(Ever)ComeDownVille
From Travis' Lupick's GStraight report on Bob Rennie's annual performance piece for the highly respected, rigourously reviewed, and fully accredited 'Urban Development Institute':
...Rennie said that 193,000 homes in Metro Vancouver are owned “clear-title” by someone over 55 years old.
The value of these residential properties is $197 billion. That’s up from $66 billion owned clear-title by the region’s baby boomers in 2006.
Rennie noted that $60 billion of the $197 billion of clear-title property is owned by people over the age of 75.
He suggested that these equity-rich boomers are trading down and buying second homes or recreational properties. In addition, he said that they’re helping their children and grandchildren enter the market.
“The Royal Bank of Canada is tracking first-time buyers,” Rennie stated to a full house in a Fairmont Hotel Vancouver ballroom. “Eighty percent-plus of their Vancouver first-time buyers are receiving family funds, 70 percent-plus in Burnaby, and 60 percent-plus in Surrey.
“The $197 billion is fuelling Victoria, but it’s also in Kelowna, on Bowen Island, and at Whistler,” he continued...
So.
There you have it folks.
Nevermind the Bollocks (and/or uppity citizens who can't get into the market in the first place), because this bubble is going to have real bounce for everyone, old and young, near and far.
Which, if put another way, presumably also means that when the bubble pops it won't just be folks in the Lower Mainland who will get slimed.
Or worse.
****
Gosh.
What a wonderful world Clarklandia is.
.
10 comments:
"People were purchasing (tulip) bulbs at higher and higher prices, intending to re-sell them for a profit. However, such a scheme could not last unless someone was ultimately willing to pay such high prices and take possession of the bulbs.
In February 1637, tulip traders could no longer find new buyers willing to pay increasingly inflated prices for their bulbs. As this realization set in, the demand for tulips collapsed, and prices plummeted—the speculative bubble burst."
https://en.wikipedia.org/wiki/Tulip_mania
Hugh--
Absolutely.
I'm re-reading Michael Lewis' account of the 2008 tulipfest that almost ruined the entire worlds economy.
And the crux of the thing appears to be not the fall, but rather the slowing of the climb.
Because once the speculators at the top smell that they start to get out and the folks at the bottom are suddenly left holding a decomposing paperbag 10,000 leagues under the sea.
.
Being in the over 70 age group.... the only way our kids will get to live in Vancouver is for us leave the house intact, and let them pay the 'mortgage' on our nursing home costs.
NVG--
It's a mug's game...
Essentially the good King Robert the B is telling the young 'uns to shut-up and strap themselves to the bottom of the pyramid with the help of their re-leveraged parents.
And then, when the bubbles burst that are holding up the pyramids...
Well?
.
Those who lived through the Dirty Thirties were always warning my generation about borrowing too much. Looking back to 1975 our north shore property, just the property, was $45,000. Today its $1.1 million
Year Prime Rate
April 16, 1974 10.50% Watergate April 29, 1974
May 13, 1974 11.00%
July 24, 1974 11.50%
November 21, 1974 11.00%
January 15, 1975 11.50%
February 1, 1975 9.75%
February 26, 1975 9.00%
September 5, 1975 9.75%
March 10, 1976 10.25%
November 23, 1976 9.75%
December 24, 1976 9.25%
February 1, 1977 8.75%
June l, 1977 8.25%
March 15, 1978 8.75%
April 5, 1978 9.25%
August 1, 1978 9.75%
September 15, 1978 10.25%
October 18, 1978 11.00%
November 7, 1978 11.50%
January 5, 1979 12.00%
July 25, 1979 12.50%
September 10, 1979 13.00%
October 10, 1979 13.75%
October 26, 1979 14.75%
November 2, 1979 15.00%
March 17, 1980 15.75%
March 28, 1980 16.50%
April 3, 1980 17.50%
April 21, 1980 17.25%
April 28, 1980 16.75%
May 5, 1980 16.50%
May 12, 1980 15.75%
May 15, 1980 14.75%
May 26, 1980 13.75%
June 23, 1980 13.25%
July 21, 1980 12.75%
July 25, 1980 12.50%
August 5, 1980 12.25%
October 3, 1980 13.00%
October 10, 1980 12.75%
November 3, 1980 13.25%
November 18, 1980 13.75%
November 28, 1980 14.50%
December 5, 1980 15.50%
December 12, 1980 17.00%
December 19, 1980 18.25%
March 23, 1981 17.75% Referendum rights of Trudeau
April 20, 1981 18.00%
May 1, 1981 18.50% Shuttle's first flight April 27, 1981
May 8, 1981 19.50%
June 5, 1981 20.00%
July 24, 1981 21.00%
July 31, 1981 21.75%
August 7, 1981 22.75%
September 8, 1981 22.25%
September14, 1981 21.75%
September 21, 1981 21.25% Natural Gas Sales Plummet
October 9, 1981 20.75%
October 19, 1981 20.00%
November 9, 1981 19.50%
November 16, 1981 18.00%
November 23, 1981 17.25%
January 4, 1982 16.50% Olson Pleads Guilty to 11 murders
March 26, 1982 17.00%
June 4, 1982 17.50%
June 18, 1982 18.25%
July 16, 1982 17.75%
July 23, 1982 17.25%
August 6, 1982 17.00%
August 20, 1982 16.00%
September 3, 1982 15.50% Miners Flock to BC for Coal
September 24, 1982 15.00%
October 8, 1982 14.50%
October 15, 1982 13.75%
November 12, 1982 13.00%
December 17, 1982 12.50%
January 7, 1983 12.00%
February 18, 1983 11.50%
April 19, 1983 11.00% Seat Belts Mandated September 6, 1983
March 23, 1984 11.50% Jobless rates lowest since July 1982
May 9, 1984 12.00%
June 25, 1984 12.50%
June 29, 1984 13.00%
July 6, 1984 13.50%
August 10, 1984 13.00%
October 26, 1984 12.50%
November 20, 1984 12.00%
December 7, 1984 11.75%
December 21, 1984 11.25%
November 11, 1985 11.00%
February 22, 1985 11.50%
March 8, 1985 11.75%
March 29, 1985 11.25%
April 12, 1985 11.00%
April 19, 1985 10.75%
May 22, 1985 10.50%
August 23, 1985 10.25%
October 7, 1985 10.00%
January 7, 1986 10.50%
January 14, 1986 11.00%
January 31, 1986 11.50%
February 7, 1986 12.25%
February 14, 1986 13.00%
March 14, 1986 12.50%
March 21, 1986 12.00%
April 7, 1986 11.50%
April 11, 1986 11.25%
May 2, 1986 10.50%
May 16, 1986 10.25%
July 18, 1986 9.75%
January 23, 1987 9.25%
March 13, 1987 8.75%
April 24, 1987 9.25%
May 22, 1987 9.50%
July 31, 1987 10.00%
North Vancouver Grumps,
my god I lived through all of that! I remember signing the mortgage at 19.5% for a housing co-operative costing $3.5M. I thought I'd have a heart attack.
Aging baby boomers are not going to all have the retirement they planned on. they may well outlive their money,. they won't be able to finance their children and grandchildren. Care for seniors in the province is not great. Most of it is privitized, ehllo el gordo, with "subsidies" being available to those who need it. but those who qualify, aren't a lot. If you have money and go into care and have to pay for it, you can be moved somewhere else, once your money is gone or if there is no subsidy available or the place doesn't have subsidy.
Rennie is out of touch with reality, but that is most likely why he's with the B.C. Lieberals.
If the bubble does burst and I don't see it happening, my suggestion is, just walk away from it and declare bankruptcy. Let the banks eat it, they helped it all along.
Anon-Above--
Something super special about this bubble?
.
The retired folks have the choice I'm already planning. Move out of the country with better governance, weather, food, etc......with a much lower cost of living than lotusland.
Not for everyone but a necessity for some.
out of country interest in BC property
prices go
https://www.youtube.com/watch?v=PLTq9Mn4OyI
It's interesting to speculate what a burst bubble would be. You know, there are so many dismally-scientific weasel-words like "slump", "stagnate", "recession" and "depression" that trump the cognates of regressive expression...ism---is there one that defines a "burst"? How much of a drop in real estate sale-prices has to happen before it's classified as more than a statistical fluctuation.
Is "a correction" painless to everyone but speculative newcomers? It seems only those who buy high but doesn't need the house to live in would be hurt by a price drop. And, of course, those who borrowed money against the presumably "incorrect" bubble-value to buy something non-appreciable, like a bubble-machine that's made out of soap.
The perversity of bubbles we already saw in 2008. That correction was largely considered incorrect---even the repo-men were compelled to rent back to the same families who'd defaulted on their incorrectly leveraged mortgages.
In '81 I had a house in the Alberni Valley that the bank wouldn't touch after thousands of us got a sandwich wrapped in a roadmap. My bubble had turned into a pair of jeans, couple T-shirts rolled into a sleeping bag strapped to the sissy-bar of a motorcycle, just like magic! Went to Calgary where all us refugees had to group up to afford scarce rental housing. Few years later those same refugees had purchased those same rentals after that bubble had burst. It does happen---it has happened, but the definition is still conspicuously etherial.
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