Vancouver's Real Estate Market

[Tapioca]

CMHC is finally stating that the Vancouver market for detached homes is detached from fundamentals (no pun intended):

https://www.cmhc-schl.gc.ca/en/corp/...04-27-1200.cfm

[Mr.HappySilp]

Originally Posted by dat_steve

curious, where do you get a condo for 270k?

Pre purchase my unit for 295k went up to around 350k now @@

[westopher]

Yep. Mine was about 335 up to about 390+ now. 3 months from move in date as of today!

[dat_steve]

tempted at all to take a 30k payday an run for the hills? Literally, you know, since you can buy back in and all. lol

[Harvey Specter]

I still believe the DT condo market is undervalued and will continue to grow but there will be a time in the near future when condos will be overvalued like homes.

[GLOW]

couldn't you offload, take the $ and run and then look for a slightly older condo in decent shape at a lower price? i assume condos a few years old would be cheaper?

[westopher]

I only want money so I can get the things I want, so giving up what I want for money doesn't make sense.
Living somewhere I don't love with 40-50k extra in my bank account will not add to my quality of life.
This is my biggest gripe in this city, is that all I ever hear anyone talk about, is investing and money, and everybody talks about it like they know what the fuck they are talking about. People should worry more about what that money can do for their quality of life instead of being willing to sacrifice enjoyment for more money. Its the most widespread addiction I see.
*edit not trying to totally sound off at you about the question, as its totally legit, but it just brings up a gripe I have with most people I meet on a daily basis.

[Harvey Specter]

Older condos are going up as well plus the strata might be higher and you have to be concerned about future repairs with older buildings.

[yameen]

do you guys think the burquitlam area will start to boom as well? they currently finished a condo near lougheed mall. i don't know if i want to live so far out though but if that area is going to be developed then i wouldn't mind.

i think i saw somewhere in the previous pages, should i buy presale or once it's completed?

[fliptuner]

It already is. Compare it to what it was 5 years ago.



How long do you guys think the market will continue to rise at this pace (let's say 10-20%, annually)?
If and when it flattens out, what do you think will be the cause(s) (interest rates, gov't regulation, etc.)?

[Hehe]

Originally Posted by fliptuner

How long do you guys think the market will continue to rise at this pace (let's say 10-20%, annually)?
If and when it flattens out, what do you think will be the cause(s) (interest rates, gov't regulation, etc.)?

It's anybody's guess really.

A few thing to look for though:

Market tends to overshoot (in both up and downward directions) before start changing course.

So, when you start seeing price to increase slower but volume decreases faster for 2-3 consecutive quarters YOY, I'd say that's a hint of market reaching the very peak.

It signals that the price has reached a point where fewer people are able to get into the market excluding other external variables (interest rate, economy... etc). Thus people might still pay a premium on it, but those are either the last dumbass to get in, or they simply have too much resources.

As for what factor could trigger it beyond market forces, it can be many things as there's a huge amount of speculation in GVR market. Interest rate hike can be one, any sort of gov't intervention can be another (although unlikely as it's against BC gov't interest to do so), even a natural causes (disease outbreak, earthquake and so on), or foreign interference (economic crisis in US, China... etc)

Ultimately, it still has to do with economic fundamentals. Either the general rent, income or job opportunities keep up with the increase (meaning there's more people able to buy into the market), or it's just a bubble waiting to be popped. A bubble in any assets would never stagnate, it either continues to grow, or it would start deflating. The only question is the speed it deflates. It can pop or do so in a very long term (a la Japan) until real prices matches again with economic fundamentals.

[Tapioca]

Originally Posted by yameen

do you guys think the burquitlam area will start to boom as well? they currently finished a condo near lougheed mall. i don't know if i want to live so far out though but if that area is going to be developed then i wouldn't mind.

i think i saw somewhere in the previous pages, should i buy presale or once it's completed?

Burquitlam is far?

I think Burquitlam is probably the next Brentwood. Lougheed is set to undergo a major re-development like Brentwood. There are lots of older 3-4 story walk-ups that are probably going to be bought out over the next decade as they become too expensive to maintain. My wife's hairdresser bought into one of these buildings a while back and the owners agreed to take an offer from one of the major developers at 50K over assessed value per unit.

Originally Posted by fliptuner

How long do you guys think the market will continue to rise at this pace (let's say 10-20%, annually)?
If and when it flattens out, what do you think will be the cause(s) (interest rates, gov't regulation, etc.)?

A few factors come to mind:

- When the Chinese government starts to really crack down on capital flight
- When the first wave of milennials who are expanding their families give the middle finger and move out of Metro Vancouver or have finished upgrading from their starter condos
- When interest rates rise to the 4% range
- Act of God - earthquake, etc.

It has to stop at some point, but who knows?

[Hondaracer]

Originally Posted by yameen

do you guys think the burquitlam area will start to boom as well? they currently finished a condo near lougheed mall. i don't know if i want to live so far out though but if that area is going to be developed then i wouldn't mind.

i think i saw somewhere in the previous pages, should i buy presale or once it's completed?

As I posted before, Lougheed mall is set for 25+ high rises in redevelopment of the mall over the next 30 years. Some are zoned to be 60 stories+

[Special K]

Is the rate of increase in condos/townhouses now faster than detached??

It seems like people are moving towards multi-family now that 10 year old or less detached homes in Vancouver (not Greater Vancouver) are now starting at $1.6-$1.8m

[Tapioca]

Originally Posted by Special K

Is the rate of increase in condos/townhouses now faster than detached??

It seems like people are moving towards multi-family now that 10 year old or less detached homes in Vancouver (not Greater Vancouver) are now starting at $1.6-$1.8m

I'm not sure what's happening in other areas, but I can offer my observations on the areas I know.

Condos in the Brentwood area have increased nearly 20% over the last quarter. Townhouses in Burnaby generally have increased by the same amount - probably more, depending on the area (Metrotown, Lougheed Mall).

Multi-family in the Tri-Cities is through the roof right now. The vast majority of the townhouses in "desirable" areas such as Westwood Plateau, Burke Mountain, Heritage Mountain/Woods, and Klahanie are going above asking. Based on my observations and my brief access to sales data, I would say that benchmark prices for townhouses have gone up by at least 25% since last fall.

[Ulic Qel-Droma]

it aint real cash till it's in the bank.

[6thGear.]

A 2 year old townhouse just sold for $1.14mil in my area (River District) just recently. Barely lasted 4 days. My neighbor offered $1mill with zero subjects including a $50,000 deposit on the spot and they still got outbid. These townhomes were $800,000 brand new. I'm not sure what the original owners asking was though. As for my apartment I bought it at $310,000 2 years ago and last assessment is $350,000.

[4444]

hysteria, that's all it is with locals.

it happens every so often in all assets, from tulips, to equities, bonds, and right now real estate in vancouver.

it comes, it goes. those that win, cash out when the time is right - only difference here is that a family home isn't really an investment like equities that can be emotionless-ly cashed out.

ok, so the real winners are those that bought rental properties with yield back in the day that cash out.

[GLOW]

Originally Posted by fliptuner

How long do you guys think the market will continue to rise at this pace (let's say 10-20%, annually)?
If and when it flattens out, what do you think will be the cause(s) (interest rates, gov't regulation, etc.)?

my guess is when young 2 income families can no longer afford to buy these strata homes. a million for a TH holy shit....when 2 br condos get out of reach i think there's going to be some change in activity since at that point what other buying options are there other than moving or renting...

[westopher]

With the rental market in such a frenzy because of low vacancy rate and so many people trying to cash in, thats even killing that option. I have so many friends who have been given 2 months notice to vacate because their landlord wants to sell.

[dat_steve]

affordability is a matter of perception and values. if you want a single detached, you're going to have to compromise in some way or form. either live with the fact that you will forever be your bank's bitch fuckb0i, or you need to adjust what you perceive to be important.

My answer? Polygamy, baby. the traditional family structure just isn't as important as having a yard. when dual income won't cut it anymore it's time to think of triple (sky's the limit here) incomes to service that debt. bam - that's compromise. *mic drop

[fliptuner]

Originally Posted by GLOW

my guess is when young 2 income families can no longer afford to buy these strata homes. a million for a TH holy shit....when 2 br condos get out of reach i think there's going to be some change in activity since at that point what other buying options are there other than moving or renting...

The opposite is happening in my area, where locals can't or won't compete for detaches that are 40-60% more than 2 years ago. So the foreign money and investors are getting the houses and locals are taking a step back and getting into larger townhomes. From Nov to Feb, TH's in Poco have gone up over 30% from my observation. It's ironic that by not buying that house and just upgrading from a condo to TH or 3br TH to a 4br, they're seeing better returns and living more within their means. It might not be their preferred living situation but right now, I'd say it's totally worth it.

[Tapioca]

Originally Posted by Ulic Qel-Droma

it aint real cash till it's in the bank.

Well, if you've got a HELOC, rising equity means you can borrow more money for investing (or spending on something silly, like a modern European luxury car). CIBC is offering HELOCs at prime in Greater Toronto which is a crazy "deal". Who knows if they'll be offering this product to people in Vancouver?

Originally Posted by 6thGear.

As for my apartment I bought it at $310,000 2 years ago and last assessment is $350,000.

Assessed value doesn't mean anything these days. Our previous condo was assessed at 406K and similar units are now selling for over 500K.

Originally Posted by GLOW

my guess is when young 2 income families can no longer afford to buy these strata homes. a million for a TH holy shit....when 2 br condos get out of reach i think there's going to be some change in activity since at that point what other buying options are there other than moving or renting...

My guess is people will keep moving further out, like Maple Ridge or Aldergrove, until they can afford a suitable home. New high-rises are being built everywhere outside of the City of Vancouver, so 2-bedroom units will still be within reach for above-average 2-income families as long as interest rates remain fairly low.

With the rental market in such a frenzy because of low vacancy rate and so many people trying to cash in, thats even killing that option. I have so many friends who have been given 2 months notice to vacate because their landlord wants to sell.

Or others have landlords who raise rates against the amount set by the RTA just because they can. Even if a landlord loses a hearing and has to pay 2-months rent, it's worth the risk because the demand for rental units in premium locations (i.e. anything in the City of Vancouver) is so high.

The market rent for a typical 2-bedroom high-rise condo in Burnaby is 1800-2000/month. That's still a deal considering the carrying cost of that condo for an owner based on a 10% down payment is still 2600-2800/month.

[twitchyzero]

Originally Posted by westopher

I only want money so I can get the things I want, so giving up what I want for money doesn't make sense.
Living somewhere I don't love with 40-50k extra in my bank account will not add to my quality of life.
This is my biggest gripe in this city, is that all I ever hear anyone talk about, is investing and money, and everybody talks about it like they know what the fuck they are talking about. People should worry more about what that money can do for their quality of life instead of being willing to sacrifice enjoyment for more money. Its the most widespread addiction I see.
*edit not trying to totally sound off at you about the question, as its totally legit, but it just brings up a gripe I have with most people I meet on a daily basis.

Why does it bother you so much? May be they're saving it for retirement/healthcare/travel or even helping family out. Everyone has their preference/reason in the way their finances are managed

Some may wanna spend it on depreciating assets like cars in their 20-30s while others are trying to look long term. Different strokes.

[westopher]

When its ALL anyone talks about.
MONEY money money money money. It bothers me a lot. When I sit down with someone for the first time and the conversation goes straight to money, its annoying, and its tacky as fuck.
I don't have a problem with what people DO with their money, I have a problem when its all anyone wants to talk about. Its very different.