Vancouver Real Estate 'Bubble' at 30-year Peak

[misher]

Originally Posted by csbvan

I don't think you're referring to anything that would be considered a 'precedent' for the situation we're now in.

SARS is a decent precedent of what fear can do to a market.

https://www.sciencedirect.com/scienc...94119007000095

https://www.scmp.com/business/articl...id-19-outbreak

Currently you can see packed open houses and multiple offer scenarios. Things have only quickened.

Originally Posted by WarrenC12

Any sane person is putting home buying on the back burner right now.

You've mentioned sanity before in the context of our real estate market. Sanity has never applied to humanity. I agree you'd be insane to buy a home in Vancouver, renting is logically more attractive and safer.

[rofina]

Originally Posted by WarrenC12

Any sane person is putting home buying on the back burner right now.

In fairness, any sane person probably hasn't bought in Vancouver since like 2011.

Currently we are simultaneously selling out of toilet paper region wide, and units of housing under 1 million in cost. No idea how the two facts can exist in the same reality, yet, here we are.

[csbvan]

Originally Posted by misher

SARS is a decent precedent of what fear can do to a market.

https://www.sciencedirect.com/scienc...94119007000095

https://www.scmp.com/business/articl...id-19-outbreak

Currently you can see packed open houses and multiple offer scenarios. Things have only quickened.



You've mentioned sanity before in the context of our real estate market. Sanity has never applied to humanity. I agree you'd be insane to buy a home in Vancouver, renting is logically more attractive and safer.

This crisis is in its infancy, BC is about 10 days to 2 weeks behind Italy, where they have largely shut down the country, including shutting down all commercial businesses that aren't pharmacies or grocery stores. Talk to you then, and we'll see how things have 'quickened'.

[misher]

Originally Posted by csbvan

This crisis is in its infancy, BC is about 10 days to 2 weeks behind Italy, where they have largely shut down the country, including shutting down all commercial businesses that aren't pharmacies or grocery stores. Talk to you then, and we'll see how things have 'quickened'.

Italians are "friendlier". I get kissed a lot by men and women I don't know at family gatherings. Also Italy has a lot of wind.



I can see why the virus spread much faster there than elsewhere. I would not use Italy as the best example of how this will spread here.

[Changing City]

Originally Posted by misher

Italians are "friendlier". I get kissed a lot by men and women I don't know at family gatherings. Also Italy has a lot of wind.

I can see why the virus spread much faster there than elsewhere. I would not use Italy as the best example of how this will spread here.

Ah, now Dr Misher explains why Vancouver won't see real estate affected by Coronavirus. I feel so reassured. Unfortunately, in the real world they just closed all the public schools in Seattle. Are they big kissers too?

[misher]

Originally Posted by Changing City

Ah, now Dr Misher explains why Vancouver won't see real estate affected by Coronavirus. I feel so reassured. Unfortunately, in the real world they just closed all the public schools in Seattle. Are they big kissers too?

I never said it won't be affected. I said its not currently being affected.

[Changing City]

Originally Posted by misher

I never said it won't be affected. I said its not currently being affected.

Well you certainly implied it when posters questioned whether the spring market might be affected. But if you want to change your mind, that's OK.

We're in unchartered waters with a virus that impacts the community very differently from SARS. So SARS isn't any sort of useful precedent, and how houses have sold in the first week of March doesn't tell you anything about how they'll sell in the whole of March, or the spring market in its entirety. Logic suggests the market will be very quiet for a while - despite lower interest rates and a relaxed mortgage stress test. But I don't know if that's how things will play out, and neither do you.

[misher]

Originally Posted by Changing City

Well you certainly implied it when posters questioned whether the spring market might be affected. But if you want to change your mind, that's OK.

We're in unchartered waters with a virus that impacts the community very differently from SARS. So SARS isn't any sort of useful precedent, and how houses have sold in the first week of March doesn't tell you anything about how they'll sell in the whole of March, or the spring market in its entirety. Logic suggests the market will be very quiet for a while - despite lower interest rates and a relaxed mortgage stress test. But I don't know if that's how things will play out, and neither do you.

I expected things to slow at the end of Feb but instead they quickened. Unless we get like Italy or Iran where people can reasonably expect someone nearby to be infected I don't expect things to slow.

Looking at how things are going, reduced rates and stress test should push sales higher when they start (April) unless the local economy tanks, or we're more reliant on China than I think, or everyone's too afraid of the virus to go out.

We have several factors at play here. But if everyone remains calm you can expect massive real estate gains in April.

[chowhou]

Unless you are trying to time the market somehow, this is all just unnecessary speculation. Maybe this is the next black plague. Maybe this will be easier on Canada than SARS was. We'll find out by the end of the year.

[misher]

Originally Posted by chowhou

Unless you are trying to time the market somehow, this is all just unnecessary speculation. Maybe this is the next black plague. Maybe this will be easier on Canada than SARS was. We'll find out by the end of the year.

Hah without speculation we wouldn't have a forum!

[Changing City]

Originally Posted by misher

I expected things to slow at the end of Feb but instead they quickened. Unless we get like Italy or Iran where people can reasonably expect someone nearby to be infected I don't expect things to slow.

Looking at how things are going, reduced rates and stress test should push sales higher when they start (April) unless the local economy tanks, or we're more reliant on China than I think, or everyone's too afraid of the virus to go out.

We have several factors at play here. But if everyone remains calm you can expect massive real estate gains in April.

Here's the logic for lower interest rates from the Governor of the Bank of Canada.

“The outbreak and its effects could be more persistent. Consumer and business confidence could be set back for a longer period of time, causing economic growth to slow more persistently. This could include longer-term layoffs, for example. At this point, we simply do not know. Indeed, declining consumer confidence would naturally lead to reduced activity in the housing market. So in this context, lower interest rates will actually help to stabilize the housing market, rather than contribute to froth.”

The local tourism industry is taking a beating. Cruise ships may or may not sail, but they won't have as many passengers. TED is postponed. Other conferences are cancelling. The airport is much quieter. There will be some job losses, and it's hard to say how long they'll last. Canadian households are the most indebted in the G7, with debt servicing ratios at all time highs, despite record low interest rates.

The timing of how this pandemic will play out is entirely unknown. The medical authorities are doing everything they can to 'flatten the curve' - to make it last much longer, but have fewer people needing critical care at any one time. (Those facilities are already stretched). If they're successful then this will last well into the fall.

[whatnext]

Originally Posted by Changing City

Here's the logic for lower interest rates from the Governor of the Bank of Canada.

“The outbreak and its effects could be more persistent. Consumer and business confidence could be set back for a longer period of time, causing economic growth to slow more persistently. This could include longer-term layoffs, for example. At this point, we simply do not know. Indeed, declining consumer confidence would naturally lead to reduced activity in the housing market. So in this context, lower interest rates will actually help to stabilize the housing market, rather than contribute to froth.”

The local tourism industry is taking a beating. Cruise ships may or may not sail, but they won't have as many passengers. TED is postponed. Other conferences are cancelling. The airport is much quieter. There will be some job losses, and it's hard to say how long they'll last. Canadian households are the most indebted in the G7, with debt servicing ratios at all time highs, despite record low interest rates.

The timing of how this pandemic will play out is entirely unknown. The medical authorities are doing everything they can to 'flatten the curve' - to make it last much longer, but have fewer people needing critical care at any one time. (Those facilities are already stretched). If they're successful then this will last well into the fall.

Of course low interest rates won't help all those laid off by the downturn in travel and tourism or the oil sector. Banks won't lend to them at all.

Central banks left "emergency" interest rates in place for far too long after the 2008 Financial Crisi and now their effectiveness will be diminished.

[misher]

Originally Posted by whatnext

Of course low interest rates won't help all those laid off by the downturn in travel and tourism or the oil sector. Banks won't lend to them at all.

Central banks left "emergency" interest rates in place for far too long after the 2008 Financial Crisi and now their effectiveness will be diminished.

Its always scary when we agree.

[rofina]

Trudeau's are quarantined.
EI is being paid/issued immediately.
Cruises are on stop for 60 days.
Cramer is on TV screaming about a tax holiday saying a large number of S&P500 will be insolvent by months end at this rate.

This might be a contagion in more ways than one.

Buy Van RE.

[whatnext]

Nice to see some stratas busting illegal AirBnB scum first hand:

Vancouver strata president busts illegal Airbnb by renting condo unit, owner fined over $46,000
by Carlito Pablo on March 11th, 2020 at 4:13 PM

A Vancouver condo owner was found to have repeatedly violated her strata’s bylaws by using her unit for short-term rentals.

For these offences, Suqian Zhang was ordered by a B.C. Civil Resolution Tribunal to pay a total of $46,400.77 in fines.

The evidence against Zhang included a September 2018 booking of her unit by the strata president at the time...

...SN also recorded licensed plates of more than 60 different vehicles parked at Zhang’s parking spot between April 2018 and July 1, 2019.

Gibson said the number of different cars recorded to have parked at Zhang’s stall “over the time period is significant”.

According to Gibson, this is “inconsistent” with Zhang’s claim that there are “occasional guests”.

Zhang has claimed that only three tenants occupied her condo, “all for periods of more than 30 days”.

“The owner says that she allowed her brother, his friend and her realtor to caretake the unit while she was out of the country,” Gibson wrote....

https://www.straight.com/news/137185...ner-fined-over

[misher]

Originally Posted by whatnext

Nice to see some stratas busting illegal AirBnB scum first hand:

Vancouver strata president busts illegal Airbnb by renting condo unit, owner fined over $46,000
by Carlito Pablo on March 11th, 2020 at 4:13 PM

A Vancouver condo owner was found to have repeatedly violated her strata’s bylaws by using her unit for short-term rentals.

For these offences, Suqian Zhang was ordered by a B.C. Civil Resolution Tribunal to pay a total of $46,400.77 in fines.

The evidence against Zhang included a September 2018 booking of her unit by the strata president at the time...

...SN also recorded licensed plates of more than 60 different vehicles parked at Zhang’s parking spot between April 2018 and July 1, 2019.

Gibson said the number of different cars recorded to have parked at Zhang’s stall “over the time period is significant”.

According to Gibson, this is “inconsistent” with Zhang’s claim that there are “occasional guests”.

Zhang has claimed that only three tenants occupied her condo, “all for periods of more than 30 days”.

“The owner says that she allowed her brother, his friend and her realtor to caretake the unit while she was out of the country,” Gibson wrote....

https://www.straight.com/news/137185...ner-fined-over

Honestly I have no idea how he got the CRT to issue that big a fine. But great news!

But I will point out the only reason AirBnB's do so well in Van is because of our critical lack of hotel space which is ridiculously low. Even with the virus most hotels in Van are $200-$300 a night which is ridiculous while a 1 bed+bath airbnb is $100 or less.

[nds88]

Originally Posted by misher

Honestly I have no idea how he got the CRT to issue that big a fine.

There's a lot of behind the scenes I assume. The Strata Property Act lays out specific steps that need to be carried out in order. The CRT can't just make up an arbitrary fine. The Strata needed to send written warnings, given the owner a chance at a hearing, then issue fines on a daily/weekly basis. If this stuff was not done at first, I don't think the Strata or CRT can go back and issue a fine retroactively. It would be interesting to find the actual CRT case and read the evidence and reasoning behind the decision.

[Changing City]

Originally Posted by misher

Honestly I have no idea how he got the CRT to issue that big a fine. But great news!

But I will point out the only reason AirBnB's do so well in Van is because of our critical lack of hotel space which is ridiculously low. Even with the virus most hotels in Van are $200-$300 a night which is ridiculous while a 1 bed+bath airbnb is $100 or less.

Did you read the story? It was over $500 for a 1-night stay in the apartment through Airbnb. Most hotels in any major city are $200+ a night for anything reasonable. Prices in Downtown Seattle for hotels are very similar to Downtown Vancouver. If you want to pay a bit less, you stay in Richmond or Burnaby.

[nds88]

BoC just cut rates by another 50 basis points. Key overnight rate went from 1.25% to 0.75%. Those on variable mortgage rates should be expecting a 1% or close to 1% cut off their payments over a course of a couple weeks. We will probably be heading to 0% overnight rates soon.

[whatnext]

Spring market will be DOA.