Real Estate Talks

In the longer run, prices are determined by supply availability versus demographic demand. Vancouver RE has been in a big bull trend because of the difficulty of increasing supply.

In the short run, prices are determined by psychological factors. Speculators and investors have piled in when they perceived that Christy Clark's government was friendly to investors. There was zero risk to buyers.

Now that fat Christy has done a complete U-turn, the psychological mood has made a 360 reversal. In fact, expect hawkish policies up to the provincial elections next May. Both the Liberals and NDP will be competing to be the people's champion.

There could be legal challenges to the 15% transfer tax, But, this takes time to resolve. Adding to uncertainly for the next two years.

I would expect potential buyers to wait and see, pending the CoV's vacancy policies. What about the potential sellers? Can they wait? Will they panic if the NDP looks strong?

Here's advice for long term home owners. Stay cool and get on with your life. The long term trend is in your favor. After all, a 20% drop merely reverses the gains of the last year.

What about the speculators and flippers? Can they wait it out? What about the foreign investors who have acquired land and vacant properties? The message is loud and clear. Foreigner money not welcome!

Agree with you post 100%

1. Long term, this is not a big deal. If you have weather the storm for the next 6 months your will be fine.

2. A lot of uncertainty and some people will panic. People that are over leveraged will sell quick.

I remember in 2008 when the USA had the financial meltdown many people sold their homes for cheap. I remember in the metrotown area homes where selling for 550k. (50 x125 lots) These homes were liveable. By 2009, approx. 8 to 14 months later, these same homes sold for 750k. Now these properties sell for north of 1.8 million. If we do see a correction of 25 % your still really far ahead.

For regardless of lengths, Vancouver has so much new zoning is not even funny. Its all the domestic, foreign, and people with passports tnat buy properties and stay and leave.

Can Re drop 30% or more?

Certainly can happen if a combination of policies bite at the same time that economic/political crisis hit.

We know that all levels of Canadian governments are acting. Ottawa is targeting tax evaders, money laundering and immigration fraud. Victoria has passed vacancy legislature and added a large transaction tax. City Hall is targeting vacancies.

Meanwhile, China has cooled significantly, and will remain so. Add in the protracted program against corruption. Wealth creation will be modest compared to the past. Meanwhile, confrontation looms in the South China Sea.t

Another global factor is the anti-foreign backlash. You saw it in Britain. It's happening in Vancouver. It's made its influence felt in the States.

Bernie and Donald don't need to be elected. They have changed the political landscape. Both party platforms are going after the big banks. TPP is crippled and dying. NAFTA may be 're-negotiated'. The question is how much momentum is left in the anti-free trade movement?

“QuickTake Q&A: Why Global Trade Is Central to Clinton-Trump Race“

http://www.bloomberg.com/politics/artic ... trump-race


“Clinton backers look to close ranks on trade

PHILADELPHIA — Hillary Clinton is going to put new trade initiatives, including the maligned Trans-Pacific Partnership, in the rear-view mirror if elected and instead focus on “things that are clear job creators," a top economic adviser to the Clinton campaign said Monday...”

http://www.politico.com/story/2016/07/h ... 1?lo=ap_d2



Regardless of who wins, the outcome is likely to be negative for the Asian stock markets. For the Americas too...

“Trump or Clinton means 'downside' for equities: HSBC”

http://www.cnbc.com/2016/07/25/trump-or ... -hsbc.html

Besides some lumber what the Americans do doesn't matter that much at all. Where it matters, BC recently cut the required dollar amount of investment to immigrate to BC in half, and there isn't minimum floor level for language ability either. So much money will be created compared to history it isnt even funny.

Haha
Wouldnt that be funny if the BC Liberal party raised the # of investor immigrants to offset the loss of foreign buyers?
I would not discount something shifty like this from this government.

remember last year that lady that said she was jealous that she didnt have 1 million or something like that - lol. no sign of her now!

remember last year that lady that said she was jealous that she didnt have 1 million or something like that - lol. no sign of her now!

I hope one day you reflect on the things you choose to write.

also there was that spinster that said vancouver needs us too with that amusing hashtag lol. as if there's a shortage of people.

The govt will step back in after the market corrects 30%

It won't drop 20 or 30.... it will drop 60% or wont drop at all. 20% - 30% does not bring normalcy back to this market.

Agree with you post 100%

1. Long term, this is not a big deal. If you have weather the storm for the next 6 months your will be fine.

2. A lot of uncertainty and some people will panic. People that are over leveraged will sell quick.

I remember in 2008 when the USA had the financial meltdown many people sold their homes for cheap. I remember in the metrotown area homes where selling for 550k. (50 x125 lots) These homes were liveable. By 2009, approx. 8 to 14 months later, these same homes sold for 750k. Now these properties sell for north of 1.8 million. If we do see a correction of 25 % your still really far ahead.

The US didn't tank because people "sold their homes for cheap". It tanked because people stopped paying their mortgages and eventually walked away from homes they were upside down on. The banks sold them for market value - the flood of properties selling for whatever the market would bear compounded the downward pressure on prices.

Nice cherry picking: sure, you are far ahead if you bought 8 years ago and have to endure a 25% drop. But what if you put 25% down on a $2million home now and it drops 25%? You would just lose half a million dollars and still be stuck with a $1.5million dollar mortgage.

Who use to say that prices don't always go down?

It won't drop 20 or 30.... it will drop 60% or wont drop at all. 20% - 30% does not bring normalcy back to this market.

If it does drop, it will drop 5%, then 10%, then 15%, then 20%, etc. until it finally fits a bottom.

As far as normalcy: I don't think we'll ever see that again in the Vancouver market.

the americans pay a lot more taxes on homes than people in vancouver too

It won't drop 20 or 30.... it will drop 60% or wont drop at all. 20% - 30% does not bring normalcy back to this market.

10 to 15% = 90%
30% = 40%
50% = 5 %
60% = not a fucking hope in hell