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Good Friday Free-for-all!

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169 Comments

You did it. You made it to the end of the week and what a good Friday it is!  Lets do our regular end of the week news round-up and open topic discussion post.  Here’s a few stories I’ve noticed lately, a long list for a long weekend:

–CIBC: Canadians spending more than they can afford
–Average Vancouver house price now one million dollars
–Job anxiety highest in British Columbia
–Re/Max campaigns against part-time Realtors
–West Van prices sliding?
–High house prices stabilizing
–Why buying a house is a bad investment
–January economic boost driven by manufacturing
–Current rally has echos of 1930 snapback
–BOC interest rates 1935 to 2010
–No compelling case to raise rates
–The 5 year loophole for new CMHC rules
–Canadian mortgage arrears 1990 to 2010
–Case Shiller US market declines from peak
–NYT: Canadian banking is not the answer
–Gated community turns bad in collapse
–Irish banks need $43 billion on ‘appalling’ lending

So what are you seeing out there?  Post your news links, thoughts and anecdotes here and have an excellent weekend!

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ulsterman

They can make up that loss only if some greater fool throws away his own money to their benefit. And I think the greater fools will disappear very soon and will not be back for decades. It’s not different here from the US. I really do hope you are right – and i mean in a real-world i.e. some time in the next 2-3 years time period. I'd like to buy a place and actually raise a family in it for the next 20 years. I don't want to continue renting a house for the next 10 years if at all possible waiting for net present value to match renting. I will of course if prices don't significantly return to fundamentals, but contrary to some on this site, the "freedoms" of renting are not always that enticing when one has… Read more »

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patriotz

However, i would not say it with such utter confidence – it’s not like the calls here have been on the mark to this point.

That's because you appear not to understand present value. It has nothing to do with market price, which doesn't mean anything unless you sell. If you don't sell, what matters is rental value. It has nothing to do with the accuracy of anyone's market call. Market tops and bottoms cannot be timed.

They are paying over twice present value, i.e. the discounted rental value of the property. That's throwing away money, period.

They can make up that loss only if some greater fool throws away his own money to their benefit. And I think the greater fools will disappear very soon and will not be back for decades. It's not different here from the US.

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InspectorKnowledge

I can say with personal knowledge that the fired Chief Inspector is considered a genius by those who work with him. He is also high up in the world of electical standards and safety. I recently met him and can say he has an excellent, casual demeanor and a great sense of humour. He was ripe for retirement, but he might not have wanted that. I think whatever the real reason he was fired, he and a couple of other inspectors lost their jobs because of the olympics.

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wolfey

163 # no olympics

could be both overtime and cut corners

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ulsterman

They are going to throw away twice as much money as the fool buying the condo. And this time there won’t be a greater fool to make it up from

Yes, i'd thought the same thing too, because a 25% drop will wipe out their equity. However, i would not say it with such utter confidence – it's not like the calls here have been on the mark to this point.

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Seth

"Funny about your weather claim since random comments, theweathernetwork.ca AND my iPhone all say it’s been raining in Van all weekend."

Good god man, get a life. What a loser!!!

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NO- LYMPICS

Olympic Village…..

The COV fired their head electrical inspector(ie called it downsizing) after he had some comments about the quality of work…but $170,000 buy out later "all is now well".

Any project with such a tight timeline either suffers form cut corners or is way over budget with overtime.

The Olympic Villages only "out" is they have to undo a lot of the work and go higher end to make them saleable and keep Boob Rennie happy.

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NO- LYMPICS

#144 Anonymous

Review my reply in #110

It's all a sliding scale.

The most secure is a single retired Gov't worker whose SFH is paid – off , with no kids,no pets and their superannuated COLA – secured pension. Not even Donald Trump has it so safe.

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[…] April 2010 · Leave a Comment jesse at vancouvercondo.info 4 Apr 2010 2:20 pm […]

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[…] April 2010 · Leave a Comment In response to our recent question about Westside buyers, ulsterman at vancouvercondo.info 4 Apr 2010 11:23 am kindly supplies this anecdote […]

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Anonymous

@wolfey

I have a friend who's uncle worked on the village. He said they were cutting corners left and right.

I don't think it'll just be the village that will be leaky tho … anything built from around 07 and on will most likely have issues in the future. Van RE mantra … bubble, build fast, bust, leaky phase … repeat

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wolfey

i wonder if the olympic village will be become leaky over the next 5 years. they built it quick and they tried to cut costs

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Best place on meth

>>>they are selling the condo and have pocketed 200k tax free<<<

They're not pocketing it, they're just throwing it into an asset even more overpriced than the one they're selling.

Funny thing about equity, you can lose it as quickly as you gained it.

A lot of people found that out in the dot-com bust.

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patriotz

A lot of asian families have second homes that are rentals.

If you rent a property out to somebody it's their home, not yours. It's your investment.

Another casualty of the bubble – plain English. And no it's not a triviality – the RE industry knows that "home" carries more emotional weight than "house" or "condo" so they've debased its use.

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Ming Bao Newspaper

FYI: in the Chinese newspaper today, on the first page, is a full page article in bold letters describing the new mortgage qualification rules. I don't read Chinese, but the gist of the story is that rental income will hold less weight when qualifying for a mortgage.

A lot of asian families have second homes that are rentals. This is not a new phenomenon at all, its been this way since at least the 80s and probably earlier.

This is going to reduce the overall number of would-be buyers of rental houses and condos, no doubt about it.

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chip

I liked this comment from a Chinese national at Mish's site about his hometown of 1 million people:

"The average apartment (1000 sq feet) will cost $90,000. This comparable with US condo prices in a second tier city."

And the average wage in this city: $3500 a year.

Talk about crazy price-income multiples!

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[…] April 2010 · Leave a Comment CondoConundrum at vancouvercondo.info 3 Apr 2010 6:05 am […]

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[…] April 2010 · Leave a Comment other ted at vancouvercondo.info 2 Apr 2010 4:44 pm – “Back in Vancouver. All I hear is how Vancouver real estate is the greatest […]

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patriotz

No I don't say.

They are going to throw away twice as much money as the fool buying the condo. And this time there won't be a greater fool to make it up from.

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scullboy

Tim: Wow, that's a lot of hostility. Feeling a little anxious about something? Yeah I check blogs around the world, housing blogs, stuff on HuffPo and Salon. I know it's shocking that I'm curious about the world around me, but I am. When I lived in Van I'd often check out thestar.com and the Chronicle Herald. I can't imagine thinking the city I lived in was the only worthwhile place in the world. I've been watching Van's real eastate market for a long time and in a very real way I feel that I placed my own bet on what will happen by leaving. I think real estate has gone beyond insane there, and I'm curious to see what happens. Halifax is a really nice little town. It's not as exciting as Toronto or Vancouver for sure. I would also… Read more »

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ulsterman

Patriotz, yes they are selling the condo and have pocketed 200k tax free. Nice line in the balance sheet now, don't you say.

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No Longer Looking

The Tenancy Branch restricts "freedoms" of owners way more than tenants…and that is a good thing. BTW as a middle class of long-term renters gets more established, watch for even more laws favoring tenants. The right to be properly housed will slap down property owners rights in our democracy.

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logic

dear 146. I think you'll find that that was PEI. Reading is a good thing.

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Anonymous

move to halifax if you dont like it here. a realtor did that.

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jesse

There’s no point in talking about market peaks, PE multiples That's right. Because their effective entry point is significantly lower so their personal affordability is lower. Would they be saying the same thing had prices simply tracked wages? No. They would be complaining they saved less because they borrowed money. I know a couple almost exactly like that in your story, with about the same incomes, but they are buying an SFH in the centre part of Vancouver for about $900K. Both bought condos a few years ago before they married. They sold one in '07 and are selling the other this year, using the proceeds to purchase an SFH at 6X their gross annual income (assuming they rent the basement). Their purchase is by no means "crazy" — since they have made significant money on their condos and interest… Read more »

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