Saturday, September 12, 2009

Bob Rennie... the newest Bear?

Bob Rennie, dubbed Vancouver's Condo King, is known across Canada as the real estate wunderkid.

Considered the #1 Condo Project Marketer on the wet coast, Rennie has been the penultimate real estate bubble booster. Last year he even revealed his 101 Reasons You Should Buy Today in the Vancouver Marketplace.

What a difference a year makes.

In a stunning article in BC Business Magazine, Rennie has penned a column titled "Lowering the boom: Are the good times over for Canada's most privileged generation?"

It's a question Rennie answer's in no uncertain terms.

"The financial crisis that broke loose a year ago is not just a temporary setback; it’s one of those defining generational events that alter behaviours and attitudes forever."

Rennie forsee's a dramatic shift in our consumer society.

"Many of us have long presumed that a big inheritance was going to be coming down the pipes – a legacy from Ma or Pa that would clear the deck of any debts and solve all post-retirement problems. Yet this market meltdown, which has seen a huge erosion of our mutual funds, pensions and stock portfolios, has affected grandma too. Her portfolio – as conservative as it is (or was) – got whacked, and now she’s being forced to dip into her savings. Our inheritance."

And what does Bob see as the future for real estate?

"The early warning signs of the new, more frugal world order are everywhere... in the real estate world, we’re going to have to recognize the new reality and start looking at boomers differently."

Rather than Boomers shooting the moon on real estate purchases, Rennie correctly sees a massive scaling down, "selling the house and finding something smaller and more affordable, either to pay off their debts or to increase their cash position."

That, by the way, is one of the doomsayer predictions of the real estate bears: Boomers downsizing.

The theory is that, as the market begins to flood with all the huge 'McMansions' for sale by aging Boomers, the much smaller 'echo' generation will not be able to absorb all the inventory.

Result? A severe decline in prices.

It's a stunning about face for Rennie, whose company is currently marketing the Woodwards development in the seedy downtown east side. 'Be bold or move to Surburbia! The wait is finally over...' goes the marketing slogan. It appears Rennie is not quite as bold (or as bullish) as the ad copy and predicts a massive demographic shift in priorities.

"We’ve experienced the biggest financial collapse in our lifetime. We will have to institute dramatic changes in how we entertain ourselves, where and how we travel, what we drive, where we live and how we ultimately pass on wealth to our children."

Not only doesn't Bob see the economic recovery taking hold in the same way as the rest of the real estate community, Rennie is downright pessimistic about what he does see.

"For those praying for a return to yesterday, forget it. It’s gone."

This is an earth shattering statement from someone like Rennie.

Bob clearly knows that the bubble is about to burst and that the ever-expanding real estate growth of the last decade is going to come to a crushing end.

I just never thought I would ever see the likes of Bob Rennie publically admitting it.


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1 comment:

  1. He's a complicated man, that's for sure. Have you read about his new private art gallery? Here, from