tag:blogger.com,1999:blog-816559531110064247.post7276995307418992015..comments2024-03-08T01:03:44.522-08:00Comments on Humble Student of the Markets: Is the secular bull market in Vancouver RE over?Cam Hui, CFAhttp://www.blogger.com/profile/09672203690656029787noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-816559531110064247.post-57408370217351060192013-03-16T11:30:18.761-07:002013-03-16T11:30:18.761-07:00I was going to say that prices in all provinces do...I was going to say that prices in all provinces doubled or tripled, but rp1 beat me to it. Did hot foreign money drive up prices in Saskatoon, Winnipeg and Toronto too? Isn't it far more plausible that the same cheap & easy credit made available everywhere in Canada is what caused the housing boom? The same cheap & easy credit that fueled the US, Europe, Australia housing bubbles?<br /><br />Cause: Reckless lending (which at our peak insanity was: 40-year ams, 0% down at record low interest rates). <br />Effect: Record housing prices, debt/income ratios, % GDP from RE. <br /><br />If you're itching to plot something alongside housing prices to show correlation, try Canadian household debt instead of China's GDP.crashcowhttp://alphahunt.canoreply@blogger.comtag:blogger.com,1999:blog-816559531110064247.post-66722886056453586252013-03-16T09:10:01.448-07:002013-03-16T09:10:01.448-07:00Cam - I think you are right AND the commenter abov...Cam - I think you are right AND the commenter above is right.<br /><br />The stupid actions of the Bank of Canada and the Doubling of the CMHC lending capacity led to a trans-Canada RE boom, which included Winnipeg and Saskatoon which have limited overseas interest.<br /><br />The result is bumper bank profits courtesy of tax-payer insured mortgages and zero return to savers and of course a RE boom.<br /><br />However in Vancouver (and Toronto) there was the added kicker of Mainland Chinese money, which added very dry kindling to the raging fire. <br /><br />We have got as far as we can we can with the Government inspired lunacy - rates are already super low, the CMHC has been widely criticized by many outside bodies and even the Province is tapped out and cannot add anything to it's first time buyer's incentives (the best help BTW for first time buyers is to allow lower prices!)<br /><br />The only variable that remains is the outside, mostly Mainland Chinese, money. With the restrictions on the investor class immigrants and the crack-down on corruption being considered by the new leaders in China, this is also under threat. <br /><br />good post.fish10noreply@blogger.comtag:blogger.com,1999:blog-816559531110064247.post-9764383823753957042013-03-16T08:29:08.763-07:002013-03-16T08:29:08.763-07:00Please do continue to comment on real estate in Va...Please do continue to comment on real estate in Vancouver, as it could be a good indicator of health of Chinese economy. For reference, here are some older vintages that you could compare and contrast:<br /><br />1. In the late 1980's and early 1990's, Taiwanese wealthy parents bought houses for their "small foreign students" (boys < 15 years old leaving to avoid conscription) to attend US high schools in Southern California (Irvine, Alhambra, etc) and Northern California (Fremont, Cupertino, etc). In hindsight, 1990 was the peak in Taiwan stock market (like Nikkei).<br /><br />2. Hong Kong wealthy escaping 1997 turnover to China buying in Northern California (Millbrae, Hillsborough, etc). In hindsight, Hong Kong property went up a lot more than US.<br /><br />3. Mainlanders are now buying in college towns like Boston, Palo Alto (Stanford), and Westwood (UCLA). Not sure how this episode would end.<br />WimpyInvestorhttps://www.blogger.com/profile/18148362644880449393noreply@blogger.comtag:blogger.com,1999:blog-816559531110064247.post-5637850484728635452013-03-16T01:27:46.131-07:002013-03-16T01:27:46.131-07:00Locals aren't priced out, they are heavily ind...Locals aren't priced out, they are heavily indebted thanks to government backed high ratio mortgages. And houses in Winnipeg have appreciated more in percentage terms than Vancouver's. Foreign buying has never exceeded 5%, and immigration has been much lower than the 1990s.<br /><br />I'd put the blame squarely on city planners for constraining supply, and the CMHC and Bank of Canada for inflating demand, and everyone who fancies themselves a rentier.<br /><br />I'm surprised that anyone would promote the foreign buyer myth. Do they understand what the reaction will be? From young Canadians can not raise a family in a home they can afford? Everyone here has expressed their preference for criminals from the PRC.<br /><br />What if there was a crisis and absolutely everyone assured them it was safe, and now they are scalped? Does this country eat its young? Because I think the price for that is high.<br /><br />Of course foreign speculators have bought in very recently. They always jump in at the end without fail. These flashy people can be counted to lose money. Then they'll be gone. What is left?rp1noreply@blogger.com