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  #61  
Old Posted Nov 20, 2007, 8:02 PM
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Fact of the matter is we've been in a boom cycle for too long, a bust is due, during bust cycles the suburbs face a much harder crunch. Labour costs are very sticky on the way down, but real estate prices alot less so. If a correction occurs and it's more then 10% which is very probable, it then makes financing very diffilcult if not impossible, as alot of the purchasers will decide to walk away as they can not get a mortgage for more then 100% of the new value. Builders will find it impossible to get their financing w/o large deposits from purchasers. A lot of these new developers are only asking for 10% down, it can come back and haunt them. I'm not hoping for this, but it appears to be becoming more apparent with each passing month.
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  #62  
Old Posted Nov 20, 2007, 8:21 PM
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Any idea when the bust will happen? 6 months, a year, 2 years?
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  #63  
Old Posted Nov 20, 2007, 8:23 PM
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Yeah I understand the economic principles, I just dont see this boom ending any time soon... to me it seems like it is being artifically propped up by the olympic fevour and a toasty hot economy. I see the end of this boom coming after the olympics and hitting hard.

But my thoughts on the matter are almost purely heresay.
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  #64  
Old Posted Nov 20, 2007, 8:39 PM
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As I said nothing is formal, but it is not speculation, figure it out.

As far as the boom goes, we've reached the plateau, properties will stagnate and then fall at least 25% by the end of 2008, if not 50% which is most likely, although timing of that upper drop is hard to say (before/after 2010). As jlousa mentioned, the suburbs will lose their value much faster than in d/t simply because the land is worthless here, and in richmond, and in burnaby, and in the tri-cities...OH and of course Abbotsford - what a joke that high-rise project is.

Those who bought in SkyTowers were the last segment of society to purchase an 'investment' as they believe that they must not be priced out of the market forever. Please, $149K for a studio in a concert block? You have to be kidding me. Aside from the inflated construction labour wages, the land value, the current market is just ridiculous. I'm glad to be leaving the job market just as the local recession hits.
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  #65  
Old Posted Nov 20, 2007, 10:39 PM
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If I knew when the market correction would come and how much it would be, I'd be much richer then I am now, and I wouldn't tell anyone. *l*
While I beleive a correction is coming and that it will affect the industry, I don't beleive it will be anywhere near what the above poster mentioned. I'm betting on around 10-15% over 2 years mostly in the burbs, with the city proper maybe down 5% in real dollars. I then envison prices increasing back to current rates over the following 2-3 years before the next boom takes them to the next level.
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  #66  
Old Posted Nov 20, 2007, 11:22 PM
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So you think there will be a small correction squeezed in between now and the olympics, and then a boom following the olympics... interesting. I always assumed the olympics would keep things hot right up to and after the event then following the hubub we would get our slump in prices and activity.

If only we could know for sure....
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  #67  
Old Posted Nov 21, 2007, 4:06 AM
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5% in d/t heheh - thats crazy talk..no i mean thats my cousin, crazy talk.
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  #68  
Old Posted Nov 21, 2007, 8:18 AM
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for a wile I was a bit afraid that there was no common sense left out there, but cc85 and jlousa proved me wrong .
i actually agree with cc85's projections much more and have no problem envisioning 50% price drops over a period of 2 or so years relatively soon for suburban condos, large drops for downtown as well and smaller drops for single family homes. what you have to remember is that with a condo you own nothing really, just location, and in the suburbs you have no location as a condo with the same location can be duplicated hundreds and thousands of times, a condo is supposed to just depreciate over time anyways. with single family homes you at least own land, land that is yours for ever, it doesn't disintegrate, it doesn't age it just becomes more scarce over time, though its still way overpriced in Vancouver. i actually wouldn't be surprised if some of the prices of these suburban condos will never reach their current prices again when they fall, and they will no questions about it. labor costs should come down considerably soon as the supply of new apprentices over shoots their demand, our economy slows down or worse which is starting to happen now, and price of materials should also come down as the whole world economy slows and supply reaches and outstrips demand. there is perfect storm brewing right now and everything i said was very vague and just a quick and ruff summary. also like jlousa said i cant predict when it will happen but ill say one thing, logic says it will happen before the olympics, in fact i wouldn't be surprised if the nearing of the olympics actually becomes the turning point in Vnacouver. imo personal opinion i always thought late 2008 would be the turning point and i have been saying that for probably 4 or so years. so far everything to me looks like thats very likely but we will have to wait and see. personally im going to feel very sorry for many people, well not for the idiots who invest their life savings in to a investment at a huge speculative peak, ready to tumble because there is nothing really to speculate about. see the problem with real estate is that every dumbass invests in to it with out thinking, i mean if you want to live in the home and think its worth that much then fine but your probably going to be nailed down to this city for a long time.
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  #69  
Old Posted Nov 21, 2007, 6:31 PM
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I totally don't agree with what is written. I'm from the UK and am here for 2 years representing an investment group. We are buying selective investments in the Lower Mainland and Fraser Valley. You need to look at a far wider spectrum than your simple focus on the local market. Important items such as Vancouver's strategic position on the Pacific Rim and the growth of trade with the future world economic hot spots such as China and India. The fact that you have an almost undiscovered world class city here, which the Olympics will help to reveal. The fact that every Olympic city to date has experienced at least 3 years of substantial equity growth following the Olympics (why should Vancouver be the odd ball). Then probably the single largest factor, which you all seem to be missing by a mile, this entire place from Downtown to Abbotsford is ridiculously CHEAP. It may seem on the high end to you people, but believe me, its some of the cheapest high end property available in the world. My corporate mandate through our London brokerage is to invest at least $3billion in property in this area and we are doing it very successfully. It's the old story, and I've been in the offshore investment industry for 35 years, if you keep saying the bubble will burst long enough, I promise you you'll be correct, but in the meantime I will have made millions. What's also true is that if the economy did slow, and there's no suggestion out there that it will, it recovers in grand style fairly quickly, so simply ride the waves. That's the historical roller-coaster of real estate ownership and investment, there isn't one piece of real estate on this planet that has ever gone down without reversing. Be thankful that you are blessed with such a great location offering one of the highest economic prospects available in the world today. These are great times, enjoy them and prosper.
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  #70  
Old Posted Nov 21, 2007, 10:58 PM
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well surrey does have some things in its favour over Vancouver

It still has loads of land left to build upon and it has a lot of room for industrial useage and its closer to the border and railway lines could just go there without needing to cross the river to get into vancouver etc.

I don't see why the Lower mainland can't have two great cities like our neighbours to the south
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  #71  
Old Posted Nov 22, 2007, 2:26 AM
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it took 26 years for the market to recover from the crash of 1981...vancouver is not a world class city; we are not a financial hub, nor are we even a head office hub - both of which are the primary reasons that world class cities develop and can afford to create high market rents and property values. Think tokyo, london, paris, new york, shanghai, hong kong, fair enough?

Are you know aware of the impending global recession? Oil at $99 a barrel, sky high commodity prices, high liquidation of american currency, climate change, terrorism?? the world is not doing too well all cause of your generation. thanks!
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  #72  
Old Posted Nov 22, 2007, 2:57 AM
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Originally Posted by SpongeG View Post
well surrey does have some things in its favour over Vancouver

It still has loads of land left to build upon and it has a lot of room for industrial useage and its closer to the border and railway lines could just go there without needing to cross the river to get into vancouver etc.
But Surrey's planning has been so horrendous for so long that it takes the same time or longer to drive within Surrey as it does to cross the river.
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  #73  
Old Posted Nov 22, 2007, 3:45 AM
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In speaking with industry experts on a daily basis (ie. developers who analyze this stuff to death, not realtors) I can tell you that while the general consensus is that we're due for a market correction, the estimates are far closer to those made by jlousa; in both the suburbs and downtown.

While I agree with many of the arguments being made here, I don't see justification for anything as dramatic as a 50% price drop in 2 years.
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  #74  
Old Posted Nov 22, 2007, 3:57 AM
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Originally Posted by cc85 View Post
it took 26 years for the market to recover from the crash of 1981...vancouver is not a world class city; we are not a financial hub, nor are we even a head office hub - both of which are the primary reasons that world class cities develop and can afford to create high market rents and property values. Think tokyo, london, paris, new york, shanghai, hong kong, fair enough?

Are you know aware of the impending global recession? Oil at $99 a barrel, sky high commodity prices, high liquidation of american currency, climate change, terrorism?? the world is not doing too well all cause of your generation. thanks!

Even during a recession goods still need to be traded and transported, cc85. I think what PitBoss is trying to say is that Vancouver has a very bright future, one that we may not even fully realize. His company is investing 3 billion dollars, for god's sake. Companies don't throw around that kind of money unless they've made sure a proper profit can be made. Take his 35 years of knowledge and run with it. I think that's what he's trying to get across. Thanks the the insight, PitBoss.

Vancouver has a huge advantage being the primary port city of Canada. While Seattle, SF and LA fight over federal dollars to update their west coast ports, Vancouver is pretty much the sole beneficiary. Couple that with shorter travel times from Asia and decent infrastructure to move those goods, and you have a pretty good recipe for a very successful city in the near future.
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  #75  
Old Posted Nov 22, 2007, 4:23 AM
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Originally Posted by phesto View Post
In speaking with industry experts on a daily basis (ie. developers who analyze this stuff to death, not realtors) I can tell you that while the general consensus is that we're due for a market correction, the estimates are far closer to those made by jlousa; in both the suburbs and downtown.

While I agree with many of the arguments being made here, I don't see justification for anything as dramatic as a 50% price drop in 2 years.
You only need to look at the amount of rezoning and subdivision applications now being taken out in the growing cities to tell you that they are way down from earlier this year and major developers know that they've created too much supply that will push prices down once all of the local speculators (re: local misinformed buyers) find out that no one will rent their place for a value high enough to pay their monthly mortgage.

Anyways, sky towers, good good development, i think it needs an addition or two.
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  #76  
Old Posted Nov 22, 2007, 4:49 AM
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Originally Posted by cc85 View Post
it took 26 years for the market to recover from the crash of 1981...vancouver is not a world class city; we are not a financial hub, nor are we even a head office hub - both of which are the primary reasons that world class cities develop and can afford to create high market rents and property values. Think tokyo, london, paris, new york, shanghai, hong kong, fair enough?

Are you know aware of the impending global recession? Oil at $99 a barrel, sky high commodity prices, high liquidation of american currency, climate change, terrorism?? the world is not doing too well all cause of your generation. thanks!
In the UK we are lightyears ahead of Canada in terms of market insight. What has yet to happen in Canada has happened to us over the past several hundreds of years. We have learned a great deal from these experiences. Economies adapt to cater for changes such as world oil prices and high commodity costs, they don't have to cause recessions.

The UK was in turmoil after World Wars I & II, but no recession occurred. Indeed the opposite happened, there was massive economical growth. This despite construction costs being 300% higher then pre-war prices and fuel prices over 400% higher. This equates to construction costs in Vancouver rising from $280 sqft to a staggering $1,120 sqft. Terrorism has been a daily part of our lives in the UK since the 1970's, it's only "new" to you here in North America. And so on and so on.

You have hit the nail right on the head my friend when you say "Vancouver is not a world class city" because to those of us in the UK and Europe that's exactly why we are prepared to invest so much in this wonderful and beautiful part of the world that you are privileged to live in. Through our long history of charted and documented growth we are able to see what it is that you can't see..............Vancouver is a world class city WAITING TO BE DISCOVERED. The answer is staring you in the face and sadly so many here are too blind to see it. Mark my word, this place will move from strength to strength, whether you like it or not. The vast trade with Europe opened up the East coast of the USA to immense wealth (as it also did to a lesser degree for Toronto and Montreal). The same will now happen to the West coast as massive trade grows with the Far East and Asia and, guess what, Vancouver sits in the most strategic position imaginable. I would go far as to say that if recession hit Canada (which it won't), the Vancouver area could probably remain immune to its effects.

We always have a chuckle in London when we hear of Quebec wanting to separate from Canada (into almost instant bankruptcy), the real situation should be Alberta and BC threatening to separate as that's where the whole future of Canada lies. Not only do you have the Pacific Rim potential economic explosion waiting to happen, you also have vast natural resources that the US will be begging you for in the next 20 years.

Stop looking at real estate for a moment and take the time to explore how many shipping companies are racing to expand their container fleets and container holdings to cope with the Pacific Rim trade that will happen over the next few decades, it will make your eyes bulge. Do you think they have it wrong as well?

You are some of the luckiest people on the planet. You have a strong economy, your national debt is rapidly disappearing, you have control on your interest rates (which are just about to be lowered again) and you are blessed to have some of the best real estate potential available in the world today. CONGRATULATIONS.
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  #77  
Old Posted Nov 22, 2007, 7:45 AM
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^Wow, I've never felt so optimistic about Vancouver's future until I read that, and I was pretty optimistic before.

Brings to mind "Adventure Capitalist" (non-fictional book about a really rich guy that does a road trip around the world) and how after visiting Vancouver (near the end of his trip) the author said it would be the next New York City.

It also brings to mind this news I heard today that apparently a study came out in the last day or two by some independent group stating that the population of Vancouver (Metro I assume) will grow by 1 million people in the next 12 years. Sounds crazy I know. I heard it from my brother who heard it from his wife (I don't know who she heard it from). Apparently either the City or the Metro held an emergency meeting regarding it. I couldn't find any mention of such a study online though. My bro said his wife would email me with some more info about it. If there is any truth to this news then that's pretty insane. I'll have to get back to you regarding the validity of it though. Even if the news is true though, who knows how accurate the actual study is. I would assume such a study must factor in the assumption that Vancouver's Olympic exposure will be very good marketing for it.
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  #78  
Old Posted Nov 22, 2007, 10:13 AM
cornholio cornholio is offline
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Originally Posted by PitBoss View Post
In the UK we are lightyears ahead of Canada in terms of market insight. What has yet to happen in Canada has happened to us over the past several hundreds of years. We have learned a great deal from these experiences. Economies adapt to cater for changes such as world oil prices and high commodity costs, they don't have to cause recessions.

The UK was in turmoil after World Wars I & II, but no recession occurred. Indeed the opposite happened, there was massive economical growth. This despite construction costs being 300% higher then pre-war prices and fuel prices over 400% higher. This equates to construction costs in Vancouver rising from $280 sqft to a staggering $1,120 sqft. Terrorism has been a daily part of our lives in the UK since the 1970's, it's only "new" to you here in North America. And so on and so on.

You have hit the nail right on the head my friend when you say "Vancouver is not a world class city" because to those of us in the UK and Europe that's exactly why we are prepared to invest so much in this wonderful and beautiful part of the world that you are privileged to live in. Through our long history of charted and documented growth we are able to see what it is that you can't see..............Vancouver is a world class city WAITING TO BE DISCOVERED. The answer is staring you in the face and sadly so many here are too blind to see it. Mark my word, this place will move from strength to strength, whether you like it or not. The vast trade with Europe opened up the East coast of the USA to immense wealth (as it also did to a lesser degree for Toronto and Montreal). The same will now happen to the West coast as massive trade grows with the Far East and Asia and, guess what, Vancouver sits in the most strategic position imaginable. I would go far as to say that if recession hit Canada (which it won't), the Vancouver area could probably remain immune to its effects.

We always have a chuckle in London when we hear of Quebec wanting to separate from Canada (into almost instant bankruptcy), the real situation should be Alberta and BC threatening to separate as that's where the whole future of Canada lies. Not only do you have the Pacific Rim potential economic explosion waiting to happen, you also have vast natural resources that the US will be begging you for in the next 20 years.

Stop looking at real estate for a moment and take the time to explore how many shipping companies are racing to expand their container fleets and container holdings to cope with the Pacific Rim trade that will happen over the next few decades, it will make your eyes bulge. Do you think they have it wrong as well?

You are some of the luckiest people on the planet. You have a strong economy, your national debt is rapidly disappearing, you have control on your interest rates (which are just about to be lowered again) and you are blessed to have some of the best real estate potential available in the world today. CONGRATULATIONS.
Dont want to be an ass but clearly you either dont know what your talking about, or most likely you have allot of money riding on our current real estate situation and you are afraid. I find it interesting that although you only have 6 posts since march you have just spent allot of energy trying to convince us that not only is our market safe, but its only going to grow. I mean I would love to write a couple pages going over everything but I wont because I don't care that much and I have nothing riding on it nor will I in any scenario. As for the future if you are so knowledgeable you should know that one of the most important demographic waves that has been putting many things out of wack in many societies and countries for half a century and specifically relating to real estate has had a huge impact which has further been increased with a after wave that due to changing society has had its first big hit on real estate at the same time and both waves combined at the moment have fueled our economies because of a overlap of the second waves peaked productivity and the first waves declining yet still positive productivity which obviously further add fuel to real estate prices and our hot economy. Now obviously there are other factors but they hold a much lower importance then most people even think, that is if they ever think about the bigger picture of our world and how everything is connected. Having said this these effects on real estate will be reversed, and the next decade will begin to see this while the decade after will feel the biggest impact. imo the longterm outlook for real estate is not that good and although im not going to say that we are not going to see overall growth over the next few decades i also wouldn't be surprised if between 2015-2035 real estate increases dont average above the rate of inflation.

Now i actually agree that a 50% drop soon is probably way overblown but i also think that real estate price drops wont be equal across the board and think suburban condos and townhouses will be hit particularly hard. And again PittBoss no offense but not much of what you said made much sense, in fact allot of what you said is the flawed thinking of our society, it might be normal but its flawed. Anyways if you really have been in the industry for 35 years then you might have more at stake then you think, but i think i have ranted enough.

by the way after rereading my rant im not sure if it will make much sense to everyone but im not in the mood of editing. good luck to all on your investments and remember its always the unnormal ones that dont seem to follow the rest of society that make the best scientists, and investors, etc. if they have smarts, if they dont have smarts then well you know what then...


edit...all i said doesnt only apply to vancouver by the way, though vancouver unfortunately has a dose of a bit of extra speculation and when everyones speculating on real estate, or anything really, everyone looses.

edit again...actually i dont think anything made any sense in you post, but again i am not trying to be an ass, im just giving you my honest opininio

Last edited by cornholio; Nov 22, 2007 at 10:26 AM.
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  #79  
Old Posted Nov 22, 2007, 12:29 PM
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I think we could move alot of this discussion into an new thread in the general section, can someone do that?
I'm curious as to where the 3 Billion dollars you're investing is going though, can you share?
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  #80  
Old Posted Nov 22, 2007, 1:22 PM
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''As for the future if you are so knowledgeable you should know that one of the most important demographic waves that has been putting many things out of wack in many societies and countries for half a century and specifically relating to real estate has had a huge impact which has further been increased with a after wave that due to changing society has had its first big hit on real estate at the same time and both waves combined at the moment have fueled our economies because of a overlap of the second waves peaked productivity and the first waves declining yet still positive productivity which obviously further add fuel to real estate prices and our hot economy.''


Er....a period would be nice. Ah, just messing with ya.
You brought up a good point regarding the baby boomers. It's had an effect on demand, especially in places like Vancouver, Victoria and Kelowna.
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