Saturday, July 7, 2012

Very few buys but big sticker's

Volume has really ground to a halt, despite talk on the media of buyers diving in to beat the changes in the mortgage rules which come into effect this Sunday.

Maybe we will see a huge spike in the sales numbers on Monday as last minute buys hit the MLS or maybe buyers have had their epiphany.

Maybe they realised that if they cannot afford to buy a house at the lowest ever interest rates, rigged with Tax-payer insurance for their default, with just a 5 year change in amortization period from 30 to 25 - then they shouldn't buy it!

In any case some lenders started implementing the changes sooner than July 8th .

Meanwhile the really big money, not concerned by questions of CMHC insurance is still buying.

eg West Van has 7 new SFH listings yesterday, 3 price changes and just one sale, a remarkable $3.3 Million under the original asking price! However the sale price was still $8.08 Million.

That sort of huge number will distort the median and average prices up when over-all volume is so low. There was another high ticket sale on the Westside with anemic sales too.

So we will get some skewing in the prices as the lower end (which is now about one MILLION dollars!) pulls back, while big local, Albertan and off-shore money can still buy the upper end. None of this will change the trajectory, but low volumes have this effect.


  1. Friend's house is on sale a little over 2 months now, barely any showings, but he is not nudging his price. His argument is that with his share of the sale, presuming the house sold for the listed price, he has to downsize to a townhouse or condo. He forgot to mention that that the house was bought at 1/3 the current assessed value, when he and his bought it in 2003/4.

    1. Prices are always sticky on the way down, because people have this idea that their home is worth the highest price that a similar property price sold for and anything below that is a discount.

  2. From "pricetags" blog:

    “Sell ‘em shit and charge ‘em a little less.”
    anonymous developer

    "Soules predicted that if mortgage lenders allowed applicants to borrow more or if interest rates dropped, housing and land prices would only rise.

    That is exactly what happened. "
    ~ John Baker

  3. O Mighty fishyRE, do you have any scoop on this tale?

    #168 ZRH2YVR Says today at 11:06 am @VCI
    "Here’s a question for the group. Anyone know what’s going on with all the HSBC foreclosure sales at the Hilton in Whistler? Looks like some American from New Jersey has defaulted and foreclosed on something like 40 units. Ouch. They are blowing them out however so you’re seeing the Whistler stats spike a bit on volume.

    Any thoughts?"

    1. Hmm - very interesting. Who would buy a unit of a hotel as an investment? Not me. Subject to the vagaries of the tourism market, management fees, etc I wonder if anyone has actually made money on these- they usually come out with very rosy revenue projections which are not met.

  4. Had a quick look on the MLS. Lots of stuff for sale at the Hilton (514 condos and townhouses listed in Whistler!) Prices all over the place from $800+/foot (good luck with that) down to under $300/foot after some major reductions, so I guess there could be some truth in it, though I didn't see 40 listed.

    Whistler seems to be running around 10 MOI or more

  5. We are entering phase two of the real estate slowdown

  6. HAM's phase II

    Sat, May 19, 2012

    Fri, June 22, 2012

    1. the first link should be -

      May 21, 2012
      Canada: A New Frontier For Real Estate Investors

  7. A must read @Cam Hui's blog
    Monday, July 9, 2011
    "Banking lobby's power"

  8. So far the 'big buying frenzy to beat the mortgage changes' was a no-show. However we have a few more days where panicked buys can show up, so better wait till the end of the week before making any bold statements that I may have to recant :)

  9. Looks like some HAM buyers are filtering back into the higher priced sales. Not a trend yet, just something to watch. As I mentioned in my post, the local wealthy, HAM etc are unaffected by these CMHC changes and that's why the average price may tick up in July, even as the volumes are anemic and the lower end stagnates. It means we will need to look at median and (God help us) the HPI for clues on the market.

    This should be a short-lived phenomenon (hopefully)

  10. A week after leaving his post as Chief Executive and President of the Executive Council of Hong Kong", Donald Tsang Yam-kuen was sighted at Dynasty @West Broadway, accompanied by his wife and dining with his 2 brothers who lived in Vancouver. His younger brother Tsang Yam Pui retired as the Police Commissioner of Hong Kong in December 2003, and later migrated to Vancouver.

    Wikipedia has a writeup on him and Rafael Hui Si-yan, that'll help to understand the Vancouver Sun's article of last March 31.

    #7 - "In the closing days of the selection process, made by a committee of 1,200 people chosen by Beijing, it was revealed that the out-going governor, Chief Executive Donald Tsang Yam-kuen, is being investigated by the ICAC for what are deemed questionable close relationships with senior business tycoons from whom he accepted lavish entertainment and other benefits."

    1. Looks like we are a good hiding place for the corrupt and immoral. The Hong Kong policemen who came here with tens of millions, wives and concubines were never sent back. Some of died of old age, the rest enjoying a lavish retirement on their ill-gotten gains.

  11. Okanagan MOI around 20.

    Stats here

  12. Anyone has the completion date of River Green?
    My business is kind of slow, so I might import this fantastic contraption.

  13. Lower end sales picked up a bit with the pre-July 9th deals coming in. However not many high priced ones now. Only one West Van SFH sold each of the last two days.

  14. Per today's Sun, Vancouver kings of Harbor Green & River Green are "devout evangelical Christians".

    "Third, Tiah is passing the baton to the second generation, something which many tycoons do not talk about. Said Tiah, a born-again Christian: “The family has worked as a team and what we have achieved thus far is a blessing from God.”

    Any idea when will this downtown pothole be filled up?

    Other countries require their foreign developers to complete construction within 5 years they bought the land, and to well all condos within 2 years of receiving the Temporary Occupation Permit.

    Not only we undersold our citizenship, we are giving away deals.

    1. typo .. to sell all condos within 2 years of receiving the TOP (temporary occupancy permit).

  15. Americans moving to Canada in record numbers
    "In 2011, Ottawa approved 34,185 visas for U.S. residents — a figure that falls just short of the all-time record of 35,060 approved visas in 2010.
    ...most Americans who come to Canada do so through the expedited "NAFTA visa" process which requires applicants to have a Canadian job offer in one of 63 recognized occupations. "

  16. The bank robbing activities of this decade will make the infamous Great Train Robbery seem like kindergarten stuff. Toxic subprime derivatives, non-existent gold reserves, Libor interest rates derivatives, and ..............
    HSBC to Pay $1 Billion Fine in Money Laundering Charges

  17. fishyRE, you are right and I was wrong wrt "realtor who deals in the Mainland Chinese market".

    David Choi, president and CEO of Vancouver-based Royal Pacific Realty

    I confused him with this SinoForest chap. :P

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