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January 27th, 2010 at 7:38 pm
I like my Chinese food doggy style.
January 27th, 2010 at 7:38 pm
“Best Chinese Food in World”
Glad to hear you hold The Economist in such high regard. Now take a look at their prophetic report on the global housing bubble and tell us where they say “livability” has anything to do with sustainable price/income or price/rent. It it will cost you a few bucks but I think it’s money well spent.
http://www.economist.com/displ.....id=4079027
January 27th, 2010 at 7:33 pm
Browncow has a sense of humour. Not bad. Maybe there’s hope for that guy after all.
January 27th, 2010 at 7:02 pm
oh yeeaah nutslaps! best chinese food! recommends foody goody or Lee’s rub and tub!
“kung pau poon”
January 27th, 2010 at 6:21 pm
First, The Economist tells us Vancouver is the world’s most livable city (2009 ranking) and now Conde Nast Traveler tells us in its February issue that we have the best Chinese food in the world.
http://www.vancouversun.com/li.....story.html
January 27th, 2010 at 6:06 pm
The bathroom is a single water-tight unit with a toilet, sink and shower all combined into one. Now I can shower, shave, and poop all at the same time.
This reeks of a Seinfeld episode where Kramer installed a garburator in the shower. Like a Seinfeld episode it is kinda sad, pathetic and not funny.
January 27th, 2010 at 5:55 pm
@Continuous Burn: My view is that prices will go up a little further and then stabilize for many many years.
So once prices have “stabilized”, who will pay 2x as much to own as it costs to rent without any appreciation??
January 27th, 2010 at 5:52 pm
@Letthemburn:
Um, isn’t that exactly what they tried south of the border? How did that work out?
Do you think the Cons are going to drive away almost all the supporters they have left (rural areas) by trying to bail out big-city homedebtors? The only real exceptions are Calgary and Edmonton – and they did nothing about the bust there that started in spring 2007 and went on for over a year for a 20% drop. When they already have an example from the US that one, it doesn’t work, and two, it doesn’t get you re-elected?
And all the bail-out programs south of the border are really in aid of the banks, not the homedebtors who would be better off walking. The banks already have their bailout here.
And finally, you don’t seem to realize that the bust in the US was not due to mortage defaults, but simply because the markets ran out of buyers, like all Ponzi schemes. Defaults didn’t start to rise until over a year after prices started dropping.
Dream on. The Cons will simply pretend there is no problem, because any other course of action would lead the public to realize that at best the Cons were negligent, and at worst they created the bubble deliberately.
January 27th, 2010 at 5:09 pm
@Continuous Burn:
“My view is that prices will go up a little further and then stabilize for many many years. The feds will do what is necessary to keep people in their homes, and the banks will fall in line (e.g. mortgage relief, which is already taking place).”
They’re burning money like there’s no tomorrow right NOW! You think they can spend MORE on what will pretty soon become a bottomless money-pit just to placate a few people who paid too much?
70% of Canadians may own real estate but only about 5% of Canadians own in the really overpriced areas and most of those areas don’t traditionally vote Conservative anyhow, so why should they care?
On the whole your, “The government will save us!”, argument is about as realistic as praying to god to save you from your mortgage. I can tell you the Americans are a lot more religious than we are and it doesn’t appear to work for them!
January 27th, 2010 at 4:49 pm
“Housing is the only shinning sector in the national economy, and it has done a wonderful job of keep people employed and stimulating economic spin-offs.”
It takes me a lot to get riled up, but this kind of comment really pushes my buttons.
Housing is NOT a “shining sector of the national economomy”, nor does it stimulate economic spin-offs. Housing is a non-productive asset, and the recent housing “boom” has done nothing other than misallocate capital from more productive uses.
How hard is it to comprehend that a house, once built, just sits there, producing no added value of any kind? Why should it go up in price forever? Why should someone make money by sitting in that house and doing nothing productive with their life? Why should those people get rich while hard-working entrepreneurs are busy producing real products and services?
The answer, of course, is that the housing boom is a ponzi scheme, and has done the exact opposite of “keeping people employed and stimulating economic spin-offs”.
This is basic economics, and it is staggering how many people misunderstand this simple concept.
January 27th, 2010 at 4:43 pm
In 5 years, or less, I will be an expat and won’t be paying any Canadian taxes for the rest of my life…….
I estimate that over the next 20 years my actions will remove $1MM of revenue from the coffers of the Canadian government. So, the “complacent taxpayer” some people speak of doesn’t refer to me. I chose to fight back and leave this cesspool for what it is.
“No bailout for you !!!”………At least not from my wallet anyways.
January 27th, 2010 at 4:34 pm
I personally think this is a great idea and pushes the design envelope further esp. with our beautiful west coast backdrop. I can’t wait!
http://www.littlediggs.com
Personally I think if you’re not into small spaces, it just means you’re not in the target market. Nothing to argue about.
January 27th, 2010 at 4:07 pm
“Parents associations are reporting a big drop in kids not being signed up for sports because the parents can’t afford it. ”
Interesting. Do you have a source?
January 27th, 2010 at 4:03 pm
@realpaul:
Now I know why many of your posts don’t make sense, realpaul. You’ve just informed us that you can’t count to three (Estonia, Latvia, Lithuania). From this point on I’ll read your posts with that in mind.
January 27th, 2010 at 3:45 pm
Lets see, is it time to capitulate? Japan has capitulated, so has Greece,New Zealand, Portugal and Spain, even little Iceland and the Celtic Tiger Ireland. Too many Baltic countries to count have capitualted. Obama will admit to capitulation tonight. The 12 trillion in debt has got them absoutley nowhere. The US spent 800 billion +++++ in the last few months to get unemployment below 10%, didn’t work. All this free money just throws gasoline on an already screaming fire.
The thing about capitulating is that when it happens, you will definatley get a turn in the market. The bulls should check thier facts and hope this isn’t the case.
I listened to Peter Schiff this morning on Bill Sluts show @ 98. Schiff is as convinced as ever that it is a matter of when and not if. If the macro continues to deteriorate then whos going to be left to buy anything? Does anyone whose testicles have dropped actually believe in never never land economics?
Canada IS a special case, the people are very complacent about taxes. Even so, there is an inflection point in every countries fiscal universe when the bills gotta be paid as was pointed out above. Just a matter of time.
IMF wants stimulus spending to continue. Guess who gets to pay it all back? You do! Right now direct taxes are at the 50% level, indirect take another 25%. You get to take home 25% of what you make. Any wonder why amortizations are at zero/35?
Parents associations are reporting a big drop in kids not being signed up for sports because the parents can’t afford it. Seniors now dominate the food banks. Welfare rolls just doubled in the past 12 months and the media whores have stopped reporting the number of people on EI (never mind the people falling off after exhausting thier weeks). Who sees an upside in all this?
January 27th, 2010 at 3:44 pm
32
Does it really matter? My view is that prices will go up a little further and then stabilize for many many years. The feds will do what is necessary to keep people in their homes, and the banks will fall in line (e.g. mortgage relief, which is already taking place).
Housing is the only shinning sector in the national economy, and it has done a wonderful job of keep people employed and stimulating economic spin-offs. With 70% of the population owning, the feds know where their base of support is ( and yes, yes, income trusts were affected despite the power of baby boomers, but RE is not like income trusts that only a fraction of the population participated in).
And while everyone likes to say that they cannot do anything, or that there are no “bullets” left, few of those “analysts” predicted the federal governments intervention via low interest rates and the massive increase in the CMHC cap. Who knows what they will come up with, and/or how successful it will be, but I know that there are a lot of creative options out there to keep this little party going. Just because bears and prudent savers may not be the net beneficiaries of these policies does not meant that they will not be implemented.
When the average joe sees bailouts to banks and car companies, they now rightly assume bailouts will emerge for them should anything happen. A moral hazard has been established, and the average joe knows it. Taking on big risks, as is always outlined here by the cautious folks, will pay off for them because the good old government will help them out. Unfortunately, or unfortunately, red is the new black.
And if you seriously think that there will not be some form of bailout or relief for any underwater mortgage holder you are kidding yourself. Our neighbour to the south has experienced with some (though not necessarily effective), and Canada’s socialistic leanings will certainly kick in for the “poor” homeowner living in that 500k condo.
And that relief will come from me and you, but the rub will be extra hard on all those prudent renting savers (which is most people on this board from the sounds of it). First, you got to see hapless fools gamble and win for 8 years, and now everyone will pay for those hapless fools if there is ever a correction.
So who really cares where prices go – everyone gets affected either way. If it goes up, you remain priced out and renting for many years, and if it goes down, you will be subsidizing a remedy for those hapless supposed “greaterfools.”
January 27th, 2010 at 3:24 pm
@patriotz:
Politicians live off consensus. They need re-election every few years. Houses are the single most common type of asset held by family. In the past few years it has morphed dangerously into a way to ‘save’ without saving. I am really curious to see how politicians are going to take this toy off the hands of their voters.
Imagine that: get rich without working! Accumulate asset without savings! And then the big bad politician comes and shuts down the CHMC and it all unravels. I just can’t see that happening, at least not in a short amount of time. It might over several years.
Before politicians do anything about it, the market will have unraveled under its own weight.
Almost forgot to sign….abolish the CHMC!
January 27th, 2010 at 3:00 pm
@rp:
I swapped the vast majority of my net worth from the CAD about 3 years ago when it was last on par +/- with the USD, and then flipped right out of that into a different foreign currency, located safely out of the country. Worried about currency controls preventing large monetary transfers out of Canada when the “sheet” hits the fan. Don’t wanna be stuck like a South African. Been very happy (and secure) ever since……
————————————
The comments about what kind of tenant you will get in these places is very well worth noting IMHO.
Having lived briefly for a few weeks in a 35 metre apartment (315′) I can say that is is very doable, if you are single, and spend most of your time outside of the flat. I have no problem with the concept, but for one thing……
Unfortunately, this is Vancouver we’re talking about……..hardly what you’d call a 24 hour city, that is warm, dry, sunny and world class.
January 27th, 2010 at 2:39 pm
@Continuous Tool aka Vancouver Rocks: What’s your prediction for RE prices in Vancouver?
January 27th, 2010 at 2:22 pm
@Housing Advocate:
City of Vancouver’s Standards of Maintenance bylaw indicates that a sleeping unit, “equipped to be used for sleeping and sitting purposes,” has to have at least 50 square feet of gross floor area for each occupant. At 270 sq ft, according to city standards, is capable of having 5 occupants!
I’m positive Gordo’s welfare department will have no problems paying slumlords $1875/mo to house 5 welfare recipients in these micro-condos.
January 27th, 2010 at 2:03 pm
@vreaa:
“15% drop in national average could well translate into >40% drops in Vancouver.”
More than that.
If Canada as a whole dropped 15% that would put us from our current state of 3.7 median multiples to 3.145 median multiples.
If Vancouver dropped to 3.145 it would mean about a 65% drop in prices.
I’m not saying it WILL drop that much but it certainly could. But anything less than a 50% correction here is just not in line with historic pricing for real estate anywhere in the world during any period in recorded history.
January 27th, 2010 at 2:00 pm
@Anonymous:
Take a few years off those dates and the same comment could be found verbatim on the US blogs.
It’s not different here and it’s not different this time, and you’re not going to have to wait 5 years to find out.
January 27th, 2010 at 1:46 pm
I saw these micro condos on the news.
The comment about 270 sqft being below the liveable space requirement sounds true. In the news, I heard something about the developer having to apply for some exemption. To me though, if someone wants to build 270 sqft places and another person wants to buy a 270 sqft place, then I don’t have a problem with that. I think there are too many zoning restrictions already.
I’m probably in the minority here, but I actually like the idea of these things. Veriety is the spice of life and all that. I myself may be in this city or another two years, and would even consider buying something like this……..However…..
I would only be willing to pay maybe $75K given the size and location. in the news the develper threw out numbers like $600 or $700 a month in rent. I’m extrapolating from other price/rents, so I’m sure they would want something stupid like $150 to $200K for these.
January 27th, 2010 at 1:33 pm
15% drop in national average could well translate into >40% drops in Vancouver.
270 sqft Condos – “Cutting away the non-essentials is the only way to get to that price-point in Vancouver.” « Vancouver Real Estate Anecdote Archive Says:
January 27th, 2010 at 1:31 pm
[...] Housing Advocate at vancouvercondo.info 27 Jan 2010 12:56 pm – “I do not think that people realize that 270 sq feet was previously deemed as non-livable space by provincial guidelines. The minimum space requirements, outlined in discussions on affordable housing strategies, identify a much bigger number. It is funny how concepts of “liveable space” get altered when there are profits to be made.” [...]
January 27th, 2010 at 1:24 pm
The bubble will continue unabated said Mr.Bernake today.
http://www.financialpost.com/n.....id=2491025
Who said cash wasn’t trash. BTW, I think the toilet for the 270 ft condo is under the Murphy bed. The Shitty Planners are getting greased on this for sure.
January 27th, 2010 at 1:20 pm
^^^^
2005…and here it is 2010..and no bubble bursting…maybe in another 5 or 10 years
interesting to see even hardcore bears capitulate and realize things are not going to go down significantly if at all
January 27th, 2010 at 1:11 pm
@Continuous Burn:
Instead of paying attention to the people who have been wrong in the past (and Garth has been wrong in spades) why not pay attention to the people who have been right?
Every US commentator who correctly predicted the US bust and who has looked at the current situation in Canada has predicted the same outcome here, for the same reasons – excessive price/income and price/rent.
As Robert Shiller (“Mr. Bubble”, who was right about the dot-com and US housing bubbles) memorably put it:
That was said in 2005 – and guess what, he was right.
January 27th, 2010 at 12:56 pm
Ahhhh…you can almost taste the disbelief and disappointment by Garth’s faithful blog dogs today.
He has the “dire” prediction of a 15% correction (no longer a crash) nationally? That is after a 20% ramp up in prices nationally in one year? And he still only predict a 15% decline despite predicting a 10-15% decline in 2008?
Oh no, look out below! That is nothing but a minor event, unworthy of discussion, as it will simply catch a couple of subpar mortgage holders. No collapse, no US style foreclosures – life will carry on as usual. Meanwhile, the rest of RE holders have enjoyed unprecedented gains wile those sitting on the sidelines have wasted 2 years of rent and grief waiting for that “big” correction.
This is simply too funny. I think people are starting to appreciate that the term “greaterfool” doesn’t apply to people that bought in the last 2 years, but rather, to people that sidelined it and shelled out money on his book that outlines a non-event.
Why both writing at all. It is like writing a stock newsletter saying that there might be a minor pullback in a SP prior to its stabilization and/or further increase. Big deal.
January 27th, 2010 at 12:51 pm
From the story – “…need for more affordable rental units in the downtown area”
These are not condos for purchasing – they are rental units. Stop saying they are for potential purchasers
January 27th, 2010 at 12:49 pm
I do not think that people realize that 270 sq feet was previously deemed as non-livable space by provincial guidelines. The minimum space requirements, outlined in discussions on affordable housing strategies, identify a much bigger number.
It is funny how concepts of “liveable space” get altered when there are profits to be made.
January 27th, 2010 at 12:45 pm
Anyone check out Garth’s “predictions” yesterday?
What a sham that guy is. After a 20% increase in prices nationally, he predicts a 15% decline. But lets not forget the fact that he predicted the same 15% in 2008 prior to the 20% increase. What a pansy.
Why bother writing anything at all. A 15% pull back is not even noteworthy.
Instead of “After the Crash,” maybe his next book can be “Real Estate Armegedon” where he note that prices will drop 5% in 2020 and outlines how you can profit from this “dire” event.
Too funny…
January 27th, 2010 at 12:42 pm
@domus:
The politicians in power in Ottawa (and in most provinces) are the same people who have been actively working to diminish the pricing power of labour over the past decades. If anyone knows that wages will not be able to outpace inflation, it’s them, and if wages cannot outpace inflation, inflation cannot support house prices. Period.
January 27th, 2010 at 12:26 pm
@patriotz:
I agree, not trying to suggest otherwise: if they push up inflation, long-term rates will go up and so will mortgages. House prices down.
If they keep inflation down, it means restricting money printing and credit therefore, again, house prices down.
There is no getting around the final result: there is no way these crazy prices for housing can be supported any longer.
I am not so sure politicians know that zero inflation is their best course of action. You seem very optimistic.
Not sure what would happen in terms of inflation. I know that in all scenarios there will be a drop in RE valuations. If the bulls have alternatives I have missed, I am eager to listen. But they must provide sound reasoning and hard facts.
January 27th, 2010 at 11:55 am
“Canada resale home price index up for 7th month”-.Teranet.
OR
“up for two thousands and tenth year through history of planet tenth”. because hey @VRENGD:
January 27th, 2010 at 11:41 am
Oops. I appear to have had my facts wrong. These micro-condos are simply going to up-slum the existing slum on the DTES.
January 27th, 2010 at 11:28 am
@domus:
Increased inflation only supports house prices if wages outpace CPI. Remember increased inflation inevitably results in increased interest rates.
That worked back in the 70′s when we had things called “manufacturing” and “unions” and the labour participation rate was growing rapidly. Anyone who thinks it will work going forward from today is deluded.
The course which leads to the least political and economic damage going forward is near-zero positive inflation, and the BoC and the politicians know this full well.
January 27th, 2010 at 11:25 am
patriotz Says:
January 27th, 2010 at 9:08 am
@VRENGD:
They will be rented at a loss to poorer people and the neighborhood will becmone the next downtown slum.
Next?
——————–
Exactly – I would not live down there is you gave me a place for free.
January 27th, 2010 at 11:02 am
“Something is wrong with this picture.”
It’s strange that they would be expecting a lower cap rate yet think it’s a good investment. There is definitely something else going on and I’m not ruling out blatant stupidity as an explanation.
January 27th, 2010 at 10:59 am
@Slim:
The “pain” is the destruction of the illusion of wealth that established homeowners have been enjoying. Many of them have not been saving adequately for their retirements because they have been planning on selling their house for a huge sum. For many of them it will be too late to start.
And most of them will not get that it was an illusion all along. We have been seeing this in the US on many fronts – even someone like Bob Herbert of the NYT, who ought to know better, thinks falling house prices are a problem, not the solution.
And guess what has pushed Brangelina off the Yahoo home page:
http://m.ca.yahoo.com/
January 27th, 2010 at 10:48 am
@domus:
I don’t buy it! Who exactly do the politicians have to be afraid of? If rates go up, house prices fall – a little in most of the country, a lot in a few places – some people lose their overpriced speculations, and everybody else acclimatized to the notion that they’re going to be living in their house for a while. There doesn’t have to be any pain for most people – just the moron speculators – and do you think they’ll get sympathy from anybody?
January 27th, 2010 at 10:12 am
@rp:
General price level cannot be inflated 2 or 3 times: politically impossible to support. Imagine what would happen to the real value of baby-boomers’ savings? They would be wiped out. More likely a slow but persistent increase in average inflation.
Of course the best course of action is to accept short term pain and let nominal prices adjust downward: but we know that politicians won’t do it, too worried about re-election.
By the way, for a few days new listings have been really high. Anyone knows what is going on, has hard data?
January 27th, 2010 at 10:05 am
Rosenburg says BoC interest rate hike unlikely:
http://www.theglobeandmail.com.....le1445523/
I think it’s time for the bears to give up. They are never going to reign this thing in, the government and BoC know they must inflate or die.
Markets always revert to the mean, so if houses are 2-3x too expensive that just means they will inflate until the price of everything else rises 2-3x. They will never let prices go down.
I don’t like what this would mean for economy for the next decade or two. If they don’t raise the rates in June I’m dumping the currency.
January 27th, 2010 at 9:38 am
@VRENGD:
Actually, it’s a purpose-built rental – or so they claim:
The typical return (cap rate or net yield) expected on rental property by REIT’s and other investors is 8%, not 6%.
Something is wrong with this picture. I think there is some Plan B in the cards, such as unloading the whole building to the government for social housing (or getting a subsidy for rentals), or doing a condo conversion for sale to the public, if the units aren’t strata titled already.
January 27th, 2010 at 9:08 am
@VRENGD:
Next?
January 27th, 2010 at 8:59 am
The units will be bought by small time speculators (who are now obviously priced out of speculating on normal sized condos.) They will be rented at a loss to poorer people and the neighborhood will becmone the next downtown slum.
I wonder what will happen to the property values of adjacent neighbourhoods? If you rent in an adjacent neighbourhood, no problem, give 30 days notice and move. If you own, then too bad, sucker.
January 27th, 2010 at 8:58 am
Once can assume that they did market research and determined that there is a demand for this product.
How is buying a micro condo better than renting the average west side basement suite (which is on average probably 3 times bigger)?
This project is a demonstration of the hieght of delusion in Vancouver. This is a hallmark of a manic market.
January 27th, 2010 at 8:54 am
This can’t be real. It must be some sort of performance art piece, right? Social commentary, like proposing dumpster reno’s for homeless shelters?
January 27th, 2010 at 8:13 am
wheres the toilet ? next to the micro-fridge or what
January 27th, 2010 at 7:38 am
“Hey baby, you wanna come back to my…micro bachelor pad?” I’m sorry but that line just won’t do the job.