Quote:
Originally Posted by lorenavedon
sounds like you have a lot of, "let them eat cake" type of friends. You're probably upper middle class very well off with very well off friends. That's not a good representation of the "average" person. Those with secure jobs, friends of the owners etc are in a very good position to whether the storm. Go talk to people in O&G that have already lost their jobs and ask them how they feel and how concerned they are. When times get tough and in a 200 person company 100 people get laid off, the remaining 100 people are just fine. If anything they're better off because they have jobs and can take advantage of lower prices due to the slower economy. But those 100 that got laid off will create a huge downward pressure on the economy and real estate market. So asking people in the %1 how they feel about their satiation is probably not a good indicator of the overall trend out there. If I was rich I'd welcome a downturn so I could take advantage of it. Too bad that doesn't help the rest of those that are going to have trouble making ends meet.
Also remember, a huge driver of the market in the past few years has been investors. So even if people aren't rushed to dump their homes, they might rush to dump their extra properties and at the same time investment demand will drop off a cliff. There is also a case to be made as to what will get hit the hardest. I agree that some will get hit less than others. Commercial office space is going to be brutal once all this new space comes on tap from query park, brookfield, telus, the bow, etc. There's going to be tons of extra office space all across this city in the next few years.
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I already saw your post in the other thread and this one is no different - comes across as if you are attacking me or have something against me. It's purely a question with a opinionated answer - there is no right or wrong.
As for the rest of the post, why would investors be dumping their properties right now? The only reason I can think of is that they are in a position where they need whatever cash they can get out of the property asap. Rental vacancy rates are still below 1.5%, a correction in housing prices (be it moderate growth in the 1-2% range or losses in the 2-3% range) are not going to do much for vacancy rates. As long as investors are still covering their tails on their rental income, it makes no sense to sell now if they are in a position to hold on for a year or 2. Of course there will be the unique case of a investor needing the equity however that holds true in any market condition.
I can guarantee that someone who is unable to purchase a $399,999 property isn't all of a sudden going to have no problem getting in at $388,000 thus driving demand for rentals down.
Speaking of office rental space, it is already dropping. It may be the hardest hit throughout the whole downturn however those in charge of making the decisions to spend the money spent on these office spaces are much smarter than I and I don't think the woke up and decided to build on a hunch.