China's Liquidity and Vancouver's Housing Bubble in Chart Form

I took the MLSLink HPI data from the Greater Vancouver Housing Board and the Constant Quality Price Index chart from Evaluating Conditions in Major Chinese Housing Markets by Wu, Gyourko and Deng's working paper of 2010 and overlaid them.

Red line is Vancouver residential detached house prices in dollars (left hand labels) from MLSLink HPI, the grey (nominal) and black (real) lines are Wu, Gyourko and Deng's Constant Quality Price Index for Newly-Built Private Housing in 35 Major Chinese Cities (right hand labels).

From 2005 you can see Vancouver's prices responding like Ireland, the U.S., and the UK to the pressure of low interest rates. Up and up, but then comes the crash and down the prices begin to plummet. But a floor appears and then another surge upward, suspiciously forming a deflection point exactly where China's happened. That's the Chinese government's stimulus program.

Chart of China House Prices vs. Vancouver House prices 2005-2010

The same effect we see in Australia (Cascading Bubble Inputs, Australia) is present here (I'll redo that as a combined chart when I get a chance). Canadians credited the Winter Olympics for the double peak in house prices. I submit that it was, more so, China's insane excess liquidity.