# Vancouver and GTA home prices ridiculous rise in price



## sags (May 15, 2010)

Vancouver and the GTA both experienced ridiculous increases in price over last year...............26% - 38% in Vancouver, depending on east side or west side.

Garth Turner did a phone in show in Ontario and it showed the mind set of people and how everyone is swept up in the mania.

People with no money buying homes through lender down payment financing. People paying $270,000 for a 350 square foot condo.........about the size of a decent sized room.

Parents borrowing against their own home equity to finance homes for their kid, or possibly several kids.

It didn't matter what the logic Garth Turner put forward............bubble prices, likely interest rate increases, cost of ownership, stagnant wages, debt ratios..............the callers were having none of it.

Home prices are the best investment and will go up in price.............was the conclusion of many callers.

The average home in Vancouver is now $2.3 million. In the GTA it is around $1 million.

Turner talks about his experience in la la land on his blog.

These people are going to be so screwed it will take the rest of their lives to recover.

_In the past 12 months prices have increased 38% on the west side and 26% on the east (where the poor people live). Now Royal LePage has thrown more gas on the fire, saying the average price for a two-storey deteched house in YVR has (according to its realtors) swollen to $2.36 million, up 30.7% in a year.

Two point three million, by the way, is 34 times more than the average income in Vancouver. Let’s compare that to the GTA, where 300% more people live, incomes are higher, there’s an actual economy, The average detached two-story house here costs $975,937 – a 42% reduction from Delusia, yet still the second-hottest property market in the country with the same low mortgage rates and restricted supply of available listings.
_

http://www.greaterfool.ca/


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## new dog (Jun 21, 2016)

It has been this way since the early 90's in Vancouver. If interest rates rise enough, which isn't much compared to what is considered normal, then the bubble will pop for sure.

What will keep this from happening?

First interest rates remain historically low.
Second Vancouver is an elite city so foreigners will bid it up.
Helicopter money is deployed making all assets worth more as the currency is worth less.
Lastly our rules are stricter then the US was during their bubble.


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## steve41 (Apr 18, 2009)

No one cites the geography! Mountains to the north, ocean to the west, ALR to east and south..... all chopped up by major waterways... burrard inlet, false creek, the fraser river. There is simply nowhere else to go except up. Similar to Hong Kong and NYC.


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## gibor365 (Apr 1, 2011)

> Vancouver and the GTA both experienced ridiculous increases in price over last year...............26% - 38% in Vancouver, depending on east side or west side.





> Second Vancouver is an elite city so foreigners will bid it up.


especially considering the fact that CAD$ felt more than 20% in 2 years vs USD$.

I'm always curious why an extreme example are always Vancouver and Toronto?! Check prices in Paris or London (not in Ontario ones ).
Just out of curiosity, I checked real estate prices in Moncton (capital of the province btw ) . For 140-170K you can buy nice, big, new house.
example: http://www.remax.ca/nb/moncton-real-estate/na-49-tanya-crescent-na-crea_id17024682-lst/


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## new dog (Jun 21, 2016)

Good point steve41, even if Vancouver corrects hard in a interest rate rise, it would come back. Only a world crisis effecting every market or a disaster would keep it down.

Other Canadian markets will never compete and never have with Vancouver and Toronto. I remember thinking about moving to Calgary because I could cash in but the advantage has only grown over the years, except maybe for very brief blips along the way.


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## Pluto (Sep 12, 2013)

Apparently buyers in Vancouver have dried up at current prices. (This needs to be ratified by month end sales figures.) If true, odds are high prices will come down until buyers start biting.


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## new dog (Jun 21, 2016)

I have also noticed this, many signs are still up after weeks without a sold sign on it. I think this has to do with the time of the year and many builders have their inventory of knock downs for now. In fact prices could stabilize for the next year or two as they may have found their price point for now. This has happened a number of times since the 1990's and one may even get some decent price reductions from people who need to sell now.

I remember in 2007 I could get over 7 or 800 thousand for my house and then in 09 I think it was, I would have got 450 thousand if I was desperate to sell.


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## Berubeland (Sep 6, 2009)

Ya I can really see your point about how we are running out of land. 

https://www.e-education.psu.edu/earth107/node/1438


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## new dog (Jun 21, 2016)

I also forgot to mention as prices rise enough you reach a sellers price point bringing on more supply then buyers, at least in the short term. People say now is the time to cash in, get rid of the mortgage retire, you have to take advantage of this or whatever the reason is.


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## Daniel A. (Mar 20, 2011)

I've lived in the Vancouver area for 40 years now and watched the changes.
I can say that my daughter born and raised here moved two years ago 1000 kms away, she found that she had a life away in a small town where she could buy a house with a yard and have pets.
Yes the small town had its issues ie stores close at 6pm so if you need something after that good luck, major shopping met a 2 hour drive to get what most people take for granted.
I North Vancouver all she did was work and pay rent plus sit in traffic for what should be a ten minute drive that could be half an hour. 

Young people are starting to see the light I don't mind traveling up to visit, she has so much more a life where having a boat & RV to get away are things not possible in Vancouver. Yes the weather is different they do have winter and yes I was surprised she stayed as she has always been a city girl but she does see that she can have a life that is not possible in Vancouver.
Yes there is only so much land in the city so it is limited due to a number of factors but what is going on is crazy. 
Buying a condo use to be the norm as a starter now what is on the market is stupid and cost as much of what a house use to cost.


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## saskstu (Oct 21, 2013)

gibor365 said:


> especially considering the fact that CAD$ felt more than 20% in 2 years vs USD$.
> 
> I checked real estate prices in Moncton (capital of the province btw ) . For 140-170K you can buy nice, big, new house.
> example: http://www.remax.ca/nb/moncton-real-estate/na-49-tanya-crescent-na-crea_id17024682-lst/


Which Province? New Brunswick capital is Fredericton.


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## dubmac (Jan 9, 2011)

http://www.visualcapitalist.com/van...n=(Not)+Boring+Finds+for+July+2016+2016-07-05
this infographic pretty well sums it all up. interesting graphs and facts. Go to "Chapter 8" to get the summary on "IS THIS GROWTH SUSTAINABLE?"
like one of the little old ladies in a fairy tale, I plan on eating a portion of my house when I retire - so I'm OK with all this hype. My kids on the other hand..well..we won't be retiring here.


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## new dog (Jun 21, 2016)

Christy Clark announced today the BC Liberals will put a 15 percent tax on foreign buyers as well as taxing empty homes. They are also going to crack down hard on real agents who engage in misconduct.

http://www.theglobeandmail.com/real...c-everything-you-need-toknow/article30642062/


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## sags (May 15, 2010)

So Vancouver prices can keep rising, as long as wealthy Chinese buyers are allowed to purchase them ?

One of the statistics that stand out is that most of the employment in Vancouver revolves around construction and real estate.

If it is true Vancouver is running out of places to build, what happens to the employees in the most important industry when there is nowhere left to build ?

We are being "financially evicted" from our own city.


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## indexxx (Oct 31, 2011)

sags said:


> So Vancouver prices can keep rising, as long as wealthy Chinese buyers are allowed to purchase them ?
> 
> One of the statistics that stand out is that most of the employment in Vancouver revolves around construction and real estate.
> 
> ...


I can't see ever running out of room to build- in the foreseeable future there are hundreds of old buildings, lots, decrepit neighbourhoods etc in the GVRD to keep everyone busy for a long, long time. And of course there are the hundreds and hundred of older low-rise condo units, retail strips, corner malls and what have you that will eventually be razed to put up much larger, multipurpose developments. Tons of areas in North Burnaby, New West, Poco parts of Richmond, and many others are going to be part of the longer-term development, and that's just for starters.

I like what the post by New Dog says, however I don't think it goes far enough. It's a start though. I've always felt there should be very, very tight limits and controls on foreign property ownership to protect pricing and availability for Canadians. When I was trying to live in Slovenia, I was told that foreigners simply cannot buy land- even if one marries a local citizen, the local retains property rights.


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## new dog (Jun 21, 2016)

The problem Clark has and I am sure Toronto faces the same concerns is that if she goes to far then she could create a recession and tumbling home prices putting people underwater. There are a lot of homeowners in Toronto and Greater Vancouver that do not want to lose a pile of money from their home value. From what I understand is the new taxes will also go to build more affordable housing.


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## donzo (Aug 18, 2015)

new dog said:


> The problem Clark has and I am sure Toronto faces the same concerns is that if she goes to far then she could create a recession and tumbling home prices putting people underwater. There are a lot of homeowners in Toronto and Greater Vancouver that do not want to lose a pile of money from their home value. From what I understand is the new taxes will also go to build more affordable housing.


+1 on that. I think the bubble here is so close to popping that any outside disruption, like a 15% foreign buyer tax, could pop it. When the bottom falls out, and a lot of new families who made the stretch suddenly have homes worth less than their mortgages, bad things could happen. On the other hand, its going to pop sometime, thats going to happen anyway, why not now?

New taxes going to affordable housing? Yeah... thats what they say. Maybe it will... for a while


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## Pluto (Sep 12, 2013)

Most of the demand is local demand. I think if all foreign buyers disappeared no one would notice. Blaming foreign buyers happens everywhere the average person gets priced out of the market. 

maybe Vancouver should look at how other places, for example, Singapore handle residential real estate.


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## nathan79 (Feb 21, 2011)

15%...so that means houses might actually sell for their asking price instead of 15% over... lol.

They should have implemented this two years ago, then we might not be in as big of a mess as we're in now. I think it is good to start with 15%, then gradually increase the percentage over time to avoid a major shock to the market. But it's largely too late to reverse the damage now. I think the best case scenario would be a very slow decline in prices.


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## peterk (May 16, 2010)

indexxx said:


> When I was trying to live in Slovenia, I was told that foreigners simply cannot buy land- even if one marries a local citizen, the local retains property rights.


Were you just visiting for a while, or actually living in Slovenia Indexx? What were you doing there? I was just visiting Slovenia last summer for the first time, beautiful country, could see myself living there some day. It's perfectly situated where one can live in a very cheap, pleasant, peaceful country, and be only a 2-3 hour drive to northern Italy, the Austrian Alps, Vienna, the Adriatic sea and Damatian coast, and is the most South Easterly country before slipping out of the Schengen and into the chaos and adventure that is eastern Europe.


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## Daniel A. (Mar 20, 2011)

The feds should change the rules on the tax free windfall after one year.

Speculators come in and hold for a year and make thousands tax free, change it to five years.


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## new dog (Jun 21, 2016)

People who have to move here to work including hockey players and such are going to be caught in this foreign real estate purchase tax grab. Also it takes effect at the end of the month so everyone is scrambling to close the deals made already.


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## indexxx (Oct 31, 2011)

peterk said:


> Were you just visiting for a while, or actually living in Slovenia Indexx? What were you doing there? I was just visiting Slovenia last summer for the first time, beautiful country, could see myself living there some day. It's perfectly situated where one can live in a very cheap, pleasant, peaceful country, and be only a 2-3 hour drive to northern Italy, the Austrian Alps, Vienna, the Adriatic sea and Damatian coast, and is the most South Easterly country before slipping out of the Schengen and into the chaos and adventure that is eastern Europe.


You're right, it's Europe's hidden gem. I just loved it and Ljubljana is such a great little city. I was trying to find a way to stay; I spent four months there supporting myself by busking and selling my photography while looking for a job- however as a non-EU citizen it's pretty impossible unless you have a skill in demand. I really wanted to open a hostel or a bar or something but it didn't work out unfortunately.


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