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VanMag: Time to Buy?

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Crabman pointed out this article in Vancouver Magazine asking that perennial question “To Buy or Not to Buy?“.  The author seems to think now is a good time to buy, particularly if you’re extremely wealthy or partake in a ‘Fonzi Scheme’.  That is to say, rent out part of your home to Fonzi:

Vancouver is behaving in a rational and even laudatory way. At the same time, we’re ensuring that centrally located single-family houses will probably never again be affordable to mere wage earners. The only buyers will be the very wealthy, and people like us: homeowners willing to take advantage of what an economist would call a “densification premium” but I prefer to call a Fonzie scheme, in honour of the rough-edged yet carefully groomed sitcom character who provided added value to the Cunninghams by bunking above their garage.

Vancouver’s response to the challenges of sustainability is one of the reasons our real-estate values have not followed similarly expensive American markets into the toilet, and probably won’t. And one of the reasons why, if you’re thinking of buying, now might well be a good time.

There are other reasons in the article for why ‘its different here, this time’, but I must say, I like the Fonzi Scheme the best.

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hongcouvercrackhead

supra and franco: fuck you pieces of shit.

go back to your circle jerk sausage party

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DaveD

I don't think anyone can deny that the local Chinese form a non-trivial part of what's supporting house prices here. Culturally they're some of the biggest suckers for groupthink anywhere, ever – once it starts to be "common knowledge" that Vancouver real estate is joining in on the global retraction, you won't be able to move for all the people trying to sell you their houses and yelling "you buy now! you buy now!"

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Franco

(The housing market is too big for these elites to absorb all the coming inventory)

what a laughable I have ever heard statement seclude city like Van. Van RE is just a little pea to Chinese elites who has massed immense wealth ever recorded in human history. They can gulp up every single house in greater Van in a flash.

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Vancouver Old-timer

#74 No Lympics

Vancouver City allows property owners to defer taxes after the age of 65 indefinitely. The unpaid balance is rolled over and hefty (not sure of the current rate) interest is added on. I'm not sure about other municipalities but have been led to believe they all have pretty much the same system. I don't know if the municipalities have available statistics on how many people take advantage of this but it could be a lot.

The reverse mortgages (as advertised of TV, the CHIP) are apparently very popular. The 88 year old woman I refered to kept increasing her debt as her house assessment went up.

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NO -LYMPICS

# 72 Vancouver Old Timer:

Interesting anecdote:

Any info on the deferred property taxes ? I am only aware of it, but do the UNpaid taxes keep rolling over till the house is sold. How much is or can be deferral ? I wonder how many parties are taking advantage of this.

As you say, could be surprises to those inheritors.

Also, those reverse mortgages could be in place as well.

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oneangryslav2

Vancouver Old-timer: Brilliant move by the old lady; she most likely knows that her daughter is a useless alcoholic and thought "there's no friggin' way I'm going to finance her foolish ways. I'll spend the money on myself!" Well done, granny!

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Vancouver Old-timer

I have an odd story to relate about people expecting their parents to leave them a house worth $1M plus – an old friend from Kitsilano High School decided her 88 year old mother needed care so arranged to sell her mother's house and "help" her mother adjust to life in a facility. In reality the ex-kitsie wanted the house money to continue her life as an unemployed drinker – imagine her surprise when she found out that there was less than $200,000 equity in the house due to her mother having borrowed against it several times. How many times will this play out in the future with many expectations of wealth and security based on the sale of a family house being dashed due to CHIP programs and deferred house taxes?

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Franco

doogle good job!!!!

Unlike those traitors of BC who keep spreading disinformation and our beloved B.C.,You are the few honesty gentlemen who speaks the truth. Cheer for the thousand yrs of prosperity of BC.

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observer

One possible catalyst for the coming Vancouver RE correction is falling demand and oversupply of rental units. Once these specuvestors run out of options, the units will begin to flood the market. It could end up being our little version of subprime if banks approved a significant number of loans based on expected rental income.

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doogle

I think what we're seeing here is a continued stable real estate market in Canada. What that means is that Canada because of it's strong banking industry and excellent healthcare system will come out ahead in this recession. This is great news for owners and horrible news for bitter renters.

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bat

interesting post http://vancouver.en.craigslist.ca/van/apa/1342718…

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bums up2

Strataman: given that condos/stratas are the new entry-level housing in most of the lower mainland, I (and doubtless many others) have much personal interest in your experiences and what you have to say.

Bury us in the details, please! 🙂

Especially any recommendations on what to look for, what to avoid, etc. A how-to guide of sorts.

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adavar

Strataman wrote: "It’s a large topic I’ll do one system at a time, if you like you will eventually get all the tower systems?"

I would really appreciate any information you're willing to compile. (and I am sure I'm not alone).

Cheers.

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observer

Franco: There are other reasons Vancouver RE hasn't yet crashed. Remember if B happens, there can be more reasons than just reason A which can cause B to happen.

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realpaul

Burden of Proof:

#56 BoP, do you smell the shit in the water? I'm told it gets a bit rank in the summer.

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observer

Franco: The housing market is too big for these elites to absorb all the coming inventory. Anyways, a more plausible scenario is when we run out of local buyers and after the market crashes, these elites will buy at bargain prices (they are surely smart enough to determine whether an asset is overpriced or not, regardless of how deep their pockets are). It would be easy to see if your theory holds up by looking at the US market which is 2 years ahead of us. Are these elites buying over there?

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realpaul

Franco:

#51 F, are you saying that Beverly Hills is there because of a few half baked thieves who have stolen money from the Chinese government?

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realpaul

Boombust:

#49 BB, thats what I was getting at. If there is nobody to rent to, then the landlords are going to be forced down to accept less. Or….. maybe the Olympics will see them all renting the pits out for ten grand a day like the bozo in the real estate mag article was blathering. If I wa a renter today I would get on the phone and start shooting low balls unto I found a guy desperate enough to get anything I offered. Bwahahahahahahah.

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Franco

If it weren't Chinese wealthy immigrants pop up Van RE then why Van property are more expensive than anywhere in California,which has much much better climate and vibrancy than Vancouver.

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observer

Hovering: I wonder if the new accounting practices introduced as a result of the financial crisis are allowing banks and companies to paint a rosier picture than it would appear. I think this is what happened in Japan after their crash. They tried to hide the bad loans and it stunk up the economy for decades. On the other hand, if that's what it takes to avoid another great depression I suppose it is a necessary evil.

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absinthe

Rental Story: Just moved into a single family home, Marpole, $1500 all in for 2 floors and yard. What I found really interesting was that so many 2 bedrooms and larger were being rented at $1300, regardless of what or where or amenities – and then there were scads and scads at >$2000.

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NO -LYMPICS

Strataman:

Look forward to your posts on problems with new buildings.

Thanks for accepting Pope's invitation.

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Burden of Proof

Here is my rental story. In August of 2008 I signed a lease for a 1200 SF unobstructed waterfront 2 bedroom 2 bath, 2 parking apt in false creek south. Our living room overlooks the water with a great view of downtown. The building is right on the seawall. The agent was asking $2000. He took $1800. It was a week from our offer to his acceptance. The previous tenant was paying $1900. We renewed this year with no increase.

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NO -LYMPICS

Good one Franco

Sorry, but that Mythical Asian buyer "RE saviour" is getting boring.

The wealth has come over. Why do ya think the interest rates are so low ? Why aren't these rich Asians snapping up the millions of foreclosed bargains in the US ? Ya don't think there are plenty hurting in this current market in BC ?

Most of the SFH I am seeing built are built by South asians either spec building or doing the capital gains fandango(ie live in it for a while).

Asians were the masters of the quick RE flip. They must be crapping with the global RE market, and probably smarter than Canadians to realize that its only a matter of time till it hits here.

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Boombust

"I was told from my RE agent that there gonna be a torrential RE shopping spree from China."

Oh puhleeze! Spare me.

Did he also say he could bend spoons like Uri Geller?

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