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  #7401  
Old Posted Aug 2, 2017, 7:20 PM
lio45 lio45 is offline
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Originally Posted by whatnext View Post
The only thing that will return Vancouver to normalcy is an outright ban on foreign purchases of real estate. Luckily for money launderers, that is unlikely to happen.
If Canada started to take a more serious look at the origin of the money entering the country, it would likely help bring back Vancouver to normalcy, without having to ban anything.

At first sight, I am theorizing that if Canada, federally, tightened its scrutiny of incoming laundered Chinese money to bring it to approximately U.S. levels, then the rents-to-property-prices ratio in Vancouver would approximately be brought to Seattle/San Francisco levels, i.e. still low, because those are desirable West Coast markets and there's a speculative premium to ownership, but not insanely low.

(And not by an increase in rents, needless to say.)
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  #7402  
Old Posted Aug 2, 2017, 10:23 PM
ssiguy ssiguy is offline
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Originally Posted by whatnext View Post
The market for single family houses is virtually frozen in Vancouver and it's immediate suburbs. And that's because they are almost all priced for offshore buyers, so locals are frozen at the condo/townhouse level. I suppose many of the homes listed are held by offshore money, as nobody seems in a big hurry to reduce the price to get a sale. Or maybe spec builders would rather try and rent them out than offer big price cuts.

The only thing that will return Vancouver to normalcy is an outright ban on foreign purchases of real estate. Luckily for money launderers, that is unlikely to happen.
This is exactly right.

Foreigners {or recent passport buyers} own so many homes in Vancouver that the idea of locals owning homes in the city or inner suburbs is becoming meaningless. So many Chinese bought homes with cash for a quick profit, to launder money, or to buy a passport that these "homes" are nothing of the sort. They are just a fast way to clear money. They are viewed as nothing more than stock. Very few own just one house but rather buy several so normal economics no longer apply which they still do in Toronto. Vancouver has been bought, sold, and commodified.

In a normal place when there are far more sellers than buyers, prices fall but that is because the sellers have to sell their home and so have to adjust their asking/selling prices downward. In Vancouver with these thousands of 2nd/3rd/4th homes owned by the same people they bought strictly to flip as money was no object. Seeing they don't need the money and certainly aren't moving to another city for a job as they still work in China, they simply take the houses off the market...............supply declines until better times arrive.

Supply and demand no longer applies in Vancouver housing because so few actually own the number of houses for sale that they can manipulate supply to reflect lower demand.
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  #7403  
Old Posted Aug 2, 2017, 11:55 PM
geotag277 geotag277 is offline
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Originally Posted by someone123 View Post
So your theory is that this decline is driven by regulatory changes in Ontario and will turn out to be temporary. Anybody who bought a house recently in Toronto will end up doing well in the next few years when the market resumes its upward climb.
My theory is simply that Toronto and Vancouver are following the same pattern. That is, the immediate after shock of foreign buyer taxes saw two things: sales fall off a cliff (especially in higher end properties), selling price averages tank, and year over year medians continue to show growth.

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That is a possibility, although we are in a low interest rate environment with high levels of indebtedness, and rates just went up. The article I linked pointed out that most people who bought million dollar houses lately have a debt-to-income ratio of about 4.5:1. How will people borrow ever-increasing quantities of money to pay more and more for real estate?
For the record, Vancouver has higher mortgage servicing costs than Toronto.

http://www.cbc.ca/news/business/cmhc...debt-1.4158195

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At the end of 2016, the average scheduled monthly payment for a new mortgage was $1,328, according to CMHC. Torontonians paid $1,826, while the average monthly payment for Vancouverites was $1,936.
Obviously the price growth will not be sustainable, but again, people are playing no true scotsman with the definition of bubble. Is the definition of a "bubble popping" going from a high price growth scenario to a flat price growth scenario?

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You should probably stick to talking about what's actually in my post rather than imagining what my motivations are. I'm not gloating or trying to declare victory one way or the other. My post just contains some data I saw somewhere plus some simple conclusions derived from that data.
For someone to complain about sticking to what you actually said, you sure ignored the question. Why would you expect Toronto to be any different than Vancouver, one year later?

You mockingly alluded to a "soft landing" in your post, as if what we are witnessing is some kind of hard crash. It is actually no landing at all when median prices are still going up year over year, in the face of both interest rate hikes and unprecedentedly large foreign buyer taxes.
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  #7404  
Old Posted Aug 4, 2017, 1:44 PM
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Martin Mtl Martin Mtl is offline
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Home sales in Greater Montreal for july: +16% from last year
For the city of Montreal: + 21% from last year
Prices up 13% from last year on the island.

http://affaires.lapresse.ca/economie...a-montreal.php
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  #7405  
Old Posted Aug 4, 2017, 3:30 PM
lio45 lio45 is offline
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I love Chinese greed and disrespect bring it on!
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  #7406  
Old Posted Aug 8, 2017, 4:24 PM
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travis3000 travis3000 is offline
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Prices are down about 19% on average across the GTA from the absolute peak in April. Some excellent opportunities right now for buyers. Worst hit areas were the burbs outside of TO (Mississauga, Brampton, Richmond Hill, Markham, Vaughan) where the average home has dropped by about $200,000! Believe it or not, that only takes prices back to where they were 8 months ago in Dec 2016.


I've noticed the market picking up a tad in my market of Barrie over the past week or so. Prices here are down about 12% from the peak. Average detached home went from $600,000 to $535,000. Townhouse from $430,000 to $370,000.
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  #7407  
Old Posted Aug 10, 2017, 6:03 PM
geotag277 geotag277 is offline
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  #7408  
Old Posted Aug 10, 2017, 10:51 PM
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Lol. It will never end.
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  #7409  
Old Posted Aug 11, 2017, 5:25 AM
sunsetmountainland sunsetmountainland is offline
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It is just math is all. Not much supply for huge demand. No lio45 economics here!
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  #7410  
Old Posted Aug 11, 2017, 3:18 PM
lio45 lio45 is offline
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Is it possible that you don't see that we all agree it's "supply and demand"?

China has more millionaires than Vancouver has residents, and the former seem to have massively reached the conclusion that the safest BitCoin-type vehicle to permanently take their money out of reach of the Chinese government's tentacles is Vancouver property.

So, yeah, supply and demand in that situation will inevitably bring prices to levels that are totally out of whack with all other local metrics, as long as demand is unchecked (i.e. as long as Canada continues to let questionable Chinese money in that easily).

However, it doesn't mean it's a stable or sustainable situation, at all - the current levels of demand can EASILY change. It wouldn't take much, in fact.

In other words - a classic bubble.
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  #7411  
Old Posted Aug 11, 2017, 3:30 PM
lio45 lio45 is offline
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Originally Posted by geotag277 View Post
I just skimmed through this article, and the gains are for only a few months in a row....... starting from a slump. So honestly, that doesn't tell us much.

It seems to be classic spin of data just for the sake of the catchy title.

I don't know to what level the Van market has rebounded from the slump following the new tax last year, and I don't know how big the slump was, but my point is, that article isn't telling me any of that! And it's actually THE useful and interesting part!

All the article says is that it's gone up in the past few months, but for all I know the Vancouver market could've had the greatest crash in human history last year, falling to levels where properties are nearly worthless, then from those levels "it's gone back up by 5% since the beginning of spring 2017", and this useless article would be written the exact same way.
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  #7412  
Old Posted Aug 11, 2017, 4:36 PM
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Originally Posted by lio45 View Post
I just skimmed through this article, and the gains are for only a few months in a row....... starting from a slump. So honestly, that doesn't tell us much.

It seems to be classic spin of data just for the sake of the catchy title.

I don't know to what level the Van market has rebounded from the slump following the new tax last year, and I don't know how big the slump was, but my point is, that article isn't telling me any of that! And it's actually THE useful and interesting part!

All the article says is that it's gone up in the past few months, but for all I know the Vancouver market could've had the greatest crash in human history last year, falling to levels where properties are nearly worthless, then from those levels "it's gone back up by 5% since the beginning of spring 2017", and this useless article would be written the exact same way.
The article includes a chart that shows there was a bit of a slump in 2016 If you look at that dip you'll see what the size of the slump was. It was nowhere near as big as the one in the early 90s, or even the one in 2008.

And yeah, the gains are just for the last few months. What they're reporting on is the month-to-month percentage increase averaged over a three-month rolling period.

Here's a chart of housing sales prices from the Real Estate Board of Greater Vancouver that might add some context as well:



Does that help?
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  #7413  
Old Posted Today, 4:44 AM
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jmt18325 jmt18325 is offline
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http://business.financialpost.com/in...b-f7a5fce42b82

And apparently, the bubble is no more.
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  #7414  
Old Posted Today, 5:21 AM
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Pinion Pinion is offline
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Quote:
Originally Posted by jmt18325 View Post
http://business.financialpost.com/in...b-f7a5fce42b82

And apparently, the bubble is no more.
Oh phew, I can tell all my former friends to move back to Vancouver now. I don't remember condos dropping by about 70% but I'm glad it happened.

Quote:
Originally Posted by lio45 View Post
Is it possible that you don't see that we all agree it's "supply and demand"?

China has more millionaires than Vancouver has residents, and the former seem to have massively reached the conclusion that the safest BitCoin-type vehicle to permanently take their money out of reach of the Chinese government's tentacles is Vancouver property.

So, yeah, supply and demand in that situation will inevitably bring prices to levels that are totally out of whack with all other local metrics, as long as demand is unchecked (i.e. as long as Canada continues to let questionable Chinese money in that easily).

However, it doesn't mean it's a stable or sustainable situation, at all - the current levels of demand can EASILY change. It wouldn't take much, in fact.

In other words - a classic bubble.
Thanks for saying this so I didn't have to. Also affecting supply of course is that each Chinese multi-millionaire buys several properties, not just one, and often leaves them empty. My neighbourhood is mostly regular workining middle class people but there is one huge multi-tower development on the waterfront (in my avatar) where condos start at $900k and no one ever seems to be around.
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  #7415  
Old Posted Today, 5:34 AM
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jmt18325 jmt18325 is offline
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Originally Posted by Pinion View Post
Oh phew, I can tell all my former friends to move back to Vancouver now. I don't remember condos dropping by about 70% but I'm glad it happened.
No offence, but I'll probably take that opinion over yours.

A 70% drop seems totally unrealistic.
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  #7416  
Old Posted Today, 6:15 AM
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Pinion Pinion is offline
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Originally Posted by jmt18325 View Post
No offence, but I'll probably take that opinion over yours.

A 70% drop seems totally unrealistic.
I don't care what opinion you take, the bubble hasn't burst and that article is typical Toronto-centric trash.

And is a 70% drop unrealistic when my area went up 54% last year alone?
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  #7417  
Old Posted Today, 6:17 AM
ssiguy ssiguy is offline
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Now that Toronto seems to be retreating and prices and sales are down in the GTA, expect the media and Ottawa to ignore the problem and consider the issue resolved.
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