So when is the Vancouver BC market to crash?

Question

It has always been crazy but if it will crash, its going to be huge! China economy needs to crash before it happens to Vancouver.

http://www.vancouversun.com/news/metro/high+metro+vancouver+real+estate+buyers+commuting+helicopter/11782670/story.html

Peter Crisp · Answer

For what it's worth, I'm with Pawan on this and I keep looking for holes. Population estimates predict 1.2 million more people in the region by 2041, and with land at a premium, this will come from infill and increased density. BC's growth is solid right now. Based on cranes and shovels, at least in Surrey, I don't see any deceleration - likely the opposite. So it makes sense to invest to the max, then re-invest either locally or diversify to other areas.

I've been to China several times, and the transformation in the country has been amazing. But the air, land and water pollution issues are very challenging. Even without getting into politics, just being able to afford to move to a place with clean air and water is a major driver and will continue to be.

It is jarring to me that we have stories of helicopters to luxury locations, at the same time as stories of one-way bus tickets from SK to BC for a couple of guys that sound down in their luck. This is straying out of BiggerPockets territory. But, the strains of affordability and what to do about it could get ugly (e.g. ban strata rentals vs. force them open; go after illegal suites or turn a blind eye;  ban AirBnB or tax, etc.).

Pawan J. · Answer

Vancouver wont crash!

Being born and raised in Sydney Australia I have seen real estate rise, rise and rise some more. Even when people thought it couldn't get more expensive it went up another 20% in Sydney last year.

Vancouver and Sydney are very similar in that they are the most desirable places to live in their countries and until recently Sydney was also in the top 5 in the world but now only Vancouver remains there. both cities are land locked, and they are also both beautiful harbor cities. Australia sells non-renewable resources as its main export to China and Canada doesn't sell much to china instead more Chinese/Asia invest in property in Vancouver, also in LNG companies and resource companies in BC etc. Canada sells more to the USA (~87% of exports).

Even when china slowed down some years ago and stopped buying from Australia, Sydney house prices did nothing but stay stable. At the same time and to this day Chinese folks with money continue to get their money they make out of china and hence invest in real estate in Vancouver mainly due to instability in their own country and most don't care if their investment appreciates as long as its holds it values.

Long story short even if china crashes prices will do nothing in Vancouver but remain stable or maybe fluctuate no more than 5% even if their is more inventory than buyers.

Vancouver is an amazing place to live and the more the world knows this the more the prices will rise.

This is why our investors and I continue to make great residual income through buy, renovate or build new and sell in Vancouver and will continue to do so for some time.

If you own real-estate in Vancouver - don't sell unless you have to, use the equity as our investors do to make residual income on flip deals and use that residual income to then buy rental properties for long-term passive income. :0)

Michael Lam · Answer

hi @Lorin K.

What a big topic!

If anyone can answer this, they wouldn't be on this board, they'd be busy investing their billions!

1.  I agree that China will influence a crash.  I do believe based on the research and data I've collected that China will influence world economies.  The fact that a very  good portion of foreigners purchasing homes in Vancouver is Chinese plays into this narrative.

2.  Remember the market news is several months behind.  Pay attention to leading indicators like building materials or permit pulls.

3.  Another factor that isn't getting nearly enough attention is corporate play into this "crash".  You'll notice if not already companies are tightening up on their fundamentals.

4.  If your into stocks, look at the option play for home builders or mortgage companies.  Market will price that in (a way to look at sentiment instead of reading surveys)