Quote:
Originally Posted by Hehe
It's all about a game called "the last fool". When there's still fools (both local and foreign speculators) in the market believing that price would continue to increase, the market would have the power of moving forward.
The problem or the "shit" is when there is no more fools or it becomes too expensive to bet.
Take Calgary as an example, they relied heavily on resources to bump up their RE. When resources collapsed, it didn't hit RE during the first few months as fools still believed the RE could move forward without resource industry.
IMO, look at pure transaction numbers (ignore the price). When the trend changes and buyers start to dry, that's when shit hits the fans.
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I agree with some of your points, but if anyone thinks a vancouver house will ever be "affordable" is the only fool.
Vancouver hasn't relied on any resources like Alberta, yet the RE market has
Boomed like crazy. What makes you think it'll ever collapse? Also, what exactly is collapse?
Here's what I personally think. Also note I'm no expert in RE.
- Vancouver will always be a renters market.
- even if housing dropped by 50%, it's still unaffordable (houses)
- mortgage rate hike will not affect the Chinese or any immigrants when they purchase cash
- doesn't help that low Canadian dollar actually makes Vancouver more desirable to immigrants. They'll easily pick Canada over the states just because of the worth of there dollar
- the majority of people will not up and leave BC because it's unaffordable. Do you know how hard of a decision that is for people that don't have degrees, have families, significant others?
In the end, I don't know what's going to happen. It could crash hard, prices could double again. Who knows, but if you're waiting to buy a house in Vancouver to raise a family but can't afford the $1mil+, have fun waiting.