Real Estate Talks

Austin, the graph you are showing hides what may turn out to be ephemeral duration effects. That is turning out to be the case in the US and, now, other first world markets (not Canada's per se). I agree that negative rates can cause price distortions but I'm not wise enough to state this effect is necessarily permanent. A few smart people have told me it's not and while I cannot attribute a 100% certainty to a crash I would not be doing my DD by not taking it under active consideration.

Or stated another way, looking at even, say, 30 years of trend may not be long enough to capture the most probable range for asset price movements. That was certainly the case with Japan, my favourite whipping post. You may be right and Vancouver (and Sydney NSW) are "different", but it's not something into which I for one would devote any additional positions.

The closest graph I could find to the one you posted is on page 5. It differs in that it has one less series, the series are labelled and it goes to '12 instead of ending at '09.

Van12.png

To me it clearly shows two things. First, compared to other major Canadian cities Vancouver RE is unaffordable (something I doubt anyone is ignorant of or would disagree with). Second, it shows affordability hovering around 60% for almost two decades '88 - '06 before jumping to hover around 80% from '08 to present. This was not at all clear in the chart you posted.

Good chart. Thanks.

Condos don't look very overpriced because there is a strong supply of new condo. Detached prices have risen a lot because SFH are actually declining. The rental yield doesn't matter for SFH because the proportion is small compared to the rental market for condo.

Listen to the wisdom of the market. Buy the scarce because it will get more expensive.

Condos don't look very overpriced because there is a strong supply of new condo. Detached prices have risen a lot because SFH are actually declining.

Interesting interpretation to say the least. Both increased by about a third, SFH from 60 to 80 and condos from 30 to 40.

Condos don't look very overpriced because there is a strong supply of new condo. Detached prices have risen a lot because SFH are actually declining.

Interesting interpretation to say the least. Both increased by about a third, SFH from 60 to 80 and condos from 30 to 40.

Of course, I meant to say that the actual number of SFH is declining, not that the income ratio of SFH is declining.

The key is that Vancouver is now MORE THAN 80% LESS affordable than in the mid-1990's (90% vs. 50%), so house prices would have to fall _________% to get back to the mid-1990's levels of unaffordability (given that incomes have stagnated or are actually falling due to the current recession since 2008 AND assuming interest rates stay at current record lows) - you fill in the blank....

Canada lost 30k jobs last month. 15k jobs were lost in BC. That means 15k people could have trouble paying for their mortgage/rents. This is not good news for the bulls. There is nothing positive about RE. With recent mortgage rule changes and possible of further tightening later, there will be a buyers market for years to come. Yes total listings has dropped. But why? Because they were all expired. So this is called shadow inventory. These listings will return, and most likely at a lower price. Dont forget about all the condos that are needed to be sold from developers. They are now dropping prices and even taking offers on certain developments. When did this last happen? (2008-09) What will save the market this time?

HAM the labour force survey is just a survey. Monthly fluctuations are best taken only in observing longer trends. I wouldn't call one month of data "good news" or "bad news"

HAM the labour force survey is just a survey. Monthly fluctuations are best taken only in observing longer trends. I wouldn't call one month of data "good news" or "bad news"

Ok, agreed that very short-term (month-to-month) is not very predictive, but lets look at the longer term trend: before 2008 recession, Vancouver unemployment was in the 4.5%+/- range. It has jumped to well over 7% since then......and Vancouver hotels, restaurants and retail businesses are in the worst recession since the early 1980's....

Ok, agreed that very short-term (month-to-month) is not very predictive, but lets look at the longer term trend: before 2008 recession, Vancouver unemployment was in the 4.5%+/- range. It has jumped to well over 7% since then......and Vancouver hotels, restaurants and retail businesses are in the worst recession since the early 1980's....

Yes the underlying trend is that unemployment has been decreasing from around 7.5% since early 2011.



Housing starts have been increasing since that time, so it looks on the surface that increased construction activity is at least part of the reason for the last 18 month's fall in unemployment:



But unemployment is still elevated even with renewed construction starts, so it looks like there is something else going on.

jesse: I basically agree w/ your above post data and analysis. My point is that Vancouver unemployment today (even w/ its recent downtrend) is still way higher than prior to 2008 credit crisis and all other economic indicators for Vancouver are really bad and way worse than prior to 2008 (as I listed in my above post) all of which implies total unsustainability of current house prices (even AFTER the recent downturn in prices) - i.e. $1.0M+ SFH prices are WAY out of wack by any measure....

HAM:

Canada lost 30k jobs last month. 15k jobs were lost in BC. That means 15k people could have trouble paying for their mortgage/rents. This is not good news for the bulls. There is nothing positive about RE. With recent mortgage rule changes and possible of further tightening later, there will be a buyers market for years to come. Yes total listings has dropped. But why? Because they were all expired. So this is called shadow inventory. These listings will return, and most likely at a lower price. Dont forget about all the condos that are needed to be sold from developers. They are now dropping prices and even taking offers on certain developments. When did this last happen? (2008-09) What will save the market this time?

Famous last words.
So where is the shadow inventory that were expired listings that were to come on at lower prices???
The prices are even higher and there are no listings at the good old "lower prices" to be found.

There are many people with decent downpayments and incomes that are priced out of this market. Where's ol' all talk and no action, "YipYap Matters" or fawkin' Paul B. the realtor to the Basht'rds? If they went out and actually listed a saleable house they would be doing their part to increasing the inventory and eventually increasing their income.....hahahahaha....

yup, where is Vanpro? Told him it's Chinese, but he insisted Chinese have no money even buy a decent lunch.

i feel mean when I laugh. but I laugh.

Tapioca:

i feel mean when I laugh. but I laugh.

....go ahead and laugh to your hearts content. You had the foresight and the guts to make a move. You have every right to enjoy this. To wake up in the morning and thank your lucky stars that your family set yourselves up in 2004 against the condemnation of what seemed like most of the forum. We were all subjected to the Basht'rd mockery and had to tolerate their hubris debris and they were proven wrong. Now it's our turn. So lay it on thick and heavy.... hahahahaha!

yup, where is Vanpro? Told him it's Chinese, but he insisted Chinese have no money even buy a decent lunch.

Its become quite clear that this is the issue.

What bother me more is that government at all levels refuses to keep track of the actual numbers.

Why are we not able to have a fact based discussion, around hard numbers?