Democrats will unveil their first provincial budget in 17 years. The Union of B.C. Municipalities has put forward 32 proposals to address homelessness and clear up the housing horror show—mainly steep speculation taxes and investments in rental housing (Metro Vancouver’s rental vacancy rate currently stands at one per cent). There’s high hopes for the new $15.9-billion federal “co-investment fund” that Ottawa announced last year. Green Party leader Andrew Weaver wants B.C. to take a page from New Zealand’s playbook and ban foreign ownership of real estate outright.

Whatever B.C.’s new government does, deflating Metro Vancouver’s obscenely bloated real estate bubble should be expected to provoke stiff, big-money resistance. Vancouver’s real estate “bubble risk” is the worst in the world, according to the Global Real Estate Bubble Index compiled by the Swiss bank UBS. But at some point, Metro Vancouver’s property bubble is just going to have to burst.

And when that happens, there will be hell to pay.”

– from ‘The battle to clean up B.C.’, Terry Glavin, Maclean’s, 7 Feb 2018 [hat-tip El Ninja]

In our years of Vancouver RE Bubble-watching, we can’t recall a more adamant mainstream article… With this degree of shrill realization reaching voices like Maclean’s, the end has to be in sight. – vreaa

158 responses to “Vancouver “an international housing-affordability basket case” with “RE bubble risk the worst in the world” – Maclean’s

  1. Give credence to the criminal banksters at UBS? No.
    And the “big” numbers quoted above are a pittance compared to what local billionaire parasites have siphoned off.
    Red herrings.

    • white_angelo_blockchain_commando

      sure, the banks are at the heart of the pb … the central bank in particular because it facilitates the creation of unbacked credit… but don’t forget, we also let it happen … when fortune swings in our favor, we are willingly complicit

    • Address the argument, not the messenger.

  2. white_angelo_blockchain_commando

    i grew up on the westside, back when it was considered decent, before it became ‘ultralux’ … i’d try to tour by bike the old haunts every time visiting town … one could conclude, quite easily, something was very wrong with foundation of the entire pyramid, social, economic and otherwise, when the best neighborhoods are littered with vacant, rotting houses … the why becomes obvious once the eyes are open

  3. How would ‘ending badly’ actually look like when, as the analysis shows, there is so much capital out there. It doesn’t appear to be a case of dodgy loans when multi-million dollar homes are owned by low (declared) income families.

    Even if things go pear-shaped, I can’t possibly see the same carnage that the US experience a decade ago.

    • You are forgetting the thousands of non-multimillion-dollar homes owned by regular, average-income-earning Canadians who have taken on record amounts of debt to speculate on continued price increases. Even those owners who haven’t speculated and haven’t gone into debt have in many cases re-calibrated their entire financial lives on the “wealth” that they perceive to have accrued to them in recent years. They, too, will feel much pain. And the “wealth effect” of rising prices will go into reverse, with sharply curtailed consumer spending, to the detriment of the broader economy.

      • I see what you’re saying.

        But the question then becomes whether it is morally just for the government to recalibrate Vancouver’s real estate market in one fell swoop for the benefit of the prudent but at the cost of new immigrants, foreign investors, affluent Canadians and blue collar locals who followed their animal instincts.

        Just what is the government supposed to do?

      • I don’t know that the government *can* recalibrate the market in one fell swoop. It would take dramatic and politically untenable action to do that. They have but crude tools at their disposal (empty homes tax, closing loopholes here and there, etc.). What the government should do, and I am referring to every level of government, not just the city, is apply the rule of law and then stay out of the way. No subsidies to homeowners, no grants, no immigrant investor program, no this privilege or that privilege. Just let the market operate freely. It is because of central banking and government interference that we got into this mess, to a large extent.

      • How would one define a ‘freely open market’? Does it allow foreign citizens to participate in the Canadian real estate market as it had prior to central banking intervention?

        If the problem rests with loose monetary policies of the past decade then the anger should really be directed at central banks (who operate independently from government) and not at local and national government.

        Yet, as central banks are mandated to keep the economy growing at 2-3% then what have they done wrong?

        It really is an extreme view to expect a crash in the propert market. We’re living ‘the best of times and the worst of times’ for the foreseeable future.

      • As I said, all levels of government have meddled. And, no, it is not an “extreme” view to expect a crash. Not when the market is egregiously overvalued by every measure, and not when every other instance of market overvaluation, the world over, has been followed by a crash.

      • How do you see a crash happening without government intervention? Unless rates shoot up, which is most certainly an extreme and outlier view, I find it hard to believe the many foreign and local owners, mortgaged or not, selling their properties at distressed prices.

        In my mind, if such an environment took hold, Canada will become an even more attractive currency to hold (which naturally leads to investments into assets such as property).

        The reality is that inflation has took hold more than the official numbers (CPI) show. The property market reveals just how much of an impact monetary easing policies have had.

        The property market in many cities that have an international link has been on a bull market for nearly 20 years now. Unless property prices crash and last for just as long, there will have been no correction but rather just a blip like 10 years ago.

        Asian economies, and not just China, have grown so much that its hard to imagine the world’s wealth level returning to the early 2000s.

        I could be wrong but in my mind, Canada’s competitiveness globally has fallen behind which is why Canadians are having a harder time climbing the property ladder.

        Unless Canada implements rules to limit global capital into its property market, a nearly impossible task, there really is not much that will trigger a correction.

      • Thanks for the discussion, BLM and El N.
        BLM: “I find it hard to believe the many foreign and local owners, mortgaged or not, selling their properties at distressed prices. ”

        This is the crucial point, isn’t it?
        How much does the market have to drop (or how long does it have to pause) before (1) those who are holding based on the belief that prices only go up start to come to market (and closely related: (2) buyers who up to now have only bought on the premise that prices are going up and up forever step away.)
        We’ve called both of these mindsets ‘speculative’ because they involve holding/buying where the idea of price increase is paramount.

      • I’d argue that the mindset of buying/holding property on the assumption that prices will rise has always been a paramount factor. Why else would one buy if that were not the case?

        On selling, unless there are more compelling investments, or even simple store of value to hedge against real world inflation (not headline inflation), of which there is none for the common folks, then even declining prices may not be enough to trigger a meaningful correction. Sure, you may have some temporary panic selling by those who are financially vulnerable but given how many households there are in Vancouver proper that show unusually low incomes compared to the property they live in, its hard to see a big correction let alone a crash.

      • “I find it hard to believe the many foreign and local owners, mortgaged or not, selling their properties at distressed prices.”

        Prices are set at the margin, and there are always sellers. That’s all you need to know.

      • “given how many households there are in Vancouver proper that show unusually low incomes compared to the property they live in, its hard to see a big correction let alone a crash.”

        Is it me, or does this logic sound backwards?

    • BLM: “I’d argue that the mindset of buying/holding property on the assumption that prices will rise has always been a paramount factor. Why else would one buy if that were not the case?”

      Answer: For utility; for use.
      This idea is closely related to the aforementioned crucial point (and it’s great that you ask it in that fashion because it illustrates a lot about the RE zeitgeist…)..
      In Vancouver, we’ve forgotten about the REAL reason for buying RE… to USE the property!!… in normal times RE prices rise at the same rates as wage inflation… RE is not a lottery ticket or casino chip (or shouldn’t be!!).
      In fact, to summarize our core beliefs, we’d like to see RE in Vancouver return to prices that are commensurate with utility value in our society/economy. (That’s how other essentials are priced, why not RE?)
      We don’t think this will come about by government intervention, but rather by market forces (speculative bubble crash).

      • white_angelo_blockchain_commando

        bonds down (i.e. rates up), equities down, commodities up (i.e. core inflation up) … all 3 long-term trends turned/turning … if the cb’s try to fight it this time, it’ll light an even bigger fire under the 3rd one … probably see a period of +ve real rates before it can turn again … i think you’ll get to see your wish fulfilled

      • Speculation has always been part and parcel of real estate. Always. Otherwise there’d be no development. Yes, there’s more speculation now than in the past but that’s symptomatic of loose monetary policies and in a more globalized world. Just look at any asset price that generates a yield.

        I don’t believe many people bought into property having expected it to be a lottery ticket. How many of us, including those who have benefited, expected prices to be where they are now?

        Even the utilitarian home buyer expects appreciation in normal times. And normal times may have become a thing of the past.

        If and when rates normalize, Vancouver will have changed. The world has become more globalized, and the city (to a larger degree than other major cities due to geography) has become the epicentre of Asia’s economic rise manifesting in North America. Similar things are happening in the world of business too in the US and Europe.

        Without government intervention, nothing structural will change. Rates are only crawling up at a snails pace and if the economy can handle further rises, it means there is growth and inflation.

        You’d have to admit, a 50% correction (or what you consider the equilibrium) is pretty darn unlikely.

      • Obfuscation. Bulls are skilled at it.

        “Speculation has always been part and parcel of real estate. Always. Otherwise there’d be no development.”

        This is code for, “move along, nothing to see here”. The notion that speculation is a factor makes bulls uncomfortable because they would rather believe that prices reflect the city’s true worth and its “Best Place on Earth” status. So they downplay it.

        Healthy property development is not spurred by speculation, but by the expectation of income generation. Development spurred by speculation leads to oversupply.

        “How many of us, including those who have benefited, expected prices to be where they are now?

        Nobody has said that buyers ten or fifteen years ago expected prices to be where they are today. We are saying that many expected them to be significantly higher than at the time of their purchase. Later buyers expected prices to go higher still. And so on, in a self-fulfilling, speculative frenzy that has led us to where we are today.

        “normal times may have become a thing of the past.”

        The “it’s different this time” argument is one of the most dangerous pitfalls in investing.

        “The world has become more globalized, and the city (to a larger degree than other major cities due to geography) has become the epicentre of Asia’s economic rise manifesting in North America.”

        First, Vancouver is not a “major city”. It just isn’t.

        Second, what sort of marketing mumbo-jumbo is “epicentre of Asia’s economic rise”?

        This is just another vague rationale, like so many others used prior to bubble implosions. In the 90s stock market it was the “information superhighway” that was going to render the traditional economy obsolete. In 2006 it was a demographic tidal wave of retirees that was going to propel Phoenix and Florida property prices to the stratosphere. A couple years later, it was “peak oil”, and the price of crude was going to $250!

        There’s always excuses of one kind or another. And the fundamentals always crush them.

        “Rates are only crawling up at a snails pace.”

        So far this is true but I would point out two things. One, you might be underestimating just how vulnerable many households are to even slightly higher rates. There has been subprime lending in Canada and household debt is at record levels—higher, even, than those in the U.S. pre-crash. Two, future interest rates cannot be predicted. No one can predict them, and you have no idea how high they will go, nor when.

        “You’d have to admit, a 50% correction (or what you consider the equilibrium) is pretty darn unlikely.”

        50% is conservative!!

      • At what point would you say there is no bubble? Another 20 years of property prices going up (or even simply staying at this level) before it drops 50%?

        I’m not sure you can quite call a 20 year property bull market a bubble even if prices drop by 50% when it has risen 200%-300%. That might be more a cycle.

        Gold isn’t worth $1,000+ an ounce. A bowl of salad at Whole Foods isn’t worth $16. Yet, that’s what the market supports, even if by the few.

        I’ve traveled extensively in Asia and can assure you Vancouver is much more international than you assume. It’s a beachhead for many immigrants, businesses, and investors. The reasons are numerous but it is not unlike the gold rush era.

        We’ve not seen, in the history of mankind, an economy and population of China’s integrating with the world at such a pace. Vancouver is not exclusive to bearing this front. Imagine if America was a reclusive country that suddenly emerged into the world. It’s businesses and it’s citizens would wreak havoc on everything from business to culture. China is aware of this and its doing its best to limit the impact of its rightful rise in the world but 1.2 billion people and all its wealth is not easy to govern.

        I know every fiber of your being disagrees with everything that I say but if there is one thing that I hope you’ll consider, it is that the world will truly never be the same now that China, and Asia as a whole, emerges to become global businesss, investors, and citizens.

        Just think, the world’s second largest economy now has its own interest rate policy that isn’t necessarily affect by the US Fed rate. You may ask how that affects Canada but the reality is that it will eventually have as great an indirect effect as the US Fed rate in Asia.

      • There is an emerging Asian superpower that is going to supplant the U.S. and take over the world. The time is the 1980s. The country is Japan.

        What you have said about China’s inevitable dominance was also said of Japan, and it was said of other countries before that.

        I’m not convinced.

        China has grown rapidly in recent years, and it’s no wonder. For one thing, they started from close to zero, so the law of numbers has been on their side. Second, they have the world’s largest population, so their output darn well better be higher than it has been historically. They’re playing a massive game of catch-up.

        Yet China remains a largely centrally planned economy, with no political freedom and limited individual rights. A cursory study of history should tell you that such a system is not conducive to long-term prosperity.

        Today, despite all its growth, China has a per capita GDP that is roughly on par with Brazil’s, and with the world average. Japan’s is 2.6x greater. Millions upon millions of Chinese still live on a few dollars a day.

        Superstar? More of a disgrace.

        I don’t doubt that Chinese riches have fueled Vancouver’s bubble, but suspect that much of it is unsustainable, and much of it ill-gotten. In any case, buying up homes to launder money, or to use during holidays, while leaving them empty the rest of the year, is not “investment”.

      • Superstar, model nation, China is not. Though it’s contribution to the rise in asset and commodity prices around the world is hard to deny.

      • On that I will agree.

      • Fascinating. So we disagree on the degree to which we agree.

      • Maybe. But only on this particular point.

        Maybe.

    • Hi, BLM. There need not be an obvious trigger to make the housing bubble burst, but simply a change in sentiment. A tipping point is reached, where eventually enough buyers just give up and refuse to play. Suddenly prices are not steadily rising any more, as the lack of willing (or able, due to interest rates or B20) buyers reduces demand. But, bubbles don’t ever just end with a stalemate like this. Prices don’t just flatline for years until wage growth makes those prices reasonable. If bubble prices aren’t going up, they’re going down.

      Unfortunately, once sentiment turns, and there’s a hint that prices won’t go up forever, some people will decide to unload at close to peak. Small drops in price then spread the idea that prices might just go down. Then, prospective buyers say, well, let’s wait and see how far the prices will go down (if they’re strong enough to resist the BS from the real estate boards at that time!). This leads to lower prices, especially as some will be forced to sell for whatever they can get, for various reasons – divorce, job relocation, the bank calling in the HELOC, etc.

      Asset bubbles burst catastrophically – stuff just goes no bid. Prices are forced down to where a buyer will take a chance. There is an actual fair price for real estate, easily calculated. It is that which is supported by local incomes – either the price to rent ratio, or price to income ratio. Asset prices always mean-revert to where they would have been had the bubble not occurred, then usually overshoot below to some extent. By these metrics, Vancouver and surrounding areas will likely drop not just by 50%, but likely in excess of 65%. This is what El Ninja was probably getting at when saying -50% was conservative!

      It’s a scary time to be owning real estate in BC, especially if bought in the last 5 years or so. I’d expect it to fairly quickly lose the last 2-3 years of oversized gains, then tediously draw out the remainder of the drop for many years.

      As far as speculators go, whether foreign or local, they will be among the first to bolt. There’s a whole world of opportunity for your money out there, and no reason to keep it in Canada if it’s no longer making the big speculative gains. Better to crystallize the gains and move on. This of course will lead to even more drops in price here. There will be no stopping it – if the might of all America was not able to keep their prices from collapsing, there’s no reason to think Canada will be able to either. Bubbles simply collapse under their own weight.

      • JCH nails it.

      • JCH – I don’t doubt what you and many others here believe could actually happen. It is entirely possible but the odds are unlikely without government intervention.

        Sentiment is unpredictable even in the best of times and can change on a dime. In fact, bearish sentiment can be just as out of kilter as bullish exuberance.

        The difference between a correction and a crash, a buying opportunity or to dump, is subjective as you argue. Is a violent crash that leads to depressed prices for 5 years after a 20-year bull market really going to reset the market for good? What if the 5-year breather leads to another 20-year bull run?

        You put out a scenario where property prices make a sudden retreat that is followed by a decline lasting many years. But how do you actually envisage this happening other than a sudden return to fair value supported by just local economics when the world, including Vancouver, has become much more globalized?

        Assuming markets will rationalize and stay that way is a wild assumption and perhaps this is where we differ.

        Has property around the world ever been as globalized and commoditized as it is today?

        Is it possible that the loose monetary policies of the past decade have put a lasting wedge in the wealth gap causing home ownership rates to drop to pre-WWII levels (an acceleration of Pareto’s Law of sorts)?

        Has the world ever seen 10 million new middle class tourists flood the market annually? (This is China alone and so far only 5% of its population has a passport according to Bloomberg.)

        Has Canada ever offered 10-year visas to a country with a population of 1.4 billion people? Even if a small percentage of these visitors and a fraction of them decide to buy property in Vancouver, it will overwhelm the region.

        All of this new wealth and mobility is not only affecting Vancouver but the city is at the forefront of this global change due to historical and geographical reasons.

        I’d like to think I see a wider spectrum on this matter than most being Canadian but having spent a dozen years in Asia. I can say confidently much of the investments and indeed, family roots, that have taken hold in Vancouver will stay for better or worse.

        It will take much more than slow rising interest rates for sentiment to change. There is also a bottom to Vancouver’s market as it is now being compared to Sydney, Melbourne, San Francisco, LA, London, and others as a lifestyle destination for a new emerging class of affluent global citizens in numbers that the world has not seen before.

        If Vancouver’s waterfront properties offer better value than Sydney or San Francisco, it’s not hard to imagine these global citizens buying here (on the basis they have a 10-year visa) even though Vancouver’s economy is small. Their incomes are, after all, earned elsewhere.

      • You also mention about the property market correction in the US 10 years ago. It’s now a mere blip from a qualitative perspective and cities from New York to Seattle have all but recovered and some more. So let’s say Canada (Vancouver’s) property market collapses, what’s to say it won’t again follow history and recover to today’s prices?

      • white_angelo_blockchain_commando

        @blm … cherry picking factoids to support a narrative you want to believe … not helpful … instead, see how a good job you can manage at destroying it (due diligence) … start with … we’re in the late stages, if not the terminal one, of a cb-enabled credit bubble … $7T out of thin air will create a lot of misallocations … just because something hasn’t happen yet, could mean it won’t … could also mean it’s now more likely … eg. ask the guys shorting vol, steady profits for 5 yrs, if they could have anticipated losing the entire position in 24 hrs

      • If not choosing factoids to support a view, then why have a discussion at all?

        Trying to identify the next bubble or time a correction is just as dangerous. The toxic securities sold at the height of the financial crisis and the VIX ETFs that crashed last week were not all well understood by investors. No one going into real estate investments today is thinking it is risk free (though for many who have the means that risk is much lower).

      • @BLM

        I had given you the benefit of the doubt, but your last two posts discredit you entirely.

        The Asian wealth / “global elite” narrative amounts to fear-mongering. It’s a great story if you’re a real estate promoter and you’re trying to drum up urgency among locals (who comprise 95% of the market). It’s not great for honest discussion.

        Your various unsubstantiated statements are similarly unhelpful. “Odds are unlikely without government intervention”, “crash not likely”, “there is a bottom to the Vancouver market”, etc. On what grounds do you make these rather bold claims? You need to provide evidence, sound reasoning, historical equivalents. “Rich Chinese” and “globalized world” don’t cut it.

        Your dismissal of the devastating U.S. experience as a “mere blip” shows either ignorance or callousness. The real estate meltdown in that country led to widespread financial distress. A lot of families were financially ruined. So what if a few cities recovered (eleven years later, no less)? Do you have any insight as to the basis and sustainability of their “recovery”? Some observers believe that current prices in those cities are not reflective of fundamentals, but once again the product of speculative activity and artificially low interest rates. If true, that would suggest caution.

        You cannot make the case that Vancouver is comparable in economic stature to San Francisco, New York, LA, London, etc. and hence likely to follow a similar path. Such comparisons are utterly disingenous. Again, great marketing fluff, but not helpful to honest discussion.

        Part of the reason Vancouver is in such a mess is precisely because too many people bought into sales tricks like these.

      • Of course we can not compare each city as apples to apples. New York is not London and Hong Kong is no Vancouver. Seattle is not San Franciso and Toronto is no Calgary.

        But there is more influence on Chinese money in Vancouver than say New York as a proportion. No doubt some will milk this point for maximum marketing but why would you totally dismiss this point?

        Vancouver isn’t following the path of any city. The city is manifesting in its own way unique to its geographical, economic and cultural ties.

        Discrediting my every single argument to an absolute degree, I think, is disingenuous.

        And my belief that Vancouver’s market will not crash and reset to a new norm is not a ‘claim’ but rather a view, of which my ‘sound reasoning’ you don’t want to hear. I don’t have ‘evidence’ but none of us do for where prices are headed.

        On a final point, I understand entirely the devastation that housing bubbles can cause. Anyone who needs to be leveraged to the hilt shan’t ever put themselves in that position to become a homeowner. Of course there will be pain and suffering in Vancouver should the property market ever drop, however brief.

      • Royce McCutcheon

        BLM said: “Vancouver isn’t following the path of any city. The city is manifesting in its own way unique to its geographical, economic and cultural ties.”

        Respectfully, you are saying “it’s different here/ this time.”

        Look, I’ve been “wrong” for a long time. Maybe it IS different here/now. But I honestly believe that the outcome, if things are truly different, will be that this region becomes non-viable for a majority of its current residents long-term – including the on-paper real estate millionaires, who (like everyone else) will increasingly be starved of essential services and labor.

        You took issue with comparisons between cities. But i think you missed the point: many of those cities share a common thread that is conspicuously absent here: they have a wealth of (non-real estate) job opportunities and compensation that Vancouver does not – and that will sustain those communities long-term.

        Even if the fever dreams of local real estate fans come true – if prices only go up and up with no meaningful correction (with rents along side it) – the region is ruined. Think about the Lower Mainland’s highly praised livability. That rep has already taken quite a hit amongst its actual citizens due to ghost neighborhoods, tiny living quarters, long commutes, relatively poor employment prospects, etc. So even if real estate here can defy the odds and show never-ending price gains, it will cannibalize every other facet of life here. There will be fewer businesses. Fewer schools. Fewer tax dollars to sustain the region. Christ – fewer people in general.

        Even if you subscribe to the notion that this is all due to Chinese money (I don’t), that is not what these people came here looking for. At least not from any of the monied Chinese immigrants that I know (which includes astronaut families).

        Bottom line: the interests of the vast, vast majority of people here are very much aligned against the ongoing real estate hysteria. This reality has been masked for some by large gains in on-paper wealth. But I have seen that effect waning first-hand and the number of people on the wrong side of the real estate status quo is growing – and this IS still a democracy.

        Here’s hoping things calm down before the most viable group to address it is led by a populist nitwit with all kinds of hateful baggage.

      • @ Royce

        “It’s different here this time” is not exactly what I mean.

        I think the dynamics that make up the demand side for Vancouver’s property are vastly different than say Miami or Montreal. The laws of economics remain the same everywhere and it is on that basis most here seem to argue for.

        It is plain to see (at least to me) that there is a steady appetite for investing or living in Vancouver by a rising affluent class from China. That demand IS the economic bedrock that is supporting Vancouver’s property values just as a factory in a small town.

        That demand from Asia, let’s say it is only 15% of transactions, is enough to spur locals and foreign investors alike, to justify the city’s elevated property values. Whether that demand will support prices if ‘sentiment’ in Vancouver’s property market changes, or if there is an economic crisis is unknown (probably unlikely) but that demand will continue to be there and prices will recover in the long run because that is what markets are all about – demand.

        On your argument, either there are fewer people and fewer taxpayers or more people and more taxpayers. If the current tax system doesn’t serve the greater interest of the population then it must be looked at.

        You’re right that if a populism grows it will be in no one’s interest. That risk is increasing and if not addressed, we have a far bigger issue to deal with than property values.

      • BLM you seem to have missed Royce’s point. Namely, that the demand for Vancouver real estate is, in good measure, based on the city’s overall appeal as a place to live, work, study, raise families, and participate in community. If real estate remains unaffordable, entire generations of current and prospective residents will vote with their feet, undermining the city’s viability and hence the very basis for continued demand.

        Yet you claim that demand will be ever-present and growing. How do you reconcile these points?

        And how do you reconcile the fact that demand at the high end (which you claim is the market’s “bedrock”) has already diminished, with sales activity in affluent areas now at levels not seen since the 1980s?

      • Demand can be curtailed with policies. There is a lot our politicians can do to protect residents. Some of the ways I can think of include punitive property transfer taxes if a property is bought or sold within three years; new developments requiring 51% of the units to be sold only to residents (ownership of the condo building must always consist of 51% Canadian owenership), foreign non-resident buyers limited to buying only new developments (an interim policy until markets/interest rates normalize).

        From what I can see, interest from prospective residents will not diminish even if property prices continue to climb. Only that Vancouver will attract ever more affluent families.

        In terms of the high end market, my guess is while it is stagnant, listings are also very low as a ratio compared to the 80s. I don’t have the data but that’s my guess. The other obvious factor is that it is getting increasingly difficult to move capital out of China. (Contrary to what is reported in the media, the vast majority of Chinese wealth is legitimately earned but that’s a whole different kettle I won’t delve into.)

        We’re not seeing fire sales are we? (I ask this genuinely)

      • “Demand can be curtailed with policies.”

        How do you square reduced demand with your expectation for continued price strength?

        “Interest from prospective residents will not diminish even if property prices continue to climb. Only that Vancouver will attract ever more affluent families.”

        Who will service these families? How will they like a city with shortages of teachers, nurses, police officers, sanitation workers, and so many non-affluent others, without whom a place is unlivable? Do you think a city composed increasingly of affluent residents will remain functional? You are overlooking the bigger picture that Royce so thoughtfully described. It’s quite astonishing.

        “It is getting increasingly difficult to move capital out of China.”

        Again, this is at odds with your thesis.

        “We’re not seeing fire sales are we?”

        These are early innings, BLM. Just wait.

      • @ El Ninja @Royce McCutcheon

        I don’t believe I’m contradicting myself. As I’ve said before, without government intervention (new policies), prices will be supported by demand. If new policies can be introduced, such as those I’ve mentioned, then a repricing of the market is likely because demand will be restricted. Government policies, the populist kind, in fact, is the biggest risk to property owners IMHO.

        Don’t confuse my bullish views for Vancouver’s property market for what I believe is just. I share the same concern as you both for the City of Vancouver. It would be the right thing to do to introduce further measures ASAP.

        I’m merely trying to point out that demand for Vancouver property is high and prices are sustainable at current levels. I drum on this point because perhaps it is not apparent to some of you that Vancouver is an aspirational destination for living and for investment by the Chinese and beyond (I’ve even quite randomly come across acquaintances in Malaysia to Bangladesh who have seriously considered moving to Vancouver).

        It’s not coincidence Vancouver condos are marketed aggressively in Asia and sold sign unseen. For some, it’s an investment (as a store of wealth, not for appreciation, or as a second home for a distant hope of moving to the city) and for others it’s in preparation to move to Vancouver to study, live, or retire.

        No one in Asia dreams of moving to Montreal, Chicago or Houston even though their economies are bigger and property cheaper. Vancouver is very high on the list for many, many Asians to move to and that makes it more international than most here think.

        On Chinese capital, yes, it is harder to move money out. That may be partly why Vancouver’s westside has cooled (I admit, a wild guess). However, China’s capital controls isn’t a binary policy that applies to all and continually adjusts based on economic indicators. If there is a will, there is a way, including many legitimate ways not unlike tax loopholes in Canada that are only worth pursuing if you’re a top-tier earner.

        I’m continually drawn to this blog and the discussions here because I see so much misunderstanding. Most of the commenters here simply dismiss the desirability/international-nature of Vancouver and hold a grip-tight view that high property prices are mainly due to mindless speculators (yes, they exist too).

      • Royce McCutcheon

        @BLM: Unless 1) that Chinese number is much, much higher than 15% and 2) those Chinese immigrants declare local income and work local jobs that replace losses of essential services and labor due to an exodus of locals, the math cannot work.

        You yourself are suggesting that the majority of demand is local. Data indicate that real estate, construction, and related sectors have come to comprise a steadily larger slice of our GDP. The economy is not only becoming less diversified, but its loan, er, lone bright spot is reducing the viability of other sectors (good luck growing a non-real estate business here).

        If this region’s economic engine is (mostly) local people buying and selling houses to each other, the region’s economy will fail because eventually there will be too few workers to sustain essential services and labor levels.

        If the region’s economic engine is (mostly) foreign buyers who leave places empty and/ or declare minimal income, then the region’s economy will also fail, because the problem of too few workers to sustain essential services and labor levels will persist.

        Right now, we are already seeing headlines about difficulties finding, for example, wait staff in restaurants and coffee shops. In my world, I have seen difficulties in securing daycare workers, office staff, etc. in Vancouver and other pricier parts of the Lower Mainland. I am also familiar with similar challenges in hiring and retaining medical and research staff (because a 2+ hour daily commute to a nice-enough-but-unremarkable place in the burbs is not reward enough after a decade of school that nets you what should be a great income). This is the progressive loss of labor and essential services. It doesn’t happen quickly, but it happens as the deal here gets worse (even for older folks with huge on-paper wealth who face things like never seeing their grandkids, isolation from family that can’t afford to live here, ever-growing wait times because this place can’t attract enough doctors, and massive increases in prices/ user fees/ taxes to sustain the bare minimum of labor and essential services here).

        If you were to argue that we might see a wholesale displacement of current locals with wealthy Chinese immigrants who would take over existing businesses, pay taxes, and supply labor and essential services, that would be different. But this isn’t an opinion I typically see expressed by those who are even super-bullish on real estate prices and ascribe this to Chinese influence. So, again, even if the overseas appeal of this area as a peaceful place to shelter capital remains high, the math doesn’t add up.

      • Royce McCutcheon

        @BLM: As El Ninja notes, not many members of affluent families will repair the situation. They won’t be sanitation workers, nurses, road surveyors, orderlies, etc.

        And even if they were willing to do that, the sea of empty houses and condos out there argues against a “replacement” theory anyways. Local and foreign affluent types may be “replacing” other local owners, but they’re not replacing anything else. They aren’t replacing the work they do. They aren’t replacing the taxes they pay. The only way to remedy that, is to pay those people who would otherwise have left a whole lot more. There will be much higher prices for everything, higher taxes, higher user fees, etc. – or there will simply be less of all of these things and the place will fall into disrepair. All of which works against the desirability of the region.

        Again, I’m not saying this will necessarily unfold rapidly. But there is no way that this place will sustain its rep for livability (let alone grow it) without a functioning community to underpin it. And I have a hard time believing that a place increasingly inhabited by the affluent will be able to turn it around on its own.

  4. “Unless rates shoot up, which is most certainly an extreme and outlier view”: rates have been rising for a year, and can be expected to rise slowly, steadily, for another year or two. That will curb a lot of the prattle about how “affordable” our crack shacks and shoeboxes-in-the-sky are. New buyers will be affected first, but as time goes on there will be owners who discover that for them, it makes more sense to sell than renew at higher rates. Sure, “there will always be buyers,” but there will always be sellers too, and more of them once it becomes clear that sellers are no longer controlling the market.

  5. Is it “morally just for the government to recalibrate Vancouver’s real estate market in one fell swoop for the benefit of the prudent but at the cost of new immigrants, foreign investors, affluent Canadians and blue collar locals who followed their animal instincts”?
    Why . . . yes.
    Though I don’t imagine it can be done at “one fell swoop”; several swoops have already failed to do so. But that’s after years of government policies that cost the prudent dearly while creating huge windfalls for all those other groups.

  6. Vancouver is one of the most valuable assets in the world. Should we listen to the con banksters at Swiss UBS who were astute enough to lose 50 billion during the subprime times. They are blowing it out of their Swiss ahos. They are as believable as Las Vegas casino owners. Less so. At least with the casino owners you expect to be ripped off. Where were these financial geniuses when Madoff perpetrated the biggest fraud in the history of the world? Busy perpetrating their own brand of bs. Believe them if want. Check your Swiss-made Rolex or Omega that cost thousands instead of checking the time on your smartphone or car clock. Indonesia has the reputation as one of the most corrupt countries in the world. They just don’t know how to play the game as well as the Swiss.

    • You must be fun at parties.

    • How does Indonesia come into play? If you’re comparing to Switzerland, Singapore might be a better example. The city-state was built on the backs of corrupt Indonesian money because of its rule of law.

      Yet, Indonesia is one of the world’s largest democracies. It has a population that is almost 10 times Canada’s. If it gets its act together, it could very well become an economic powerhouse.

      • Singapore vis-a-vis Switzerland is good comparison. I mention Indonesia as a juxtaposition in terms of reputation. Whether one could call it a democracy is of little relevance. So is India and it is massively corrupt. Is the USA a democracy or a corporatocracy. It is, as George Carlin opines, the best government money can buy. The Koch brothers allegedly spent 120M just on supporting climate deniers groups.
        Switzerland has a squeaky clean image, but their companies, such as Nestle, have no qualms about flogging baby formula in the Third World even when it impoverishes families and kills babies. They also use strong-arm tactics to get water practically for free while selling it in plastic bottles. There are a lot of rich bs artists in Switzerland. Believe them at your peril. Trust their banksters? No way.

      • And when it does, lots of newly rich Indonesians will want to . . . buy real estate in Vancouver!!!
        Am I right? Is that where we’re going here?

      • No, that’s not what I said and certainly not what I meant. One can assume a rising Indonesia may affect other cities and economies but no so much in Vancouver.

        Singapore comes to mind.

  7. Macleans magazine makes me positively ill – can’t stand to look at it at all. Just another one percenter’s propagandistic ad rag.
    Someone asked about how to push back in terms of social and economic justice. CBC Ideas had a good documentary just this Wednesday on why there is so much poverty in Canada. It is, as Peter Joseph describes it, structural violence.
    We can’t hold defeatist attitudes. It took Rosa Parks refusing to give up her seat on the bus to spark a civil rights revolution.
    It took Muhammad Ali refusing enlist to galvanize resistance to the American War in Vietnam.
    It took Gandhi to lead Indian people on a salt march and defeat British rule.
    Two steps forward, one step back. The well-financed do not let up. If you are defeatist, you have already lost. The one percenters are relentless.
    Again, of all the people in the world, J K Rowling has the power of the word, the cash reserves, and the trust and minds of the young to make positive change.

    • Listen up, comrades! We have a volunteer to lead us into the glory of social justice and equality of outcome for all.

      Henceforth, Arnie will be donating all of his income to the government so that it may be redistributed to the poor. He will open his spacious and heated house to the homeless.

      This is how we will defeat the one-percenters! Arnie, you will be Canada’s Ghandi. We are counting on you!

      Wait, what’s that? You won’t be handing over your money? And your house… locked?

      But, but, Arnie… structural violence!

  8. Where are you, Burnabonian and Raging Ranter?

  9. It may be that all this bubble blather is actually a ruse promulgated by those in the r.e. business to scare owners into listing – the number one goal of agents is to get listings. Some of the most vociferous criers of wolf are agents with no listings blabbing all sorts of erroneous technical analyses.
    Or the bs artists in financial services – mortgages don’t make them piles of cash. They want to sell life insurance and mutual funds.
    And comparing Vancouver to San Francisco, or Toronto, or Paris – that’s just silly. Might as well start quacking about Guildford and Whalley.
    If I could live in Baron Black’s mansion, which he sold and now rents, and had him as my personal varlet, I’d decline. Toronto. No thanks.
    There is nowhere else on the planet that I’d prefer to live. Visit, maybe. Live? No.

  10. white_angelo_blockchain_commando

    @blm … horse meet water … no interest in the waving hands strawman dance … ‘discussing’ the pathology, mechanics of major market turns … fundamentals are very lopsided and when sentiment shifts, there is a very long way to go in the other direction … root cause: fractional reserve banking is legalized fraud … and activitist central banking amplifies it … frauds always resolve in the same way … took long while for communism to play out – we underestimated the number of ppl they were willing to kill to keep it going … btw, guess what? it’s back in the form pc socialism gone wild …. you all still like trudeau? – what a freaking disaster … anyway, on the point of timing, there are multiple independent signals of that shift now … study the risk, manage the risk to stay afloat when the flood comes … and there is even the possibility of cashing in on the biggest reversal in history … btw, the xiv crash was entirely predicted though not the exact timing … the btc crash too, and that was even discussed on this blog shortly pre-crash

    • Trudeau is a disgrace and international laughing stock. It was immoral for him to even run for election. The only basis for his candidacy was his father’s name, and Canada isn’t a dynasty. His positions on a host of issues are even more immoral. Wake up, Canada!!

      • white_angelo_blockchain_commando

        i disagreed with the original trudeau, that is when i finally understood what his politics were about, but i still liked him and thought he was genuinely trying to help … this incarnation however is a complete self-serving disgrace that needs to be taken out with prejudice and flushed down the sewer … i think the fatal flaw of socialism is this … ppl are 1st attracted to it b/c they want to help … but they make the very serious mistake of believing they know how to help … they become seduced by their own ego and intellect … probably why it’s so attractive to intellectual types … cross the line from aid to oedipal and downhill straight to hell we go … exact same tragedy keeps playing out over and over … ppl still lining up, paying up to get in the theater

  11. white_angelo_blockchain_commando

    v, an immdoerate comment awaits your blessing

  12. [Guardian] – How Canada became an offshore destination for ‘snow washing’ : The country’s opaque jurisdictions allow owners of private companies to remain anonymous and the firms to remain in the shadows

    …”How Canada stacks up against other countries – including known tax havens – was suggested in a 2013 study by American researchers. After sending out thousands of queries about setting up anonymous shell companies, researchers ranked Canada among the easiest of 60 countries to set up an untraceable company, along with Kenya and a few US states.

    This opacity – described in a recent Transparency International report as the “getaway car of financial crime” – has become the perfect vehicle for “snow washing”: the use of Canada’s positive image to tout the country as an offshore destination where suspect transactions can be legitimised…

    …The lack of transparency handicaps law enforcement and tax authorities’ ability to investigate proceeds of crime.

    Other impacts are more subtle. A 2016 report found that nearly half of the 100 most expensive homes in Vancouver – which ranks among the world’s least affordable housing markets – were bought using shell companies, trusts or nominees.

    “Is it a wealthy person who earned that money? Or is it the Hells Angels?” Johnson asked. “An Iranian or North Korean under US sanctions? We have no idea.”

    Files from Mossack Fonseca, leaked in 2016 as part of the Panama Papers, revealed another consequence, said Transparency International Canada’s James Cohen. “Canada is being sold through snow washing by foreign intermediaries, who are telling their clients that you can bring your illicit finances into Canada and they’ll be cleaned like the pure white snow.”
    Canada’s strong rule of law means that corporations registered in the country are less likely to attract scrutiny from foreign governments, tax authorities or law enforcement officials. “That’s exactly what foreign intermediaries are selling – the clean image of Canada,” said Cohen.

    An investigation last year by the Toronto Star and the Canadian Broadcasting Corporation found more than two dozen firms around the world touting the benefits of Canada as an offshore destination.
    “Canada is a new player in the world of offshore companies,” noted the website of one corporate service firm in Switzerland. “It is by far one of the best neutral jurisdictions, providing offshore benefits without any of the traditional offshore drawbacks.” …

    https://www.theguardian.com/world/2018/feb/14/canada-corruption-snow-washing-investigation-private-companies

  13. [G&M] – How shady lenders with drug-crime connections are using B.C. real estate to clean dirty money

    …”A Globe and Mail investigation has discovered that the Zhangs and other local residents associated with drug-related crime are effectively parking their riches in Vancouver-area real estate, where it is rendered clean and secure, without actually owning any of the properties. They call themselves private lenders – issuing millions of dollars in registered mortgages and short-term loans.

    Just as a bank does, they grant a loan, then register a land-title charge against the borrower’s real estate, equal to the value of the debt, plus interest. The charge, which gives them a stake in the real estate, remains in place until the debt is cleared. If the property is sold, the loan gets paid out from the sale proceeds, in clean money, all seemingly legal.

    Except these financiers are unregulated and unlicensed and the loans they grant are in cash, which is likely dirty money derived from drug deals or other crimes. The Zhangs charge interest rates of up to 39.6 per cent, with some private lenders demanding up to 120 per cent. Court records show that one of the Zhangs’ associates is among those allegedly charging that extortionate level of interest, which is double the maximum legal rate.

    By combing through hundreds of lawsuits, foreclosures and property records, The Globe identified 17 such lenders, who have collectively claimed a $47-million stake, plus interest, in 45 Vancouver-area properties in recent years. The three Zhangs alone laid claim to at least $20.7-million of that, individually or through numbered companies.”…

    https://www.theglobeandmail.com/news/investigations/real-estate-money-laundering-and-drugs/article38004840/

  14. Pocket change to the billionaire parasites that own this rag; pocket change to the billionaire parasites that fixed prices on bread for the past 16 years. Not pocket change to Felon Baron Black, but not enough to change his lifestyle.

  15. @BLM.

    – Vancouver as a desirable retirement location? Spare me. And it is decreasingly desirable as a place to work / raise a family due to prohibitive cost of housing and knock-on effect to communities. Your demand argument has no legs.
    – Asians move to Chicago, Houston, and elsewhere, by the THOUSANDS. They are the fastest growing group in many of these cities.
    – In statistics I cited a few blog posts ago, immigration to Vancouver today is significantly lower than in the past.

    • @El Ninja

      Clearly you don’t have a pulse of the subtleties of Chinese immigration/migration.

      Visit Richmond Centre or Oakridge Mall on a weekday. Many of the middle aged and seniors of Asian descent are retirees. They are living the middle class dream (for those who aspire to come to Canada). Some of them live here while others only spend 3-6 months of the year in Vancouver.

      Vancouver is an attractive full or part time retirement destination for health care, tax, familial, cultural and geographical reasons. The details of which I will spare you unless you care to know more.

      Immigration to Vancouver need not grow anymore for property demand to grow. With the newly instated 10-year Canadian visa for Chinese nationals, there’s no need to immigrate here to justify buying a property for self use anymore.

      In fact, those who are still earning a high income prefer the 10 year visa since their incomes world wide won’t be subject to Canadian income tax. Advice – don’t read into immigration trends too much and the policies I mentioned in my previous post will help to this effect.

      I may have embellished when I said Chicago and Houston don’t see Chinese immigration but those arriving there are of a different economic class. More so, some wealthy Chinese with international income don’t want their children to be subject to US taxes that demands even its non-resident overseas citizens to pay income taxes.

      Over the last 150 years, Chinese immigrants from different villages to towns in vast China have tended to migrate to select cities overseas (ie Fujian and Fuzhounese to New York and Cantonese to Vancouver). These century old familial ties still impact immigration flows today.

      If you care to know more about how the diaspora of the Chinese affects Vancouver’s property market I could broadly explain but I’m not sure you have the imagination for it.

      • I frequent Henderson Mall in Coquitlam and Crystal Mall in Burnaby. If you see a white guy – that’s me. Also spend a lot of time in Richmond and the West Side. Still feel like a minority. It’s cool.

      • @BLM

        I would engage you further but your condescension is a turnoff.

        Let’s just say this: “Chinese people at the mall” is not an investment thesis and it does not justify house prices at 11x income.

      • Arnie: “Ethnic homogeneity is cool!”

      • BLM: “The Chinese are buying condos sight unseen.”

        Question for you, BLM: do you think that, in general, buying real estate sight unseen is smart?

        It’s a simple yes/no question. Can you handle? I know you like to expound at length, but I don’t want a long answer, or an “it depends”. Just a yes or no.

        I’m waiting.

        Thanks.

      • @El Ninja

        Broadly speaking, no. Not smart nor fair for the buyer. That the market has evolved to this is ridiculous.

        But it’s worth the risk for some buyers – even fits their timeline/finances/life situation.

      • I have a lot of contact with Fuzhounese – there are quite a few in Vancouver. It’s common for them to send their kids back to Fujian Province to be raised by relatives while the parents earn money here. But the kids will eventually return. And they won’t be renters.
        It seems like people here don’t grasp the scale of growth in China. The doc on the new silk road could enlighten them. Just the city of Chongqing, has 35 million people.
        My prognosis for real estate in Vancouver is way beyond bullish – it will be one of the most precious assets in the world. Especially if the SHTF. Just hope vreaa doesn’t fold. There is often stuff worth reading, though the raging trolling is annoying.

  16. I read that 70% of the stock market is a black pool. Bernanke said he had no idea what was going on in there. Of course, he was clueless (disingenuous?) about the ‘08 crash too.
    Alao read there was over 30 trillion in offshore accounts stashed by companies like Apple and Facebook and the filthy rich – leaving the working and middle classes to foot tax bills.
    Yet the billionaire-owned Globe rag screams Yellow Peril.
    Sheeple lap it up.
    Subscribe now.

  17. Royce McCutcheon

    @BLM: I feel I do understand the aspirational argument. In terms of foreign money involvement, I think its role was very over-stated in the past, though less so in the years since the CAD crashed and attempts at capital control have increased in China.

    My argument is that the reality of life in a continuously over-priced Vancouver will become progressively less desirable. Again, this will not occur rapidly but without a sizeable correction, I do think labor and essential services will decline significantly. Does Vancouver become more or less aspirational when the infrastructure declines, when health care standards worsen, when prices for everything increase, when budget cuts force security declines? To keep the lights on – and with fewer and fewer residents who aren’t aspirational foreign buyers – who do you think the city and province will tap for increased revenue? Even those Chinese seniors “living the middle class dream” will very much be affected by this.

    I do understand that you do not think this is just. And, while I think you may be under-selling the degree of participation by local workers, I agree that Vancouver may be an aspirational place from a global perspective today. But I don’t understand on how you can be bullish on this long-term. As I said before, the math doesn’t make sense unless the hordes of foreign money investors who come here massively increase their money and labor investments to get essential work done. I have my doubts that we would ever see that, given what we saw with IIP participants (fewer taxes paid than refugees after 5 years), ghost neighborhoods, declared incomes lower than property taxes due on houses, etc.

    (As an aside: in my experience over the years, critical debate about the negative impacts of severe unaffordability has been sidelined by rabid fixation on foreign money. I’m not saying it’s not important and shouldn’t be addressed. But years of progress have been lost because developers were able to cry “racist”. There should have been much, MUCH more focus on why high prices are absolutely devastating for all residents in this region, regardless of the cause. Discussion on how to tackle that – with measures for local and foreign influences – should have followed.)

    • @Royce

      I share much of the same ‘longer-term’ concerns as you for the city, including who will be wiping our bottoms!

      A difference exists between how we see things playing out though. I feel strongly (to the same degree of faith that I have in a democracy) that such issues as labour shortages and ghost neighbourhoods will eventually be solved by market economics (the ‘invisible hand’).

      In an overly simplified way, scarce labourers will lead to higher wages and underfunded government resources can be balanced with the right tax policy mix that doesn’t overburden the resident working class — if part-time residents and empty homes (that pay property taxes for services the owners don’t use) are really stretching public services.

      Maybe the solution is to reduce immigration or to increase the ethnic mix and economic diversity in those we take in. You would also think a large proportion of the new immigrants who have come here with their children to study will eventually enter the workforce too.

      As you mentioned in a previous post, populism and populist measures are the biggest risks to Vancouver, Canada, and even to much of the democratized world.

      Until the reality of the economics of Vancouver have been digested by our elected policymakers, the city’s loss will be Richmond, Burnaby and Surrey’s gain. If people move out, then businesses, culture and therefore microcosms of new city centres will develop in the surrounding areas (municipal finances look great for Burnaby and Surrey from what I’ve read).

      I hold on to my bullish views of Vancouver’s property market because the city is far from degenerating. For all it’s existing and potential problems (and what growing city doesn’t face challenges and uncertainty), Vancouver still remains a desirable destination that has a bright future ahead of it. More so than other cities that the ‘aspiring class’ is considering to live or invest in.

      Asian investors/immigrants/part-time residents will continue to be attracted to Vancouver and make up a large enough demand in the market to support property prices.To be clear, the great majority of immigrants and short-term residents arriving from Asia are not uber-wealthy (and certainly not all corrupt), so I agree with your view that this was overplayed. The demand I keep referring to is really in the middle-class properties and not exclusively in Vancouver’s bonkers westside.

      On a final point, you used a crashing CAD as an argument for tepid gains in the property market if I read it correctly. Quite the contrary! A devalued CAD makes Canadian property cheaper for foreign buyers (including non-residents and Canadians with international assets).

      • Royce McCutcheon

        Re: CAD, I could have been clearer. I was saying that the impact of foreign money was often overstated in the past. However, since the CAD tanked and capital controls in other nations have increased, the role of foreign money here has increased (as you note). A crashed CAD relative to USD or RMB would mean this place was selling at a discount internationally, obviously.

        I disagree on Vancouver thriving. For a few years now (and certainly since the madness of 2016), places like Pitt Meadows, Ladner, and even Langley have been gaining the higher earners with families. Places like Abbotsford or Squamish (or even Nanaimo!) have absorbed families with less-than-high incomes. Yet many of the high earning jobs remain in Vancouver/ downtown, which means incredible commutes – or even weird living arrangements. The prices I see in, say, West Van actually seem less bonkers to me than the $800k places in, for example, Maple Ridge. Those communities are “gaining” in an immediate sense, but I don’t think the young people with families and professional success who live there – and are embracing 2+ hour commutes – are particularly psyched. Certainly not the ones I know (with some looking to cash out and move somewhere less crazy). Without truly massive investments in transit (which no one seems to want to pay for) and an elusive soft-landing in real estate prices, this success looks transient to me (and I don’t see all of the actual well-paying jobs getting dislodged out of the city either). Either prices will correct and people will flood back to the city, or out-sized price gains will persist, in which case we’ll simply see more unoccupied units, loss of essential skills, etc. So long as the relationship between real estate prices and incomes (both their amounts and where they are earned) stays out of whack, there will be tension here.

        Ultimately, I don’t think they are dumb. The celebrated lifestyle possible in Vancouver for decades – even when it was relatively expensive – is toast. There is this relatively bright line between those who started their careers at a time when prices were a realistic multiple of incomes and those who did not. The living circumstances of people working identical jobs but having started five years apart can be staggeringly different. These are not indicators for a “bright future” – and neither are the issues that have been referred to elsewhere (an inability to staff a variety of sectors, etc.).

        Also, you cite demand for “middle class” properties and that it’s driven by immigrants who are not “uber-rich”. Frankly, I see very few family-friendly “middle class properties” here if we go by actual middle class incomes. Immigrants are typically poorer than the average Canadian. If an immigrant is moving here and able to participate in this real estate, I don’t see how they wouldn’t be designated as rich.

        Sorry if this is a bit disjointed – I’m writing on the fly. I still see talented people leaving. I absolutely see recruitment and retention challenges in multiple sectors. It’s not necessarily an acute issue. But I can’t think of anyone I know who would tell you the future of this place seems brighter now than it did in the past, or that their kids would have it better here than them.

        YMMV.

      • Your comments were not disjointed at all. I agree with a lot of your points. It is a challenge we should hold our politicians to resolve in a just and equitable way.

        I’ll add that these challenges, such as long commute times and affordability, are not unique to Vancouver. I also believe the successes of surrounding areas such as Burnaby and Surrey will be sustainable.

        As for affluent immigrants, it was the policy of the federal government to attract them. Change the policy to focus on welcoming true working class Asians or economic refugees and we can be certain to see a very different Vancouver — one that would fit three generations into a one bedroom apartment.

        On middle class, it is hard to define. What is middle class in one region or in one social circle may be considered a millionaire or house poor depending on who you ask. I find that this discrepancy is more pronounced in Vancouver because local wages are so much lower than elsewhere in the world.

        Here’s an example. In Hong Kong, which faces a lot of the same challenges as Vancouver with unfathomable amounts of Mainland Chinese capital lurking, a two bedroom government-subsidized public housing unit goes for more than C$1m. This is proper middle class in a city like Hong Kong so when that family of three moves to Vancouver, and buys a upscale two bedroom home in Richmond in full, they still see themselves as middle class because they need to continue working.

        That ‘bright line’ you mention is prevalent in many cities around the world.

        I don’t have the answers to solving these problems. I only believe demand for property in Vancouver will continue to grow and that the social and economic problems you’ve mentioned will work itself out to produce a new Vancouver that won’t be recognizable to its former self. Vancouver has a lot of soul searching to do.

  18. Today, Vancouver is aspirational to money launderers, speculators, and few others.

    No sensible person, any in the world, seeks to put down roots there anymore. Park money? Yes. Send kids to school for a few years? Sure. Exploit lax immigration and tax rules, while keeping one foot in China? Yup. Join the family for a few months a year? Roger that.

    Actually settle there, legitimately and permanently, because it offers good value, community, arts, nice weather, and economic opportunity? He** no.

    This is inarguable.

    Fewer immigrants, ghost neighborhoods, and increasing evidence of tax evasion, immigration fraud, and money laundering are all evidence of this reality.

    BLM would have you believe that Vancouver is a retiree’s dream destination. If you don’t agree with this deep insight, you lack imagination.

    • Royce McCutcheon

      I generally agree with you.

      That said, let’s take BLM’s point about this place being a “dream destination” for foreign money retirees TODAY as somewhat fair. I honestly want to know how s/he believes it will stay a desirable place. I haven’t seen anyone explain how this region is sustainable as a “dream destination” (lax income reporting requirements/ minimal local tax demands, safe/ secure, clean, excellent social benefits and infrastructure, etc.) if it remains fixated on that one foreign money cohort and offers no incentive to attract or retain anyone else.

      Because I think the “dream” takes a pretty big hit if the expense burden to sustain the place actually ends up landing on those who thought they could treat this place as a low overhead resort.

      • Yes, I will grant that for a minority of people (i.e. some nouveau riche Chinese) Vancouver remains “attractive”. However, the attraction is, in my opinion, only partly due to “cultural”, “geographical”, and other feel-good reasons as per BLM. There are less savoury reasons involved, like the aforementioned tax, immigration, and money sheltering advantages.

        No one has countered your central point re: the sustainability of a place where only the upper crust can afford to live, because no one *can* counter it.

        #HungerGames

      • Royce McCutcheon

        Right. That’s why I’m expecting to hear crickets.

        I had the whole mess ably distilled to five words by a friend. Interestingly, this is someone who believes that foreign demand will not abate, prices will not fall substantially, and supply-side solutions are key. But he is galled by low local salaries and cannot stand NIMBY types, so we certainly have common ground.

        Anyhow, his message for every house-rich, “I’m all right Jack”, born-at-the-right-time, self-entitled moron:

        “Who’s gonna wipe your ass?”

        Seems like a pretty good distillation to me!

      • That about sums it up!

  19. BLM (aka Blowing Lots of Marijuana) is right that market forces will restore balance to Vancouver, but he’s got his dependent and independent variables backwards. In BLM’s fantasy world, property prices will stay where they are, and incomes will rise. In fact, it is property prices that will come down. They are the dependent variable.

    Just as incomes in the U.S. didn’t magically rise to match bubble prices, nor will they in Vancouver.

    Ask yourself: If you’re a business owner, do you massively raise everyone’s wage so that your employees can afford to remain in Vancouver? You might choose to close shop, or relocate. Bye bye employees. Bye bye services previously provided by said employees.

    If you decide to stay, where do you get the money to pay for the wage increases? You have two options: raise prices or reduce earnings to shareholders. Do the former, and consumers will pay, further exacerbating the city’s high cost of living. Do the former, and it becomes a less attractive market for investors to open businesses, further weakening the local economy.

    It’s a lose-lose proposition.

    • @El Ninja

      The Second Coming in Vancouver’s property market is about as likely as that papal BJ. In other words, prices are extremely unlikely to return to the levels last seen in the 80s/90s.

      Any number of scenarios can play out. Yours and mine are two. The US housing crash a decade ago is a horrible comparison. No two bubbles are exactly the same and the external factors are so different today.

      The way I look at it, land and property prices are roughly determined by:

      1. the value of money, of which it is cheap at the moment and for the foreseeable future (10 years +). Income comes secondary and that is especially true today as capital is global regardless of origin.

      2. the demand in a region. Unless you can keep speculators and wealthy people (including all local Canadians) out of the housing market in Vancouver proper for good, even the prospect of re-allowing this group of buyers back in the market is enough to prop up prices.

      As a business owner, you raise prices to cover higher labour costs. If it doesn’t add up, then you close up shop or move to another part of town that allows you to be profitable. Last I checked, Vancouver’s population is still growing. At some point, the businesses will find an equilibrium. If it’s all high-end restaurants, well, then that is the new face of Vancouver (I don’t believe this is or ever will be the case).

      Finally, I also believe there’s a silent minority. There is a large segment of the population (including Canadians who have settled in Vancouver for generations) who are non-vocal and have benefited hugely from the surge in property value. They have no qualms paying more for a meal or higher property taxes. For them, it is the best of times. For others, it is the worst of times. For Vancouver, the times, they are a changing.

      • So much wrong with this. Let me try to unpack it.

        You think prices won’t revert?

        Reversion to the mean is a law of investing and of nature itself. Check it out.

        The only determinant of any asset’s value is the present value of the future cash flows it will generate. You need only consider the rent-generation capacity of a property, and an appropriate discount rate, to value it. Current prices in Vancouver do not add up.

        You think the U.S. is not relevant? It is astonishing how many Canadian RE cheerleaders hide behind the “it’s different here” copout, while wholly ignoring the many similarities. Here we had, before our very eyes, a massive spectacle of human folly–and a huge learning opportunity. Instead, “nah, won’t happen here”. The smugness of it is breathtaking.

        Your “new face of Vancouver” sucks. And no one will want to live there. Including the rich.

        You think a “large segment has benefited hugely”? Care to name it? Care to put numbers to it? The only people who have benefited are those who have sold, without buying back into this bloated market. They are a tiny minority. Those who are paper-rich have not gained any true wealth. The only thing they’ve gained is higher property taxes and a hollowed-out community.

      • You seem to be fixated on binary views. It’s very much 1s or 0s for you.

        It’s not that it’s different this time but that Vancouver has changed and that the monetary system has been skewed. You simply can’t take a what goes up must come down rule and apply it as gospel for every real life situations.

        Good for textbooks but not a blanket principle.

        As an extreme example, should one never buy into Google or Amazon stocks because it has never been fairly valued? Gold, though it pays no dividends and has little utilitarian value, was once fairly priced but like Vancouver property has stayed lofty but do you dismiss it entirely as part of a big portfolio? Nor should one dismiss the impact of foreign capital in Vancouver’s property market. We’re not in Kansas anymore and we ain’t going back with globalization.

        What we are seeing in the asset world is almost hyper inflation. It’s the result of loose monetary policies and thank goodness it hasn’t hit other everyday items other than shelter.

        10 years on, is everything in the US now priced at market value fairly?

        I too worry a morbid version of Vancouver manifesting but I also have an unwavering faith in our democracy and market principles.

        On the large segment who have benefited, I used ‘large’ figuratively. As I later referred, they are the silent majority. I cannot and need not prove it but I trust my judgement they are a larger group than you estimate.

      • I love how you dismiss investment principles out-of-hand, calling them suitable only for “textbooks”. You are bending reality to fit your narrative. It should be the other way around.

        And who says Google and Amazon aren’t fairly valued? They have been growing like weeds; it makes sense for them to garner higher PEs relative to the average firm. When their growth become average, they will command average PEs. i.e. they will revert to the mean. You can’t escape that.

        Comparing a soggy west coast outpost, of little global significance, to the humanity-changing innovations that are Google and Amazon is some slick marketing sleight-of-hand. It might trick some innocent foreign buyers, but not the rest of us. Much like your faux concern for the fate of Vancouver. Not buying it.

        Here’s my guess. You “found yourself” in Asia and developed a sort of fetish for the region and its people. Now back home, your financial future is linked to continue price appreciation in Vancouver, either via a real estate-related job, or property ownership, or both. You are terrified, like various others on this blog, that the party will end. Crafting lengthy pseudo-arguments about “globalization”, “elite buyers”, etc., without actually addressing any counterpoints, is your self-therapy.

      • You would do well to not jump to conclusions in your assessment of Vancouver’s property market as you have about me. You’re way off on my profile. Not even close.

        I will say, hand on heart, I have far more to gain if Vancouver’s property market corrects. No exaggeration.

        I am rooting for just about everything you prophesize but I’ve seen both sides and beyond.

        I don’t claim to know more than anyone but I do feel certain I have an above average spectrum on perspective. I take into account everything, including your arguments and use critical thinking to reach my own conclusions.

        Judging Vancouver’s property market without actually analyzing it from the outside is a bit like claiming the earth is flat standing on top of Grouse Mountain.

        I sense you’re taking my comments a tad bit personal so I shall disengage with you for the time being. Not because I disrespect you but because our back and forth no longer serves you, me or the readers here value anymore.

      • Because telling someone they lack imagination isn’t at all personal…

        Listen, I’ve lived and worked in four countries, including a time in Asia. Traveled to dozens more. Speak two languages natively, fluent in a third.

        Not saying I’m smart, or special. But outside perspective? I got that. And while perspective helps one appreciate Vancouver’s qualities, it doesn’t necessarily lead to the conclusion you have reached.

      • At some point, the businesses will find an equilibrium.

        Says the neoclassical model. Which is wrong. Markets are always trending further towards disequilibrium, before snapping strongly back and overcorrecting. It is equilibrium that is the unnatural state, not disequilibrium. This is especially true when credit is too easy for too long. At least you addressed that much.

        Finally, I also believe there’s a silent minority. There is a large segment of the population (including Canadians who have settled in Vancouver for generations) who are non-vocal and have benefited hugely from the surge in property value.

        Of course there is. People who benefit from a bubble have a strong incentive to consider that bubble the new normal. They also consider themselves “prescient” for buying a home years ago. Such a wise investment!

        They have no qualms paying more for a meal or higher property taxes.

        Yes, such people tend to be stupid and careless with money. Just like other lottery winners.

        For them, it is the best of times. For others, it is the worst of times. For Vancouver, the times, they are a changing.

        Vacuous jingoism is not argument. Aren’t you embarrassed saying such things? If Van real estate doesn’t work out for you, you are a shoe-in to work as a speechwriter for the current PM.

      • “For them, it is the best of times. For others, it is the worst of times. For Vancouver, the times, they are a changing.”

        “Vacuous jingoism is not argument. Aren’t you embarrassed saying such things? If Van real estate doesn’t work out for you, you are a shoe-in to work as a speechwriter for the current PM.”

        I simply tried to injection some lightness into the discussion. That was some clever bit of Charles Dickens and Bob Dylan mixed together – both very relevant in context. Did it go over your head or did it simply not impress?

      • BLM has high regard for his own intellect.

  20. Bull! Bull! Bull!

    So when’s the big crash guys? Any idea?

  21. [MacLeans] – Taking a stand against Vancouver’s real estate disaster

    …”It’s a start, at least. And on the surface, it looks surprisingly bold. But it remains to be seen whether the 30-point housing plan British Columbia Premier John Horgan’s government unveiled Tuesday will begin to expunge the pathologies that have turned Metro Vancouver’s real estate market into an international housing affordability basket case and a global playground for white-collar criminals and fentanyl tycoons.

    It may well be that the suite of measures outlined in the first full budget of Horgan’s seven-month-old government will start to remedy the most obviously ill effects of high-stakes real estate speculation, shadowy foreign investment rackets, massive tax evasion and money-laundering. It could be, too, that the measures will merely end up allowing the New Democratic Party government to get in on the action, like its Liberal Party predecessor did, except in its own way.

    What is certain—and it has come as a delight to many West coast housing activists—is that after more than a decade of willful neglect by provincial and municipal politicians, and out of a political culture of persistent denial, indifference, self-dealing and outright corruption, there appears to be a government in Victoria that is giving the province’s distorted, overheated and out-of-control real estate business some long overdue attention.

    “I’m not happy, but I’m not sad, either,” said Andy Yan, the director of Simon Fraser University’s City Program whose data analysis and public advocacy helped to shame Victoria into acting. “This will not make Vancouver affordable. But this is a nightmare we’re coming out of. It’s going to take more than one provincial budget to unwind the machine.”…

    http://www.macleans.ca/news/canada/taking-a-stand-against-vancouvers-real-estate-disaster/

  22. white_angelo_blockchain_commando
  23. It’s not that it’s different this time but that Vancouver has changed…

    It’s not that I don’t understand you, you just make no sense.

    I will say, hand on heart, I have far more to gain if Vancouver’s property market corrects. No exaggeration.

    No, that’s not exaggeration. That’s lunacy. How do you expect to benefit from a Van crash, unless you have a short position on some of the big lenders? And why would you be short Van housing, then spend 10,000 words arguing that a crash won’t happen? Oh, I get it, you’re the typical bull who is thinking he’ll by the dip if prices to plunge. Cuz they can only go straight back up again. Like I said, lunacy.

    …I do feel certain I have an above average spectrum on perspective. I take into account everything, including your arguments and use critical thinking to reach my own conclusions.

    Wait a minute… Brian? Is that you? Does BLM stand for Brian’s Latest Moniker? Brian’s Long Musings? Brian’s Lazy Morphology?

    I dunno, you don’t sound quite arrogant enough for Brian. He couldn’t go five posts without telling us A) How lucky Canada was that he chose Vancouver, and B) How if the government even considered stemming the flow of foreign capital from China, he and his ilk would pack up and leave, and we’d be the poorer for it. He could never explain why that would be a bad thing. I guess he considered it self-evident, in an “Ask not what your country can do for you, ask what your country can do for me” sort of way.

    • “No, that’s not exaggeration. That’s lunacy. How do you expect to benefit from a Van crash, unless you have a short position on some of the big lenders? And why would you be short Van housing, then spend 10,000 words arguing that a crash won’t happen? Oh, I get it, you’re the typical bull who is thinking he’ll by the dip if prices to plunge. Cuz they can only go straight back up again. Like I said, lunacy.”

      Presumptuous and spoken like a true raging ranter. The answer is simple. I wish to get on the property ladder in Vancouver which is important for me (I don’t need convincing of otherwise please). Furthermore, I’d quite like to settle in the same neighborhood that I grew up in.

      I have property in Toronto and in Asia and when the timing is right, I will make a move to sell some or all of those assets to buy here.

      And yes, Vancouver’s deteriorating culture and economy is a cause for concern but I still believe the city’s best days are ahead.

      • You say this:

        The answer is simple. I wish to get on the property ladder in Vancouver

        I already said this:

        Oh, I get it, you’re the typical bull who is thinking he’ll by the dip if prices plunge.

        You perma-bulls are so easy to read.

        Vancouver’s deteriorating culture and economy is a cause for concern but I still believe the city’s best days are ahead.

        So a deteriorating culture and economy indicate to you that the best days are ahead? Are you capable of writing a single sentence without contradicting yourself? If a deteriorating culture and economy were a sign of future growth, then you should be sinking your money into Detroit.

      • Detroit’s not home. Vancouver’s were I was brought into this world.

        I’ve made no secret I’m bullish on Vancouver’s property market here.

        You bet I’ll buy if prices dip!

      • BLM is confused.

      • “I have property in Toronto and… when the timing is right, I will make a move to sell some or all of those assets to buy here.”

        The time to sell in Toronto was last year.

  24. Unpopular fact: Anyone who uses the term “property ladder” cannot be taken seriously.

    • white_angelo_blockchain_commando

      even the cdn media is piling on now … that fake, empty gaze … tfw you take a spiritual day trip to have a peek inside, and discover there is nothing there

  25. white_angelo_blockchain_commando

    prediction … we have yet to reach peak stupid … but it’s pretty close now … https://tinyurl.com/y93uu4te

  26. 4511 Harriet St. – Turkey. No Frills location. Baby-sized lot. No view. Horrendous layout. No laneway. Blurb says it was an award-winning builder, but there is no proof. Asanti website says check out their reviews. There is all of one – obviously written by a wife, or the toad that did the execrable staging of this pile. The builder bought this crappy little lot just six months ago for $1.3M and was able to throw up a house with incredible speed – retailing for $2.5M. Cost to build, ppt, closing/carrying costs – probably around $400 K. Built during the rainy season. That means trouble. Upside? No.

  27. Vancouver will be added to this list:

  28. Ninja the parrot: don’t shoot the messenger, don’t shoot the messenger, don’t shoot the messenger. If you paid attention to credible people, maybe you wouldn’t be so bitter. Learn to discern grasshopper.

  29. white_angelo_blockchain_commando

    pathologically speaking … low vol bounce rolling over? … let’s see what we get if … just a messenger, no shooting pls

  30. 4513 James St: priciest open in East Van at $3.289M. Bought as a scraper nine months ago for $2.040M. Sold a year previously for $1.266M. The $2.040M sale made sweet profit.
    A demented structure as idiotic in layout as it is in the exterior. Small lot. No laneway house. No garage mentioned in the listing. Undesirable east west orientation. Nice views in the dungeon suite of the landlord’s feet and of the toilet. Open concept evolved. The laundry area has a countertop blocking the dryer. Clever. No windows. Shriek.
    An absurd house at an absurd price.

    • “Double garage with lane access.” There’s a photo of it. But on the whole, a silly attempt to create a house meeting contemporary standards on a lot too small for that purpose.

  31. 780 32nd: listed at almost $700K over assessed. A renovated post war box in a No Frills close to the graveyard location. Atrocious layout – no concept of a kitchen work triangle. Nice pictures of this staged turd.

  32. At-ease, Canadians. You’re in good hands.

  33. Disgruntled Condo Owner

    Any opinions on whether a Vancouver crash can really happen as long as the Quebec immigrant investor program remains intact? Yes I am referring to the program that sends tens of thousands of ultra rich foreigners through Quebec straight to Vancouver to buy up all our real estate at prices which in their terms remain quite affordable. Sort of like bailing a sinking boat with a bucket without plugging the 12 inch hole in the hull?

  34. There are many ways to skin a cat. The Quebec investor springboard into Vancouver is just one of them.
    The sales to list ratio for detatched is still above what is considered to be a buyers’ market.
    The strata market is too crazy red hot. If you have the moolah, you might score a freehold. That would be smarter. Still, as usual, 90 plus percent of what comes up for sale is renoflips, builders’ gewgaws, scrapers, and crap on busy streets.
    I spotted just one property in the fabulous East Side that I would buy, and that’s north of 2 mil. And it need’s work.
    Don’t hold your breath for drops on anything good.

  35. backwardsevolution

    El Ninja said to BLM: “Here’s my guess. You ‘found yourself’ in Asia and developed a sort of fetish for the region and its people.”

    BLM is Chinese. I can tell by his sentence structure. He was probably born here, but to Chinese parents. Could care less about Canada; Chinese through and through.

    He’s going through all of the possibilities just to pick your intelligent brains. My bet is he’s a speculator who wants to know when to unload, so he’s putting out every “for” argument just to elicit your “against” arguments. Kind of like stealing someone’s technology, but pretending not to.

    BLM said: “I’d argue that the mindset of buying/holding property on the assumption that prices will rise has always been a paramount factor. Why else would one buy if that were not the case?”

    There you go.

  36. backwardsevolution

    By the way, that was an excellent article, and the comments were great too!

    “In our years of Vancouver RE Bubble-watching, we can’t recall a more adamant mainstream article… With this degree of shrill realization reaching voices like Maclean’s, the end has to be in sight. – vreaa”

    The Liberals kept it going as long as they could, long enough for a whole bunch of people to get angry, where they could no longer keep a lid on the corruption, and then they passed it off to the bag holders who will now be left to clean up the mess and take all the heat.

    There’s a special place for people like that.

  37. A tale told on the back of a turnip truck. Vile Mcleans rag owned by vile Rogers – brainwashing.
    Beggars belief that the equally vile G&M, owned by Canada’s most revoltingly rich family, is whining about not getting a donation of $50 million (Andrew Coyne) from the turnip truck taxpayers. Better get that subscription. Thomsons want more money. $40 billion is not enough. Send more money turnip truck taxpayers. Believe the propaganda. Only 99c a week.

  38. 2507 25th Ave E. New listing. “Walk to Skytrain”. Walk? You could spit and hit it. “Reasonable price” ? $300K over last assessed. Reasonable only with a land assembly/rezoning. Otherwise a nasty place to live. Nasty.

  39. U.S. bubble 2.0.

  40. Terrible news for China. And also for BLM, Arnie, Brian, and others who see future Chinese wealth as the hero and saviour of Vancouver real estate.

    https://www.economist.com/news/leaders/21737517-it-bet-china-would-head-towards-democracy-and-market-economy-gamble-has-failed-how

  41. white_angelo_blockchain_commando

    owwch … but true … https://tinyurl.com/yajy7han

  42. 2670 25th Ave E: looks like good value, but it sits on a bog. Strip away the asphalt and concrete, and it would be sitting on the boggy bank of a stream. Where’s that in the listing blurb? There are a lot of bogs and underground streams in Vancouver. How often is that expressed listings?
    See no evil monkey is clearly too busy with his one and only listing. Incompetent, or deceptive?
    What about the buyer’s rodent that comes along. Are they going to speak no evil too? Plead ignorance?
    Gimme dat commission.

  43. Vancouver Canada’s unhappiest city. Colour me shocked.

  44. 3140 28h Ave E: decent location overall, but the noise from 29th just a couple of hundred feet away penetrates painfully. Prehistoric pink sink and tub. Okay but forgettable house on a big lot. $2.998M. $357K over last assessed. Underground stream is just a few houses east. Lots of traffic thanks to Windermere School.

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