Boo!

You made it to the end of another week and here at VCI that means it’s time for another Friday Free-for-all!

This is our regular end of the week news round up and open topic discussion thread for the weekend, here are a few recent links to kick off the chat:

-Canadians spend more on housing
-Heritage drives down prices
-Using tax dollars to boost economy
-The little mountain that couldn’t
-Holidays are for losers
-TFW program not so curtailed
-Swedish bubble test case?

So what are you seeing out there? Post your news links, thoughts and anecdotes here and have an excellent weekend!

In Vancouver everything is about real estate.

Yes, EVERYTHING.

Even that bus you take to get to your weed dispensary before yoga class.

Thats why it’s so disappointing that our world class fare gates are still not working.  This is the system that was supposed to be ready in 2008 but has been delayed over and over again. It’s a $194 million dollar solution that isn’t quite a solution yet.

Once in place this system should put a stop to fare evasion which is currently estimated to be a loss of at least $10 million per year. Well, hopefully it’s at least $10 mil per year, since we’ll be paying $12 million per year for operating costs once the system is working.

Fortunately this is all happening in Vancouver which means whether the transit system is losing money in fare evasion or through operating costs it can always make that money back in real estate.

Posted in BC, hype, supply | 35 Comments »

Looks like somebody has figured out the easiest and best way to make tons of money in Real Estate.

It’s not buying and flipping condos, it’s not renting out rooms and sheds, it’s not even as a developer building towers or a realtor taking a commission on each sale.

No, all those things would take way too much work.

The best way we’ve ever seen to get rich off of real estate is simple: sell your name to developers.

This way you take no risk in the market and make money no matter what happens.

So what are you waiting for? Get selling!

BC really hasn’t done so bad for itself by digging stuff up from the ground and selling it to other countries, but as prices change in that market it can leave our economy somewhat wanting.

For example:

This week, we discovered just how far the B.C. government was prepared to cave in order to assuage proponents like Petronas. It effectively cut the royalty tax it first talked about in half.

Now ‘free money’ is still free money, but anytime your income is cut in half its a bit of a downer.

So whats plan B to diversify the BC economy?  Gary Mason says there is no plan B and Patriotz says ‘what about real estate‘? But isn’t the RE market a bit played out at this point?

Most middle class RE purchases in Vancouver have gained less than a GIC over the last four years, and there’s the risk that high home prices chase away more productive industries.

So how does BC grow its economy in the future? If resources take a dive, what our best hope as a province to compete on a national and global scale?

You survived the rain!

And here we are at the end of another work week, could life get any better?

And since it’s the end of another week, what say we do our regular Friday Free-for-all post?

This is our end of the week news round up and open topic discussion thread for the weekend. ok? Lets do it!

Here are a few recent links to kick of the chat:
-BOC raises red flags over housing
-A new generation of renters
-Bloated debt risk to economy
-BS Talk?
-Spending Vigour?
-What I learned on VCI
-Inventory Graph

So what are you seeing out there? Post your news links, thoughts and anecdotes here and have an excellent (though perhaps slightly soggy) weekend!

Should banks take on more risk?

October 22nd, 2014

There’s an article over at the CBC on the CMHC and CEO Evan Siddall.

Mr. Siddall is of the opinion that the CMHC should not be privatized as it acted as a ‘shock absorber’ during the last correction, but does think the banks should take on a share of the risk for insured mortgages.

“That ultimately will be a decision for government to make and we’re in the process of looking at different options that will take a few years to evaluate, but the idea is that people should have skin in the game,”

“In the insured mortgage businesses, the banks offload all that risk to the government through CMHC, The government’s interested in taking a reduced role in the housing market … so we’ll look at different ways to share risks with lenders.

What do you think, should the CMHC force banks to take on more responsibility for the insured loans they hand out or would the banks just use that as an excuse to charge more?

Read the full article here.

Evangelists for buying

October 20th, 2014

Many Franks pointed out this article in the Globe and Mail and then pulled out a whole bunch of gems.

“Here’s a hilarious litany of Vancouver real estate orthodoxy straight from the punch bowl:”

…the city renowned in popular mythology as a place with such astronomical house prices that its young will be forced to live in basement suites forever…“

That’s right, buy or basement suites forever, your choice.

…There’s definitely sacrifices. I budgeted. I didn’t eat out. Some could say I missed some life experiences. But if you have that [home ownership] as your goal, anything is possible…”

It’s amazing whats possible if you just skip life experiences.

…the proliferation of condos and townhouses here gives them a lower-priced product to choose from compared with other cities that are dominated by houses…

Not only a magical city, but also one of the only ones around that has condos and townhouses!

…siblings or friends will buy an apartment together until they’ve built up enough equity to sell and take their proceeds…

Because what could go wrong with that?

…they’ve decided they’re going to buy in, no matter what…

NO MATTER WHAT!!

…buying became an emotional decision about moving to a new life phase. “This was the first step of being an adult,” said Mr. Richard…

Emotional decisions are an important first step of being an adult.

…some young homeowners have become slightly evangelical about the need for others to realize it’s possible if they stop being so clueless about money…

All it takes is a little knowledge.

“They don’t know anyone who owns, they don’t understand money, they just don’t think it’s possible. I keep telling them: “It’s a conspiracy to keep you as renters. Then you can pay someone else’s mortgage.’”

As Many Franks says “Amazing how much paydirt you can pack into a single article.”

 

FFFA! Bubble, Oil, Toil

October 17th, 2014

You made it to the weekend!

And that means its time for another Friday Free-for-all! This is our regular end of the week news round up and open topic discussion thread for the weekend.

Here are a few recent links to kick off the chat:

-End of the boom?
-A look at bankruptcy and foreclosure
-Alberta anxious over dropping oil
-HAM or BCM?
-Prices wont go up or fall

So what are you seeing out there? Post your news links, thoughts and anecdotes here and have an excellent weekend!

CIBC World Markets has released research that looks behind the average price moves in Canadian real estate. How are prices moving in Vancouver?

Astonishingly enough it looks like properties under the $1.1 million mark have moved less than a GIC in the last four years.  Here’s a graph from the original PDF:

Screen Shot 2014-10-15 at 2.50.16 PM

 

That boggles the mind. Even Toronto which has prices going up at the high end looks like its been a much better investment at the lower and middle end:

Screen Shot 2014-10-14 at 2.38.45 PM

 

So essentially that idea you have in your mind that Vancouver real estate has been a good investment over the last four years with prices just rising and rising? Not so much.

Over the weekend we found out that a bearish poster on this site just bought a house.  Not in Vancouver mind you, but still..

What went wrong? Landlord wanted to move back in. Now if it was just me I would have rented another place, but as it isn’t just me I decided to see if I could make buying work.

Had to look outside my old neighbourhood, but I found a house on a big lot, price $330,000. Taxes about $3000/year, rental value about $1750/month. Great deal? No. But one I can live with. There might be some downside on the price going forward, but what matters to me is value, i.e. ownership costs versus rent, not expectation of price changes going forward.

And in that same thread we found out that a bullish poster sold his house and is now renting.

In all sincerity, when a voracious bear purchases, it may signal a top. Market trends often reverse at points like this.

To let you guys in on a secret, yours truly is no longer a home owner. I rent. I do have other real estate interests though.

So are these signals of a market top or what?

 

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