Vancouver Real Estate 'Bubble' at 30-year Peak

[rofina]

August so far continuing with July's strength in sales. If sustained it will mark another unusual, out of season uptick in sales.

[whatnext]

Originally Posted by rofina

August so far continuing with July's strength in sales. If sustained it will mark another unusual, out of season uptick in sales.

I'd be interested to see where that "strength" is. Houses I see in Vancouver/Richmond/Burnaby are still for sale after months of sitting on the market.

Condos in areas I keep tabs on seem to be finding price resistance at $1.1 million+ for your standard two bed. Inventory hasn't really dipped as you would expect in August.

Perhaps areas where local wages can actually still purchase ahome, like Maple Ridge, Surrey, Langley are doing better.

[Changing City]

Originally Posted by whatnext

I'd be interested to see where that "strength" is. Houses I see in Vancouver/Richmond/Burnaby are still for sale after months of sitting on the market.

Condos in areas I keep tabs on seem to be finding price resistance at $1.1 million+ for your standard two bed. Inventory hasn't really dipped as you would expect in August.

Perhaps areas where local wages can actually still purchase ahome, like Maple Ridge, Surrey, Langley are doing better.

The July REBGV data shows sales of detached and apartment were around 50% higher in July 2019 compared to July 2018 in Vancouver, Burnaby, Coquitlam, Port Coquitlam and North Vancouver. They were pretty much the same in Richmond, Maple Ridge, West Vancouver and Port Moody and down in New Westminster and Squamish.

[whatnext]

Originally Posted by Changing City

The July REBGV data shows sales of detached and apartment were around 50% higher in July 2019 compared to July 2018 in Vancouver, Burnaby, Coquitlam, Port Coquitlam and North Vancouver. They were pretty much the same in Richmond, Maple Ridge, West Vancouver and Port Moody and down in New Westminster and Squamish.

Though wasn't July 2018 dismal? Perhaps as Open Housing reports on the first half of August, prices are being slashed to move homes:

Metro Vancouver detached prices are showing sharp declines in August, with sellers slashing prices by as much as half to get out of the market.

The Open Housing Home Price Index for Metro Vancouver detached properties – calculated using the generally-accepted and transparent repeat sales or Case-Shiller method1 – fell 11.8% year-over-year, the August mid month update shows.

Looking at home sales reported in the last 30 days, seven out of 10 single family homes sold for below 2019 assessed value in the City of Vancouver, with the median sale being 7.3% below assessed.

An East Vancouver property assessed at $1.23 million and listed for $949,000 million ended up selling for just $860,000.

A Shaughnessy property listed for $7.68 million in April 2016 sold $3.45 million – less than half the asking value and 22.6% below assessment.

In Richmond, all but two out of the 24 properties sold in the last 30 days sold below assessment, with the median sale being 13% below assessed...

https://openhousing.ca/2019/08/20/metro-vancouver-detached-prices-showing-sharp-declines-in-august/

[Changing City]

Originally Posted by whatnext

Though wasn't July 2018 dismal? Perhaps as Open Housing reports on the first half of August, prices are being slashed to move homes:

Metro Vancouver detached prices are showing sharp declines in August, with sellers slashing prices by as much as half to get out of the market.

The Open Housing Home Price Index for Metro Vancouver detached properties – calculated using the generally-accepted and transparent repeat sales or Case-Shiller method1 – fell 11.8% year-over-year, the August mid month update shows.

Looking at home sales reported in the last 30 days, seven out of 10 single family homes sold for below 2019 assessed value in the City of Vancouver, with the median sale being 7.3% below assessed.

An East Vancouver property assessed at $1.23 million and listed for $949,000 million ended up selling for just $860,000.

A Shaughnessy property listed for $7.68 million in April 2016 sold $3.45 million – less than half the asking value and 22.6% below assessment.

In Richmond, all but two out of the 24 properties sold in the last 30 days sold below assessment, with the median sale being 13% below assessed...

https://openhousing.ca/2019/08/20/metro-vancouver-detached-prices-showing-sharp-declines-in-august/

Yes, sales in July 2018 were down, to similar levels seen in 2010 and 2011, so saying that they were higher in 2019 than a year earlier is hardly indicating a 'recovery'. That said, July 2019 was the first month this year where there were more sales in 2019 than in 2018, although still well below the 10 year average.

Properties should be expected to sell for less than assessed value - those were set in July 2018 when the condo market was at its peak. Detached house prices had already fallen a bit when the values were set, but they've fallen a lot more since then - 10.5% according to the REBGV news release.

The new assessed values for properties, when they are issued at the end of the year, should be based on the July 2019 values, so it's reasonable to expect that on average they'll see around a 10% reduction for detached houses across the Lower Mainland, although the actual change will depend on the market in the specific location of the homes. You can already hear the cries of 'unfair' when owners find their house values have dropped by 10%, and their property taxes go up by 4% (or whatever they go up by).

[rofina]

Originally Posted by whatnext

I'd be interested to see where that "strength" is. Houses I see in Vancouver/Richmond/Burnaby are still for sale after months of sitting on the market.

Condos in areas I keep tabs on seem to be finding price resistance at $1.1 million+ for your standard two bed. Inventory hasn't really dipped as you would expect in August.

Perhaps areas where local wages can actually still purchase ahome, like Maple Ridge, Surrey, Langley are doing better.

So far something like 20% above August 2018. Average price for condo also up, due to sales mix changing for more expensive units selling.

Listing will close the month down.
MOI will be down getting close to Sellers market.
Sales will be up.

Unless things change from here, which is entirely possible.

July was abnormal seasonally speaking, and August is also trending to be same.

2 months don't make a trend, but this is certainly a break from the relentless down trend we have been seeing for nearly 2 years.

To be clear - I'm not saying its all over and were off to another V-shape recovery, but I do think bears are underestimating the effect high rent is having, combined with lower rates and lower prices over last year and a half.

[Vin]

Prices have found the bottom?

https://biv.com/audio/2019/08/greater-vancouver-real-estate-we-found-bottom-biv-today-no-319

[rofina]

Originally Posted by Vin

Prices have found the bottom?

https://biv.com/audio/2019/08/greater-vancouver-real-estate-we-found-bottom-biv-today-no-319

July and August are definitely proving to be outliers to the upside.

Market has been beaten down for nearly 2 years, prices are down, rates are down, and sellers are willing to negotiate. Add to this the mental increases in cost to rent, and buyers are feeling the pressure to purchase, while investors are seeing some cash flow opportunities.

There are good units selling for sub $500k, that rent out for over $2000. That's better cashflow then we have seen in sometime.

I don't think this will be a V shape recovery - this ain't no 2009.

[Migrant_Coconut]

Yeah, anybody predicting a resurgence any time in the near future should generally be ignored - especially if that anybody is "vice-president of development at Cressey Development Group." Of course he's going to act like the market is about to boom.

[misher]

Originally Posted by Migrant_Coconut

Yeah, anybody predicting a resurgence any time in the near future should generally be ignored - especially if that anybody is "vice-president of development at Cressey Development Group." Of course he's going to act like the market is about to boom.

There's been a resurgence across Canada along with lower interest rates and an increase in interest from Canadian Hong Kong residents. This has been coupled with a decrease in development, an increase in employment along with investment in BC, and an increase in rents. We also have the wild card, the foreign buyer tax case whose judgement is still not out. With the past two months seeing a large increase in sales you can expect to see a resurgence over the next few months although it may not reach the heights it did previous. Unless something happens a resurgence makes sense.

[Migrant_Coconut]

Originally Posted by misher

There's been a resurgence across Canada along with lower interest rates and an increase in interest from Canadian Hong Kong residents. This has been coupled with a decrease in development, an increase in employment along with investment in BC, and an increase in rents. We also have the wild card, the foreign buyer tax case whose judgement is still not out. With the past two months seeing a large increase in sales you can expect to see a resurgence over the next few months although it may not reach the heights it did previous. Unless something happens a resurgence makes sense.

The general trend is downward, regardless of random peaks and valleys; two months isn't enough to talk about resurgences. At best, those factors mean it'll level out sometime in the future and stay there.

[whatnext]

The problem is there are way too many listings that make no sense when you take into account local incomes. Case in point:

[IMG]broadmoor by whatnextyvr, on Flickr[/IMG]

Credit: rew.ca
Listing: https://www.rew.ca/properties/R2376357/7...c&search_type=property_browse&sort=price

Who is going to pay $6 million to live in the centre of flat as a pancake Richmond? That kind of money will get you view or waterfront in countless other municipalities. And the problem is ther are tonnes of houses and condos that were tailored to that market that isn't coming back anytime real soon. And because we wasted land and resources building those, we don't have enough of the product real buyers actually want, and we drove up land prices to make delivery of that product nigh impossible.

PS what's with the tombstone address trend? Creepy.

[misher]

Originally Posted by whatnext

The problem is there are way too many listings that make no sense when you take into account local incomes. Case in point:

[IMG]broadmoor by whatnextyvr, on Flickr[/IMG]

Credit: rew.ca
Listing: https://www.rew.ca/properties/R2376357/7...c&search_type=property_browse&sort=price

Who is going to pay $6 million to live in the centre of flat as a pancake Richmond? That kind of money will get you view or waterfront in countless other municipalities. And the problem is ther are tonnes of houses and condos that were tailored to that market that isn't coming back anytime real soon. And because we wasted land and resources building those, we don't have enough of the product real buyers actually want, and we drove up land prices to make delivery of that product nigh impossible.

PS what's with the tombstone address trend? Creepy.

There are homes in Richmond that have sold for 8+. West Richmond has some large lots along Gibbons and scenic lots along River Rd. Also some large lots in East Richmond.

As I do live in Richmond I would say about half the people in these houses are Chinese or Indian and the other half are white. No idea how the firefighter or bike store owner bought theirs. The tech company owner is obviously capable. Many also have just held on as prices went up.

[WarrenC12]

I think we could see some movement Canada-wide if the Bank lowers rates 0.25 or 0.5 before the end of the year. Not enough to change the downward momentum in Vancouver, I'm just thinking about other places.

I think Vancouver will be flat through the end of 2020.

[whatnext]

Originally Posted by WarrenC12

I think we could see some movement Canada-wide if the Bank lowers rates 0.25 or 0.5 before the end of the year. Not enough to change the downward momentum in Vancouver, I'm just thinking about other places.

I think Vancouver will be flat through the end of 2020.

And that assumes no recession.

It's clear the west has fallen into the Japan Trap. Ultra low rates do no good. Trump is a fool for pushing the idea, the recession will all be his doing.

[Vin]

Originally Posted by rofina

July and August are definitely proving to be outliers to the upside.

Market has been beaten down for nearly 2 years, prices are down, rates are down, and sellers are willing to negotiate. Add to this the mental increases in cost to rent, and buyers are feeling the pressure to purchase, while investors are seeing some cash flow opportunities.

There are good units selling for sub $500k, that rent out for over $2000. That's better cashflow then we have seen in sometime.

I don't think this will be a V shape recovery - this ain't no 2009.

Nope, definitely not 2009, but flattening out is good, meaning that prices will not crash.

[Vin]

Originally Posted by Migrant_Coconut

Yeah, anybody predicting a resurgence any time in the near future should generally be ignored - especially if that anybody is "vice-president of development at Cressey Development Group." Of course he's going to act like the market is about to boom.

Did you actually listen to him speak? He is actually very objective, and not biased at all in what he was saying. He even said that the high-end market is depressed as there is no urgency for anyone to buy as the "foreign money tap had been turned off".

[SpongeG]

Metro Vancouver retail sales down; flat housing market, money laundering to blame, expert says

BY KAREEM GOUDA AND MIKE LLOYD
Posted Aug 26, 2019

METRO VANCOUVER (NEWS 1130) – It looks like people in Metro Vancouver are holding onto their cash a little more these days.

Statistics Canada suggests the regional retail market has declined, and largely attributes that decrease to a flat housing market, combined with money laundering.

Data shows people are buying less, compared to the same time last year.

David Ian Gray, a retail specialist with DIG360, says when people aren’t buying houses, they’re also not spending money on things that go in them.

“When there’s home sales, there’s a lot of ancillary spending on retail, both in terms of renovations and building supplies, landscaping, that sort of thing,” he explains. “But also, remodeling and interior designs — the home furnishings and furniture.”

Additionally, the crackdown on money laundering in B.C. casinos has people on the lookout for shady transactions, which are also felt in the luxury automotive market, he adds.

...

https://www.citynews1130.com/2019/08/26/metro-vancouver-retail-sales-down/

[Sheba]

Originally Posted by SpongeG

Metro Vancouver retail sales down; flat housing market, money laundering to blame, expert says

...and in breaking news, sun hot.

[misher]

Originally Posted by Sheba

...and in breaking news, sun hot.

Its crazy how interrelated things are. Reduced housing sales are going to hit a lot of industries.