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Friday Free-for-all!

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Better late than never, it’s time for our open topic discussion post.  Here are a few stories I’ve noticed this week:

–Bring on the real estate crash
–BC Expected to barely avoid recession
-BC economic stimulus package: an extra $70 for you
-Scotiabank: Canadian housing market slide overstated
-Canadian banks: longest profit slide in two decades
–You can still get a zero down mortgage
–What will happen to luxury condos?
-Harper will ‘do what it takes’ to fight economic crisis
–Fears of deflation
-Economics 101: everything you know is wrong
–67,000 Chinese factories closed in six months

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

note: any conversation on Vancouver, real estate or economics is allowed, please keep it civilized. When posting articles please only quote pertinent points and link to the original instead of pasting the entire article here. Pasting a link will automatically create a clickable hot-link. Thanks!

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NO -LYMPICS

Carioca Canuck:

Re Calgary City Hall

No, you were right ….it IS communism.

What is often a major warning sign is when they raise taxes and also the perks levels to City Staff. This is the makings of a mini – fascist state. It's usually either the CAO or the Mayor (or possibly both )

They pay the staff well, keep the senior administration rolling in dollars and added perks…with severance packages in $100's of thousands of dollars. This gets them support and heads off internal coups…they often have a few heads rolling from time to time to send a message to the others.

The bunker mentality reins, having built the aforementioned walls at City Hall to protect them from the general public (ie their actual bosses) or frustrate them from mounting any opposition.

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patriotz

Yes, unfortunately we have had an influx of eastern liberal types (due to economic immigration) in the last 3 years. Sorry to say…..

Guess that explains why the Liberals took all the Calgary seats in the 2008 provincial election… oh sorry they only got 4 out of what, 20 or so?

Then I guess only eastern liberal types vote in Calgary civic elections. Well that's the fault of the 81% who don't vote, isn't it?

As for the "socialist" Calgary city council – would you believe that in Calgary you have to pay $12 a year to use the public library? Yes, it's true. Roll over, Andrew Carnegie, you old commie.

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Alex Curylo

"When we got home I checked the mail and the Wynn wants us to come back to Vegas for $169/night (half price). I’m seeing a theme here, everything is dropping to HALF PRICE!" What, only half? You're getting ripped off 🙂 I'm taking a 1-week Caribbean cruise out of Miami on the 6th, the brochure price is $1699 + 75% single supplement, I'm paying $135.00 and no single supplement. Yes, the port charges are almost double what the actual cruise line is getting, less than $20 a day, you read that right. And I've got a March reservation for a week in Cuba, all inclusive (even drinks!) and including Vancouver return air fare, CDN $502 including all taxes that's the final price, which is something like a quarter of what the same vacation was a year ago. So, yeah, for… Read more »

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/dev/null

Patiently Waiting – that's exactly what I'm doing. A year ago everyone looked at us like we were nuts for renting a house (but were too polite to say so). Just in the last few months we've had three people tell us what a good idea it is. Of course, they attribute it to luck and not foresight, but whatever.

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NO -LYMPICS

Mickey Finn: Re the sales… Do these sales simply reflect the transfer date ? I other words, all or some of these sales you noted may have been negotiated before the RE crash, but what we see is that the sale has actually completed (and shows the other data associated with it). I think the next few months will show even more major drops in the categories of "List" vs. "Sold" and Decline %, and thus they will be more reflective of the impact of the RE meltdown. Re That house at $29.9 Million (list) selling for $25.9 Million (ie sold for $ 4 Million less) kind of indicates to me they still sold an overpriced listing to a sucker purchaser who may be on the railings of the Lions Gate Bridge as we speak (ie that house they bought… Read more »

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Patiently Waiting

Why buy when you rent a large Westside family home for $2000?
http://vancouver.en.craigslist.ca/apa/932207022.h…

That's cheaper than many suburban homes in places like Coquitlam and its not the first time I've seen a Westside deal like this.

Yet Westside real estate is always so much more expensive…for now. This just shows you how little there is to justify million dollar tear-downs.

If I had kids, I'd rent a place like this and send them to one of those nice Westside schools.

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Nobody!!!!!

Assessed value is a true certificate which give the bank an idea to allow further loan to the applicants,bank runs similar method to assess current market value through appraisal agencies. Any area that countinue earn appreciation also help to add more value into assessement i.e.100%+1 to 15% then banks keep 25% on hold and the left over amount get passed to the applicants in case of guarenteed expected appreciation bank can pass more part of 25% to the applicant or bank can hold more part otherway around. Assessed value is best method to measure current market value than the hpi by the real estate board because board is unable to take a solid grasp of sold properties in any perticular area but city gets hard factual information in their system a recorded value of multiple units sold in any perticular… Read more »

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Carioca Canuck

Patriotz….. Yes, unfortunately we have had an influx of eastern liberal types (due to economic immigration) in the last 3 years. Sorry to say….. Our current Mayor, Dave Bronconnier, is a red liberal to the core, and was thinking about running for the provincial party's top spot, but declined…..half of city council plus the one vote needed to rule, is uber left wing……. I don't know why no one showed up to the civic election either, except to say that perhaps good 'ole voter apathy was the reason……Vancouver only had 22% voter turnout in your recent civic election IIRC……go figure eh ? And look what the result was there. A christmas cake got elected mayor. What happened here was that Bronconnier wanted a 9.5% property tax increase to pay for the city budget ($500 a year per home), and as… Read more »

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NO -LYMPICS

Major Olympic sponsors bailing ? http://www.businessweek.com/globalbiz/content/jul… Maybe this is a harbinger of things to come, and that the Olympic movement is becoming over-ripe. The Global economy has over-saturated brand names, and many think the Olympics is a waste of resources. Given the IOC gypsy/bandits have raped and pillaged just about every major country now that China has just hosted them in 2008 , perhaps people will have connected the dots and see the litany of lies and debt once the Olympics side show leaves town. Maybe public floggings will make a comeback…for any politician that even dares suggest an Olympic bid be submitted, given many will see it is a big negative simply funding political egos. Toronto was a bit pissed when they lost the 2008 games to Beijing, but maybe Toronto is heaving a collective sigh of relief…given the… Read more »

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archer

"The higher the assessment, the higher the taxes, you can’t argue with that."

Not true. If our local government decides to spend EXACTLY the same amount as last year, but EVERYONES assesment doubles, thier taxes will remain the same. If one half of the cities assessment doubles and the other half remains the same then the doubled assessments have to take on a higher portion of the tax burden.

Assessments here only matter in relation to other assessments. We're different from California in that way.

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MickeyFinn

A friend sent me a list of every sale of a single family home on the Westside of Vancouver in the last 30 days… there have been only 16 sales… so given that there are still over 900 active listings it implies close to 60 months of inventory. I will cut and past the details of the last 30 days of sale here but I do not know if it will work. List Sold Decline % 839,000 810,000 29,000 3.5% 859,000 800,000 59,000 6.9% 1,048,000 1,038,000 10,000 1.0% 1,148,000 928,000 220,000 19.2% 1,198,000 1,050,000 148,000 12.4% 1,198,000 1,040,000 158,000 13.2% 1,199,000 1,120,000 79,000 6.6% 1,249,000 1,100,000 149,000 11.9% 1,268,000 1,220,000 48,000 3.8% 1,588,000 1,450,000 138,000 8.7% 1,798,000 1,558,000 240,000 13.3% 2,090,000 1,950,000 140,000 6.7% 2,198,000 1,980,000 218,000 9.9% 3,150,000 2,800,000 350,000 11.1% 4,380,000 3,550,000 830,000 18.9% 4,780,000 3,550,000 1,230,000 25.7%… Read more »

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NO -LYMPICS

Richmond Council changed the OCP for the City Center, effectively turning the light industrial commercial area into Hi Density. This created huge tax increases based on " highest and best use" designations and many owners and tenants organized to seek tax relief. Knowing some of them …I found out that the assessment did not change, but apparently the Mill Rate was adjusted a bit, but not much . One can try to hire a private firm to review the assessment ,….but apparently these tactics do not meet with much success. I have been to appeal boards several times(and won some minor victories)…and in my view it is a waste of time…given the work/ reward ratio. These private firms have all sorts of rates, I hear some charge 1/2 of what you saved in increased taxes. However, unless mistaken, if one… Read more »

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patriotz

Our socialist gubmint here in Calgary is tax hungry and the population revolted last week The city government in Calgary is "socialist"? Didn't Ralph Klein use to be mayor? What happened, did you get a huge influx of pinko voters from Saskatchewan or something? Has a single NDP MLA or MP ever been elected in Calgary? If Calgarians are so up in arms, why did only 19% of the voters turn out for the last civic election? BTW if you consider Calgary city council "socialist", what would you call Lula? Patriotz: The higher the assessment, the higher the taxes, you can’t argue with that. Yes I can. If everyone was assessed at double market value, everyone would pay the same amount of taxes. The only thing that matters is what % of the total assessment base your property is. That… Read more »

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Carioca Canuck

PATRIOTZ SAID….."If there were systematic overassessment there would also be large-scale appeals."

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I live in Calgary. That is how it works here. We have entire industries that specialize in doing nothing but corporate and personla tax appeals.

Altus Group….Deloitte……Rickard Realty Group…..CV Group…..et al…too many to list. One of my clients runs Altus and told me he has never been busier in the last 18 months and is almost booked solid now for 2009……the city lets many of them right to court where they usually lose. Our socialist gubmint here in Calgary is tax hungry and the population revolted last week.

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Michael Randallbard

B.C. apartment sales drop by half VIRGINIA GALT Monday, November 24, 2008 The commercial market for apartment buildings in British Columbia has “come to a near standstill,” according to a report issued Monday by real estate firm Avison Young (Canada) Inc. “There is now a standoff between purchasers, who in the wake of the global credit meltdown have changed their pricing expectations, and vendors, who are looking for yesterday's pricing in a much more challenging market,” Avison Young principal Rob Greer said in releasing the report. The number of real estate transactions in British Columbia's “multi-family market” has dropped to 76 so far this year, down from 153 in the corresponding period of 2007, according to a survey by Avison Young. “The total value of multi-family investment transactions year-to-date … amounts to $270-million – approximately 52 per cent of the… Read more »

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cashisking

Back of the envelope stuff

GVRD detached Benchmark price for last month was 695,962 from realestate board MLSLink Housing Price Index

Paul B median house price from weekly stats for three weeks in Nov (ending Nov 22) are 630,000, 660,000, 547,500 or an AVG of 612,500

695,962-612,500=83,462

83,462/695,962=11.99% DECLINE

Understand the shortcomings of Median prices but lets not forget the shortcomings of Benchmark … I use a blended rate.

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Ulsterman

meant to "hear", too early for me i guess

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Tom Vu

Low prices mean the best time to buy real estate is now. I see deals everyday and so can you if you look. Do you want to make money and get rich? Then get off the couch and away from computer and start shopping. The doer gets rich not the loser.

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Ulsterman

Anyone else here the economic alice-in-wonderland boosterism taking place on cknw 980 this morning? They're giving their staff a 1/2 day off to go shop with in their advertisers' stores. Apprently the dire economic times are all in our collective heads. We ARE different from the US. If we just went out and spent more all the bad news would go away.

Do you reckon mgt. got together with stuff and asked them to run this shameless fluff or maybe face job cuts down the road?

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NO -LYMPICS

Economist ? = are psychologists that can do Math.

Most of these experts are hired to provide some credibility to the message they are hired to spoon feed the public.

They are fully aware of the herd mentality and how the truth and " news " affects herds. Since the early 1990's these " economists " must have been aware that much of the domestic and international economy was based on bubbles….they should have seen this latest bubble coming, and thus they are either lying through their teeth or truly ignorant.

A lot of these professionals travel in packs , joining the given bandwagon, continually selling themselves out. Any idiot can report the obvious when times are good, but when times are bad or tanking, why sugar coat it ? That's what I see their role as.

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Anonymous

Patriotz: The higher the assessment, the higher the taxes, you can't argue with that.

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Garth

I was reading stuff over at http://www.johnchow.com. He has a post where he tours an unfinished home in West Vancouver. 7000 sq. ft. for 3.5 million, down from 6. One of the commenters says:

"It’s a buyer’s market, especially for higher-end homes like these. Snatch it up and rent it out to international millionaires when they visit for 2010."

I wonder how much of the 3.5 million you would recoup renting the house out for the Olympics?

http://www.johnchow.com/house-shopping-at-whitby-…

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patriotz

Assessed value is truly meaningless and will be for the next decade IMHO. It is a falsly inflated figure used by municipalities to generate tax revenues. You don't understand how property taxation works in BC. Property taxes equal local government spending. They are not a function of assessments. Anyone who has owned a property through the RE cycles of the last few decades knows this perfectly well. Assessments are not perfect, but there are the best (actually the only) universal estimate of market value we have. If there were systematic overassessment there would also be large-scale appeals. The people doing the assessments aren't dumb, they don't want people appealing, and they try not to overassess. As I have already pointed out, overassessment does not result in increased property tax revenues. Also assessment is not done by the municipalities, but by… Read more »

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Patiently Waiting

Check Paul B's latest weekly prices.

http://www.nvcondos.realpagemaker.com/aPage.jsp?a…

It looks a huge chunk has been taken out of both SFH and condo median prices in the last week. SFH down 17% and condos down 14%. I know this could be blip, but it happened to both at the same time.

At this pace, I'll have to buy a house by Christmas. 🙂

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freako

Freako–how does #125 relate to the bit about econ profs? In 125 you are talking about economists like Pastrick, who is most certainly not an econ prof.

True that. I just felt like going on a rant. I hit Helmut's bio, and there is no title at all. What's he got? A bachelor's in Economics?

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