Canada's 'housing bubble' deemed close to bursting

[casper]

Originally Posted by Pinion

The context is it's a $4 million shack that my dad bought for $25,000 before the bubble, do you not comprehend how insane that is? It wasn't always expensive, it was relatively cheap as recently as the 90s. You know, back when housing prices reflected the local economy and demand. Don't call me disingenuous when you're constantly shilling for the real estate industry in a province you don't live in.

You do realize my dad's old place is five times the value of your sad Calgary comparison, and my posting was a government property assessment that is usually an underestimate, while yours is an unsold listing. AND that was just an example from my immediate family, not even close to the most obscene overvaluing I could find in this city.

Re: white spot, I can't believe - even in this market - that a single restaurant sold for $245 million. Condo units will have to be priced at $1.5 million each to make that financially viable, according to urbanyvr.

$245 million worth of land, everybody:

They did not pay $246 M for a chain burger place (even if it has access to that special sauce). If you look at that photo you see towers in every direction. It is a block a away from the water. They don't care about the building and will pull it down the first opportunity.

[Pinion]

.

[geotag277]

Originally Posted by Pinion

Vancouver will be nothing but a pile of foreclosures, bankruptcies and broken dreams when this is all done, and all because people like you insisted it wasn't a bubble and didn't do anything to regulate it.

Funny, I heard that in the 90s too. Back when Vancouver was 1/2 the size it is today...

I sympathise with the unique housing challenges facing Vancouver, but being "aghast" that a prime real estate development was sold in a prime location to build luxury condos is ludicrous. Showing a tear down in one of the most expensive luxury neighbourhoods in Vancouver as being overpriced compared to 50 years ago is being absurd.

There is a way to have an honest conversation about these things, and you continually refuse to do it. These cherry picked flourishes into reality distortion actually hurt your argument, hurt the ability to have a real conversation about actual solutions, and all it ends up doing is perpetuating the problem.

Vancouver residents have no one to blame but themselves for not voting for their interests and making housing a political priority since the 90s, when Vancouver passed Toronto in housing value and never looked back. The clearest sign there was a serious problem.

Perhaps if we're honest, part of it is that they did vote for what they wanted, as you are now inheriting 20 million, and many other Vancouver residents are getting similarly rich off the situation.

Perhaps what Vancouver really needed was a government with backbone to make hard decisions on behalf of the electorate and risk their political skin fighting for what they believe in and what was the right thing to do for future generations. Unfortunately, such political leadership tends to be absolutely non existent in today's world. Blame democracy.

In any case, stick to the facts, and present them honestly, or you are part of the problem.

[milomilo]

Originally Posted by geotag277

Vancouver residents have no one to blame but themselves for not voting for their interests and making housing a political priority since the 90s, when Vancouver passed Toronto in housing value and never looked back. The clearest sign there was a serious problem.

Perhaps the problem is/was that too many people were voting for their own selfish interests. For the lucky people that had a house back then this situation (in a very closed minded way) has been great for them, on paper at least.

[Doady]

That piece of land is worth $245 million? I guess I should have known just looking at extreme high density surrounding it.

[Pinion]

.

[SaskOttaLoo]

Originally Posted by Pinion

$245 million for a small restaurant is shocking even in in Coal Harbour. You seem to not be shocked by any price, but even in developer circles people are saying —. It's not financially viable.

There's no reasonable discussion to have with these prices. Things are turbo fucked, it won't be fixed, the only solution at this point is a crash. That's why Vancouverites are so upset. We are drowning, and it's going to get a lot worse before it gets better.

All political parties are supposed to look out for citizens. No one has. Obviously the BC Liberals - as conservatives - have let "the free market" annihilate everything for the last 17 years, and the bubble didn't exist the last time anyone else was in power. I've voted for the NDP the whole time and they just won (via coalition by the narrowest of margins) for the first time in the bubble era. So far they've done nothing, and I'm not optimistic they're willing to lose boomers either. So that's Vancouver voters faults? Anyone other than a boomer deserves to have their lives ruined because there are more of them than anyone else?

I'm lucky because my parents, aunt and in-laws were smart/lucky with housing, but most people will inherit one house, and that goes nowhere in this city. Maybe not even that as most parents will downgrade and spend the proceeds as they get older. In general, no one besides boomers will get rich from this. Everyone else, even babies born 10 years from now, are screwed. The only thing we can do is leave, and that's what a lot of Vancouverites have done. The population has been replaced by immigrants with lower quality of life expectations - and the ultra-rich Chinese of course - but actual Vancouverites under 60 who grew up here are a rare sight these days.

So yeah, it's nice to see you admit there is a serious problem, and that the government has screwed us. It's too bad you blame regular people who can't do anything about it though.

From the outside, it would seem obvious that there would be more political pressure to do something about this. What do you attribute this not happening to? There's been speculation of property developers being the largest contributors to political campaigns given Vancouver not having many locally headquartered large firms...is that a main driver? Or is it really people voting for their short-term interests instead of the region's long-term interest? I'm a bit dismayed that it seems like the governments have put their heads in the sand, decided not to collect the relevant facts that would expose the extent of the problem, and then only taken baby steps when it seemed that they were reaching political suicide. If the NDP, after going ahead with Site C also does nothing here, I wonder if they'll have much of a political future. Seems a bit like Brexit, where none of the two major parties strongly championed remaining despite the vote having been around 52%-48%...

[osmo]

So what is the issue here? $245 million or $600/psf when units in Vancouver go for well over $1,000/psf ?

[someone123]

Originally Posted by Pinion

$245 million for a small restaurant is shocking even in in Coal Harbour. You seem to not be shocked by any price, but even in developer circles people are saying —. It's not financially viable.

It seems weird to have a debate about whether or not this is a sign of something bad or unusual going on without looking at what the price per square foot of the land is, how much it used to be in Vancouver, and how much it is in comparable areas of similar or larger cities.

This site is under an acre, so the price per square foot of land is in the $6000 range. The $600 number is per buildable square foot, i.e. it is based on the FAR allowed for the development site.

There's an older article here from 2014 that says a land price record for Vancouver was set that year at $1,587 per square foot. So all-time record price in Vancouver has gone up by approximately 4x during a period of 3 years or so.

[ssiguy]

This situation is made drastically worse by the fact that most of the buyers will be foreign Chinese and those that aren't will be recent Chinese who already own a slew of homes. They will leave them vacant {the miniscule empty home tax means less than nothing to people who buy $2 million + condos with cash} and then flip them a few years later to other Chinese money launderers.

[lio45]

We may be at the dawn of a paradigm shift with cryptocurrencies replacing Vancouver real estate as the vehicle of choice for Chinese money launderers.

It would be amusing if the solution came from such a source... Vancouver would have had its few decades of market craziness as the one city on the side of China in a stable country where the Feds are particularly welcoming of questionable foreign capital -- a quite unique position which is what sent the market to such heights.

[someone123]

Originally Posted by ssiguy

This situation is made drastically worse by the fact that most of the buyers will be foreign Chinese and those that aren't will be recent Chinese who already own a slew of homes. They will leave them vacant {the miniscule empty home tax means less than nothing to people who buy $2 million + condos with cash} and then flip them a few years later to other Chinese money launderers.

I wonder how the vacancy tax can have any teeth at all when the principal resident of a house can be a homemaker or student who reports $0 in income and may or may not even be physically present in Canada most of the time.

I guess in a market where houses can go up by 30% in a year, some of these owners might care so little about the 1% tax that they may not even bother to evade it. But if they want to it's not difficult.

It's the same with the foreign buyer tax. If you have millions of dollars it is trivial to manage ownership through a Canadian shell company or proxy, participate in investor class immigration, enroll a relative in school here, or arrange for a fake job offer from a company. If you have managed to get this amount of cash to Canada from China in the first place you've already demonstrated an ability to be minimally creative and evade China's rules, since theoretically Chinese nationals are only supposed to take $50,000 a year out of the country.

[whatnext]

Originally Posted by ssiguy

This situation is made drastically worse by the fact that most of the buyers will be foreign Chinese and those that aren't will be recent Chinese who already own a slew of homes. They will leave them vacant {the miniscule empty home tax means less than nothing to people who buy $2 million + condos with cash} and then flip them a few years later to other Chinese money launderers.

And it’s worth noting BC’s Foreign Buyers Tax still doesnt apply to presale condos. Every voter should be lobbying the NDP to include presales in the February budget.

[dreambrother808]

Originally Posted by whatnext

And it’s worth noting BC’s Foreign Buyers Tax still doesnt apply to presale condos. Every voter should be lobbying the NDP to include presales in the February budget.

The NDP were elected because of the housing crisis. Their political future depends on whether or not they choose to make real changes.

[casper]

Originally Posted by whatnext

And it’s worth noting BC’s Foreign Buyers Tax still doesnt apply to presale condos. Every voter should be lobbying the NDP to include presales in the February budget.

Why?

If 20-30% of the market is sold to Chinese interests (the number being floating around here, not my number), then just add an extra floor or two onto each of these buildings.

[whatnext]

Originally Posted by casper

Why?

If 20-30% of the market is sold to Chinese interests (the number being floating around here, not my number), then just add an extra floor or two onto each of these buildings.

Or just not let them buy at all.

[whatnext]

Originally Posted by someone123

It seems weird to have a debate about whether or not this is a sign of something bad or unusual going on without looking at what the price per square foot of the land is, how much it used to be in Vancouver, and how much it is in comparable areas of similar or larger cities.

This site is under an acre, so the price per square foot of land is in the $6000 range. The $600 number is per buildable square foot, i.e. it is based on the FAR allowed for the development site.

There's an older article here from 2014 that says a land price record for Vancouver was set that year at $1,587 per square foot. So all-time record price in Vancouver has gone up by approximately 4x during a period of 3 years or so.

And to illustrate the speculative insanity at work, the adjacent Chevron site sold for $72 million for 16,400 sq ft in April. That was only $4,400 per sq.ft 8 months ago.

[urbandreamer]

I'm buying Stanley Park for $999 trillion and putting up a wall of towers to house China's 10%.

[Pinion]

.

[esquire]

Originally Posted by urbandreamer

I'm buying Stanley Park for $999 trillion and putting up a wall of towers to house China's 10%.

You have to wonder if Vancouver ever gets tempted to carve off a tiny slice of Stanley Park... I mean, with that White Spot going for $245 million, Vancouver could easily raise billions of dollars without really altering the park in any appreciable way.

Kudos to that White Spot owner for selling at what surely must be the top of the market, though. I'm sure they received many amazing offers for that site over the last however many years... it's actually amazing that it's still a White Spot.