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Leaky condos, tourists, HST & forecasting

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86 Comments

So it’s official.  That silence coming from the Homeowners Protection Office regarding leaky condo loans was the BC Government killing the leaky condo loan program. The good news is that you can get a really good rate on a hotel room in Vancouver since business travelers and other tourist visits have dropped right off.  The new hotel visitor in Vancouver is the local family on a ‘Stay-cation’.

But Hey! Next year’s going to be more economically awesome than this year! At least according to this oddly written forecasting article in the Province.  And even more good news: The extra money you pay for the HST is going to help bring down the deficit! The $1.6 Billion transition payment from Ottawa is going to help ‘bring this years deficit down’… The deficit that was going to be “$495 Million maximum”… From the government that promised to not implement the HST, or run a deficit for that matter.

Enjoy your Stay-cation!

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Advocate

Why would anyone risk buying a condo in BC? With leaky condos, antiquated strata legislation and escalating strata fees due to the HST the alternatives are looking more attractive.

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Starving Artist

bandit: Hahah wow some luxury. I guess that "new condo smell" is worth the extra thousands per month.

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bandit

buyers don't make conscious, educated decisions but they buy based on gut feel or hype. I've seen it amongst friends and workmates. My take on this, if they are willing to take the risk then they have to deal with the consequences. people just don't do their homework, reading the contract, asking questions, researching ect… anecdotal: One time I made an inspection because the friend that bought was out of town for a while and it was shocking how many fails there were in his brand new Firenze 'luxury' condo. Bought a while back at 450$/sqft, presale takeover/unseen. I doubt they would have bought upon actually seeing the thing but presale is hoe they got the 'great' price. Just a few gems: – huge gap in balcony door letting air and water in (1 inch on the top) – carpet… Read more »

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Arwen

– you're not alone! We're saving a tiny amount per month (RRSPs, RESPs, but nothing like 1K per month) and paying off a student loan, and otherwise squeaking by.

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No Longer Looking

Sean,

Most people in Vancouver are better off in rental or non-market housing. Unless prices plunge 50%, home ownership is too risky.

Do you recognize that condos are inherently a problem? They are built for short-term profit and there is no way to hold the builders accountable. If buildings were built by those who would own them for decades, I can guarantee they would be properly designed with higher quality workmanship.

Its really too bad that the rental stock is growing old, and all we can replace it with is these bloody condos.

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Dr. No

"People need a home. Most cannot afford to buy a detached home in this city. What other choices do they have."

Hmmmm, ever heard of a thing called: 'RENT'? Forget owning; start renting and save yourself big $’s over the long term. It’s the desperation to own that pumps up the prices and makes others ever more desperate!

It's not enough that people are stupid enough to pay way too much to own condos in this city, they add insult to injury after the fact by suggesting that taxpayers (not the Government) should pay for their maintenance.

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Sean Wiens

No it is not the Government's Fault that it rains. It is their fault that they do not take the rain into account when designing the building codes. Yes the cost of the Government's mistakes is born by the taxpayer. When has this been different. You would think that the voters would start to hold the Government accountable.

People need a home. Most cannot afford to buy a detached home in this city. What other choices do they have. They are not moron's, they are usually desperate, a position I hope that you, with your high standards never find yourself in.

Sean Wiens

President – SENWI Home Inspections

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Dr. No

"We need to hold the Provincial Government accountable for the fact that their prescriptive building codes is what caused the leaky condo problem in the first place. In most cases the builders built the way they were told to. It is the building codes at fault and the only body to be held accountable is the Government. Downloading this responsibility to societies seniors or those falling on hard times is unconscionable. Sean Wiens President – SENWI House Inspections" Give your empty head a shake Sean! It's the Government’s fault that it rains in Vancouver?? Taxpayers bail out Governments so when you suggest that the Government should pay, you’re saying that I should pay. What's unconscionable is jerks like you suggesting that it was somehow the Government’s fault (because they have the deepest pockets) that people were stupid enough to buy… Read more »

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Sean Wiens

We need to hold the Provincial Government accountable for the fact that their prescriptive building codes is what caused the leaky condo problem in the first place. In most cases the builders built the way they were told to. It is the building codes at fault and the only body to be held accountable is the Government. Downloading this responsibility to societies seniors or those falling on hard times is unconscionable.

Sean Wiens

President – SENWI House Inspections

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gorky

real world example: we're renting a beautiful garden level suite in a house for just under 1300 a month, ALL inclusive (cable, www, heat, water…everything). It's ~1200sqf or so with one large and a smaller den like bedroom (our guestroom for visitors, soon to be kid's room), living room with fireplace. We get to use the whole, rather large Garden for ourselves for planting things like tometoes, salad ect., BBQ parties or just to hang out with our little one. In the meantime the landlords are working both their asses off to pay for the house (North V., 650K, bought 1.5 years back), they don't even have time to ever use their garden. Anyways, this is easily be doable with family income of 75K while still being able to stash away some money. In our case what's really noticeable is… Read more »

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DD

Piddlesby Thanks for expanding on your experiences with young adults, particularly around your ethnic minority associates. And I agree with your statement that they are "socially behind." As an aside, three former work associates, not friends, are either still living at home or just moved out. One was of Scottish descent, 32 and moved from his Dad's home to his own condo; another Fijian, 34, moved from his parents house to his wife's condo after marriage; and one East Indian, 34, just laid off, and still living at home. When questioned on how they could still live at home, they said, "we don't know any better, so don't know what we are missing" I am quite shocked that none of your younger staff took on the matching employee pension contribution. Every job I have gone for, I have looked for… Read more »

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Ulsterman

Piddlesbby said "Their salaries range from $35K – $50K. Most of them can’t save and therefore feel that they will never own a home. We have brought in a professional to help them with their Retirement planning, but only a dozen were interested, even though the company would match their contribution." I'm glad you said this Piddlesbby. On this site i feel there is a tendency for people to claim that because the condo they're living in would cost them $1000/month more to buy than rent, they are saving $1000 / month. It's as if they are actually saving this money. As your example suggests, your employees aren't able to save anything on their 35-50k and the $1k / month rent is all they can afford. It seems that everyone on this site is socking away thousands a month by… Read more »

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Piddlesbby

DD: I appreciate your further explanation and detail regarding the statistics. In my world, they seem off and especially when looking at the 18-30 year olds that I know of and not through work, there is only a couple that have flown back to the nest, but just temporarily. I was born and raised in Vancouver, with an Eastern European background as well as my spouse and in our circle the younger generations couldn't wait to leave the family home. Most did by the time they were 25 (about the age they completed college/university and found their first real job). However, within our circle, we have many Asian and East Asian friends who would agree with me, I would say though, that the main difference is that all their children were born here, so they grew up with different influence;… Read more »

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DD

Piddlesby I will dig out the statistics for you. It was a stats can census report conducted about a year ago. Give me a day to find it as I have a hard copy in my files. In short, the large number of "young adults" living at home in the Metro area was indirectly attributed to the large number of ethnic minorties living here. It was hypothesized that cultural values, where kids stay at home until they are married, was the explanation for the delayed development. As for my opinion, it has been shaped by my professional employment as opposed to my social circle (as they left home early). I worked in the post-secondary education sector, privy to enrollment information at the graduate and undergraduate levels. Professors and associates at the AUCC have also commented on this trend of delayed… Read more »

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Piddlesbby

DD: "We have the highest proportion of “young adults” (18-30) in Canada living with their parents rather than starting out on their own two feet. The number of late 20s and early 30 year olds living with their parents, or “sharing a house” as they like to call it, is significant." I'm guessing you are referring to Richmond and maybe East Vancouver? Curious to know where you got these statistics. Speaking of statistics, I can give you one that I am positive on. I run a dept with 200 employees, so let's call this a statistical sampling. All live in the lower mainland and 90% of my staff are 18-30. I know most of their personal situations, who is engaged, getting a divorce, having a baby, mourning a death, coming out of the closet, etc. Let's say my role is… Read more »

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read on

^^

so they get homes but remain socially retarded? that actually explains quite a few of my experiences since moving to Van.

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DD

Piddlesbby One contributing reason why real estate in Vancouver is so expensive is the number of young adults staying at home until they secure a reasonable down payment. We have the highest proportion of “young adults” (18-30) in Canada living with their parents rather than starting out on their own two feet. The number of late 20s and early 30 year olds living with their parents, or “sharing a house” as they like to call it, is significant. Even with a mediocre wage, you can save significant amounts of money when you have no living expenses (rent, groceries, utilities). You can even party every weekend and pay for your designer jeans, while banking a tidy sum. As such, you can come to the table with large DPS that allow you take out large mortgages. You do not need the 110K… Read more »

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Piddlesbby

DD – I do agree with your observation/opinion that Vancouverites are obsessed with RE. Other than that, I disagree with your "analysis" of the current market. FTB's that can afford half a million dollar mortgages are becoming extinct. Mainly because most do not have a family combined income of 110K with excellent credit. And most do not have any savings at all. Forget the chat's with the barista's and young cabbies. If they are from another province, they are living here alone, no parents or grandparents to help and they are simply dreaming. You said it yourself, they are in their 20's. You know what they are doing this weekend, meeting all their friends at Glowbal for dinner, then off to George for a few drinks, then ending the night at Bar None. Sunday all day, paying for their $300… Read more »

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Anonymous

citizen's bank selling off its mortgage and real estate related stuff because, you know, it's such a good business to be in these days. And

freddie mac and fannie mae make over?

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Thanks krrish2,Thums

DD: You did not add numbers of new homes in your account that has changed from Vancouverboom1 of this century,You did not recognized numbers of small lenders who are willing to nail down top banks for interest rates.Interest rates will never go up above 5.5% yes you have read it here first.Listings are down from 22,700 from september 2008 peak however they are depend on buyers time of thinking.It does not cause constriction on the prices and if pressor increase it will stop the highend sales to affect the acceleration but this pressor is unable to nail down prices specially in VANCOUVER because hey Vancouver Real estate……………

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DD

64 Ahhh… the manifestation of intelligence! Look at the due diligence of Thanks Dave, Supraboy! ”there will be a large wave of sellers (boomers and older)in the next few years wanting to downsize…the market will flood” That was a QUOTE from No-Olympics (#62). I guess you just don't understand quotes or grammar… To No-Olympics: "I will admit I don’t have the data readily at hand…but I will assume that the numbers are correct..ie that interest rates were 2% higher at the peak of the bubble." Just look up the BOC tables – you will see that rates were higher at the peak years. Attention Thanks Dave, Supraboy! Note the above QUOTE referencing No-Olympics again. That means, in plain English, that those are his words. Just a reminder. PS – Yes, listings are down from the 19,000 in late summer 2008/early… Read more »

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NO -LYMPICS

From Victoria Re blog http://www.househuntvictoria.blogspot.com/ Median Greater Victoria price in October 2008: $495K Median in June 2009: $530K July numbers are out, along with hyper-spin, and the median price dropped to $520K. My earlier guess was off, I had expected price hikes, avg and median prices both declined MOM. What this indicates is that it is properties priced below $500K that continue to fly off the shelf as fast as they are listed while properties priced $600K or more move slowly if at all. Official sales stats are: 516 single family homes, 252 condominiums and 103 townhouses or 933 in total–the highest July sales volume in 19 years. The "buying opportunity" in housing occurred exactly 3 months after the fall declaration: interest rates dropped to equal the lowest on record and buyers bought. But real estate analysts should be concerned… Read more »

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Thanks Dave,Supraboy

DD: Good joke,"there will be a large wave of sellers (boomers and older)in the next few years wanting to downsize…the market will flood” what about more than 8000 sellers who just did exactly like that and listings are down compare to July 2008.DD do you love to rent laneway housing?

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DD

I would love to agree with you regarding the depletion of the FTB pool and the impact of the baby boomer property dump. Since late 2006, I thought that the FTB pool was depleted, but each year they seem to come out of the woodwork. When I repeatedly chat with 20 year old baristas strategizing on how to get their condo now, or 25 year old cabbies living with their parents to save for a DP, I walk away with the distinct impression that RE is what Vancouverites live for. I don't know about you, but at 20, I was worried about finding a summer job, not what colour I was going to paint my aspired condo. RE, in my opinion, has become a defacto "value" of our little society here. You are judged by whether you are an owner… Read more »

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NO -LYMPICS

DD I agree with much of your last post. However,….In a reducto ad absurdum argumment, what if Gov't legislated zero interest payments ? People still need an income to make payments and pay down the debt incurred from the original purchase price. How secure are their jobs as unemployment mounts ? Everybody is h-a-p-p-y if: (i) The seller can sell (ii) The buyer can buy in some sort of equilibria. Will the Buyer pool continue ad infinitum ? I submit not enough exist to maintain the current prices. Then the Sellers get upset because they didn't get peak price or lost out. In my view… , demograpically, there will be a large wave of sellers (boomers and older)in the next few years wanting to downsize…the market will flood. In the 1980's, local RE prices did bubble and collapse to 50%… Read more »

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