Friday Free-for-all!
It’s Friday! If you’ve been here before you probably know what that means, if you’re new here.. Welcome! It’s time for our regular end of the week news round up and economic open-topic discussion. Here are a few stories to kick off the weekend:
-Vancouver house prices show steepest drop nationwide
-BC real estate market now ‘balanced’
-Housing industry creates bewildering statistics
-Vancity abandons interest rate increase
-Olympic rentals for fun and non-profit
-Canada scores B+ on economic report card
-BMO expects recovery to be better than expected
-US jobless numbers take a jump
-Canada will lag US recovery
-CHEK-TV employees raise money to buy station
-Sub-primal in Canada
-Uberbear doom n’ gloom for stocks?
So what are you seeing out there? Post your news links, thoughts and anecdotes here and have an excellent weekend!
August 20th, 2009 at 11:51 am
What is the current true value of Vancouver RE.
You would need to know what the current Asian is willing to spend!
Vancouver is no longer a Local market!
Foriegn people from foriegn lands(mostly asian) have more$$$ than local buyers!
FACT!
August 18th, 2009 at 6:18 pm
thx … still don't know how to post
August 18th, 2009 at 11:07 am
Regarding the Wall Street Journal, did you know that you can read all of their articles for free, even if they are behind a pay wall? Just type the name of the article into Google and voila…
http://lmgtfy.com/?q=The+New+American+Dream%3A+Re…
August 18th, 2009 at 8:01 am
Did anyone read WSJ – Weekend Journal
Front page and all of page 2
"The New American Dream: Renting"
It's time to accept that home ownership is not a realistic goal for many people and to curtail enormous government programs fueling this ambition. BY Thomas J. Surge.
Should be the new post Pope.
August 18th, 2009 at 6:42 am
pat:
Because the system was designed that way. Skytrain was designed to have small trains running at short intervals and small stations, and turnstiles or other entrance controls do not fit into this model, because you would need more space for the entrances and more waiting space to avoid missed loading of trains.
And do note that Skytrain was designed with no (that's right zero) input from local planners, but was a turnkey system supplied by an Ontario government corporation, UTDC (which eventually ended up being owned by Bombardier). This decision was made unilaterally by the BC Socred government of Bill Bennett over the objections of local governments.
BTW it is not just the Skytrain that is like this, for example the Calgary LRT is barrier-free (and offers free rides within downtown), and just about all public transit in Switzerland, for example, works the same way.
August 18th, 2009 at 6:07 am
read on:
In Europe the trains go to the airports, not the city transit (Heathrow being a rare exception as it has both trains and the tube).
That's the reason they are so well utilized. You can fly into, say, Amsterdam, and get on a train for anywhere in Holland. They're not just taking people downtown, and they are designed to take luggage of course.
I think ridership for the RAV line will be well under projections, and note that local taxpayers (not the BC government) are 100% on the hook for any ridership deficit.
August 18th, 2009 at 2:42 am
i really don't understand why skytrain stations don't have gates? i am sure tons of ppl don't pay for fares (or those multiple doors buses like 99 or 98)! translink is saying they're running out of money? yet, they have such a loose system.
August 18th, 2009 at 1:08 am
woops correction to last post "developed but still not fun" should be "developed but still fun"
August 18th, 2009 at 1:07 am
real paul thanks for your posts and I agree with what you say. I went several years ago to samui as it was being developed but still not fun. Not sure how it is now but at the time loved it. Tried phuket as I never have been there before and I will not go back.
girlbear $120 a night is expensive. My parents just paid a bit more than that a night for the hilton in hawaii as part of a package. And there are $700 a night hotels in phuket too. Anyways I was just pointing out the marketing and hype about real estate I found overseas don't have more details. But I was quoted outrages prices and idiot tourists I mentioned it to found nothing wrong with those prices. If you find it a good deal that is a personal choice.
August 17th, 2009 at 10:20 pm
Some of the posters are getting confused about subprime.
Let's make sure everyone understands the definition.
Subprime refers to loans given to borrowers with less than ideal credit. Simply stated, these folks don't get the "prime" rate.
Instead, they get something that's worse that prime.
Subprime has nothing to do with zero downpayment or interest only payments.
The general consensus is that subprime was not as big of a issue in Canada when compared to the US.
Now that may be true, but subprime is only part of the problem.
There are also a huge amount of loans made out in the ALT-A and OPTION ARM categories. These are going to be nasty as the bulk of these are set to reset sometime after 2011.
My understanding is that ALT-A are sometimes called liar loans. The borrower has good credit, but their income takes too much work to document, so they just take your word for it.
Option ARMS are loans with low initial rates (teaser rates).
When these expire, the rates jump significantly.
You could say that the majority of loans taken out now are Option ARMS. You can bet interest rates will be higher in 5 years.
This combined with 35/40 year amortizations and low to zero downpayments makes a volatile recipe.
Essentially these mortgages do not build in any room for error.
Any kind of decrease in home values or rise in interest rates can push many of these mortgages into default.
There are over 18 million vacant homes in the US right now.
I'm sure there also millions of borrowers who are getting close to the brink of defaulting and millions of other homes that are still going through the foreclosure process.
Yes, we are not the US, but what happens over there DOES affect us.
Anyways, these are my reasoned observations.
I know bulls don't like to hear this kind of stuff, but I think it's beneficial to talk about.
August 17th, 2009 at 10:00 pm
Another story from the CBC about the same stress study:
http://www.cbc.ca/money/story/2009/08/17/cma-heal…
" * 40 per cent said they felt stressed and/or overwhelmed by financial concerns. Among those who earn less than $30,000, that number rises to 51 per cent.
* 25 per cent said they have delayed or cancelled a dentist appointment as a result of financial worries. The figure is 34 per cent among Canadians who earn less than $30,000.
* 16 per cent of those polled said they skip meals to save money, with the figure rising to 28 per cent in the lowest income bracket.
* 23 per cent said they are losing sleep over economic worries, with the figure rising to 33 per cent among those without a university degree.
* 14 per cent said they had delayed or stopped buying their prescription medications because money was tight."
August 17th, 2009 at 9:49 pm
Talk about stimulus
85% of Canadian money laced with cocaine:
http://www.vancouversun.com/news/canada/Canadian+…
"I'm not sure why we've seen this apparent increase," Zuo said in a summary of the study. "But it could be related to the economic downturn, with stressed people turning to cocaine."
——–
The quiet suffering behind closed doors, as Canadians lose sleep and skip meals due to financial stress (or exposure to cocaine
):
http://www.vancouversun.com/news/canada/Canadians…
August 17th, 2009 at 9:36 pm
NO -LYMPICS:
Foreign ownership of land is forbidden by law in Thailand. You cannot own through a proxy or a spouse. If you marry a Thai ( M/F) they lose their right to own property. If you gift the money to a spouses family for a land purchase it can be confiscated or a forced sale withing 90 days will be ordered.
Any complex leased by foreigners must also be held 51% by Thai nationals. You can be sure they are not paying what the asking price for foreigners is. It is a national obsession to rip off Farang ( foriegn devils) as the sport permeates every levell of society. It is quite common for foreigners to have their rights extinguished and assets usurped by a Thai through bribery or quasi legal coersion.
There are many types of title in Thailand. The developer you lease from may not actually own the land on which your complex sits. Its very complicated and can be changed with a wink if a Thai wants to steal your property. You'd have to be a wide eyed numbskull to buy proerty in a place like Thailand where you have no rights to protect your ownership rights. The question is then " What do I get for my 500K?" The answer is " Nothing Tangible".
The rights of residence are a constant issue for everyone who has chosen to reside in Thailand. Even the old pros are getting screwed at times, and these are the guys that have been in country thirty years and have Thai wives and families. Once a foreigner always unwelcome is the policy.
Girlbear, trust me you'd get tired of the sleazy bars in no time. You should have seen Phuket in the days before the development craze. It was paradise. It is now a stinking shithole IMHO. It also flushes 100% of its sewage directly into the beachfront and the water is sickening. This is also the case in all Thai recreational areas, like Phi Phi, Krabi, Lanta etc etc. Thailand is over, so over baby.
The quality of construction in Thailand is decent but you have to be on site for the entire process. Otherwise they don't do a bad job. Quite often though the Thai tradesmen or contractor will get into a dispute with the developer and bullets fly. Many foriegners are killed by this method in Thailand every year as are foriegners who's wives tire of them and decide to have them killed. These cases are never solved as the police are easily bought off.
I just returned from a month on Maui. The real estate prices continue to fall precipitously. Houses are off hundreds of thousands and there are many good foreclosure deals. Best thing to do is Google a site to follow the game or like I do get a local realtor to email you all the current info. You are starting to see some sweet deals in the islands.
August 17th, 2009 at 9:14 pm
Fed shenanigans:
http://www.chrismartenson.com/blog/fed-buys-last-…
Just last week, when the auction results were announced it was trumpeted to great fanfare that there was "more than sufficient" bid-to-cover, "strong demand" and all the rest.
And now it turns out that 47% (!) of the bonds that were taken by the primary dealers in that auction have been quietly bought by the Fed and permanently secreted to its balance sheet.
And somehow, Mish is a deflationist…
Printing money leads to only one thing. The Gov't may be hoping that it finds its way into RE like it has for the last 20 years, but that game is up.
August 17th, 2009 at 9:01 pm
NO -LYMPICS: Oh, and I doubt the building codes could be much worse than some of what we have seen here in the last 15 years ! lol
August 17th, 2009 at 9:00 pm
NO -LYMPICS: From what I understand foreigners cannot own freehold to land in Thailand. They can, however, own freehold to the building on the land. Seems like semantics.
Anyhoooo, the point I was making was that I think the gentleman saying that apartments were listed in the millions in Thailand was misinforming Other Ted. I can find no such listings. Un,ess he meant in the millions in Thai Baht – which is a whole different story.
I am in NO WAY denying home ownership is more difficult there than in the US or here. I just didn't think the numbers were correct!
August 17th, 2009 at 7:48 pm
Girlbear:
The "Phuket" example you provided is listed as "leasehold" ( as opposed to freehold ).
What are the building codes like in 3rd World countries?
Also: To get a real "apples and apples " comparison, what are the taxes, strata fees, capital gains implications etc. etc. ?
August 17th, 2009 at 7:30 pm
Phuket ?
When I first came acroos VCI, I thought the RE run -up was simply North American based.
Then it became clear this was a global phenomenon. It had happened in Spain, Ireland, U.K. , Dubai etc. etc.
What the Phuket is going on ?
I think this "rich asian" card is geting played a bit much…like this will be the salvation of every collapsing RE market.. Given the news that oozes out of China, there may be rich asians bailing out in the short term, investing elsewhere, , but only if they are still rich.
RE has been a global con game, and each and every country wanted its piece of the action. In a previous post I had provided a link to an article that showed that the US Gov't has, since the early 1900's , in essence "created" programs that have subsidized home ownership, ie that home ownership would still be a dream for many, not the right many assume it to be.
Over time,Gov'ts have conveniently allowed the housing market to be a leading, if not THE TOP indicator of the GDP. To maintain this status, if natural economic market forces cannot sustain this , then political chicanery will.
Active construction, and SOLD signs are very visual indicators , and ones that politicians love, obviously at any cost, even if it is all, in essence, built on red ink and quicksand.
August 17th, 2009 at 7:29 pm
Re: Phuket
Just one example of it seems hundreds, possibly thousands….
$14mill THB = about US$400k, and that's the ASKING price. Pretty nice place IMHO. Even if it is in Thailand.
http://www.phuket.net/property/prima-villas-karon…
August 17th, 2009 at 7:20 pm
I was in Phuket a couple of years ago. Stayed at JW Marriott which easily compares to any 5* hotel in Hawaii.
My rate: about CAD $120 a night. (This included an insane breakfast buffet)
I reckon the hotel room I had would have gone for around US$700 in Maui.
So I thought the price was fair…
August 17th, 2009 at 7:14 pm
girlbear I don't believe houses are going for 3x either. That's my point the country is dirt poor and they are trying to peddle outrage prices to unsuspecting foriegners. How often if ever they get these prices is something else. I am sure some greater fools have bought at outrages prices.
August 17th, 2009 at 7:10 pm
realpaul: Fair enough.
But I still don't believe houses are going for 3 x Hawaii prices. I wasn't arguing the difference in lifestye and politics, just the dollar numbers being tossed out.
August 17th, 2009 at 7:05 pm
Girlbear:
106, GB, there is no equivelant standard on which to compare living in Phuket and living in Hawaii. In Thailand you have no rights to ownership, no right to be in the country and no way to defend yourself should your existence be challenged.$500K in Thailand is no more secure than your next bribe at immigration every 90 days.
August 17th, 2009 at 7:04 pm
oneangryslav
SkyTrain/RAV type system is not the choice of most of the world's cities. (Original system in much of metro Vancouver was LRT..ie on grade rail, up until the late 1950's) .
Hence, if it defies logic and practicality, it is " by logic " a political decision.
SkyTrain/RAV is ass backwards. IMHO, It is a taxpayer subsidy to big RE developer interests. It allows Local Gov'ts to develop new OCP's that displace current uses(light industrial/commercial) in favour of higher density residential.
Now many will cheer this on the greener , more efficient use of land , but put this in light of this very VCI blog and its theme. Its all inter-related. We will continue to add to an oversupply of condos, and depend on greater fools to absorb this with Gov't assisted financing with CMHC etc.
It was reported yesterday the City of Vancouver has offically endorsed a new City plan to densify along the Cambie corridor….(long rumoured) Gee..what a coincidence the RAV line runs there.
Why is the Cambie line practically the only major portion(with a few exceptions) underground, why not elevated like most of the system ? Is it because they don't want an eyesore…that developers want it out of sight/ out of mind, but its very existence justifies the densification..a classic double dip? Is this also why it didn't go down Arbutus corridor and aggravate the anal residents over there ?
Again, RAV will move a token amount of the population , but IMHO there is more than meets the eye. It was more Real Estate based, and will simply exacerbate the RE collapse. The Local Gov'ts collect their DCC's and developers lure in more suckers. The rest of us are left on the outside looking in.
August 17th, 2009 at 7:02 pm
girlbear I was in phuket and I was shown apartments that I was told were in the 1.5million dollar range. Anyways 500k for phuket for a 3 bedroom home is still a rip off. Phuket is no hawaii. Yes spectaculare scenery but its still third world. The resorts are very modern feels like hawaii. Well hawaii with go go girls and hookers every two feet.
August 17th, 2009 at 7:00 pm
oneangryslav:
104 OAS, I have long advocated that a giant wall should be built around Surrey to isolate the scum from rampaging through other communities, close and far. Some of the junkies are quite enterprising , as long as they have free ride on The Crime Train.
#103 OT, I know what you mean when you refer to the export of fanatasy prices from N.AM and Europe to the third world. When you get these Euro-dropouts setting up B&B's in Butthole Junction Thailand and pricing the accomadation at $200 Euro a night you know the game is up and its time to find a new place to flow.
I remember asking a waiter at a hotel in Cancun how they came to price their pool drinks at $14 given that he was only making $7 a day and the liqour was made in Uncle Jose's mule trough behind the meth lab. He said " Thats what they cost in Miami".
I would have argued that Cancun was not Miami the same way as Butthole is not Paris, but I would be wasting my time talking to a waiter who will spend his life and death within 20 miles of his birthplace. The gaseous fantasy of 'international fame and fortune' could have escaped out of Bob Rennies boy toys ass for all it's veracity.
There is a big overhang of high priced condo's built in Asia for rich foreigners to consume with no one buying. Dubai has set the standard for the Humpty Dumpty tone of third world real estate.
When I was living in Australia I found it amusing how insular the Aussies are, and how gullible. If you watch the news there long enough it's enough to convince you the Australians have invented fire and everything else since. The extreme isolation would be a good case study for anyone here to value as a talking point for why we need more competing media networks as opposed to the derth of opinion we have in Canada. Isolation breeds ignorance.
August 17th, 2009 at 5:55 pm
other ted: What resort city in Thailand were you seeing these very expensive dwellings. From what I can see in Phuket, one of the areas that is the Hawaii of Thailand, one can still purchase an EXTREMELY high-end 3 bedroom home in a country club like gated community – completely modernized with pvt pool – for around US$500k. I don't see a lot of that in Hawaii…
August 17th, 2009 at 5:49 pm
"As a few have commented, do people want to access an airport carrying their luggage onto public transit after they have made their connection ?"
In Europe almost everyone does this. Who in London drives to Heathrow? Or in Paris to CDG?
Now, whether this works in Van is a differnet story, but I'm prepared to give it a chance.
August 17th, 2009 at 5:35 pm
I guess public transit is where I philosophically part ways with some of my fellow real estate bears.
The airport is only of the destinations for the Canada Line, the other being Richmond Centre. The last station is about a five-minute walk to Minoru Park. I went to an event at Minoru last yesterday and chose to drive from downtown. Had the Canada Line been in operation, I would have taken that instead.
Moreover, this serves areas that have huge current and potential demand, like the Broadway/City Hall area, Langara Campus, hospitals, etc. Moreover, if you live, for example, Arbutus/41st and work downtown, it will be faster to take the Canada Line to 41st, then transfer on to a bus for the remainder of the journey, rather than taking a bus from downtown–especially during rush-hour traffic.
That's like saying that Cody Hodgson has never fulfilled expectations. (For the unaware, he is a youngster who is 19 years old, considered to be a future star in the NHL for the Vancouver Canucks, but has yet to play a game.) The Canada line doesn't open for business until tomorrow! I'd wait at least a few months in order to determine whether the line has met projections. The same criticism was leveled against the Expo Line initially and ridership has far exceeded even the most enthusiastic initial projections.
This is the nature of the beast. I agree that there should be fare gates and it is legitimate to criticize Translink for not getting those done to coincide with the opening of the line. When you allow more access for individuals to an area/region, you can't discriminate between those who pose no trouble and those who do.
When the Ironworkers' Memorial Bridge (Second Narrows) was closed for a while for repairs/renovation, property crime in North Vancouver dropped dramatically. So would you suggest that the bridge remain closed permanently to keep property crime rates low?
August 17th, 2009 at 5:33 pm
Just got back from vacation. Interesting to see the greater fools at work around the world. Talked to an australian lady she claimed US had problems because of subprime loans. I told her that was not the cause of the problems. Loose lending, too much money being printed and prices being too high were the problem. In Canada we don't have a subprime problem but we definately have loose lending. She claimed in Australia they won't lend to anyone without a 20% downpayment and that their banks are the best in the world. Sounds familiar. I don't believe her but I believe her media feeds her that crap. Why do common wealth countries all suffer from this delusion of grandeur and superiority while in fact the rest of the world just sees them as lackeys of the americans?
In thailand, the mexico of asia, apartments were priced(not necessary sold) in the millions in resort cities. According to some french guy this made sense, his answer drum roll…rich asians. so rich asians are driving up vancouver because they want to get out of their shitholes at any cost. And now rich asians are driving up their own properties because the thought of moving here sickens them. I pointed out you could get places for a third of the cost in Hawaii and no resort city in the pacific should be more expensive. He didn't seem to get it. My take on it is idiots from europe spread their bubble oversees and there is a get rich quick scheme in progress in some asian countries to take advantage of this. In the end it will all come crashing down.
My take on asia is there is not much progress going on just a race to the bottom. Everthing is still manual labour. We are not outsourcing because of efficiencies over there but we are arbing our labour costs. If they ever advance the slave labour their will be too costly for us. They are not industrializing but we are de industriulizing and now using slave labour. Sadly the world seems to be going backwards not forwards.
August 17th, 2009 at 4:57 pm
From what I've heard, the 99 bus line has been at max capacity for ages, and what's needed is a skytrain line along Broadway to UBC. Lines start forming for the 99 at Commercial as soon as the previous bus leaves.
Conversely, the few times I've taken the bus to the airport there have been four or five other people on it, max. The 98 can be pretty packed, but much like with the Millenium line where people are going is not where they built the Skytrain.
Even as an Olympic project, a train to the airport is stupid. The athletes aren't going to take skytrain, they'll have their own buses. The officials and VIPs aren't going to take it, they'll have limos and chaufeured cars. And the spectators are going to be just like all the other tourists who come to Vancouver; some will take transit but most will use cabs because they don't want to haul their luggage around.
August 17th, 2009 at 4:11 pm
realpaul:
One study on the Skytrain impact was that 60 % of property crimes are within 1/2km of the SkyTrain line, which maybe extrapolates with what you referenced.
( However, duly note that RAV does not directly connect to Surrey, the closest connection is at Waterfront ).
However, the RAV line converges at River Rock casino, so we may see more muggings etc. as RiverRocks locale is currently remote and requires vehicular access . RAV will allow for quicker escapes ?
RAV ain't cheap and I don't see it being much of a success.
I don't see a lot of Richmond residents using it, and if not mistaken YVR is one of the few if not only airports that have a rapid transit line . As a few have commented, do people want to access an airport carrying their luggage onto public transit after they have made their connection ?
Suckers riding free today will be used as photo-opps to show how popular it is. From what I have read, the entire project has not ever met its projections.