Quote:
Originally Posted by Carl Johnson
Global recession does NOT only destroy Vancouver real estate, it also destroy all other asset classes like stocks and commodities. What is true though is that a house is the best form of hedge against inflation. Do you really think central banks will let us come to a financial ruin again after what they witnessed happened if they don't help Fannie, Freddie, AIG, and Lehman Brothers?
The Chinese corruption money is simply just a front for people to vent their frustrations and anger for missed the real estate market rally or people who sold too early.
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I actually agree with you even though I'm against buying at this stage.
Here's my speculative theory:
A correction will happen, however, a total collapse (crash) is very unlikely. The central bank (not just the BoC, think of it as a coalition of CBs backing each other) will attempt to burst it in a way that we move from one bubble to the next without the market sustaining a lot of damage.
For example, look at the latest correction in the stock market: they maintained the market by investing heavily in market leaders (FANG stocks, leading biotech such as GILD), then slowly dropping it through gold and oil. The bubble was popped and market corrected 15% from 2015 high early this year. Then they took it up through, again, gold and oil from Feb 16. It seems to have worked and they are betting on market going much higher from here, as they believe they have instilled confidence in the market. You saw ECB announcing another round of bubble last week.
So you can see, similar to the stock market, this RE bubble can be bursted through various means that ensures no collapse can happen. Again, this is why having a plan for your investment is important. People with no plan will panic sell at the bottom of a correction as they are easily influenced by fear.
This theory, of course, is based on the confidence that the CBs is competent. If they fucked up, well then we are all fucked (perhaps on different level, but fucked nonetheless) as now, it won't be a collapse of one market but multiple of them at the same time.