Vancouver Real Estate 'Bubble' at 30-year Peak

[Vin]

80s was a better time for home ownership? Think again.....

https://www.theglobeandmail.com/real-est...from-80s-interest-rates/article24398735/

[cairnstone]

You could say the cause of retail shopping to go down is mainly based on the collapse of the grey market cannabis market. It was a cash industry that no one had a real clue on how big it really was. I know when I was involved in the retail business Robson street new what was happening by the customers. Same as Boat dealers etc. When the borders got tight they would not hit the forecast sales. when the dispensary's started opening they saw right away a change. Now they are all closed no more cannabis market so sales will go down.

The problem is you can take any number and create a stat and say this is the reason why housing is high. Blame it on money laundering, or foreign buyers.


Are economy is locally is largely based on building housing for foreign markets. The housing shortfall is a result of government policies 20 plus years ago when they choose to not zone areas of the city for rental. So the developers choose to build strata. This lead to 20 plus years of gray market housing.

Most purpose built rental is 50 plus years old. Light a match build new, as it has zero value ready for rebuild or it needs to undergo a half life upgrade like commercial builds quite often do.

[whatnext]

Who is Keyser Söze, or more tawdry tales from the real estate bubble coming to light as it pops:

A man who alleged there was a real estate conspiracy to obtain his West Vancouver home for $5 million had his claim dismissed in B.C. Supreme Court recently.

After first agreeing to sell his property at 1028 Eyremount Dr. for $5.1 million in May 2015, Wen Hsien Tsai refused to complete the deal. Claiming he’d been “stiffed,” Tsai filed a lawsuit against homebuyer Zhixiang Li and real estate agent Yi Zhang, alleging the two made a profit after working together to obtain his house at a lower price. Tsai’s lawsuit requested the purchase agreement be terminated and he be awarded damages. Two months after Tsai agreed to sell to Li, Li arranged to sell the home to a numbered company for $5.7 million with Zhang taking a $50,000 commission, which he has not yet received. The home was subsequently set to be shadow flipped for $6.3 million, according to court documents...

...Myers also wrote that, rather than the real estate agent approaching the homeowner, it was Tsai who initially approached Roderick Xie, Zhang’s caretaker. “Tsai’s counsel advanced the proposition that Xie hung around the property next door . . . waiting for Tsai to approach him,” Myers stated.

“As far-fetched as that might seem, there is more,” Myers wrote, explaining the allegation that another real estate agent had done a “sham listing” of Li’s property.

“Without using the word ‘fraud,’ Tsai has alleged what can only be construed as a fraudulent conspiracy worthy of Keyser Söze in The Usual Suspects,” Myers concluded. “There is no basis in fact or in law for his conspiracy claim.”

https://biv.com/article/2019/08/west-van-homeowner-forced-sell-conspiracy-claims-dismissed

[Migrant_Coconut]

Originally Posted by Vin

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".

Objective or not, he has absolutely no reason to preach doom and gloom even if he thinks that's how things are going; markets are based on confidence, so it's in his and his company's best interest to bring some of that confidence back. A studio executive isn't going to start making public statements about how album sales are down - not unless they're about to start blaming pirates.

Housing prices are dropping. Theywill level out eventually. Any further guesswork is exactly that, guesswork.

Originally Posted by misher

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

Luckily, there's a lot of industries that aren't tied to real estate, and that would benefit from cheaper property values and rents.

[retro_orange]

Originally Posted by Migrant_Coconut

Luckily, there's a lot of industries that aren't tied to real estate, and that would benefit from cheaper property values and rents.

Exactly. You know what's strange, we may actually see some doctors accepting new patients or not have perpetual hiring at places that don't pay enough to live here *cough* retail and service and nurses and other medical professionals *cough*

[misher]

Originally Posted by Migrant_Coconut

Luckily, there's a lot of industries that aren't tied to real estate, and that would benefit from cheaper property values and rents.

A reminder that despite propaganda Vancouver has been complaining about high prices and foreigners for around a century. Commercial lease rates are still rising fast as are residential rents, slightly cheaper property values hasn't improve affordability at all. People say things are better, but what specifically is better? The only difference I see is a slightly lower price for condos which does nothing to benefit the poor or middle class.

Unfortunately every business and many homeowners are about to be slammed by drastic increases in utilities and property taxes. Partially this is to balance the reduction in development fees which are down more than 50%.

Vancouver property taxes could rise up to 10% to cover recent council motions: staff. Garbage collection will go up by 3.1 per cent, while upgrades and maintenance of Vancouver’s sewer system will increase 11 per cent for the average household...Water services fees and rates are also proposed to go up by 9.7 per cent in 2019 for the average household, for a combined increase of 8.7 per cent for all three utility categories. FortisBC will be increasing its residential customer rate by nine per cent – an interim rate approved by the B.C. Utilities Commission.

[Vin]

Originally Posted by Migrant_Coconut

Objective or not, he has absolutely no reason to preach doom and gloom even if he thinks that's how things are going; markets are based on confidence, so it's in his and his company's best interest to bring some of that confidence back. A studio executive isn't going to start making public statements about how album sales are down - not unless they're about to start blaming pirates.

Housing prices are dropping. Theywill level out eventually. Any further guesswork is exactly that, guesswork.[/B].

He did mention about the doom and gloom of the high end property market. he also added that he would not bet on that sector improving any time soon. Of course prices are dropping, but not like what many hope for, ie. a drastic correction or crash. In fact, prices could have bottomed out for the majority of property (take away the very high end ones).

Originally Posted by Migrant_Coconut

Luckily, there's a lot of industries that aren't tied to real estate, and that would benefit from cheaper property values and rents.

Such as?

[whatnext]

Originally Posted by Vin

Such as?

Duh, every industry that isn't involved in peddling real estate. Tech, tourism, film production, education, retail etc etc.

[whatnext]

As I said, the "Who's Getting Sued" section of BIV is a great source of real estate heartbreak, or "tales from a bursting bubble":

Defendants
Yufeng Xue and Beverly Developments Ltd. and Yunbo Xu Renee Xu and Toplinks Holding Group Ltd. dba Sutton Toplinks Realty

Plaintiff
Liqian Miao

Claim
Damages for breach of fiduciary duty arising from defendants’ failure to properly advise plaintiff about the tax implications of a real estate deal.

Defendant
Onni Taylor Way Properties Ltd.

Plaintiff
Jun Chen

Claim
Rescission of a real estate contract for plaintiff’s inability to complete a sale due to her inability to purchase enough Canadian currency due to tightened capital controls in China.
(How is it ONNI's fault she couldn't spirit her money out of China?)

Defendants
Mackenzie Premium Properties Corp. and Gary K. Lo Law Corp.

Plaintiffs
Yen Kwan aka Fai Yin Kwan and Tuong Chanh Dang aka Ethan Dang and Lai Chun Yu and Panfilo Diaz Abela and Estelita Zamora Abela and Arthur Chung-Chang King aka Arthur Chung King and Chih Hao Paul King and Chain Singh Parhar and Ru Liang Qiu and Zhu Qiu and Soo Sing Wong and Peter Kin Ping Wong and Carolina Tallarico and Ravinder Singh Gill and Harbhej Singh Gill, as executors of the estate of Jagtar Singh Gill, deceased

Claim
Damages for breach of contract for defendants’ failure to forfeit deposits paid on a land assembly after backing out of the deal.
(Anyone know what land assembly this was?)

So much woe from those who though real estate was a surefire way to get rich quick. It never goes down!

[Migrant_Coconut]

Originally Posted by misher

A reminder that despite propaganda Vancouver has been complaining about high prices and foreigners for around a century. Commercial lease rates are still rising fast as are residential rents, slightly cheaper property values hasn't improve affordability at all. People say things are better, but what specifically is better? The only difference I see is a slightly lower price for condos which does nothing to benefit the poor or middle class.

As a businessperson, you'd know that economic measures take several years for their effects to be visibly seen.

Housing prices only started their exponential climb in '03 and '04 - even Expo 86 and Li Ka-shing and Yaletown didn't affect the market that much, so it's hardly been a purely "everybody wants to live here" problem thus far. With the taxes and regulations, coupled with more development, we get a slowdown. Doesn't have to work immediately, but it will definitely will work.

Originally Posted by misher

Unfortunately every business and many homeowners are about to be slammed by drastic increases in utilities and property taxes. Partially this is to balance the reduction in development fees which are down more than 50%.

Why ya gotta keep lying about this over and over again? Changing City already shut you down: the developer contributions are a surplus, and less contributions just mean less spending, NOT more taxes.

[Migrant_Coconut]

Originally Posted by Vin

He did mention about the doom and gloom of the high end property market. he also added that he would not bet on that sector improving any time soon. Of course prices are dropping, but not like what many hope for, ie. a drastic correction or crash. In fact, prices could have bottomed out for the majority of property (take away the very high end ones).

It's leveled out over the past couple of months, that is correct. Prematurely declaring a "bottom" is not.

Also, nobody aside from whatnext wants a crash.

Originally Posted by Vin

Such as?

Such as film, animation/VFX, game development, software, clean tech, medical tech, biotech, manufacturing, transportation, and services... all of which have considerable room to grow and would greatly benefit from non-exorbitant real estate prices. Real estate and development is 30% or less of Metro Vancouver's GDP, so it's completely silly to be talking about economic devastation.

[Vin]

Originally Posted by whatnext

Duh, every industry that isn't involved in peddling real estate. Tech, tourism, film production, education, retail etc etc.

Tech, tourism, film production, education, retail, etc. etc. would not have grown so much without the initial surge of foreign money coming in to invest in everything from housing to hotels, malls, city amenities (property taxes), public transportation, education, etc. etc. Stop kidding yourself by totally discounting the fact that foreign money has actually been helping to bring in a lot of other industries here.

Originally Posted by Migrant_Coconut

It's leveled out over the past couple of months, that is correct. Prematurely declaring a "bottom" is not.

Also, nobody aside from whatnext wants a crash.

Such as film, animation/VFX, game development, software, clean tech, medical tech, biotech, manufacturing, transportation, and services... all of which have considerable room to grow and would greatly benefit from non-exorbitant real estate prices. Real estate and development is 30% or less of Metro Vancouver's GDP, so it's completely silly to be talking about economic devastation.

I'm pretty sure a lot of these would not even bother to come invest here if this City remains a backwater without the initial surge of real estate development. The new money and people coming in are what power the the City forward in many ways.

[Migrant_Coconut]

Some posters seem to be confusing "investment" with "corruption." It's completely possible to have one without the other, which is the goal right now.

Originally Posted by Vin

I'm pretty sure a lot of these would not even bother to come invest here if this City remains a backwater.

Actually, manufacturing has been with us since the 19th century, and the service sector since the early 20th - when Vancouver was definitely a backwater. And the city's been popular for film crews since the Seventies; it's a very scenic location close to L.A. (also, in the same time zone), has plenty of cloudy days that make it easier to adjust shots in post-production, good tax credits, and a talent pool dating as far back as 1910.

Speaking of talent pools, having more attracts more, since employees and employers alike flock to places where they know there's plenty of jobs and business. That's where the many tech sectors are now. They too are dinged by expensive real estate; the second-highest cost for many companies is office rent. Personally, I think that being Hollywood North or Silicon Valley North is much preferable to Switzerland or the Caymans.

[WarrenC12]

Originally Posted by Vin

Tech, tourism, film production, education, retail, etc. etc. would not have grown so much without the initial surge of foreign money coming in to invest in everything from housing to hotels, malls, city amenities (property taxes), public transportation, education, etc. etc. Stop kidding yourself by totally discounting the fact that foreign money has actually been helping to bring in a lot of other industries here.

I'm pretty sure a lot of these would not even bother to come invest here if this City remains a backwater without the initial surge of real estate development. The new money and people coming in are what power the the City forward in many ways.

Good grief, were you born in 2008? This city has had those industries for a long time, throughout the ups and downs of real estate.

[GenWhy?]

Originally Posted by Vin

Tech, tourism, film production, education, retail, etc. etc. would not have grown so much without the initial surge of foreign money coming in to invest in everything from housing to hotels, malls, city amenities (property taxes), public transportation, education, etc. etc. Stop kidding yourself by totally discounting the fact that foreign money has actually been helping to bring in a lot of other industries here.

I'm pretty sure a lot of these would not even bother to come invest here if this City remains a backwater without the initial surge of real estate development. The new money and people coming in are what power the the City forward in many ways.

Land and construction costs could / largely still can not compete with many feasible proposed projects. Land assembly was becoming cost prohibitive (still kinda is) and property taxes from speculation is still dangerously high for all forms of renters (commercial, residential, industrial).

To make most of these feasible with the high land and construction costs you have to sell at very high prices or rents... which gets us to where we are. Land prices and construction need to come down, and they are. Slowly. Which helps homebuyers, renters, business owners, and industry.

[Migrant_Coconut]

Originally Posted by GenWhy?

Land and construction costs could / largely still can not compete with many feasible proposed projects. Land assembly was becoming cost prohibitive (still kinda is) and property taxes from speculation is still dangerously high for all forms of renters (commercial, residential, industrial).

To make most of these feasible with the high land and construction costs you have to sell at very high prices or rents... which gets us to where we are. Land prices and construction need to come down, and they are. Slowly. Which helps homebuyers, renters, business owners, and industry.

Correct. Unless you're in the business of ONLY buying and selling, high land value hurts everybody.

[Migrant_Coconut]

(double post, please remove)

[Migrant_Coconut]

(triple post, sorry, I don't know what happened here)

[whatnext]

Originally Posted by Vin

Tech, tourism, film production, education, retail, etc. etc. would not have grown so much without the initial surge of foreign money coming in to invest in everything from housing to hotels, malls, city amenities (property taxes), public transportation, education, etc. etc. Stop kidding yourself by totally discounting the fact that foreign money has actually been helping to bring in a lot of other industries here.



I'm pretty sure a lot of these would not even bother to come invest here if this City remains a backwater without the initial surge of real estate development. The new money and people coming in are what power the the City forward in many ways.

Bullshit. Your arrogance is astounding. No wonder so many residents have gone off foreign investors.

[misher]

Originally Posted by Migrant_Coconut

Correct. Unless you're in the business of ONLY buying and selling, high land value hurts everybody.

Not really. So many people became realtors in recent years that competition is fierce and each realtor was forced to drop commissions and put more work into selling/advertising. A license is so easy to get that along with more business being available more people joined, the rules of supply and demand apply.

What really boomed our economy and benefited everyone+the government was the # of sales. Transactions back and forth constantly create economic growth and pays huge taxes. What frightens me is not that prices have gone down slightly, its that the # of sales has gone down significantly. Hopefully the last two months are indicative of a resurgence of sales.

And btw you criticize 30% of our economy being the real estate industry or associated industries but this is pretty normal worldwide for a city with a growing population and high amounts of tourism. Just like food will be a significant portion anywhere. California has a very similar division of the economy. When houses stop getting built but our population continues to increase....thats just frightening as to the future consequences.