HAM vs BCM

[crabman]

I've found some more pretty compelling evidence that the last 5 years have been driven by foreign money. I've recently noticed that high-end condos in my neighbourhood (Yaletown) have appreciated much more than low-end condos. This is not what usually happens in a debt-fueled bubble. Entry-level homes rely on debt much more than high-end homes do.

It's also true that the $1M+ SFH market has been much stronger than the sub-$1M condo market in recent years. However, CMHC hasn't insured mortgages on $1M+ properties since 2012. This strongly suggests foreign money is the primary driver of the market right now.

If you look at the long-term price graph for Vancouver detached versus apartment, you also see strong evidence of foreign money. Since 1977, detached and apartment prices have generally appreciated/depreciated at the same rate. However, there are two periods where this has not been the case.

The first period was the 1990s. In the first half of the decade, immigration from wealthy Hong Kong residents concerned about the Chinese handover was very strong. During that period, detached prices increased significantly more than apartment prices. In the second half of the decade, when immigration from Hong Kong slowed, detached prices actually fell, while apartment prices were flat.

The second period is late-2009 to present. (The same period I mentioned in my earlier post which compared Vancouver to Victoria). Over this period, apartment prices have been flat, while attached prices have increased about 50%!