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Re: Vancouver real estate now 9.3 times incomes
Originally Posted by Lord Vader
(Post 8289259)
you don't see a correlation between what I said and what dboy said? Interest rates are the same everywhere in the country and will always be the same everywhere in the country. The GVA and GTA are hotspots for new immigrants, many of whom come with lost of cash from their home countries and intend to buy homes when they get here. Victoria and Kelowna have many retirees who have built up funds/equity to be able to purchase homes. Supply/Demand. What does the dollar have to do with real estate in GVA? The USD or the CAD? If the USD tanks, will people still come to live in the GVA from Asia and Europe? if the CAD tanks, would that not make it cheaper for people from Asia and Europe? If the USD was going to tank, wouldn't it already be well on it's way? All I am saying is that the market will react to the demand for housing. If their is less demand the housing prices will fall, increased demand and they will continue to rise. Welcome to suburbia Vancouver.
I accept immigration as a cause - but how long can it go on? Do you see Vancouver as being the Monte Carlo of Canada - home to the rich but with no real economy or industry? Re currencies - you might be interested in reading this. I consider CPI to be a politically motivated inflation measure where the basket of goods is frequently manipulated to get the correct figures to justify whatever monetary policy is in place. Personally I'd like to see inflation measured by the growth in M4 + M0; i.e. the change in how much money there is in the system. I don't have the figures for Canada, but assuming a typical western economy this value will be between 10 and 20% per year - this is a huge number. The only thing stopping that wall of cash causing hyper-inflation is the fact that nobody is spending it. When the spending eventually starts I don't want to be holding worthless paper. I realize that I'm more bearish than many, but when you think how few people are controlling this stuff you realize how precarious the system is. Especially as said people can only be trusted to look after their own interests and not yours and mine. |
Re: Vancouver real estate now 9.3 times incomes
Originally Posted by brizzle
(Post 8287833)
Oh lord. Poor you. I can think of at least 3 grow-ops closed down near our old house and there is definitely a drug type house near where we live now - The comings and goings are very suspicious and have a remarkably quick turnaround??
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Re: Vancouver real estate now 9.3 times incomes
Originally Posted by Alan2005
(Post 8289350)
I don't really understand what you are trying to say. Interest rates don't make places more or less desirable to live, they amplify the demand that already exists by turning demand into economic demand (i.e. ability to pay + want)
I am saying that interest rates will not be as large a factor in the Vancouver housing market. If 25,000 new potential home owners arrive in Vancouver this year, combined with another 25,000 next year, and the year after that, and the year after that, etc,..plus the cradles and the locals, then demand for housing is going to be high. Canada accepts more immigrants per capita than anywhere else in the world, however most immigrants tend to flock to the GTA, GVA and a smaller number to a few other large centers. Most immigrants are not spread out evenly across the country the way the Brits are. So, we have a country taking in a lot of newcomers relative to the population and those new comers tend to settle in a few places which puts even more pressure on the local housing markets. Demand drives the Vancouver housing market. There is more money on the sidelines than what may be indicated by household income. A lot of people bring a lot of cash with them, people make large down payments on homes. I accept immigration as a cause - but how long can it go on? Do you see Vancouver as being the Monte Carlo of Canada - home to the rich but with no real economy or industry? I see those in Vancouver that want to buy a home either SOL or moving further out of the city. The only way the housing market will change in Vancouver is if the demand decreases or the supply increases or a combo of both. That is unlikely to happen in Vancouver proper because as pointed out, there is no land, that is why there are so many condo's. The only way to grow is outward, which means increasing the size of suburbia. There is no other way. Re currencies - you might be interested in reading this. I consider CPI to be a politically motivated inflation measure where the basket of goods is frequently manipulated to get the correct figures to justify whatever monetary policy is in place. Personally I'd like to see inflation measured by the growth in M4 + M0; i.e. the change in how much money there is in the system. I don't have the figures for Canada, but assuming a typical western economy this value will be between 10 and 20% per year - this is a huge number. The only thing stopping that wall of cash causing hyper-inflation is the fact that nobody is spending it. When the spending eventually starts I don't want to be holding worthless paper. I realize that I'm more bearish than many, but when you think how few people are controlling this stuff you realize how precarious the system is. Especially as said people can only be trusted to look after their own interests and not yours and mine. |
Re: Vancouver real estate now 9.3 times incomes
Originally Posted by Alan2005
(Post 8289350)
II consider CPI to be a politically motivated inflation measure where the basket of goods is frequently manipulated to get the correct figures to justify whatever monetary policy is in place.
Personally I'd like to see inflation measured by the growth in M4 + M0; i.e. the change in how much money there is in the system. I don't have the figures for Canada, but assuming a typical western economy this value will be between 10 and 20% per year - this is a huge number. The only thing stopping that wall of cash causing hyper-inflation is the fact that nobody is spending it. When the spending eventually starts I don't want to be holding worthless paper. I realize that I'm more bearish than many, but when you think how few people are controlling this stuff you realize how precarious the system is. Especially as said people can only be trusted to look after their own interests and not yours and mine. I agree inflation is higher than what is reported. I've thought that for a long time. But, I also think there is demand. I would like to see the whole of Van and parts of burnaby re-zoned to townhouse/multifamily housing. We can actually fit in a lot more people...there are lots of single family neighbourhoods that take up a lot of space. Vader, what the locals do is buy single family homes with friends and family and convert them into, basically, apartments. I know quite a few people who have done this. Whether the city councils care to admit it or not, the single family home is dying in this city. I recently checked the BC assessment for our neighbourhood and it cracked me up - almost every home is listed as single family with no basement suite, however the line up of cars on the street and the number of people going in and out of entrances tells a different story. |
Re: Vancouver real estate now 9.3 times incomes
Originally Posted by Lord Vader
(Post 8291159)
I am saying that interest rates will not be as large a factor in the Vancouver housing market. If 25,000 new potential home owners arrive in Vancouver this year, combined with another 25,000 next year, and the year after that, and the year after that, etc,..plus the cradles and the locals, then demand for housing is going to be high.
Canada accepts more immigrants per capita than anywhere else in the world, however most immigrants tend to flock to the GTA, GVA and a smaller number to a few other large centers. Most immigrants are not spread out evenly across the country the way the Brits are. So, we have a country taking in a lot of newcomers relative to the population and those new comers tend to settle in a few places which puts even more pressure on the local housing markets. Demand drives the Vancouver housing market. There is more money on the sidelines than what may be indicated by household income. A lot of people bring a lot of cash with them, people make large down payments on homes. I see those in Vancouver that want to buy a home either SOL or moving further out of the city. The only way the housing market will change in Vancouver is if the demand decreases or the supply increases or a combo of both. That is unlikely to happen in Vancouver proper because as pointed out, there is no land, that is why there are so many condo's. The only way to grow is outward, which means increasing the size of suburbia. There is no other way. |
Re: Vancouver real estate now 9.3 times incomes
Originally Posted by Kiwilass
(Post 8291252)
I agree inflation is higher than what is reported. I've thought that for a long time. But, I also think there is demand. I would like to see the whole of Van and parts of burnaby re-zoned to townhouse/multifamily housing. We can actually fit in a lot more people...there are lots of single family neighbourhoods that take up a lot of space.
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Re: Vancouver real estate now 9.3 times incomes
Originally Posted by Alan2005
(Post 8291528)
I don't think Vancouver will ever be 'affordable' again; I do however think it will be more affordable than it is now at some point (I have no idea when though). Either via inflation (likely) or price decreases (unlikely).
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Re: Vancouver real estate now 9.3 times incomes
Originally Posted by Alan2005
(Post 8291469)
You aren't saying anything that hasn't been acknowledged on this thread already. Everyone understands supply and demand, and yes those 25,000 all need to live somewhere and yes if they are all cash rich people then prices will continue to go up regardless of the economy and interest rates. I would say though that I think that without interest rates at 0.25% prices would have continued to fall instead of rise last year.
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Re: Vancouver real estate now 9.3 times incomes
Originally Posted by Alan2005
(Post 8291469)
You aren't saying anything that hasn't been acknowledged on this thread already. Everyone understands supply and demand, and yes those 25,000 all need to live somewhere and yes if they are all cash rich people then prices will continue to go up regardless of the economy and interest rates. I would say though that I think that without interest rates at 0.25% prices would have continued to fall instead of rise last year.
i agree with you above in that Vancouver will never be "affordable" again. |
Re: Vancouver real estate now 9.3 times incomes
Originally Posted by Lord Vader
(Post 8291596)
I. Don't get me wrong, I agree that it sucks and that a large portion of people are falling out of the detached housing market, but those that fall out are being replaced each year. Those priced out of the Vancouver market will have to look outside of the city, into an increasing suburbia, c'est la vie.
i agree with you above in that Vancouver will never be "affordable" again. Or accept living in condos. The reality is even way out of Vancouver detached houses are too expensive for most FTBs. |
Re: Vancouver real estate now 9.3 times incomes
Originally Posted by Kiwilass
(Post 8291616)
Or accept living in condos. The reality is even way out of Vancouver detached houses are too expensive for most FTBs.
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Re: Vancouver real estate now 9.3 times incomes
Originally Posted by Lord Vader
(Post 8291596)
I know you understand demand/supply, what I mean is that demand will trump an increase in interest rates. Interest rates can have an impact in the short term, but how much of an impact would interest rates remaining where they were before the recession have had on the Vancouver property prices in 2009? Personally I don't think very much. How did the prices get inflated in the first place? Do you think that an average 5 yr fixed mortgage rate of 5.5% 3 years ago vs one of say 4% now would have made any noticeable or significant difference in real estate prices? Do you think it would have made the market "affordable"? I don't see how rates going back up a couple percent is going to make much of a difference. Not in a market like Vancouver anyway, not with a continued influx or new cash waiting to be used in the real estate market. Don't get me wrong, I agree that it sucks and that a large portion of people are falling out of the detached housing market, but those that fall out are being replaced each year. Those priced out of the Vancouver market will have to look outside of the city, into an increasing suburbia, c'est la vie.
i agree with you above in that Vancouver will never be "affordable" again. |
Re: Vancouver real estate now 9.3 times incomes
Originally Posted by Almost Canadian
(Post 8291642)
FTBs that wish to purchase a detached house are probably delusional anyway. What happened to working one's way up the property ladder?
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Re: Vancouver real estate now 9.3 times incomes
Originally Posted by Alan2005
(Post 8291679)
Prices got to where they are because the west has just seen the biggest credit bubble in recent memory - with exponential growth in the amount of credit available (including here). The recession was biting in Vancouver and prices fell for many months until the effects of low interest rates caused them to rise again. I don't think it was because immigration stopped for 9 months and then started again.
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Re: Vancouver real estate now 9.3 times incomes
Originally Posted by Lord Vader
(Post 8291886)
short term
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