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?
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/H...
[2] 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-...
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?
Nearly all of these millionaire immigrants to Quebec move to BC.
http://www.scmp.com/comment/blogs/article/1929324/study-reve...
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.
Property price crash != property bubble.
Everyone knows there's a bubble in Vancouver. No one thinks the bubble is crashing next month or even this year.
You've got people on this very thread thinking Vancouver's people are selling their souls and never getting it back.
I think for a general statement, it's carries a lot more weight than the two examples you've given.
It's a general description of sentiment during a bubble, not a precise description of each person's state of mind. As a statement, I think it's fine as it is.
FUN facts - IF the Vancouver housing market crashed by 70%
1] - A Vancouver detached house would still be valued at OVER the current Canadian national average selling price(2016-02) for detached homes of 503K
2] If you exclude Vancouver and Toronto sales out of the national housing sale, the average price of a home drops from 503K to 355k
People always see the property price crash coming. People know, intuitively, housing can't go up 20% or 50% or whatever every year. It's just that they think they can make money and get out before the crash happens. Let me put on my Carnac the Magnificent turban and tell you there's definitely a property price crash coming in Toronto and Vancouver. Guaranteed.
The problem is you have to know when it's coming to cash in, and I can't help you there. If I could I'd be buying up million dollar houses. These things last way, way longer than I expect.