Tag Archives: Bulls

“I was really fortunate with how things worked out for me in real estate. I definitely took chances when I bought a few presale condos to flip back in 2004, but I was adamant at the time that there was room to grow for Vancouver.”

“I have moved on from residential and have been working in the commercial RE industry for over 8 years now. A lot less ups and downs and I get to deal more with businesses rather than individuals who tend to be less professional. Both sides of the industry have their pros and cons, but I love working with commercial brokers and tenants. I work for a large developer in town looking after their commercial portfolio in Western Canada.

A little about what has happened [to me]:

– Sold 2 of my condos that I bought pre-sale in 2004 in downtown Vancouver just by Rogers Arena. One sold in 2010 and the other in 2012. Both were 2 bedrooms that were purchased for $280K give or take and sold around $560K each. One I lived in with my family and rented out the other.
– Used the profits to upgrade to a spectacular 3-bedroom, 1600 square feet “new” condo in Fairview
– Have 2 lovely young kids
– Love condo living close to downtown with my family for the proximity to work downtown, restaurants everywhere and just the energy that the burbs don’t offer

I was really fortunate with how things worked out for me in real estate. I definitely took chances when I bought a few presale condos to flip back in 2004, but I was adamant at the time that there was room to grow for Vancouver. I still think it is one of the best places to live in the world and I am gladly paying for it by choosing to live close to downtown. I travel a lot internationally and every time my plane lands at YVR, I feel so blessed to be back home to such a beautiful place.

I took some chances, had some luck and stayed away from the extreme negative and positive views of posters on [RE Talks forum]. I would put myself in the Bull camp always, but that is only because I think you need to be ready to seek out deals – and this requires a pro-active mindset. One should never buy what they cannot afford (everyone agrees on this), but you should always be ready to buy a home when you need one (starting a new family, for example). Most of the original bears on [RE Talks] are gone, but I must say, it is funny to look back and see how wrong on the timing they were.”

Property_Magnate at RET 24 Jun 2013 [cited by ‘WhipMaster’ (aka Johnny Horton, etc, etc) as an example of a story from a “winner” in Vancouver RE, VREAA 25 Jun 2013 7:14pm]

Nobody is disagreeing with the idea that one could have done well in Vancouver RE by buying in 2004.
And, please, nobody misinterpret the above anecdote as an endorsement for buying “a few” presale condos in Vancouver, least of all in 2013.
– vreaa

Royal Bank, CIBC, BMO, CTV, REBGV, Michael Levy, Royal LePage, Global TV – “Housing Crash Fears Unwarranted”; “There is no property bubble. Period.”

vanc re keep calm

In contrast to the recent MacLean’s ‘2013 Crash’ article, we now have a surging surfeit of reassuring commentary from other sources:

“Canada’s real estate market remains “relatively solid” and should experience a “soft landing” despite the current slowdown and fears of overbuilding in the condominium segment, the country’s leading bankers said Tuesday. …
“Our expectation is that the overall real estate market in Canada is still relatively solid,” Royal Bank CEO Gord Nixon said. …
“Pure math says that a soft landing, if it means you go back historic levels of activity, that we’re going to have some softness in our economy,” Gerry McCaughey of CIBC said.
“… That softness doesn’t necessarily come out in mortgage defaults, it comes out in employment softness and consequential unsecured consumer lending softness.” …
“In fact, house prices may just stagnate. Condominium prices may just stagnate for a couple of years. And that’s the definition of a soft landing,” Bank of Montreal CEO Bill Downe said.”

– from ‘Bankers expect soft landing for Canadian housing market despite slowdown’, Canadian Press care of CTV News, 8 Jan 2013 [hat-tip Dr. Bubble]

“I just watched ctv vancouver news. they did a 5 minute piece on real estate here. they interviewed two realtors and one guy from real estate board. they all said prices of sfh in vancouver were down 1 % for 2012 and say prices won’t fall more than 3% in 2013 as sellers don’t need to sell so they will just pull properties and wait…so buyers who are expecting big drops will not ever see that. the real estate board guy said there is nothing in the cards that is showing sellers will have to sell so prices will stay high. then the host of the news said, well, there you have it… no bubble popping here and went onto next story.”
– vancouverbubbleman at VREAA 8 Jan 2013 5:49pm

Michael Levy, financial analyst: “There is no property bubble. Period. We’ve had prices come up because of demand, both domestic and from off-shore, and demand swelled, and particularly here in Vancouver, a most desirable place to own property, you want to live here or invest here.” …
Announcer: “Prices seem to be holding, as the tug-of-war between buyers and sellers continues.”

– from ‘Experts Say No Real Estate Bubble In Vancouver’, Global TV News, 8 Jan 2013 [video archived by Greenhorn; hat-tip YVRhousinganalyst]
[“There is no property bubble. Period.” – this latter-day pronouncement added to “What Bubble?” sidebar]

“Royal LePage forecasts that the price of an average Canadian home will rise by a modest 1% in 2013.
Canadian home prices will see a “very modest” appreciation over the next two years, as economies in both the U.S. and Canada gradually improve and family incomes climb slowly, the brokerage said.
“More home buyers moved to the sidelines as 2012 progressed, as economic uncertainty abroad and reduced affordability became a drag on the market, however house prices proved resilient,” said Phil Soper, president and chief executive of Royal LePage.

– from ‘Housing-Crash Fears for 2013 Unwarranted, Forecasters Say’, WSJ, 8 Jan 2013

Bears Care, Too

“…the schadenfreuden stories on Vancouver Real Estate Anecdote Archive. Always good for a bitter laugh.”Bill Lee at francesbula.com 26 Nov 2012

“I never did give anybody hell. I just told the truth and they thought it was hell.” – Harry S. Truman

All the very best for the festive season to all readers, and wishing you all a fine, peaceful 2013.
Regular readers know that we foresee challenging times ahead for the Vancouver RE market. This opinion is not a wish, it is simply the result of an analysis of all the available evidence. And it is most definitely not to be confused with a desire for bad things to befall anyone in our community.
The speculative mania in housing (2003-2012) has been detrimental to Vancouver. It has misallocated human and financial capital, and distorted the economy of the city. It has inconvenienced many, and, unfortunately, in the end, it will have financially and psychologically hobbled a good number of citizens. This outcome is inevitable. Again, please don’t confuse this observation with a wish, it is simply part and parcel of a spec mania: a messy resolution has been ‘baked in’ since prices hit the afterburners in the mid 2000’s. When asset prices are artificially inflated by a chain of ever increasing debt-financed transactions, there will always be a large group left ‘holding the bag’ when it all runs out of oxygen.
There is, unfortunately, no other way things can resolve, and nothing that can be done to significantly ameliorate the bubble’s consequences. It is too late for that. The problem was letting it develop in the first place; and not allowing it to unwind earlier.
Anybody who is wishing for soft-landings, or hoping that some form of kindness will somehow allow for a resolution that involves no damage, needs to answer this question: Who do I expect to do the buying that will let everybody down gently? Who do I expect to step in now, borrow (or ‘donate’) large sums of money, and agree to purchase properties that are still woefully above their fundamental values? (and thus exposing themselves to very large losses ahead). Who do you suggest should be the sacrificial lambs?
Those wishing for fantasy bullish, Pollyanna-ish outcomes may be well-meaning, but they are simply ignorant of bubble market dynamics. You can’t simply call the game off and hope that everybody wins; it doesn’t work like that after years of ever-increasing over-extension.
All that said and done, we hope that readers fare as well as possible. All citizens, owners or not, will feel some of the economic effects of a RE downturn. Non-owners will suffer less direct personal impact, and there are a good number of owners who will survive the RE bear market with just a scratch or two. We are most concerned about modest net-worth households who have almost all of their savings in their homes; often with leverage. We know it is a painful fact that they can’t all get out ‘whole’, but we fear for them nonetheless. Particularly vulnerable are those close to retirement who are relying on the value of their homes for a comfortable future.
We hope that Vancouver can find a way to make the transition from overvalued market to a fairly, and sustainably, valued market with as little damage, and as peaceably, as possible. In fact, for us, the ‘peace’ bit is paramount. Economic stress puts groups at risk of highly-charged fractures, and we sincerely hope that as a large and diverse group we’ll be able to avoid scapegoating, in-fighting, and division.
So, to emphasize: Bears care, too. They may come across as grumpy and (per force) contrarian, but they care as much for family, friends, neighbours, and fellow citizens as anybody else. Sure, the occasional bearish commenter will express the opinion that they will gain pleasure from the losses of speculators, but this is far from the commonest position. The very few Vancouverites who have seen this speculative mania for what it is most commonly express genuine concerns about the potential consequences for themselves, their families, and their fellow citizens.
– vreaa

“I conceive that the great part of the miseries of mankind are brought upon them by false estimates they have made of the value of things.” – Benjamin Franklin

“I think you’ll need another sidebar category to capture the mounting “why do you hate families/wish misery on others?” accusations that are going to come in increasing numbers. Long time bulls – and new visitors to this site – may trot that one out more and more, accusing you and posters here of schadenfreude, hating home “owners”, etc. Even if it doesn’t happen here, mind-bending statements in this vein will increasingly pop up elsewhere and be worth collecting. May I humbly suggest a sidebar icon with a picture of Helen Lovejoy and the words “won’t someone PLEASE think of the children?!?” to link to the post you ultimately create addressing this topic?
Past even-handedness will matter little to desperate people who will misinterpret many sentiments expressed here. The archive will be useful to a subset of these people who are willing to be taught the historical mechanics driving this bubble.”

– paraphrasing of Royce McCutcheon at VREAA 17 Sep 2012 8:50am [We’ll call such a sidebar ‘Bears Care, Too’ -ed.]

Bear Exhausted By Tenacious Bullishness – “Over the long term real estate never goes down besides there is so much money coming over here.”

“Talking to a colleague. Her and her brother were looking at places in my neighborhood last night. He sold his place in the sticks and is now looking to move closer to the city. I asked her why doesn’t he just rent, “he feels that interest rates are going to rise and he wants to lock in a low rate.” Wouldn’t it better to sock away the money and wait for rates to rise, values to decrease and then buy, I asked. “Over the long term real estate never goes down besides there is so much money coming over here.”
The rent for my one bedroom is $1,550 and similar apartments are listed for $490k. meaning it would cost me almost $3,000 a month to own a comparable apt. — based on 5% down with a 5-year fixed at 4% with a 25 year amort.
I am so very, very tired of being wrong about Vancouver’s RE market. It appears that there is just no shortage of people who truly believe that we are running out land, that real estate always goes up and that everyone wants live here.”

Manna from heaven, at VCI, 1 Jun 2012 11:19am

“What do you mean you were wrong? Average price is down 12% YOY. It sounds like you were right.
Bears have been wrong so long they can’t recognize when they are right!”

WFT? at VCI 1 Jun 2012 12:15pm

Infographic Argues For A Soft Landing – “Just because it is in the form of a Tintin book, doesn’t make it true.”

– this infographic from ratehub.ca, a ‘mortgage blog’, 27 Mar 2012.
The link was kindly forwarded to us by frequent contributor ‘Zerodown’, who adds:
“I admit to being impressed with the thoroughness of this info graphic. However, just because it is in the form of a Tintin book, doesn’t make it true. An annotated version will be required.”

We think this infographic overstates the strength of Canadian borrowers: 5% has not been the minimum downpayment; 32% of income has not determined the ‘maximum affordability’; 153% debt-to-disposable-income ratio is a very significant level; “Long term low interest rates” do not “shield the market from a bubble burst”.
We personally can’t see a soft-landing (a coolly deflating balloon?) playing out.
Who do we expect to keep buying Vancouver RE at these extremely lofty price levels once the promise of future abnormally large price gains disappears? Because, that is what would be required for a ‘soft landing’; a steady stream of buyers prepared to take out ginormous loans to buy RE that is no longer appreciating, or is very likely dropping, in real terms.
Who do those calling for a ‘soft landing’ propose to be doing that buying?
– vreaa

Vancouver 2030, Bull Case – “Stop throwing rent down the toilet and filling your landlords shorts with money bags, stop dumping money into risky and volatile stocks or savings account yield negative interest rates.. Be an OWNER and not a renter and GET RICH”

“This Macleans article is all about predictions.. no difference than economist, fortune tellers, mayans
The fact is that Toronto and Vancouver are the most attractive cities in the world and foreigners are trying to bust down barriers to enter these two cities to lay their roots. Here’s why the RE boom will continue:
– Lots of immigration coming in; esp professionals and high net worth families
– Best banking system and excellent government policies in place
– Very competitive in the resources/oil/financial sectors
– Consistently ranked by all financial publications as the best cities to live in the world
– Best educational system in the world
– Diverse, multi-cultural, polite population that are always welcome to foreigners
– Interest rates will stay low for a very long time (think Japan)
– The Conservatives show us that time and time again that they are pro-RE and will not let prices fall at all
Here are the prices for Toronto and Vancouver in 2030:
Vancouver -> [see chart above]
Stop throwing rent down the rent
[sic] and filling your landlords shorts with money bags, stop dumping money into risky and volatile stocks or savings account yield negative interest rates..
Be an OWNER and not a renter and GET RICH”

BobJJones commenting at Macleans 28 Feb 2012

Saved here for the (somewhat broken) record.
“Yes, Virginia, there were people who were still this bullish on Vancouver RE, circa 2012.”
– vreaa

Guerrilla Advertising On reddit? – “Just moved here, and have been renting a place for 4 months. My wife and kids (3 boys) are now coming to live here with me. I need to buy a home.”

“Just moved here, and have been renting a place for 4 months. My wife and kids (3 boys) are now coming to live here with me. I need to buy a home. I have a $800,000-$900,000 budget. I work in downtown. What are some good, safe, and clean neighborhoods I could live in? A place where my dollar will go far and my kids could grow up.
Any good neighborhood in the GVRD would be good.
Please tell me what neighborhoods you would recommend,

– thread at reddit.com ‘Need to Buy a Home in Vancouver’ started by ‘MiamiToIbiza’, 3 Oct 2011. [hat-tip matt at VREAA]

A discussion ensues, with bubble/no-bubble exchanges.
Through the discussion ‘MiamiToIbiza’ elaborates as follows:
“Coming up with a $1,000,000, is really difficult. I’m Only 32 years old, and banks consider me a risk at for a million, but I have approval for $750,000 loan. I plan on putting $150,000 in my self, I can’t afford to put in $250,000.”
“Looking for 2-3 bedroom +2-3 bath, at least 3000sqf home.”
“I may have my parents come and live with me.”
“I don’t think I’ll be buying in the proper City of Vancouver area.”
“I don’t think were in a bubble, we are very stable. Vancouver is Port City, a gateway city for people and goods.”
“I’ve been looking at Fraser heights, It seems really nice, I’m putting an offer on this home: http://www.cotala.com/1648 . THANKS FOR THE HELP VANCOUVER”

Gee, this guy went from asking an initial very open exploratory question about which area of the city to consider living in, to putting in an offer on a specific home, all in the space of 24 hours??
If we were in any way cynical, it’d occur to us that this reddit post just may have been a bit of guerilla advertising by a realtor or seller. But, no, Vancouver RE gets people to do crazy things, right?
The only three other posts on reddit from ‘MiamiToIbiza’, all in the last 24 hours, criticize teachers, Alberta and Winnipeg.
And another post thread started by ‘MiamiToIbiza’, also on 3 Oct 2011,   just hours after the first, reads:

“I bought a home
Got a home in Fraser Heights, everything is now getting finalized.
HOUSE: http://www.cotala.com/1648
It was slightly hire
[sic] then [sic] my budget but I’m happy. (Parents put in some money, THANK YOU MOM AND DAD)
Let me know what you think of the home”

Yep, we’d say it’s fair to conclude that this is guerilla advertising.
(Anyone who knows otherwise, please let us know).
The market is deteriorating.
Are Vancouver sellers and realtors becoming desperate?
Oh, and what does the BCREA have to say about this kind of advertising?
– vreaa