Vancouver, Canada Real Estate
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I know Nicole has been talking about the crash of the Vancouver Real Estate Market, but it just seems feels no big crashes are ever going to make there way here lately. However, I think we are just lulled into a false sense of security. What does everyone think the Real Estate is likely to do in the next 8 months? Will the economy of Canada somehow weather through all the turmoil?
Any thoughts would be greatly appreciated.
I don’t see any signs of it levelling (but it’s hard to tell that a bubble is bursting until it happens.) On my block, just a single average street on the desirable west side of town, but not the swanky part out by UBC, there were FOUR houses demolished in ONE MONTH to make way for new homes. Three of the houses were occupied (the fourth was a crappy old wooden structure) but their fatal crime was that they were too small. That’s a death sentence in Vanbubbleouver. Two homes are almost built, the third is going up rapidly, and a steam shovel is now sitting next to the pit where the fourth one stood.
Plus, two homes have also sold in the same period. I expect they will be razed. And two places within eyesight of our house have put in “laneway houses.” (Little places fronting the alley, behind existing houses.) All this on one block!
The early indicator for whether the bubble is bursting will be a decrease in the volume of houses sold. I’m not in the industry, so I can’t attest to that. I skim the real estate propaganda that I see in the Courier (a free paper) and it looks like sales volume was down last year, but it’s picking up again. So the mania remains strong.
Hi Bukko! Glad to see that you made the transition to this new blog.
I follow
https://vreaa.wordpress.com/Vancouver Real Estate Anecdote Archive
Stories From The Boom & BustTo try to get a balanced picture.
Anacdotely, I’m observing that the number of house that require maintenance, like paint, seems to be increasing.
To me that is a sign that people’s budgets are strained.I also keep an eye on what is for sale at
I read this weekend that the real estate in Shanghai is currently equally valued to that of the entire USA. Reminds me exactly of 1989 Tokyo, and we saw what happened there – a deflationary collapse lasting over two decades and bank zombification. I don’t think China will have a hard landing; I think it will have a crash landing, and damn soon. When China goes, Canada will go as the demand on natural resources will plummet. Consumers in Canada are totally tapped out debt wise. Same deal in Oz. I understand that most new mortgages are now for 40 years. Reminds me of Japan before the crash when the first born son had to come in and cosign the mortgage.
The one thing that may “save” the Canadian economy for a while is the upcoming Iranian war which could boost crude and NG revenues immensely as crude goes for a moonshot. Depends on how long the Straits are closed and whether Iran can destroy the oil infrastructure of the other countries like the Emirates and Saudis.
El G, I’m not sure which country you’re talking about with the 40-year mortgages, but Canada has had the sense to clamp down on those. Most of the mortgages I’ve seen advertised here are for terms of 5 years or less before you have to re-fi at whatever the existing interest rates are. I wonder how the interest vs. principal ratio works on loans that amortize in 30 vs. 40 years? In a standard American 30-year home loan, people spend the first half paying almost nothing but vigorish, and not knocking anything off the cost of the home. When someone has a 5-year loan with even a 30-year amortization, does the percentage for principal paydown change over the course of the loan?
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