When do you think the Vancouver housing bubble will explode and come crashing down ?

[Realtor Rod]

24 minutes ago, Warhippy said:

http://www.msn.com/en-ca/money/homeandproperty/incomeless-students-spent-dollar57-million-on-vancouver-homes-in-past-two-years/ar-BBwbsbP?li=AAggFp5

 

Nine students with no apparent source of income bought $57-million worth of single-family homes in Vancouver’s tony Point Grey neighbourhood over the past two years, according to records compiled by British Columbia’s Opposition New Democrats.

The NDP said the purchases are more evidence that authorities have let the region’s housing market overheat beyond the reach of most locals.

 

The properties include a $31-million mansion that Canaccord Genuity founder Peter Brown sold earlier this year to a buyer whose occupation was listed on the title document as “student.”

Four of the sales to student buyers were covered by mortgages from three major banks – a fact that underscores how Canada’s banks are inflating the region’s housing market, said NDP housing critic David Eby, who provided data from his provincial riding.

RELATED: Vancouver’s vacancy tax will rely on owners to declare if homes are empty

 

“How did the students qualify for mortgages? Where did that money come from?” Mr. Eby said at a news conference on Wednesday at which he handed out photos of the homes that included the address and the purchase price.

He said this very small sample size of data he has collected offers a snapshot of problems that are likely plaguing the region’s wider housing supply.

 

“If this work were expanded or done in a systematic way by an academic – or a provincial government – it could raise serious questions about the implications of this bank policy of lending to people with no apparent source of income across Metro Vancouver.”

 

Mr. Eby said he obtained the title documents of the nine homes after reading about a Globe and Mail investigation that found Canadian banks allow foreign clients with no credit history, including students, to qualify for uninsured mortgages without verifying the sources of their income. The practice exempts non-Canadians who have money in the bank from the scrutiny domestic borrowers face when buying a home or an investment property.

BMO, CIBC and HSBC provided mortgages to the four students, Mr. Eby said.

 

Late last year, Mr. Eby and Andy Yan, acting director of Simon Fraser University’s City Program, released an analysis of 172 transactions in three expensive Vancouver neighbourhoods during a six-month period ending last year. That study – which ignited controversy for screening buyers for non-anglicized Chinese names – showed almost a third of all occupations listed on titles held by a single owner was homemaker, followed by business people at 18 per cent and students at 6 per cent.

More on MSN Money about Vancouver real estate: Cooling Vancouver home sales cramp average price

Mr. Eby said he had no way of knowing if the nine students whose real estate data he released were foreign speculators because citizenship is not included on land-title documents. But he said The Globe’s investigation “explained the rapid inflation in real estate values over the last two years, where people have functionally accessed almost unlimited capital as long as they have a down payment.”

 

The federal regulator of financial institutions warned the banks this summer that income verification is lacking for non-Canadian clients and urged them to be more thorough.

Jean-Yves Duclos, the federal minister responsible for housing, said on Wednesday that his government is reviewing this and other issues brought up in another Globe investigation on allegations that speculators avoided taxes in Metro Vancouver’s real estate market.

 

“We are clearly concerned by the fact that there may be ways in which Canadians are not being treated equally in having access to the housing market,” Mr. Duclos told reporters in Vancouver.

Mr. Eby said the provincial Liberal government should immediately review all residential transactions across Metro Vancouver over the past two years to identify how widespread these mortgages are and give qualified academics access to land-title and foreign-buyer data so they can identify trends.

B.C. Finance Minister Mike de Jong was unavailable on Wednesday, but an open-data project on foreign investment in local real estate will be released this fall, his spokesman said in an e-mailed statement.

 

He added that the Conference Board of Canada is expected to complete another taxpayer-funded study of Metro Vancouver’s superheated market before the end of the year.

The spokesman said the province’s financial-services regulator is focusing heavily on ensuring that B.C.’s credit unions are verifying that mortgage recipients have enough income to repay their loans. Still, he said, these credit unions “are not significantly involved in foreign buyer financing programs.”

That is absurd. That is a CRA issue fir sure.

[taxi]

1 hour ago, Realtor Rod said:

Where are you getting the 'they cant afford it' data? If sales were only down 26% from the record August, who is buying those homes? 

 

To your second point, isnt that speculating? Shouldn't the Asian money be selling and pulling out? I wouldnt want to risk my money in a terrible crash. 

 

The reality. Nothing has changed. August was slower than the record august last year. We've gone back to a balanced market and there is more product coming on. None of my buyers are waiting. I haven't heard one of them say it. I am busy again today. 

 

 

Sales on detached homes fell dramatically after steps were taken to keep foreigners out. That suggests it wasn't locals buying.

 

You can also go on and on about how it's just a small dip from record numbers last year. However the actual figures show a large drop in sales. 

 

Prices are also already down. Speculators in the market can't simply just pull the money out. They need buyers. Properties are staying on the market longer, and we're seeing price reductions.

 

 

Edit: also sales are down 30% year over year in actual value, which is big. Especially once you rate it to a per capita basis.

[Warhippy]

48 minutes ago, Realtor Rod said:

That is absurd. That is a CRA issue fir sure.

Do agents or do agents not have a fiducial duty to report potential issues like this to CRA?

 

It is a municipal, provincial and federal issue for sure.  but it is also a regulatory issue.

 

Students buying literally tens of millions in homes and no agent speaks up at all?  Reports of smiling agents taking hundreds of thousands or millions in cash payments for home purchases and nobody speaks up?

 

It's across the board in terms of failure honestly.

[MaxVerstappen33]

2 hours ago, Realtor Rod said:

If the market has collapsed and prices are crashing why isnt everyone buying? Seems like a perfect time to buy if prices are so low and the bubble has popped. 

Condos sales went up 196% in Augusr in my area. No one wants to talk about it though. They want to talk about the uber rich neighbourhoods that no one can afford in that has cooled off.

The market is just starting to crash. Look at the first page of the thread where i posted the charts of all the other bubble crashes. They take time. There is always a 30% bounce too.

[Realtor Rod]

56 minutes ago, LolClarkson said:

The market is just starting to crash. Look at the first page of the thread where i posted the charts of all the other bubble crashes. They take time. There is always a 30% bounce too.

I have enough graphs that would make your head spin. The market was cooling before any announcement of any tax. What would the reason be for that? 

 

There may be an adjustment, but that was already happening. It may adjust for 6 months and then we are in the new year and things will pick up again. 

 

BC real estate sales went up 1.5% in August. No mention of that? All the foreign buyers are running elsewhere? 

 

You guys keep towing the medias line. The rest of us, who are in the business, will carry on as it is business as usual. If prices go down, great. If they don't, i will be curious to hear what our competent liberal government blames it on next.

[Realtor Rod]

1 hour ago, Warhippy said:

Do agents or do agents not have a fiducial duty to report potential issues like this to CRA?

 

It is a municipal, provincial and federal issue for sure.  but it is also a regulatory issue.

 

Students buying literally tens of millions in homes and no agent speaks up at all?  Reports of smiling agents taking hundreds of thousands or millions in cash payments for home purchases and nobody speaks up?

 

It's across the board in terms of failure honestly.

We do for sure. We fill out FINTRAC docs and while we are asking them what their job is and who their employer is, if we hear something 'suspect' we are to report it. Unfortunately, the poor realtors dont report. 

[Warhippy]

1 hour ago, Realtor Rod said:

We do for sure. We fill out FINTRAC docs and while we are asking them what their job is and who their employer is, if we hear something 'suspect' we are to report it. Unfortunately, the poor realtors dont report. 

But with Fintrac reporting over 60% of all agencies across the country having moderate to severe infraction in that regard doesn't that pose a serious problem?

 

over 60% of the over 800 agencies in the country they visited.  That's a huge number of "poor realtors" as you put it

[taxi]

56 minutes ago, Realtor Rod said:

I have enough graphs that would make your head spin. The market was cooling before any announcement of any tax. What would the reason be for that? 

 

There may be an adjustment, but that was already happening. It may adjust for 6 months and then we are in the new year and things will pick up again. 

 

BC real estate sales went up 1.5% in August. No mention of that? All the foreign buyers are running elsewhere? 

 

You guys keep towing the medias line. The rest of us, who are in the business, will carry on as it is business as usual. If prices go down, great. If they don't, i will be curious to hear what our competent liberal government blames it on next.

The cooldown started before the tax because:

 

1. Prices were already out of reach; and

2. China had already put in place stricter regulations on exporting money. Hence the cooldown in markets like Hong Kong, London, and San Francisco.

 

Also what is that 1.5% increase relative too? July 2016? If so, that's not indicative of anything. 

 

The fact of the matter is the market is definitely shaky at best right now. Your assertions that everything is normal aren't giving anyone much confidence.

 

 

[taxi]

41 minutes ago, Warhippy said:

But with Fintrac reporting over 60% of all agencies across the country having moderate to severe infraction in that regard doesn't that pose a serious problem?

 

over 60% of the over 800 agencies in the country they visited.  That's a huge number of "poor realtors" as you put it

IMO a major issue is how easy it is to become a licensed agent. A few courses and you get a license which allows you to manage someone's life savings. It doesn't help that the real estate board lets so many realtors off with slaps on the wrist following major infractions. 

[Warhippy]

5 minutes ago, taxi said:

IMO a major issue is how easy it is to become a licensed agent. A few courses and you get a license which allows you to manage someone's life savings. It doesn't help that the real estate board lets so many realtors off with slaps on the wrist following major infractions. 

I think serious regulation is needed for the real estate industry coupled with a massive overhaul of standards and practices.

 

And I think the amount of crying by saying so will be delightful 

[Realtor Rod]

2 hours ago, Warhippy said:

I think serious regulation is needed for the real estate industry coupled with a massive overhaul of standards and practices.

 

And I think the amount of crying by saying so will be delightful 

I am all for more regulation. Government regulation though, good luck with that. 

[Realtor Rod]

2 hours ago, taxi said:

The cooldown started before the tax because:

 

1. Prices were already out of reach; and

2. China had already put in place stricter regulations on exporting money. Hence the cooldown in markets like Hong Kong, London, and San Francisco.

 

Also what is that 1.5% increase relative too? July 2016? If so, that's not indicative of anything. 

 

The fact of the matter is the market is definitely shaky at best right now. Your assertions that everything is normal aren't giving anyone much confidence.

 

 

The cool down started because it happens every year in June.

 

China money is already here, they arent bringing in money. Its here in the Trillions.

 

August to August is the 1.5% rise.

 

Its not my job to provide confidence. I get that you want to see a price correction, i do to, but they arent doing anything to truly affect the price  (raise rates, force sales of vacant homes etc.)

[MaxVerstappen33]

6 hours ago, Realtor Rod said:

I have enough graphs that would make your head spin. The market was cooling before any announcement of any tax. What would the reason be for that? 

 

There may be an adjustment, but that was already happening. It may adjust for 6 months and then we are in the new year and things will pick up again. 

 

BC real estate sales went up 1.5% in August. No mention of that? All the foreign buyers are running elsewhere? 

 

You guys keep towing the medias line. The rest of us, who are in the business, will carry on as it is business as usual. If prices go down, great. If they don't, i will be curious to hear what our competent liberal government blames it on next.

Quote

. The market was cooling before any announcement of any tax. What would the reason be for that? 

I stated before and after the tax that the tax was more of a contrary indicator and had little to do with the action in the market. The reason is, the Vancouver housing market has been 8 years late for a correction. Markets that don't correct turn into bubbles. And bubbles don't correct. They crash.

Quote

BC real estate sales went up 1.5% in August. No mention of that?

The trend is changing. Crashes always go down in legs. We are one leg down. It will go up to sidways then up a bit. Then another leg down. As reality sets in

 

Quote

You guys keep towing the medias line.

what ? The media has been on the sell side this whole time. The media always plays along with the sell side in these bubbles. You are towing the media line

[taxi]

4 hours ago, Realtor Rod said:

The cool down started because it happens every year in June.

 

China money is already here, they arent bringing in money. Its here in the Trillions.

 

August to August is the 1.5% rise.

 

Its not my job to provide confidence. I get that you want to see a price correction, i do to, but they arent doing anything to truly baffect the price  (raise rates, force sales of vacant homes etc.)

 

BC prices are up 1.5% year over year. That's natural though and more or less in line with inflation, which signifies a flat market overall in BC. Also keep in mind those figures include the madness that occurred from January to April. The Vancouver market is still correcting from that. So to say things are flat year over year is misleading and ignores the details. 

 

What actually happened was that prices rose about 30% in the GVRD between August of last year and April of this year. Since then prices have plummeted.

 

Perhaps that 30% rise in early 2016 was just an anomaly and prices will level out after accounting for that correction, maybe prices will even start to go back up. However, if they follow the current trend for the last 3 months or so, they will continue to fall.

 

My overall, point is that our government doesn't need to do anything to affect prices. The prices have been in the hands of foreigners and externals forces for a long time. It appears that money is gone now, both due to China putting into force stricter controls and, to a lesser extent, the new tax. Prices will fall on their own, as they are in London, Hong Kong, and San Francisco, on their own.

[Realtor Rod]

11 minutes ago, taxi said:

 

BC prices are up 1.5% year over year. That's natural though and more or less in line with inflation, which signifies a flat market overall in BC. Also keep in mind those figures include the madness that occurred from January to April. The Vancouver market is still correcting from that. So to say things are flat year over year is misleading and ignores the details. 

 

What actually happened was that prices rose about 30% in the GVRD between August of last year and April of this year. Since then prices have plummeted.

 

Perhaps that 30% rise in early 2016 was just an anomaly and prices will level out after accounting for that correction, maybe prices will even start to go back up. However, if they follow the current trend for the last 3 months or so, they will continue to fall.

 

My overall, point is that our government doesn't need to do anything to affect prices. The prices have been in the hands of foreigners and externals forces for a long time. It appears that money is gone now, both due to China putting into force stricter controls and, to a lesser extent, the new tax. Prices will fall on their own, as they are in London, Hong Kong, and San Francisco, on their own.

Again, having spoken to Chinese realtors who work with Chinese clients, their money has been here for decades. They create MICs and lend money. There isnt a lot of new money coming in. You used to be able to bring 50k in and they reduced it to 25k. None of this matters. The money is here. The guys i have spoken with said foreign buyers arent flinching at the 15%, they are waiting to see what the market does. They like it here and they like spending money here and there is LOTS of it here. We will all wait and see what happens. 

[Lancaster]

I'm not sure if it was mentioned previously.... but since the Chinese currency is still pegged to the USD, the Chinese buyers have been getting like a 30% discount when buying Canadian properties these last couple of years. 

[Alflives]

57 minutes ago, taxi said:

 

BC prices are up 1.5% year over year. That's natural though and more or less in line with inflation, which signifies a flat market overall in BC. Also keep in mind those figures include the madness that occurred from January to April. The Vancouver market is still correcting from that. So to say things are flat year over year is misleading and ignores the details. 

 

What actually happened was that prices rose about 30% in the GVRD between August of last year and April of this year. Since then prices have plummeted.

 

Perhaps that 30% rise in early 2016 was just an anomaly and prices will level out after accounting for that correction, maybe prices will even start to go back up. However, if they follow the current trend for the last 3 months or so, they will continue to fall.

 

My overall, point is that our government doesn't need to do anything to affect prices. The prices have been in the hands of foreigners and externals forces for a long time. It appears that money is gone now, both due to China putting into force stricter controls and, to a lesser extent, the new tax. Prices will fall on their own, as they are in London, Hong Kong, and San Francisco, on their own.

Damn it.  Are you saying the house I bought years ago for 29,000, and last year was worth 3 million, is now only worth 2.7 million?  Son of a b@&%h.  Now I'm upset with all this stuff.  

[MaxVerstappen33]

19 minutes ago, Alflives said:

Damn it.  Are you saying the house I bought years ago for 29,000, and last year was worth 3 million, is now only worth 2.7 million?  Son of a b@&%h.  Now I'm upset with all this stuff.  

I am trying to find the simplest explanation but learn something about bank leverage to equity ratios. When prices rise for 8 years, banks "assets" keep rising. Which means they have more "equity" to lend against. So they extend more credit. Which makes prices rise more and so on. This is how we get to crazy house prices. It all works great while prices are rising. But when they fall 17% in one month, the leverage works in reverse. A 10% fall in price could easily drown a bank. And they did in the US and they will here.

 

I said at the start of the thread that Canadian banks will be in trouble before this is over. I am sticking to it.

 

and for the record, Canadian banks got a back door bailout in 2008

[mpt]

12 hours ago, LolClarkson said:

The market is just starting to crash. Look at the first page of the thread where i posted the charts of all the other bubble crashes. They take time. There is always a 30% bounce too.

The bank of Canada came out early this week and said likely a 10% correction, that's not a crash, that's a correction.  As long as people want to live in Vancouver prices will remain high.  10% is nothing, no way 30% occurs.

[MaxVerstappen33]

2 minutes ago, mpt said:

The bank of Canada came out early this week and said likely a 10% correction, that's not a crash, that's a correction.  As long as people want to live in Vancouver prices will remain high.  10% is nothing, no way 30% occurs.

Well prices are down 17% already.

 

I know prices will go down over 30%. Its virtually guaranteed.