Friday Free for All!

Easter Edition!  Here’s our weekend open-topic posting to discuss anything related to economics and the real estate market.  A few stories to get us started:

-Condo supply growing like crazy
-The disappearing first time buyer
-Oil, gold and the Canadian dollar drops
-Canada following US downturn
-More pain in store for Canadian banks
-Turner answers questions about ‘greater fools
-Condo marketer says Translink plan ‘prudent
-Vanoc opposes any Beijing boycott
-Price of gas has Americans cutting back elsewhere
-BBC: LA’s subprime shanty towns

So what are you seeing out there this fine holiday weekend?  Post your news, links, anecdotes and comments here and have a great weekend!

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142 Responses to “Friday Free for All!”

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  1. 1
    ulsterman Says:
    Thanks for the great work. I must say the BBC shanty towns video smacks of a classic BBC April Fools prank. You can’t afford a mortgage payment - OK, i accept that. But how about renting a one bedroom apartment? I don’t believe it’s common-place for someone to go from owner to tent dweller. May happen, but it’s hardly typical of the subprime problem.

    Current score: 0
  2. 2
    paulb Says:
    Looks like Infinity in Surrey has completed. Craigslist has 100 posts under apt rentals in this building. That can’t be good.

    Current score: 0
  3. 3
    kit Says:
    Housing Crisis Deepens Across Britain, Europe

    http://www.npr.org/templates/s.....d=88732648

    Current score: 0
  4. 4
    The Van Man Says:
    Saturday’s issue of the Vancouver Sun has an interesting article about investors of Canaccord Capital Inc. It detailed how investors were told by their brokers that these ABCP investments were triple AAA safe! And that they are comparable with GICs and Canada Savings Bond and now having most of them finding out that their life savings are put on ice. They’ve been given an ultimatum. Accept the deal which means the money will be tied into the longer notes or get 60 to 80 cents on the dollar. These folks think that they could veto the bigger boys, so the big institutions would just buy their bonds back. How wishful thinking is that? Don’t forget that these institutional investors represent a pool of ordinary investors who are in the same boat as they are now. This smells like BRE-X all over again I suppose..
    My advise to them is simply this. Learn from the BRE-X shareholders and sell for whatever you could get for and just walk away, albeit a tad poorer.

    A lady in the report said that, if this doesn’t get resolved soon, she might have to sell her house to get some cash. She used to be a real estate broker too and wouldn’t want to get involved in this mess if she knew it was ABCP.

    Oh come on… ABCP offers attractive rates. ABCP invest in among other things mortgages in American housing which prices were going up like a space shuttle. Fundamentals were completely broken. And if she was a former real estate, shouldn’t she know that the boom was unsustainable??

    Scary prospects are unfolding..

    Current score: 0
  5. 5
    Re-diculous Says:
    Headline in today’a Province Money section:

    “we’re battling a headwind
    The Economy: Canada’s risk of falling into recesion sharpens”

    …..so how’s that Decoupling Theory coming along?

    Current score: 0
  6. 6
    Anonymous Says:
    Housing Crisis Deepens Across Britain, Europe

    “homeowners are worried that house prices might start to fall”

    They call that a crisis? I thought the crisis was that houses were unaffordable. Falling prices are the return to normalcy.

    Current score: 0
  7. 7
    -A- Says:
    Rob, aka Krrish/Satv;

    I just got back from the USA, your counterparts from the NAR are really pumping the idea that boomers should be investing in farm land.

    They hype goes something along the bio fuels boom, and anticipated food shortages pitch.

    Any plans in the works for you guys getting on board this new scam?

    Or do you think the Olympic BS has a little mileage left?

    Current score: 0
  8. 8
    pricedoutfornow Says:
    I’ve been following the infinity listings on craigslist too, as I watched the building go up (recently moved out of the neighborhood). It’s beyond me why anyone would be willing to pay $1400/month just so they can “be guaranteed a seat on the skytrain!” Pulleaase…plus if no one has noticed, the whole place is still one great big construction site as they put up tower number 2. Thanks, but I don’t like hearing hammering at 7am. Crazy!
    Here we go! Soon enough those investors will realize they can’t get the rent to pay the mortgage and dump the condos back on the market. Price declines, anyone?

    Current score: 0
  9. 9
    Vansanity Says:
    Friday off…so nice. Too bad I can’t sleep in.

    Anyway, had a talk with a friend this morning who’s talking about getting away from Van, he’s a plumbing trade. Talking about Fort McMurray for a bit and then buying in the interior or island.

    He knows a developer working on some land around Bear Mountain. He has a proposal for a new sub-division there and if it goes through he’ll build it and retire. I talked to him about being careful buying anything on historic highs, he listened but wasn’t concerned. Says that Bear Mountain has many foreign investors showing interest and he figures if he picks one up he will see some serious gains. His exact words were, I’ll do better than my RRSP’s. I know what you’re all thinking, believe me, I do.

    It’s not worth wasting my breath trying to dissuade him, his mind is already made up. The longer this goes the more people will get sucked in. I’m still going to wait it out for two more years, job is going good, but if I don’t see things change post-olympics or sooner, I’ll be packing up and going somewhere else, somewhere affordable and sunnier.

    Current score: 0
  10. 10
    Anon Says:
    Many Victoria RE agents are convinced that the industry here will be propped up by people from Calgary buying up the Island.

    I would love to get stats on this.

    Also, if it were true who wants to live in a city whereby one is the “poor” local while Victoria is ruled by 50 somethings from Calgary.

    Any comments?

    Current score: 0
  11. 11
    Drachen Says:
    Anon:

    Same kind of fallacies that are spread everywhere. One of the first rules of critical thinking is that the burden of proof lies with the person making an existential claim. In this case, “Rich Calgarians are buying up the island.”

    If the person making that claim cannot offer any proof then the statement has as much value as, “Unicorns live in Madagascar.”, “George W. Bush is a really smart guy.”, or “Aliens ate my pet cat and replaced her with a clone.”

    We get the same kind of argument here in Vancouver but it’s Asians or Americans. It’s just BS sold by the agents as a plausible explanation (if it’s not examined too closely) for the possibility of future gains.

    Current score: 0
  12. 12
    Krrish2 Says:
    A,

    10 over 10 man, The work force is busy till 2020 tonz of project in non residential construction.Unemployment rate is to fall 0 around 2010 to onwards then may be another olympics. British Columbia is going to creat 250,000 job from free trade with India and we have lots of job shortage in all other sectors.Raise after raise you can face the elimination challenge, Buy or move with the hammer of inflation or get in with full pocket,Best real estate on earth Vancouver,B.C.bpe.

    Current score: 0
  13. 13
    Carioca Canuck Says:
    FWIW…….I personally know 3 Calgarians who have bought property on Vancouver Island in the last 12 months.

    Current score: 0
  14. 14
    Anonymous Says:
    “I personally know 3 Calgarians who have bought property on Vancouver Island in the last 12 months”

    Tell us how their investments turned out in about 12 months from now.

    Current score: 0
  15. 15
    patriotz Says:
    Any comments?

    Yeah, if the Albertans are so flush why is RE falling in Alberta?

    The Californians were supposed to be propping up RE values in every outpost west of the Rockies. How did that work out?

    The whole of southern BC is trolling for Alberta RE money, because its traditional economy (forestry, mining) is practically dead. That’s spreading it way too thin.

    Current score: 0
  16. 16
    richard Says:
    “And if she was a former real estate, shouldn’t she know that the boom was unsustainable??”

    well, current real estate brokers know re only goes up, up, up….

    so ironic, isn’t it?

    Current score: 0
  17. 17
    condohype Says:
    First-time buyers disappearing but prices are expected to go up?

    Lower demand + greater supply = price increases?!

    Man, the industry is drunk on hype.

    Current score: 0
  18. 18
    SC Says:
    First time buyers disappearing not because they don’t want to live here. They still do (hence demand is there), however they can’t afford to because of prices. So someone else with deeper pockets are buying it up. Seems like an influx of wealth from other sources to push the market higher. I hope we don’t end up like Whistler, where locals have to rent and foreigners are the landlords.

    Current score: 0
  19. 19
    Drachen Says:
    I missed this one the first time.

    “And if she was a former real estate, shouldn’t she know that the boom was unsustainable??”

    Do you think the secretaries at Enron knew what was going on? I can tell you for certain that the technicians at Nortel had no clue (I knew one who’d convinced everyone he knew to invest (except for me)).

    Agents are just salespeople. Next time one of those annoying ‘flat rate’ natural gas salesmen comes around ask him if he knows what his company’s stock is worth and where it’s going in two years.

    Current score: 0
  20. 20
    -A- Says:
    ” Comment by SC
    2008-03-21 11:33:27
    First time buyers disappearing not because they don’t want to live here. They still do (hence demand is there), however they can’t afford to because of prices. So someone else with deeper pockets are buying it up. Seems like an influx of wealth from other sources to push the market higher. I hope we don’t end up like Whistler, where locals have to rent and foreigners are the landlords.”

    I guess we better beg, borrow, and steal, just to get in right? And couples should get a second job, buy a 2 bedroom leaky condo in East Vancouver, and rent out the second bedroom as a mortgage helper to 6 or 7 foreign students right?

    Are you a realtor? or bad at math?

    Do you know it is impossible to get price out of the market indefinitely?

    As for Whistler… if the locals accept the conditions they live in, it proves that eventually a high consumption of pot is bad for analytical thinking.

    Current score: 0
  21. 21
    Carioca Canuck Says:
    I didt’t say they were investments. In each case they are primary retirement residences.

    Don’t confuse me with a RE bull….for I am not.

    Current score: 0
  22. 22
    Drachen Says:
    CC:

    It just seemed that way to some people I guess. Anecdotal evidence is a nice snapshot of things but it’s really useless for building an argument.

    Current score: 0
  23. 23
    MC_V Says:
    “Looks like Infinity in Surrey has completed. Craigslist has 100 posts under apt rentals in this building. That can’t be good.”

    Richmond has so many buildings under construction I can’t count them. New West has about 4 or 5 high rises completing soon, UBC, etc, etc. It’s everywhere overbuilding to the extreme for the rich Albertans.

    Sorry, but there aren’t really that many rich Albertans, the wealth, like everywhere else is concentrated in a few hands. I’m off to Calgary next month to see my retired in laws, and my friends none of whom are overly wealthy. Like Californians, they are not buying up all the land, and those that do will loose on it soon.

    Current score: 0
  24. 24
    MC_V Says:
    Mortgage broker friend said business is best he’s seen pretty much ever. Most people that are buying are first time buyers getting 40 year mortgages but using big down payment gifts from their boomer parents.

    We’ll see how this turns out!

    My guess, the boomers are throwing their money away by betting on their kids ability to pay. A 30 year old getting a 40 year mortgage is still paying for it at 70!

    The one thing going for the banks here is that there is at least some skin in the game. Zero down isn’t a very big part of my friends business. Neither is 5%.

    Prices will drop, but they may not walk like in the US; depends on how much more mommy and daddy are going to pony up to keep up the payments for their kids.

    Current score: 0
  25. 25
    Anonymous Says:
    This is a paragraph from a montly RBC economics email report i get. I like the part starting at “However most of the increases came from the volatile urban multiples”

    Does this mean condos/housing are subject to risk? :)

    Housing starts rose a phenomenal 15.4% in February to an annualized 256,900 units from 222,700 in January. However, most of the increase came from the volatile urban multiples component. Despite the surge in February starts, however, some moderation in activity for all of 2008 is expected from the slightly under 230,000 housing units started in 2007.

    Current score: 0
  26. 26
    M- Says:
    Travel to Canada hits lowest level since 1972: StatsCan
    http://www.cbc.ca/consumer/sto.....ravel.html

    Current score: 0
  27. 27
    Leaving Vancouver For Different Reasons « Vancouver Real Estate Anecdote Archive Says:
    [...] 21 March 2008 · No Comments This from Vansanity on Vancouver Condo Info 2008-03-21 08:11:25 [...]

    Current score: 0
  28. 28
    patriotz Says:
    I hope we don’t end up like Whistler, where locals have to rent and foreigners are the landlords.

    If you rent a house to someone who can’t afford to buy it, you are losing money. The reason is simple: the tenant is not covering your costs of ownership. If he were, he could afford to buy it.

    Li Ka-Shing probably builds more condos in Vancouver than anyone else. Does he rent them out, or sell them? Why is that you think?

    Current score: 0
  29. 29
    Cynic Says:
    Imagine it’s 2011. The olympics are over. All the hype and every other person’s justification for high real estate prices has come and gone. We have a ton of empty condos because the foreigners who were renting them have gone home. And they will go home because everyone gets homesick. Everyone misses their own bed. The party’s over. Yeah Vancouver is nice but now I’ve seen it and I want to see something else. I’ve never been to Rio. Where’s the NEXT winter olympics being held. I’m sorry but the world is a pretty big and BEAUTIFUL place. Are you so sure that we are “The Best Place On Earth”?

    Current score: 0
  30. 30
    The Van Man Says:
    MC_V said:

    Prices will drop, but they may not walk like in the US; depends on how much more mommy and daddy are going to pony up to keep up the payments for their kids.

    I say.

    Well, I don’t think they can. Canadian mortgage bearer is responsible for paying off the mortgage or the difference of it when it gets sold plus transaction costs. This is different from the Americans where they could actually mail back the keys, hence the term “jinglemail”, back to the banks and walk away, although I heard that in some American states, walking away endures similar penalties. Besides, I suspect that if their parents provides the downpayment for the loan, they too may provide some guarantees to the bank. So that is why, your friend’s bank isn’t too worried. The question really is, will these kids simply walk away?
    I’ve seen some many people in the work force nowadays that come in to work whenever they like, when they like and when they leave, they sometimes don’t even give a darn of a notice either. If they do, it’s a couple of days and then they vanish like Merlin.

    The Carpe Diem’s website actually described the US subprime mortgage as being as very small part of the overall mortgage lending practices. It’s the 40 year AMS that Canadians are signing up for that is troubling me. This I will have to agree with Mr. Turner for once.

    If the Vancouver real estate does fall, the overbuilt condo market will go first, because it doesn’t take a lot of condos to bring prices down in the same neighborhood. Good neighborhoods with established home ownership won’t suffer that much as a previous poster had posted. This is because, once the mortgage is paid for, a 50% price drop won’t matter. West Vancouver in the 80s is different from the West Vancouver of today. 25 years had passed and many of these residences had already paid off their mortgage. However, residences in new condos with 40year AMS haven’t! That is the difference! So, expect significant prices drops in areas where there are condo overbuilding.

    Current score: 0
  31. 31
    patriotz Says:
    If you think that SFH in high-priced neighbourhoods aren’t being bought with toxic financing today, you’re kidding yourself.

    The 80-81 boom lasted for a far shorter time than the current bubble, which means a much smaller % of the housing stock carried shaky financing. When the bubble pops all categories are going down. Just like south of the border, and just like previous Vancouver bear markets.

    Current score: 0
  32. 32
    krrish2 Says:
    Are you so sure that we are “The Best Place On Earth”?

    Ofcourse,People like to spend money on future of the city not on Olympics or Fifa,for example few year back there was World Cup in West Indies two month’s long there was nothing up,the spectators left the tournament half way because place and length of tournament was boring.

    E2 Since the annocement of 2012 olympics home prices are falling in most cities of UK but VANCOUVER IS UP while Juggernaut across the border has fallen on it’s knee.

    In Vancouver you can CATCH all the action of life,we are not just ol but bpe.

    Current score: 0
  33. 33
    Disbelief Says:
    People situations are always changing and even older people with no mortgages have to die or move to assisted living. Eventually all neighbourhoods are sold and new families with vast mortgages move in. So I don’t think that any area is exempt from a correction. It is getting so crazy that parents are using HELOC’s to allow their children to get into the housing market. Thus putting themselves in jeopardy. This will be very messy spanning all generations… Mom and Pop could lose their homes also. Don’t spend your false equity. It’s just common sense.

    Current score: 0
  34. 34
    HomesickButNotNuts Says:
    Fine…I’ve risen to the bait. Can no one make Krrish2 STFU? He wouldn’t know a “world class city” if it jumped up and bit him on the arse. Initially I thought he was one of those experiments in artificial intelligence that get put on the web, where an attempt is made to pass off a program as a human is made, but now I just think he’s an inarticulate mortgage broker with lots and lots of time on his hands.

    I’ve attached a list of amenities required to make the big league of cities.

    http://www.thisislondon.co.uk/.....article.do

    Current score: 0
  35. 35
    freako Says:
    Price of gas has Americans cutting back elsewhere

    Of course it would. Call me Austrian, but I have long argued that rising gas prices is not a CAUSE of inflation. Inflation occurs when there is too much money chasing to few goods. In this case there is ONLY a shortage of gasoline (compared to demand). Since demand for gasonline is inelastic (people will buy similar amounts at almost any price) there is less money to spend on other goods. Thus demand and price for non-gasoline items will drop. One price up, another down. Not inflation. Our MEASURE of inflation, CPI uses FIXED baskets and may be impacted by a shift in consumption. Thus CPI has gone up, but inflation has not. At least from an Austrian point of view (which is th correct one IMHO).

    Current score: 0
  36. 36
    emile Says:
    I watch a debate of finance professionals from France.

    People start to default on their mortgage because of variable interest rates contracts: when form 3.5% up to 6.2% in 2 years. (Banks increase rates to cover their los in the sub-prime mess).

    Mortgage rejection went from 3% to 10% in the past few months (banks not willing to take risks anymore).

    They also said that in the UK one mortgage out of 2 is rejected at the moment.

    They also said the financial crisis should hit Europe with a lag of 6 to 9 months and that they are ready for the worst. They were worried that Trichet would not act like Bernake did, so that the hit would be even more painful.

    They believed the world is many months from the end of the global crisis.

    Current score: 0
  37. 37
    Fish Says:
    Since demand for gasonline is inelastic (people will buy similar amounts at almost any price) there is less money to spend on other goods….Freako

    That depends if money supply is inelastic. In our current system it is, though in others, such as the Weimer republic printing presses, the money supply was elastic.

    Current score: 0
  38. 38
    Drachen Says:
    emile

    “They were worried that Trichet would not act like Bernake did, so that the hit would be even more painful.”

    I think that’s a backwards way of putting it. Bernake’s morphine was just helping the market walk on broken legs for longer, in the end the pain is greater than just letting it break, waiting until it hits bottom and THEN start picking up the pieces. If you’re already overextended in trying to prevent an inevitable crash you have nothing left to start rebuilding with.

    The BOC, the Fed and the CMHC are just trying to put the fallout off until after the next election cycle, it’s 99% politics and 1% economics IMO.

    Current score: 0
  39. 39
    Damn Dan Says:
    Can no one make Krrish2 STFU?

    Don’t be fooled. I suspect that the shape shifter in question is actually a well-educated and “successful” RE guy who is bored with life and who is somewhat annoyed with the ideas expressed on this and other RE blogs. He’s just “having a little fun” as he would put it, while he degrades the nature and quality of posts on the blog. This in itself suits his purpose because he doesn’t want the blog taken seriously. Some day he will truly be “outed” and he will be embarrassed when that happens, at which time he will proclaim “Oh No! I’m-bare-assed!”

    Current score: 0
  40. 40
    freako Says:
    That depends if money supply is inelastic. In our current system it is, though in others, such as the Weimer republic printing presses, the money supply was elastic.

    I view them as two separate eventualities. Overexpanding money supply (the provervial printing presses) IS inflation. Rising gasoline prices are a possible RESULT of inflation, but not inflation itself. If gasoline prices rises in the absense of excess liquidity IT IS NO inflation, even if CPI ticks up a notch (it does this because the CPI basked is fixed, and cannot account for economy wide changes in the basked).

    Current score: 0
  41. 41
    freako Says:
    In our current system it is, though in others, such as the Weimer republic printing presses, the money supply was elastic.

    Not sure what you mean by “inelastic”. Elastic supply literally means that the amount supplied drops if market prices drop. The “price” of money is the interest rates, and money supply sets interest rates, this statement does not make sense. I presume that you merely mean that the money supply is somewhat fixed, or not. Our money supply is ever expanding (our economy grows), and the BoC has a straight inflation target. If inflation (as measured by CPI) ticks above their threshold (2%?) the shut off the taps for a while.

    Current score: 0
  42. 42
    freako Says:
    Condo supply growing like crazy

    Now this is interesting. It means that builders and lenders also believe it is different here. Maybe the builders think that they can limit their exposure through presales but what about the lenders? Where does the buck stop? My guess is with the tax payer (c/o CMHC) and some unwitting creditors such as Norwegian fishing villages (as happened with U.S. subprime). I doubt that our major banks are stupid enough to leave skin in this game. In any case, the lenders are the achilles heel in this shell game.

    Current score: 0
  43. 43
    -A- Says:
    “Can no one make Krrish2 STFU?
    Don’t be fooled. I suspect that the shape shifter in question is actually a well-educated and “successful” RE guy who is bored with life and who is somewhat annoyed with the ideas expressed on this and other RE blogs”

    I am not so sure how successful he really is. I drive by his place of business on my way to SFU, and it doesn’t exactly exude success. And the bald guy he has working for him looks like somebody who just got out prison.

    As for educated…. he seems to parrot superficial knowledge retargeted superficial knowledge from illiterate Surrey housewives calling in the Bill Good Show.

    I think his character Kiingi, Krissh and Satv are his attempt at reproducing some character from Mordecai Richler writings but fails miserably and is quite banal really.

    Current score: 0
  44. 44
    Vansanity Says:
    Erase this if it was already posted. Below is a link on Van RE (what else?) bearish, Schiller was on ROBtv (or bnn) recently talking about Vancouver, I didn’t know that, anyway, check it out, Happy Easter!

    http://www.bclocalnews.com/business/16872171.html

    “Don’t feel too ‘bubbly’ about real estate”

    Current score: 0
  45. 45
    exx Says:
    I wonder if I could buy the small piece of land in the middle of pacific & richards and charge realtors a fee for littering my lawn with open house signs… there must be at least 20 of them. I’ve lived in the area for 4 years now and the amount of signs this year is extraordinary.

    Current score: 0
  46. 46
    Fish Says:
    Freako- this is the discussion that is going on forever on Mish’s blog.

    How does one define inflation? Some use simple price increases…core/ producer/ over-all… define it as you will.

    Or money supply, again define it as you will.

    Depending on the definition one can show inflation running at almost double digits or near deflation. I suspect we have both.

    Inflation in things that have relatively inelastic supply..oil and wheat..and deflation in other categories such as housing in the US and UK and cars.

    I think we agree in that further inflation in the first category will likely lead to more deflation in the second. However so much hot money has gone into the commodities that I suspect we are due for a good shake out.

    As to my second statement. Our money supply is inelastic because our Central banks have inflation targets (however they define it) which they are supposed to at least aim for.

    Current score: 0
  47. 47
    freako Says:
    How does one define inflation? Some use simple price increases…core/ producer/ over-all… define it as you will.

    Or money supply, again define it as you will.

    I thought I clarified that with the “call me Austrian but” and “from an Austrian point of view”. It is indeed an unresolvable debate, and I gave one particular point of view (and identified it as such).

    Current score: 0
  48. 48
    jesse Says:
    “Some use simple price increases…core/ producer/ over-all”

    This is not a good measure. It is used as a proxy but, in certain cases, can lead to extraneous results. As a theoretical example, imagine if all prices rise by 5% but consumers scale back spending by 10%.

    Current score: 0
  49. 49
    freako Says:
    However so much hot money has gone into the commodities that I suspect we are due for a good shake out.

    And where did that hot money come from in the first place? If it was created as part of fractional reserve banking system, then it was inflation. If it was diverted from other goods, then not inflation. Again, as per the Austrian view.

    Our money supply is inelastic because our Central banks have inflation targets (however they define it) which they are supposed to at least aim for.

    I guess you could look at it that way, but the term does not sit well with me. Money may be created or destroyed as part of attempts at regulating the economy, but it is not produced or consumed in the traditional sense. Hence I don’t think the term “inelastic applies”. Taken literally, inelastic supply means that the same amount would be supplied no matter what the price. That obviously isn’t the case.

    Current score: 0
  50. 50
    Anti-Pesto Says:
    Where is the oversupply of condos d/t? I can beleive there will be an oversupply in the burbs but d/t?
    Over the last few years and the next few years we are looking at about 3-4K completions/year in Vancouver. With an average of 1.5 people per condo that’ll house 6K people hmm that’s the same figure Vancouver’s been growing at for a long time. That is also assuming all those condos are occupied which we know they won’t be. So I can’t see this oversupply, it’s not like Vancouver is expanding, all new supply is only condos/townhouses, knocking down old houses for new houses doesn’t increase supply.

    Current score: 0
  51. 51
    bdk Says:
    “knocking down old houses for new houses doesn’t increase supply”
    Densification=an increase in the density of something

    If you want specific best place on earth term then google “ecodensity”

    http://www.vancouver-ecodensit.....t.php?id=2

    I agree with your stats on completions, but it’s speculation and not immigration that’s driven the prices up.
    There were also the same amount of people coming here between 1989 and 2004 and there was minimal appreciation in resale values of condominium units.

    If you saw the same stats canada immigration numbers you’ll agree we have the lowest immigration right now since 1994?

    Current score: 0
  52. 52
    Anti-Pesto Says:
    bdk,

    I agree with what you’ve said maybe I didn’t explain it clearly, what I meant is knocking down old houses and rebuilding a new one does not add anything to supply. Only when you upzone is there an increase in supply, we know there is no vacant areas getting new sfhs home in the city proper so really all new supply is coming from those condo completions. Within the city proper I don’t beleive we are seeing an oversupply. Wether those 6K new residents each year can continue to afford the every growing prices is the valid arguement.

    Current score: 0
  53. 53
    freako Says:
    Where is the oversupply of condos d/t? I can beleive there will be an oversupply in the burbs but d/t?
    Over the last few years and the next few years we are looking at about 3-4K completions/year in Vancouver. With an average of 1.5 people per condo that’ll house 6K people

    Do you know what the population is for DT Vancouver? These are huge numbers in the relative sense. It was 80K as of 2007 (doubled from 40K 20 years ago). Six thousand a year is 7.5 percent of current population. Downtown is growing, but currently houses only about 3-4% of the Metro Vancouver poulation. If the area grows by 30K a year, based static on static proportions, DT would get about 1200 far below the 6K capacity. Of course things aren’t static, and DT is growing fast. But don’t scoff at 6K, it is probably far more than fundamental demand. Second, it remains to be seen whether living downtown is fad or a long term shift.

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  54. 54
    patriotz Says:
    Within the city proper I don’t beleive we are seeing an oversupply.

    Maybe we are and maybe we aren’t. But just what is so magical about the city proper anyway? The region is essentially one market. Does it matter what side of Boundary Road you’re on really?

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  55. 55
    Anti-Pesto Says:
    It matters because in all honesty it isn’t one market, it is made up with dozens of small markets. Let’s say there were hundreds of empty condos d/t and a shortage of sfhs on acreages, those condos wouldn’t put downward pressure on the price of those homes. We need to compare apples to apples. I’ll agree that if there are an abudance of condos in the burbs that will probably restrain price increases in the city as more and more people would look at them as an alternative. My arguement was really only that there is not an oversupply in Vancouver. There is high prices which will curtail demand. But supply is under control.

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  56. 56
    freako Says:
    My arguement was really only that there is not an oversupply in Vancouver

    Could you explain how you arrive at that conclusion?

    Current score: 0
  57. 57
    sheeplessinvancouver Says:
    “knocking down old houses and rebuilding a new one does not add anything to supply”

    That’s not what’s happening in my neighbourhood where every time they tear down an old house they replace it with two or three townhouses and a carriage house. Or else they jack up the basement, put in a new foundation with at least eight foot ceilings and turn it into a two bedroom basement suite. One three bedroom house has been replaced with four townhouse/carriage house units.

    The zoning on most of the lots is multifamily. So far they are all quite attractive and blend in well. If this is ecodensity, I’m all for it.

    Current score: 0
  58. 58
    Anti-Pesto Says:
    There is no oversupply in Vancouver as follows please keep in mind I am speaking of Vancouver proper not the Metro.
    New supply=3000-4000/condo units a year.
    Average household for condo 1.5-1.6
    So new supply can house ~4500-6400people/year.

    We know Vancouver has been growing at a rate of 6000/year. So there is no oversupply of units.
    In fact we could argue that the city is undersupplied as we know a certain percentage is bought as second homes/vacation/no used at all.
    If I’m missing something let me know.

    Current score: 0
  59. 59
    Strataman Says:
    “We know Vancouver has been growing at a rate of 6000/year. So there is no oversupply of units.” How would you explain the massive number of vacant units advertised for rent? If the people moving in can’t afford to rent how could they buy at three to four times the monthly cost? It’s a total renters market if you are in the $1400/month plus bracket, you have a thousand to choose from in Vancouver West alone. And most of those are vacant ie: no income is coming in, the ads are plaintive begging, few come to look anymore.

    Current score: 0
  60. 60
    freako Says:
    New supply=3000-4000/condo units a year.
    Average household for condo 1.5-1.6
    So new supply can house ~4500-6400people/year.

    I think you grossly underestimate construction. For example, what about the Parklane East Fraser lands development below marine drive. What about all the densification (duplexes etc). CHMC showed 65 deteached and 700+ condo starts in February 2008. If se assume 2 per unit, that is capacity for over 1500 people IN A SINGLE MONTH. Sure not all months have starts like that, but you need to go beyond your assumption that a simple condo unit estimate multiplied by 1.5 equals added housing capacity in Vancouver.

    Current score: 0

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