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December 1st, 2009 at 10:03 am
@G Lady:
logic, nope, my place isn’t 250k for 1500. my mortgage is 310k, ~1300 a month. strata is about 200.
You forgot to mention your place is in Ocean Falls (or la-la land)
December 1st, 2009 at 10:03 am
G Lady
In some locations the rent can cover the mortgage. You may think that your deal is great now but when you refinance in 5 years and your best mortgage rate is 8.5% you may not feel the same about your little investment or when the condo is moldy and they need a $100k for restoration. I just want to remind you of some of the risks of buying a condo at the top of the largest bubble in recorded history.
December 1st, 2009 at 10:00 am
Hey Anonymous (21),
China is in an inventory bubble that will eventually collapse. This will be the next leg down in this crisis.
The Chinese (myth) of them buying today might have some virtue (though I haven’t seen the data to support this) but sure as hell it won’t be happening in the future).
December 1st, 2009 at 6:00 am
Patriotz:
That’s the problem with the Van real estate market, people do think of it as moral. Owners are smart, and virtuous and good citizens. Renters are cheap, shifty, dirty bastards. You’re either moral or you aren’t in Van.
Dave, you’re right. Baiting SUpraLadyboy is getting old. I have to admit it’s fun to hear him squeal though. There’s something pleasingly symmetrical about trolling a troll.
Mind you, if the guy opens his yap here again it’s open season.
You’re also right about there being good and bad aspects of Halifax. I went on a date with a nice Chinese guy from Toronto last night. We hit a chain type mexican restaurant that wasn’t very good, but I’m blaming the chain’s recipies for that one.
He was complaining that you can’t get good dim sum in Halifax, and given all the comments I’ve posted here I had to bite back a lot of laughter.
Halifax isn’t as ethnically diverse as Toronto or Van, and therefore you’re probably not going to get authentic ethnically food, or at least authentic Asian and Indian food. That’s one probably minus to the city. However, if you’re one of those people who likes to eat locally produced seasonal fare, Halifax is awesome. There is a LOT of great local fare here.
And of course if you’re a trained chef Nova Scotia is a total bonanza. I’ve been promised duck, goose, rabbit and venison by some friends of my dad’s, as long as I cook for them when I’m visiting. The apples are top notch, as are the blueberries, the potatoes, carrots, the celery and onions. If you’re into French food, you can get fantastic ingredients here as well.
I also saw a frozen antelope roast in the market, which was pretty cool. Not exactly local fare.
December 1st, 2009 at 4:49 am
@stagnate:
The market price of any asset is determined by a willing buyer and a willing seller. The buyer thinks it’s a good time to buy, the seller thinks it’s a good time to sell. In other words each party thinks he’s making the right decision and the other the wrong decision. It’s not a moral choice at all, just an opinion on future prices, and you cannot claim that one party is more moral than the other.
December 1st, 2009 at 2:06 am
I was up late and reading this article:
http://www.debtdeflation.com/b.....g-the-gfc/
Afterwards, I was inclined to reflect on the last few years of economic leadership and mainstream thought. I’ll let the record speak for itself:
- there is no housing bubble
- the subprime mortgage problems are contained
- there will not be a recession
- we are not in a recession now
- we may be in a recession, but it will be mild
- there are no problems in the financial system
- we are addressing minor problems in the financial system
- we are confident the financial system is robust
- holy crap give us trillions of dollars right now or the world goes kaboom and civilization as we know it ends
- we have stabilized the financial system
- green shoots!
- the banks are all healthy and solvent
- the recession is ending
- we successfully prevented a depression
- no, we will not tell you what happened to the money
December 1st, 2009 at 1:46 am
1300*12 = 15600
15600/310000 = 5.03
So, a rate of 5.03 % including capital repayment. I guess that works.
Ok, new question. Where can get a condo for 310k that rents for 1500? Seems one can barely get a studio in East Van for that.
December 1st, 2009 at 1:36 am
logic, nope, my place isn’t 250k for 1500. my mortgage is 310k, ~1300 a month. strata is about 200.
December 1st, 2009 at 1:32 am
I appreciate your respectful response, other ted! I notice most people that come here are usually the anti-homeowner people so I might’ve offended a lot of you for feeling glad about my purchase. I just wanted to share with you guys that there are people out there that got a better deal than renting.
My place is actually just slightly over 1000. I think including the balcony, it would be 1049? 2 bedrooms plus a tech room. It’s not in the core of downtown but not far from it, but it takes me about 20 minutes to drive down there every morning.
My parents referred a VERY good and responsible mortgage broker so I locked down my mortgage at 3.6% for 5 years. I do agree that variable is better but I’m the conservative type so I locked it for 5 years.
December 1st, 2009 at 1:26 am
where can one buy a 250k condo that rents for 1500? (or are you not including capital opp cost?) I’m renting a 2 bed west end 500k condo (minimum) for 1400 (and i dont pay the condo fees etc, of course, which are 250 ish, i think).
December 1st, 2009 at 1:06 am
thanks for the update g lady. For 1500 a month in rent it must be a big place you bought. How many square feet? So let me guess its a 900sq ft. place that you bought with a 250000 mortgage on a variable rate. That doesnt sound so bad. But something tells me your place is smaller than 900 sq ft. and hoping for 1500 in rent would be a bit optimistic. But as long as your convinced you got a good deal why try to convince us, and who are we to convince you otherwise.
December 1st, 2009 at 12:58 am
I have been reading this blog since about 2 years ago, give or take. Everyone had been bitching about how the Vancouver owners are going to get screwed over very soon by the bursting of the housing bubble. I thought you guys were finally right when the prices dipped 1 year ago.
Now it’s going back up again…quite aggressively. I personally know a handful of people (professionals in their late 20′s planning to have a family) with enough down available to buy for their own use instead of for investment/speculation like before. I think the current market today is actually more solid than the market from a couple of years back because of this difference. Vancouverites are just not giving up in buying. Different groups of buyers keep showing up to keep the market from dying. First the speculators now the young professionals.
When I bought my condo, I thought it was at the market peak. I did regret buying it at such a high price for a few months until recently I spoke with some new neighbors with a similar floor plan, the price they bought it at is just more ridiculous than mine. In other similar units, the rent ($1500/month) is enough to cover the entire mortgage payment AND strata fees. I’m glad that for the $1500/month that I’m paying, I’m owning this place instead of using that as rent.
November 30th, 2009 at 11:16 pm
Australia’s Reserve Bank just raised discount rate by 0.25%, all the way up to 3.75%. I think they are well ahead of the curve and will reap the benefits of their forward-looking behavior.
Meanwhile in Vancouver people are lining up under the rain for the right to pre-register to buy a condo…..and this in the middle of the biggest recession of the last 25 years! Really!
November 30th, 2009 at 11:05 pm
I too hope that the gasping, greed of “The Mark” is punished.
However, it is we, the bears, who have called the timing of this bull market incorrectly for sooooo long. Maybe we should not be quite so quick to call them dumb – i suspect many have made money flipping condos over the past few years.
I’ve given up calling peaks (for SURE this time) in this market.
November 30th, 2009 at 11:00 pm
Well I lined up and bought 6 units on the weekend … got them cheap before it went up 75k a unit … a steal I say… I am gonna flip these puppies to wealth foreign investors during the Owelympics … Maybe I can sell them all during the opening ceremony for a cool 200% profit per unit …
See didn’t that just sound stupid?
Vancouver home of the ‘greatest fools on earth’
November 30th, 2009 at 10:01 pm
Today, I talked to three different people from other parts of the country who are returning home. Why? The high cost of living and poor job prospects in Vancouver. Also talked to a painter whose company went from over 200 employees a year ago to under ten today, and the only calls he gets are from people looking for work.
But, in other news: the locals are going all out on real estate, willing to pay the highest prices in the world. Well, I guess if you can’t get a job you have to make money somehow.
I’m starting to think that one of the reasons that B.C. is the only place in North America with a negative saving rate is because everyone with half a brain has left town.
Living in a mortgage free home in a city that actually provides opportunities for individuals outside of the dirt business kind of sounds to good to pass up. Or, I guess you could just rent here and buy somewhere else; there is a tremendous amount of value in real estate in many places right now.
Vancouverites need to learn that wealth comes from buying into depressed markets and selling out of over valued ones. It also helps if you have the resources to finance your investments.
People are already on the edge, and the only ones eating out are the renters (and people who bought real estate before the bubble). More job losses, more skilled people leaving town: those who remember the early eighties might want to think about what happens when interest rates rise in this kind of environment.
November 30th, 2009 at 10:01 pm
@stagnate: I don’t claim the moral high ground. If prices were to crash 50% tomorrow I would gladly swoop in and vulture off the best deals from those that are the most financially screwed. I’m an oppourtunist not a moral champion, but what’s moral about overpaying for anything anyways?
November 30th, 2009 at 9:56 pm
It turns out that CDN manufacturing sector does feel held back by the decades long manipulated lows of the Loon.They are buying sophisticated equipment to increase productivity while the loon gains some competative advantage on the US parity value.
Many on this site were screaming that this couldn’t possibly be the case and the Canada needs a low loon to survive. No, Canadian unions want a low loon for reasons of thier own. But has it done them any good? No, they have seen more jobs lost as they lobbied the federal LIBS for dinosaur jobs.
If we want to lose more jobs to the Americans then just keep the loon down so that our manufacturing sector has to fight with stone axes against F16′s in the business world. Low productivity is guarateed to keep Canadian jobs being sent overrseas.
http://www.theglobeandmail.com.....le1383247/
November 30th, 2009 at 9:31 pm
interesting post dave, point taken that some of the hard core bears on these blogs could do better with some positive energy. real estate like any other aspect of life is what you make it. it gets a bit tiring listening to some bloggers reverse speculating on doom and gloom. desperately hoping they can help their families through others misfortune and then trying to claim the moral high ground, i don’t think anyone is fooled.
November 30th, 2009 at 7:03 pm
It’s good to be mindful.
http://vimeo.com/4357777
November 30th, 2009 at 6:51 pm
Dave, you sound like Buddha. I’m enlightened all of a sudden. Thank you.
November 30th, 2009 at 6:44 pm
@scullboy:
Let it go. Please stop taunting Supraboy. You won. He loses. You brought some good insight and anecdotes to the blogs through the years, but you are now bringing the level of discussion down. I think most people want to see more posts from you on how life is in Halifax, but please no more trolling of Supraboy.
As far as your insights on Vancouver vs Halifax go, there is an old story that I think you should consider. I am paraphrasing, but I think it is fitting for you.
…A Vancouverite (Drachen) was sitting on a park bench in Stanley Park having lunch and struck up a conversation with an old man who had just moved to Vancouver from Halifax. Drachen asked the old man about Halifax and what life and people in Halifax were like. The old man said that he loved Halifax and that the people there were great. Salt of the earth. Drachen said, ‘that’s great, you will find that people in Vancouver are quite the same’.
The next day Drachen was having lunch and by coincidence he struck up a conversation with a second old man who had just moved to Vancouver. Again Drachen asked about the people of Halifax. However, this second old man said, ‘The worst people are from Halifix. Terrible to the core. The lot of them.’ Drachen replied, ‘I hate to break it to you, but the people of Vancouver are just like you described for Halifax’…
In my opinion people are people. Our situations, backgrounds and histories make us all unique, but we are still all people and most people are good. If you constantly are seeing negatives, then it’s probably you, not them. We are all very fortunate to live in this country whether it is Halifax, Vancouver or Yellowknife.
November 30th, 2009 at 6:28 pm
Glad that you’ve a good laugh, patriotz. So did I spraying fantasies between the ears of flipvestors. Only the sane recognizes what’s insanity that’ll continue for as long as pigs have it their way.
November 30th, 2009 at 6:26 pm
He’s one of our top entrepreneurs who recently put all his investments into cash. The reason: He believes Britain faces bankruptcy.
Is Britain on the brink of financial armageddon?
November 30th, 2009 at 6:24 pm
Go ahead keep pumping, the explosion will be of epic proportions. I hope you understand consequences and will be well armed and prepared to face them when the time comes.
November 30th, 2009 at 6:07 pm
After Dubai, one wonders when someone is going to put a fork in this beast, just out of fear of the possible outcome…
November 30th, 2009 at 5:16 pm
These people are the greatest fools line up and lose your money. Pre sales are sooo dead you might just light your money on fire at least you get warmth. I have no sympathy for these idiots.
November 30th, 2009 at 5:00 pm
@Anonymous:
“Official” estimate by whom? The REBGV? That’s 200,000 per year.
Canada (all of it) received 236,760 immigrants in 2007. Half of all immigrants to Canada settle in Toronto. Montreal gets as many as Vancouver. Immigration has traditionally declined during recessions. Put those facts together and contrast with your fantasy.
But thanks for the laugh, it’s good to know what kind of thinking motivates those buying today.
http://en.wikipedia.org/wiki/Immigration_to_Canada
November 30th, 2009 at 4:40 pm
The CYUAN cannot double vs. CAD in 4 years, compared with a 40-50% drop in local RE by that time, and that is a regular 10% per year. My guess is that we’ll see 20% drop by the end of 2010
November 30th, 2009 at 4:24 pm
“folks think that you get rich by signing on a dotted line and then waiting 40 months.”
……
Because 40 months later, CYuan will appreciate higher making this investment cheap in C$. Guaranteeing easy flips for huge profits, when the official estimate of immigrants to BC/Vancouver area by 2018 to reach 1.8 millions.
November 30th, 2009 at 4:03 pm
Starving Artist
That’s awsome! Love the concept.
November 30th, 2009 at 3:51 pm
Thanks Drachen
November 30th, 2009 at 3:26 pm
Holy crap, unbelievable.
Still in this day, folks think that you get rich by signing on a dotted line and then waiting 40 months.
How can one not recognize the classic ponzi scheme.
Profits are not made by the asset itself but rather new entrants coming in (pyramid) in the years ahead.
November 30th, 2009 at 3:22 pm
Oops, missed a ” in the last post, use this link.
Maggie
November 30th, 2009 at 3:21 pm
@Starving Artist:
Call Maggie, ask her to keep you on top of the pre-sales scene, she probably has an e-mail list for people looking at pre-sales that automatically informs you.
November 30th, 2009 at 2:51 pm
the cure for stupidity is more stupidity or
the cure for high prices are insanely high prices
pick one
November 30th, 2009 at 2:26 pm
Hey VCI or anyone else, could you post something before the next condo presale? I’m starting a photography project on the endangered animal known as the condo speculator.
If anyone has a date/time/place for the next likely presale lineup please let me know!!
Contact info here: http://www.skyenott.com/#153168/About-Skye-Nott
November 30th, 2009 at 1:49 pm
BTW Calgary built a lot of infrastructure during the 80′s, including the Saddledome (which was used for the games and is now the home of the Flames), and major expansions to the rapid transit system. That’s the time to do it – when contractors are hungry for business and workers are hungry for jobs. We did the exact opposite here, of course.
November 30th, 2009 at 1:44 pm
Calgary. The city saw a massive RE bust in the early 80′s (like Vancouver), coincidental with the awarding of the games to the city. Prices staged a weak recovery for a few years after the games were held in 1988, and then they stayed essentially flat until the the current bubble in this decade.
But that had nothing to do with the Olympics. It was all about oil, and everyone in Calgary knew it. Nobody expected the games to do anything for the local economy, RE or otherwise. It was just a big party to keep people’s minds off the oil bust.
http://cuer.sauder.ubc.ca/cma/.....algary.pdf
November 30th, 2009 at 1:27 pm
Speculators back in the market? This is so nice, the song i was waiting for in the last year, Vancouver RE bubble is so close to the end you cannot imagine. You’ll see a lot of people staring at their new condos after olympics and asking … “an now, what?” well nothing my friends, that is what will be left after the big party. The business are leaving the city (see the Commercial RE continuing drop in the last 2 years), people are overextended and not much money left beside paying the slave mortgage.
I am looking for a 2 br for rent right now in Vancouver/Burnaby area and i have seen a lot of so called landlords, asking in 800-1100$ are for a basement/ground level suite. Some of them were really stressed out by the idea of not having that income for a month, but didn’t ask themselves that maybe their property is a dump and it is plenty of options right now.
November 30th, 2009 at 1:05 pm
The Lesson of Dubai: The Crisis Is Not Over
Monday, Nov. 30, 2009
Lying ahead are a slew of unresolved problems, policy challenges and, no doubt, further surprises. Unemployment remains a serious global issue, and may yet get worse; excess capacity left over from the boom years haunts the recovery; and the drastic stimulus programs utilized to fight the recession are creating a new menu of potential troubles.
~O~O~O~
Take the Asian financial crisis of 1997. In South Korea, the biggest corporate failure — the collapse of the humungous Daewoo Group — happened two years after the onset of the crisis, when healthy economic growth had already returned.
~O~O~O~
And on top of the old problems, new ones are appearing as well. Fears continue to mount that the loose monetary policies put in place by central banks worldwide are creating potentially destabilizing increases in property and stock prices.
“Asset bubbles could be the next fragility as the world recovers, threatening again to destroy livelihoods and trap millions more in poverty,” World Bank President Robert Zoellick recently wrote in the Financial Times.
Property-market analyst Nicole Wong at brokerage CLSA argues that Hong Kong may inevitably be heading for “another boom and bust” in its real estate sector, due to a combination of tight supply and easy money. “The answer to the question could there be a property bubble in Hong Kong is yes,” she says.
~O~O~O~
Read more: http://www.time.com/time/busin.....92,00.html
November 30th, 2009 at 12:15 pm
I thought these people were stupid speculating on bubble-priced, shabby, leaky condos several years ago. Now it appears Vancouver residential real estate is The Best Place on Earth for Stupid.
Note that Vancouver commercial real estate is falling in price. Business has left the scene. Other than businesses connected to condo speculation and organized crime, Vancouver has become hostile to legitimate business – especially the creative class of small entrepreneur. Condo speculation and crime are displacing economic activity in Vancouver. The shrinking industrial tax base in Vancouver is also contributing (along with the Olympics) to a reduction in public amenities in Vancouver (like understaffed libraries, fewer fire inspectors, etc).
Yalie’s post in the previous topic warrants repeating:
…“As an entrepreneur, I have been busting my butt the last three years building a real business, with a real product, that people can actually use. It would be bad enough if these flippers were merely throwing themselves off the financial cliff, but what really gets me is that through the associated misapplication of capital and the inevitable economic fallout they’re creating, they’re also going to take out hard-working, honest people who do real work.”
November 30th, 2009 at 11:36 am
For those who don’t know it, the US has an institution similar to the CMHC which insures mortgage loans south of the border. It is called FHA, it is technically bankrupt and kept alive by continuous recapitalization from the US government.
Here is an interesting piece on what is going on that front:
http://tinyurl.com/ygl7j6m
Some important points:
- FHA now insuring half of all new home loans
- tiny capital base (money has run out, waiting for Uncle Sam to pass some more)
- nearly 10 percent default rate on insured loans
It seems to me that CMHC’s interference in the Canadian market is, proportionally, even larger. This scam is going on an unprecedented basis, with complicity of all major political factions, and of ‘independent’ central banks. This is going to end up in a major disaster for most people involved, with huge losses for taxpayers and homeowners alike. House prices are artifically supported at high levels, but of course this won’t last much longer. The crash and burn of this market is inevitable. And it will be brutal.
Let people line up outside condo developments!
November 30th, 2009 at 11:27 am
I think all of you should follow the SupraLadyboy model of condo purchasing. He buy three, his huzzba buy three, then they go home and give each other dirty Sanchezes.
November 30th, 2009 at 10:40 am
I know I’m preaching to the converted here, but presales are fraught with confidence scams. See the vancouvercondo wiki for more information, and feel free to add your own experiences too!
November 30th, 2009 at 10:32 am
Lining up for presales!!?? That’s sooooo 2007. It’s cases like these where I actually do hope these idiots lose their shirts. People can call me an a$$*&^* or whatever, I hope these clowns lose it all. That one guy “Prices will surge after the Olympics” Is independant thought completely void fromt he masses now. Unbelieveable.
November 30th, 2009 at 10:16 am
(My condo owning friends aren’t overstretched: they are all in places where their purchases made sense. But now there’s a certain “stuck” feeling, I think, because no one could cash out to buy what we’re renting easily.)
November 30th, 2009 at 10:12 am
I have answered a number of condo-owning friends now regarding how much we’re paying rent. (Top 2 floors of SFH in South Vancouver). Everyone is stunned.
And every month, I check comps to make sure there are other similar places coming to market (there are, every month).
It makes me realize that one of the issues here is that people don’t comparison shop to rental; everyone’s just sort of resigned to paying tons of money to their housing.
November 30th, 2009 at 10:01 am
This is proof the speculation is back in full force. One could have argued that the recent uptick in sales was by people actually buying to live in, but this building wont even be done until 2013! Each and every one of the buyers is hoping prices will increase by then. They could end up living in the place when it is done, but you can be sure that they are hoping for an increased price by then.
November 30th, 2009 at 8:53 am
From the Garth…..on the Nation Debt. Closing in 79% of GDP…Keeerist, does anyone stop to ask how we are going to pay for all this? Grow ourselves out of debt…..on what…property tax increases and another HST?
http://www.theglobeandmail.com.....le1380944/
Boys and germs …we are well and truly screwed. Even Soupnut can do the math on this fisaco.