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January 31st, 2010 at 2:36 pm
#98, don’t you mean ‘some real press?’ Seriously, good post
January 31st, 2010 at 2:31 pm
CREA and the local real estate boards are fighting like rabid cats in a sack to keep screwing the public with thier monopoly on information and data. Read on.
http://www.theglobeandmail.com.....le1450088/
January 31st, 2010 at 2:16 pm
finally we get some big press: http://www.msnbc.msn.com/id/35.....-americas/
January 31st, 2010 at 2:07 pm
#73 “If I can never buy in Vancouver I won’t be heartbroken, there are many excellent alternatives. But as long as I can rent so cheaply, save the difference and live my life I’m happy to stay here.”
I’m with you. My financial situation is this:
- A property in the UK (my original country before work then marriage brought me here a couple of years ago) almost paid off after owning it for 10 years – worth maybe $230,000
- Savings of $50,000
- No pension
- No investments
- No debt
- Self-employed income varies from 20,000 to 60,000. partner more secure up to 70,000 income
So we have an income of 90,000 to 130,000 and a downpayment of 280,000 and I’m still not touching real estate in Vancouver – vastly overpriced. Much better to rent for $1300 indefinitely. Like you I could buy in another country or another part of Canada (I even like Toronto) but I’d rather rent here. I like to think my frugal, but enjoyable, lifestyle of many years will pay off eventually but at this point I expect never to own property in Vancouver. Houses in decent areas are too expensive and I refuse to pay the ridiculous fees attached to condo ownership. I can see myself maybe owning a vacation property and just always renting in vancouver – if you want to live in a nice area in this city you either rent or mortgage your life away.
January 31st, 2010 at 12:34 pm
@Wilma:
One, inflating the economy will not inflate wages, and only higher wages will support today’s house prices.
Two, you need capital inflows as well as low interest rates to support inflated house prices. CMHC’s mortgage obligations are growing exponentially. What does that mean?
With respect to BC, I couldn’t agree with you more. But unfortunately, the causes are already baked in the cake.
January 31st, 2010 at 12:21 pm
I think the government will either inflate the economy or keep interest rates low. Our economy just could not handle a crash ala the USA
January 31st, 2010 at 10:23 am
@Not much of a name:
Never mind the informal rental market, the official statistics show declining real rents.
http://cuer.sauder.ubc.ca/cma/.....couver.pdf
January 31st, 2010 at 10:14 am
Dave real prices matter a whole lot when an owner has to sell. Bubbles and crashes rarely mete punishment fairly. Lazy greedy speculators emerge from a bubble free and clear and honest God fearing families lose their savings when they need to sell due to job loss, illness, etc.
January 31st, 2010 at 10:07 am
@Dave:
Did you even read the post which you are apparently replying to? Apparently not. I didn’t even talk about mortgages, for starters. And just what did you think “sell for the original purchase price” was supposed to mean?
January 31st, 2010 at 9:37 am
@Dave:
Are there stats rental rates for non-purpose built rental units (basement suites, etc)?
January 31st, 2010 at 9:00 am
@patriotz:
I have a feeling that inflation is over your head. Mortgages don’t go up with inflation. They go down in nominal terms. Houses prices can drop in real terms and an owner can still be ahead in nominal terms, which is all that matters.
January 31st, 2010 at 8:37 am
@patriotz:
Rental rates have outstripped inflation for the last 6 or 7 years. Why you maintain your view despite overwhelming evidence is strange at best.
January 31st, 2010 at 7:57 am
Trees 1; Highrise Buildings 27.
—
Happy Smiling Buildings? – Subtle Signs Of A Perverted Vancouver RE Market In An Olympic Children’s Book
http://tinyurl.com/happy-smiling-buildings
It would be natural to animate the mountains, trees, oceans, islands… right? Well, yes, maybe you would, if all else were equal. If, however, you were living in a society preoccupied with its profoundly over-inflated real estate market, you’d be moved to animate the buildings. Yes, the buildings. Subtle point? Perhaps. But a preposterously distorted real estate market does effect a society in innumerable subtle ways. -vreaa
January 31st, 2010 at 5:33 am
Surprisingly softball article about Sam Sullivan in today’s NYT:
http://www.nytimes.com/2010/01.....=1&hpw
Which of course is a bare faced lie.
But if you look at the other articles by the reporter (click on his name), you will find that he is a sportswriter.
January 31st, 2010 at 4:13 am
@rp:
Complete nonsense. If government was actually restricting supply, rents would be higher. Real rents (and even many nominal rents) in Vancouver are falling, and rents are no higher than in Calgary, so effectively there are no more restrictions on supply than in Calgary.
And need I tell you that the same sources were spouting the same rationalizations in 1982 on how prices couldn’t go down. Prices didn’t crash then because government got rid of development restrictions, they crashed because the market ran out of fools wiling to pay ridiculous prices – as it always does.
If anyone tells you that government restrictions on supply lead to RE bubbles, tell them you just have one word for them:
Florida
There is only one cause for RE bubbles and that is purchasers willing to pay more than rental value. Everywhere, all the time.
January 30th, 2010 at 11:47 pm
@Johnny O: “This is the root cause of why for example so many people who are born in poverty die in poverty”
With the exception being Vancouver property owners, who will miraculously die rich due to their real estate gains. I hope you’re being ironic.
January 30th, 2010 at 11:41 pm
@Johnny O:
““It has been said that often what you get in life is what you expect to get. This is the root cause of why for example so many people who are born in poverty die in poverty, or why someone who has failed several times to quit a bad habit has a hard time believing that he or she can succeed the next time. Certainly the past doesn’t equal the future- sounds reasonable enough on paper. But whom am I trying to kid? We are emotional creatures and logic often cannot stand a challenge from deeply embedded feelings.””
Everything about that is total crap. Most people take on household debt expecting that they’ll earn more money in the future, guess what? Doesn’t happen. People born in poverty die in poverty because they don’t generally get a decent EDUCATION those who succeed are normally in fields that don’t require education for success (music, sports etc.). It’s been shown that the number of attempts to quit a smoker has made in the past INCREASES their odds to quit the next time they try.
If I expect house prices to crash and 95% of Vancouverites do not will they crash or not? Same answer as if the pilot expects to crash but his passengers do not.
The future tends to meet our expectations when our expectations are based on logic, otherwise any attempts to predict the future are just random.
January 30th, 2010 at 11:23 pm
Johnny,
I can assure you that many of us here – myself included – are not, and will not be, in poverty. In fact, NOT buying a house in past 4 years (for me – as this is the timframe that I have been in a position (ie: finished grad school) to do so) is a key reason why I am not in current poverty.
January 30th, 2010 at 11:13 pm
@Drachen:
Notice the article in the Vancouver Sun today:
http://www.vancouversun.com/te.....story.html
real estate & financial engineering at its best. BoC has just told the lenders that they want to put this bubble story in Canada to rest once and for all. Just when you thought things were getting a bit heated. See…no bubble, no crash,no worries!
I tried to warn you bears that fighting the Fed is not recommended.
And Drachen, would like to leave you this great quote I read not long ago and I only want to pass it on yo you and all your friends that probably have many years ahead of them, to make wise and calculated decisions but to listen to reason especially when it’s given as free advice.
“It has been said that often what you get in life is what you expect to get. This is the root cause of why for example so many people who are born in poverty die in poverty, or why someone who has failed several times to quit a bad habit has a hard time believing that he or she can succeed the next time. Certainly the past doesn’t equal the future- sounds reasonable enough on paper. But whom am I trying to kid? We are emotional creatures and logic often cannot stand a challenge from deeply embedded feelings.”
Good night.
January 30th, 2010 at 11:10 pm
The vancouver scum is out with some more editorial on how taxes and restrictions on developers drive up house prices. Blame that nasty ALR, and taxes for our #1 industry? Good heavens those saintly lords that supply us with the one thing we all have to have, why should they pay anything? I’m sure they’ll pass the savings on to *you*.
http://www.vancouversun.com/bu.....story.html
http://communities.canada.com/.....rices.aspx
I can’t believe anyone even buys this newspaper.
January 30th, 2010 at 10:01 pm
@Dude:
During 2009 more foreign owners sold properties in Vancouver than foreign buyers purchased. So right now the actual impact of foreign money on the market right now is negative. But in that case we were referring to immigrants, not overseas money.
January 30th, 2010 at 6:38 pm
“People see one person buying, then nine others jump in.”
who sez you can’t herd lemmings?
January 30th, 2010 at 5:23 pm
@patriotz:
You are absolutely correct. I remember reading an article saying that investment from Asia plays a very small role in this bubble. People see one person buying, then nine others jump in.
January 30th, 2010 at 5:18 pm
#68 @Anonymous: That article in the Tyee has the MONEY QUOTE. From the editor in chief of The Province:
“We have contra deals with all sorts of agencies and people we report on. And there’s lots of things the company does in terms of giving space away and cross-promotion and free promotion that could be viewed as a conflict if it was run out of a newsroom. But it isn’t.”
January 30th, 2010 at 3:41 pm
@realpaul:
Well I only get face value plus a buck for HTE.DB.E and I lose the income too. But read this and tell me what’s so bad about that:
http://www.marketintelligencec.....amp;s=7878
If the unitholders were so hot on the trust they could have loaded up at $3 and made a bundle on the takeover. A bigger gain than me BTW.
The takeover terms were part of the original share offering and if people didn’t like them they didn’t have to buy in.
January 30th, 2010 at 3:19 pm
#60 P, its too bad that all the common share holders (majority)of HTE.UN got $10 bucks a unit and lost all thier income. Not to mention my point of the thousands of people who lost thier jobs. The idea that trust income was flooding some mysterious cabal offshore was just the governments spin behind the tax grab. Bottom line is that Harvest is no longer in business due to the cynical machinations of the Mighty Mighty Cons.Thats a lose-lose for Canada in my books because all that revenue goes straight back to Korea now.
You’re welcome and congrats on the lucre.
January 30th, 2010 at 2:53 pm
@tim:
If you buy a house (or any other asset) for less than its fundamental value, you’re ahead if you never sell it. So it doesn’t matter whether the market price goes down, unless you’re forced to sell during a mega-bust like the Great Depression.
For example, people who bought a house in Vancouver in the mid-80′s would still be ahead today even if they had to sell for the original purchase price – which in real terms is a 50% capital loss.
But I get the feeling that this concept is a bit over your head,
January 30th, 2010 at 2:46 pm
@Anonymous: Hmm.. Saving a few extra grand a month I can now buy much more than I could a couple of years ago in Florida, California, Arizona, Spain, Ireland, Etc.. All places where the renters were far behind for years, then suddenly the situation changed: rents dropped AND house prices dropped. If I can never buy in Vancouver I won’t be heartbroken, there are many excellent alternatives.
But as long as I can rent so cheaply, save the difference and live my life I’m happy to stay here.
January 30th, 2010 at 2:39 pm
@tim:
“Actually, being right or wrong isn’t even the point.”
Then why did you bring it up?
“The problem with the spindoctoring is that there is no room for improvement.”
Yes, which is why we don’t do spin doctoring here, that’s what the Bulls do, we try to do actual analysis based on historic trends, comparable markets and internationally observed truths.
“You guys aren’t trying to improve your analysis skills.”
THAT’s the problem here? Are you serious? How long have you been reading this blog? Over the past year alone we’ve made huge strides. I for one take credit for pointing out that the 20 year run-up of Vancouver real-estate coincides exactly with the period which the CMHC has been dabbling in mortgage insurance to ‘help’ Canadians afford housing. Many others here have had similar evidence to add to the pile, we are constantly looking at new ways of analysing the data although most new ideas get thrown out or marked as relevant but not essential to the timing and severity of the coming crash.
“You’re just a bunch of yahoo’s screaming about nothing and influencing no one.”
Then why are you scared? What worries you about us? Are you losing business and looking for someone to blame it on? You seem to be spending an awful lot of time and energy here today for someone who thinks this place is all hot air.
January 30th, 2010 at 2:33 pm
@vreaa “How many people do each of us know who have “made considerable gains in this time and are back to being liquid””
I can think of 3 of my close family/friends who cashed out. I know a few others who cashed out in 2005 too, and are technically “underwater” compared to if they sold today.
Never confuse genius with luck. To the untrained eye they appear the same.
January 30th, 2010 at 2:23 pm
yeah exactly… what are we arguing? Sooner or later you’re going to buy also, and then the market will fluctuate one way and then fluctuate the other way and they you’ll be wrong again.
You’re assuming that it’s going straight down from here. You don’t know that. It can go up, down, or stay level for another 1,2,5,10,20 years. Timing is everything, and if your analysis doesn’t take that into consideration, then it’s worthless.
January 30th, 2010 at 1:51 pm
@tim:
You mean they became bears and sold for the reasons we’ve given on this board?
So what exactly are you arguing with?
January 30th, 2010 at 1:35 pm
‘ Sun, Province to Promote Governments’ Homeless Message ‘
http://thetyee.ca/News/2010/01.....sPRCentre/
January 30th, 2010 at 1:27 pm
From SI
‘ As Olympics near, people in Vancouver are dreading Games ‘
http://sportsillustrated.cnn.c.....index.html
January 30th, 2010 at 1:18 pm
Actually, sorry, let me correct: I know ONE family that cashed out and left Vancouver.
January 30th, 2010 at 1:16 pm
@tim: “Some people have made considerable gains in this time and are back to being liquid.”
Okay, this is important:
How many people do each of us know who have “made considerable gains in this time and are back to being liquid”. [we're talking RE here]
I’ll start: Zero.
(I know a LOT people who are MORE into RE now than 5 years ago, or 10 years ago. And almost ALL of them are in with leverage. (= MOST of them have more than their entire networth in RE.) I don’t know ONE person who has cashed out, or, for that matter who has even lightened up.)
January 30th, 2010 at 1:10 pm
@patriotz: In fact we’re gaining on the owners every month because we’re paying less
No you’re NOT. You are falling further behind every month and have been for 5 years. If you were getting further ahead you would be more capable of buying each month not less.
January 30th, 2010 at 1:02 pm
@tim:
Someone buying RE now doesn’t get another chance. If prices go down, they lose. They won’t be able to buy another property when prices are lower because they will have a negative net worth. We’re not talking stocks where you can buy or sell a $1000 worth at a time.
The bears aren’t losing anything by renting. In fact we’re gaining on the owners every month because we’re paying less. If at any time in the future prices go down to the level we’re waiting for, we win.
January 30th, 2010 at 12:39 pm
Actually, being right or wrong isn’t even the point. The problem with the spindoctoring is that there is no room for improvement. You guys aren’t trying to improve your analysis skills. You’re just a bunch of yahoo’s screaming about nothing and influencing no one.
There are people on the financial message boards who post a message every 30 minutes, “I feel it in my bones, MSFT is going to buy YHOO. They just met behind closed doors and I think that Carol Bartz just blew Ballmer … virtually. It’s coming!” That’s what you guys are.
January 30th, 2010 at 12:27 pm
@patriotz:
And we only have to be right once. The bulls have to be right all the time.
Wrong again, buddy. This market correction can happen 0-x months/years from now. There are plenty of opportunities to be right and wrong multiple times. How long have you all been wrong for already? 3 years? 5 years? Some people have made considerable gains in this time and are back to being liquid.
There’s no time limit to your predictions yet when Rennie “guarantees” the value of properties, people on this board are up in arms, “He didn’t say for how long!”
January 30th, 2010 at 12:20 pm
@realpaul:
Please. Flaherty did not “destroy” the trusts. They simply have to convert to a corporate income tax structure, to prevent the income being distributed tax-free to non-taxable entities or offshore. People who hold the trusts in a taxable account will be getting about the same returns after-tax, because they will get the dividend tax credit.
Something had to be done before BCE and other big companies converted to income trusts with a big loss in corporate tax revenue.
Disclosure: I bought Harvest Energy debentures at a big discount last winter (price drop due to the financial crisis, not the trust taxation decision which was years before), and KNOC is buying them from me at $101.
Buy low, sell high.
http://investdb.theglobeandmai.....movement=0
January 30th, 2010 at 11:55 am
http://www.vancouversun.com/Bo.....story.html
DTES in the spin cycle from the vanshithouse whores.
January 30th, 2010 at 11:52 am
#50 L, exactamundo, everytime a foriegn national organization buys a large Canadian resource with sites around the world they do not immediately shut thier offices in Zurich and Rio de Janeiro and rush to relocate in Canada. In fact its the opposite, the Canadian offices down size to match the tax advantage restrictions offered by the government and thats it !
Ex: Korea National Oil Co. recently bought a very extensive collection of properties from one of the trusts that the Mighty Jim Flaherty destroyed called Harvest Energy. The entire company which was once the third largest energy trust in Canada employing thousands of people in Canada and supporting hundreds of thousands more with the income spin off is no more.
People hopeing for a low Canadian dollar are just ignorant of the facts. They have been douched up to the gills with the enema of bullshit from the socialist leaning Liberals. What they can’t seem to get is that the dinosaur jobs in manufacturing they were trying to save 40 years ago by draining the countries manufacturing sector of competative productivity capability has come home to roost and as the last few factories close, the entire manufacturing base is dead in a box and being shipped to China for retooling.The union lobbies have been entirely self centered and extremly short sighted on this issue. What can you expect from a bunch of drop outs who’s only goal is to collect thier fat pensions and fuck everyone else. Small country small thinking.
And finally, more happy talk about the DTES, nice to see that the pseudo yuppies are clinging to thier dreams. But….what happens to all the homeless and the poor? Are they all going to be found in the ravines of Coquitlam and the alleys of Kelowna?
The Shitty of Vanshithole Council says there are only 15 or 16 hundred homeless people in Vancholio. American reporters from Seattle report the number at 13 to 15 thousand !!!!! Is the BC government in on the conspiracy and ‘transferring clients’ to the outlaying communities? Are they sending the homeless away from the DTES by saying “We’ll starve you out asshole”?
January 30th, 2010 at 11:52 am
The only thing on the rise will be unemployment and foreclosures. Enjoy the Olympics and live it up because when it’s over there will be a bitter hangover that follows. Huge debt massive layoffs. Campbell and his buddies will be the ones who profit on the backs of all the taxpayers.
January 30th, 2010 at 11:11 am
Homeowners fear homeless campers pose forest fire threat in Coquitlam ravines. The days are gone when the local woods were there for neighbourhood kids and dog walkers.
http://www.bclocalnews.com/tri.....80952.html
January 30th, 2010 at 10:40 am
@tim:
Getting it right on a financial issue certainly is special when everyone else gets it wrong, buddy. And we only have to be right once. The bulls have to be right all the time.
January 30th, 2010 at 10:03 am
“-UBC: Olympics offer no economic gains”
I love the spin on this. Just proves what a bunch of spindoctors the editors of this site are and how they like to just bury your head in the sand, thinking that they are “influential”.
Seriously – a bunch of losers. They just run around and repeat the same nonsense over and over until it finally happens that way and then they think they’re special because they it got it right.
January 30th, 2010 at 9:15 am
Property value increases ???? LOL !!! I don’t know about BC, but here in Alberta, WAGE DEFLATION is occuring on a large scale…..to wit…..
http://www.calgaryherald.com/n.....story.html
I want to see what potentially can happen when $15MM of annual income evaporates……..
As before, with my other comparisons and estimates posted here over the past months, my argumentative premise remains the same…….I am still using a 25 year amortization, a 5% fixed rate, and a bi-weekly payment schedule…….after all, gotta assume some of these folks have functioning grey matter and as CAAMP tells us they do…..here we go……
As the online RBC mortgage calculator will “short out” with too many zeros, I did it this way…….
A $1MM mortgage debt on the above terms costs $2,684 every 2 weeks, so multiply that times 26 bi-weekly periods and you get $69,784 of principal and interest to service a $1MM mortgage over a one year period.
Divide $15MM of lost annual income by $69,785 and you get 214.95……or…..$215.95 MILLION dollars of mortgage debt service (or, put another way, consumer buying power) that just evaporated……and that is from the municipal public sector employees only. FWIW…..the private sector is also experiencing strong WAGE DEFLATION as well…….and if I could get a job I’d be able to report first hand what that amount is…….LOL !!!
Now someone will come along and say, hey wait a minute CC…..what about debt service ratios….shouldn’t you be using 30/32/34% of that lost income instead of all of it….? Well, if you know what these people are like, and my wife works with them, they are pretty much all buried up to their eyeballs in mortgage and consumer debt. Financially, the majority of them are like the WWII German battleship “Bismarck” in her last hours…..circling helplessly with a broken rudder in the North Atlantic while under a hail of British gunfire and torpedos…..the decks awash in blood and listing to one side.
January 30th, 2010 at 8:49 am
Yup, BCREA predicts a nice 7% increase this year!
Official release: http://www.bcrea.bc.ca/news_ro.....recast.pdf
January 30th, 2010 at 2:09 am
Hey kids! – time to sit up and take note – Cameron Muir has picked some more numbers from his ass and forecast real estate for this year and 2011:
http://www.vancouversun.com/bu.....story.html