Here’s your open topic for Friday May 11th –
– The ongoing saga of CB Developments
– Island construction hits 30 year high
– Spain fights speculation and fraud
Post your news, links and thoughts on our crazy real estate market here!
44 Comments
Tenants can be forced to move when real estate prices go up. This can be devastating for families with children that suddenly can't rent again for a similar price in the same area. Those tenants with pets, even a well-trained cat or little dog, are restricted to about 10-20% of the rental supply and can pay huge penalties in extra rent or pet deposits. Pets are not really a luxury, they are family. Many landlords have a knee-jerk "no pets" policy based on following the crowd. Truth of the matters is many of the better, more stable tenants out there have pets and barring these tenants isn't smart business for most landlords. Its just ignorant foolishness to use pet ownership as an indicator of a potential bad tenant.With the new tenancy laws, it would be foolish for any tenant to… Read more »
There also seems to be an attitude that landlords have the upperhand. I don't get it. Any recent buyer is paying more for the mortgage than you're paying for rent – if prices go down you benifit by moving, but if you bought your still paying the same amount each month.Not only that, but if you count your 1/2 month damage deposit as gone you can do whatever you want and someone else pays for it. Dance on the soft wood floors in high heels? burn candles on the carpet? paint the fridge pink?And if you're in a secondary house suite and you run into problems you usually have the upper hand of reporting the landlord to the CCRA, because how many of them are paying tax on that rental unit?
Seems like a lot of talk is on the rising rents. The interesting fact is, a lot of the upward pressure for rent come from previously poor young people and recent immigrants. The employment market for unskilled labour is great, and wages for anything construction related are going up faster than inflation. We're hearing a lot of whines, but Vancouverites generally whine a lot. Back in the 90's and early 2000's, I saw a lot of my friends struggle to find employment, as they are not academically gifted. I was quite annoyed with the social welfare system of BC, as it didn't help hardworking young people. The current RE bubble helps them find employment, and provides a career break for many of them. The downside is the rising rent. My landlord raised rent by 20% after we moved out, but… Read more »
Ok Grant, you forced me to make a decision of cataclysmic proportions.Your well thought out argument compels me to refrain from further commenting on this subject until the next time.
tulip-Mania2, please let us know when you've purchased a home in vancouver, upgraded the windows/appliances/bathroom, and rented it to this lady for her target price of under $1,900.Til then, you're in no position to criticize landlords who choose to rent their properties for whatever other tenants are willing to pay.
"Come now, I would expect better from you than the above. Talk about a bogus choice. On what planet do those alternatives exist?"One thing at a time. I am isolating the issues. I never claimed those to be real life alternatives.IF that was the choice, which would you prefer?In your list of choices, I would pick option A. To return the favour, I don't think your choices are representative of real world choices."if in the 90s demand outstripped supply growth by a factor of 2, would it be crazy put in place regulation which reduce upward price pressures in the short-term, "1. Who is to determine when such intervention should be applied. The vast majority don't think that the market is mispriced, else they wouldn't let prices get out of line in the first place. Government economists? They created this… Read more »
Edmonton? Have you been watching any RE in that area?The grass is always greener…
northgrl i'm in the same boat… I'm going to edmonton this week to check it out. I'm set on leaving this place and going to a city in which I won't have to slave away for the next 30 years just to afford to buy a decent place to live. While it sucks to move away from family and friends, I'd rather be financially secure in 10 years rather than struggling to make ends meet.
Can anyone explain to me why someone in the U.S. can get a mortgage where the interest rate is fixed for 30 years, but in Canada, it seems that about 10 years is the longest fixed interest rate term?Both countries have 30 year bonds, I don't know why our banks don't offer 30 year fixed rate mortgages.
"Another option for those unable to afford decent rentals may be to look into co-op housing. It doesn't necessarily have to be only for those with large families."That's what we did. I've mentioned before that we sold in 2004 (family of 4 outgrew 875 sq.ft.), but were not willing to burden ourselves with a mega mortgage for 40 yrs.We now pay rent that is less than half of what it would cost to own. Our rent only goes up enough to cover maintenance and taxes, and we have no risk of being kicked out because the landlord wants to sell.IMHO, it is the best way to rent if that is your choice. I don't know why there aren't more co-op situations.
In a nutshell, what we have is an economic system much like a poker game.What I object to is the dealer (government) gets to see what cards the players have, and change the rules to favour some of the players.I am not against the game; I am against the changing of the rules to favour some over others.I also don’t mind the money taken away from me for an equitable redistribution of wealth, but what bothers me, is why is the redistribution called Welfare when given to a poor person, and something else when given to the Olympic committee?
Another option for those unable to afford decent rentals may be to look into co-op housing. It doesn't necessarily have to be only for those with large families.
I think that if the wages are not supporting a human being to have a decent housing that they will not get sick in and can stay healthy mentally and physically in, then it is time to leave this city.My plan is to leave Vancouver, lower mainland as soon as I am finished with my training. I am the dream citizen: I am healthy, smart, non drinker/smoker, I am not corrupted or in debt, but Vancouver is not measuing up. I have standards. I think more young people here should do the same. If this city have nothing to offer, then use your free market thinking and let Vancouver belong to the 2% club, specuvestors and off shore investors. I bet they will love each others company. Us younger cows should move on to greener pastures,let the old alpha bull… Read more »
…it is the free movement of capital that keeps the world (government, businesses and individuals) honest…Except the world isn't, in fact, "honest".Freedom of capital movement coupled with freedom of labor movement would help – a lot – but that isn't what we have. We only have capital movement while most of the world's labor population is artifically held back behind arbitrary borders.The current situation is more accurately described as global-scale feudalism. Which is great for us, locally, since we're a lot nearer the top of the food chain than than the bottom. And it's really, really great for the oligarchs in charge of those arbitrarily-defined holding pens we call "developing nations".
Should basic housing, health care, and education go to the highest bidder?Tulip, somewhere in Malaysia a 7 year old just finished her 12 hour shift at Nike and is asking herself the same question about you. And me. And everybody else living in this incredibly lucky country.We're all acting out "warren" beliefs, when it comes down to it.
"You see, if governments muck things up, capital flees QUICKLY (if it can) and consequences are immediate, a very effective deterrant."So, basically it is ideal if a democratically elected government does something the money markets do not like, the market exercises an effective veto power through capital flight. Heck, why bother with elections when we can just run ourselves with a committee of bond traders…….One comment really rankles me…MicroloansThe two countries with the most successful micro credit programs are Bangladesh and Bolivia. These two countries have had these sorts of programs in place for the last couple of decades. They also remain to be among of the poorest countries on the planet. Micro loans do not seem good at generating macro results. But,hey they sound great ideologically.
I think there is a lot of talk about the wonders of free markets and the principles of optimal allocation of resources.I believe that, when all adjustments are made, free markets are the most efficient proposition. This is in the long-run though.Each market works differently. In particular, RE markets have very slow adjustment on the supply side: it may take literally decades for the two sides of the market to be equalized, which can explain the decade long swings we observe.I have a practical question: is it free market such a dogma that any short term intervention is undesirable? Example, if in the 90s demand outstripped supply growth by a factor of 2, would it be crazy put in place regulation which reduce upward price pressures in the short-term, rather than waiting 10 years for things to go out of… Read more »
patriotz:Actually, you're being too generous claiming that Canada's current health care is 'great', and you're thus setting up your own 'false choice'. One could more accurately describe the current Canadian Health Care system as (adapting your phrasing) "a covert multi-tier system where care ranges from poor to great depending on your social connections, your ability/willingness to pay, and/or your blind luck."Those with connections and wealth are already getting better health care here, and with the boomers hitting high-maintenance ages, there is absolutely no way we'll avoid a freemarket component to our health care system.One challenge will be maintaining a reasonable quality of care for those who cannot access 'private' services.
What if you had to choose between:1. A system with absolute equality that provided mediocre healthcare for everybody2. A tiered market based system where care ranged from good to great depending on your ability/willingness to pay?You may not agree, but if those were true alternatives, which one would you pick?Come now, I would expect better from you than the above. Talk about a bogus choice. On what planet do those alternatives exist?I could just as well say:1. A system that provided good healthcare to everyone (i.e. Canada right now).2. A tiered quasi-market based system where care ranged from poor to great depending on your ability/willingness to pay and/or blind luck, incurred huge overhead costs, cost 50% more, and yielded poorer overall outcomes? (i.e. US right now).See how easy that was?As for me, I don't believe in government subsidies or price… Read more »
"This rant wasn't against all landlords. What it correctly pointed is that too many landlords shouldn't be in the business. If you can't provide the basics, you have no business renting to people."So to paraphrase, the rant wasn't against high rents, but incompetence of landlords. One would think that competition among landlords would eventually squeeze the bad ones out of the business.The landlord-tenant relationship is a weird one. In most businesses, the customer is king. Having been on both sides of the fence, I like neither. As a tenant, I thought some landlords to be greedy, arrogant buffoons, and I felt at their mercy, residential tenancy act or not. As a landlord, I felt equally powerless as a*hole tenants quote their "rights" while thrashing my place. What is a half months rent? Doesn't come close to cover replacedment of burned… Read more »
Oh, and I am the farthest thing from a libertarian. I believe in gun control. I have no beef with taxation. I have no problem with welfare, though it should be tweaked to minimize dependence. And I don't think many of the social programs we have fly in the face of the free market. Self-interest and altruism need not be mutually exclusive. Sometimes you save money by spending money. If there was no welfare, for example, many desperate people would resort to crime. What I am for, is the idea of accomplishing the most using the least amount of resources. Efficiency in other words. Nothing accomplishes that better than the market system. Want to curtail greenhouse gases? Tax them at the margin. Allow trading of credits. Want to reduce rush hour congestion? Peak hour tolls. Reduce use of fossil fuels?… Read more »
"Are the free market forces at work in this current housing market, or is, the creation of this bubble, at least in part, a result of a government controlling the money supply and manipulating the inflation figures? "I would say both. I have said it before, but it has been a while, so I say it again. I read some of Reuven Brenner's books, and I think I have seen the light: Freedom of capital markets.He makes a very good case that it is the free movement of capital that keeps the world (government, businesses and individuals) honest. It is THE most important factor in that sense. It is a better indicator than political system (full democracy or dictatorship). You see, if governments muck things up, capital flees QUICKLY (if it can) and consequences are immediate, a very effective deterrant.He… Read more »
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Freako:I have no desire to defend or be a participant in a command economy; I do in fact detest the monopolization of power in the hands of bureaucrats. And there lies the crux of my discontent.Let’s look at the truth. Are the free market forces at work in this current housing market, or is, the creation of this bubble, at least in part, a result of a government controlling the money supply and manipulating the inflation figures? What about the restriction of land supply?What about the mega projects, and the Olympics, are those good examples of a market driven economy?
Thanks for the discussion, all.The rental-rant shows how overextended the Vancouver market is. Folks complaining about landlords who are in effect subsidizing their housing costs by 50-70%.When we recently moved into our latest rented house, we simply paid to upgrade it, partly because I didn't want to needle the landlord for upgrades. I didn't want to do anything that'd encourage him to do some math.At monthlyrent/price ratio of >300, I don't want him to sell from under us at first opportunity. Shhhhhh….