Larry as usual provides the numbers.
Detached MOI = 6.9
Attached = 5.6
Condo = 6.1
These MOI are in the 'balanced' range. However they are a LOT lower than last August. Is this demand pulled in because of the interest rate and CMHC changes or is the Bull back?
Some higher sales have skewed the numbers. Lots of local and HAM big buys in August in the Multimillion range have pulled the numbers up.
Is HAM buying drying up? Not yet. There are some signs that emerging markets are under some financial stress with the Fed TALK (only talk so far) of pulling back on ponzi monetary policy.
However the Chinese PMI number has come in above expectations and that may bring more hot money to our shores.
As I have said recently, we SHOULD have seen the top with everything stacked against RE. However there could be some new dynamic that I have not taken into account which will ignite further buying and if so, then it is time to move on. We will know very soon if this is the case.
Still on the Road to Financial Repression
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The Fed’s annual Jackson Hole symposium is intended for participants to
discuss the challenges they face and the long-term implications of
different ways o...
3 hours ago
Bull trap.
ReplyDeleteThat's what I am thinking too. The rush to buy before rates go up, except every jolt up in rates makes RE more unaffordable and less attractive as an investment with such low cap rates. But that would be too logical!
DeleteIf it's a bull trap, then we won't be seeing much of a correction. For comparison, UK and US bull traps happened at the -15/20% range. While I'm here, I find the intransigence of some sellers on the North Shore to be breathtaking; properties that don't sell for upwards of a year see asking discounts of -5/-10% only. Of course, this being Canada, it's hard to know what they actually sell for, but still. Anyway, i favor Garth's view that this is going to be one long, slow melt & by the time we turn round in 2017, prices will be 15-20% below their 2012 nominal peak, approx 30-35% lower when inflation adjusted.
DeleteFish,
DeleteThis is gotta be a big bull trap.I think there has been a major rush to buy before the rates went up. The proof is going to be the next 6 months. But again this is a crazy market and Iam not so sure anymore if logic applies to real estate in Vancouver.
I just dont get it.
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I have just come back from abroad, Fish. I'm not sure I'm a bear any more. There is money pouring into the in-demand capitals from China and other places. And it's been happening for decades. Perhaps we were stupid not to see this for what it was.
ReplyDeleteEgg! What did you see out there that put the fear of God into you.
Delete490 new
ReplyDelete205 price change
234 sold
7092 detached
8482 attached
Looks like a $8 M and a $4 M HAM buy in West Van today. Unaffected by mortgage rates and CMHC restrictions, the money river keeps flowing. I am still baffled how you can bring $8 big ones over form a country that has $50K a year a person limit!
ReplyDeleteJust hope our banks don't have any skin in these deals, or we will end of paying for that too.
As I have posted at VancouverCondo.info before, for new immigrants, TD has special program where if you show that you have 1 year's of mortgage payments and property tax in a savings account and 35% down payment, you are good to get a mortgage on the house without proof of income or credit....I think you can even get a HELOC too...
DeleteFish,
ReplyDeleteIn the 1980s, around 1986, I looked at an apartment in Southwark that was about 180K pounds sterling. I popped into an agent and asked what the place would be worth now. I was stunned to hear approx 7M. That is an increase far greater than Vancouver.
Many articles in London press point to dark windows and they have gathered hugely different stats--they say something along the lines of 50% of recent sales have gone to foreigners. I find it hard to believe the same phenomena happens here with drastically different numbers.
In Paris, the locals complain that hot money from asia is starting to buy up central parts of Paris. Parisian apartments far outstrip Vancouver in price and are horrible, really by comparison for the price.
So. Whose to say Vancouver is inflated and about to collapse just because the locals can't and their salaries can't support it? That is the same thing in both these European capitals and has been for a long time. I don't see that changing with the influx of immigration they are receiving. And I don't see that changing here either anymore.
Biggest irony ever--Londoners now get Mark Carney to help lower their costs of borrowing and drive up prices even more.
Very valid points Egg. We value things through our own lenses. So to us Vancouver is expensive due to our low incomes and the fact that we have to pay tax on that income. Whereas for the world's rich elite, who escaped taxes in their own countries, still see us as a cheap alternative to launder/invest/buy a safe haven on the world scale.
DeleteHowever the foreign buying has just been the icing on the top of this bubble. As we have said many times on this blog, the boom in RE is from to coast to coast to coast, even in areas where there is no outside money. Here the outside money just adds that final level of lunacy.
The UK was the same, they allowed the banks to embark on stupid lending with no risk controls...teezer rates, zero down, no interest for five years all that BS...then when it hit the fan, the bankrupt banks were bailed out, and rates were sent to zero to reinflate speculation., and now they have the real speculator's friend Carney at the helm.
The outside buying there is just in the downtown core where the prices defy any logical explanation except to say..where else can you buy if you are a super rich Chinese, Egyptian, Russian mogul and want a safe place that protects your property rights when the next revolution comes! In the outskirts of London prices have actually been drifting down and Craney recently said that people should buy as he would make sure prices are supported!!
Another irony is that no one can refuse this hot money! The flow of money brings with it quick tax revenues and a quick (and shallow) economic buzz. Even though long term it causes distortions and of course most of these buyers will not be paying much in taxation beyond the stamp duty and local taxes.
Governments know that and have chosen to ignore it. That's why they don't ask too many questions about where the money is coming from or why someone with an $8 M house has no income and pays no taxes.
the burden of baby-boomer health and pension entitlements is sooo huge that the governments of France, U,K, Canada will take money from whomever it can and hope they don't go Spain's way.
I agree. The only thing that I can hang my bear hat on is the coast-to-coast aspect of house price inflation in Canada. My English family lives in the countryside. So yes. Much cheaper than London but considering the job prospects, still pretty expensive. So how much it would drop here or in London or Paris, I really don't know.
DeleteThe funny thing was, I said to the agent in London what I thought he'd be happy to hear, that now he has Mark Carney so there's nothing but upside to prices as he'll print and print. He was firmly against QE repeating over and over again how it didn't work. And said Carney is concerned about inflation and talks a lot about it. I said Carney is "concerned" about a lot of things, and warns and talks one way but watch his hand... it's on the printing machine. He's a real Goldman Sacks boy. The agent had no idea!
REBGV news release out
ReplyDeleteStill YOY prices losses in the HPI for all categories. From 1-2%
http://www.rebgv.org/news-statistics/summer-housing-market-remains-active-greater-vancouver
And a statement from the RE President that floored me:
“People entering the market should not confuse stronger sales activity with rising prices. Home prices have been quite stable and consistent for much of this year,” Wyant said.
Here is the stats package:
Lots of areas NEGATIVE over 5 years, led by Whistler which is in a major slump
http://tinyurl.com/loxfnkh
A good day
ReplyDelete504 new
217 price change
202 sold
7139 detached
8529 attached
449
ReplyDelete185
179
Sorry the numbers are late
ReplyDelete428 new
190 price change
176 sold
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