Welcome!
VancouverPeak.com- admin replied to the forum topic Sandbox. in the group Housing Data
- admin posted an update:
- jesse and Makaya are now friends
- jesse replied to the forum topic Sandbox. in the group Housing Data
- jesse posted an update: CMHC starts, completions and under construction in Vancouver […]
- The Ant started the forum topic BC Population Growth in the group Housing Data
- jesse and The Ant are now friends
- jesse and wreckonomics are now friends
- wreckonomics posted an update: New Year, New HPI. ”Selection Broadens and Demand Eases to […]
- Best place on meth and admin are now friends
Wordpress theme by Abhishek Tripathi of Mediawick Digital Solutions
September 8th, 2008 at 9:39 pm
Tsur is smoking crack. We’ve long susected this was the case, todays “report” confirms it. 7 to 11% for Van & Calgary, 20% for TO?!!! ROFLMAO!
September 8th, 2008 at 9:05 pm
Krissh STFU
September 8th, 2008 at 6:37 pm
call the owner it’s gone
September 8th, 2008 at 6:35 pm
Boomerang.
Here is a reasonable deal
“$1250 / 1br – Coal Harbour 1 Bedroom w/ Parking & Locker (1166 Melville St., Van BC) (map)”
It’s on craigslist right now.
September 8th, 2008 at 6:32 pm
Krissh STFU
September 8th, 2008 at 6:29 pm
*UBC Study is based on old data.*Current rental market condition is too tight,*tenents are flooding in response to listed units,*lots of parents are waiting for their children to get in school,*decisions are pending or being reverse or skip to next school,*b.c transit has extend the size of buses by 20% *still too short compare to the increased numbers of immigrants and migrants,B.C taxi drivers association is looking more taxi and drivers only one taxi per 1000 people *rents are up and coming *$5000 / 3br – Luxury Living at its Finest.
While smart buyers and fool sellers will be countinue MR.BEAN will be loughing his ass off because study show 10% Reduction =10% of REALTORS COMMISION.-Shakira and enrique eglisia
September 8th, 2008 at 5:40 pm
A 2 level loft at the Hudson, 870 sq ft, can be had for $1700 and it has 1.5 bathrooms.
It’s a loud street and there are a lot of panhandlers around but the building is pretty nice.
September 8th, 2008 at 5:39 pm
“I agree that is what people are asking,it is hardly DATA what a joke this is a University paper?”
Strataman, using craigslist data is the LEAST of that report’s problems. Its calculations are fatally and fundamentally flawed. What a disaster; it’s embarrassing even for the Sun’s editors its conclusions were published. A professor in a first year finance course would have failed this paper on the spot.
September 8th, 2008 at 5:37 pm
Yaletown rents for about 10% more than Coal Harbour.
About $2.20 per sq ft is realistic to pay. Landlords do get more on occasion but they are sometimes renting to international students and people with dogs, sketchy “jobs” and references etc.
The only 1990′s buildings in yaletown that have close to 1000 sq ft units would be the 1000 beach complex or rosedale on robson and they are more like 900 sq ft and they are EARLY 90′s so not less than 8 years old. The beach towers have had property management companies advertising 1150 sq ft units in the $2k range, it was a listing with Rancho.
For coal harbour the palais georgia was built in 1990 and has 1200 sq ft units and also rents for quite cheap, although there is a humongous disparity between landlords ($1800-$3000 for 1200 sq ft).
For 8 years old a big 2 bedroom is 900 sq ft and a lot of them are 820.
For the 8 year old units IMHO the best deal is the 680 sq ft 1+den with only 1 bathroom and those can be had for as low as $1300 and can command up to $1800 if it has a prime view.
September 8th, 2008 at 5:10 pm
some pissed of canadians discussing cmhc
September 8th, 2008 at 5:07 pm
condohype “This is an extremely poor way of establishing local rents. Craigslist prices in particular are fantasy rents.” Rent data? I agree that is what people are asking,it is hardly DATA what a joke this is a University paper? Makes one wonder what a degree from said University is really worth!
I know for a fact that anyone actually aware of pricing pays substantially less then Craiglist averages..and that’s why a lot of Craiglist is “available NOW” as it sits empty! 
September 8th, 2008 at 5:02 pm
YLTN “Any suggestions of what reasonable rent should be, say for a building less than 8 years old.” Well for one thing they don’t make that size of 1 bedrooms in buildings 8yrs old or less. I guess if there is one out there you would pay the same as a two bedroom of similar size. Probably $2000/month in Yaletown or Coal Harbor less in Burnaby or Coquitlam ($1600.)
September 8th, 2008 at 4:54 pm
Speaking of fantasy rents…
I’m looking for a 1 bdr den for two of us to move into downtown; a real 1 bdr den of normal 1990′s size of 1000sqft not the micro apartments they are constructing now. Any suggestions of what reasonable rent should be, say for a building less than 8 years old.
September 8th, 2008 at 4:25 pm
chip – First, I’m sorry for even going there, this is a real estate forum, I’ll make this quick. Yes, I’m aware that 19% of the budget goes to such things. So what? I’m also aware that 47,000,000, that’s 19% of Americans have no health insurance.
Your stats on cancer survival were supposed to impress me? Not even for one second.
Here’s some stats on topic:
Nearly 90 million people – about one-third of the population below the age of 65 spent a portion of either 2006 or 2007 without health coverage.
And…8 in 10 uninsured people come from working families – almost 70 percent from families with one or more full-time workers and 11 percent from families with part-time workers
Also…Nearly 40 percent of the uninsured population reside in households that earn $50,000 or more. A growing number of middle-income families cannot afford health insurance payments even when coverage is offered by their employers.
I would love to go on, and I really could, there are plenty of stats out there. Let’s just say you’re entitled to your opinion, as am I.
September 8th, 2008 at 4:24 pm
From today’s UBC study: “For each metropolitan area we match rents by type of house and location with price data. The rent data come from Craigslist and classified ads in local newspapers.”
This is an extremely poor way of establishing local rents. Craigslist prices in particular are fantasy rents.
September 8th, 2008 at 3:22 pm
Hey Chip, that’s a mighty unbiased report you’re quoting there…
http://en.wikipedia.org/wiki/N.....y_analysis
“The National Center for Policy Analysis (NCPA) is an American non-profit conservative think tank.”
Global warming deniers as well.
September 8th, 2008 at 1:59 pm
Vansanity says:
“Americans, seriously… state run mortgage lending is ok but state run healthcare is communist and will mean the destruction of your free state?”
Are you seriously really unaware that US state governments spend about 20% of their budgets on health care, or that Medicaid covers about 40 million low-income people, that Medicare covers another 40 million disabled and elderly?
Or that US government healthcare programs are the world’s largest, and that the US spends more per capita on healthcare than any large country on the planet?
Many Americans oppose universal state-run care not because it’s “communist,” but because it would increase wait times, deprive them of treatments and , as in the UK’s NHS, result in high rates of death from serious diseases like cancer.
Study:
“According to the survey of cancer survival rates in Europe and the United States, published recently in Lancet Oncology.
-American men have a five-year survival rate of 66 percent — compared to only 47 percent for European men.
-American women have a 63 percent chance of living at least five years after a cancer diagnosis, compared to 56 percent for European women.
http://www.ncpa.org/pub/ba/ba596/
September 8th, 2008 at 1:44 pm
No problemo, the mortgages are CMHC insured (well at least those for over 80% financing, and I don’t see many defaults for the rest). So the taxpayer is holding the bag.
I think your taking our loan situstion as a total safe bet, I think Coast Capital is heavy into personal loans using home equity, demand loans so to speak. I believe they could have millions of dollars of unsecured speculative loans.
September 8th, 2008 at 12:55 pm
For a long time they were running ads about how they would give mortgages to just about anyone, which implies a lot of bad loans.
No problemo, the mortgages are CMHC insured (well at least those for over 80% financing, and I don’t see many defaults for the rest). So the taxpayer is holding the bag.
Where they might get in trouble is with construction financing and other business lending tied to RE. This has taken other CU’s down in the past
“We think this is good for Fannie and Freddie because the US government used to be invisibly guaranteeing them, but now it is taking explicit action to positively guarantee them,” said Bank of China spokesman Wang Zhaowen.
http://news.bbc.co.uk/2/hi/business/7603754.stm
Uncle Sam’s loan shark has spoken.
September 8th, 2008 at 12:39 pm
http://www.canada.com/vancouve.....4e7666c4b2
Looks like UBC has decided that the prices are coming down after all.
Maybe it’ll just be for one month and then will go up again just like Miami, Las Vegas and California.
John, what are you doing this afternoon? I’ll drive if you want to go buy up some assignments.
September 8th, 2008 at 12:38 pm
The methodology employed by that UBC paper is extremely poor. It’s more than a bit disappointing, because I actually graduated from the finance department at UBC. The problem with the paper is that it is based on a flawed equation for fundamental value. How can you apply a non-cash cost of depreciation to an equation and then also reduce your cap rate by the expected price appreciation?
As I always say, the real way to determine fundamental value is to look at the lifetime stream of rents less all applicable expenses (including maintenance capex) for the property, what financing you can achieve on those rents, and the resulting cashflows to equity versus your cost of capital. Most other methods are either an approximation of that or a flawed attempt at an approximation of that.
The method utilized by the guys from UBC is absolute crap. Why the hell would you utilize historic appreciation, even through the top of a cycle, to determine future appreciation? What about the fact that inflation was higher in the past? What about the fact that there is no real income growth occurring at the moment? What about the mantra of the investment industry that past returns are not good predictors of future returns?
How about the fact that there is no reason you should be utilizing depreciation as an expense AND taking into account price appreciation in the same calculation? How did someone not catch that nice simple fact? Consider it: If you are depreciating your house over time, you are trying to take into account, from an accounting perspective, the fact that it has a limited useful life and therefore you are using up some of the capital you put into the asset over time. You can do this from a financing perspective as well (although in finance you would only employ depreciation for specific reasons… and I would say not in a calculation like this, at least not where I work), but generally you take into account replacement cost over time instead. But here, you are saying the value of your home will appreciate forever, and yet you are also depreciating the asset. Huh? If my home is going to increase in value forever, then I don’t need to take into account depreciation, because I can sell it for more than the original value when I’m done using it.
So somehow at the end of all this they decide that our current cap rate is 3.6% (I have some stats on cap rates downtown at my blog if you want to take a look) and that our cap rate should only be 4.1%. Really? Really?! You are an educated person and you really believe that? Makes me wanna hop in a cab over to their offices and give them a piece of my mind. Perhaps instead I’ll just write a thorough and complete refutation of their bullshit methodology. Really, I’m embarrassed that my degree is from there… stupid damn real estate department.
September 8th, 2008 at 12:37 pm
The government takeover of Fannie Mae and Freddie Mac is making waves far off American shores. China is watching the events closely because some 10 percent of China’s gross domestic product is invested with the troubled mortgage giants.
http://www.npr.org/templates/p.....m=94369815
September 8th, 2008 at 11:58 am
“So far every call you’ve made has been wrong. If there were an Olympic event for being consistently wrong you’d be a gold medallist. Why should we believe this?”
And furthermore, the previous Liberal government paid down the debt for a decade. The Conservatives are throwing money around like sand on a beach. If your key issue is financial management, you have to vote Liberal.
“Question; if there is a local financial institution that is over it’s head due to the housing bubble when will we know about it? Specifically VanCity; I wonder how diversified their investments are and how involved they are in home equity loans. I wonder how “honest” their financial statements are?”
I have a similar question about Coast Capital. For a long time they were running ads about how they would give mortgages to just about anyone, which implies a lot of bad loans. What are the odds they will fail, and what happens if they do? I have my chequing account there.
September 8th, 2008 at 11:29 am
“Apartment Buildings Lose Their Immunity to Housing’s Chill”
“Rent Rates Decline”
Wall Street Journal. August 20, 2008
September 8th, 2008 at 11:03 am
You buy groceries far more often than you go to the doctor and food is critical to your survival. There are very very few people who advocate for so called “free” government supplied food.
September 8th, 2008 at 11:02 am
Building Permits rise 1.8% across Canada.
http://www.cbc.ca/money/story/.....rmits.html
How did BC fare? Well… not so good. These are from June to July 2008
Vancouver -32.3%
Kelowna -34.1%
Abbotsford +52.6%
http://www.statcan.ca/Daily/En.....80908a.htm
The driver of this stat has been central Canada.
September 8th, 2008 at 11:02 am
Building Permits rise 1.8% across Canada.
http://www.cbc.ca/money/story/.....rmits.html
How did BC fare? Well… not so good. These are from June to July 2008
Vancouver -32.3%
Kelowna -34.1%
Abbotsford +52.6%
The driver of this stat has been central Canada.
September 8th, 2008 at 11:01 am
“Americans, seriously… state run mortgage lending is ok but state run healthcare is communist and will mean the destruction of your free state?”
I find this confusing, too. But, I don’t always understand American culture. Love Americans, but I think it’s weird how they always have to bring the discussion back to America and how it is the envy of the world. I wish Vancouver hadn’t adopted that attitude, because now I want to run away! Where can I find humble people? Nepal? What’s the rent to own ratio on a yurt these days?
Also, I thought corporations which are too entangled with government could also be perceived as fascist, but I always see accusations of communism & socialism when these weird bailouts happen. The news is giving me a headache.
September 8th, 2008 at 9:59 am
As I understand it the two are now in “conservativeship” whereby the government now runs them but is not “interested” in profits or dividends. Rather, they are looking for stability and balance.
The Feds are Commies!! It’s a Red American State!! What has the world come too?? Rush Limbaugh, where are you??
Americans, seriously… state run mortgage lending is ok but state run healthcare is communist and will mean the destruction of your free state? Not to go too far off topic but history has shown that some things in life, ie. healthcare, should not be run for profit. Imagine if they allowed police, fire and ambulance service to be run by private corporations trying to make a profit. I digress.
Garth – I too struggle with where to put my money these days. I practice W.B.’s mantra regarding fear and greed which serves me well. Today the variables that are not included in that are confusion and government intervention. I am still looking for bargain stocks that have been taken down with their sectors and are now under-valued. It’s tough because there is a lot of time that needs to be devoted to such undertakings and between my obsessive blogging and that thing called work, I have to rely on other’s opinions…yikes! You’re plan is a safe one and when confused, it’s a good bet to play it safe from the sidelines and wait things out a bit until you’re more comfortable. Price the market and see what you find.
September 8th, 2008 at 9:41 am
Sniggy
“Vancouver decline to fundamentals would be about 30 to 35%.”
Well that would be more honest. In reality 50-60% is more reasonable. Run the numbers nearly every kind of fundamental analysis puts it in the same ballpark.
September 8th, 2008 at 9:37 am
Dave
“Garth, the best way to play the economy is to make sure the Liberals don’t get into power. The Tories will keep our finances managed well and won’t rock our economy. Dion however, seems to want to rock the boat, which isn’t good in times of uncertainty.”
So far every call you’ve made has been wrong. If there were an Olympic event for being consistently wrong you’d be a gold medallist. Why should we believe this?
September 8th, 2008 at 9:00 am
I don’t agree with their breakdown either:
– Only in Toronto are prices in balance with rents
Wrong. Toronto is cash flow negative except for some duplex or triplex properties in marginal areas.
- In Halifax, Montreal, Ottawa, Regina and Winnipeg prices would need to drop by at least 20 per cent to be in balance
Montreal and Ottawa are cash flow breakeven or close to it on many properties. Both cites are less than 1/2 the price of Vancouver with rents perhaps 10-20% lower. Here’s what 300K buys you in Ottawa:
http://www.mls.ca/PropertyDeta.....ID=7382023
- Equilibrium in Calgary and Vancouver requires a 7 to 11 per cent drop in prices
Ludicrous. Everyone knows that rentals in Vancouver only cashflow 50% or so. Calgary is about 2/3 the price of Vancouver with the same rents, so it cashflows no better than 75%.
They are claiming that Vancouver properties cashflow 89% or better. There is not a single individually titled property (i.e. excluding multiple-unit rentals) for which this is true.
– In Edmonton prices are actually below equilibrium, by 8 per cent
From what I’ve been reading on Alberta Bubble, I don’t think so.
Maybe they should just check the information on this website, apparently they missed it:
http://cuer.sauder.ubc.ca/cma/index.html
September 8th, 2008 at 8:47 am
Sniggy, see the open forum topic on RET
here.
The study is a bit confusing. Interestingly, it claims annual price appreciation in Vancouver is about the same as in Toronto, peak-peak and trough-trough, yet somehow the cost of capital is less in Vancouver. It stems from depreciation assumed less in Vancouver than other jurisdictions. Maybe someone specializing in finance can comment why they did is.
September 8th, 2008 at 8:22 am
Being honest would get Tsur and the school in a whole lot of trouble with their local business buddies. I look forward to your analysis of the schools study and the metrics they used.
September 8th, 2008 at 8:19 am
Interesting topic but I think the more interesting local topic is the new Sauder School study on overpriced housing in Canada (link below). It seems to me Tsur and the school are now trying to influence the local decline by suggesting a 7 to 10% decline is in order. If they were honest, the Vancouver decline to fundamentals would be about 30 to 35%.
http://www.canada.com/vancouve.....4e7666c4b2
September 8th, 2008 at 8:15 am
This proves that the housing market in Vancouver will remain strong. US buyers will now begin to snap up large numbers of condos now that their mortgage companies are in the government’s hands. Rich asians know this too so they’ll come in and buy even more as well. I was down at the beach yesterday looking around. Decided to buy a porsche as an investment. Rich asians love them.
September 8th, 2008 at 7:56 am
The Fed has given the appearance of being responsive to whiners. Jim Cramer comes out heavy about interest rates and within a couple days they get cut 0.75%. Bill Gross complains and the Fed buys F/F. However, I imagine this was in the works for some time and probably before Gross made the comments.
September 8th, 2008 at 7:36 am
Are Fannie and Freddie just like our CHMC now?
No, F/F still have private sector shareholders (both common and preferred) who stand to gain or lose by government actions. Nor has the USG explicitly guaranteed Fannie debt (yet).
If you think this represents an opportunity for influence peddling and payoffs on a huge scale, you’re right. F/F’s creditors have already realized huge capital gains from the “takeover”, the largest domestic one being PIMCO (as far as I know).
September 8th, 2008 at 7:19 am
Garth, the best way to play the economy is to make sure the Liberals don’t get into power. The Tories will keep our finances managed well and won’t rock our economy. Dion however, seems to want to rock the boat, which isn’t good in times of uncertainty.
September 8th, 2008 at 7:13 am
Do you know or suspect anything about Vancity then? I was of the (non-researched) opinion that they are reasonably conservative in their mortgage and builder loan portfolios.
September 8th, 2008 at 6:15 am
Question; if there is a local financial institution that is over it’s head due to the housing bubble when will we know about it? Specifically VanCity; I wonder how diversified their investments are and how involved they are in home equity loans. I wonder how “honest” their financial statements are?
September 8th, 2008 at 1:36 am
I really don’t know how to play this from an investment perspective. Even without crazy government intervention it is tough enough to respond intelligently to what the market is doing. For example, I called the top in housing 3 years early or so.
But when the government starts intervening it just makes everything all the more complicated. I am starting to think I should simply put half my wealth in cash and the other half in gold and wait everything out, hoping that at least one of the halves will come out the other end being worth something.
September 7th, 2008 at 11:03 pm
No there is border between two
September 7th, 2008 at 10:49 pm
Are Fannie and Freddie just like our CHMC now?
September 7th, 2008 at 10:32 pm
the cmhc is directly linked to the bank of canada. any losses would be monetized. money supply growth always gets little attention in canada as opposed to greater scrutiny m2/3 gets in the states.
September 7th, 2008 at 10:30 pm
Na na na na, na na na na, heyyYYyy goodbye.
September 7th, 2008 at 10:21 pm
Baby steps
Just a matter of time b 4 we see it here …. if you HONESTLY think its different here just wait … say hello to my little friend … how’s your burger
September 7th, 2008 at 9:56 pm
I guess if Fannie and Freddie had heavyweights like Muir, and Robyn working for them they would have not met this humiliating fate.
Shouldn’t we good neighbours, offer to send Pastrick down there to stabilize the situation?
Shame on the bastards, shame on David Lereah, shame on our local pimps.
September 7th, 2008 at 9:43 pm
“Bailout” is not really the right word for CMHC. It is a Crown corporation and all its obligations are guaranteed by the taxpayer from the start. “Deficit” is really putting it better.
I have no doubt CMHC will incur heavy losses from defaults in BC, and some in Alberta and Toronto. The question is whether these will overwhelm the reserves it has built up during the last decade, the last period of serious defaults being the Toronto bust of the early 90′s.
We will see.
September 7th, 2008 at 9:39 pm
some quotes regarding the shaved apes who ran Fannie Mae/Freddie Mac:
http://www.msnbc.msn.com/id/26578804/
Mortgage giants Fannie Mae and Freddie Mac — despite their robust cadre of economists and mortgage experts — failed to heed warnings that the most dramatic housing bubble in U.S. history would burst.
…
“How could you look at an enormous rise in prices and not think there was a potential for them to fall?” said Christopher Thornberg, a principal with Beacon Economics in Los Angeles.
Another longtime proponent of the housing bubble concept is Dean Baker, co-director of the Washington-based Center for Economic and Policy Research. He recalls several occasions when he debated top Fannie and Freddie economists, who dismissed the idea that U.S. home prices could decline.
“Even if they didn’t’ want to listen to me, they should have at least thought this could be a possibility,” he said.