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Baby, we got a bubble!?

No kidding. Almost 500% increase from 15 years ago.
Clearly this shows no Vancouvronite or other Canadian can buy these properties save if they are on an extreme job ascention or if they are well off to begin with.
I am sure this was just foreign money looking to deposit somewhere.
What is amazing is the house in the 2 pictures while being perhaps very nice does not really look like that much. Again I guess limited supply and clearly very high demand.
All this makes Toronto look tame by comparison.
 
interested said:
No kidding. Almost 500% increase from 15 years ago.
Clearly this shows no Vancouvronite or other Canadian can buy these properties save if they are on an extreme job ascention or if they are well off to begin with.
I am sure this was just foreign money looking to deposit somewhere.
What is amazing is the house in the 2 pictures while being perhaps very nice does not really look like that much. Again I guess limited supply and clearly very high demand.
All this makes Toronto look tame by comparison.
Click to expand...


while looking at the numbers, it would appear so; however, from reading the story it looks like the property was bought for $531,000 in 1996 then this custom build 3,735-square-foot contemporary house was built in 1997.
my guess a house was bought, razed and a new infill built.

by comparison on $ per SQ FT, it's not that bad considering it's Vancouver ...
$2.55-million for 3,735 sq ft = $682.73 for a detached property on 50 by 125-foot lot ...
not saying that it's cheaper but it's better than alot of condos with no land in Toronto !
 
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I don't know. I appreciate that I missed the house was rebuilt but still a lot of money for most Canadians. How much do you really have to be earning a year to pluck down $2.3 mill on a home. I know you buy it over time and you can finance but still. How many jobs out in Vancouver are paying $230K/year and you are talking about buying at 10 years of gross income?
 
interested said:
I don't know. I appreciate that I missed the house was rebuilt but still a lot of money for most Canadians. How much do you really have to be earning a year to pluck down $2.3 mill on a home. I know you buy it over time and you can finance but still. How many jobs out in Vancouver are paying $230K/year and you are talking about buying at 10 years of gross income?
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Actually a fair number of two-income families can afford $2 million homes. eg. Two docs in a family may make $600000 a year, and they may already have $500000 in equity from their condo purchase a decade earlier. Remember also that Point Grey is the land of $5 million homes. It's probably my favourite neighbourhoods in all of Vancouver actually.

I'm not saying Vancouver isn't overpriced, cuz it is. I'm also not saying that any higher range two-income family will be able to afford to live in Point Grey. I'm just saying that in 2011 it's not that hard to find families that can afford a $2 million home. Sure, it's less than 0.1%, but less than 0.1% isn't necessarily a small absolute number in a city as big as Vancouver.
 
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point taken Eug.

what happens if interest/mortgage rates say go back to historic values?

My belief is that there are a of people in $2 million homes with big mortgages and living much closer to the line than people realize. I am amazed when my wife tells me she is aware of people in their 60's carrying mortgages but living in $2+million dollar houses. I just don't get it. I would rather live in a million dollar home and be mortgage free. We are all collectively crazy or unfortunately a huge part of the population is living way beyond their means. If people were more responsible then perhaps our real estate prices would in fact be more reasonable.

I appreciate Vancouver is a suburb of China and perhaps unfortunately for those Canadians who live and work in Vancouver they are being bid out of the market. However, I believe that Vancouver is absolutely unsustainable by local market standards were in not for the foreign income/investors. Remember foreigners not tied to Canada or say Vancouver could decide that Seattle for example is the place to be because they just offered say an Ivy League University and Ivy league High School and we should"go there". Not saying this will or has happened, I am just using it for illustration purposes. That would make me very nervous that this could turn very quickly very ugly. On the other hand, it may just keep increasing at 10-20%/year and I will just keep scratching my head.
 
interested said:
I don't know. I appreciate that I missed the house was rebuilt but still a lot of money for most Canadians. How much do you really have to be earning a year to pluck down $2.3 mill on a home. I know you buy it over time and you can finance but still. How many jobs out in Vancouver are paying $230K/year and you are talking about buying at 10 years of gross income?
Click to expand...

Aha, you've stumbled across the fundamental crux of real estate on the West Coast.

What's really worrying about Vancouver is actually even more plain when you look at things like corporate presence in Vancouver - which is very low for a city of its size - there are simply not a lot of executives in the city capable of affording these places. Contrast to say Toronto where many of the comparable neighbourhoods are packed with high end corporate types (and hockey players... ) . Out West the corporate activity is concentrated in Calgary, which is why its per-capita income is so high - but yet, its real estate prices relatively affordable at 4.5x income or so(and declining).

That's why they bring the investors into the argument. It doesn't make sense otherwise.

edited: For 'interested' - I'm from there. There is a heavy Chinese component, but a lot of them have been here for many generations, the Chinese presence in Vancouver predates the city itself and many of the Chinese residents are just like any multigenerational immigrant group - basically fully Canadianized. It's nowhere near a suburb of china.

The market is still driven by locals, most of whom are dangerously close to disaster. What is really scary is that they don't realize it, they're spending their "equity" as fast as it builds rather than sitting on it in case the market goes belly up - as seems to happen out there about once every 12 years.
 
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lafard said:
Aha, you've stumbled across the fundamental crux of real estate on the West Coast.



edited: For 'interested' - I'm from there. There is a heavy Chinese component, but a lot of them have been here for many generations, the Chinese presence in Vancouver predates the city itself and many of the Chinese residents are just like any multigenerational immigrant group - basically fully Canadianized. It's nowhere near a suburb of china.

Thank you lafard. I appreciateyour point. I was not really trying to imply that it was an actual suburb of China. What I was trying to portray and I apologize to all for not being clearer was that a large number of Chinese from Hong Kong, Bejing and other provinces were bidding up the values so that it was behaving as if it would be part of the Bejing market, perhaps more than if it were a typical Canadian market city.
I apologize for any confusion and thank you
Click to expand...
 
The way I see it, overseas investors who are being priced out of Vancouver market, most likely, will turn to Toronto market causing a huge increase in prices here. That, in turn, means no sharp decrease in prices here -- as predicted by othes.

Reasonable conclusions?
 
Ka1,
Your guess is a good as mine. I guess if Vancouver gets too expensive, and people still want to invest abroad and have the money to do so, then it is as reasonable a conclusion as any.
Of course you realize if that happens, playing out this scenario suggests that Vancouver would logically drop as there would be less people bidding it up, and then the same thing would play out in Toronto worsening the drop since it will have gone to higher heights.
Would that not also follow?
 
interested said:
Ka1,
Your guess is a good as mine. I guess if Vancouver gets too expensive, and people still want to invest abroad and have the money to do so, then it is as reasonable a conclusion as any.
Of course you realize if that happens, playing out this scenario suggests that Vancouver would logically drop as there would be less people bidding it up, and then the same thing would play out in Toronto worsening the drop since it will have gone to higher heights.
Would that not also follow?
Click to expand...

Not necessarily.

Overseas investors who can afford million dollar plus property will stay in Vancouver. Others will move over to Toronto and stay here. Both the markets will flourish and stay at that level.

It is just like individuals who can play at NHL level will play for Maple Leaf. Others will play for Marlees.
 
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