Renting in Vancouver is more cost effective.
When was the last time you saw an article like this in the Vancouver Sun? It’s not written by a developer or a real estate marketer, and it doesn’t get all breathless about granite countertops or make vague promises about constant price increases. Indeed, it’s the first one I’ve seen in that paper to come outright and call this a property bubble. It mentions price to income ratios, the lesson of other property bubbles and the fact that the lower mainland market is currently sagging from the outside in:
So why do real estate agents continue to advocate the opposite? Because real estate agents are just that – real estate agents. They are salespeople. They make money when you buy or sell a home using their services. They are not financial advisers. They possess no great knowledge, they do not have access to either a crystal ball or reams of facts and figures that are inaccessible to the average person, and they will not be there three years from now when your financial burden is slowly killing you. But their overtly rosy picture, unfortunately, dominates media headlines.
Interesting to see this perspective in the Sun, it’s a nice thoughtful counterpoint to the empty Goodisms. If it sounds familiar, it’s because one of you wrote it. Gordholio explains his perspective here, and here’s the original story he refers to that was published on VCI last October.
April 28th, 2011 at 1:56 am
Good discussion on CMHC! New post started.
April 28th, 2011 at 1:46 am
@Bear Patrol: The easiest thing to do would be to cap CMHC insurance to a low multiple of family income. That would cool local markets. Capping it based on rental yield is a sounder choice.
The most amazing thing to me is that the CMHC would insure "investors" at any rental yield. Socialism for speculators.
April 28th, 2011 at 1:43 am
@Bear Patrol:
There was such a thing in place previously. The mortgage amount that qualified for mortgage insurance was capped at a maximum amount through CMHC. Areas such as Vancouver had a higher cap to in order take into account the higher prices that exist here.
Imagine if this scenario returned where the maximum insured mortgage was in the range of $500k?
April 28th, 2011 at 12:45 am
@patriotz: Totally agreed but politicians being politicians, they will always want power regardless of consequences. It's like why would a Democrate want to be US president right after George Bush in 2008 when everything is going to hell and Republicans will blame everything including Iraq and Afganistan on you and a good portion of US population will believe them? Personally I think Hillary was lucky in a sense to lose out to Obama.
April 28th, 2011 at 12:27 am
@Keeping An Eye On The Pimps:
That turned out really well in Japan, the US, Ireland, Spain, didn't it?
The way for governments to deal with bubbles is to stop them from happening in the first place, and that's by limiting mortgage lending and taxing speculation.
Works just fine in Germany and it would have worked just fine here if the politicians and voters had wanted it.
April 27th, 2011 at 11:41 pm
@Bear Patrol:
"Locally-targeted policies should be seriously considered IMO."
Why?
Let the bubble grow as big as it possibly can, it will eventually pop.
What is your hurry? Do you really want a political solution to make it worse?
April 27th, 2011 at 10:18 pm
@patriotz: Vancouver prices are distorting the national average. Locally-targeted policies should be seriously considered IMO. Limiting CMHC and other gov't-sponsored loans' appraisals based more on rental value, not just comparable sales, especially in the condo market, would help see to that.
I cannot believe that the huge weight a couple of small corners of the country are taking in national price indices (and debt levels) is going unnoticed.
April 27th, 2011 at 7:28 pm
@Anonymous:
If you're talking about Federal government policies you must look at national prices, not just Vancouver.
And prices did not take off nationally until 2006. That was no accident.
April 27th, 2011 at 4:20 pm
here's a great little 'Buy Now or Later?' spreadsheet for anyone that wants to play with some numbers.
It's a great way to play with the impact of certain metrics. Thought it was worth sharing.
http://www.google.ca/url?sa=t&source=web&…
April 27th, 2011 at 4:01 pm
@Anonymous: "The service economy is overrated. Manufacturing and “knowledge” is where real wealth is created."
For Canada, combining manufacturing and knowledge has been a recipe for success. When you claim "service economy is overrated", well, I know a few small "knowledge" business owners who would disagree with you. Sure, lots of waste, especially in financial services and, yes, real estate services, but services is a massive and varied part of the economy: when you're paying your knowledge employees first-world salaries you might want to consider juicing their productivity by using at least some of the services the marketplace provides, and consider what quality of life the services provide them when enticing them to stay in the city instead of heading elsewhere.
April 27th, 2011 at 2:53 pm
@Anonymous:
Why concentrate on the military? Given recent West Side hijinks, apparently China has an endless supply of idiots; let’s focus on them.
That would be right thing to do given endless supply of idiots aka smart investors but I guess Douche is pushing for military since they already sent the vanguard and invested a lots in whore-houses, parlours and other sex businesses that employ Chinese workforce to serve military.
April 27th, 2011 at 2:49 pm
@bubbly
Yes the real estate boom started shortly after September 11th,… by 2006 the market was already "rich", however, that didn't stop the Tories from loosening mortgage lending through the CMHC. It was the equivalent of throwing gasoline on an inferno.
The market wasn't really expensive until after 2004..
April 27th, 2011 at 2:18 pm
Risten…round eyes
I own the Chinese military…
I have grass bottom boat to keep eye on Italian navy and Gleek air force…
April 27th, 2011 at 2:07 pm
@stagnate: … it is cheaper to own a 500 sq. foot condo than rent a house, even in vancouver…..
You've just outed yourself! Clear you've never actually looked into renting a house otherwise you'd know that your statement is not even close to being accurate.
April 27th, 2011 at 2:02 pm
@Extremely rich Van house owner.: …leasing the land to China for naval and air base;Vancouvver will benefitted from visiting Chinese military personnels and tourists……
Why concentrate on the military? Given recent West Side hijinks, apparently China has an endless supply of idiots; let's focus on them.
April 27th, 2011 at 1:48 pm
Hey Romeo Jordan I thought you left and went to work as Rob Chipman's assistant? Again the whole putting on your dad's suit and trying to be an investment advisor didn't really work out. Maybe you can replace Dave as our resident clown? The pay isn't great but the perks are amazing!
You are like the Blackhawks, yesterdays news. Please just go away and stop "telling" us things we already know.
xoxoxo
McLovin
April 27th, 2011 at 1:44 pm
We are currently sweeping up poop at the circus to help pay the bills.
This also keeps up our qualifications to build leaky condos at world sporting events.
See you in Sochi and London
April 27th, 2011 at 1:33 pm
Vancouver East & West*
New Listings – 102
Back On Market Listings – 0
Price Changes -31
Sold Listings -59
Vancouver All Areas*
New Listings – 273
Back On Market Listings – 4
Price Changes – 114
Sold Listings – 184
*Attached & Detached – Date: 04/27/2011 Time:17:33 Pacific YatterMatters.com: Courtesy REBGV. Data believed to be accurate but is not guaranteed.
April 27th, 2011 at 1:31 pm
@ Li Kai Shing
You are comedic genius!!!
April 27th, 2011 at 1:02 pm
No
I got rots o peoples I want to smuggle in.
rots and rots of people.
I going to evict west van round eyes and sublet to Malik brothers.
They always pay their bills.
They say cheque in the mail and its only 18 months late !!!!
bwhahahahahahahah
April 27th, 2011 at 12:34 pm
painted turtle
I told everyone (other than McLosin – no use preaching to a moron) that the chinese will eventually pick up and go home (in terms of net trends).
Westside is at the greatest risk. Watch the average price drops for April they will shock you.
xoxox
Romeo Jordan
April 27th, 2011 at 12:17 pm
Interesting stats re bc immigration numbers. Found at Garth's.
http://www.urbanfutures.com/Q4%202010%20Migration…