Bursting real estate bubbles: China, Spain...Vancouver?

What would happen in Vancouver if China's real-estate bubble were to burst?  Would Vancouver's bubble burst and would we ever see a squatter's movement like that in Spain? (Image below by vikkies)

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High eviction and foreclosure rates (Spanish banks foreclosed on over 100,000 households in 2010 alone) have led to a rapidly-shrinking demand for any form of higher-end housing. We don't see huge amounts of foreign investment, since Spain's economy is still so unhealthy. Basically, nobody's buying these fancy new apartments because nobody can afford them.

When you have a growing homeless population and a growing number of vacant properties, the environment becomes ideal for the growth of a squatter movement; that's precisely what is happening in Spain.

Seville has become a locus for squatters, as families occupy unsold apartments in some of these ghost buildings. 

Welcome to Corrala Utopia, a meta-development in which these vacant properties are taken over by families who need shelter. Corrala Utopia's slogan says it all: "Ni gente sin casa, ni casas sin gente (No people without houses, no houses without people)".

As building owners go broke, banks have actually started negotiating with the squatters to arrange a sustainable agreement. If you kick a squatting family out, you're left with what you had before: an abandoned unit. If you arrange some sort of rent program, then at least you're not eating the entire cost of your "investment"... particularly if you're a development company undergoing bankruptcy proceedings of your own.

Vancouver: a squatter destination?

Reading about China's ghost towns, you may have thought of the Olympic Village project, even if only for a moment. The Village has had an excruciatingly slow go of it, and it's not difficult to see why. After all, unless you have over half a million dollars, all you could get at The Village on False Creek is a studio.

There are plenty of vacancies, though, if you have up to $1.5 million to spend. According to its own sales website, the Village at False Creek has 102 units unsold, with a third of them in the $1.5 million-and-up range.

When you read about Spain's squatter movement, did you also think of the Olympic Village development?  It's actually no ghost town, with more units sold than a stroll through the quiet streets may indicate. I'm not suggesting that you squat in Olympic Village, but you may have at least briefly thought about it before reading this article.

Same with the Yaletown skyline. Looking across False Creek at dusk and seeing all those unlit windows, did you ever think, "Nature hates a vacuum"?

While the idea of Yaletown squatter colonies may fuel our rueful fantasies, such a thing would be a long time coming.

British Columbia just doesn't have the grim economic climate to drive its residents to such lengths in great numbers, nor does it have entire completed developments in such a state of abandonment that you're finding in Spain or China. If you're trying to make ends meet, it's just easier to get a flatmate or sublet your place to a backpacker via AirBnB.

Spain is in dire straits to the extent that it's helping to pull down the entire Euro-Zone, and young people with mobility are seeking prospects elsewhere in Europe. Vancouver, on the other hand, remains a desirable destination, for lifestyle if not for wages.

Are there squatters in Vancouver? Of course. Every city has a squatter scene to some extent; while Vancouver's middle class is frozen out of much of the housing market, the situation is not at the tipping point that parts of Spain have already reached.

No matter what happens in China or in Spain, don't count on Lower Mainland property becoming cheap anytime soon.

(Working on this story reminded me of Michael Winterbottom's 2003 film Code 46, starring Tim Robbins and Samantha Morton. Code 46 is more relevant now than when it was originally released. Among then-futuristic elements such as touchscreen smartphones and eroding privacy, the film also deals with a vanishing and less-mobile middle class and abandoned structures originally meant for wealthy occupants. The film doesn't have any action scenes, though. Sorry.)

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