Monday, August 8, 2011



This is what happens when sentiment changes. It is sudden, dramatic and painful.

Many Billions of $ disappeared from Canadian's net worths. What does this mean to housing:

1) The B of C has torn up it's rate increase memo.

2) There is no way that this will NOT impact housing.


  1. These people are no fools. Nor are those who preach doom-n-gloom to the naive from their well-paid crown-related jobs. Liquidity trap is not an unpredictable science.

    We are still importing record number of permanent and temporary immigrants. Watch out for yourself. To each his own.

  2. If you read the FOMC statement from today it's clear the US is going to have unbelievably low interest rates until at least 2013 -- you really think the BOC is going to raise rates much in that environment? IF and that's a big IF the stock market stabilizes, then I see no reason for a big downturn in Canadian real estate with rates low for likely the next 2 years.

  3. Chad,

    So why the downturn in Kelowna and Calgary?

  4. Rich Asians, lack of land, global desirability, warm climate, etc. Current conditions and realities obviously justify said reality. Try to keep up, Anonymous!!! :)

  5. Chad- as we are seeing from the stock-market- low interest rates can only keep things up for so long, eventually the fundamentals have to catch up.

    Maybe our 'event' will be a global slow-down, higher unemployment and cut-backs in government revenue and spending.

    However your thesis is one we also have to consider.

  6. Fish, low interest rates cannot save a market which is what they tried to do in Japan and the United States, however when momentum is to the upside and rates remain extremely low, then they do continue to prop things up.

  7. Chad,

    So the question stands: Why the downturn in Kelowna and Calgary?

  8. I chose not to answer your question and berate you because it's a very stupid question but because you asked twice I feel compelled.

    Hot money coming from Asia was NEVER buying in Kelowna or Cgy and given that my argument stems from the fact that China is signaling they will hold off on tightening, I don't even understand why anyone with half a brain would ask the question you asked, but you did, twice. Why not bring up Vegas, Detroit, Yellowknife while you're at it? Otherwise we can just focus on the Vancouver market which is what I am referring to.

    Onto people who are not as moronic as Anonymous -- Fish, my thesis, like I said in my original reply has one major caveat, and that is the global stock markets stabilizing. If stock markets around the globe continue to nose-dive, then housing will probably see something similar to what it saw in 2008, however, if they stabilized around these levels then I think this week has put enough fear into the Fed and in turn the BoC that rates will remain low for an extremely extended period and with housing momentum already to the upside I can't see the worst case scenario being any more than a shallow decline in VANCOUVER (not Kelowna, Calgary, Saudi Arabia or Iraqi) home prices.

  9. Chad - first you said "I see no reason for a big downturn in CANADIAN real estate with rates low for likely the next 2 years" Then you changed your story to just "Vancouver" and HAM.


    Sorry - did I just feed a troll or am I one.

  10. Chad,

    So much anger. Such anger is usually more about one's self than where it is directed. Perhaps you might reflect on that for awhile.

    Thanks for your insightful repsonse. Your answer translates roughly as "It's different here".

    Enjoy your kool-aid. Try the grape.

  11. Aww Vancouver housing market started cratering in June '08; prices falling in a big way were coincidental with stock market weakness but the sales were faltering since April '08 and price drops were inevitable. Looking at stock market machinations and somehow thinking it relates in any substantial way to Vancouver RE is a bit silly, even for dumb bears like us.

  12. "Australia took 29,547 migrants from China, or 17.5 percent of the total program of 168,685."
    That is 0.13% of Australia's population.

    Canada surpasses Australia @ 0.16% - 0.17%.

    So what?

  13. Question for Jesse--
    If we were in the recovery stage of the economic cycle, does it leap forward skipping stages to contraction,(if we go back into recession) or can it backtrack? Or I am being too literal in reading the business cycle?

  14. Guys please try and pick a name or Anon1 , 2 etc so we know who is saying what.

    Chad has a point that the recent turmoil has frightened the wits out of the Central bankers and no rate rise is likely and maybe even a rate cut in Canada.

    HOWEVER- as we have seen in Japan- low rates are not enough to sustain high prices that have long ago divorced the fundamentals.

    We need more money coming to the table. It wont come if our commodities falter. It will come if Chinese buyers keep coming, but only to the areas that are active which is about 20% of GVRD.

    The rest of the GVRD will have to stand or fall depending on our local economic situation. What will that be? Too early to say. But if we continue much longer in this crisis (and that is what it is) you can expect the August and September house price numbers to take a big fall.

  15. I am Anon1 and I am with Chad. :)

  16. Anon 9:30, For housing, cycles can be prolonged; the US peaked in 2005; we're 6 years after that point with no end to the misery in sight.

    A severe housing recession starts with piling inventory and low sales and right now, in Vancouver, that is not the case. The rest of BC... I'd say they're in a wee bit of trouble. Parts of the outskirts of Victoria are back to 2006 levels.

    I'd ask fish10 for more info on business cycles.

  17. Where are the HAMsters no SFh sales in West Van today.

    Jesse maybe I will throw something up on Business cycles this week-end.

  18. Whistler 5 sales in a week with 777 on the books. MOI = a very long time.

    Of these five sales some got real bargains and some, inexplicably, paid almost full price. Original list and final sale price;

    L 314 S 220!!
    L 479 S 469
    L 759 S 600!
    L 739 S 712
    L 1050 S 995