Real Estate Speculation: A City Built on Property Values

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"It is the English-speaking world's favourite game: property," writes the economic historian Niall Ferguson. "No other facet of financial life has such a hold on the popular imagination. No other asset-allocation decision has inspired so many dinner-party conversations. The real estate market is unique. Every adult, no matter how economically illiterate, has a view on its future prospects."xx1

In few cities can this be as true as Vancouver. From the city's founding in 1886, Vancouverites have had an almost neurotic obsession with their property values. Many of the defining events in this city's early history, from the completion of the Canadian Pacific Railway and the establishment of Stanley Park, to the city's layout and the name "Vancouver" itself, are all connected to the buying and selling of real estate.

One of the defining events in Vancouver history, perhaps the most important event that most people today have never heard of, was the real estate bubble of 1905-1913. It coincided with the biggest economic boom in Vancouver's history, when tens of thousands of new immigrants arrived and vast new tracts of land were opened up for settlement. Foreign money from Britain poured in, sending real estate prices through the roof, while shady realtors encouraged Vancouverites from all walks of life to invest their life savings in buying up speculative plots of land on the fringes of town. The speculative fever infected society, and thousands made off with fortunes they scarcely could have dreamed of a few short years before. Thousands more were left destitute, priced out of the market by soaring property taxes and rents.

Then in 1913 the global economy went into recession and the real estate bubble burst. The shock was a body blow to Vancouver's skyrocketing economy. A cascading series of bank failures led to a complete collapse in real estate prices and high unemployment. The building boom ground to a halt and few new buildings were to be erected for decades. In some regards the city would not make up all the ground lost until after World War II.

Today real estate has once again become the top topic of dinner-table conversation. Prices continue to rise at breakneck speed, fuelled by a torrent of foreign money, this time from China. Many of the same trends seem to be in play today and one can't help but feel unease about the many parallels between 1912 and 2016.

In this tour we will learn first about how real estate speculation shaped Vancouver's first years and laid the groundwork for the modern city. Then we will examine the real estate bubble from 1905 to 1913, learning how it happened and what it was like to live through. Are there lessons we can learn from the popping of Vancouver's first real estate bubble?

Liens

• Website onthisspot.ca
• Download App apps.apple.com

Organisateur

On This Spot

The On This Spot app takes people on guided walking tours through the history that surrounds them.

At each stop on their journey users will find themselves standing on the spot a historic photo was taken. They can view a then and now photo comparison, use the built in camera to create their own, and read about local history and how it ties into the broader human experience.

Based in Vancouver, On This Spot is working with heritage, tourism, and business organizations across Canada to expand the app's coverage.