Every day the realestate price is going higher and higher never seen anything like it 1 year ago you could not sell the home for 1.3 Mil now it gets blown out for 2.2 and more in my area
Vancouver Canada Boiling Hot Real estate Market
By westparkestates Follow Tue, 17 May 2011, 5:13pm 20,713 views 44 comments
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Newport Beach, CA
Canada is currently in a delusional bubble due to low mortgage rates. The bubble will burst eventually and the fall-out will be tremendous. Most Canadians are living well beyond their means. The party will be over soon, and I predict the crash will be as bad or worse than the current U.S. recession/depression.
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MoneySheep says
It is certainly possibly that *some* rich chinese cash buyers will not care enough to create fire sale conditions if prices start to drop.
But what about the regular mortgaged buyers, and their lenders. I bet they will care.
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It's so funny that finally when china is poised to take over as the next financial powerhouse of the world, those elite who stand to benefit are instead bailing out to buy a 600k home somewhere to protect their assets. Yeah, that makes sense.
People please support your arguments with data, otherwise go and buy a house before the Chinese own them all!!!,
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Wait... is it better to buy now, or wait until later? 'Cause I heard it is never a better time to buy! Tell me more.
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I grew up in Van. My father bought our house on the west side for $25k in the late 1970's. We sold it for over $600k in the mid 90's. It probably would sell now for $1.5 to $2m. Amazing. What is so special about my home city? It is obvious that the home price trends everywhere else, the Olympics, and Chinese investment/migration have contributed to the moon shot in home prices over the past 30 years, but where to from here? Homes are extremely unfordable compared to income levels, the Olympics are over a year now, and finally China is starting to overheat. Does anyone think that prices in Van can be sustained much longer? Or, will the Chinese money fleeing inflation in China keep it going up for the next few years? I have been eating crow for 2 years now warning family and friends to liquidate their investment real-estate assets. "Really, Greg? It's different here", they say.
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Well, even Australia has stopped self-levitating now. And that was mostly based on the marginal effect of mining and selling minerals to China.
What is Vancouver selling to China? "Freedom"?
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Oakland, CA
I remember going to Vancouver (from Seattle) in the 1980s and there were blocks and blocks of brand new office towers - all vacant. I was told it was Hong Kong money coming in, prior the the "fall" of Hong Kong to the Chinese, and that they would fill up eventually. The Canadian dollar sucked then, which was why I was there shopping.
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San Diego, CA
It's not just Vancouver. I'm here in Toronto and have been the past few weeks and housing prices here seem really expensive for the income levels. I'm not sure this trend can keep up.
I'm seeing absolute dumps going for $500,000. And the houses are so close together in many neighborhoods here. I'm in a rental in a nice area and I can literally stick my hand out of a window and almost touch the neighbor's house.
These kind of bubble prices remind me of the USA a few years ago.
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justme says
bubble, some Canadian type of NAR speculation.
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Our Government should limit foreign investment and speculation in real estate. Man of us have been driven out thanks to the Chinese and our short-sighted Government. Vancouver is becoming unlivable. What do people do if they only make $60-80K a year? Live in a 500 square foot box? Commute from Aldergove?
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San Diego, CA
JO says
Rent, like many people now wish they did during the US bubble. There will be an opportunity to buy after it all comes crashing down.
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Hi Thank you for the feed back I remember the 80s and 90s and this is so much more dangerous I just look at the commercial space for lease and turn over that tells you everything when you go to the court house you hear of many more foreclosures than you did say 3 years back out side of Vancouver is much slower
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Brooklyn, NY
"Unlike London or New York, “we don’t have enough jobs with high
incomes to justify” the home prices, said Ladner"
"Vancouver’s median home price of C$602,000 ($618,000) was 9.5 times the annual median household income of C$63,100, the group said in a study released Jan. 24. Canada had a 4.6 national multiple, making it “seriously unaffordable,” while the U.S. at 3.3 was “moderately unaffordable,” the study showed. To be affordable, the multiple must be 3 or less."
the 2 most important points of the article.
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It does seem to be different in Vancouver. I used to own several homes there. Unfortunately I sold them to purchase in Seattle when I moved. Dumbest thing I ever did. The last Vancouver home is now worth more than twice what I sold it for in 2007, the house I bought in Seattle I short sold for 1/2 my purchase price.
The dynamics of the Vancouver market are: many foreign investors, most homes have a rental unit in them to make them more affordable (constructing one will net you $50-100k more on resale). Most Vancouverites who don't already own can't afford to buy, it's definitely a move-up market with the foreigners coming in to keep the cycle moving. This has been going on since 1990 with Hong Kong reversion to communism, and amazingly hasn't stopped. $250k home in 1990 now worth well over $4M
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Is there any reason why the Vancouver bubble will not burst?
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Los Angeles, CA
People flock there for the mediteranean climate, right?
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Baltimore, MD
Where do these Chinese get all of their money from? Factory owners? If you are able to become so wealthy under such a system in China then one would think you would know how to invest in non-bubble investments. At least they know that real estate in China is a bad investment.
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OO says
Really? What neighborhoods in the Bay Area and LA are showing "extreme resilience" because of foreign buyers? Do you have any data showing this?
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Look at it this way.
Essentially there are 1 billion + slaves out there who will work for anything. If you can escape the slave class and do cost arbitrage on them and get in between outsourcing, you will be golden. Not necessarily factory owners, but Chinese bureaucrats, real estate developers, or even bankers and accountants, sales and marketing people etc.
The wealth distribution in China is very skewed, so if you are top of the pyramid, you take much more than your fair share. Now only a very tiny fraction of the population get to be the top, but since there are so many people out there, it is not difficult to find hundreds of thousands of wealthy people.
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There are no data showing whether the buyer is foreign or not. But anecdotally, there are lots of cash Chinese buyers in San Marino and Arcadia, and you can look at the population composition, same for Cupertino, Palo Alto in the Bay Area.
Now, you realize that every year, only about 5% of the total inventory goes on market. So let's say, you have 10,000 houses altogether in San Marino, it doesn't take 10,000 Chinese cash-rich buyers to support the market. All you need is 500 of them each year.