Industrial land prices crash

Blueskies pointed out this article in the Globe and Mail – Apparently industrial land prices in Metro Vancouver have dropped as much as 30% over the last year.  Vacancy rates for industrial land is also on the rise.

The value of industrial land in Metro Vancouver decreased by as much 30 per cent in the last year as speculators desperately unloaded land bought near the market’s peak into a market with little demand.

“If there is no demand to build, it is no surprise vacant land is the first asset to be disposed of,” said Avison Young principal Rob Gritten. “Speculators who entered this market in the late stages of the bubble, and with no income to support carrying costs, have been forced to discount significantly to attract bids.”

Silly speculators, don’t they know that residential condos is the place to invest?

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[…] Metro Vancouver industrial real estate prices plummet, vacancies … […]

space889
space889
10 years ago

@Purp: Not all municipalities follow that model. Majority do but not all. The big one is apparently City of Vancouver which operates more on a % level rather than on a budget level.

Also doesn't change the fact that higher property assessment values can mean a lower property tax rate even if the tax has actually gone up. If enough people believe the property tax is set based on a rate then a lower rate will give the appareance of doing a good job to keep the costs down.

patriotzed
patriotzed
10 years ago

@Deliverator: Tamil is a state in India, not a race Well actually Tamil is the language spoken by (surprise) Tamils. Tamil Nadu (which literally means "Tamil Land" is a state in India. Tamils are an ethnic group whose homeland is Tamil Nadu and who also live in Sri Lanka, Malaysia, Singapore and elsewhere. Whether you want to call an ethnic group a "race" is subjective and not worth debating. realpaul: The Big Lie is that prices go up. They don’t. The purchasing power of your dollars goes DOWN. Are there prizes for this kind of thinking? The price of something is how much money it takes to buy it. The purchasing power of money is how much of something you get for a given amount of money. In other words, one is the reciprocal of the other, and if one… Read more »

Deliverator
Deliverator
10 years ago

@realpaul: Sikh is a tribe currently occupying the state of Punjab not a race and Tamil is a state in India, not a race

Sikh is a religion.

http://en.wikipedia.org/wiki/Sikh

Purp
Purp
10 years ago

@Truthiness : I think it's been discussed here lots before, but property taxes are not calculated as you describe. The annual budget is determined, and then property assessments are used to divide this tax burden based on a property's assessment relative to other properties. Total assessed value of all properties do not affect the total amount of taxes collected.

Drachen
Drachen
10 years ago

Truthiness;

You don't really understand how municipal taxes work this has been covered 1,000 times here so I won't go into detail but it doesn't work the way you think it does.

tincup
tincup
10 years ago

@Ulsterman: #44

I agree, Ulsterman. I lived in South Granville for about five years, and it was sad to see old places like the Normandy shut down to make way for yet another women's shoe store. Even the butcher has moved to kits (on 4th) because it's more affordable. I guess its proximity to Shaugnessy makes the landlords ask high rents. Glad they are not getting them.

truthiness
truthiness
10 years ago

Another gem from g's blog comments points out that civil service unions love the rise in assesments because it clears the way for higher wage and benefit demands. Sneaky eh? "High real estate prices are a stealth tax. Governments, at all levels, pursue policies that tend toward higher real estate prices. Why? It’s a way to raise taxes without officially “raising taxes.” The key beneficiaries are the municipal politicians and municipal public employees, but also the provincial governments, along with the federal government. Higher assessments mean higher property tax revenue. This means that municipalities require less in the way of transfer payments from the provinces, and, in turn the provinces need less from the federal government. Feeding the municipalities with high real estate prices leaves the feds and the provinces with more money to “redistribute.” This is before we even… Read more »

Starving Artist
10 years ago

Also an interesting comment from the Greater Fool blog….

Cariboojohn on 11.12.09 at 3:56 pm

Hi Garth

I live downtown Vancouver- Gastown, in somewhat of a new building. 1996 It has 170 suites in it.

I was just reading my council minutes.

One lien has been placed on a unit.

Two last warning letters for two units.

And four warning letters to units.

That seams high to me.That thay can`t pay the mantenace fee`s

Starving Artist
10 years ago

Interesting precedent….

http://www.cbc.ca/canada/british-columbia/story/2

The B.C. Supreme Court has ordered a home inspector to pay nearly $200,000 in compensation to a North Vancouver couple for a faulty home inspection he performed.

The court found that Imre Toth of Aldergrove was negligent because he failed to inspect the entire home, and should have advised the couple to hire a structural engineer before they bought the $1.1-million house in September 2006.

realpaul
realpaul
10 years ago

Is there a similarity here? You decide.

The bubble now is US Treasuries.

And that bubble is caused by credit, specifically “bail out credit” provided to banks at 0% or thereabouts used to buy 10-Year and 30-Year paper and make a “risk-free-margin”.

Except it’s not risk-free, because as soon as interest rates start to rise, anyone who bought a 30-Year on effectively a 100% margin, will lose his shirt.

That is the stuff bubbles are made of. And that is very dangerous.

Einstein once defined a lunatic as someone who keeps on doing the same thing even after there is overwhelming evidence that course of action is misguided.

Tis the season for lunatics clearly, take care!

http://seekingalpha.com/article/172915-lunatic-bu

Ulsterman
Ulsterman
10 years ago

@Vomitron:

Yet despite all the deterrents the band keeps playing and the price of drinks keeps on rising.

Low incomes, poor quality jobs, last major employers shedding workers, difficulty attracting out-of-town employees, high commercial taxes, bad weather, traffic, drugs, litter, gangs, apparently mostly local buyers with local incomes, major buyers of our products in recession, AND YET IT MAKES NO DIFFERENCE.

I feel like i have fallen down a rabbit hole. Now where did i leave my ruby red slippers?

Anonymous
Anonymous
10 years ago

"Seems like a pretty big stretch to me."

yes it does seem like a big stretch. except i don't think that was what he was saying. are you smoking something dave?

Dave
10 years ago

@scullboy:

Don't get your panties in a bunch. Relax.

Let me sum up your thought process:

1. I know a few asians gangsters;

2. There are lots of asians in Vancouver;

3. Therefore, high real estate prices in Vancouver are probably caused by Chinese money laundering gangsters.

Seems like a pretty big stretch to me. First it was the realtors, then the developers, then the speculators, then the media, then the bankers, then the CMHC… now it's Chinese gangsters. Who can we blame next?

Starving Artist
10 years ago

And all this has what to do with Industrial land prices?

Have we just completely given up on staying on topic these days?

Ulsterman
Ulsterman
10 years ago

@Starving Artist:

The S Granville merchant issue is a sad one. I lived in that area for years and in the past 3-4 years lots of the mom n pop business closed because their lease went up fourfold at the end of the lease. The area is losing character fast.

realpaul
realpaul
10 years ago

The legal system in Canada supports the criminal element. This country is well known as a soft spot to sit on stolen booty and criminal misdeeds. Corruption is absolute in China and there have been many well publicized cases of th e corrupt coming to Canada and using our own lax sytstem and the bleeding hearts and Liberals who can't get enough Sikh and Tamil terrorists as thier doormats and stooges. And knee jerkers….Sikh is a tribe currently occupying the state of Punjab not a race and Tamil is a state in India, not a race.

space889
space889
10 years ago

@Purp: There is a very simple reason for this, Canadian's refugee system. As Lai Changxin's case and several other cases in Canada made it perfect clear to those corrupt Chinese officials/smugglers/gang members/etc, as long as you have money and set foot in Canada, the Canadian legal system will do everything and anything in its power to keep you from being extradited back to China. All you have to do is bring cash to Canada, say any 2 or more of the below: falong gong death penalty human rights unfair trial democracy 1 child policy and you will be allowed to stay in the country for years and years, probably collecting social benefits, free medicare, living a nice/luxury life, have a couple of kids (very important, must be 2 or more). If after everything you lost your case and have to… Read more »

scullboy
10 years ago

…. and there we have the knee jerk reaction I was expecting. Thanks for being utterly predictable, Dave. As I said previously, I have nothing against any community. Hell, my ex and his family are Colombian and trust me, if assumptions are made about any group, Colombians are high on the list. As I previously stated I'm personally acquainted with at least two Asian gangsters. Another guy was kicked out of school for gang related activity. I'm not making it up, dude. All three were Chinese in that particular case. I also made the point that Vancouver really is different in its immigrant makeup from Toronto, and the nature of those demographics may influence how criminal elements differ in each city. I guess that went over your head though. The sad fact is we can't have any kind of real… Read more »

space889
space889
10 years ago

@Franco: So I guess the moral of your story is that as long as the money comes to Canada and benefit you personally, it's fine and dandy? You don't give a damn that those $$ are STOLEN from the working poor, peasant farmers, honest working middle classes people in China who are just trying to make a better life for themselves and their children. That they often work in horrible conditions @ slave wages as often portrayed by the media here and paying taxes that gets siphoned by these corrupt officials and smuggled out of the country doesn't raise any moral, ethic concerns in your heart and mind because hey, it's making my house price going up!? Geez, you wonder why Canada is still a member of an extremely exclusive club in the world? That club being of a handful… Read more »

Dave
10 years ago

Most immigrants are hard working taxpayers. Criminality and illegal activity cross all ethnic boundaries. If we are going to make accusations towards a certain group, let's at least have some evidence to back it up.

Drachen
Drachen
10 years ago

There's some serious delusion going on in this town.

I just heard a woman on the CBC talking about a rental scam where people ask for money up front and of course don't provide any actual accommodation. Nothing shocking there. But describing it she said, "This type of scam is very common when there is anxiety about the availability of accommodation because the rental market for the Olympics is very tight and people may jump at any opportunity."

Maybe locals believe that but anyone from outside of Vancouver looking in would see a ridiculous amount of listings and relax.

Vomitron
Vomitron
10 years ago

Re: Business Property Tax

Vancouver has the highest commercial property tax rates in Canada, by quite a bit. In a normal city commercial property tax rates are 2 to 3 times residential property tax rates. In Vancouver commercial property tax rates are an astonishing 5 times residential property tax rates.

The high commercial property taxes are an effective deterrent to business in Vancouver (along with the usual Vancouver deterrents, like high business insurance costs due to high property crime in Vancouver and the bubble pricing of housing in Vancouver which makes it difficult to attract and retain employees).

I told you so
I told you so
10 years ago

It seems like everyone is jumping off the ship before it sinks in June 2010.

http://www.nationalpost.com/story.html?id=2215373

Anonymous
Anonymous
10 years ago

I applaud scullboy for sensible discussion. I am Asian and don't think it is racist just to tell it like it is even though it may sound a bit racial. I agree 100% with scull's observations.