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Do you think the people buying these houses are so poorly off that they will sell when times get tough or do you think they incredibly rich and will laugh off m

by hoodoof 11y ago

Do you think the people buying these houses are so poorly off that they will sell when times get tough or do you think they incredibly rich and will laugh off market fluctuations?

moistgorilla 11y ago
if the bubble pops it means people are selling.
meric 11y ago
Yes, they will sell. These people don't care about the price when they buy. They won't care about the price when they sell either. The last time a property bubble in a developed economy fueled by Chinese speculators crashed, it crashed by 70%. [1] People never see a property price crash coming. Credit Suisse First Boston – 15 July 1997: [2] We believe the supply demand imbalance will continue to drive residential prices during 4Q 1997 and into 1Q 1998. The two extremes will perform best; luxury residential prices should fare particularly well as we see flows of capital into the top end of this sector. Luxury property is also much less sensitive to affordability levels and much more geared to supply and price expectations. The smallest units (below 40 square metres) will also fare well as there is very limited supply at this level, yet they are the most affordable private sector flats. [1] http://www.macrobusiness.com.au/wp-content/uploads/2013/04/HK.png http://www.macrobusiness.com.au/wp-content/uploads/2013/04/H... [2] http://www.businessinsider.com/hong-kong-property-did-you-see-the-crash-coming-in-1997-2011-6/?r=AU&IR=T http://www.businessinsider.com/hong-kong-property-did-you-se... The overheated property markets Vancouver & Sydney are fuelled by Chinese speculators. Why are they buying overseas when there's a perfectly sound economy right on their border, Hong Kong? There's a property bubble in Hong Kong too, and it was getting expensive there, the Chinese went overseas to other well-off cities that are full of Chinese, Vancouver and Sydney. If Hong Kong was leading the price rise amongst the three cities, it might lead the price fall too. At this very moment, Hong Kong's property prices are slumping: http://www.bloomberg.com/news/articles/2016-02-01/hong-kong-property-sentiment-turns-as-sales-slump-to-25-year-low http://www.bloomberg.com/news/articles/2016-02-01/hong-kong-... One could argue, for all the many rich people buying in Vancouver who could shrug off market fluctuation, there are even more millionaires and billionaires in Hong Kong, which has the 4th highest billionaires per capita, who could shrug off even bigger market fluctuations. Yet it's property price is falling anyway. One third of property buyers in Vancouver are Chinese. How many percent Chinese do you think are buying the property in Hong Kong?
- hkmurakami 11y ago
  Wasn't the Vancouver property also fueled by some kind of citizenship granting process from purchasing property in excess of some price?
  - tostitos1979 11y ago
    Not anymore as far as I know. And not for a few years.
    - Tiktaalik 11y ago
      The Fed investor immigration program was canned, but there's still a backdoor in Quebec letting in millionaire immigrants, as Quebec manages their own investor immigrant scheme. Nearly all of these millionaire immigrants to Quebec move to BC. http://www.scmp.com/comment/blogs/article/1929324/study-reveals-awfulness-canadian-investor-immigration-income-tax http://www.scmp.com/comment/blogs/article/1929324/study-reve...
      - throwaway6969 11y ago
        That is unfortunate. There's been a long history of provinces just screwing each other (Sask just recently put two homeless men on a bus to vancouver).I wonder why the federal govt doesnt have full jurisdiction on immigrant visas.
- IkmoIkmo 11y ago
  > People never see a property price crash coming. Isn't this a bit like any statement. 'People who get hit by a car never saw it coming'. Or 'people diagnosed with cancer weeks before they died, never saw it coming'. Well sure, ignoring the people who did saw it coming, which are events we then ignore. i.e. there may have been various formations of bubbles, people saw it coming, adjusted their investments, and the bubble diminished. Further, it's not like today, people don't realise there's a bubble in Vancouver. It's pretty much the opposite.
  - 11y ago
seanmcdirmid 11y ago
They will sell, just like they sold when the Japanese bubble popped. This has happened before, playing out in almost the exact same way (except the bubble is bigger this time, and more cities are involved).

by hoodoof 11y ago

Do you think the people buying these houses are so poorly off that they will sell when times get tough or do you think they incredibly rich and will laugh off market fluctuations?

moistgorilla 11y ago

if the bubble pops it means people are selling.

meric 11y ago

Yes, they will sell. These people don't care about the price when they buy. They won't care about the price when they sell either. The last time a property bubble in a developed economy fueled by Chinese speculators crashed, it crashed by 70%. [1] People never see a property price crash coming. Credit Suisse First Boston – 15 July 1997: [2] We believe the supply demand imbalance will continue to drive residential prices during 4Q 1997 and into 1Q 1998. The two extremes will perform best; luxury residential prices should fare particularly well as we see flows of capital into the top end of this sector. Luxury property is also much less sensitive to affordability levels and much more geared to supply and price expectations. The smallest units (below 40 square metres) will also fare well as there is very limited supply at this level, yet they are the most affordable private sector flats. [1] http://www.macrobusiness.com.au/wp-content/uploads/2013/04/HK.png http://www.macrobusiness.com.au/wp-content/uploads/2013/04/H... [2] http://www.businessinsider.com/hong-kong-property-did-you-see-the-crash-coming-in-1997-2011-6/?r=AU&IR=T http://www.businessinsider.com/hong-kong-property-did-you-se... The overheated property markets Vancouver & Sydney are fuelled by Chinese speculators. Why are they buying overseas when there's a perfectly sound economy right on their border, Hong Kong? There's a property bubble in Hong Kong too, and it was getting expensive there, the Chinese went overseas to other well-off cities that are full of Chinese, Vancouver and Sydney. If Hong Kong was leading the price rise amongst the three cities, it might lead the price fall too. At this very moment, Hong Kong's property prices are slumping: http://www.bloomberg.com/news/articles/2016-02-01/hong-kong-property-sentiment-turns-as-sales-slump-to-25-year-low http://www.bloomberg.com/news/articles/2016-02-01/hong-kong-... One could argue, for all the many rich people buying in Vancouver who could shrug off market fluctuation, there are even more millionaires and billionaires in Hong Kong, which has the 4th highest billionaires per capita, who could shrug off even bigger market fluctuations. Yet it's property price is falling anyway. One third of property buyers in Vancouver are Chinese. How many percent Chinese do you think are buying the property in Hong Kong?

hkmurakami 11y ago
Wasn't the Vancouver property also fueled by some kind of citizenship granting process from purchasing property in excess of some price?
- tostitos1979 11y ago
  Not anymore as far as I know. And not for a few years.
  - Tiktaalik 11y ago
    The Fed investor immigration program was canned, but there's still a backdoor in Quebec letting in millionaire immigrants, as Quebec manages their own investor immigrant scheme. Nearly all of these millionaire immigrants to Quebec move to BC. http://www.scmp.com/comment/blogs/article/1929324/study-reveals-awfulness-canadian-investor-immigration-income-tax http://www.scmp.com/comment/blogs/article/1929324/study-reve...
    - throwaway6969 11y ago
      That is unfortunate. There's been a long history of provinces just screwing each other (Sask just recently put two homeless men on a bus to vancouver).I wonder why the federal govt doesnt have full jurisdiction on immigrant visas.
IkmoIkmo 11y ago
> People never see a property price crash coming. Isn't this a bit like any statement. 'People who get hit by a car never saw it coming'. Or 'people diagnosed with cancer weeks before they died, never saw it coming'. Well sure, ignoring the people who did saw it coming, which are events we then ignore. i.e. there may have been various formations of bubbles, people saw it coming, adjusted their investments, and the bubble diminished. Further, it's not like today, people don't realise there's a bubble in Vancouver. It's pretty much the opposite.
- 11y ago

seanmcdirmid 11y ago

They will sell, just like they sold when the Japanese bubble popped. This has happened before, playing out in almost the exact same way (except the bubble is bigger this time, and more cities are involved).