‘Extreme Speculation’ – “The problem is that the diversion of resources into investments that are only justified by the stream of new money and artificially low interest rates will destroy wealth at the same time as it is boosting activity.”

The Vancouver RE market can only be understood as part of a global phenomenon of too-cheap money encouraging ‘extreme speculation’. -vreaa

“When the central bank pumps money into the economy and suppresses interest rates it creates incentives to speculate and invest in ways that would not otherwise be viable. At a superficial level the central bank’s strategy will often seem valid, because the increased speculating and investing prompted by the monetary stimulus will temporarily boost economic activity and could lead to lower unemployment. The problem is that the diversion of resources into projects and other investments that are only justified by the stream of new money and artificially low interest rates will destroy wealth at the same time as it is boosting activity. In effect, the central bank’s efforts cause the economy to feast on its seed corn, temporarily creating full bellies while setting the stage for severe hunger in the future.
We witnessed a classic example of the above-described phenomenon during 2001-2009, when aggressive monetary stimulus introduced by the US Federal Reserve to mitigate the fallout from the bursting of the NASDAQ bubble and “911” led to booms in US real estate and real-estate-related industries/investments. For a few years, the massive diversion of resources into real-estate projects and debt created the outward appearance of a strong economy, but a reduction in the rate of money-pumping eventually exposed the wastage and left millions of people unemployed or under-employed. The point is that the collapse of 2007-2009 would never have happened if the Fed hadn’t subjected the economy to a flood of new money and artificially-low interest rates during 2001-2005.”
– from ‘Setting the stage for the next collapse’, Steve Saville, The Speculative Investor, 22 July 2014

“Yellen will not use interest rates to head off or curtail any asset bubbles encouraged by the extremely low rates that might appear. And history is clear: very low rates absolutely will encourage extreme speculation. But Yellen will, as Greenspan and Bernanke before her, attempt to limit only the damage any breaking bubbles might cause. … I had thought that central bankers by now, after so much unnecessary pain, might have begun to compromise on this matter, but no such luck… The evidence against this policy after two of the handful of the most painful burst bubbles in history is impressive. But not nearly as impressive as the unwillingness of academics to back off from closely held theories in the face of mere evidence.”
– from Jeremy Grantham’s latest newsletter, GMO Q2 2014

One Chart – Canada is “a country where house prices still haven’t found fair value.”

“A chart that shows those countries where housing prices still haven’t found ‘fair value’.”

– chart and excerpt from ‘Of housing booms and busts’, David Keohane, ftalphaville.ft.com, 26 Jun 2012 [hat-tip Ralph Cramdown and JS]

[If you find charts eloquent, see also this post from two years back: ‘Two Charts: All You Need To Know About Canada’s Housing Bubble’, VREAA, 26 Aug 2010]

White Rock – “Who the hell do they think will buy this stuff at these prices? Especially when so much more is being readied every single week? “Overbuilt” doesn’t begin to describe it.”

“It was so interesting biking through White Rock the other day. Even if I wasn’t an ardent bear, it would have been hard to miss the sheer number of For Sale sings. I have no idea if the official totals reflect it, but there sure seems like a ton of them when you’re on the street, sometimes several in the same block. Three or four carried the “New Price” message.

But on top of that, the flood of new product and new developments just…doesn’t…stop. We rode past at least a half-dozen new condo/townhouse/SFH developments that day alone. Meanwhile, back here in my own between-the-border-crossing neighbourhood, construction continues unabated. They’ve opened up a whole new section of land since my photo essay a couple months ago (building roads, infrastructure, etc) that looks big enough to handle a hundred townhouses and dozens of row houses.

You gotta remember that there are already 90 (!!!!) listings just in this mini-neighbourhood alone, nearly all of which are new. And unloved, apparently. These places were being snapped up a year ago, but not now. The weekend open houses here are seemingly drawing nothing but flies.

There’s one house in particular that bears mentioning. It’s situated where prospective buyers can’t miss it when they drive into the area, and it’s been in a constant state of “open house” for the last two months. Yet there it sits today, un-purchased, while dozens more just like it are nearing the final stages of completion.

Honestly, who the hell do they think will buy this stuff at these prices? Especially when so much more is being readied every single week? “Overbuilt” doesn’t begin to describe it.”

– Gord at VREAA 20 Jun 2012 9:33am

‘The Province’ Publishes BC’s Shocking Price:Rent Fundamentals – “If the number is higher than 15, it’s generally not a good time to buy. Our numbers are through the roof, from 29 in Prince George to 73 in West Vancouver.”

A map of the price-to-rent ratio of cities throughout Greater Vancouver.

“Take the house price and divide it by what it costs to rent for a year to get the price-to-rent ratio: Price divided by (Monthly rent x 12) = X.
(Estimates for additional costs of homeownership, such as taxes, maintenance and insurance are factored into the equation.)
If the number is higher than 15, it’s generally not a good time to buy.
If the ratio is less than 15, buying is a better deal than renting, if you plan on living there for at least five years to offset moving and closing costs.
By the time the number hits 20, renting is apparently the way to go, except if buyers expect to stay put for at least 15 years, according to a formula used by trulia.com to rank major urban U.S. centres every year.
B.C.’s numbers, as shown in the graphic, are through the roof, from 29 (Prince George) to 73 (West Vancouver).”
“Local real estate experts say the number is simplistic and doesn’t factor in other market drivers.”
– from ‘Where it’s cheaper to buy (or, more likely, rent) in B.C.’, Susan Lazaruik, The Province, 12 May 2012
—

Ergo, it is not a good time to buy, anywhere in BC, especially in the LML.
The only other “market driver” of importance is the insanity that accompanies a speculative mania.
Almost all purchases are speculative, and have been so for years.
It is good to see The Province printing something like this.
Will their readers realize what it means?
– vreaa

‘First We Take London and Manhattan, Then We Take Berlin’ – Limitless Demand Argument Revisited, Again – “Anytime a midlevel city grows and becomes a popular destination to live, people come, demand increases, supply dwindles, and prices go up.”

“Anytime a midlevel city grows and becomes a popular destination to live, people come, demand increases, supply dwindles, and prices go up. Witness New York and London 100 years ago and what it’s like now.
New York City police and firefighters earn about $100k a year yet can’t afford to live in Manhattan. They live in New Jersey and commute. When I was in London, a shuttle bus driver told me he grew up in Earl’s Court, but had to move to Reading and commuted to work. This is a normal state of affairs.
Vancouver is an international city. People are going to move here, as is happening in Germany. Real estate prices in Berlin and other cities are increasing because the remaining wealthy Europeans are moving and investing there because of the solid economy and collapsing prices in their home countries. They are pushing out middle-class Germans. The movement of people and capital to better places is normal development. What’s happening is not new. It has happened since the dawn of civilization.
If [anybody] feels disenfranchised and displaced, [they] should remember the plight of the First Nations people. Their homes were taken from gun point and they were subjected to genocide. The remainder were made to feel really welcome by being forced to live on reserves and treated like second-class citizens in their ancestral homeland. At least the Chinese purchased their homes legally and are contributing to the economy by buying Canadian natural resources from which she is benefitting.”
– Terry Chan, Letter To Editor, Vancouver Courier, 20 Apr 2012

Excellent debating technique, Terry.
– Hand-waving comparisons linking our (modest, small, provincial) city to capitals such as New York, London, Berlin.
– Vague claims of historical precedent (“since the dawn of civilization”).
– Superficially arresting but essentially empty concepts (“Vancouver is an international city”)
– Avoid mention of all non-supportive data (thus let’s not talk about any actual numbers)
– Pre-empt dissent by associating any would-be opponents with historical atrocities (“plight of First Nations people”).
—
While it is true that cities do develop, the problem is that the vague arguments used by Terry, if accepted, can be used as an excuse to justify just about any price, for any property, in any growing city.
Show us the math that supports current Vancouver prices. None does.
Yes, Vancouver will develop.
But, yes, too, Vancouver is in a huge speculative RE mania that can only end with implosion.
The two ideas are not mutually exclusive.
There are at least 150 other cities around the globe as important as Vancouver – Does Terry argue they are all on the brink of becoming the next NYC; London; Berlin?
– vreaa

Also see:
“Vanhattan”.
Various posts in the sidebar category “Limitless Demand Argument For Ongoing Market Strength”.

Opinion; Food For Thought – “The people of this region have a near infinite capacity for diminished expectations. Personally, I’m planning to move because I want something better.”

“It may not end.  The people of this region have a near infinite capacity for diminished expectations.  They seem to always do what they are told and accept what they are given, and no matter how ridiculous it is.  They will pay more and more for less and less.  Today it’s $700k for an old basement on a busy road in hookertown.  Tomorrow it could be $1 million dollars for a tent and a license to beg in the rain.  It’s the best place on earth you know.

That’s the true value of Vancouver: chumps.  There is an inexhaustible supply of fools who will never look elsewhere and the media apparatus to direct them.  Pay $10 for a hot dog?  Lineups for days.  Why not $100?  Limited time only.  Buy now.  These people will pay anything and do anything, regardless of whether it makes sense, and that’s why Vancouver is so valuable.  It’s not the land, or the scenery, or the climate, and it’s certainly not the standard of living.  It’s the people.

You can argue from simple mathematics that eventually this must end.  The population will be unable to pay for it.  This is true, but don’t ignore the fact that so many 60 year olds have 40 year mortgages.  When the general population can wield sums of money that they have no hope of repaying the integrity of the system is lost.  Money doesn’t mean anything in Vancouver, and under current policies Canada is sure to follow.  We have socialized credit and destroyed capitalism.  Newcomers don’t own anything in Vancouver and won’t get the opportunity.  It’s like a communist country, which is maybe why HAM finds it so appealing.

As for options, with the precedent established and the trend so firmly in place, there is no reason to bet on a reversal.  In 2008 this new system cracked and the authorities handed out gobs of money to favoured groups until it was fixed and the transformation could continue.  They invited corrupt CPC officials to immigrate and launder an unprecedented amount of money through Canada.  Anyone betting on an ounce of fairness or responsibility was badly burned.

That’s it as far as I’m concerned.  The social structure in Canada is ossifying and the economic structure is in decline.  Our neighbours to the south have once again shown the way, by restoring balance to their system after only a few crazy years.  Despite this enormous cost (or actually, because of it) sensible investment opportunities exist in the United States.  That country is dynamic again.  The fact that an American dollar today buys twice as much food, twice as much house, and twice as much gas is a harbinger of things to come.  Canadians foolishly think they are better off, but Canada is going nowhere.  Trade your Canadian dollars at par while you can, and move to the US to enjoy the standard of living you expect and get the opportunities that everyone deserves.

The worst thing you could do in life isn’t buying a $700k Vancouver basement suite, it’s sitting around waiting for that to change.  It may not change, or if it does, it may take too long, or you may not like it anymore.  So you better have a plan in motion.

Personally, planning to move because I want something better, full stop.  Vancouver is just crap with a zero on the end, and Canada is grossly overrated too.  I’m 50% out of Canadian assets because I don’t think our dollar is worth what the world says it is.  I see China imploding instead of leading the world.  Their model of over-investment is near an end.  I think the next great invention will come from the United States, and the next bull market will be born there.  They have so many small companies working on the next big thing, you have no idea.  If you want opportunity, it’s there.  They have nice houses for $100,000.  Buy one and get on with life.  It doesn’t have to be perfect.  It’s as close to economic freedom as you are ever likely to get.  I am astounded that people on this website could be offered this and somehow turn it down.

Real estate and credit bubbles were the last decade, so why is Canada still mired in it?  Who even gives a shit?  In the greater world, nobody.  And nor should they care.  And nor should you.”

– rp1 at VREAA 26 Feb 2012 1:37am

Vancouver’s Too Expensive For Entrepreneurs – “Last night during a meeting we realized that of five, only two of us aren’t thinking about leaving the city in the next year or two.”

“Over the past year I began working with a loose group of consultants; there are five of us who work together in complementary ways. We’ve taken steps towards forming a more formal business together, but last night during a meeting realized that of five, only two aren’t thinking about leaving the city in the next year or two. Vancouver’s too expensive to be an entrepreneur and have a family, and we all want other things – like retirement funds, or the ability to travel and take vacations, etc.”
– Absinthe at VREAA 20 Feb 2012 11:37am

BC Budget: Taxpayer Debt To Support The Construction Industry – “Every young person out there today understands the challenges of getting into the housing market.”

“Every young person out there today understands the challenges of getting into the housing market. As parents and grandparents, we worry about the struggles our children and grandchildren have trying to save for their first home.
Even with the relief we provide to first-time buyers from the Property Transfer Tax, it is still difficult for many British Columbians to save up enough to make a down payment and still have money left over to cover all their other costs.
That is why, as part of this budget, we are introducing the B.C. First-Time New Home Buyers’ Bonus. It is a temporary, refundable income tax credit for first-time buyers who purchase newly‑built homes effective today until March 31, 2013.
They will receive a cheque for up to $10,000. Just think of the difference that’s going to make.”
[Yeah, it’ll almost definitely result in the prices of New Homes purchased by FTBs rising by an effective $10K, resulting in absolutely no net-savings to the purchasers, who will continue to purchase at the very limit of their monthly-payment ‘affordability’ level. -ed.]
“It complements the measures we announced last week — which included raising the threshold for the existing HST rebate to $850,000, and making a similar grant available for new secondary homes outside the Greater Vancouver and Capital regional districts. Over 90 per cent of all new homes in the province are below this threshold.
Together, these measures serve the dual purpose of giving consumers a break, while supporting the new-home construction sector.”
– BC Finance Minister Kevin Falcon, Budget Speech, 21 Feb 2012

This in a budget that will come in with a spending deficit of about $1 Billion.
Taxpayers are spending borrowed money to support the construction sector.
And note the glib assumption that “every young person” needs to “get into the housing market”.
Next up, assistance for toddlers interested in buying their first condo.
– vreaa

Addendum:
Find the ‘fact sheet’ regarding this bonus here:
2012 First Time Home Buyer’s Fact Sheet
[And see the end of the sheet for the hilarious example that some government wag came up with: a home for $150K! Unfortunately the home has to be in BC, Canada. – ed.]

Vancouver – “Where my friends/mom/society/tourists think I live; Where I actually live.”

– found on Facebook by Makaya, forwarded to VREAA 20 Feb 2012.
[Thanks. -ed.]

Extirpated Biologist – “In conservation biology, when a species can no longer survive in its home territory, it is referred to as “extirpated”.

From the ‘Introduce Yourself To The Forum’ thread at RE Talks, a post by ‘extirpated’, 22 Mar 2011 7:55pm–

1) Age / Location / Occupation
“38, born and raised in Richmond BC (to Polish immigrants) forced out of my home province by rising real estate prices and the desire to live in my own house. Conservation biologist – turned – artist”

2) What real estate do you own?
“2 houses, which are not in BC”

3) What’s your view on the market going forward? Buyer or seller? Which parts of the market?
“I don’t think I’ll ever be able to afford to live in BC again” 😥

4) Anything else?
“In conservation biology, when a species can no longer survive in its home territory, it is referred to as “extirpated”.

“A guy I know bought a place and was bragging that his mortgage is only a little bit higher than his rent would be. He gave me the whole lecture about how I am throwing money on rent. It took only a month until he started complaining about other expenses.”

“A guy I know bought a place and was bragging that his mortgage is only a little bit higher than his rent would be in a similar place. He gave me the whole lecture about how I am throwing money on rent etc. It took only a month until he started complaining about the high condo fees (which he did not account for), taxes (which he did not account for), higher insurance cost (which he did not account for) and a possible “assessment” (not even in his dreams when he was doing his “calculations”).
He has a variable rate mortgage and is paying just over 2% interest, that’s how his mortgage payments came relatively close to rental cost. Every 0.5% increase would add another $200+ to his cost.
Most home “owners” I talk to ignore any variables beyond mortgage when they are doing their calculations.
Another cost that is almost never accounted for – closing costs.”
– a splice of two posts by ‘bubbly’ at VREAA 20 Dec 2011 11:55am and 11:58am

‘The Economist’ – Rental Income Shows Canadian Home Prices Are 71% Overvalued

‘The bursting of the global housing bubble is only halfway through’.
Home prices tumbled by 34% in America from 2006 to their low point earlier this year; in Ireland they plunged by an even more painful 45% from their peak in 2007; and prices have fallen by around 15% in Spain and Denmark. But in most other countries they have dipped by less than 10%, as in Britain and Italy. In some countries, such as Australia, Canada and Sweden, prices wobbled but then surged to new highs. As a result, many property markets are still looking uncomfortably overvalued.
To assess the risks of a further slump, we track two measures of valuation. The first is the price-to-income ratio, a gauge of affordability. The second is the price-to-rent ratio, which is a bit like the price-to-earnings ratio used to value companies. Just as the value of a share should reflect future profits that a company is expected to earn, house prices should reflect the expected benefits from home ownership: namely the rents earned by property investors (or those saved by owner-occupiers). If both of these measures are well above their long-term average, which we have calculated since 1975 for most countries, this could signal that property is overvalued.
Based on Incomes, home prices are 29% overvalued in Canada.
Based on Rents, home prices are 71% overvalued in Canada [The most overvalued by this measure of any of the global markets studied. -ed.]
Canada has an even higher household-debt burden in relation to income than America did at the peak of its bubble.
– excerpted from ‘House of horrors, part 2’, The Economist, 26 Nov 2011. Image from the Huffington Post, Canada, where the story was headlined as: ‘Canada’s Housing Market More Overvalued Than U.S. At Its Peak, The Economist Says’.

None of the above comes as anything new to readers here.
Only wackos like Vancouver RE bears and ‘The Economist’ go on about something as passé as ‘fundamentals’.
Gravity will reassert; we will revert to the mean; perhaps overshoot. – vreaa

“I looked for a decent house for 3 years and have given up. I am not willing to spend all my money on a tear down. Just crappy value all around.”

“I too sold my company, no I did not make near $2M, I did ok in my books and I am seriously considering putting some money into other real estate investments NOT in Vancouver. I also looked for a decent house for 3 years and have given up. I am not willing to spend all my money on a tear down. Just crappy value all around. Vancouver is nice, yes, but it also rains 8 months of the year and costs an arm and leg to do it. Central California, a little in from the coast, up in the foot-hills on a few acres… now that sounds decent.
Why does everyone stay in Vancouver if it’s so damn expensive?”
– Cali Calling at VREAA 22 Nov 2011 7:07pm

Repost: It Is Dangerous To Blame The Consequences Of A Speculative Mania On One Sector Of Our Community: Let’s Make Sure We Don’t Do That.

[This was originally posted here almost exactly six months ago, VREAA 18 May 2011. Reposted in view of discussion regarding foreign ownership in local press, and in light of upcoming election. – vreaa]

Imagine you own a beach house in a resort area and you decide, at the end of a beautiful summer, to revive the memories of your youth by organizing a BBQ and bonfire on the beach in front of your home. You invite all your local friends, you organize the food, and you ask everybody to bring along their families, their friends, and their own booze. With plans for a whopping big bonfire, you also ask them to bring wood. Everybody complies, similarly eager for a beach bash. One of your buddies, Ken, has access to some really good firewood, so he brings a trunk-load of the stuff. The BBQ goes well, drink and chat flows, you and your buddies start to build the bonfire. Everybody is in a disinhibited party mood, and you all somewhat unwisely start constructing the bonfire a little too close to the house. A couple of people mention this but, the wind is blowing in the safe direction, it’s an arguably fair distance from the house anyway, and, besides, there is a fire extinguisher in the kitchen, right? Consensus is that the fire site is fine, and a really seriously large pile of wood accumulates.
So, the bonfire is lit, it looks glorious, and, in the fading light, everybody has a great time… marshmallows, jokes, dancing, singing. Everybody piles on the wood they’ve brought; everybody is particularly grateful to Ken, as his supply burns extremely well, it gives off a wonderful aroma, and it warms everybody very nicely.
You can see where this is going: The wind changes, the fire roars, the fire extinguisher is woefully inadequate, the house burns down, neighbouring houses catch sparks, the whole beachfront is destroyed, and everybody blames Ken.
Did I mention that Ken is from mainland China?

—
The speculative mania in Vancouver RE had its roots in the early part of last decade. Vancouver housing was already pricey by Canadian standards, the good-weather premium was baked in. Things really took off after 2003, when very low interest rates allowed home prices to divorce themselves from fundamentals such as local incomes. This effect occurred in all major Canadian centres, it was a monetary and not a local effect. Through 2004, 2005, 2006, 2007, local Vancouver speculators threw themselves onto the fire, borrowing large amounts to buy primary-residences and ‘investment’ properties at prices that were only justifiable if you thought that prices would continue up forever. People told themselves all the necessary stories to reassure each other that prices could, indeed, only go up: Best Place On Earth; Running Out Of Land; Olympics; and, yes, Limitless Demand From China. Under ‘normal’ circumstances, 2008 might have marked a top, but we all know that little about Vancouver RE is ‘normal’. Prices started dropping from the summer of 2008. Perversely, shortly thereafter, the world financial system imploded and interest rates, already at low levels, dropped to essentially zero. Vancouver RE didn’t need a bail-out, but it got one anyway. Prices had only been able to drop 15% before being re-ignited, taking out prior highs, and blazing on to their current dizzy heights. Now, with Australia finally pulling back, our real estate is arguably the most overpriced in the entire world. We are the last remaining pristine and unimploded RE bubble.

The most important fuel for this market fire, by a very, very long way, was and is local speculation. Local buyers, through all of these years, have continued to mercilessly overextend themselves to purchase property at prices that they would never dream of paying if they foresaw a significant risk of price downside. This applies to primary residences as much as it does to ‘investment’ properties. If locals had not speculated, or had speculated less, prices would not have gotten so very far divorced from fundamentals. Yes, there is a direct influence of foreign buyers on the market, more so in some areas of the city. But these buyers still participate in less than 5% of all property transactions. In the part of the city most affected by this phenomenon (the high end of the westside), realtors report that 50% of sales are to this group. That means, of course, that the other 50% of sales are to locals, overbidding on properties by arguably a factor of two or three times fundamental value. Our speculative mania has attracted non-local momentum players, and, yes, there may be a need for some consideration of specific limits on their activity; but let’s be very clear that these players are only a small part of the entire phenomenon.

There is no easy way out. That is the nature of speculative manias, they harm many on the way up, and a lot more on the way down. There is no way of ‘landing’ them ‘softly’. By their nature, they run out of fuel and implode. We have built and ignited a bonfire here that was long ago completely out of control and destined to raze the whole block. It would be very unfair and disingenuous to blame the outcome on our buddy Ken, who we invited to the party, who only brought wood with our encouragement, and whose fuel we appreciated while all seemed okay.

We are very concerned, however, that our city is setting up for such a scapegoating. Canada’s policies of multiculturalism encourage people to celebrate their differences. This is hunky-dory when everybody is rich and has adequate resources; it is easy to celebrate your neighbour’s good fortune when you are experiencing similar luck. But, if you put the economic screws on a society that has been encouraged to emphasize difference, it is probably more prone to developing ethnic fault-lines than a society that puts more effort into celebrating similarities.

There has been more and more media prominence given to foreign buyers recently. Local politicians such as Peter Ladner are pointing to this group as the cause of our lofty prices. We are concerned that many are going to be getting their wires crossed by associating foreign buyers with the existence of the bubble. There is a very real subsequent risk that many of those who suffer the consequences of the imploding Vancouver RE bubble will mistakenly blame foreign buyers and, by extension, specific ethnic groups, for the whole phenomenon, and for the inevitably devastating outcome.

As we said in our end-of-2009 predictions for the coming decade: ‘A Real Estate Bear Market Will Be Vancouver’s Defining Social And Economic Event.’ We hope that, as a society, we will be able to successfully navigate the substantial challenges of that event in a mature and wise fashion.
It is dangerous to blame a speculative mania on one small sub-sector of our community.
Vancouverites built this bonfire, and Vancouverites need to take responsibility for its consequences.
No scapegoating.

– vreaa

City Of Vancouver – Enough New Homes; Business-Unfriendly; ‘Green’?

City of Vancouver, 1998 to 2010:
Net increase of new residents: 83,267
Net increase of homes: 50,973
Net increase of new businesses: 46 (0.09%)
Business:Residential tax rate ratio: 4.5:1 (cf 3:1, or less, rest of Canada)
Net increase in cars: 64,329
– from article ‘Business growth in Vancouver stalls while suburbs flourish’, by Don Cayo, Vancouver Sun, 24 Oct 2011

Are these figures correct?
If so:
1. 1.7 new people to each new home (cf 2.1 average household).
2. Unattractive to business endeavours.
3. ‘Green’? [eyeroll]
– vreaa

Four Out Of Four RE Industry Insiders Agree: “There is no bubble in Vancouver” – “[Moderator] Podmore wore a ‘no bubble’ button to the debate”

“Ward McAllister, president of Ledingham McAllister Properties, and fellow panelists Eugene Klein, president-elect of the Real Estate Board of Greater Vancouver, and real estate consultant Richard Wozny, of Site Economics Ltd. were at the board of trade to debate whether or not Vancouver real estate is in the midst of a bubble. They all agreed it is not. …
“Buyers, especially the under-25 mark, are sitting on the sidelines,” said Klein. …
The HST effect was the only real damper on Metro Vancouver real estate, which the three panelists and moderator David Podmore, CEO of Concert Properties Ltd., all said (was) not a bubble. Podmore wore a button to the conference with the slash symbol for “no” imprinted over the word bubble.
“I am very optimistic about where we are heading,” he said, noting that his company largely pulled out of Metro Vancouver Real Estate in 2007, but went back in 2009.
He cited two reasons for the region’s strong real estate market: immigration and the fact that real estate is being viewed as a hedge against the uncertainty that has hit global finance.
Klein said international interest in Vancouver is attracting foreign buyers. He said buyers are coming here to live, with only three per cent characterized as foreign investors. He said supply is now out-stripping demand, but it has no affected prices. Prices have increases dramatically in some area over the last 12 months; in Richmond by $200,000, in West Vancouver by $275,000 and Vancouver’s West Side by $400,000.
“Demand for high-end properties have helped drive our demand for most of the year,” he said.
Wozny said Metro Vancouver’s real estate prices are “very high by any measure.”
“It must be something political or social because it certainly has nothing to do with economics.” he said.
He forecast low interest rates for the foreseeable future, which will translate into continuing sales.
“There is no bubble in Vancouver,” he said.
McAllister had advice for prospective homeowners in their 20s who are questioning whether they should wait for prices to come down. Don’t wait, he said; borrow from mom and dad.
And he warned against selling hoping to get back into the market later.
“Affordability is one of the main concerns in this market and I think will continue to be over the rest of my life.”
– from ‘New housing sales stall over transition out of HST’, Gordon Hamilton, Vancouver Sun, 21 Oct 2011
[hat-tip Patiently Waiting at vancouvercondo.info]

Well now, ain’t that.. cosy?
Quite the ‘debate’.
Metaphors almost fail us… kinda like getting Palmer, Nicholas, Woods and Player to debate the subject “Golf, the Best Game?”; or four vultures to debate the merits of carrion.
Thoughts:
1. Interesting terminology, “the under-25 ‘mark’ “. (Ever seen ‘The Sting’?)
2. They are seeking buyers at the margins: persuading those in their 20’s to borrow downpayments.
3. Their analysis is arguably even more nebulous than the usual “limitless demand” position: Even though prices are very high and not supported by “economics”, low interest rates and “something political or social” will “translate into continuing sales”. “Immigration and the fact that real estate is being viewed as a hedge against the uncertainty that has hit global finance” will continue to buoy the market. This really is little more than wishful thinking. Consider what may happen to this market if just a 15% drop in prices (and a 10% drop in the loonie) lead investors to question its “safe haven” status.
4. “Affordability is one of the main concerns in this market and I think will continue to be over the rest of my life.” – Classic bubble quote. Whenever people start expressing opinions that markets will never change, take note.
5. With reference to our discussion earlier regarding the media and the RE industry, witness the Sun running this as ‘news’.
– vreaa

“I’d like to share my story as someone who was born and raised in Vancouver, lived abroad for ten years, returned, and is now planning to leave permanently.”

“I’d like to share my story as someone who was born and raised in Vancouver, lived abroad for ten years, returned, and is now planning to leave permanently.
I grew up in what is today ground zero for Vancouver’s speculative mania, Point Grey. My dad was a professor at UBC, and my mom a part-time teacher. In real terms, my income is comparable to that of my parents when they bought our house in the 70s. And my expenses are lower: we have one child (so far) instead of four, one car instead of two, etc. And yet the modest house I grew up in would be utterly out of reach for me today.
The question is, what has changed between a mere two generations? Yes, the economy has grown, and there is more wealth in the world today. But presumably one’s income reflects this growth, so that real estate should be no less affordable than it ever was.
Locals shrug off this uncomfortable question with the standard wisdom: We have water! And mountains! To which I reply: Vancouver has always had water and mountains. The city’s attractive geography is widely known and has long been priced in to the market. It’s a valid reason for local prices to start out higher than in certain other places, but not for them to go up any faster over time. Some improvements have been made to the city itself, but the fact is Vancouver is pretty much the same place it was 30 years ago.
What does seem to have changed is our collective mindset. We are living in a dream where Vancouver is the new global hotspot, debt and real estate are the path to riches, and where history doesn’t matter, because “it’s different here”.
I believe Vancouver is in for a grim wake-up call. By any number of fundamental metrics, local real estate appears overvalued by 60-70%. If there were a way to short the market, I would wager a significant portion of my net worth on this bet.
The ridiculous cost of housing aside, after living in six cities in four countries, and traveling to countless other locales, I can say with some confidence that Vancouver is not as uniquely wonderful a place as its residents claim it to be.
None of my three siblings—all hard-working professionals—has chosen to settle in their hometown. My wife and I only moved back because my dad fell ill. We currently rent an eastside bungalow, and intend to relocate internationally next year. I plan to move my business with us. The place we’re going to has its own challenges, but in our experience the overall quality of life is superior.”
– El Ninja at VREAA 15 Oct 2011 3:28pm

“At potential rental after rental we discovered that the answer to “How long can we stay?” was “Depends on market.”

“As someone who’s spent the last few months trying to find a decent rental in this town, I’d say that my impression is that the majority of would-be landlords on the West Side are looking to sell just as soon as they can, and many of them have only recently bought these properties! At potential rental after rental, house or condo, we discovered a). the place had been bought fairly recently and b). the answer to “How long can we stay?” was “Depends on market.”
– Vesta at VREAA 16 Sep 2011 12:07pm

“Try calling Dr. Aladdin [an individual on craigslist advertising a 2,600sqft Southlands SFH for rent; $3.5K p.m.]… No you cannot view this rental-to-be …he just purchased it and won’t have possession until the end of October.
craigslist has been littered with newly purchased ‘rental-to-be’s this year. Google 6188 Mackenzie St or 3118 West 44th Avenue, both “March madness” sales, now rental properties managed by Macdonald Realty and Advent Property Mgmt respectively. Are they available for long-term lease? No. Vesta is right.”
– Epica at VREAA 16 Sep 2011 1:47pm

These landlords may be planning on selling into a rising market, but how will they respond to a falling market? We’re anticipating a good number will try to bail precipitously, and thus add to supply (and price momentum) on the way down.  – vreaa

“It has become fashionable to suggest that price levels in Vancouver are set to correct substantially. Central 1 does not subscribe to this view.”

“It has become fashionable to suggest that price levels in Lower Mainland-Southwest region of the province, and particularly Greater Vancouver, are set to correct substantially due to the significant price gains in recent years and a de-linking of home prices relative to income and rental rates. Central 1 does not subscribe to this view, but does expect price gains to slow considerably over the forecast horizon.
While price levels may turn lower in the near term, the annual Lower Mainland-Southwest median resale price level in 2012 is forecast to surpass 2011 by 1.4% to reach $497,000. A further gain of 3.6% is forecast in 2013.
Central 1 deems a significant price correction in the Lower Mainland-Southwest to be unlikely for various reasons. First, much of the price growth in the region has been attributed to disproportionately strong demand for higher priced single-detached product in localized regions such as the west side of the City of Vancouver and Richmond. In contrast, price gains have been less substantial in other markets and product types, meaning this has not been a regionwide price surge. Moving forward, demand will likely remain stable as economic growth, albeit slow, persists and mortgage rates remain low.
In addition, speculative demand in the region remains low. The proportion of units re-sold within six months of purchase can be used a proxy for speculative activity.
In theory, speculators look to gain through capital appreciation over a shorter time-frame relative to home-owner occupiers. In a period of higher speculation, which is generated by strong market activity and price gains, this proxy generally rises. However, this metric has exhibited a declining trend since early 2008, currently hovers near 2% and operates near normal levels. In contrast, this proxy surpassed 10% in the late 1980s, and was closer to 6% in 2006 when markets were overheated. The lack of excessive speculation suggests that we are unlikely to see a speculation-induced bust in pricing.
Meanwhile, price levels will be further supported by supply-side adjustments. Sales activity and the flow of new listings are positively correlated – when demand increases, new listings tend to follow in the months that follow. The opposite is also true. This reflects the tendency of sellers to capitalize on strong markets and rising prices, and sit tight when market conditions weaken. In the absence of any major shock in the economy such as a large and unexpected increase in interest rates or another recession, Central 1 expects the recent slowdown in demand to be met by declining listings activity, which will mitigate growth in standing inventory of resale product.”
– from Brian Yu, Economist, Central 1 Credit Union, Economic Analysis of British Columbia, p4-5, Vol 31 Issue 4, Sept 2011 [pdf]

“Fashionable” to suggest a “substantial price correction”? The only current prominent ‘fashion’ in Vancouver RE ‘circles’ is to debate the exact nature that the “Vanhattanization” of the City will take, or discussing whether foreign buyers are each bring in 10s of millions or 100s of millions.
It remains rare to find a Vancouverite who truly believes we’re in a bubble. Calling the bubble will only become “fashionable” in retrospect, and once we hit the trough everybody will know we were in a bubble (see US RE, still plumbing for a bottom).

This report grossly underestimates ‘speculative’ action in our market. Anybody who buys any property not simply for it’s utility as a home or as an investment, but also for expected future price gains above the rate of inflation, is speculating. The vast majority of RE purchases in Vancouver thus have a speculative component.

And another thing: Looking at the price chart, note how this Credit Union has simply extrapolated price gains forward in the channel from the early 2000’s. In other words, “We expect more of the same”. These guys are rear-mirror commentators disguised as forecasters, and their forecasts are consequently of questionable value.
– vreaa

Vancouver’s Second-Oldest House A Teardown – “Dates to 1888, when Vancouver had 6,000 people.”

– images and excerpts from ‘Vancouver’s second-oldest house to be demolished’, John Mackie, Vancouver Sun, 6 Sep 2011

The small house at 502 Alexander is pretty well hidden. It’s sandwiched between a couple of apartment blocks, and the front is barely visible behind a stand of trees. The address first appears in a Vancouver directory in 1888, only two years after the city was incorporated. It was built by John Baptist Henderson, and a story in the Dec. 31, 1888 Vancouver World newspaper says it cost $1,500 to build. [Inflation adjusted, about $36,000 in 2011 dollars. -ed.] Somehow the house has managed to remain standing through 123 years of Vancouver real estate booms. It may now be the second-oldest house in the city. But not for much longer. An addition at the back of the house was recently taken down during a renovation, which has rendered the house unstable. The owner is now applying for a demolition permit, and it will probably be torn down.
…
Don Luxton of Heritage Vancouver said it would be a “travesty” if the second oldest house in the city were torn down while the city is celebrating its 125th birthday.
“Our earliest buildings are the story of Vancouver being carved out of the wilderness,” he said. “This house dates from the time when the train was just arriving and the city was growing – there was nothing here when this house was built. [Several commenters at the Sun site noted that, of course, Salish people had lived there for centuries. -ed.] To look at the history of this building is like going to Rome and seeing a Roman house. This dates back to the establishment of the city, very clearly.”
…
Modest as it is, the house has an interesting history. After Henderson moved in 1893, it was occupied by John Stitt, the manager of the Hastings Mill store, which is now the Hastings Mill Museum in Kitsilano. (The Hastings Mill store was originally located on the waterfront at the foot of Dunlevy, a block away from 502 Alexander. It dates to 1865, which makes it the oldest structure in Vancouver. The oldest house is 385 East Cordova.)
…
Early residents of 502 Alexander included a bookkeeper named Huddart, an accountant named Jackson and a restaurateur named Schuman.
…
The street would be part of Japantown until Japanese-Canadians were forced to leave their homes during the Second World War. For a brief period prior to the First World War, the 500 and 600 blocks were also a red light district.
In 1911, Ruth Richards took over 502 Alexander, and a year after that, Dollie Darlington is the first listing at 500 Alexander. Which means 500 Alexander was probably built as a brothel.
…
Vancouver’s planning director Brent Toderian said the city “did investigate some options” to try and save the house, but none worked out. Part of the problem is that Alexander east of Main is outside the officially designated heritage districts of Gastown and Chinatown, “so frankly the amount of [heritage incentive] tools that we had to offer in this particular case were limited.”
…//

VANHATTAN – Vancouver The Next New York? – [“These ludicrous comparisons have to stop.”]

– Photo of ‘BC Homes Magazine’, Aug/Sep 2011 cover, gratefully received via e-mail, from Aldus Huxtable, who sensibly adds:
“Is Vancouver becoming the next New York City? These ludicrous comparisons have to stop…..”

Vancouver Sun Editorial Unashamed RE Promo

‘Detached homes can be had for just over $500,000 in Squamish, less than hour’s drive from downtown Vancouver.’ [Sun image and caption]

It is one thing to run obvious RE-promotional articles by industry insiders (Cam Good [Vanc Sun 21 Apr 2011], James Schouw [Vanc Sun 2 Jan 2010]), it is something else entirely to run an editorial encouraging people to overextend themselves into questionable RE purchases in the latter stages of a speculative mania.
‘Editorial: To dream the impossible dream — home ownership’ [Vancouver Sun Editorial, 25 Aug 2011] encourages “median-income earners” to “lower expectations”, to “make compromises” in property choices (smaller properties; different class of property; outside of the city), to use variable rate mortgages, and to amortize their mortgages over 30 years. In short, it encourages them to find a way, almost any way, to buy.
The editorial is dismissive of the recent RBC report showing the extreme lack of affordability in Vancouver: “… depressing numbers may be valuable for studying trends, making predictions and agitating for policy changes, but they are not useful as a buyer’s guide to the market.”
You are persuaded to step up and buy:“The variety of properties available at different price points and flexibility in financing, including variable rate mortgages and extended amortization, along with a bit of luck, can help fulfil the dream of home ownership for agile buyers willing to keep their options open.”
Vulnerable, naive prospective buyers may be influenced by this peppy argument. ‘Be agile, be flexible, be lucky: be a buyer.’ Those who take the Sun’s advice will very likely prove to be in the group of buyers who will be most severely adversely affected by the coming bust. There is not one word in the article about a possible downturn. It reads a lot like the smooth words of a sales promotion, trying somewhat desperately to get the last buyers, the most dodgy quality buyers, to step up and clear product.
We record the fact of this editorial here, as we’re sure we’ll have reason to return to it in 2 or 3 or 4 years time. It is just one example of the role the Sun has played in this mania.

Mayor Robertson – “People come here with money and they want to be part of this. That creates challenges for my kids and the next generation to live here. It’s not affordable to live here now.”

“There are many hopeful environmental stories in the city of Vancouver. In the past 15 years, residents’ use of cars and carbon emissions have both gone down dramatically, by roughly one per cent every year – even while the population has expanded to 570,000 people and the economy continues to grow. This is a very unusual trend in the world’s cities now. A city that is committed, and that sets aside the perceived inevitability of calamity, can be a stronger community. We can change our ways of getting around and looking after each other. I think there’s a lot of hope in that for generations to come.
The converse is that Vancouver becomes a very desirable city. People come here from all over the world for the beauty and for the sense of community… That creates challenges for my kids and the next generation to live here. It’s not affordable to live here now. People come here with money and they want to be part of this. And that makes it difficult. So it’s creating other challenges for us.”
– mayor Gregor Robertson, Vancouver Sun, 23 Aug 2011, from a conversation with David Suzuki, Thich Nhat Hanh, and Jim Hoggan

The mayor is deducing that Vancouver RE prices are high because his “green” policies are perceived as successful. We believe that he is sincere in his logic, but also that he is simply wrong. Housing prices have ballooned to “unaffordable” levels in Vancouver because we are in a very large debt-driven speculative mania, not because we have any particular desirability as an environmentally friendly city.
Many of the apparent problems of unaffordable housing will be ‘solved’ by a simple market crash. Of course there will be all sorts of bad effects for the community from such a crash, but that is now unavoidable. You may say that such an outlook is an example of a “perceived inevitability of calamity”, but this outlook is not pessimistic, it is simply realistic. Ask any student of speculative manias. It’s already woven into the fabric of the market; it’s a completely natural consequence of the speculative mania. – vreaa

‘The Mortgagors With Hands On Their Faces’ – “Extremely poor and rapidly eroding affordability in the Vancouver-area market”, “without a doubt the most stressed in Canada, facing the highest risk of a downturn.”

Above images advertise videos accompanying the Globe and Mail article ‘Vancouver housing affordability ‘rapidly eroding’: RBC‘, 22 Aug 2011 [hat-tip Nemesis]. They are remarkably sorrowful images for a 2011 Canadian housing article, and remind us of ‘The Brokers with Hands On Their Faces Blog’.

Excerpts from the G&M article:
—
Most Canadian cities offer “reasonably affordable” housing, according to Royal Bank of Canada’s quarterly survey into affordability, but Vancouver is at risk of a downturn.
—
“Extremely poor and rapidly eroding affordability in the Vancouver-area market is somewhat skewing the national picture.”
—
“Vancouver’s housing market is without a doubt the most stressed in Canada and is facing the highest risk of a downturn,” Mr. Craig Wright, senior vice-president and chief economist at Royal Bank, said.
—

This sensible comment at the G&M by PF Murphy, 22 Aug 2011, 10:35am:
“With the average price of a house in Vancouver being 11 times the average annual salary, the RBC’s advisory is many days – like several years – late and shows the conflict of interest of their benignly offering advice in an industry on which they depend for their bloated profits. To think that ill-advised people can go on buying houses that mortgage their grandchildren’s futures is idiotic. It is to be devoutly hoped that this bubble pops soon [so that] some sanity will be restored to housing in Canada.”

“33% of Canadians between the ages of 55 and 64 have an outstanding mortgage.”

“33 per cent of respondents between the ages of 55 and 64 had an outstanding mortgage.” – from a Canadian Imperial Bank of Commerce survey, as described in the Financial Post/Vancouver Sun, 16 Aug 2011.

Left Off The List – “Toronto, Montreal ranked as pricey. What, no Vancouver?”

“Vancouver, Canada’s most bubbly housing market, wasn’t among the 73 cities studied. (When I first called UBS to ask about Vancouver, the folks that could help me were at lunch, in Zurich, the world’s second-most expensive city.)” – from ‘Toronto, Montreal ranked as pricey. What, no Vancouver?‘, Michael Babad, G&M, 17 Aug 2011, reporting on a study by UBS AG on “the world’s 20 priciest cities”. [In rankings of price levels excluding rent, Toronto ranks ninth and Montreal 17th.]

The truth is, these guys didn’t see us as important enough to consider in the rankings. As ‘three left feet’ said in the G&M comments: “Vancouver’s not on the list because globally it’s not an important city, despite what the locals claim.” – vreaa

“The main Wiggles guy asked the kids and the crowd to name something special and unique about Vancouver.”

“I was at the live Wiggles show the other day. The main Wiggles guy asked the kids and the crowd to name one thing/something special and unique about Vancouver.
Awkward confused look on people’s faces.
Someone said “maple syrup”..or “sushi”(??)…until everyone seemed to agree on “Olympics”
Come to think of it, I cannot think of anything either..”
– Get Real at greaterfool.ca 11 Aug 2011 11:12pm
—
Damn! This would have been the cutest story if one of the kids had called out something about the housing market. – vreaa
—
On that note, this extract from ‘Summer Fun For Boys’, by Tim Long, New Yorker, 1 Aug 2011:
“At the beach, build the biggest sandcastle anyone’s ever seen. Pretend that it’s 2005, and take out a huge, adjustable-rate mortgage on the sandcastle which you can’t really afford. Throw lavish sandcastle parties for seashells, rocks, plastic shovels, and candy wrappers. When the bank comes to foreclose on your castle, run and find your dad. Try not to look surprised when you discover him sitting with a lady in a green swimsuit. Her name is Terri. While shaking Terri’s hand, ask her for a seven-hundred-thousand-dollar loan to cover your sandcastle debts.”

“Without the Vancouver housing bubble I would have probably spent 3,500 hours working on building my business instead of getting addicted to learning everything I can about finance and economics.”

“I hate to invest in things I don’t understand, so from the age of 18 to 28 I invested in the thing I understood best: myself. My investment involved spending enormous amounts of time studying computer science, marketing, sales, accounting, the basic skills needed to operate a business, and IT management practices. In the first 3 years after finishing university I had spent $25,000 on computer books (crazy, but true). I am sure some RE bull observers would say that I would have been better off buying a house and watching it appreciate in value but they would be wrong because I loved every minute of reading hundreds of books on all things comp sci, IT management and geo politics. End result I have a consulting business where I am tax optimized, and only work 100 days of the year, generating 140K to 200K of revenue per year while being able to live anywhere in the world, so I effectively own my job.

My obsession with finance and economics was born around 2007 when I decided that I would stay in Vancouver. The plan was to live in Vancouver, enjoy the great outdoors, start a family, buy a house, and put what I learned into hitting a home run with a product based business (still swinging for the home run; have not hit it yet).
What really pissed me off is that, even though I had done something totally crazy [in a good way] compared to the average 28 year old (starting out as an immigrant kid with no connections and no money and lots of student debt), I still could not afford to buy a house in Vancouver. At this point I owned some commercial RE in Ontario and had cash accumulating in the bank at a healthy rate. My definition of affordable is minimum 25% ideally over 50% down payment and prices close to fundamentals.
My obsession with finance and economics became an addiction in 2008 as the world economy was blowing up. As of now I estimate that I have spent over 3,500 hours reading finance and economics books, and blogs. For fun, I wrote the CSI exam to see if I had learned enough, and I had no trouble passing it.
After 3,500 hours of research I have learned how to tell if something is a bad investment. The problem is that I have no idea what the [current] good investments are, other than my business, and myself.
I don’t have enough money to afford the seriously good money managers that know what they are doing and I know that the financial advisers at the banks and insurance companies really don’t know anything that I don’t know and will probably not advise me on anything and just sell me some product from their company.
It also seems to me that the markets are fundamentally corrupt and rigged against those who don’t have servers in the stock exchanges, or friends in government, or 100 million +.
Buying a house and putting all my money into it would have freed me from dilemma of figuring out what to do with my savings because I would have worked to pay off the house in 5 to 8 years and get mortgage free.

Now it seems to me that my options for my money are:
A) Put my money into a grossly overvalued housing and lose lots of it – I have worked too hard to let that happen.
B) Put my money into the fundamentally corrupt politically rigged and manipulated public markets.
C) Keep it in cash and let the bank gamble with it and loan it to fools who buy over valued real estate while my taxes “guarantee” the loans (current strategy)
D) Spend it
E) Try my hand at investing and see if I learn anything useful (I like learning and creating things not buying things in hope of selling them for more not really who I am the game just does not appeal to me but maybe I could grow to like it)
F) Invest it in my business and work to increase my revenue to $300K per year while only working 60 days per year. Use increased time and cash flow to search for business model with a personal 25 million + exit where I bootstrap the business from the ground up.
G) Raise money from investors for a business idea that I have developed business models for, then work 60 hour weeks 50 weeks of the year, be in perpetual raise capital mode, baby sit investors, lose my time to learn and grow, and then maybe exit if my interests are still aligned with the interests of the investors by the time an exit opportunity shows up.
H) Keep learning more and see if I learn anything new to change my mind about what my options are.
I) Leave Vancouver and hope that by doing so I don’t end up being obsessed about finance and economics any more.

Now that I have written this rather long post, it seems to be too personal and revealing to post online. But … I share my story for sake of contributing to this blog’s effort to capture the impact of the housing bubble.
So, without the Vancouver housing bubble I would have probably spent 3,500 hours working on building my business instead of getting addicted to learning everything I can about finance and economics.”

– ams at VREAA 5 Aug 2011 4:36pm

—
Thanks, ‘ams’, for sharing your illustrative story so openly. You are by no means alone, as the pressures applied to you through these profoundly abnormal times have been felt by many of us. And the perversion of behaviour you describe has also affected many; each in their own way. Witness the very existence of this blog as just one small example.
A few thoughts:
1. The speculative mania in housing has distracted many from usual productive activity. This is just one of the many ways in which asset bubbles misallocate resources.
2. Despite ‘austerity’ talk internationally and nationally (BOC Governor Mark Carney, etc), economic pressures continue to punish the prudent. ‘ams’ still feels pressure to use his accumulated wealth in an arguably unwise fashion: to speculate, to buy overvalued assets, or to squander it (spend unnecessarily).
3. The speculative mania in Vancouver RE was very clearly underway by 2007, and it was prudent of ‘ams’ to avoid the market then. Price action in the four years since then has punished him psychologically. This is a common phenomenon in bubbles.

Having said all this, if one lives through abnormal times, and if one is naturally drawn to examining one’s own behaviour and the behaviour of those around you, isn’t it normal to be fascinated by these massive social forces, to study them, to document them, to discuss them, to attempt to take advantage of them? Isn’t that a particularly human thing to do under the circumstances? – We are all to a certain extent products of our times. The results of ‘ams’s 3,500 hours spent studying ‘finance and economics’ are perhaps as much an important part of who he is as his business career, or the business that he has built, or any other valued aspect of his life.
– vreaa

“We’ve got a kid on the way and are looking at the rent vs. buy situation right now.”

‘nobody you know’ at VREAA 22 July 2011 10:34pm –
“We’ve got a kid on the way and are [looking at the] rent vs. buy situation right now.

If we continue to rent:
– Cost of housing is less than $1000 per month
– Commute to work is 5 minutes or less
– Wife can quit job, stay home with baby in early years
– RRSP and RESP savings continue uninterrupted
– Mortgage savings grow, emergency fund intact
– Disposable income allows for travel to visit family, enjoy life

If we choose to buy:
– Cost of housing rises to $2000
– Commute to work increases to 20-45 minutes + $100 or more in gas
– Wife forced to work, child placed in daycare system
OR
– RRSP and RESP stalled indefinitely
– Savings gone, emergency fund won’t be replenished if used
– Disposable income wiped out, new baby separated from grandparents

Five years from now we’ll have a nice little pile of cash, our kid will have spent their early childhood being raised by their mother, and we’ll be able to travel and have a bit of fun. My wife will go back to work, the kid will be in school and we’ll be able to buy what we need.

But if we are pressured into buying right away we’ll drastically increase our cost of living at the same time that our income is going down. Our finances would be brutally tight. If my wife worked she’d give so much of her net income to a daycare that she’d be working for minimum wage and all so we could have a place in an inconvenient suburb that required me to spend 5-8 additional hours per week in a car. We’d be stressed and unhappy, as we’d be reducing our quality of life just to fit in and join the excitable real estate chatter at family gatherings and work parties.

And the best part about renting now is that we’ll actually be able to buy a much nicer place in a few years even if prices don’t go down. So instead of being stuck in a condo we’ll have a real house. Yes, this requires patience and discipline, but we’ve got plenty of both. We’ll just have to put up with mortgaged bank tenants looking down on us for a while.”

“You’re starting to see more desperation from sellers because they want to get out at the top.”

“I think people are starting to remember that price does matter.” – Ross McCredie, chief executive officer of Sotheby’s International Realty Canada

“We’re seeing an increased amount of attention to what’s happening in the economy.” – Don Lawby, Vancouver-based chief executive officer, Century 21.

“You’re starting to see more desperation from the sellers because they want to get out at the top. You are seeing signs that things are definitely changing.” – Mayur Arora, Oneflatfee.ca, Surrey, B.C.

– Excerpts from ‘Home-buying blitz in Vancouver shows signs of cooling’, G&M, 3 Aug 2011 [hat-tip ‘midnite toker’]

Ontario – “I have 3 rentals that i own and a house that i live in and iam only 29 years old. How can you say its a risky investment i have so little risk i want to own even more.”

“I have 3 rentals that i own and a house that i live in and iam only 29 years old. all the house make me a positive cash inflow and have made my life very comfertable. How can you say its a risky investment i have so little risk i want to own even more and build a rental empire to last me till i decide to sell. Some areas are out of control like toronto or vancover but the rest is a great bang for your buck… maybe look at areas where it is good to buy a house like most of ontario.” – Dgreen, comment at Canadian Business 20 Jul 2011 2:49pm

[sic] -ed.

“The dissonance between the tranquil image Vancouver exports and the lie the city has become: You cannot be a sustainable city when no working-class resident can afford to live within a 45-minute drive of the city centre.”

‘High-end Vancouver, like its high-end hockey team, has alienated working-class fans to the point of anger’, by Shefa Siegel, themarknews.com, 24 Jun 2011 [hat-tip ‘lex’]. Siegel is a Research Fellow at the Vale Columbia Center on Sustainable International Investment. Excerpts –

“[There exists] a dissonance between the tranquil image Vancouver exports and the lie the city has become.”

“Gregor Robertson lives in a comfortable 23rd Avenue house one block west of Oak Street. Until the mid-1980s, Oak was the division between the city’s wealthy and middle classes. Moving east from Oak to Cambie, Main, and Fraser, each major north-south street was a further step toward working-class homes, immigrants, and the rundown schools that defined Vancouver as an affordable city at the continental edge.”

“Until I was 13, I lived four houses up the hill on 23rd Avenue from where Robertson resides. We had a plum tree and raspberry bushes. There was a schoolyard across the alley where we shot hoops and practised wrist shots. We walked to school. Our friends lived in the neighbourhood. It was a good place to live.”

“Today, a single-floor postwar home on 23rd is worth a cool million. The districts across Cambie, Main, and Fraser, once avoided by puny Jewish kids who knew nothing about fists and fights, are coveted grounds for swanky young parents. Coupled with obscene food prices, living in the heart of Vancouver is no less expensive than life in Manhattan.
Were I now living in Vancouver, I would have to move further east. No matter my ordinations from the educated class, I am a data point on the downward trend where the purchasing power of middle-class offspring is exponentially lower than the income of the parents who spawned them.
Because the million-dollar range stretches past the Pacific National Exhibition and the old Canucks Coliseum, my hypothetical move east displaces still further the working classes and immigrants who once occupied these formerly grunge areas. The people upon whose backs the city – any city – hums are not part of the post- Expo ’86, Hong Kong, Whistler-Blackcomb, cannabis capitalism, cult-of-celebrity, and Olympics economic boom that make the 2011 Vancouver Canucks possible.”

“There is no undeveloped property anywhere – every nook and niche claimed by condominiums, stadia, coffee, and casinos; timbermen’s jackets replaced by adorable Lululemon asses, the costume of a leisure class with time to shape their figures; hippies gone wealthy, local festivals marketed worldwide, mountains transformed to Monte Carlo; the mines – though still economic bedrock – obscured by film crews and marijuana monopolies.”

“..the Vancouver mayor glamourizes the city as a beacon of “sustainable” urbanism. I am sorry, but sustainability has nothing to do with bike lanes to cross bridges connecting one affluent neighbourhood to another. Sustainable development is equal parts environmentalism and social justice; it is the principle that every individual, class, race, nation, and generation has equal rights to prosperity and resources – an ethics of distribution. And for the past 30 years, up to and including Robertson’s administration, Vancouver has veered away from, not toward, the ethics of sustainability.
Testifying internationally to Vancouver’s glory does not change the crisis. You cannot be a sustainable city when no working-class resident can afford to live within a 45-minute drive of the city centre..”

Westside New Build Calamity – “The house is for sale for $2.7M at the moment.”

rmac at VREAA 21 July 2011 4:01pm – “The house next door to ours (on West 21st) was constructed by casual labourers that were trucked in daily from Surrey – not much English between them but they did anything required, including discovering an old oil tank and disguising it in a pile of debris to be hauled off. After the house was finished but before curtains were up we glanced in the front window from the sidewalk and noticed a veritable waterfall cascading out of the ceiling fixture. We called the real estate agent listed on the sign out front and hours later someone came to look at it. The never used plumbing in the bathroom had exploded. The water was cleaned up and the plumbing fixed but the wiring, light fixtures, hard wood floors were just left to dry out. Shortly after that the three stairs leading to the front porch came separated at the porch because no rebar had been used to tie in the stairs. That little faux pas was tiled over. The house is for sale for $2.7M at the moment.”

In a red-hot speculative ‘seller’s market’, construction standards disintegrate. Buyers get even less than what they would for lower prices in a more normal market. The ‘high-end’ has not escaped this effect. – vreaa

“I convinced my brother – a doctor in Vancouver – to NOT upgrade his accommodations. I said, don’t you think the fact that you – a doctor – is afraid of getting priced out means that something is very wrong?”

Anotherlowlyrenter at greaterfool.ca 17 Jul 2011 11:17pm–
“I convinced my brother – a doctor in Vancouver – to NOT upgrade his accommodations. He owns a 2 bedroom condo and had been considering buying a house. Not that he can afford it. Homes are too pricey even for doctors. I said, don’t you think you have enough $$$ exposure? He said, but what if I get priced out? I said, don’t you think the fact that you – a doctor – is afraid of getting priced out means that something is very wrong with this picture. Besides, who is going to price you out? Incomes in Vancouver are well less than incomes in Toronto, yet prices are 3 times as high. He sez, but what about the Asians – they’re coming aren’t they? I said, well they have been coming. But what if they stop coming? Or maybe they sell too, once the bubble starts to deflate. Asian “investors” are pretty good at riding a trend up – and they’re good at selling on the way down. Besides, if Vancouver becomes a place that doctors can’t afford to live, then maybe you better ask yourself if this is the kind of city you want to live in . . .”

“Here’s a couple of attempted flips in Metrotown to watch…”

Crash at vancouvercondo.info July 15th, 2011 at 4:04 pm–
“Here’s a couple of attempted flips in Metrotown to watch:

MLS#: V893467
7005 Gray Avenue
Assessed: $780,000
Sold: Mar 2010 $805,000
Listed: Jul 2011 $1,340,000 (after some renos. maybe $40-50K worth)
Note: This was listed in May 2011 for around $1.1 Mil and didn’t sell, so now re-listed even higher!

MLS#: V899271
7162 Gray Avennue
Assessed: $739,900
Sold: Apr 2010 $790,000
Listed: Jul 2011 $1,398,000 (after some renos. maybe $40-50K worth)

Both of these houses are 1960′s era bungalows and were bought just over one year ago, prettied up with renos and re-listed just after the one year mark to avoid the capital gains.
These people must be watching old reruns of Flip-This-House.

Also:
7188 Gray Avenue
Assessed: $697,500
Sold: Oct 2010 $757,500
House has now been demolished and a new spec. house is being built. This next door to 7162 Gray Avenue.

Lots of builder and speculator activity in the Metrotown area south of Imperial Street. I have noticed a sales slowdown in the area recently, with a noticeable increase of listings.”

Two Possible Class-action Lawsuits Against Local RE Investment Expert – “The road to hell is paved with good intentions.”

From ‘Real estate specialist denies he withheld information from investors’, David Baines, Vancouver Sun 22 July 2011. Excerpts –

Selfstyled real-estate expert Ozzie Jurock and two associates have been named in a proposed class-action lawsuit by investors in a condo development in Williams Lake.
Brian Stachniak of Delta, who bought one of the 76 units in the Crestwood Estates development, alleges that Jurock and his associates, David Barnes and Ralph Case, failed to report major repair work that needed to be done, misrepresented the value of the units and failed to upgrade the units as promised.
Stachniak is asking B.C. Supreme Court to certify the lawsuit as a class action, which would permit him to pursue it on behalf of everybody who purchased units.
…
This is the second proposed class action filed against Jurock and his associates in the last 16 months.
In March 2010, Gregory Bosworth of Bowen Island made similar allegations with respect to his purchase of a unit in the Roosevelt Apartments in Prince Rupert.
A hearing to certify that lawsuit as a class action was held in May and a decision is pending.
…
Jurock – who is the public face of this business – uses his folksy charm and extensive real estate knowledge to generate publicity in mainstream media outlets.
Until 2008, he wrote a weekly column in The Vancouver Sun. Radio and television business commentator Michael Campbell has also heavily promoted him. Campbell regularly features him as a guest on his Money Talks program on CKNW radio and at his annual World Outlook Financial Conference.
On his conference website, Campbell describes Jurock as “one of Canada’s leading business motivators” and says he routinely attracts audiences of more than 700 people. “There is only one reason,” he asserts. “Ozzie Jurock delivers more than he promises.”
These sorts of endorsements provide Jurock with name recognition, credibility and the platform he needs to attract people to his Real Estate Action Weekend.
This is a weekend seminar billed as “two days of inspiration and insight from Ozzie Jurock.” Topics include how to build and maintain a rental portfolio, and how to buy an apartment building with no money down. Cost is $797.
Taking the two-day course entitles you to join the Real Estate Monthly Action Group. These monthly meetings include guest speakers and reports on market activity. They also provide the opportunity for members to pitch their own real estate deals, and – not incidentally – the opportunity for Jurock and his associates to pitch their deals.
It costs another $300 to join this group, plus $177 per month for a minimum of 12 months, but Jurock provides deep discounts for people who make an upfront commitment to buy the whole package.
The bottom line is that he ends up with a monthly audience that includes relatively unsophisticated but very attentive people who are heavily motivated to invest in real estate.
And what better real-estate deal for a student to invest in than the teacher’s deal, especially if the teacher is offering it at what he claims is below appraised value?
As a further inducement, Jurock offers a $500 referral fee to every member who convinces a friend or family member to invest in one of his deals.
He also peppers members with sophomoric sayings designed to spur them into action. Some examples are “life is in the doing,” “the road to hell is paved with good intentions,” and “it’s never too late [to] attract that great passive income we all need for a self-actualized life.”
I personally do not like this sort of hype, which is exactly what it is. It appears to me that Jurock’s overall marketing strategy appeals to financially unsophisticated people who have limited funds to invest and know little or nothing about real estate investing, but want desperately to get into the real estate market.
One of his answers has been for these people to buy apartments and condos in remote communities such as Williams Lake, Prince Rupert, Prince George and Merritt, and place them in rental pools to generate so-called “passive income.”
But of course, such resource-oriented locations are often subject to wrenching economic downturns, and these markets don’t enjoy the same sort of boost from immigration as the Lower Mainland does. Also, unforeseen expenses (such as leaky condos) can turn the most conservative cash flow projections into wishful thinking.
…/end of excerpts

These kinds of cases almost exclusively occur in falling markets. In soaring markets, even bad investments are bailed out by price rises. Expect there to be similar cases in the LML once the market here turns. How many here ‘invested’ in RE under ‘guidance’? – vreaa

“I’ve been a renter and an owner. Without doubt, from a financial and quality of life point of view, ownership is the correct choice for most people in the long term.”

From comment at the Globe and Mail by Geo Centric 3 Jul 2011 10:11am –
“I’ve been a renter and an owner. Without doubt, from a financial and quality of life point of view, ownership is the correct choice for most people in the long term. How many people, who have been homeowners for 20 years or more, have you heard say “that was mistake – I should have rented”?
We have 60-year old friends that have been renters for 40 years. They have no equity in a home and will be paying ever-increasing rent with nothing to show for the rest of their lives. I have been mortgage free for 10 years and the value of the house has increased by $450K over the 19 years I lived here. If I sold it, I would get my $250K purchase price returned as well [the price appreciation] for a total of $700K – tax free. That’s a tax efficient average annual return of 5.2%.
But wait, there’s more, as Billy Mays would have said. I also get a tax-free dividend each month from my house – the value of what it would cost me to rent it, which is currently about $2,800. Remember, rent is paid with taxed dollars, so to pay your $1,200 apartment rent you might have to earn $1,500 to $2,000 gross, depending on income and tax situation.”

A question for newbies and relative newbies: What is the most important factor that ‘Geo Centric’ is leaving out of their calculations? – vreaa

“Three friends are planning on moving away due to the disproportionate cost of living:income ratio. One is going to Calgary and the other two are going to UK and Australia.”

Vansanity at vancouvercondo.info 19 Jul 2011 3:40pm –
“This week I’ve had the conversation with 3 friends that are planning on moving away due to the disproportionate ratio between the cost of living:income.
One is going to Calgary and the other two are going to UK and Australia (Australia has its own housing bubble to deal with but it sounds like the incomes are higher in their field).”

“We’re facing an exodus” – “Young families will say ‘Let’s sell what we have here, get a better mortgage and make more money somewhere else.’”

Nizam Ibrahim lives in Vancouver but commutes to Calgary, where he rents a two-bedroom apartment in a nice part of town. Despite added monthly expenses of more than $3,000, he still averages $15 an hour more than any job he could get in Vancouver.
“It’s a bit tiring, but to enjoy any kind of lifestyle in Vancouver it’s a compromise I need to make,” said the IBM IT consultant. “I’ve saved more in the last two years working in Alberta and traveling back and forth than I ever did working in Vancouver.”
Recruitment experts predict with its high living costs, skyrocketing real estate and grossly inadequate salaries, more Vancouverites will flee to where salaries are higher and commensurate with their skills and inflation.
“We’re facing an exodus,” said Feras Elkhalil of the WPCG recruitment firm. “We don’t want a brain drain out of Vancouver. We don’t want to lose talented people. If you want good talent, you need to pay for it.”
He added Toronto salaries are at least 15 per cent higher, and 20 per cent greater in Calgary and Edmonton where taxes and real estate prices are lower.
“Employers are not keeping up,” he warned. “I fear they’re turning a blind eye, saying it doesn’t apply to them and we’ll have people frustrated at the cost of living and (foreign investment) driving up costs of real estate. Young families will say ‘let’s sell what we have here, get a better mortgage and make more money somewhere else.’”
– From ‘BC facing a brain drain‘, Erica Bulman, 24 Hours, 17 Jul 2011 [hat-tip to Brent]

The math for Ibrahim is remarkable. It appears that, given the pay differential and his cited extra expenses, he only profits from the commute if he works more than 200 hours per month. Perhaps there are also career advantages.
That aside, the main point of the piece is sound: That income:RE_price ratio in Vancouver is forcing some people away. – vreaa

City Councillor – “The main source of profitability in the real estate market is capital appreciation rather than income.”

“The main source of profitability in the real estate market is the line not shown in your pro forma, which is capital appreciation rather than income. This kind of performance is not untypical of real estate companies who embarked on a buy-and-hold strategy.” – North Vancouver City Councillor Guy Heywood, commenting on a rental apartment developers request to waive city fees to save the project [‘Rental developer asks city for $500K in fee help’, North Shore News, 15 July 2011] (hat tip VCI)

Local governments are endorsing a new norm where developers are expected to build rental properties that are not cash-flow profitable, but rather on the premise that strong price appreciation will continue unabated?
Yet another example of ‘new paradigm’ thinking common during speculative manias. – vreaa

“What I don’t get is that my friend pays less for rent in Vancouver than I do in Calgary. I don’t know if Vancouver landlords are just more understanding and generous or if the market isn’t that tight for renters.”

“What I don’t get is that my friend pays less for rent in Vancouver than I do in Calgary (And I also paid less when I lived there) for something relatively similar. Most of these houses look like those that have basement suites. Even if you bought before the boom (2002-ish), the house is still around 500-600k. But now that it’s worth 800k, the property taxes should be enormous, add in the costlier utilities and sewage/garbage/recycling fees and I don’t know if Vancouver landlords are just more understanding and generous or if the market isn’t that tight for renters.” – relationship_tom at reddit.com 15 July 2011

“It’s most certainly a renters market. I live in Van and renting is so much more affordable it’s insane. My dad just bought an apartment in Arizona for 80k and is renting it for $900 a month. A similar place here would be 500k but only rent for $1800.” – jsbell_69 15 July 2011

[Comments above from a discussion thread regarding Vancouver Sun article, ’20 ‘average’ homes in Vancouver priced around $810,000′]

“Right now I am betting about 85% of my life’s savings in small town Canadian real estate. I am buying nice houses in quiet small Canadian towns for the rental income.”

Ben Rabidoux, of the Economic Analyst, has a fine post headlined at zerohedge.com 24 Jun 2011, ‘What’s Really Driving House Prices In Canada? The Must-See Graph Of The Day…’.
Here’s ‘Diogenes’ in the comments section, 24 Jun 2011 19:55 and 19:45–
“I don’t know why house prices are still climbing. I figured the US crisis would spill over into Canada so I sold all my rental properties between 2008 and 2010. I was wrong, now I am buying other properties at higher prices. Right now I am betting about 85% of my life’s savings in small town Canadian real estate, the balance being in physical gold and silver. I am buying nice houses in quiet small Canadian towns for the rental income. If they go up that’s nice but I can hold on quite comfortably and live on the rental income. If they come out with some kind of draconian rent control due to runaway inflation I can sell them at a profit. So no, I am not afraid of a Canadian real estate collapse. I expect prices to continue rising as long as governments pursue inflationary policies. If they ever decide to go for the balanced budget, higher taxes and higher interest rate policies I expect the market to dip then stay flat for a while. That is what typically happens in Canada. Yes we have boom and bust cycles but not to the extent of the US.
Examples of my purchases, in small towns in the neighborhood of Belleville Ontario.
Latest purchases, a 1400 sq ft bungalow on 2 1/2 acre lot on the Moira River, 265ft water frontage, $85,000 plus another $50,000 in fix up costs.
2500 sq ft solid brick Victorian 2 story 4 bed 2 bath house in a small town, $124,000.
1000 sq ft raised bungalow, circa 1987, 3 bed one bath, quiet neighborhood $140,000
All bought since last fall, rents $1000 to $1250 per month.
I leave it to you if these are “bubble” prices.”

As we all know, these returns are far, far better than any in Vancouver.
The prices seem very reasonable to us, partly because prices here in Vancouver have become so very unreasonable.
In the coming crash, some small towns in parts of Canada may suffer less of a price drop than in the bubble centres, but we’d still expect RE to underperform across the country. And are those rents possibly vulnerable to economic climate?
It’d be interesting to know if ‘Diogenes’ is using any leverage, in which case, considerably more than 100% of their net-worth is in RE. – vreaa

“Only one UBC employee can afford to own a westside home.”

Unagi Don kindly posted this observation/analysis at VREAA 12 July 2011–

“Only one UBC employee can afford to own a westside home.”

#1) The income levels required to own a westside home: $496k.
http://www.yattermatters.com/2011/07/vancouver-home-buyers-adopt-slogan/

#2) The largest employer in Vancouver (which happens to be on the west side): UBC
http://www.lib.uwo.ca/programs/companyinformationcanada/canadaslargestemployersbycity2007.html

#3) The number of UBC employees earning more than $496k: 1
Prof. Donald Wehrung in Sauder School of business earns $510k.
Stephen Toope, the university president, earns only $483k.
http://www.vancouversun.com/business/public-sector-salaries/advanced.html

For the sake of comparison, the public universities in the US located in the most expensive housing areas are probably UCLA and UCSD. (I’m excluding Manhattan as single family detached homes simply do not exist there.)

At UCLA, there are roughly 100 employees with salaries over $400k:
http://www.sacbee.com/statepay/?name=&agency=UC+LOS+ANGELES&salarylevel=400000
And the average home price in Westwood (the upscale area where UCLA is) is around $650k:
http://www.zillow.com/local-info/CA-Los-Angeles/Westwood/r_118920/

It goes without saying that UCLA is not the largest employer in LA.

At UCSD, there are roughly 70 employees with salaries over $400k:
http://www.sacbee.com/statepay/?name=&agency=UC+SAN+DIEGO&salarylevel=400000
And the average home price in La Jolla (the upscale area where UCSD is) is around $1m:
http://www.zillow.com/local-info/CA-San-Diego/La-Jolla-home-value/r_46087/

UCSD is the fourth largest employer in the San Diego area.
http://www.alliant.edu/wps/wcm/connect/resources/file/eb9ce84c34a1a77/San_Diego_Major_Employers.pdf?MOD=AJPERES

“My wife and I are in our mid-30s with what others would call wildly successful careers here. We are seriously thinking about moving to Seattle or San Diego or at least elsewhere in Canada.”

bubbles at VREAA 27 Jun 201 6:45am –
“My wife and I are in our mid-30s with what others would call wildly successful careers here. We, however, hate the lack of any real economy or even culture coupled with the insecurity-manifesting-as-egomania of most residents. If I have to hear one more time about how Vancouver is the best place on earth from someone who’s never visited any other major centre in Canada (let alone the world) I’ll scream. Yes, the outdoor activities are nice, but experience living elsewhere has taught me that Vancouver residents do not have a monopoly on their pursuit. Despite the fact that it would mean essentially re-starting our careers, we are seriously thinking about moving to Seattle or San Diego or at least elsewhere in Canada. There is no way we would pick Vancouver as our home if starting again from scratch.”

“What does New York have that British Columbia does not?” [Let me count the ways…]

tdma800 at RE Talks 9 Jun 2011 7:59pm – “If you don’t want to see live theatre, and don’t like to work in the financial industry, what does New York have that British Columbia does not?”

Wow, where do you start?
Reminiscent of “What have the Romans done for us?”….
We thought we’d pop this up as a free educational service to tdma800 and others who have never left the 604 area code.
Readers thoughts?

[Why exactly is this relevant to a discussion of Vancouver RE? Well, next time you get into a bidding war for a Yaletown Condo, remember that one (all?) of your competitors may be thinking “After all, what does New York have that Vancouver does not?” as he pumps that bid 33% over ask.]

We’ll start us off below by listing some fairly standard stuff about NYC itself; we’re sure to be missing lots. (That’s something else about NYC, even its fans have only scratched the surface…)
In no particular order:
1. MoMA
2. Strand Books
3. The Cloisters
4. The Chrysler Building
5. The Village Vanguard (and how many dozen other jazz clubs?)
6. The Met
7. The American Museum of Natural History
8. Washington Square
9. Staten Island Ferry
10. The NYC Marathon
11. Positive Cash Flow Residential Real-Estate (made that up; much closer, anyway -ed.)
12. The Macy’s Thanksgiving Day Parade
13. The Yankees, The Mets
14. Madison Square Gardens
15. Central Park
16. Chelsea (20 streets of private art galleries)
17. Carnegie Hall
18. The Subway
19. The Lincoln Centre
20. Times Square
21. Actual Newspapers
22. The Whitney
23. Actual Industry (deserves own list)
24. 48 Million tourists per annum
25. The US Tennis Open
26. The Knicks
27. $1.3 Trillion GDP (NYC metro alone)
28. The Guggenheim
29. The Fifth Avenue Mile
30. The Chelsea Hotel
31. The Frick
32. A setting for lots of books
33. Fashion
34. The High Line
35. Eraserhead, recent midnight show
36. Chocolate exports of $250M p.a.
37. Food manufacturing $5B p.a.
38. Bowery Ballroom
39. Joe’s Pub
40. Public Transit Nostalgia
41. The Zoo
42…. etc etc etc etc
[please post own examples: ‘Debate’?; ‘Diverse opinions’?; ??]

[PS: We LOVE Vancouver, it’s a very fine city, that’s why we live here, but it simply ain’t NYC.]

“The house prices, the sense of the city as a place where the main economic base is the city itself as a spectacle…”

Local civic-life commentator Frances Bula on her blog 22 Jun 2011 –
“I have a feeling that many people who once thought Vancouver was a good place to live are beginning to see it as a good place to visit only — stay a week, visit the sites, and then head back to home. The house prices, the sense of the city as a place where the main economic base is the city itself as a spectacle: those give the sense to some that it’s not really a city to live in any more.
I don’t feel that way myself. I’ve lived in the city proper for more than half my adult life. It feels workable to me, a place with neighborhoods and a sense of civic life. But are those of us who feel that way dying out?”

“I have been here five years now; I still can’t figure out what all the people here do.”

Michael at VREAA 13 Jun 2011 11:15am –
“I have been here now five years, I still can’t figure out what all the people here do. The Tech people I know all seem to hope for the big break or work for a US company that once upon a time decided it was cheaper here than in the US, but that seems to be changing quickly too.
Anything, at least in the computer field, that has proven successful has moved to other places, mainly the US, either on it’s own power or being sold to a US company.

Having hung around the “startup” world here in Van for a bit I think what is happening is that this is the place where quite a few smart people come to play, mainly outdoors. On the side they develop an idea and because wages here are low (comparatively) they start their business here.
They soon realize that the cost of doing business here is high, that the good employees want to have money they don’t have so they either move or sell the business (Flickr comes to mind) and the cycle repeats.

There really isn’t that much high-tech success here, it’s mostly a lot of self celebrating of the “high technology” field. Vancouver was a small border town with a large rail yard and some industries that lived off of the interior (e.g. sawmills, tanneries in False Creek). Once those industries were “cleaned up” there wasn’t really a lot left.
Interesting times ahead for Vancouver, and BC as a whole, that’s for sure.”

The Disinvested – A Few Disparate Thoughts On The Vancouver Riots

by Froogle Scott, VREAA, 16 June 2011 –

Rioters = people less invested in a society, or at least capable of being less invested for an evening, when fueled with booze and testosterone.

Interesting that the typical riot shot or ‘riot pose’ adopted by the young male participants, is one with arms thrust upward and outward in a V, as if proclaiming some kind of victory, or drawing power from the carnage behind. Ergo, these are people who spend most of their time walking around feeling powerless?

The boutique and upscale display window, the BMW or Hummer, is the magnet for trashing, upscale consumer goods the key item for looting.

The riot appears to be a fun event for the participants, but also something that helps define them, assert their individuality — ironically, while part of a mob. The Canucks fail to make them feel good about themselves, so they take matters into their own hands. Surreal to see “Kesler” and “Luongo” and “Sedin” running around inside the Bay and outside smashing and looting. If the real Luongo can’t get it done, I’ll just do it myself.

A few disparate thoughts, perhaps held together by the notion of ‘investment’ — the various meanings of that term, the lack of it, and perhaps the distortion of its meaning by the broader Vancouver society. We feel invested if we own a house or a condo, or earn enough to buy $500 hockey tickets, or designer handbags and shoes, or fancy automobiles. As the society has become increasingly focused on consumerism and sensory experience, on houses and home renovation, and the price of admission to that society climbs increasingly higher, the notion of what constitutes a healthy society in which everyone can feel invested becomes increasingly murky.

I don’t think the rioters are ‘dispossessed’ in any real sense of that word, but I do think that a riot of disaffected, bored bottom-feeders in a consumerist hierarchy tells you something about the nature of the broader society.

“The number of resumes I see at work from people currently in Vancouver looking to leave, or that have already left is pretty surprising.”

westcoastfella [living in Toronto] at RE Talks 11 Jun 2011 8:08am –
“The number of resumes I see at work from people currently in Vancouver looking to leave, or that have already left is pretty surprising. The simple fact is they make more in Toronto and pay less for everything around them, and when you’re raising a family and have no tangible ties to Vancouver, it can sometimes be an easy decision to make. My observations are anecdotal for sure, I’m one guy in one industry. But the people I hire are technical engineers earning 70-120K a year (so 60-90 in Vancouver) – not the sort that Vancouver wants to be losing in droves.”

“My brother works in the film industry in Vancouver, and after a few years of nonstop employment, no longer has steady work. He said that there is nearly nothing filming now (which is understandable given its the summer), but more alarming, there is little on the horizon for the fall. 4 regular TV shows film there in the winter, and a handful of movies – but not enough to employ the industry in any significant way, he estimated 40-50% of the usual workers are looking for work. He is leaving this summer to go to Toronto or Montreal, or possibly Europe. The high dollar is stopping some projects from coming here at all, and a lot of others are moving east.”

“I’m not too surprised that the local Vancouver media has not picked up on it, given the negativity of the implication – I’m sure they’ll finally start reporting on it when its too late.”

“I’m in my mid-30s but I feel like someone who is in their 80s saying “in my day…”. The disconnect between income and housing prices is insane.”

HM at VREAA 2 Jun 2011 11:05pm – “I’ve been working in various companies in the software industry and I’m seeing that there is a difference in what I’d get paid here versus elsewhere. The disconnect between income and housing prices is insane, and this is speaking as someone born in the Interior who has seen the prices go to crazy levels there. I feel like someone who is in their eighties saying “in my day….” and I’m only in my mid thirties. I remember when the coal harbour condos were just going up and seeing the sell prices at $150 – 200K and the prices they go for now is insane. I’m resolved to pretty well never buy a home, probably stay as a renter or take whatever inheritance I get from my parents (god I don’t want to be that ghoul) or move elsewhere and not buy there as well, prices across this country just seem delusional and out of touch with common sense.”