VanMag: Time to Buy?
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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August 27th, 2009 at 3:23 pm
supra and franco: fuck you pieces of shit.
go back to your circle jerk sausage party
August 27th, 2009 at 7:58 am
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!”
August 26th, 2009 at 7:42 pm
(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.
August 26th, 2009 at 4:36 pm
#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.
August 26th, 2009 at 1:01 pm
# 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.
August 26th, 2009 at 12:07 pm
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!
August 26th, 2009 at 11:22 am
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?
August 26th, 2009 at 11:06 am
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.
August 26th, 2009 at 8:33 am
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.
August 26th, 2009 at 8:10 am
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.
August 26th, 2009 at 4:59 am
interesting post http://vancouver.en.craigslist.....18613.html
August 26th, 2009 at 1:24 am
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.
August 26th, 2009 at 12:54 am
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.
August 25th, 2009 at 10:50 pm
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.
August 25th, 2009 at 10:47 pm
Burden of Proof:
#56 BoP, do you smell the shit in the water? I’m told it gets a bit rank in the summer.
August 25th, 2009 at 10:44 pm
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?
August 25th, 2009 at 10:40 pm
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?
August 25th, 2009 at 10:36 pm
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.
August 25th, 2009 at 10:34 pm
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.
August 25th, 2009 at 10:30 pm
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.
August 25th, 2009 at 10:23 pm
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.
August 25th, 2009 at 10:01 pm
Strataman:
Look forward to your posts on problems with new buildings.
Thanks for accepting Pope’s invitation.
August 25th, 2009 at 9:31 pm
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.
August 25th, 2009 at 9:22 pm
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.
August 25th, 2009 at 9:00 pm
“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?
August 25th, 2009 at 8:48 pm
“What’s the selection like ?
Any deals out there ?
Lots of rentals sitting empty ?
Landlords getting desperate, begging you to take the units ?
etc. etc.”
Been looking to switch my North Van rental – I follow the market regularly. Prices have headed up a tad in recent months but nothing dramatic – there was a very clear dropoff in prices during the lull earlier in the year so there was bound to be a bounce in the opposite direction.
Selection is much better than it was a couple of years ago, and I’ve noted a few lower-end items sitting on Craiglist for literally months with price reductions (and some have the nads to offer benefits such as “laundry access twice a week” for the privelege of living in their basements, yeesh).
That being said the good stuff still gets snapped up pretty quickly. I wouldn’t call it a buyers market, as it were, yet.
August 25th, 2009 at 8:48 pm
#45 M
I think a near perfect storm will hit. There will be a decline in RE values due to foreclosures as the boomers downsize en masse and interest rates hike up. Some sages are saying that the current market is absrobing too many future buyers (ie those that would not normally purchase till next year or further into the future). Sorta like eating your young. These early boomers drove up the prices, so perhaps it is poetic justice that they be part of the collapse. They will pull their hair out(what’s left of it) because they coulda sold at a higher price, just as their strata gives them an engineering report identifying a number of problems and their share of the costs.
In the good old days, money was a commodity that was subject to forces of supply and demand, that’s why the interest rates went up to 22% in the early 1980′s. The public then decided if their own cost of living increases were keeping up. Those that bought at inflated prices and couldn’t make the payments were simply SOL. The strongest and smartest (and less greedy) survived.
Those natural laws of economics are not being replayed. More and more are getting sucked into the vortex. Now the powers that be are in so deep they can’t go back.
All fiat money in a faux economy.
August 25th, 2009 at 8:17 pm
Don’t worry Mackenzie Height will be bought out by young and wealthy Chinese immigrants in few yrs,and I was told from my RE agent that there gonna be a torrential RE shopping spree from China. Those Chinese elites and government officials have been making tons of money from government coffer and now they need future security and safe heaven for their offsprings and concubines . Therefore,Vancouver is their best choice and their minimum desire is 3 million house at least,but most of them would prefer 5 to millions house.
I don’t see there is any worry in the future. Indeed, the area will have a huge potential to become the Chinese Beverly Hill.
Hill in the near future.