Chinese Investors Driving Up Metro Housing Prices

[trofirhen]

This might be enlightening, even if a bit dated. That implosion is still coming, it seems, as retro said.

http://www.tricitynews.com/opinion/submi...ate-implosion-is-on-the-horizon-1.440539

http://www.mybudget360.com/canada-housing-bubble-canadian-real-estate-bubble-set-for-bust/

[Vin]

People have been talking about the housing bubble bursting since 2005. Such a talk is like predicting when the Big One (earthquake) will ever strike Vancouver.

[retro_orange]

Originally Posted by Vin

People have been talking about the housing bubble bursting since 2005. Such a talk is like predicting when the Big One (earthquake) will ever strike Vancouver.

Housing bubbles are much easier to predict then an earthquake, though inevitable both will happen. It is in no way logical for price increases to continue the way they do, sooner or later someone will look at their 10 Million dollar tiny west side lot with their cheaply built house that's mortgaged to the max in their dead neighborhood and say to themself "f*ck what have i done." and if enough people start saying that then just watch it fall. *Interest rates going up will do this too!

Sooner or later the time will come when the people will want to reinvest in the Chinese economy and if they all pull out around the same time, nobody will be there who will be able to or want to buy their overpriced cheaply built homes. Effectively making them worthless, from there who knows how far the price can fall before any locals feel it's safe to purchase again with the very real concern that the value will drop even further.

[dleung]

Originally Posted by cornholio

Usually I stay clear of topics that attract conspiracy accusations....but when the active chief of CSIS says it's so then... I join in. He specifically singled out China as grooming students in Canada for politics that are loyal to China. And more.

lmao, but you are ground-zero on ssp for conspiracy theories:

Originally Posted by cornholio

And the truth finally comes out... may I ask how your "folks" earned their cash?... I would also be curious to know if you think your folks have contributed anything to Canadian society, be honest.

[cornholio]

Relevant to the topic. Real-estate is 25% of BC's GDP. 18% real-estate and 7% construction. Alberta's oil sector at its height was 27% of Alberta's GDP.
https://www.biv.com/article/2016/1/bcs-real-estate-boost-comes-peril-say-economists/
We talk about growth in BC but much of that growth is actually real estate, and seemingly as a result of a massive ever increasing speculative bubble.

Just Metro Vancouver's residential resales (not new construction, and only in Metro Vancouver) are worth MORE to BC's economy then BC's entire forestry, mining and natural gas industries, COMBINED. And the dollar volume is up 41% from last year to a estimated $38.6 billion.

This is one reason the government is rightfully scared to do anything, they are hooked and they actually can't do anything without risking economic collapse. The real-estate bubble finally collapsing in BC would lead to a BC recession like never before.
https://www.biv.com/article/2015/12/housing-metro-vancouver-bcs-biggest-industry/

When you look at the numbers they are actually kind of scary. Amazing that we allowed things to get this far. Like I always say, the ending wont be a happy one. When ever that comes.

[Migrant_Coconut]

Originally Posted by cornholio

Relevant to the topic. Real-estate is 25% of BC's GDP. 18% real-estate and 7% construction. Alberta's oil sector at its height was 27% of Alberta's GDP.
https://www.biv.com/article/2016/1/bcs-real-estate-boost-comes-peril-say-economists/
We talk about growth in BC but much of that growth is actually real estate, and seemingly as a result of a massive ever increasing speculative bubble.

Just Metro Vancouver's residential resales (not new construction, and only in Metro Vancouver) are worth MORE to BC's economy then BC's entire forestry, mining and natural gas industries, COMBINED. And the dollar volume is up 41% from last year to a estimated $38.6 billion.

This is one reason the government is rightfully scared to do anything, they are hooked and they actually can't do anything without risking economic collapse. The real-estate bubble finally collapsing in BC would lead to a BC recession like never before.
https://www.biv.com/article/2015/12/housing-metro-vancouver-bcs-biggest-industry/

When you look at the numbers they are actually kind of scary. Amazing that we allowed things to get this far. Like I always say, the ending wont be a happy one. When ever that comes.

Suddenly, the Liberals' fast-tracking of LNG makes a lot more sense.

[WarrenC12]

Originally Posted by retro_orange

Housing bubbles are much easier to predict then an earthquake, though inevitable both will happen. It is in no way logical for price increases to continue the way they do, sooner or later someone will look at their 10 Million dollar tiny west side lot with their cheaply built house that's mortgaged to the max in their dead neighborhood and say to themself "f*ck what have i done." and if enough people start saying that then just watch it fall. *Interest rates going up will do this too!

Sooner or later the time will come when the people will want to reinvest in the Chinese economy and if they all pull out around the same time, nobody will be there who will be able to or want to buy their overpriced cheaply built homes. Effectively making them worthless, from there who knows how far the price can fall before any locals feel it's safe to purchase again with the very real concern that the value will drop even further.

Yes, a drop is likely inevitable. But when? At what speed? Measured against a human lifetime, we could never see an earthquake, and as Vin mentioned, certain chicken littles have been calling for a drop for 11+ years. If you were talked out of purchasing in 2005, you've missed out on a lifetime worth of real estate gains, sadly.

And we know exactly how far prices will fall. As soon as mortgage rates fall a certain level below local rents, people will begin buying again.

Mortgage rates are tied to long term government bonds. 30 year bonds are still under 2%.

[csbvan]

A long read by Gordon Campbell's former chief of staff of the lunacy of BC's housing:

http://www.straight.com/news/702206/martyn-brown-essay-bcs-housing-crisis-and-what-do-about-it

[Klazu]

One thing I don't understand is why are all these wealthy foreign people willing to purchase our clearly overpriced property ahead of an inevitable crash? I mean, if you have such amounts of money, one would think the person is business-savvy and aware of the ever-increasing risk involved. Are they all hoping to enjoy the annual 20% value increase as long as possible and flip the property just before the crash?

Sounds like a risky business to me, but perhaps that is why I don't have millions. Someone is guaranteed to lose once the crash happens and that someone will be a lot of people that held on to their investment properties a bit too long...

Interesting times.

[Max.]

Originally Posted by Klazu

One thing I don't understand is why are all these wealthy foreign people willing to purchase our clearly overpriced property ahead of an inevitable crash? I mean, if you have such amounts of money, one would think the person is business-savvy and aware of the ever-increasing risk involved. Are they all hoping to enjoy the annual 20% value increase as long as possible and flip the property just before the crash?

Sounds like a risky business to me, but perhaps that is why I don't have millions. Someone is guaranteed to lose once the crash happens and that someone will be a lot of people that held on to their investment properties a bit too long...

Interesting times.

One thing people need realize is that these Chinese buyer are not foreigners, most of them are immigrants. They just want to buy a beautiful house here and wait to get the citizenship. Vancouver's housing prize is still way cheaper than China's 1st tier city like Shanghai & Beijing.

[retro_orange]

Originally Posted by Max.

One thing people need realize is that these Chinese buyer are not foreigners, most of them are immigrants. They just want to buy a beautiful house here and wait to get the citizenship. Vancouver's housing prize is still way cheaper than China's 1st tier city like Shanghai & Beijing.

Please, Most on here know and will readily admit that's not even half the story.

[Migrant_Coconut]

Originally Posted by Max.

One thing people need realize is that these Chinese buyer are not foreigners, most of them are immigrants. They just want to buy a beautiful house here and wait to get the citizenship. Vancouver's housing prize is still way cheaper than China's 1st tier city like Shanghai & Beijing.

It doesn't help that many of these would-be citizens (assuming high wealth and bad attitude) care more about Canada's markets and free education than Canada itself. If the Big One hits or the market crashes, they'll be the first ones outta here - "Zaijian and thanks for all the cash," so to speak.

[logicbomb]

Originally Posted by Migrant_Coconut

It doesn't help that many of these would-be citizens (assuming high wealth and bad attitude) care more about Canada's markets and free education than Canada itself. If the Big One hits or the market crashes, they'll be the first ones outta here - "Zaijian and thanks for all the cash," so to speak.

If...if could mean 100+ more years. In the meantime, the cancer that is our real estate market is spreading and it's apparent that this will be the summer from hell for some that are trying to enter the market or rent! Vacancy rates are hitting record lows SoF as people are desperately selling and locals are being odd bid by 50-100k over the asking price in some areas (source: the realtor I know).

Originally Posted by Max.

One thing people need realize is that these Chinese buyer are not foreigners, most of them are immigrants. They just want to buy a beautiful house here and wait to get the citizenship. Vancouver's housing prize is still way cheaper than China's 1st tier city like Shanghai & Beijing.

Immigrants my 🞵🞵🞵. Not bothering to assimilate and not providing much in the community aside from token real-estate and construction jobs.

[retro_orange]

Originally Posted by logicbomb

If...if could mean 100+ more years. In the meantime, the cancer that is our real estate market is spreading and it's apparent that this will be the summer from hell for some that are trying to enter the market or rent! Vacancy rates are hitting record lows SoF as people are desperately selling...

Something has gotta give sooner or later. Frankly the sooner it happens, the less people will lose. Unless someone manages to sell and the market crashes before they buy again, most are boned.

[GilmoreStation]

Ya'll locals should be celebrating now, because the housing market is actually beginning to show some slow done from the insanely hot market in the last couple of months. Houses aren't selling as quick as before, and buyers are starting to avoid bidding wars.
http://m.huffpost.com/ca/entry/9994224

[trofirhen]

Hate to be an overt negativist, but I hope it comes crashing down like a house of cards, especially in Vancouver. This is not the type of city that can support these idioticly high prices.

[logicbomb]

Originally Posted by GilmoreStation

Ya'll locals should be celebrating now, because the housing market is actually beginning to show some slow done from the insanely hot market in the last couple of months. Houses aren't selling as quick as before, and buyers are starting to avoid bidding wars.
http://m.huffpost.com/ca/entry/9994224

“Activity in Greater Vancouver and the GTA appears to have topped out,” said Cliff Iverson, president of the Canadian Real Estate Association (CREA).

You can almost find an article every year that mentions the market "plateauing" or "topping out." This is just more propaganda spun by the CREA to get those who are leary of the current real estate market to invest in lower grade apartments and townhomes. For instance, real estate agents are trying to capitalize off the "slowdown" by showcasing Newton as the new affordable alternative.

The reality is this. The price of everything will continue to rise in our region until a) interest rates rise, and b) every level of government collaborates to restrict foreign ownership

The former could occur 1.5-2 years from now but the latter will never occur.

[trofirhen]

In London, UK, for many years, due to the high cost of housing and the shortage of medium priced housing, people have been sharing house: renting a room in a house for years.
This, I think, is common knowledge, at least for anyone ever having lived or stayed at length in London.
With no sign of a drop in rental costs, people with modest-to-middle-income salaries are now having to house share as per usual, only this time sharing a bedroom, often with a stranger.
The point being, that if the current trend continues unabated, or even at a slightly slower pace, that could easily happen in Vancouver. Food for thought?

[GMasterAres]

Originally Posted by logicbomb

You can almost find an article every year that mentions the market "plateauing" or "topping out." This is just more propaganda spun by the CREA to get those who are leary of the current real estate market to invest in lower grade apartments and townhomes. For instance, real estate agents are trying to capitalize off the "slowdown" by showcasing Newton as the new affordable alternative.

The reality is this. The price of everything will continue to rise in our region until a) interest rates rise, and b) every level of government collaborates to restrict foreign ownership

The former could occur 1.5-2 years from now but the latter will never occur.

So true. I have received 3 pamphlets in the last week from realtors all stating just that, the market is SLOWING DOWN so OMG GET IN NOW!!! And advertising apartments and townhouses in Surrey Central area as the "last hope to cash in on a booming seller's market."

Truth is the market isn't really slowing overall. A friend of mine's parents just sold their house in Surrey Chimney Hills area. It was assessed at $900,000 and they sold it in 1 week for $1.25 million. 1 week, and had like 5+ offers int hat week.

So they are basically moving to Kelowna, paying off the new house in cash (since their house was paid for in Surrey), and walking away with about $300k in their bank account.

But the speed was crazy. 1 week bang done and for well over assessed value.

[GMasterAres]

Originally Posted by trofirhen

In London, UK, for many years, due to the high cost of housing and the shortage of medium priced housing, people have been sharing house: renting a room in a house for years.
This, I think, is common knowledge, at least for anyone ever having lived or stayed at length in London.
With no sign of a drop in rental costs, people with modest-to-middle-income salaries are now having to house share as per usual, only this time sharing a bedroom, often with a stranger.
The point being, that if the current trend continues unabated, or even at a slightly slower pace, that could easily happen in Vancouver. Food for thought?

Likely. That isn't just the London model but holds true in many European cities. North America is behind the times in this regard. That's just what seems to happen in big cities as they grow and housing stock is finite.

I think Vancouver is a bit special on the price amount given what is really happening is you have people embezzling money through West Vancouver and Point Grey and ultimately that is driving the rest of the market up. Really the government needs to deal with all the illegal money laundering first but they don't want to because it will likely crash the market.

That said, it will _likely_ have a correction, but how much is still up for debate. If you say correction long enough you'll eventually be correct. That's just the nature of the pricing cycle.